Montagu Norman, Benjamin Strong and the run-up to the Great Depression
There are actually two other key central bankers, Hjalmar Schacht of Germany and Émile Moreau of France, in Liaquat Ahamed's new book about the causes of the Great Depression, Lords of Finance: The Bankers Who Broke the World—but I felt the title for this post was getting a little long. I talked to Ahamed a few days ago about that motley monetary crew of the 1910s and 20s—an eccentric, an invalid, an opportunist and a xenophobic civil servant—and what lessons we did (or didn't) learn from the suddenly resonant era. You can read the exchange on Time.com by clicking here.
Barbara!
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1
For some reason I think it's really important to mention that Hjalmar Schacht was born in Brooklyn and that his full name was Hjalmar Horace Greeley Schacht. So here goes: Hjalmar Schacht was born in Brooklyn and his full name was Hjalmar Horace Greeley Schacht. Which explains everything.
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2
I may have inaccurately related that anecdote to you, Justin. Horace Greeley Hjalmar Schacht was actually born in the small German town of Tingleff in North Schleswig (just to clarify where Tingleff is), but his parents had recently moved back from Brooklyn, where his father had become quite an admirer of the editor of the New York Tribune—hence the first two names. His grandmother, though, insisted the boy have at least one German or Danish name (his mother was Danish), hence the Hjalmar. That's the name he grew up with, although later in life some of his English friends and associates called him Horace. If you really want to get into it, I think it's safe to say that Schact was conceived in the U.S., since he was born "a few months" after his parents' return. But someone who better understands how long it took to travel the Atlantic in 1876/77 might very well disagree.
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Schacht is a fascinating character and deserves a book all his own if he doesn't already have one. He resigned from the German central bank on the cusp of the Great Depression, but then came back to it once the Nazis took over. Eventually, he fell out of favor with Hitler and was sent to a concentration camp. Later, he was tried at Nuremberg and acquitted. -
3
Oh, it said in several places on the Internets that he was born in Brooklyn. Sorry. (I don't subject my blog comments to the same level of fact-checking as my other work. I guess I should in the future.)
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4
Oh, and by the way, I think Mrs. Curious Capitalist would LOVE it if I announced that I was going to write a book on Hjalmar Schacht.
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And yes, I know it's pathetic that all the comments to this blog post are by the two of us. No one needs to point this out now. -
5
Or that we sit three doors away and could be having this conversation in person.
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All my knowledge of Hjalmar Schacht's birth comes from Lords of Finance, so technically you've consulted more sources than I have. -
6
Bankers! Interesting group of people. I went to my local bank the other day and asked "If I fill out an application for a loan, is it harder or easier to get that loan today than it was two months ago?". The answer: "It is harder because the loan requirements are more difficult". I then asked "What application did the bank need to fill out to get the $125,000,000 from the Treasury a few weeks ago" Answer: no answer, just embarrassed looks on their faces. Then I said. "Let me see if I understand this right. You were given $125,000,000 which you didn't need, but that I (and the rest of the taxpayers) are responsible for), and I can't get a portion of that money to help with my cash flow issues". Answer - no answer.
Soooo, then I said, "Why didn't the government find a way to give that $700,000,000,000 to the holders of debt with the requirement that they pay off that debt to the banks. That way, the debt is less and the banks still get their money" Answer - no answer!
Quite a gimmick they've got, don't you think?
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7
Aw Gary, the poor bank tellers probably had no clue what you were talking about, but pretty funny story.
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The book sounds pretty interesting and I was going to ask if it's available. But after reading Justin and Barbara!'s comments, I realized google would tell me, January 22 for anyone else wondering, foiled again by early review/interview!
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