By Allan H. Meltzer
Author note: ahead via Alan Greenspan
Allan H. Meltzer's enormous heritage of the Federal Reserve method tells the tale of 1 of America's so much influential yet least understood public associations. this primary quantity covers the interval from the Federal Reserve's founding in 1913 throughout the Treasury-Federal Reserve Accord of 1951, which marked the start of a bigger and drastically replaced institution.
To comprehend why the Federal Reserve acted because it did at key issues in its heritage, Meltzer attracts on assembly mins, correspondence, and different inner files (many made public merely through the Seventies) to track the reasoning in the back of its coverage judgements. He explains, for example, why the Federal Reserve remained passive all through many of the fiscal decline that resulted in the good melancholy, and the way the Board's activities helped to supply the deep recession of 1937 and 1938. He additionally highlights the effect at the establishment of people resembling Benjamin powerful, governor of the Federal Reserve financial institution of recent York within the Twenties, who performed a key function within the adoption of a extra energetic financial coverage via the Federal Reserve. Meltzer additionally examines the impact the Federal Reserve has had on foreign affairs, from makes an attempt to construct a brand new overseas economic system within the Nineteen Twenties to the Bretton Woods contract of 1944 that demonstrated the overseas financial Fund and the area financial institution, and the failure of the London financial convention of 1933.
Written through one of many world's top economists, this magisterial biography of the Federal Reserve and the folks who assisted in shaping it's going to curiosity economists, significant bankers, historians, political scientists, policymakers, and somebody looking a deep realizing of the establishment that controls America's handbag strings.
"It was once 'an unparalleled orgy of extravagance, a mania for hypothesis, overextended company in approximately all strains and in each component of the country.' An Alan Greenspan rumination concerning the irrational exuberance of the overdue Nineteen Nineties? try out the 1920 annual document of the board of governors of the Federal Reserve. . . . to appreciate why the Fed acted because it did—at those severe moments and lots of others—would require years of analysis, poring over letters, the mins of conferences and inner Fed records. this type of job could clearly deter such a lot students of monetary heritage yet now not, thank goodness, Allan Meltzer."—Wall highway Journal
"A seminal paintings that any one attracted to the interior workings of the U. S. crucial financial institution may still learn. a piece that students will mine for years to come."—John M. Berry, Washington Post
"An quite transparent tale approximately why, because the principles that really educated coverage advanced, issues occasionally went good and infrequently went badly. . . . you can actually in basic terms wish that we don't have to attend too lengthy for the second one installment."—David Laidler, magazine of financial Literature
"A thorough narrative background of a excessive order. Meltzer's research is persuasive and acute. His paintings will stand for a iteration because the benchmark background of the world's strongest financial establishment. it truly is a magnificent, even awe-inspiring achievement."—Sir Howard Davies, instances greater schooling Supplement
Alice Hanson Jones Biennial Prize (2004)
Read Online or Download A History of the Federal Reserve: 1913-1951 (A History of the Federal Reserve, Volume 1) PDF
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Additional info for A History of the Federal Reserve: 1913-1951 (A History of the Federal Reserve, Volume 1)
See Viner 1965, chart 1 and table 1, 143–44. For Ricardo’s views on devaluation of the pound see Viner 1965, 204. The Gold Standard Act of 1816 repealed bimetallism in England. central banking theory and practice 33 surplus of £3 million to £4 million per year and used the surplus to retire debt. The net effect of the Treasury’s debt retirements and the special issues to the Bank of England was the same as would have occurred had the bank engaged in open market purchases. The expansive effect of the open market operation on the monetary base and the economy was not entirely unexpected.
Central banking theory and practice 23 Schumpeter 1955, Thornton 1965, Viner 1965, and Wood 1939. Since many of the issues that arose, and their solutions, reflect the economic events of the period, the chapter begins with a description of the background events. The rest discusses three major contributions to monetary and central banking theory that were ignored, at great cost, during most of the twentieth century. First is Henry Thornton’s analysis of the control of money and credit under either a fluctuating or a fixed exchange rate.
Problems of war finance 16 chapter one soon took precedence. During the war, the Treasury’s financial demands controlled monetary policy. After the war, the Federal Reserve faced the problem of freeing itself from Treasury control. Once freed, the System raised interest rates to end inflation. It was more than successful, but at a high cost. Prices and output fell sharply in the 1920–21 recession. The 1920–21 recession and deflation constituted an important milestone. The severe contraction was costly economically and politically.