Abstract

"International Bankers, Postwar Settlement, and the Progressive Party of 1924 "

David Shorten, Harvard Business School (dshorten@hbs.edu)

This paper examines the demobilization of public credit institutions in the United States after World War I in the context of the reconstruction of international finance. It focuses on the War Finance Corporation, Federal Reserve policy, war debt cancelation, and the McNary-Haugen Farm Relief Bill. Based on the archival records of J.P. Morgan partner Thomas Lamont, as well as the papers of various senators, including Gerald P. Nye and Robert La Follette, it explains the emergence of dueling political programs of international bankers and farm-bloc progressives to shape the postwar settlement. Wisconsin Senator Robert La Follette, Sr.’s 1924 Progressive campaign for President sought to relieve postwar anxieties about bankers’ influence over federal governance and the international economy. One of the most successful independent campaigns in United States history, La Follette championed an antimonopoly agenda for postwar reconstruction. Bankers like Lamont, on the other hand, who greatly influenced postwar trade and loan policies, believed peace required powerful and intimate forms of international cooperation and advocated the free flow of goods and fixed exchangeability of currencies for the sake of stabilizing global commerce, rather than to benefit any one nation. This essay explores how these competing programs shaped politics and policy in the 1920s.