Epilogue
The world was now plunged into a monetary chaos of fiat money, competing devaluation, exchange
controls, and warring monetary and trade blocs, accompanied by a network of protectionist
restrictions.
These warring blocs played an important, though neglected, part in paving the way for World
War II.
This trend toward monetary and other economic nationalism was accentuated when the United
States, the last bastion of the gold coin standard, devalued the dollar and went off
that standard in 1933.
The Franklin Roosevelt branch of the family had always been close to its neighbors, the
Astores and Herrimans, and American politics, since the turn of the 20th century, had been
and marked by an often bitter financial and political rivalry between the House of Morgan
on the one hand and an alliance of the Harrymans, the Rockefellers and Kuhn-Leb on the other.
Accordingly, the early years of the Roosevelt New Deal were marked by a comprehensive and
successful assault on the House of Morgan, that is, in the Glass-Steagall Act, outlawing
Morgan-type integration of commercial and investment banking.
In contrast to the Morgan dominance during the Republican era of the 1920s, the early
New Deal was dominated by an alliance of the Harrymans, Rockefellers and various retailers,
farm groups, the silver block and industries producing for retail sales, for example automobiles
and typewriters, all of whom were now backing an inflationist and economic nationalist program.
When the British, backed by the Morgans, convened a World Economic Conference in London in June
1933 to try to re-stabilize exchange rates, the plan was scuttled at the last minute by
President Roosevelt under the influence of the inflationist economic nationalist bloc.
The Morgans were taking a shellacking at home and abroad.
It was only in 1936, by the good offices of leading Morgan banker Norman Davis, a long
The beginning of the return of the Morgan's was symbolized by the September 1936 tripartite monetary agreement, partially stabilizing the exchange rates of the currencies of Britain, France and the U.S., a collaboration that was soon extended to Belgium, Holland and Switzerland.
These agreements, in addition to the dollar still remaining on an international but not domestic gold bullion standard at $35 an ounce, set the stage for the Morgan Drive organized by Norman Davis, head of Morgan's Council of Foreign Relations, to bring a new world gold exchange standard out of the cauldron of World War II.
The difference is that this inflationary, quote, Brenton Woods system would be a dollar,
not a sterling gold exchange standard.
Moreover, this inflationary system under the cloak of the prestige of gold was destined
to last a great deal longer than the British venture, finally collapsing at the end of
of the 1960s.