All the Presidents' Bankers (82 page)

33
. “Cortelyou Puts in $25,000,000,”
New York Times
, October 24, 1907.

34
. Ibid.

35
. “Bankers Calm, Sky Clearing,”
New York Times
, October 26, 1907.

36
. “All Day Siege at Doors of Eight Banks,”
New York Evening Telegram,
October 24, 1907.

37
. During the Pujo hearings, Cortelyou testified that he met with Morgan and other big bankers in the evenings and was stationed at the subtreasury during the day, where he met with a “great many people of prominence in the banking business.” In response to questioning about which national banks received the bulk of the $25 million, Cortelyou replied, “The national banks which could most quickly put up the collateral” and added that Morgan was the “leading spirit” of the conferences.

38
. “Bankers Calm, Sky Clearing.”

39
. Ibid.

40
. Tallman and Moen, “Lessons from the Panic of 1907,” 11.

41
. Ibid., 10.

42
. Morris,
The Tycoons,
250.

43
. Edward M. Lamont,
The Ambassador from Wall Street
(Madison Books, 1994), 37.

44
. Lamont,
Ambassador,
39.

45
. Ron Chernow,
The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
(New York, NY: Grove Press, 1990), 127–128.

46
. Roosevelt,
An Autobiography.

47
. Letter from Samuel Untermyer, July 3, 1912, Woodrow Wilson Papers, Vol. 24. Arthur S. Link, ed.,
The Papers of Woodrow Wilson
(Princeton, NJ: Princeton University Press, 1966).

48
. Ibid.

49
. M.A. Frank Moore Colby, ed.,
The New International Year Book: A Compendium of the World’s Progress for the Year 1907
(New York, NY: Dodd, Mead and Company, 1908), 262.

50
. “John Pierpont Morgan: A Bank in Human Form,”
New York Times
, November 10, 1907.

51
. William Greider,
Secrets of the Temple: How the Federal Reserve Runs the Country
(New York, NY: Simon & Schuster, 1987), 273.

52
. “Federal Aid Up to $150,000,000,”
New York Times
, November 18, 1907.

53
. Woodrow Wilson, Addresses at Three Schools, Some Ideals of Public Life, November 7, 1907, Wilson Papers, Vol. 17, 474.

54
. Ibid.

55
. Letter from Junius Spencer Morgan, January 10, 1909, Wilson Papers, Vol. 18.

56
. Letter to Mary Allen Hulbert Peck, October 25, 1908, Wilson Papers, Vol. 18.

57
. Letter to Frank Arthur Vanderlip, April 1, 1908, Wilson Papers, Vol. 18.

58
. Letter to Melancthon Williams Jacobus, November 11, 1908, Wilson Papers, Vol. 18.

59
. Letter from Frank Arthur Vanderlip, December 11, 1909, Wilson Papers, Vol. 19.

60
. Franklin MacVeagh, formerly a wealthy wholesale grocer of Chicago, served as Secretary of the Treasury in the Taft administration.

61
. Letter to Frank Arthur Vanderlip, December 11, 1909, Wilson Papers, Vol. 19.

62
. Letter from Frank Arthur Vanderlip, December 17, 1909, Wilson Papers, Vol. 19.

63
. Letter to Frank Arthur Vanderlip, December 20, 1909, Wilson Papers, Vol. 19. See also four news reports of Wilson’s address, January 18, 1910, Wilson Papers, Vol. 20.

Chapter 1. The Early 1910s: Post-Panic Creature and Party Posturing

1.
Nelson W. Aldrich Jr.,
Old Money: The Mythology of Wealth in America
(New York, NY: Alfred A. Knopf, 1988). Senator Aldrich’s grandson Nelson Aldrich Rockefeller became a four-term governor of New York and vice president under Gerald Ford.

2
. “Monetary Inquirers Set Sail,”
New York Times
, August 5, 1908.

3
. Julie Miller, “Frieda Schiff Warburg,”
Jewish Women: A Comprehensive Historical Encyclopedia,
Jewish Women’s Archive website, at
http://jwa.org/encyclopedia/article/warburg-frieda-schiff
.

4
. “World’s Money Centre Here,”
New York Times,
March 5, 1910.

5
. Ibid.

6
. “President Stillman Sails,”
New York Times,
August 29, 1910.

7
. Frank Vanderlip,
From Farm Boy to Financier
(New York, NY: D. Appleton-Century, 1935), 210.

8
. Charles F. Speare, “Frank A. Vanderlip, Banker-Journalist,”
The American Review of Reviews,
January–June 1908.

9
. Vanderlip and Sparkes, “From Farm Boy to Financier.”

10
. Ibid.

11
. Author interview with Jekyll Island Museum historical director John Hunter, February 7, 2013.

12
. “Aldrich Not Badly Hurt,”
New York Times,
October 22, 1910.

13
. Author interview with John Hunter.

14
. Ibid.

15
. G. Edward Griffin,
The Creature from Jekyll Island,
5th ed. (New York, NY: American Media, 2010), 5.

16
. Vanderlip and Sparkes, “From Farm Boy to Financier.”

17
. Author interview with John Hunter. In the hotel where the Clubhouse once stood, there are two meeting rooms by the dining room hallway: one is marked “Aldrich,” and the other is marked “Federal Reserve Room.”

18
. Vanderlip and Sparkes, “From Farm Boy to Financier.”

19
. “A Brief History of the Bureau of Engraving and Printing,” paper prepared by the Historical Research Center, Washington, DC, 2004.

20
. Federal Reserve Act, Section 16. “1. Issuance of Federal Reserve notes; nature of obligation; where redeemable: Federal Reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal Reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal Reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.”

21
. Vanderlip and Sparkes, “From Farm Boy to Financier.” In Vanderlip’s account of the men at the Jekyll Island meetings, he omits Charles Norton, president of the First National Bank of New York, as do later versions of Griffin’s
The Creature from Jekyll Island.
The Jekyll Island Museum includes Norton as one of the team members, but it admits that it has not come to a “conclusive” decision as to his presence.

22
. Ibid.

23
. “The Central Bank Question,”
New York Times,
January 17, 1911.

24
. “Partner of Morgan Bank Praises Bank Plan,”
New York Times,
January 20, 1911.

25
. “Aldrich Money Plan Praised in Speech,”
New York Times,
February 5, 1911.

26
. “Vanderlip on Bank Defects,”
New York Times,
February 25, 1911.

27
. Richard T. McCulley,
Banks and Politics During the Progressive Era
(New York, NY: Routledge, 2012), 228.

28
. “Taft Advocates Currency Reform: State Bankers Pleased When He Endorses Aldrich’s Reserve Bank Plan,”
New York Times,
June 23, 1911.

29
. “The Titanic Launched,”
New York Times,
June 1, 1911.

30
. “Money Trust Begins with Coffee,”
New York Times,
May 16, 1912.

31
. Charles A. Lindbergh Sr.,
Banking and Currency and the Money Trust
(National Capital Press, 1913).

32
. “The Money Trust at Work,”
New York Times,
May 25, 1912.

33
. “Questions Annoy Banks,”
New York Times,
June 7, 1912.

34
. “Untermyer Sees Taft,”
New York Times,
September 26, 1912.

35
. “Money Trust Inquiry Halts,”
New York Times,
July 5, 1912.

36
. John Wells Davidson,
A Crossroads of Freedom: The 1912 Campaign Speeches of Woodrow Wilson
(New Haven, CT: Yale University Press, 1956). In his “Speech of Acceptance, Delivered at Sea Girt, New Jersey,” on August 7, 1912, Wilson said, “No mere bankers’ plan will meet the requirements, no matter how honestly conceived. It should be a merchants’ and farmers’ plan as well, elastic in the hands of those who use it as an indispensable part of their daily business. I do not know enough about this subject to be dogmatic about it; I know only enough to be sure what the partnerships in it should be and that the control exercised over any system we may set up should be, as far as possible, a control emanating not from a single special class but from the general body and authority of the Nation itself.”

37
. Ferdinand Lundberg,
America’s Sixty Families
(New York, NY: Vanguard Press, 1937), 114.

38
. Vanderlip and Sparkes, “From Farm Boy to Financier.”

39
. Ibid.

40
. “Wilson Departs with Labor Speech,”
New York Times,
September 2, 1912.

41
. Davidson,
A Crossroads of Freedom,
433. Speech delivered at Georgetown, Delaware, October 17, 1912.

42
. Ibid., 23. Speech of Acceptance, delivered at Sea Girt, New Jersey, August 7, 1912.

43
. October 11, 1912, campaign speech, Wilson Papers, Vol. 24, 1912.

44
. According to the November 6, 1912, edition of the
New York World,
the popular vote was Wilson 6,293,019, Roosevelt 4,119,507, Taft 3,484,956, and Debs 901,873. The vote in the Electoral College was Wilson 435, Roosevelt 88, and Taft 8.

45
. “Thinks Only Wilson Will Curb Trusts,”
New York Times,
November 4, 1912.

46
. Letter from Samuel Untermyer, November 6, 1912, Wilson Papers, Vol. 12.

47
. Letter to Untermyer, November 12, 1912, Wilson Papers, Vol. 12.

48
. Henry Park Willis (1874–1937) was an adjunct professor and professor at Washington and Lee University from 1898 to 1905 and a professor of finance at George Washington University from 1905 to 1906 and 1907 to 1912. At various times after 1901, he was a financial writer and correspondent for the
New York Evening Post, Springfield Republican,
and
New York Journal of Commerce.
He was a consultant to the House Ways and Means Committee in 1911 and to the House Banking and Currency Committee in 1912. Fifteen years earlier, Willis had served on a private banker-sponsored commission to promote an earlier version of monetary reform.

49
. Letter from Carter Glass, November 7, 1912, Wilson Papers, Vol. 12.

50
. Glass and Willis conferred for two hours with Wilson in his home in Princeton on December 26. Wilson was in bed with a severe cold. The discussion centered around a draft of a banking and currency reform bill, which Willis had drawn up for Glass’s subcommittee. It called for a decentralized, privately controlled reserve system with an unspecified number of local reserve banks, each having the full reserve banking system’s power. Wilson agreed with most of the provisions of the draft but doubted that Willis’s plan to give the comptroller of the currency general supervisory authority over the reserve system would provide sufficient coordination and control. Willis felt that the conversation indicated clearly that Wilson “was desirous of effecting a substantial degree of centralization, although heartily maintaining the concept of local self-control. . . . It appeared probable that he would favor an organization designed to control and supervise and that he felt no partiality to the idea of a central bank. He recognized that such an organization was politically impossible even if economically desirable, and that what was to be sought was the provision of those central banking powers which were unmistakably desirable and the elimination of those central banking powers which had caused danger in the past.” Henry Parker Willis,
The Federal Reserve System: Legislation, Organization and Operation
(New York, 1912).

51
. Letter from Carter Glass, December 29, 1912, Wilson Papers, Vol. 12.

52
. “Taft Won’t Aid Hunt for Bank Secrets: Declines to Order Controller Murray to Aid the Pujo Money Inquiry,”
New York Times,
December 29, 1912.

53
. “Investigation of Financial and Monetary Conditions in the United States under House Resolutions Nos. 429 and 504, Part 28,” (Washington: Government Printing Office, 1913). Also referred to as the “Final Report of the Pujo Committee,” February 28, 1913, at
http://fraser.stlouisfed.org/docs/historical/house/money_trust/montru_pt28.pdf
. Wash sales would be
employed in spades during the pre-Enron and WorldCom frauds of the early 2000s. Short sales would be used liberally in the same period and during the 2008 financial crisis.