Benjamin Strong Jr.

And on the morning of October 22nd, the tellers at Knickerbocker counted out $8 million in a few hours before the doors closed.

A young banker named Benjamin Strong had been sent to examine the books and decide whether the institution deserved a rescue, and he ran out of time before he could finish.

The most powerful man in American finance, J.P. Morgan, decided to let Knickerbocker fall.

Its president, Charles Barney, shot himself three weeks later.

Henry Davidson, senior partner at none other than J.P. Morgan and Company.

Frank Vanderlip, president of the National City Bank, then the largest bank in the country, and Paul Warburg, a German-born partner at Kuhn, Loeb, and Company, who had spent years arguing in public and in private that the American banking system was fragmented to the point of danger and needed a European-style reserve institution.

Some later accounts would also place Benjamin Strong there.

This was the same man who ran out of time on the Knickerbocker's books, though Richmond Fed notes there's no solid evidence that he was there.

There's Montague Norman, who is the governor of the Bank of England.

There's Benjamin Strong, who is governor of the Federal Reserve Bank in New York.

And then we also meet a few folks like Rudolf Havenstein, who was at the Reichsbank during hyperinflation, which gets taken over by Halma Shark, and Émile Moreau, who was the governor of the Bank of France.

Oh, and Junosuke Inoue at the Bank of Japan, who also sort of is the architect of bringing the Bank of Japan into this world of Western finance and financial dominance.

So these are sort of the main characters of the book, and they get to know each other in their early travels.

Benjamin Strong traveled to the UK very early on and after the creation of the Fed.

At this time, Norman was not governor.

He was deputy.

This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences.

Each central bank, in the hands of men like Montague Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, Jean-Marc Schacht of the Reichsbanks, sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.

That is the information that powerful people do not want the common man to know.

Notice that Quigley refers to this group as a network.

So I like that image in there because it just kind of reminds you of what you lost.

back at it but within the space of about nine months exercising that claim became a federal crime punishable by ten years in prison it's hard to overstate how much of a massive change this was to understand how america got to that point we have to examine what happened when the roaring twenties came to a fiery end as a reminder the stock market boom of the nineteen twenties came about largely because benjamin strong at the new york fed held interest rates artificially low throughout the decade he did this as a favor to his friend montague norman at the bank of england that helped prop up the british pound enabling britain to return to the classical gold standard at the pre-war parity And there's a link to that article.

This was last week's post or maybe a month ago about Benjamin Strong at the New York Fed holding rates low against American interests in support of his friend who was in charge of the Bank of England.

And this is part of the value of the Phoenician League is getting this insight.

But that was a really interesting article as well.

strong's again that's benjamin strong new york fed strong's cheap money policies created a frenzy on wall street as americans rushed into the booming stock market many using margin loans to generate leverage those speculators who were early to the boom did quite well but those who didn't get out in time experienced massive losses when the market collapsed on october twenty eighth nineteen twenty nine it was the quintessential boom bust cycle In hindsight, the crash was the predictable result of the Federal Reserve holding interest rates at artificially low levels.

Sound familiar? And here's the irony of it.

Remember how the Federal Reserve was sold to the American public in 1913? Again, a link to another great piece on the history of this.

The problem was quickly solved, however, through a maneuver described at some length in chapter 10.

The Federal Reserve System under Benjamin Strong simply created the need-- the needed money through the mandrake mechanism.

Quote, "The Wilson administration found itself in an extremely awkward position, having to bail out J.P. Morgan," wrote Ferrell.

But Benjamin Strong, quote, "Offered to help Treasury Secretary McAdoo out of the difficulty." Over the following months, in 1917 to 1918, the Treasury quietly paid Morgan piecemeal for the overdraft.

By the time the war was over, the int-- the Treasury had lent a total of $9,466,000,000, including $2,170,000,000 given after the armistice.

That was the cash flow they had long awaited.