A Series of Plots, Visions and Illusions
THAT summer of 1927 when the President was in the Black Hills, stirring up American politics with his puzzling renunciation of a third presidential term, a small but significant gathering was meeting in early July in New York City. It came about in this way: That year a number of important developments in the United States and in other countries combined to create a demand for further liberalization of the Federal Reserve credit policy. The alarming business recession which occurred in the United States in the early part of that year and which Mellon and Coolidge checked by optimistic statements was part of an international slump. European nations had been losing gold to the United States. A number of these nations, notably Great Britain, were in danger of a collapse of their recently established gold standards unless the pressure on their gold reserves could be relieved. This condition intensified exchange difficulties. Also foreign purchases of American products were hampered, particularly agricultural commodities.
In an effort to resolve these difficulties a conference of four central international bank governors was held in New York early in July, 1927.1 In attendance at the meetings were Governor Norman, of the Bank of England; Professor Charles Rist, deputy governor of the Bank of France; Dr. Hjalmar Schacht, president of the Reichsbank; and Governor Strong, of the Federal Reserve Bank of New York. Governor D. R. Crissinger, of the____________________