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'.'-fen Young
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I-learned last week from either Dr. Stewart or Mr. Pdeflex*, and I think it was
- Dr. Stewart, that when Strong was told by the doctors he was to go to the hospital and
knew it was possibly for the last time, he called Owen Young in the middle of the night ;
and sent for him*
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It wag to Owen Young that Strong dictated what was to all intents
and purposes his last will and testament concerning the Federal Iteserve batik of ^ev
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It would be interesting to find out why he called Owen Young rather than
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George Harrison, who isSupposed to have been his chosen successor. It a s y have'been as
simple a reason as 1 that Harrison was not at hand, or it may have had something to do
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: with the fact that some friction had arisen between Harrison and the Board. In any event,
that is the story*
It should be noted that Owen Yo\mg was a director of the New Xork Bank froa"
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He was Deputy Chairman -from 1 9 ^ to 1938, then Chairman «*-!94l.. In
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other words, his contact with the bank and his effect on it extended over at least 18
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years and included the period of the Young Plan (I am not sure of that date), certainly
the Dawes Plan, and the whole range of European effort on the part of Benjamin Strong.
• . . ^ During that period, Young was, of course, extremely active in the affairs of the General
Electric, so that the actual time he spent on the affairs of the bank must have been
somewhat limited. However, this make3 It more than ever obligatory that we get in touch
.:"'."••, with Mr. Young as soon as he comes back from Florida in the spring*
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The Young files are in a steel vault built into a small stone, steel and
concrete building in the village of Van Hornesvllle, in vhich Mr. Xoung makes his
home. The buildings vhich contains his office and two subsidiaiy offices, as veil
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as the steel vault room, was erected for him by hlsrsoni* Charles, on the site of
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the'little red school house vhere Mr* Oven Xoung attended school in the 1880fs#
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All these files are set in manuscript boxes on steel shelves. A quick
estimate indicates that there are at least 64O of them. Some contain clippings, but
most of them are office files vhich have been brought from the various enterprises
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in vhich Mr. Xoung has been engaged* /
Of these some 10 boxes are concerned vith Federal Reserve matters and are
so labelled*
A veiy small sampling indicated that the secretary had put files
concerned vith System matters in chronological order. Each box seemed to contain U
file folders vith papers stapled into each folder. 2 of these were correspondence,
the other 2 were labelled "Miscellaneous,"and contained pamphlets, speeches, and
illustrated documents to vhich the correspondence might bear reference.
Mr. Young1s years in the Nev York Federal Reserve Hank as director and as
•j' chainnan began in 1923 and ended in 194-0• A sampling cif boxes for the first fev
years shoved veiy little of interest, outside of such routine matter as might have
been handed to a director. Vith the years 1927 and 1928, the interest picked up.
.'>'• s The explanation of the small amount of material in earlier years may lie
in the fact that from 1924 to 1932 Mr. Young vas actively interested in the Daves
and the Young Flans* It is not impossible that boxes bearing labels vhich refer to
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vork on those tvo plans might have correspondence vith Mr. Strong, or Mr. Case, or
other officials of the Federal Reserve Bank. Certainly, anyone vorking on these
papers vould vant to make a search in boxes bearing other labels than those of the
Federal Reserve System proper.
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Mr. Yqmig,who is now 80, apparently intends to leave his files in Van
Homesville in such shape that students wishing to deal with his own life or with
enterprises in which he has been interested (the General Electric Company, the Radio
Corporation of America, the Federal Reserve Bank of New York, and so forth) may come
to Van Homesville to work with them. He spoke of legal frays in which some of his
files had contained essential material and said that he had told the lawyers they
could come there and study them, but that they could not be taken out of Van Homes- ) Cl?<C|
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When I told him that Ogden Mills1 files had gone to the Library of Congress,
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he said, "That is a cheaper way of handling them than to build a special building for
them here." It is, of course, possible that after his death his executors and heirs
may make other disposition of the papers. Meanwhile, they form a remarkable personal
record of years of work that date back to 1896 and that cover the cJe\/ebpnenT'0f
,;,<- eSfectric power and communication in the United States, as well as diplomatic and
financial achievments leading out of this.
Mr. Young's welcome was warn and generous. Wow that the sampling of files
has been done, and some sense of what they contain has bben obtained, he suggested
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that I come back and spend a longer time working on them. Dr. Lester Chandler is to
be there on Monday, August 1 (my visit was Thursday and Friday, July 28th and 29th).
It is probable that he thinks of these files as giving the material for a
comprehensive biography which may be written of Owen D. Young and for any histoiy of
the General Electric, the Radio Corporation of America, the Federal Reserve Bank,
the Dawes and the Young Plans, and any other considerable enterprise with which he
had to do.
A few items indicate how valuable the material in the files might be.
Letterbox number 273 includes a letter from Mr. Morris, President of the Federal
Reserve Bank of Philadelphia, to Mr. J. E. Case, at that time Deputy Chairman of the
Federal Reserve Bank of New York, concerning, the struggle which, was apparently going
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on between the banks and Mr. Crissinger, appointed by Harding (President Harding) to
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* y~ the Federal Reserve Board. Mr. JNorris expressed politely his willingness "to do
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etveiything possible to meet the views of the Treasury Department" - - - "but this
must not be construed as a willingness to surrender the powers expressly confered
by the Act, and naturally attaching to the degree of responsibility the directors
of Reserve Banks eo&ef$t for the management of their several institutions«" Mr.
Crissinger had wanted the Open Market Committee to sell all government securities
in the banks* Mr. Morris1 protest was probably that of several banks and made by
agreement.
Box number 264. contains a cablegram dated November 12, 1928 from Mr.
Young to Parker Gilbert asking him whether he might be interested in the presidency
of theflewYork Federal Reserve Bank. Mr. Gilbert declined, but the fact of the
cable puts a large question mark on the present belief that Mr. Harrison was the
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universal choice to follow Mr. Strong on ttte latter1s death.^
Box 266 contains a speech of Mr. John Foster Dulles dated June 1929 in
regard to the Federal Reserve System, then under heavy attack. This speech -w&& heard
by contemporaries as being a veiy lucid account of what the Federal Reserve System
. was doing in regard to the rising prices on the Stock Exchange.
This same box
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contains the Federal Reserve Bank release to news-
papers on Mr. Strong's death and indicates that it was the work of Owen Young. Mr.
Young1 s assistant at that time was Mr# Everett Case, now president of Colgate, and
it is not impossible that it was Mr. Case's draft which formed the basis of this
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release and which was so highly pr&ised.
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froia 1923 to 1927, Cia^s C director from 1927 to 1935, deputy chairman from 1927
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to 1938, chairman from 1933 to 1940* during the years of deputy and chairman
he undoubtedly occupied the appropriate directorships*
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His service irt • the Bank stemmed directly out of the sequence of his
career, and a statement of that career becomes important at this moment*. Mr.
Young, vho vas born in Van Hornesville, got hi3 degree of bachelor of lavs and .,. .
letters at Boston University in 1896* He entered immediately upon the practice
of lav in Boston,/and 'vas a member of the firm of l^ler and Yourfg,until 1913.
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In that capacity he had represented the then-young construction firm of Stone $nd
Webster. He had also had experience vith various old real estate trusts in
Boston, including one called The Fifty Associates* One of these ovned buildings
was rented by Russians, and the rent vas paid in "Russian sable iron." When
World War I ceme and iron could no longer be imported in payment of this rent,
the case vent to the Supreme Court in anfeffortto get the payment in sable iron
translated correctly into a more recognized and useable medium of exchange.
These experiences formed an introduction to Mr. Young's interest in financial and
monetary problems.
As a lavyer in Boston, Mr, Young von a case against the General Electric
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and vas thereafter engaged by that firm and asked to go to Nev Xork. As counsel
for the General Electric he had to do vith holding company problems and the
financing of public utilities. This led him into contact vith bankers and banks.
He became a director of the Bankers Trust and in that capacity met Benjamin Strong
and learned a good deal about the financing of corporations*
.Mr. Young says that he had no interest at that time in the nev Federal
Reserve Act. He vas avare of its existence but paid no attention to it. He had,
hovever, established contact vith Woodrov Wilson and had spoken for him vhen Mr.
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Wilson ran in Boston in 1912.
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Vhen World War I ended in 1917, Mr. Benjeitin Strong, then Governor of_
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the Federal Reserve Bank of Hew York, vent to Seward Prosser who thereafter called
Mr. Young in and said that Mr. Strong wanted him, Mr. Young, to come onto the
Federal Reserve Bank's board, but Mr. Prosser wanted him to stay on the board of
the Bankers Trust. However, Mr. Young wa3 interested in the public service, and
the Bankers Trust board released him to go onto the board of the Federal Reserve W ^ S ^ H L I
Bank.
He i s sure that Mr. Vilson remembered him sufficiently so that when his J*ytj;t cov^^^iifJ
appointment came up, it was approved without difficulty.
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Mr. Young said that from 1913 to 1923 the problems of the Federal
Reserve Bank and Board were mostly domestic.
largely a domestic matter.
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Even the financing of the war was
Correcting himself, he said that from 1913 to 1920
he would regard the period as one of the domestic childhood of the Bank.
From
1920 to 1931 he regarded as the teen-age era, in which the Banks were growing,
facing a multitude of new problems, and acting in a more or less awkward and sometimes rebellious fashion.
From 1931 to 194-0 the New York Bank had entered onto
its maturity, being then a great central bank fully grown and occupied with international as well as national problems.
He thought that the childhood of the Bank had been greatly accelerated
by World War I and the vast Federal financing problem,
There were enormous
personnel problems, and from 1917 to 1920 the.-New York Bank grew from a staff of
500 to a staff of 5*000 and faced all the problems which one would expefit from
such enormous expansion.
Speaking of the financing of WTorld War I, Mr. Young said that the
slogan was then r.l,fByy^and,S^)orrowy/Viar Bonds*"
Strong raised it to 6% in 1919.
followed.
^he discount rete was 4 1/2^. Mr.
There was a good deal of stress and strain that
The government wanted to borrow, but fi**st paying 6% on a one-year
certificate«
The Treasury said that that wa3 impossible.
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In an effort to find out more about international financing and how
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Mr* Young1s work in that field had touched edges vith his work as a director of
the Federal Reserve Bank, I asked whether he had had anything to do with the Daves
Plan,
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The question evoked considerable mirth from all three men, as it vas Mr*
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Yoimg who wrote the Dawes Plan.
The progcession was as follows, and here too the line of development
of Mr* Young's own life is a direct and related factor?
The distinguished attorney, Mr. ^harles Hughes, was run for the
Presidency of the United States in 1916 and was defeated.
office in New York.
K^y
He then opened a lav
ment for breaking the Anti-Trust Laws*
Indictment in those days was apparently
a much more serious word than it is now*
indicted, you certainly were guilty*
The assumption was that once you were
The tension in the General Electric board ( 5->\c
of directors was so great that one member (from Pittsburgh) committed suicide,
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At that time the General Electric was under threat of indictr*
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regarding his career ruined and himself come down to shame at the end of an
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honorable life*
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Mr. Young went to Mr. Hughes and retained him as ^prosecuting]
counsel for the General Electric*
(I did not find out what happened to the case*)
Mr. Hughes then became Secretary of State under Mr. Coolidge, and the
high opinion which he had formed of Mr. Young was a factor in his appointment to
the Dawes Committee.
Mr. Young also had had a long connection with Mr* Coolidge, who was in
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Boston as Gcrvwnor^£J4a#sa^husetts a t the time t h a t Mr* Young was there with Tyler \ V5>£u!|
and Young law firm.
General Dawes was made head of the Dawes Committee.
Morrow suggested Young as the other American member*
both assented.)
Dwight
(Mr. Coolidge and Mr. Hughes
Mr* Dawes was always interested in the drama of the situation,
but i t was Mr* Young who did the hard work.
Not only was he the author of the
vplan, but he was apparently the counsel to toe committee during the whole of the
negotiations.
The group working on the Dawes Plan included Mr. Schacht of Germany,
Governor Gorman of the Bank of England, Uovemor Strong of the New York Federal L^f"*^18^.'.'.,;.
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Reserve Bank, Emile Moreau of the Bank of Franco, Erdle Franqui of Belgium who was
known popularity as "the J. P. Morgan of Europe."
Mr. Young said that France played approximately the same role at the
Dawes conferences as she has recently played at Geneva, and history repeats itself
in the public appearance of this countiy. (/' •
This activity of Mr. Young and the fact of Mr. Strong being ^a'-th-a—
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committee actively tied in the New York Bank with the Dawes Committee and the whole
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reparations problem. This connection has been something of a puzsle, and it
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certainly deserves a more detailed study than has yet been given it,
Mr. Young said that the Bank of France was a veiy different from either
the Bank of England or the Federal Reserve Bank of New York. The Governor, Mr,
Moreau;lived in an apartment in the Bank of France. The building had a great
ballroom, and at one time the Moreaus gatfe a great party for Mr. and Mrs. J*
Herbert Case at which champagne was brought up from the vaults of the Bank where
it was regularly stored and provided for the guests.
Going back to the beginning of the Dawes Commission, Mr* Young said that
the Reparations Commission appointed after World War I had wrestled with the financial
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problem from a political point of view, and that they were getting no place with it. '
Mr* Hughes suggested in a speech ^-t-^^aie-comsteneement that the Reparations Commission get in financiers and business men to grapple with these financial problems
and get them in a state which the German economy could absorb. Late in 1923 Mr*
Young and Mr. Dawes were called to Washington to get advice from President Coolidge
before they set off on their mission. After lunch in the White House dining room,
they went upstairs to Mr. Coolidge1s office, which was at that time on the second
floor (this was before the big executive wing had been thought of).
Mr. Dawes and
Mr. Coolidge discussed politics and the political implications of the trip. Mr.
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7- .jig asked, "Mr* President/have you any specific instructions for us?" Mr. Coolidge
considered in silence for a while and then said, Well, if you1 re going to Paris,
I think you T d better take your wives along.11 So far as Mr. Young remembers, those
" were the only instructions which the President of the United States gave the t & w s
Commission at that time.
The story had a second chapter in Paris when work was well along, and
Mr. Young and Mr. Dawes proposed tor^-4*-w^^-f^**-
from the work of the Goas&sMafc*
One of them said,"If we*re going to save civilization, I think perhaps v & M b M ^ v
investigate it," and proposed that they go to the Follies. Three hours lator,
emerging from the Follies, Mr. Dawes said to Mr. Young, "Young, by God, I dcv^t
think it's worth^
One other colorful phrase was remembered. When Mr. Francqui of Bel£iaiaf
who spoke English with considerable difficulty, was very skeptical of Germany1*
convenient protests that she could not pay/ his retort wa3 In his own queer £r*£l1$k,.
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How much you pay at the Rit2 last night, you tell your grandmother, she drop
dead."
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Mr. Young said that the sessions of the Dawes Committee were held behind
closed doors with no press and only a small croup. Mr. Dawes himself handled the
reporters hfter the meetings were over. The sessions were nev«r boring, and the
personal relations were such that no irritations entered in to confuse the arguments. . He mentioned Mr. Dawes as the most colorful character there,yStamp of England,
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Fgpe&d of Italy, and Ponmftntiere of France -who-muet-have-heen::-HrcompaJiyfng^~HoreHu*In August of 1924- a conference was called in London of twenty prince
ministers with MacDonald, the British Labor premier presiding. Mr. Young was asked
to attend in order to answer questions an to the details of the Plan in order to
see if the twenty prime ministers could come to agreement. It was this meeting which
izade it possible to put the Plan into effect.
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It was recognised from the beginning that the Daves Plan must be administered in Berlin, and by unaaimous request Mr. Young was asked to set up the ad-.
lainistrative machineiy, Parker Gilbert was picked to administer the Plan and made
Agent General for Reparations* He ran it until the Young Committee was appointed
to review the progress, success or failure of the Plan* Mr. Gilbert himself wanted
this reviewing done, and it was then that the so-called Young Plan was set up. Mr.
Young himself was chairman, Mr. J. P. Morgan was a member, -eftd-so—aiae-wara Mr.
Thomas Lamont#<&~s £*. c <&/f^*s*d4^L. v
Meetings under the Young Plan included a much larger group and were far '
more d i f f i c u l t to handle.
Results were several.
Pa^er-Gilberti-s^-^lace*/ Gates McGarrah went from the chairaahshio of the Hew York
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Bank to be president of the Reparations-Gommirttee^( Parker Gilbert had asked Mr.
Case to go over^as his assistant, but the Board refused to hold Mr. Case^ job for
him. i Mr. Pierre Jay went over.) The Bank of international Settlements was set up
under the Young Plan. At that time Mr. Shepard Morgan was on Parker Gilbert1 s staff.
The Young Plan endedywith the Hoover Moratorium of 193^
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(it will be seen that none of these memories went into the actual working
of the financial end of the Dawes and Young Plans or their connection with the flew
York Federal Reserve Bank.
"What the Bank loaned and how and why and the relation-
ship between Strong's frequent visits to Europe and the working of these two plans
must all be left for other types of research.)
Mr. McGarrah, who,up to the present time*, ia something of a mystery man
in the histoiy of /the Federal Reserve Bank of New York, was described by Mr. Case V
end Mr. Young as president of the Mechanics and Metals National Barik of New Y0rk,
which was absorbed into the Chase Bank. Mr. McGarrah was chairman of the Mechanics
and Metals at the time of the merger. He then went to the Federal Reserve Bank as
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chairman^* L H e was a vet^ good operating official, had the confidence of Wall Street,
was a steady sound operator,
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Federal Reserve
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by no means an emotional man. Mr. Young apparently
and so did Mr. Case* ^ -: "\
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By 1927* vhen Mr, Young had been on the board of the Federal Reserve Bank
of New York for four years which include^ the setting up and creation of the Dawes
Plan, Mr. Strong was relying heavily on him. In the fall of 1923, whenfeewas to
go back to the hospital for the last time, he phoned Mr. Young from the Rits and
asked him to come over* The two men talked until 2 a.m., and Mr. Strong laid all
the things on his mind concerning the Bank before the younger man* Mr. Strong knew
that he was not going to come out of the hospital, and he told Mr. Young, "This is
my last will and testament so far as the Federal Reserve Bank of New York is concerned."
(Mr• Young told this story twice - the second time his quotation was, t!This is my
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testamentary disposition.") Mr. Young was to see that Mr. Harrison was put in as
governor, and Mr. Harrison was taquiet things with Washington. There had been too
much friction and too much quarreling between the Board and the Bank, and Mr. Strong
knew that this must not continue. Of the possible governors, Mr. Burgess was too
/-> much the academic an<l fee professorial type, Mr. J. Herbert Case who had been chair--\--^ w
m^j'was too much the operating man and not enough a policy man, Mr. Harrison combined
both. His judgment was steady, but he could not build up contacts in Europe as
Strong had done, (in conversation Mr. Young did not mention the fact that he had
queried Parker Gilbert as to whether he, that is Mr. Gilbert, would take the gover^~s
norship of the Bank. It is something on which he might be queried at a moment when
Mr. Case was not present** He may have forgotten, or he may simply have decided it
was not a good moment to mention it* At any rate, Mr* Gilbert refused, but the
existence of a cablegram in Mr* Young's files indicates a lack of complete confidence
in Mr. Harrison which is interesting.)
Mr. Strong's sraunaiy of his last will and testament for the Federal Reserve
Bank included policy questions, personnel questions - it was not orderly, it was a
conversation concerned with all the things which he might have done better, an
over-all review of his years in the Bank and the plans which he had for the Bank for
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he felt that the least that could come out of the banking holiday would be a unified System/ He worked during the holiday with the *sWf of the New York Bank
and the process of getting word from Washington to the local banks* Hour fefter
hour a roll call of upstate banks came into New York, and he had a picture of
men who'd been leading citizens waiting at the telephone to see if their lives 1&H
.yewin ruin around their feet. He also had a picture of the degree .to. .which
local initiative had made these banks possible and would save them if possible.
This aroused a question in his mind on the value of unified banking^ €sad--t£e
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A H three men agreed that the restoration of the banking system and the
return of public confidence took place in remEyrtcably short time*
Mr. Everett Case interpolated a story concerning #r. Young and his father(jftt^V
which he had from Mr. William Woodin. It seems that Mr. Young was at that moment
more optimistic than Mr. Case, and he bet Mr. Case that when the stock market reopened on a Monday, having been closed for a week, it would open at twice the
closing prices. General Electric's stock (Mr. Young was at that time chairman of
the board of General Electric) had closed the previous Friday, at 12. Instead of
opening at twice 12, it opened at 16, whereupon Mr. Case sent Mr. Young 100 shares
of General Electric and got a check back for $2400. Mr. Young's retort to this
story was that, "But I won in the long run."
One other stoiy told by Mr. Young himself illustrated the public reaction
to this time of storm in banks. Mr. Young said that in 1903, when he was a young
and struggling lawyer, a widow named Meg came in and said, n0wen Young, you've got
to buy my fairo." Mr. Young protested that he was in no mood and no financial condition to buy a farm, but the widow persisted. She wanted to sell her farm and she
had chosen Mr. Young, whose father owned the next fanrt, as the buyer. She went on
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to explain her case saying, nAnd I don't want no money for it, I want a mortgage.
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Abe and I, ve agreed that we'd never have any money, we didn't trust it. We'd
have a mortgage.tf Mr. Young commented on this faith in the mortgage rather than
the money by saying that it was a fact that the wealthy country people of that
day were the ones who held mortgages on other men's farms, not necessarily the
ones who had big bank accounts that might fail*
All three men thought that the Banking Act of 1933 vas a logical move
after Strong's death 7 years previously and the determination of the Board that
never again should the New York Bank heve the power which it had had during
Strong's lifetime. The demotion of the governors to being mere presidents was
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psychologically an important matter. The Banking Act/incidentally robbed Mr. J.
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H. Case of a job paying $50,000 a year. He had been chairman of the Bank, and the
chairman henceforth MW&- an honorary title only with a director's payments for
attending meetings. (Check this detail.)
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Mr. Everett Case, going back to the beginning, said that he felt that
competition between flew York and Washington was inevitable from the start of the
System.* It was his opinion that the central Board in Washington with supervisory
powers over the banks was Woodrow Wilson's idea and a talking point with William
Jennings Biyan. Bryan had opposed the Aldrich Plan, and in order to persuade him
as a leading Democrat to back some kind of central banking, it was necessary to
present a palat^able idtea. This form of centralization which did not centralise
was the answer.
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It was Strong and the New York financing of World War I which put New
York into the lead in the picture. Mr. Strong set up what in actuality was not
too far from the Aldrich Plan, and it was his constant aim to make New *ork the
great central bank of this country.
Mr. Eccles, who came in with the Banking Act of 1935, or who was at
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will startle
people vhen too iany people are running too fast, anything that V i U slow them
down, is good and is needed*tt '
Mr. Everett Case produced one phrase which he credited to Walter Vyatt*
Speaking of the conditions before the banking holiday, he said there had been
"competition in lesdty."
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So account of Owen Young in the Federal Reserve Bank, or Oven Young as a
force in industry, -would be complete -without an account of his life in his native
village. He has a peculiarly strong loyalty to the village in vhich he vas born
and in vhich several previous generations of the family lived. This village of Van
Homesvllle lies amid rolling country some 60 miles vest of Albany, between Route
20 vhich vas the old road aloBg^the Mohavk River and the new Nev York State ThroughVay, vhich has largely replaced the old road as a carrier of commerce, important
commerce, to the vest. The village is little more than a small plot of houses on
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rolling land. It is an old village, and 25 years ago it had begun to lose population and vas literally in danger of disappearing. It is Oven Young's loyalty, intelligence and perserverance vhich rescued it from this threatened fate, and vhich
gave it the sound economic background vhich keeps it alive today.
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The village lies along Route^S^, leading north and south. It contains tvo
or three stores, perhaps a dozen houses, of vhich Oven Young occupies one, and his
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son-in-lav, Everett Case, another. y(These tvo houses are the best in tovn;) There
i3 also the office building vhich vas built for Mr. Young on the site of the old red
scIToolhouse* end across from it the mill pond vhich has been there for generations.
The village is painted and^smor-t in appearance. The mill pond is bordered by rolling
grass instead of the bull rushes and svampland vhich vere there 80 years ago, vhen
Oven Young attended school on the spot on vhich he nov does his office vork*
All sorts of stories cluster around the man of such prominence, vho is so
closely identified vith a small village. Vhen the schoolhouse vas dedicated, the
nevspapers sent reporters up vho found a contemporary of Mr* Young's and asked him
hov it vas* that he, the contemporaiy, had stayed in the village vhereas Mr. Young had
traveled all over the vorld. Why vas it that these boyhood friends had not set out
together?
The reply of the contemporary, eomevhat agrieved at the question, vas
"Hov the Hell could I knov he vas going places?" This tale iS told vith glee by the
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Mr* Young himself told the story of how it was that he decided to be a
lawyer, and told it with his customaty dry wit and care for understatement*
It seems ^
that he had come back to Van Homesville from a season in the Academy In Co&pe3*stowrw
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horses harnessed abreast and pulling a spike-toothed harrow. .The ground was heavy,
and young Owen was soft from sitting in school. He found it veiy hard work.
One day his uncle, who was being sued on account of a horse trade, asked him
if he would like to go down to Cooperstown to attend the hearing. This was a treat
S ^ for a farm boy, already feunding the limits of Van Homesville rather narrow, and
tired with heavy farm work. Cooperstown, which in an automobile is perhaps
\5^%$
minutes down the-rcad, was then a three hour trip each way in a horse and buggy.
Court procedures in that town were very simple, end the man and the boy found lawyers
i '•'>•" sitting around a table in their shirtsleeves in a shaded room, laughing and talking.
"They seemed to be having such a good time," said Mr. Young. On the way;back he
asked his uncle If being a lawyer was a way of making a living and if any one of these
men earned as much at it as his father earned with farming. His uncle replied that
they probably earned three times as much. From that moment on young Owen declared
his intention of being a lawyer. Fsr from being the hard end lonely work which he had
done on the farm, this appealed to him as a social trade in which men did not do
hard work, but sat around and had such a very good time, and earned three times as ,
much as could be earned on the farm.
In the telling of this there is no implication that the boy was bright.
This was simply- how it happened, and Mr. Young recognized that the motive which inspired him was not particularly lofty, noble nor bright. Nevertheless, he held
straight to his course. His parents were Universal!sts, and the small Universalist
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Church where they went still stands in the village. St. Lawrence college/nearby was
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-ASijn vhich vas given him by the Etaperor of Japan.
Off this hall, to the left es one eaters, is the sitting-room of the senior
Krs. Young, lt3 vails brovn as they always hnve been, a great wood stove occupying
part of one side, the chairs, the pictures and all the decorations exactly as they
have been all these years.
(Mr. Young probably bought the house somewhere around
1906, and Mr3. Young lived in it for 30 years.)
cs?<~y
Mr. Young's first wife, who came from 4tm.sftTire^rggAoa, died perhaps *k&years ago, and he^married £f£energetic and talented women, who hes "done over" part
of the house. It now contains a dining-room suitable for the Young neo>ds, a new
kitchen and a new drawing room appropriately furnished according to good modern
taste. It was noticeable that noon that Mrs. Young and her friends sat in the new
drawing room, whereas Mr. Young and Mr. Case smoked their pipes and told their tales
in the old sitting room,
Mrs. Young, who has undoubtedly had her troubles with a village so ingrown
as Ven Hornesville, reports that the natives said when her renovations were finished,
"Well, she hasn't changed the look of it much," and that was the highest praise she
got.
Another small detail is the fact that the stairs which were straight and
very steep were moved from the front hall to the middle of the house and made much
easier to mount. Also the powder room is a detail of &£ro± interest. Its wide
marble wash, bowl with a decorated interior comes from a Hudson River house which was
being torn down by one of the sons of Gerard SwopeJ and the wall fellows the decoraA
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tion of the bowl. It is a striking evidence of Mrs. Young's taste.
The office building, which was erected by Mr. Young's son, Charles, for him
(Charles is now an officer in the Radio Corporation of America), is ^ one story-
•£;
building of stone, steel, concrete and wood. It is built in the same general style
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as the schoolhouse, that is, long, low and generous. It contains an office for Mr.
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Young a&& two subsidiary offices for secretaries and a steel and concrete vault in
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which his papers are kept. (See other memo for more detail.) This was put up when
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the old red schoolhouse to which Mr. Young had gone burned, and is on its site. He
is proud that at 80 he looks down on the fair vista he saw vhen he was 8„
Talking of the problems of the town, Mr. Young, who has been.a very tall
man and is still taller than the average(_and very little bent,) took me walking down
toward the schoolhouse. Speaking of the threatened disuppeaivmce of the village, he
said that the inhabitants were moving awcy to larger towns. "Va decided thet if we
were going to keep the village alive, we had to capitalize on the town's two chief
products, milk and babies," he said. They therefore set up a milk station to which
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the fanners in the country roundabout could send their milk for pasteurizing. He
then set about building the sdhool which is still the thing in town of which he is
most proud. He got a well-known firm of architects into consultation, and when they
asked him what kind of a school he wanted, he said he did not want a factory, but
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rather a country club. The school is built of native stone and wood. It sits low on
its site in the center of the village, and is itself a most inviting place. Beside
it is a swimming pool so arranged that little children do not conflict with big ones.
Every child in the school signed a petition to have the swimming pool opened in the
summer, esd it is kept open for the village and the children in surrounding towns who
>w
' come. The school is a central school which draws its population by bus from surrounding towns. It has all twelve grades, from the first through the high school. After
it was built and furnished, Mr. Young gave it to the state of New YorkJ and it is a
regular part of the educational system of the state.
Mr. Young and his friend, Hr» Tilyou, whose names are on the bronze plaque ^
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in the school as "Rockingchair Consultants" (this may be "Rockingchair Counselors," I ^jSyPJ
am not sure;, were wise enough to know that a school by itself was not enough unless
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it could attract the proper teachers, and in order to attract teachers, there had to
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and wood construction as the school was built across the street, and so designed as
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to seem the chief house of the village, Nearby, an old house has been made over into
community living space for single teachers, who have bedrooms there, a community
sitting room, and a community kitchen*
The result of this forethought i3 that Van Hornesville, though small, is
never at a loss for teachers of the highest grade.
Two other enterprises in the town owe their existence to the family. The
second M r s . Young, being interested in textiles, set up a community weaving center,
which has in it at least a dozen looms. At-one time she had a Swedish expert there to
teach people in town who were interested, and there is at least one woman on salary
who keeps the thing going. The difficulty in the summer is that people do not
regularly stay by their work, and there is about the thing a slight aura of amateur
art* Whether this is a disappointment to Mrs. Young or not, end whether she would
have preferred a more professional air, is hard to know on single acquaintance. In
any event, Mr. Young considers this another effort for the town, and while it may not
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be economically profitable, nevertheless he regards it as worthwhile.
The family itself ownn not only the two houses of Mr. Young and Mr. Case,
but also a large house on the edge of the village which is used at times as a guest
house. In addition, Mr. Charles Young has a house above and behind the village
street and is building his children another house higher in the hills, with a
wonderful view of the Adirondacks to the north. '*7&*- X o t ^ - ^ r t ^ ^ ? ^ 4 / V ^
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There is evidence that all during a long life M r „ Young has come back to
the village when he could for summer living. It is probable that he owns a great deal
of farmland in the vicinity. Also he owns a great many shares of the Herkimer Bank,
the First National Bank of Herkimer, which is the nearest big bank. He has the welfare
of the neighborhood veiy much at heart, and in these latter years he has spent most
of his stm&ters there, calling people to him rather than going to seek then out. It is
a most interesting instance in American society of a continuation of the ancient
pattern of the laird of the land. [H?u.**f ^c£;A'r^
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Mr* Young's own story of why and how he founded the Radio Corporation of
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America is pertinent to any knowledge of the man and any estimate of his value to the
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Federal Reserve Bank of New York. He told the 3tory pertly to show that he had been
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extremely busy about a great many other things than the Federal Reserve Bank itself,
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but as a matter of fact, the story starts in 1919> five years after World War I began.
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had either talked with Woodrow Wilson or had a letter from Wilson discussing the J -y^&^^A^f
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It ves Mr. Wilson's
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opinion that if the United States was to take the leading position which seemed to be
\^/ indicated for it after the war, it must recognize that dominance depended on three
separate points: 1) Domination in international transportation by sea* In that field
: England was supreme, she had the shipyards and the..skills, and there seemed Yery little
likelihood that the United States could compete with her*
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2) Dominance in international communications. There England dominated the
cable which was the means by which nations communicated with each other* They owned
the landing places where cables came up out of the sea, and there was no possibility
that they could be dislodged from these points* 3) Domination in petroleum. There
->•; the United States had the unquestioned leadership, and in Mr. Wilson's opinion, would
remain in that position*
Given these three points of domination, and granted that at that time the
United States held only one of them, Mr. Wilson said that the*problem was to see
whether the radio could be made the successful competitor of the cable* If so, then
the United States would have tw<^ut~<>f--^eH3rree-n^^
His word to Mr. Young was, "You will know whether this is possible or not,
and I'd like to be informed whether or not it could be done*"
">'t*Cl
In telling this story, Mr. Young, who was f4*»e4ypresident and feen chairman
of the General Electric, said that the G.E* had developed the Alexanderson Alternator,
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Personal Memo - (Dwen Young
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September, 1955
Another anecdote was the stoiy of Roxanna Druse, a buxom young farm
woman married to a husband named Bill, whom she disposed of in a fashion that
fascinated and horrified the surrounding country*
The story, as told by Mr.
Young, makes it sound like a murder.mystery which would delight modern readers* .
apparently, Roxanna Druse lost her taste for her husband, killed him and cut him
up and burned the pieces in the kitchen stove one by one.
first tha't Bill did not seem to be around.
The. neighbors noted
Hext tney noted horrid smells .
coming from Roxanna Druse's kitchen, but it took a long time for the belief to
spread that she had actually killed and tried to dispose of the body*
She was
finally arrested and a trial held in Uite^(at least the story is said to have
appeared in the Utice paper).
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She was sentenced to be hanged, and, according to
Mr. Young, was the first woman hanged in the state of i^ew York (that is, hanged for murder).• : . •
Mr. Young told the stoiy with great skill and delight, as one tells an
old folk tale of a countryside in which one has lived.
His daughter Jo said she
had always intended to look it up in a local newspaper, but had never got around
to it.
Apparently it is one of the sagas of the Van Hornesville region*
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Ida Tarbell tells the story of bringing electricity into Van Hornesville, but.Mr. Young added details not in that t*le.
A motivating reason for many
things seems to have been his desire to free his mother from the drudgery with
which he saw her surrounded in all his young life.
One point of drudgery was the
cleaning of kerosene lamps, and the care of them, rie said that the night electricity.
was turned on for the first time in Van Hornesville the town burst into light just
as his mother was coming downstairs v-ith a kerosene lamp in her nand, and.it, was
«.. marvel that she did not drop it. /ihe svdtch for turning on .lights in the village
Septenibern 1955
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Box 264, - Memo 2 •
A long l e t t e r of Februaiy 17, 1927 from Owen D. Young t o Edmund P i a t t
goes i n t o t h e m a t t e r of t h e power of t h e Board t o f i x compensation and r e g u l a t e
it.
" I f the F e d e r a l Reserve'-fedokHs to f i x compensation a s d i s t i n g u i s h e d from
regulating i t ,
<JUA ate k+*>
UtaOCft. o u t
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then you have i n e f f e c t a c e n t r a l bank with h e a d q u a r t e r s I n
Wa 3h i ng ton
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regulated from Washington
so that they function in the unified system.
It is this latter that I always
supposed was the intent and purpose of the act.rt
then go on to detailed suggestions a s to what the Federal
Reserve Board might well be interested in with regard to the New York Bank*
This
whole letter of February 17, 1927 from Mr. Young to Mr. Piatt reflects the tension
between the Board and the Bank and goes into some detail as to what it is in
operating tensions that they are tiying to cure.
It constitutes a valuable
commentary on the situation-as it then existed.
The closing paragraph is as
follows.
"I am speaking of this quite frankly and at length because I think it
goes tr the root of the functioning of the System.
I believe in the New York Bank
we are on our way, under the wise leadership of your Board, to get the very ablest
men in the community to serve both as officers and directors of the Bank.
We can
do that and keep that policy going provided we make it clear that they have real
responsibilities to perform but that in executing them they must always act in cooperation with and in harmony with the Federal Reserve Board which he.s the larger
duties ond responsibilities of seeing that the System as a whole functions properly
in the interests of the countiy as a whole."
T:*J:^ 17.±5L u.-..Iil'
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-2Owen D» Yoim^i ^P^rny Box ?6AP Komo it3
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impossible to have developed a situation where McGarrah finally felt he could
not conscientiously refuse*
I have great admiration for his decision.
He comes
at great personal financial sacrifice in response to the call of duty*
I admire
that trait. Ve j&se-altogether too few such men.
We must have more, and every
example of this kind means that we will have more.
It might even become more
fashionable than to make money . ••"
The next paragraph goes on to say that the situation is much clearer
from every point of view.
"Our board is functioning wonderfully.
Everyone is
devoted and interested, and I think that the officers of the Bank including your7
self among them should feel proud that you succeeded in developing a
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that institution from the directors down which enables it to work so well at
present and promises so much for the future.
I understand that the Reserve Board
with these precedents before it is now going to try to move in on certain other
t
Federal Reserve Banks and endeavor to straighten the personnel of their set-up."
A personal letter dated March 3> 1927 from Mr. Strong to Mr* Young has
to do with the Polish loan and very importantly.
On page 2 Mr. Strong says, "I
explained (to Mr. Wdddell representing Mr. Dillon) that it was the invariable rule
of the Reserve Bank never to make suggestions or recommendations to foreign governments or to banks of issue as to whether bankers in this country should be, that
after a foreign government had decided upon what banks should represent it, if the
concern was responsible M S and reliable, we would be glad to collaborate in
these matters by dealing with the foreign ban!: of issue if we were requested to
do soj that I would therefore not undertake to make any recommendations to the
Poles, but if I found that the American banking houses could among themselves
agree upon a merger of their interests upon some basis, I felt that we might go
so far as to endeavor to reconcile the Polish government through the National
Septenber, 1955
Internal Memorandum
Oven D. Young Papers'
msge&r Traylor of Chicago, President of the First National Bank of
Chicago, on July 26, 1928 writes Mr/ Young "that the President in the last few days
has been furnished vith some illuminating statistics calculated to convince him taat
in view of the large refudding operations which the Secretaiy of the Treasury contemplates this fall the policy of the'Federal Reserve Board vith regard to open market operations is a great detriment to the government,
T
It is claimed that the facts presented His Excellency are certain to be
convincing and that by the middle of August or not later than the first of September
the banks vill begin accumulating outside investments and vill continue that policy
until there is a marked relief of the credit situation, the prediction being a
reduction in the Federal Reserve discount rate to at least U 1^2$ and possibly 1$
by the middle of September."
Mr. Traylor is alarmed.
Mr. Young replies on August 3> 1928 saying, "That the Federal Reserve
System has more credit in the market than the business of the country needs is
to myiSmind
clear.
The use of the excess amount has been to over stimulate buying
of stocks and bonds. Our policy of cheap money a year ago I think was sound then
to strengthen the foreign exchanges and stimulate the buying of our surplus for
export and to make money cheap for the movement of our crops.
After that vas over,
we should have stiffened our rates and discouraged further extension of credit by
actions, say, in November instead of February.
Ve delayed too long, and ve did not
drive vith quite stiff enough hand.after ve started on the program of restraint.
As a consequence we have two things to doj one is to discourage the further use of
credit, and the other is to get considerable liquidation of the volume outstanding.
Through the action of the last fev months the Reserve Banks, I think, have put a
stop to further extensions but they have not succeeded in getting much liquidation.
They hoped for rather quick liquidation in the stock market,*but they hoped in vain
September, 1955
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Oven B» Youn^ Pfr pers
Cable of March 11, 1929 to Harrison concerns the probable raise
in the British bank rate and the rate in Amsterdam,
This was followed by a cable from Harrison to Young dated March
13th.
This must be in tne Mew. York bank.
Situation was as follows, "February ,?rt? our dirges to ra with Mr,
Voolley absent unanimously agreed conditions still made an immediate increase
advisable, especially in view of approaching Treasury financing which was
to be announced on the following Thursday, March 7th.
'But Roy Young had advised me officially on telephone that Federal
Reserve Board would not approve increase that day even though it meant
probably delay of three qr four waeks on account of Treasury operation*
'Directors therefore voted no change, not desiring to make futile
gestures merely as a matter of record*
!Still believing urgency^so great, I went to Washington Saturday,
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March 2nd, hoping that throughyYoung and Mellon it night still be possible
to procure approval before announcement of Treasury program March 7th.
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'Both Mellon and^oung appeared to agree to continuing hardening
of all outside rates would make our increase inevitable sooner or later*
*
They questioned how much good it would do and felt it might probably just
as well wait until Treasury operation is over/
' •*. But my best judgement is that a majority of Federal Reserve
Board will probably be ready to approve by time Treasury operation Makes it
proper, that is, March 28th, or even possibly through March 21st."
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April 16, 1 9 2 9 - wire from J4rT Russell to Stuart Crocker in Paris
saying that Representstlve Frank Reed of Illinois, Republican, will introduce a
resolution providing for Investigation of Federal Reserve System covering
1)
influence of foreign banking snd financial conditions in formulation
of Reserve policies, 2) causes of export of more than half billion gold from
America in last years, 3) relation of System to International Reparations Bank
proposed by OvenD* loung as medium space for controlling flow of gold throughout
the world.
Etc*" Etc*
fe^ a^h
Note l e t t e r of March 1 3 , 1930 from Mr. Case to Mr. Hnrrison announcing
Mr. McGarreh's r e s i g n a t i o n , t h e f a c t t h a t t h e Board had unanimously voted t o
a p p o i n t Mr. Case a s Mr. McUarrah's s u c c e s s o r , and saying a t t h e end,
keeping on the job and t h i n g s a r e running n i c e l y .
a r r i v e d today and has made a f a v o r a b l e
MAfclB
impression."
"We e r e a l l
Our new s e c r e t a r y , Mr. S p r o u l ,
Oven D« Young l e p e r s
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won*t let the gold standard work.'
1932
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The Lausanne Agreement of July,'• 1932 laid down a plan for an economic
conference late in 1932«
The American government agreed*
meet with Ggden Mills in September.
Young was invited to
(Was this the forerunner of the ill-fated
economic conference of the summer of 1933?)
December12» 1932
(This was after the. Republicans'had been swept out of office by the
election of Franklin D. Roosevelt, but before Roosevelt was installed in office.)
A five-pcge letter from Ogden Mills to Owen Young in regard to the Federal
situation after the election of Roosevelt sets forth the economic, financial and
monetary conditions of the countiy as it appeared to a Republican who was
Ass»te&&&t Secretary of the Treasury*
Mr* Mills gives a vivid and gloomy picture.
He says that Congress is "living in a little world of their own \dthout genuine
realisation of the gravity of the fiscal prdblem and of its relationshiptoothe
general economic situation."
^or himself he would like the United States budget
balanced and the British back on the /gold standard, but he does not see how either
goal can be achieved.
(Young must have replied, but I cannot find his reply.)
As a postscript to and commentary on this letter from Ogden Mills, I
saw Everett Case at Colgate on-Sunday and mentioned the letter. He doubts that
it ever was answered in words. Mr. Case himself was in Washington at that time
as an assistant to Mr. «&ii£,J trying to pull together what Would, had it worked/,
h^ve amounted to a voluntary program for private employment measures.
Long
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conferences were held with/heads of Chase Bank, National City Bank, etc., men who
controlled great quantities of capital, in an effort to plan slum clearance, improvement of private property, and whatever other measures would give employment
to vast numbers out of work.
It was in those days that Mr. Case came to realize
the limits of what private enterprise could do. He said that in every instance
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I n the lon^ run tne f i n a n c i a l d e a l i n g s vhich took place a t these
meetings were l e s s important than the opportunity f o r . t a l k i n g ° v e r mutual problems which tii£nt h^ve r e p e r c u s s i o n s i n the various c o u n t r i e s .
I t was understood tiwU. i n the Daves Plan d i s c u s s i o n s (before the
Bank f o r I n t e r n a t i o n a l Settlements was s e t up; t h a t tne need to bring the
Relchsbsnk alon£ with the c e n t r a l banks of tne o t n e r n a t i o n s was v i t a l ,
The
..'Dfiwes Wfi.n atnad to develop a new program ^rith the cooperation of the Gorman
government.
I t W s understood t h a t whatever payments were f i n a l l y scheduled
would u l t i m a t e l y bo r e v i s e d , but no one knew exactly now zauen.
The phrase
on every s t r e e t corner was Germany would have ( t o pay," and t h i s phrase
dominated the thinking of the men who met i n the Dawes Plan conference, b u t
no one of them knew how Germany would psy or how much she would p r y .
The
demand t h a t she bear t h e c o s t s of the war was u n i v e r s a l , znd the emotional
response t o t h a t demand was such t h a t i t swept a s i d e p r a c t i c a l problems such ,
a s how funds were to be r a i s e d and how they were t o be t r a n s f e r r e d
?;
across
frontiers.
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The Dawes Plan came a t the end of a ion^ period of confusion and
f r u s t r a t i o n on the p a r t of the Reparations Conjrdttee.
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I t s public i n j e c t i o n i s
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c r e d i t e d to a speech made oy Charles Hu^nes, on December 2^, 1922
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at -New H&ven, wnere he spoke at a meeting of the American Historical A^socia•
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It was agreed that the Plan must be free of political influence (more
details are given in trie Tarbell biography, of Kr. Young, pages 160 and 161).
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Asked how Mr. Young had come to be appointed to the Dawes Committee, he said
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that he had come to know Mr. Hughes well after Hughes' defeat in his campaign
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for the Presidency and his return to New York. Mr. Young nad hired him as
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counsel f o r the General E l e c t r i c i n the a n t i - t r u s t s u i t .
Coolidge w e l l .
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Also Mr. Young knew
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Dwight Morrow; had t a l k e d with Hughes about p e r s o n n e l , 8nd i t
i s p o s s i b l e t h a t he suggested Young (see the e a r l i e r memorandum on t h i s ,
a l s o see Ida T a r b e l l ' s idea as t o the p o s s i b l e surges t o r , , a f r l en c ^ Q h o m a s
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advertising figure from the
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middle vest, popular in Europe because of his military exploits during World
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War I, and popular in the United States for his good sense and spectacular
publicity abilities.
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Young was to go along as an associate, and possibly to
provide the kind of legal and financial intelligence which was not expected
of Daves.
The .appointment vas cleared with Mr* Burgess of the New York bank,
who was the young, brilliant monetary expert of the period.
No one of the central banks played a part in the formulation of the
. Daves Plan, although obviously they were concerned that it be a success*
In
Mr, "Young's opinion, it had to be that way in order to keep the Plan free of
undue influence.
The men who did the actual work were Sir Josiah Stamp of
England, Pirelli of Italy, Frannui of Belgium and Parmentier of France, all
of whom cooperated.
Kindersley of England was flso useful.
It was Mr. Dawes
who "put on the show, " a n d who proved very popular in France and. highly acceptable to London.
(In a way he resembles General Petton .during World War I,
although the latter died untimely.)
Dawes met the press and kept advertising
what the Committee was doing, so that the public was content and no atmosphere
of anxiety built .up.
The whole attitude of the entire group was merely, "What will we do
with a mess like this?"
The work done by the private bankers on the Committee
was remarkably free of political and financial pressures.
influence were laid.
suspicion.
No charges of
Tfte Dawes smoke screen effectively warded off critical
The chief burden vas to find something which would seem to hurt
Germany so that the public would be placated, but would at the same time allow
Germany a chance to pay the charges levied against her.
The Story of the "instructions"' which Cooiidge gave Dawes and Young
is told in the earlier memorandum on this subject.
added.
A third chapter should be
At the end of the third vee?; of the Dawes meetings Mr. Daves got a
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letter with a request that it be shown to Mr. Young, A lady, unnrned,, living
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on the Rue St* Honored expressed herself es extremely pleased if General
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feves and Mr* Young would come to tea with her* She gave as her reference,
•rI 'fija an intimate friend of your President*11
Neither Dawes nor Young accepted
tie invitation. Both of them agreed on rereading it that "your President"
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not,mean #r. Coolidge, but the titular head of the ^^fer^-eorm±Jtte^T-odio
v?*;^Jte^Him«i^1^
Nevertheless, rtr. lawos decided he would 1
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hold onto the letter and that he had a use for it when he got back to the
United States. When the two men vent to report to Mr. Coolidge, Mr. Dawes
said, "Mr. President, do you remember your last instructions to us?" The
Vermont fp.ce of Mr. Coolidge brightened, and he said, "Yes, I told you to
ttike your wives along if you were going to Paris." Mr, Dawes then pulled the
letter from the lady out of his pocket, and read it to the President, saying,
"It is obvious that the next time *you go to Paris, you better take your wife
along." This was the only report mode to the Coolidges. Otherwise the entire
luncheon followed the pattern of the first one, and the chief subject of con• versation was not reparations or finance, but politics.
This interview clso turned up an addition to the information previously given about the meeting of the premiers in August following the
Dawes Plan meeting. This conference was held in London under the chairmanship
of Premier MacDonald and was for the expressed purpose of explaining the Dawes
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Plan to the heads of government in Europe. Mr. Dawes was at the time very
busy with the Presidential campaign in the United Stetes and could not go.
Mr. Young \nxs therefore asked to go end explain toe Plan to the Preoiiers.
He found to his surprise and dismay that this was a strictly political
meeting and that State Department rules of status applied. Premier MacDonald
presided.
Frank Kellogg (then;*^?^*^
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St&zeif' who "knew nothing about the Dawes Plan" was the American representative.
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Mr. Young discovered that he ves not supposed to speak unless Mr, Kellogg •c«?,i^,: 0.-:.^
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or him t o speak.
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He was hedged about wttii S t a t e Department r u l e s , and from h i s .-'•< /.:[
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point of view, the situation van not tolerable. Mr. Young objected that he
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h k :ir;lf van not t h e r e as en AKI'TI^MI nsjM'ftflont.MMvrt, but a s a r e p r e s e n t a t i v e
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?f the Cr;ves Plan, having come to explain i t to ho±»ds of government.
fuee'i to s i t under the S t a t e Department a e g i s and IfM't the meeting.
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He made i t
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./^ovm t h a t he had rooms a t Ciaridges and you3d bo g i r d to be of s e r v i c e to any-
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en* wr.o wished-to confer with him.
put p u b l i c i t y .
That process worked very o u i e t l y and w i t h -
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Hopds of governments had cone to the conference with b r i e f i n g
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i'voz. t h e i r OMTI n a t i o n a l s who s a t i n on trie l>aves r\lan conference, b u t with
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p o l i t i c a l axes which they f e l t they had t o g r i n d .
The a b i l i t y to ask f u r t h e r
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information from Mr. Young without any p u b l i c knowledge of such n u e s t i o n s was
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a great help.
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Tne Plt.n was f i n a l l y approved by the assembled premiers on the
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ground t h a t . Mr. Young would s e t i t up.
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Ho went to B e r l i n for t h a t .purpose and
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stayed eight weeks. Mr. Houghton of the Corning Glass Company and a resident
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of the same section of Mew York State was American Ambassador and very friendly
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and serviceable. Mr. Young knew Schacht. His Ldird set of contacts stemmed
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from his setting up of the R6A^±»=£9iS, vhen he vent to Paris to confer with
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German and French heads of electrical companies, Siemans, ^nd so forth.
he to d the cooperation of tne financiers,, the politicians (rather, the
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political leaders), and the heads of tne eiot4g$al industries. With this
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background, the setting up of the machinery for the operation of the Dawes
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Plan was not too difficult. He had complete German cooperation.
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p n r t i n uermany's demand f o r room in thje world, were not important, b u t t h a t
the underdeveloped markets of the world were, and t h a t i n t e r n a t i o n a l cooperat i o n was needed to develop such markets.,
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He argued with Schacht t h a t c o l o n i e s , which nad pieyed so g r e a t a
Tne Germans Here extremely s e n s i t i v e
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aren't important, and why should I have to worry about them. In the old days the
castle made the appointments, and in the main they appointed competent people*
These new people that are running for office aren't very good, and there's reallv .
nothing I ought to have to do about them."
Mr* Young regarded this as an indication that tne process of iiuoidng
democracy on the people who were not ready for it was a great mistake. Tne
Germans were, he said, conscientious people. Tney undertook tneir responsibility
seriously, but the responsibilities which ^o with a democratic government were not
such as they understood*
Vnen the people for whom tney voted did not do their
jobs very veil* they felt that the responsibility was theirs end tnat they had
failed.
Hor did they have time to learn tills strange now process. Tnere was .:
no quiet period when they could become seasoned in tne \ray=j of cerocracy. Vhat
Hitler did was to give.them back the confidence tu-at he would run tne works and
that they could stop trying to elect people as good as those who had hc-en appointed
by the throne in the old days*
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Mr* Young is convinced that the Dawes and Young Plan would have worked
had it not been for the emergence of Hitler, whom he regards as a maniac reasdertion of German strength.
Payments had been modified; mecnanisms were working
well; the economic pressures were not so great as to cause a breakdown, ..:oci the
country been seasoned in political ways.
Mr. Young was last in Germany in
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This interview was mostly devoted to descriptions of'people who Mr.
Young knew in the early days of his work on the Board,
For Adolph Miller ne obviously had a certain amount "of respect, if
not admiration. He said m a t the old man (Mr* filler seemed old when Mr. Young
first met him) was a persistent and rigid man, sometimes very disagreeable, but
Oven D. Young
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September 17, 1955
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tfr", y^unjj-; tnUfid at jy>ma length about the problems vhich corS?6z%&& ihe
rk,r, r>I 6f &>*, / > f ^ r ' a J'm>'rryn finnk of Wow'York a t the time t h a t Mr. Strong died.
Tro:*- y**> ;''> /^s;/,ruv* !/, ':wynU't>nn <iunor?rnlni; tho, tone of r e p o r t s t h a t Mr* McGarrah
•sv~ j ^ : * . r l . ^ *>$.•."; K>;*t .t(f '« prl v/iln bmtk to oomo to the board.
Mr. Young said t h a t
Ht. *:&<%*>* 'ixyti th*t prt'vi.fUi bank Job payed much more and had more p r e s t i g e than did
z 'y*$'L, i:'i M^ t-**teirnX Unr,"!'^ Umilu
I t wnj; An an e f f o r t to c o r r e c t t h i s t h a t the
•:tr& /',rV r>?f&. fvk**- »v» jU\rM*Nt of tliolr top men must be rr.ised rnd t n a t tney mast be
7n* 0oi>^ rtfrfr:h(j u\ Ui Mr. Strong t h a t Harrison was the only man r e a l l y
t% t%w~ t'.>; t;i*r Ush of muwiedlty; benjamin S t r o n g .
Tne problem however, or a t l e a s t
^ V ~f V-:^-r*roM.';mfl| war, t h a t Harrison was p h y s i c a l l y i n very bad shape*
The New
$^:rX:'h'y*r'i tUi'i Vnt ;/*^?rn worked with a Governor who p e r i o d i c a l l y -took time off t o
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They dreaded t a k i n g on another governor who was
'iowiHton*' Harrison himself went to Johns Hopkins h o s p i t a l ;
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• s h o r t l y i?fVir hid >;I<ioUorw
Concernlnij tho telegram which Mr. Young s e n t p r i v a t e l y to Parker G i l b e r t / "
es?tir:f{ -v.io.th^r he miyht have any i n t e r e s t i n the j o b , Mr* Young s a i d t h a t G i l b e r t
?.*A vtz'r'f /f^A
r r d ' t l o n a with c e n t r a l bankers abroad, and t h a t t h i s , was an important
fftcv?;r*'
Ai-fio t^t^r^r v/fm the d i f f i c u l t y of Mr. H a r r i s o n ' s h e a l t h *
I t i s sardonic
thnVKtm
G i l b e r t <1U:'i nomn yc/irs ago, whereas Mr* Harrison continues l i v i n g i n bad
health*
Mr. .tfouni-; ;>atd t h a t the New York board was &ood and t h a t he enjoyed
workir-g' vi tn them,
Ha was himself r e s p o n s i b l e f o r g e t t i n g Edmund Day to become
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