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Mariner Eccles, who at times seemed to be a pre-Keynes Keynesian (difficult to visualize), by uttering little snippets which Keynes expounded on at length, was dealt with at length in the O&G Central Bank and Monetary Policy, a series of some three dozen "chapters" viewing Fed development from its founding in 1913 through the thirties and WWII tomore recetn "adventures".
Eccles came on the scene in a flash, outmaneuvering seasoned Washington politicians, Carter Glass and Henry Steagall, shining brightly before the 1935 committee in laying out provisions for improvements needed by the faltering Fed banks in an honest effort to support their emergence into something more in line with today's Fed construct. More needed to be done, but precisely what that might be had yet to be learned, which upstaged Carter Glass, a former House Representative of long standing, an ex-Secretary of Treasury through WWI, and in the thirties serving in the Senate, in the process, Eccles alienated him as an ally. Glass was opposed to the direction Congress took because it was a strength he had not contemplated and thought unsuited to the US banking system. But, Eccles prevailed in the restructuring due to his brash, presumptive attitude.
As for the quote that neoh offers, it isn't surprising. Eccles was a successful banker, a self-made millionaire while still in his twenties with a string of banks in Utah. He had built a chain strong enough to withstand the pressure of the early Depression years, not one of which closed, and not one of his depositors is reputed ot have lost money. This, perhaps more than his other talents, a schooled Economist being among them, probably provided the strongest recommendation to the new president, FDR, for the appointment to the new position of Chairman of the new Federal Reserve System as drawn up in the 1932, 1933 and 1935 Banking Acts. The series Banking Acts reshaped the Fed into the form that exists today along with creating the FDIC and defining its operation.
Eccles obviously was an astute banker and if not for the political wrangling Washington politicians are so immersed in, could have been the preeminent Chairman of the Fed, he offered such promise, His one fault may have been his uneven executive talents for surviving in Washington's competitive atmosphere. He relied on his strong arguments that one time in 1935 and ratcheted down to a lower level shortly after. The strength of his reputation carried through to post WWII through the Truman presidency; he was one of the two delegates appointed to attend the important Bretton Woods meeting in 1944, along with Harry Dexter White.
As for the statement quoted above, although not surprising it prompted a chuckle. Immediately, thoughts went back to the O&G series on Central Banks - in particular from his entrance into the narrative (about a dozen and a half paragraphs into "O&G's Corner: 026 Central Banks: Monetary Policy. . . " to a point about halfway through the following chapter.
No, it isn't surprising and much in line with what we think here; that might explain some of the difficulties he experienced during his long service at the Fed. But, then, he isn't the only old timer who thought along those lines - nor the first at any rate!
Nice find, neoh.
BTW, in re-reading the O&G Central Bank series, surprising how much of it is still appropriate reading today, relative to the Fed, and the development of monetary policy as well. Reasserts the perspective of where we've been and how we progressed. Also, demonstrates that the leaders through the Fed's history didn't have an easy time of it. Except for a few of the later leaders, who simply did not allow outside opinions bother them.
Had to resort to this again - 403 nuisance is still at work!