Sunday, August 31, 2014

What Keynes Really Thought About Fed Chairman Marriner Eccles

The Marriner S. Eccles Federal Reserve Board Building 
The present Federal Reserve building in Washington D.C. is named after Marriner Stoddard Eccles.

 He was appointed by President Roosevelt as the Chairman of the Federal Reserve and was reappointed chair in 1936, 1940, and 1944 and served until 1948. In 1948, President Harry Truman did not reappoint Eccles to the position of chairman of the Fed, however, he remained on the board until 1951.

Eccles had also participated in the Bretton Woods negotiations that created the World Bank and International Monetary Fund. And he was a key player in negotiations that led to the post World War II U.S. loans to Great Britain.

The negotiations between the U.S. and the U.K.were contentious and the U.K.was led in its negotiations by John Maynard Keynes. Here is what Keynes thought of Eccles (from The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order)

Eccles wanted more assurances that the United States would be repaid. If the United States were going to finance a bankrupt concern, it had the right to priority over earlier creditors. Now Keynes was livid. "You can not treat a great nation as it were a bankrupt company." Privately Keynes said of Eccles that it was "No wonder the man is a Mormon. No single woman could stand him."


  1. You should treat a bankrupt (morally and otherwise) "Great Nation" like a bankrupty company. Actually, wasn't Keynes also opposed to treating bankrupt companies like bankrupt companies? Use government spending and funny money emissions and bail them out!

  2. Saw that quote by Keynes, sort of comical, as reading this very book at this time. In part reading to understand process of that time-period, and whether it might be instructive for what I believe is a coming reset of USD as global reserve. The issue of USD tied to gold, but ability to inflate was raised during Bretton Woods, but Treasury danced around it. It of course was a key part of the process, but ultimately gold convertibility ended in Aug. 1971 due to too many dollars floating around globally with not enough US gold to back. After that tether ended, one sees a Hockey Stick type take-off in global USD money supply (which has accelerated since 2008 with Fed QE, as well as other non-reserve fiat monies) Keynes' sparring partner during the IMF phase was Treasury's Harry Dexter White. The U.S. got most of what they wanted at Bretton Woods vs. Keynes/UK due to them having been dependent on the U.S. for war finance, and no longer holding much in gold reserves. In fact, the book asserts the Lend Lease Program issue (U.S. fronted monies to UK for war supplies, and to keep them afloat) was an ongoing concern for British-US interests.

  3. Are we supposed to sympathize with one or the other of these two gems? What lesson are we supposed to take?