Because I’ve been asked a couple times in the past few weeks, here’s a short reading list on the history of the Federal Reserve System.
Start with
Sanders, Elizabeth. Roots of Reform: Farmers, Workers, and the American State, 1877-1917. Chicago: University of Chicago Press, 1999.
Read pp. 236-266 and also 471n125.
With this in mind one may then profitably turn to some of the following, depending on your particular interests.
Friedman, Milton and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press, 1963. Particularly chapters 4-8.
Galbraith, John Kenneth. Money: Whence it Came, Where it Went. Boston: Houghton Mifflin, 1975. Particularly chapter 10.
Meltzer, Allan H. A History of the Federal Reserve, 1913-1951. Chicago: University of Chicago Press, 2003.
Further:
Dewey, Davis Rich. Financial History of the United States. New York: Longmans, Green—you need the fifth or later edition. A classic and available in its entirety on Google Books.
And because the modern Federal Reserve is very much a product of the Great Depression,
Chandler, Lester V. American Monetary Policy, 1928-1941. New York: Harper & Row, 1971.
And if needs must: Edward Flaherty on Federal Reserve conspiracy theories.
This is by no means an exhaustive list, of course, but it seems to me a good way to start.
26 comments
October 8, 2008 at 4:06 pm
bitchphd
Semi-ot: this post reminded me to buy “The Great Depression and the New Deal,” and you know how Amazon now has links to ongoing discussions about topics that are supposedly related to the title you’re looking at?
The discussion for your book, dear Eric, was “why is the stock market crashing if Obama is leading in the polls?” Guess what the implied answer was. (link)
October 8, 2008 at 4:07 pm
bitchphd
Oh noes, html troubles. link.
October 8, 2008 at 6:10 pm
Sir Charles
eric,
How could you leave out “Secrets of the Temple” by William Greider? For shame.
October 8, 2008 at 7:24 pm
Dr J
This is enormously helpful, as I have a Ron Paul supporter in my US history survey this semester who wants to take up 10 minutes of class time twice a week to argue his theory that the very existence of the Federal Reserve System is unconstitutional.
You may not have had the pleasure of encountering these strange people, so you may not know how difficult it is not to scream, “Why are you taking your cues for how to interpret the Constitution from a gynecologist?!” when they attempt to engage you in such debates.
October 8, 2008 at 7:34 pm
eric
How could you leave out “Secrets of the Temple” by William Greider?
(a) Sir Charles, I left off a lot of books and
(b) I left them off because I thought they were not as good at introducing people to the subject as these books.
October 8, 2008 at 8:35 pm
bitchphd
Dr. J, let me guess: when you resist his trying to take up class time, he accuses you of censoring him.
(Btw, there’s someone in town who has a big Ron Paul sign that’s been joined by a “Yes on Proposition 8: Save the Children” sign. How someone who is, presumably, a libertarian also buys into the idea that letting gay people marry is a threat to the children is something I don’t really get.)
October 8, 2008 at 8:57 pm
Brad
Thanks for this list, eric. Though getting me to read something by Friedman will be challenging.
Btw, there’s someone in town who has a big Ron Paul sign that’s been joined by a “Yes on Proposition 8: Save the Children” sign.
That is just awesome. B, you bring a smile to my face with that.
October 9, 2008 at 1:08 am
bitchphd
Another winger *not* voting for McCain.
October 9, 2008 at 7:30 am
Student
Also, see Jim Livingston’s well-received “Origins of the Federal Reserve System: Money, Class and Corporate Capitalism” (Cornell University Press, 1986 I think)
October 9, 2008 at 8:10 am
eric
Student, have you read Sanders on Livingston?
October 9, 2008 at 8:25 am
Walt
I was doing a Google search to find out what Eric’s gnomic comment meant, and this post is already number four. (I bet within a day it will be the top hit for “Eric’s gnomic comment”.)
October 9, 2008 at 9:35 am
Student
So Sanders disagrees with Livingston because she thinks that a coalition of farmers, labor and others had a more important role in the creation of the Fed than corporate leaders. I suspect that Livingston disagrees with her reading of the evidence. That historians have such disagreements about the evidence is what makes reading and thinking about history compelling. In any event, Livingston’s book remains an innovative interpretation of the events, with strong evidence and arguments.
October 9, 2008 at 10:19 am
Walt
This is probably the effect of the crisis on my mind, but suddenly “innovative” doesn’t seem like an attractive feature in a historian.
October 9, 2008 at 10:20 am
eric
Sanders doesn’t only disagree with Livingston; she argues, in my view persuasively, that some of his claims are incorrect—hence my suggestion that one should read particularly her 471n125.
I think one gets a fuller story of the Fed’s creation, including an acknowledgment of Livingston’s story, from reading Sanders’s book, than one would get from reading Livingston’s.
October 9, 2008 at 10:35 am
rosmar
I just printed this list, comments and all, so I can get these books. Now if I don’t get tenure (since none of this has anything to do with my “research”), I’ll know who to blame.
October 9, 2008 at 3:02 pm
Student
Sander’s 471 n. 125 is hardly a refutation of Livingston’s argument about the origins of the Fed. All it says is that based on her reading of others (e.g. Schwartz and Friedman) she thinks he’s wrong about the role that the Secretary of the Treasury would actually play on the Board. She may be right on that point but saying that does not exactly undermine the entire enterprise.
By innovative I guess I meant “original”; I think historians like to produce original books.
October 9, 2008 at 3:17 pm
eric
Student, Sanders’s argument over the thirty or so pages I suggested is not only that the Fed came about because of a coalition of farmers etc. but that it looked the way those people would have liked, and not the way Livingston’s people would have liked.
Livingston places a great deal of emphasis on the machinations for a central bank that occurred during the Taft administration. The point is not merely that the Fed was actually created during the Wilson administration; the point is that the Fed looked the way Wilson’s constituents would have preferred, and not the way Nelson Aldrich and his allies would have preferred—much more decentralized, much more government control.
I think it’s useful to recall that Republican interests had a plan for a central bank before they lost control of the House in 1910 and the rest of the government in 1912, but it’s also vital to note that the Federal Reserve Act was much more the creation of Carter Glass (and Democrats who were even more Bryanite than Glass) than of those of Republicans.
The note is useful because it indicates not only was the Fed the creation of those Democrats, in its original incarnation it actually behaved more the way they would have liked than it did the way Livingston’s subjects would have liked.
I think to really complete the story, one would have to go on to say that Wilson appointed to the Fed people like Paul Warburg, who thought rather more like a Livingstonian than like a Sandersite.
But the Sanders story seems to me essential: the route from the National Monetary Commission to the Fed has to go through a Democratic Congress and President. You can treat that as a detail if you hold to a view of history in which, as (I think) James Weinstein wrote in a review of Sanders, the rise of capitalist forces was “inexorable”; if you don’t think of history in that way, you really need to tell that story with slightly more regard for incident.
October 9, 2008 at 3:18 pm
eric
I don’t, by the way, say you shouldn’t read Livingston; you probably should. You should probably read Greider, too, and also Richard Timberlake. I did say this was how I think one should make one’s way in to the topic.
October 9, 2008 at 5:00 pm
James Livingston
My book on the Fed escapes the fetters of Progressive historiography, which invariably posits the people vs. the plutocrats, reform vs. the interests, etc., as in Sanders’s reinvention of the wheel built by John D. Hicks and Lawrence Goodwyn That is its principal virtue as a monograph.
But by the same accounting, it also gets us beyond Wiebe and Kolko and Weinstein, and all the related arguments that fall back on “co-optation” and false consciousness. Corporate leaders and country bankers and jackleg farmers shared a very live interest in the radical reconstruction of the competitive market system–a system that, everyone knew, was not self-regulating but self-destructing at the end of the 19th century.
Sanders doesn’t understand a simple fact of American politics: crisis and class struggle create the conditions and the imperative of reform, but reform as such is always carried out by cross-class coalitions. I don’t entirely neglect the farmers, I merely claim that they acted within the cultural/ideological consensus already established by a corporate-industrial ruling class. See, for example, my p. 218 n. 4, offered in the spirit of her p. 471 n. 25.
For my take on the financial system and the current economic crisis, look me up at http://www.historynewsnetwork.org, going back to last August, ending for the time being at the Week of October 6th, 2008.
You should definitely read Livingston, Student–he’s more fun, at any rate, than the dreaded Timberlake and the earnest Sanders.
October 9, 2008 at 5:37 pm
andrew
suddenly “innovative” doesn’t seem like an attractive feature in a historian.
Too much derivative work could bring the whole field down.
October 10, 2008 at 11:48 am
Student
I’ve read Livingston’s book, which is why I recommended it earlier in this discussion. The point about cross-class coalitions as central to negotiating social and political reform is an excellent one, which I think is also central to the book by Martin J. Sklar on “The Corporate Reconstruction of American Capitalism.” Both books are superior to Sanders, who doesn’t, I agree, understand the extent to which corporate capitalists had established a new “consensus” within which other social classes operated politically. That doesn’t mean that corporate capitalism could not be adjusted or modified over time (e.g. it was during New Deal) or that corporate capitalist ideology would not change.
Enough of this: have the creators of this blog noticed that in recent newscasts, we’ve been told that the Great Depression was only a US phenomenon, not an international one like the current crisis. I think I heard it on NBC the other night. A stunning display of historical ignorance if I heard it right.
October 10, 2008 at 1:23 pm
eric
Thanks for showing up, Professor Livingston. I think it’s safe to say I have a higher opinion of Elizabeth Sanders’s work than you do, but I certainly agree with you that it’s essential to realize that reform in the Progressive era was carried out by cross-class (and cross-sectional) coalitions.
I have an essay on this, but I’ll wait till I do a Short Reading List on Progressive Reform to cite it.
October 10, 2008 at 1:24 pm
eric
Student, I haven’t heard anyone saying that, but you’re absolutely right that anyone saying that is not terrifically well informed.
October 11, 2008 at 11:45 am
Weekend Reading When The News Cycle Catches Its Breath – Bottomfeeder
[…] friend Eric Rauchway has a helpful list of other good books to […]
October 13, 2008 at 9:42 am
Scott Fox
I enjoyed G. Edward Griffin’s, The Creature from Jekyll Island. Well researched and very forthright.
October 13, 2008 at 10:17 am
Walt
The Creature for Jekyll Island is a mixture of clear exposition and paranoid conspiracy theorizing. Not recommended.