Lords of Finance

by on December 22, 2008 at 7:32 am in Books, History | Permalink

The author is Liaquat Ahamed and the subtitle is The Bankers who Broke the World but no it’s not about today it’s about the 1920s:

This book traces the efforts of these central bankers to reconstruct the system of international finance after the First World War.  It describes how, for a brief period in the mid-1920s, they appeared to succeed; the world’s currencies were stabilized, capital began flowing freely across the globe, and economic growth resumed again.  But beneath the veneer of boomtown prosperity, cracks began to appear…The final chapters of the book describe the frantic and eventually futile attempts of central bankers as they struggled to prevent the whole world economy from plunging into the downward spiral of the Great Depression.

The 1920s were an era, like today’s, when central bankers were invested with unusual power and extraordinary prestige.  Four men in particular dominate this story: at the Bank of England was the neurotic and enigmatic Montagu Norman; at the Banque of France, Emile Moreau, xenophobic and suspicious; at the Reichsbank, the rigid and arrogant but also brilliant and cunning Hjalmar Schacht; and finally, at the Federal Reserve Bank of New York, Benjamin Strong…

I am enjoying this book very much, though it terrifies me as well.  I hadn’t known that Norman, later in his life, thought he could walk through walls.  Nor did I know that in the 1920s one-third of the population of the state of Colorado lived there as a (supposed) respite from tuberculosis.  You can buy it here.

1 Michael Tinkler December 22, 2008 at 8:53 am

A 50 year old friend of mine was a third generation Denver person. She was raised not to shake hands with strangers – you assumed they’d moved to Colorado for their health.

2 AR December 22, 2008 at 10:28 am

“The author is Liaquat Ahamed and the subtitle is The Bankers who Broke the World but no it’s not about today it’s about the 1920s”

Tyler Cowen is above punctuation.

3 Gadfly December 22, 2008 at 12:26 pm

The federal reserve corporation has failed it’s mandate miserably numerous times and now it is time to go Andrew Jackson on it and end the fed!

4 MH December 22, 2008 at 4:45 pm

I’d love to hear that Strong moved to Colorado because of his TB and that’s why we have the Denver Mint.

5 Hoover January 3, 2009 at 3:50 am

Interesting how the French, English and German bankers are portrayed as dysfunctional, while the American gets a free pass.

Still, I suppose that’s how history gets written.

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