Posted by: Dirk | August 2, 2007

(Book review) When Washington shut down Wall Street

The book is subtitled: The Great Financial Crisis of 1914 and the Originis of America’s Monetary Supremacy. In it, William Silber gives an account of how the U.S. succeeded the U.K. as the world financial superpower. The story he tells is quite interesting, introducing a lot of characters of the financial sector of New York (naturally). The chapters are ordered around topics, so at times the reader has a deja vu experience. The first two chapters deal with the start of WWI and how European’s rushed to collect their gold. Chapter 3 is a flash back, jumping to 1907. The financial crisis of that year led to damage of the US-$’s reputation. Chapter 4 describes the unlocking of emergency currency in order to evade a bank run at home. Chapter 5 and 6 deal with problems along the way, namely with the UK setting up a branch in Ottawa and a black market opposite of Wall Street. Chapter 7 describes how NYC was rescued and paid its financial obligations, chapter 8 the role of cotton exports and setting up the Federal Reserve System. In Chapter 9 the US turn into a financial superpower during WWI, leaving the UK behind. There is a small epilogue highlighting the leadership of William G. McAdoo, the mastermind behind turning a looming crisis (gold withdrawal by European nations) into triumph.

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