IDEAS home Printed from https://ideas.repec.org/h/pup/chapts/8243-1.html
   My bibliography  Save this book chapter

Introduction to When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy

In: When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy

Author

Listed:
  • William L. Silber

    (Stern School of Business, New York University)

Abstract

When Washington Shut Down Wall Street unfolds like a mystery story. It traces Treasury Secretary William Gibbs McAdoo's triumph over a monetary crisis at the outbreak of World War I that threatened the United States with financial disaster. The biggest gold outflow in a generation imperiled America's ability to repay its debts abroad. Fear that the United States would abandon the gold standard sent the dollar plummeting on world markets. Without a central bank in the summer of 1914, the United States resembled a headless financial giant. William McAdoo stepped in with courageous action, we read in Silber's gripping account. He shut the New York Stock Exchange for more than four months to prevent Europeans from selling their American securities and demanding gold in return. He smothered the country with emergency currency to prevent a replay of the bank runs that swept America in 1907. And he launched the United States as a world monetary power by honoring America's commitment to the gold standard. His actions provide a blueprint for crisis control that merits attention today. McAdoo's recipe emphasizes an exit strategy that allows policymakers to throttle a crisis while minimizing collateral damage. When Washington Shut Down Wall Street recreates the drama of America's battle for financial credibility. McAdoo's accomplishments place him alongside Paul Volcker and Alan Greenspan as great American financial leaders. McAdoo, in fact, nursed the Federal Reserve into existence as the 1914 crisis waned and served as the first chairman of the Federal Reserve Board.

Suggested Citation

  • William L. Silber, 2007. "Introduction to When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy," Introductory Chapters,in: When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy Princeton University Press.
  • Handle: RePEc:pup:chapts:8243-1
    as

    Download full text from publisher

    File URL: http://assets.press.princeton.edu/chapters/i8243.pdf
    Download Restriction: no

    File URL: http://assets.press.princeton.edu/chapters/i8243.html
    Download Restriction: no

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. To RMB or not to RMB? Lessons from Currency History
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2014-08-18 15:42:16
    2. Is China's devaluation a game changer?
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2015-08-30 19:04:01
    3. 'Is China's Devaluation a Game Changer'
      by Mark Thoma in Economist's View on 2015-08-30 14:41:03
    4. Donald Trump, Treasury Debt and the Dollar
      by Stephen G. Cecchetti in Huffington Post Business on 2016-05-24 09:01:07

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:bla:intfin:v:19:y:2016:i:3:p:353-374 is not listed on IDEAS
    2. Rockoff, Hugh, 2015. "O.M.W. Sprague (the man who “wrote the book” on financial crises) and the founding of the Federal Reserve," Journal of Financial Stability, Elsevier, vol. 17(C), pages 35-45.
    3. Tallman, Ellis W. & Gorton, Gary, 2016. "How Did Pre-Fed Banking Panics End?," Working Papers (Old Series) 1603, Federal Reserve Bank of Cleveland.
    4. Jacobson, Margaret M. & Tallman, Ellis W., 2015. "Liquidity provision during the crisis of 1914: Private and public sources," Journal of Financial Stability, Elsevier, vol. 17(C), pages 22-34.
    5. Michael D. Bordo & Christopher M. Meissner, 2015. "Growing Up to Stability? Financial Globalization, Financial Development and Financial Crises," NBER Working Papers 21287, National Bureau of Economic Research, Inc.
    6. Michael Bordo & Robert N McCauley, 2017. "Triffin: dilemma or myth?," BIS Working Papers 684, Bank for International Settlements.
    7. William D. Craighead, 2010. "Across Time And Regimes: 212 Years Of The Us-Uk Real Exchange Rate," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 951-964, October.
    8. George S. Tavlas, 2016. "New Perspectives on the Great Depression: A Review Essay," International Finance, Wiley Blackwell, vol. 19(3), pages 353-374, December.
    9. Gary Gorton, 2015. "Stress for Success: A Review of Timothy Geithner's Financial Crisis Memoir," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 975-995, December.
    10. Bernstein, Asaf & Hughson, Eric & Weidenmier, Marc D., 2010. "Identifying the effects of a lender of last resort on financial markets: Lessons from the founding of the fed," Journal of Financial Economics, Elsevier, vol. 98(1), pages 40-53, October.
    11. Gabriel P. Mathy & Matthew Jaremski, 2016. "How Was the Quantitative Easing Program of the 1930s Unwound?," Working Papers 2016-01, American University, Department of Economics.
    12. Caroline Fohlin, 2016. "When 'No News' is Bad News: Complexity and Uncertainty in the Global Crisis of 1914," Emory Economics 1606, Department of Economics, Emory University (Atlanta).
    13. repec:spr:cliomt:v:12:y:2018:i:2:d:10.1007_s11698-017-0161-1 is not listed on IDEAS
    14. repec:bla:ecinqu:v:55:y:2017:i:1:p:527-541 is not listed on IDEAS
    15. Ellis W. Tallman & Jon R. Moen, 2018. "The transmission of the financial crisis in 1907: an empirical investigation," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 12(2), pages 277-312, May.
    16. Acheson, Graeme G. & Coyle, Christopher & Jordan, David P. & Turner, John D., 2018. "Share trading activity and the rise of the rentier in the UK before 1920," QUCEH Working Paper Series 2018-04, Queen's University Belfast, Queen's University Centre for Economic History.

    More about this item

    Keywords

    Wall Street; William McAdoo; monetary crisis; gold standard; New York Stock Exchange; currency; bank runs; crisis control; Federal Reserve;

    JEL classification:

    • I - Health, Education, and Welfare

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pup:chapts:8243-1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster). General contact details of provider: http://press.princeton.edu .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.