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Marriner Eccles

Marriner Eccles


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Marriner Stoddard Eccles, the son of the banker, David Eccles, was born in Logan, Utah, on 9th September, 1890. He attended Brigham Young College before serving as a Latter-day Saint mission to Scotland. After his mission he worked in the family business in Blacksmith Fork Canyon.

On the death of his father he took over the leadership of the Eccles-Browning Affiliated Banks. Eccles was a supporter of President Franklin D. Roosevelt and his New Deal. He was also an advocate of the economic ideas of John Maynard Keynes and Lauchlin Currie worked at the Treasury Department under the treasury secretary Henry Morgenthau.

Eccles went before the Senate Finance Committee in 1933. According to Patrick Renshaw, the author of Franklin D. Roosevelt (2004): "Though the young Mormon banker from Utah claimed never to have read Keynes he had nevertheless jolted Senate finance committee hearings in 1933 by urging that the federal government forget about trying to balance budgets during the depression and instead spend heavily on relief, public works, the domestic allotment plan and refinancing farm mortgages, while cancelling what remained of war debt."

Roosevelt was not totally convinced by Eccles' economic theories but in November, 1934, he appointed him as Governor of the Federal Reserve Board. As William E. Leuchtenburg, the author of Franklin D. Roosevelt and the New Deal (1963), has pointed out: "Eccles had hardly taken office when he helped draft a new banking bill which called for the first radical revision of the Federal Reserve System since its adoption in 1913. Eccles wished to lodge control of the system in the White House; lessen the influence of private bankers, who he believed had taken over the system; and use the Reserve Board as an agency for conscious control of the monetary mechanism."

In 1935 Eccles and Currie drafted a new banking bill to secure radical reform of the central bank for the first time since the formation of the Federal Reserve Board in 1913. It emphasized budget deficits as a way out of the Great Depression and it was fiercely resisted by bankers and the conservatives in the Senate. The banker, James P. Warburg commented that the bill was: "Curried Keynes... a large, half-cooked lump of J. Maynard Keynes... liberally seasoned with a sauce prepared by professor Lauchlin Currie." With strong support from California bankers eager to undermine New York City domination of national banking, the 1935 Banking Act was passed by Congress.

In February 1944, President Franklin D. Roosevelt appointed Eccles for another 14-year term on the Federal Reserve Board. However, he did not enjoy such a good relationship with President Harry Truman and in 1951 he resigned from his post. After his retirement he wrote his memoirs, Beckoning Frontiers (1952).

Marriner Stoddard Eccles died in Salt Lake City, Utah, on 18th December, 1977.

Eccles had hardly taken office when he helped draft a new banking bill which called for the first radical revision of the Federal Reserve System since its adoption in 1913. Eccles wished to lodge control of the system in the White House; lessen the influence of private bankers, who he believed had taken over the system; and use the Reserve Board as an agency for conscious control of the monetary mechanism. The 20,000-word banking bill introduced in February, 1935, reflected the thinking of Eccles and of certain members of his staff, especially the Keynesian Lauchlin Currie.


The Secret Life of Marriner Eccles

One of the most consequential Federal Reserve chiefs in history had a lot on his mind besides banks: sugar beets, nearly two dozen siblings and a strained relationship with John Maynard Keynes.

Keynes got Keynesian economics Marriner S. Eccles eventually got his name on a building, and a nephew with plenty of juicy stories.

This week the Center for Financial Stability, a New York-based think tank, is hosting a conference on the past and future of Bretton Woods, the shorthand name for the system that gave birth to the International Monetary Fund and the World Bank in 1944. The Bretton Woods system was, of course, named after Bretton Woods, N.H., the site of a three-week conference toward the end of World War II where international policy makers hashed out the new world order of international finance.

The U.S. Federal Reserve, under the leadership of then-chairman Eccles, was deeply involved in the negotiations. Today, the Fed's main office building bears Eccles's name. And at this year's conference, Eccles's nephew, Spencer Eccles, shared some little-known stories and family lore of his uncle over lunch.

When the Fed recently unveiled a statue of Eccles, Sen. Orrin Hatch, a Republican from Eccles's home state of Utah, noted that Eccles was the "oldest of nine children." According to his nephew, this is only half right. Eccles was one of 21 children born to his Mormon-immigrant polygamous father, and was the oldest of the second wife's nine children.

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Small groups, big needs

While the foundation started six decades ago, it became more active in 1982, after George’s death. In the subsequent years, the distributions to qualified nonprofit organizations have grown annually, the report states, from $481,000 in 1982 to more than $20 million in 2017.

During that same period, the number of organizations getting grants also has expanded — from 208 groups to 1,071.

Yes, every major college and university in the state has received Eccles Foundation grants to fund scholarships and facilities, but the Guadalupe School in Salt Lake City, Wasatch Academy in Mount Pleasant and Ephraim Middle School have been helped as well.

The Road Home, Neighborhood House and the Boys and Girls Clubs are regular Eccles recipients as are smaller social service organizations such as the Moab Valley Multicultural Center and the Adopt-A-Native Elder program.

While the Utah Symphony, Utah Opera, Ballet West and Utah Shakespeare Festival couldn’t survive without Eccles funding, arts and cultural programs across the state — from the Southwest Symphony and Chorale in St. George to the Timpanogos Storytelling Institute in Provo and the Helper Arts Council — have been touched by the foundation’s generosity.

All this from a decision made some six decades ago, explains Lisa Eccles, Spence’s daughter, who runs the day-to-day activities as the foundation’s president and chief operating officer.

“They could have spent their money on something else,” she said of her great-aunt and uncle. “But instead they put it into a foundation. It was very forward thinking and inspiring because they didn’t have to do that.”

The grants will continue to be available for the foreseeable future, because the foundation is set up to run in perpetuity. Current assets — based on 2017 market values — are more than $591 million, the report states, making it the state’s largest family-run foundation.

The Sorenson Legacy Foundation — founded by the late biotechnology pioneer and entrepreneur James LeVoy Sorenson and his wife, education philanthropist Beverley Taylor Sorenson — is a close second, with total assets of $530 million, according to the latest (2016) 990 IRS tax forms available at the Foundation Center, which monitors worldwide philanthropy.

The Huntsman Foundation, created by the late Jon M. Huntsman Sr. and his wife, Karen, has nearly $480 million, documents show.

One thing the Eccles Foundation won’t donate to — political groups. “Our job is to help nonprofits do their job better,” said Spence Eccles. “They are the ones in the trenches doing the hard work.”


Biographical Note Return to Top

"Brigham Young was the colonizer Daniel Jackling the mining giant, and Marriner S. Eccles was Utah's premier financial genius", was the introduction to a 1977 Deseret News review of Eccles' then-recently published biography. The biography, Marriner S. Eccles: Private Entrepreneur and Public Servant, as well as a previously published autobiography, Beckoning Frontiers, detail the life of this remarkable man. He became the "principal economic philosopher of the New Deal", according to James Gardner, a professor in the University of Utah's College of Management. Another review of Eccles' biography stated, "The political and institutional principles he advocated and laid down as head of the 'Fed' are the very armature of the legislative structure under which US business and finance now operates".

Marriner Eccles, born 9 September 1890, to David Eccles and his second wife, Ellen Stoddard, was the oldest of nine children. David Eccles, a leading Utah entrepreneur and a Mormon polygamist, also had twelve children by his first wife, Bertha Maria Jensen. To distinguish between the two families, Bertha and her children were known as the Ogden Eccleses Ellen and her children as the Logan Eccleses. The significance of these geographical distinctions was later diminished when Marriner Eccles moved to Ogden and centered his business pursuits there during the 1920s.

Ellen Eccles and her children lived alternately in Baker, Oregon, and in Logan, Utah, because of her husband's business interests in both places. Sidney Hyman, author of Eccles' biography, speculates that because of her uncertain status as a plural wife (the Mormon church declared an end to polygamy in 1890), and thus a diminished sense of financial security, Ellen Eccles instilled in her sons a strong work ethic and the drive to become successful. She reasoned that their success would ensure her security, as was to be the case.

David Eccles, reputed to be the largest tithe payer in the Mormon church, died unexpectedly and intestate in 1912 at the age of 65. Although all of his children from both families shared equally in their father's estate, there was only one legally recognized widow--Bertha Eccles. The Logan Eccleses were left with a two-sevenths share, and the Ogden Eccleses with five-sevenths of the multi-million dollar estate.

Marriner Eccles attended Brigham Young College in Logan, Utah, which functioned more as a high school than a college. He left school in June 1909 at the age of 18 this was to be the end of his formal education. His father, whose schooling was limited, did not believe an extended education was necessary for success in business, and Marriner proved him correct. As the oldest son in his family, the responsibility for the welfare of his mother and his eight brothers and sisters, as well as the administration of the estate left them by their father, was thrust upon him.

In the meantime, he did what most other young Mormon men did-he served a mission for his church. From 1910 to 1912 he was in Scotland, the country his father left as a penniless youth. While in Schotland he met May Campbell Young (Maysie), his wife-to-be. On his return to Utah they corresponded, she joined him in Utah, and they were married in 1913.

His marriage and business career began at the same time. He first became president of the Hyrum State Bank, and a director and officer of the Thatcher Brothers Bank in Logan, two institutions in which his father had held significant interests. In 1916 he organized the Eccles Investment Company, a holding company, to manage the inheritance left to the Logan Eccleses. This holding company would exist for the next sixty years. Throughout the 1920s he built his business base in Utah. He assumed control of the First National Bank and First Savings Bank of Ogden. Eccles was also able to assume control of or take a leading role in the direction of several companies in which his father had held interests. These companies included Stoddard Lumber, Sego Milk, Eccles Hotel Company, Anderson Lumber, Mountain States Implement, Utah Home Fire Insurance Company, Utah Construction, and Amalgamated Sugar.

David Eccles was described by Leonard Arrington, Utah historian, as being a "man of vision, an analyst, an independent thinker, a fashioner of strong organizations and strong policies." While Marriner Eccles inherited these qualities from his father, they seemed lacking in the Ogden Eccleses. Their share of David Eccles' estate was much larger than that of the Logan Eccleses', but it dwindled considerably over the years. The inheritance of the Logan Eccleses, on the other hand, under Marriner's sound management, grew handsomely. According to Hyman, "The Ogden Eccleses would in time virtually disintegrate as a family while the Logan Eccleses, with Marriner in control, were held together over the passing decades despite many internal strains."

By 1918, Marriner and Maysie Eccles were the parents of three children: Campbell, Eleanor, and John (a fourth child died at an early age). During the next decade Eccles acquired, seemingly without conscious design, interests in additional banks. This led to the formation of the First Security Corporation in 1928 with Marriner serving as president and his brother George as a vice president. The corporation is believed to have been the nation's first bank holding company. At the end of the 1920s, Marriner Eccles had achieved a full measure of success.

The next decade would tell a different story. By 1930, the nation was in the grip of the Great Depression, and Eccles stood to lose much of what he had worked for during the previous eighteen years. As he reflected on the dynamics of the national economy and the responsibilities of business and government toward society, he decided that "hard work and thrift as a means of pulling us out of the depression is unsound economically. True hard work means more production, but thrift and economy means less consumption." Since these two forces were difficult to reconcile, his answer was that of controlled deficit financing on the part of government. Eccles was often asked to address local groups about his fiscal and monetary views. One group particularly interested in his ideas was an organization of Ogden businessmen called the Freidenkers. German for free-thinkers, they were also known phonetically as the "free-drinkers". Eccles was a member of this group. Another member was Robert Hinckley, who later served in the Roosevelt administration. Hinckley was a nephew of Senator William H. King, a Utah Democrat, who was a member of the Senate Finance Committee. The committee had been directed to determine the causes of the depression and to suggest legislative remedies. Hinckley recommended to Senator King that Eccles should be invited to testify before the committee.

Eccles' ideas about the need for government intervention in the economy and deficit financing directly contradicted the testimony offered by others. However, because of his testimony and subsequent meetings with men close to President Franklin D. Roosevelt, he was asked to join the administration as an assistant to Secretary of the Treasury Henry Morgenthau, Jr. He accepted and began his duties in February 1934. In November of that year he was nominated by Roosevelt to head the Federal Reserve System the Senate approved this appointment 25 April 1935. In 1936 he was appointed as chairman of the board of governors of the newly restructured Federal Reserve System created by the Banking Act of 1935.

Eccles has been given credit as being the architect of the Federal Housing Act of 1934 and the Banking Act of 1935. He continued in Washington for seventeen years as head of the nation's banking system, and provided strong leadership during the turbulent years of the depression and World War II. He often disagreed with the secretaries of the Treasury and both presidents under whom he served. These disagreements are well documented Eccles was not a man to conceal his feelings about monetary and fiscal policies. After his initial successes in the mid-thirties, he turned his attention to two other issues. The first was the unification of the country's banking system, and in this endeavor he was not successful. He based his acceptance of reappointment to the board of governors in 1944 on Roosevelt's implied endorsement of the Eccles Unification Plan. It was not until the mid-1970s that this was accomplished, however, under then-Federal Reserve chairman Arthur Burns. The second issue involved a long-standing disagreement with the Treasury Department and both secretaries, Morgenthau and Snyder, about the best way to handle the inflationary pressures building as a result of World War II. Eccles was more successful with this issue, and saw most of his ideas realized by the Accord of 1951.

While Eccles was in Washington he was fortunate to have able men in Utah to maintain his business interests. In particular, his brother George profitably managed the First Security Corporation. Marriner did not completely remove himself from his Utah interests, however, for he assumed the position of chairman of the board of both Utah Construction and Amalgamated Sugar in the 1940s. Although his professional career was flourishing, his relationship with his wife Maysie deteriorated. They were divorced in 1950, after thirty-seven years of marriage.

The early 1950s marked several changes in Marriner Eccles' life. In 1948, because he disagreed with President Harry S. Truman's economic policies, Truman did not reappoint him as chairman of the Federal Reserve Board. Eccles was, however, still a governor of the board, as these appointments are made for fourteen years. Because he was no longer chairman, he felt that he could speak more openly about his disagreements with the administration, As his Washington career was winding down, he began writing his autobiography and retained Sidney Hyman to assist him. The book, Beckoning Frontiers , was published in 1951, the same year he resigned from the Federal Reserve Board and the same year he remarried. His new wife, Sara (Sallie) Madison Glassie, was socially prominent in Washington, D.C.

Although Eccles returned to Utah, he did not think of it as a permanent move. He mounted a brief campaign to wrest the Republican senatorial nomination from the incumbent, Arthur Watkins. Even though he was unsuccessful and he was in his early sixties, an age when most men think of retirement, Eccles was not one to retire and live on memories. Instead, he resumed active participation in his numerous business interests, primarily Amalgamated Sugar and First Security Corporation in Utah, and Utah Construction and Mining based in San Francisco. He divided his time between Salt Lake City, where he and Mrs. Eccles maintained an apartment at the Hotel Utah, and San Francisco, where they also maintained an apartment. On occasion they visited their cottage at the Eldorado Country Club in Palm Springs, California. Golf was Eccles' favorite pastime and over the years he belonged to the Burning Tree and Chevy Chase Country Clubs in Washington, D.C., as well as various other clubs.

Eccles' prime objective for the past four decades of his life was to "help lay the foundations for a stable economic order at home and in the world areas," and he felt compelled to share his concerns and solutions with every possible audience. Whereas during the 1950s he had devoted himself primarily to his business interests, in the 1960s he became more active in speaking and writing about issues of public concern.

The specific issues of critical interest to him were those of world over-population, the war in Vietnam, and to a lesser extent, the need for US recognition of Red China. He felt these problems were responsible for a great deal of instability in the world and prevented the realization of the stable economic order he had worked so hard to achieve. He wrote and spoke often about these issues to a wide variety of audiences, ranging from the Commonwealth Club in San Francisco, of which he was a member, to the Brigham Young University student body and his own family reunion (encompassing his father's large progeny), to whom he lectured on the importance of birth control. He also spoke at small meetings, such as the Unitarian Church in Salt Lake City. From all of these audiences he usually received mixed reviews.

In 1972 he delivered his last public speech before the World Trade Club in San Francisco, who presented him with their International Achievement Award. Eccles' ideas and opinions over the years had often been controversial and in many cases ahead of their time, but by 1972 many of his concepts were more widely accepted, and the Trade Club members applauded him enthusiastically.

Although his public role had increased significantly in the 1960s, his role in business had not diminished. The early 1970s, however, witnessed a winding down of his business commitments, and the lines of succession were arranged. Utah Construction and Mining became Utah International in 1971. That same year he stepped down from his active board chairmanship and became honorary chairman of the board. In 1975 he also stepped aside as his brother George became chairman of the board of the First Security Corporation.

Eccles Investment Company, which had been formed some sixty years earlier in an attempt to further the inheritance of the Logan Eccleses, was now disbanded. Over the years much of its stock had been distributed to its stockholders, and in 1970 its affairs were so arranged that all its assets were sold, except the stock in Utah Construction. The proceeds from these sales were then used to buy stock in that firm. Eccles Investment Company was liquidated, leaving its stockholders with only Utah Construction stock, which then became Utah International.

In December 1976, Utah International merged with General Electric, constituting the largest corporate merger in US history to that time. Details of the merger were worked out by Edmund Littlefield, who had succeeded Eccles as Utah International's chairman. The effect of this merger was to greatly increase the value of the stock previously held in Utah International. An example of the increased stock value was demonstrated by the holdings of Eccles's long-time secretary, Va Lois Egbert, whose personal investments had been handled by Eccles. When her will was probated in 1978, following her death in November 1976, her estate was valued at approximately $4 million, instead of the anticipated sum of $250,000-largely due to the increased value of the Utah International stock. The University of Utah Medical Center was the recipient of the bulk of her estate, receiving $3.6 million dollars, the largest single donation ever made to the institution to that time.

In addition to the time he gave to his public concerns and business interests, Eccles found time to serve on a few special committees and select groups. Notable among these was the board of the American Assembly sponsored by Columbia University. The group met yearly and sponsored publications regarding issues of public concern. Many of these books and publications can be found in the Marriner S. Eccles Library of Political Economy, a part of the Eccles collection.

After Eccles finalized arrangements for both his business and personal affairs, he initiated "bequests designed to encourage the emergence of young leaders of the future who could recognize, as he did, 'that the good of the individual, the family, and the community was indivisible with the good of the larger national and world society." One form these bequests took was a series of contributions to the University of Utah for fellowships. He also established the Marriner S. Eccles Library of Political Economy, and created the Marriner S. Eccles Foundation. The Foundation funds various causes within Utah, encompassing private, non-governmental, charitable, scientific, and educational organizations for the benefit of the citizens of the state. Eccles also established the Marriner S. Eccles Professorship of Public and Private Management at the Stanford University School of Business in 1973.

During 1977, Eccles' health worsened, and he stopped traveling between San Francisco and Salt Lake City. He died in Salt Lake City on 18 December 1977. Eccles' funeral service was held 22 December 1977, in Salt Lake City and was described as "brief" by the Deseret News. Edmund Littlefield and Joe Quinney spoke movingly about his character and the qualities which set him apart from most other men. R. H. Burton, who presided at the service, summed up the meaning of those remarks when he noted that, "rarely has an individual affected the lives of so many." Eccles is well remembered by many. His descendants and other family members continue to contribute generously to Utah institutions. From time to time his name appears in a newspaper article, and in 1982 the main Federal Reserve Building in Washington, D. C., was named in his honor.

A more personal tribute is contained in a letter written to Eccles in June 1977, shortly before his death. In it his brother-in-law, Joe Quinney, referred to the biography that Sidney Hyman had been writing: "I must tell you I feel the author did not reveal the whole MSE to the extent I would have recommended. You were and are more than a mere technician and manipulator. There is also that MSE who is tempestuous in battle argumentative and insistent in debate tough-even hard-boiled in business relations yet honest, judicious as you saw justice companionable with your friends, especially your good old friends with whom you are mellow, kind and considerate who can dish it out and take it in good humor whose family relationship, though strange at times has an underlying affection and compassion all strange but true".

Content Description Return to Top

The Marriner S. Eccles photograph collection is made up of promotional and formal portraits of Eccles and various business events he attended. Includes reception of honorary degree, and attendance at an architectural competition.

Use of the Collection Return to Top

Restrictions on Use

The library does not claim to control copyright for all materials in the collection. An individual depicted in a reproduction has privacy rights as outlined in Title 45 CFR, part 46 (Protection of Human Subjects). For further information, please review the J. Willard Marriott Library’s Use Agreement and Reproduction Request forms.

Preferred Citation

Collection Name, Collection Number, Box Number, Folder Number. Special Collections, J. Willard Marriott Library, The University of Utah.

Administrative Information Return to Top

Processing Note

Photograph number Processed by Dale Larsen in 1993.

Separated Materials

Photograph number audio-visual materials were transferred to the Marriner S. Eccles audio-visual collection (A0178).

Photograph number Manuscript materials were transferred to the Marriner S. Eccles papers (MS 0178).


Historical Note Return to Top

"Brigham Young was the colonizer Daniel Jackling the mining giant, and Marriner S. Eccles was Utah's premier financial genius," was the introduction to a 1977 Deseret News review of Eccles' then-recently published biography. The biography, Marriner S. Eccles: Private Entrepreneur and Public Servant, as well as a previously published autobiography, Beckoning Frontiers, detail the life of this remarkable man. He became the "principal economic philosopher of the New Deal," according to James Gardner, a professor in the University of Utah's College of Management. Another review of Eccles' biography stated, "The political and institutional principles he advocated and laid down as head of the 'Fed' are the very armature of the legislative structure under which US business and finance now operates."

Marriner Eccles, born 9 eptember 1890, to David Eccles and his second wife, Ellen Stoddard, was the oldest of nine children. David Eccles, a leading Utah entrepreneur and a Mormon polygamist, also had twelve children by his first wife, Bertha Maria Jensen. To distinguish between the two families, Bertha and her children were known as the Ogden Eccleses Ellen and her children as the Logan Eccleses. The significance of these geographical distinctions was later diminished when Marriner Eccles moved to Ogden and centered his business pursuits there during the 1920s.

Ellen Eccles and her children lived alternately in Baker, Oregon, and in Logan, Utah, because of her husband's business interests in both places. Sidney Hyman, author of Eccles' biography, speculates that because of her uncertain status as a plural wife (the Mormon church declared an end to polygamy in 1890), and thus a diminished sense of financial security, Ellen Eccles instilled in her sons a strong work ethic and the drive to become successful. She reasoned that their success would ensure her security, as was to be the case.

David Eccles, reputed to be the largest tithe payer in the Mormon church, died unexpectedly and intestate in 1912 at the age of 65. Although all of his children from both families shared equally in their father's estate, there was only one legally recognized widow--Bertha Eccles. The Logan Eccleses were left with a two-sevenths share, and the Ogden Eccleses with five-sevenths of the multi-million dollar estate.

Marriner Eccles attended Brigham Young College in Logan, Utah, which functioned more as a high school than a college. He left school in June 1909 at the age of 18 this was to be the end of his formal education. His father, whose schooling was limited, did not believe an extended education was necessary for success in business, and Marriner proved him correct. As the oldest son in his family, the responsibility for the welfare of his mother and his eight brothers and sisters, as well as the administration of the estate left them by their father, was thrust upon him.

In the meantime, he did what most other young Mormon men did-he served a mission for his church. From 1910 to 1912 he was in Scotland, the country his father left as a penniless youth. While in Schotland he met May Campbell Young (Maysie), his wife-to-be. On his return to Utah they corresponded, she joined him in Utah, and they were married in 1913.

His marriage and business career began at the same time. He first became president of the Hyrum State Bank, and a director and officer of the Thatcher Brothers Bank in Logan, two institutions in which his father had held significant interests. In 1916 he organized the Eccles Investment Company, a holding company, to manage the inheritance left to the Logan Eccleses. This holding company would exist for the next sixty years. Throughout the 1920s he built his business base in Utah. He assumed control of the First National Bank and First Savings Bank of Ogden. Eccles was also able to assume control of or take a leading role in the direction of several companies in which his father had held interests. These companies included Stoddard Lumber, Sego Milk, Eccles Hotel Company, Anderson Lumber, Mountain States Implement, Utah Home Fire Insurance Company, Utah Construction, and Amalgamated Sugar.

David Eccles was described by Leonard Arrington, Utah historian, as being a "man of vision, an analyst, an independent thinker, a fashioner of strong organizations and strong policies." While Marriner Eccles inherited these qualities from his father, they seemed lacking in the Ogden Eccleses. Their share of David Eccles' estate was much larger than that of the Logan Eccleses', but it dwindled considerably over the years. The inheritance of the Logan Eccleses, on the other hand, under Marriner's sound management, grew handsomely. According to Hyman, "The Ogden Eccleses would in time virtually disintegrate as a family while the Logan Eccleses, with Marriner in control, were held together over the passing decades despite many internal strains."

By 1918, Marriner and Maysie Eccles were the parents of three children: Campbell, Eleanor, and John (a fourth child died at an early age). During the next decade Eccles acquired, seemingly without conscious design, interests in additional banks. This led to the formation of the First Security Corporation in 1928 with Marriner serving as president and his brother George as a vice president. The corporation is believed to have been the nation's first bank holding company. At the end of the 1920s, Marriner Eccles had achieved a full measure of success.

The next decade would tell a different story. By 1930, the nation was in the grip of the Great Depression, and Eccles stood to lose much of what he had worked for during the previous eighteen years. As he reflected on the dynamics of the national economy and the responsibilities of business and government toward society, he decided that "hard work and thrift as a means of pulling us out of the depression is unsound economically. True hard work means more production, but thrift and economy means less consumption." Since these two forces were difficult to reconcile, his answer was that of controlled deficit financing on the part of government. Eccles was often asked to address local groups about his fiscal and monetary views. One group particularly interested in his ideas was an organization of Ogden businessmen called the Freidenkers. German for free-thinkers, they were also known phonetically as the "free-drinkers." Eccles was a member of this group. Another member was Robert Hinckley, who later served in the Roosevelt administration. Hinckley was a nephew of Senator William H. King, a Utah Democrat, who was a member of the Senate Finance Committee. The committee had been directed to determine the causes of the depression and to suggest legislative remedies. Hinckley recommended to Senator King that Eccles should be invited to testify before the committee.

Eccles' ideas about the need for government intervention in the economy and deficit financing directly contradicted the testimony offered by others. However, because of his testimony and subsequent meetings with men close to President Franklin D. Roosevelt, he was asked to join the administration as an assistant to Secretary of the Treasury Henry Morgenthau, Jr. He accepted and began his duties in February 1934. In November of that year he was nominated by Roosevelt to head the Federal Reserve System the Senate approved this appointment 25 April 1935. In 1936 he was appointed as chairman of the board of governors of the newly restructured Federal Reserve System created by the Banking Act of 1935.

Eccles has been given credit as being the architect of the Federal Housing Act of 1934 and the Banking Act of 1935. He continued in Washington for seventeen years as head of the nation's banking system, and provided strong leadership during the turbulent years of the depression and World War II. He often disagreed with the secretaries of the Treasury and both presidents under whom he served. These disagreements are well documented Eccles was not a man to conceal his feelings about monetary and fiscal policies. After his initial successes in the mid-thirties, he turned his attention to two other issues. The first was the unification of the country's banking system, and in this endeavor he was not successful. He based his acceptance of reappointment to the board of governors in 1944 on Roosevelt's implied endorsement of the Eccles Unification Plan. It was not until the mid-1970s that this was accomplished, however, under then-Federal Reserve chairman Arthur Burns. The second issue involved a long-standing disagreement with the Treasury Department and both secretaries, Morgenthau and Snyder, about the best way to handle the inflationary pressures building as a result of World War II. Eccles was more successful with this issue, and saw most of his ideas realized by the Accord of 1951.

While Eccles was in Washington he was fortunate to have able men in Utah to maintain his business interests. In particular, his brother George profitably managed the First Security Corporation. Marriner did not completely remove himself from his Utah interests, however, for he assumed the position of chairman of the board of both Utah Construction and Amalgamated Sugar in the 1940s. Although his professional career was flourishing, his relationship with his wife Maysie deteriorated. They were divorced in 1950, after thirty-seven years of marriage.

The early 1950s marked several changes in Marriner Eccles' life. In 1948, because he disagreed with President Harry S. Truman's economic policies, Truman did not reappoint him as chairman of the Federal Reserve Board. Eccles was, however, still a governor of the board, as these appointments are made for fourteen years. Because he was no longer chairman, he felt that he could speak more openly about his disagreements with the administration, As his Washington career was winding down, he began writing his autobiography and retained Sidney Hyman to assist him. The book, Beckoning Frontiers, was published in 1951, the same year he resigned from the Federal Reserve Board and the same year he remarried. His new wife, Sara (Sallie) Madison Glassie, was socially prominent in Washington, D.C.

Although Eccles returned to Utah, he did not think of it as a permanent move. He mounted a brief campaign to wrest the Republican senatorial nomination from the incumbent, Arthur Watkins. Even though he was unsuccessful and he was in his early sixties, an age when most men think of retirement, Eccles was not one to retire and live on memories. Instead, he resumed active participation in his numerous business interests, primarily Amalgamated Sugar and First Security Corporation in Utah, and Utah Construction and Mining based in San Francisco. He divided his time between Salt Lake City, where he and Mrs. Eccles maintained an apartment at the Hotel Utah, and San Francisco, where they also maintained an apartment. On occasion they visited their cottage at the Eldorado Country Club in Palm Springs, California. Golf was Eccles' favorite pastime and over the years he belonged to the Burning Tree and Chevy Chase Country Clubs in Washington, D.C., as well as various other clubs.

Eccles' prime objective for the past four decades of his life was to "help lay the foundations for a stable economic order at home and in the world areas," and he felt compelled to share his concerns and solutions with every possible audience. Whereas during the 1950s he had devoted himself primarily to his business interests, in the 1960s he became more active in speaking and writing about issues of public concern.

The specific issues of critical interest to him were those of world over-population, the war in Vietnam, and to a lesser extent, the need for US recognition of Red China. He felt these problems were responsible for a great deal of instability in the world and prevented the realization of the stable economic order he had worked so hard to achieve. He wrote and spoke often about these issues to a wide variety of audiences, ranging from the Commonwealth Club in San Francisco, of which he was a member, to the Brigham Young University student body and his own family reunion (encompassing his father's large progeny), to whom he lectured on the importance of birth control. He also spoke at small meetings, such as the Unitarian Church in Salt Lake City. From all of these audiences he usually received mixed reviews.

In 1972 he delivered his last public speech before the World Trade Club in San Francisco, who presented him with their International Achievement Award. Eccles' ideas and opinions over the years had often been controversial and in many cases ahead of their time, but by 1972 many of his concepts were more widely accepted, and the Trade Club members applauded him enthusiastically.

Although his public role had increased significantly in the 1960s, his role in business had not diminished. The early 1970s, however, witnessed a winding down of his business commitments, and the lines of succession were arranged. Utah Construction and Mining became Utah International in 1971. That same year he stepped down from his active board chairmanship and became honorary chairman of the board. In 1975 he also stepped aside as his brother George became chairman of the board of the First Security Corporation.

Eccles Investment Company, which had been formed some sixty years earlier in an attempt to further the inheritance of the Logan Eccleses, was now disbanded. Over the years much of its stock had been distributed to its stockholders, and in 1970 its affairs were so arranged that all its assets were sold, except the stock in Utah Construction. The proceeds from these sales were then used to buy stock in that firm. Eccles Investment Company was liquidated, leaving its stockholders with only Utah Construction stock, which then became Utah International.

In December 1976, Utah International merged with General Electric, constituting the largest corporate merger in US history to that time. Details of the merger were worked out by Edmund Littlefield, who had succeeded Eccles as Utah International's chairman. The effect of this merger was to greatly increase the value of the stock previously held in Utah International. An example of the increased stock value was demonstrated by the holdings of Eccles's long-time secretary, Va Lois Egbert, whose personal investments had been handled by Eccles. When her will was probated in 1978, following her death in November 1976, her estate was valued at approximately $4 million, instead of the anticipated sum of $250,000-largely due to the increased value of the Utah International stock. The University of Utah Medical Center was the recipient of the bulk of her estate, receiving $3.6 million dollars, the largest single donation ever made to the institution to that time.

In addition to the time he gave to his public concerns and business interests, Eccles found time to serve on a few special committees and select groups. Notable among these was the board of the American Assembly sponsored by Columbia University. The group met yearly and sponsored publications regarding issues of public concern. Many of these books and publications can be found in the Marriner S. Eccles Library of Political Economy, a part of the Eccles collection.

After Eccles finalized arrangements for both his business and personal affairs, he initiated "bequests designed to encourage the emergence of young leaders of the future who could recognize, as he did, 'that the good of the individual, the family, and the community was indivisible with the good of the larger national and world society." One form these bequests took was a series of contributions to the University of Utah for fellowships. He also established the Marriner S. Eccles Library of Political Economy, and created the Marriner S. Eccles Foundation. The Foundation funds various causes within Utah, encompassing private, non-governmental, charitable, scientific, and educational organizations for the benefit of the citizens of the state. Eccles also established the Marriner S. Eccles Professorship of Public and Private Management at the Stanford University School of Business in 1973.

During 1977, Eccles' health worsened, and he stopped traveling between San Francisco and Salt Lake City. He died in Salt Lake City on 18 December 1977. Eccles' funeral service was held 22 December 1977, in Salt Lake City and was described as "brief" by the Deseret News. Edmund Littlefield and Joe Quinney spoke movingly about his character and the qualities which set him apart from most other men. R. H. Burton, who presided at the service, summed up the meaning of those remarks when he noted that, "rarely has an individual affected the lives of so many." Eccles is well remembered by many. His descendants and other family members continue to contribute generously to Utah institutions. From time to time his name appears in a newspaper article, and in 1982 the main Federal Reserve Building in Washington, D. C., was named in his honor.

A more personal tribute is contained in a letter written to Eccles in June 1977, shortly before his death. In it his brother-in-law, Joe Quinney, referred to the biography that Sidney Hyman had been writing: "I must tell you I feel the author did not reveal the whole MSE to the extent I would have recommended. You were and are more than a mere technician and manipulator. There is also that MSE who is tempestuous in battle argumentative and insistent in debate tough-even hard-boiled in business relations yet honest, judicious as you saw justice companionable with your friends, especially your good old friends with whom you are mellow, kind and considerate who can dish it out and take it in good humor whose family relationship, though strange at times has an underlying affection and compassion all strange but true."

Content Description Return to Top

The Marriner S. Eccles papers (1910-1985) chronicles the years when Eccles made his greatest contributions as a national and international fiscal and monetary expert, businessman, and public figure.

There are four distinct periods in the life of Marriner S. Eccles. The first period, his formative years, dates from his birth in 1890 to the death of his father, David Eccles, in 1912. The second period is from 1912 until 1934 when, following in the footsteps of his father, he became the most successful entrepreneur in Utah. During this time he assumed control of several western companies and created the First Security Corporation, the largest bank system in the Intermountain area. Neither of these periods is well documented by his papers, but each is covered by two books: Beckoning Frontiers, his autobiography completed with the assistance of Sidney Hyman in 1951, and his later biography, Marriner S. Eccles: Private Entrepreneur and Public Servant, written by Hyman and published just prior to Eccles' death in 1977.

The most significant section of the collection, the Washington Years, boxes 2-112, provides insight into Eccles' activities during the third period in his life, 1934-1951. During these years he served for a brief period in 1934 at the United States Treasury Department in Washington, D. C., and then as both governor and chairman of the nation's bank regulatory agency, the Board of Governors of the Federal Reserve System. His papers from the Federal Reserve section of his collection, his library, and the accompanying ephemera substantiate the importance of his role in Washington during the New Deal period, World War II, the postwar recovery, and the beginning of the Cold War.

The last period of his life, 1951-1977, is documented under the heading Businessman and Public Figure, boxes 113-240. This section of his papers reflects his role as an international businessman and an outspoken critic of many of the country's economic, social, and foreign policies.

The Federal Reserve papers were originally organized in loose-leaf binders by Va Lois Egbert, secretary to Eccles for almost three decades. Her apparent intention was to place material in order of its apparent subject importance. Correspondence to and from the White House were thus placed first in the collection in chronological order. Several years before the Marriott Library received the material, Eccles permitted Dean May, then a graduate student and now a member of the history faculty at the University of Utah, to microfilm the material in the binders. After the library received the collection and some initial processing had taken place, the decision was made to remove the material from the binders and place it in folders in document boxes. Although some reordering of the material was done, much of the original arrangement has been retained. The original order may be seen by viewing both the microfilm reels and the photocopies of May's "Guide to Marriner S. Eccles Washington Papers," found in box 234.

Box 1, containing Eccles' biographical material, begins the Federal Reserve section. It is followed by six boxes of correspondence between Eccles and Presidents Franklin D. Roosevelt and Harry S. Truman and their staffs. Federal Reserve Board reorganization materials, 1934-1950, including reports from the Hoover Commission and the Commission on the Organization of the Executive Branch, are found in box 8. Many of the experiences Eccles had with the Treasury Department, 1934-1951, are documented in boxes 9-12. The letters, memoranda, and reports in this section reveal some of the friction between the Federal Reserve Board and the Treasury which resulted in the Accord of 1951. See boxes 61-62. Materials found in boxes 13-16 describe the drafting and passage of the Banking Act of 1935. Removing control from the Federal Reserve Banks across the country and placing it in the Federal Reserve Board in Washington, this act changed the name and structure of the Board and centralized the power of the Federal Reserve System. Eccles believed the act, for which he was chiefly responsible, was his major accomplishment in Washington. Boxes 17-23 contain additional material about the Banking Act of 1935 and the effect it had on bank-holding companies, including Transamerica, the holding company for Bank of America. Reports published in 1948 speculated that the Giannini family, who controlled Bank of America, may have been responsible for Eccles' demotion as chairman of the Federal Reserve Board. During the depression, the chief concern was how to raise sufficient revenues from a still-depressed economy by the 1940s, the major issue was how best to generate sufficient revenues for national defense and still protect the economy from the inflationary pressures resulting from enormous war-time spending. Reports, memoranda, studies, and other items pertaining to taxation policies, 1934-1951, prepared mostly by Board staff members, are included in boxes 24-26.

One of Eccles' major accomplishments during the early 1930s was to successfully establish the Federal Housing Authority (FHA). Boxes 27-29 feature material on housing related issues, 1934-1951, but contain little material about the creation of the FHA.

Economic stabilization during and following World War II was a matter of grave concern to Eccles. He felt that the Truman administration had not taken the measures necessary to combat postwar inflation. Boxes 30-38 contain material about strategies for dealing with the postwar world. Included is some material from the Bretton Woods Conference Eccles attended in 1944.

The next part of the collection, boxes 39-56, represents many issues of importance. Some of the materials include correspondence and addresses, confidential correspondence, the Eccles-Byrd controversy, gold and capital issues, and other miscellaneous correspondence. Correspondence with members of Congress is found in boxes 56-57 information about prospective members of the Federal Reserve Board is located in boxes 58-60 material about the 1951 Accord, when the Board finally asserted its independence from the Treasury, is found in boxes 61-62 Eccles' testimonies, some of which are duplicated in his scrapbooks, are found in boxes 63-71 and Lauchlin Currie memoranda, 1934-1939, are in boxes 72-73. Currie, for whom Eccles had great respect, was long associated with the Board in a staff position. Speeches for the years 1925-1951, some of which is duplicated in Eccles' scrapbooks, are found in boxes 74-86. An abundance of miscellaneous material is contained in boxes 87-112.

Businessman and Public Figure Papers

The second section of the papers, boxes 113-240, covers the fourth period of Eccles' life, from 1951 when he left Washington, D.C., until his death in December 1977. During that period he divided his time between Salt Lake City, where he resumed control of the First Security banking system, and San Francisco, where Utah Construction was headquartered. Eccles was chairman of the board of Utah Construction, a company with world-wide interests in mining and construction. The Stewart Library at Weber State College has Utah Construction records, 1906-1961. His papers do not directly document his role as a businessman, but rather are reflective of his role as a public figure speaking out often against the foreign policy of the US government. He was particularly opposed to its policies in Southeast Asia, where Utah Construction had many interests. Eccles also took a strong stand against over-poplation and was a supporter of groups such as Zero Population and Planned Parenthood.

Personal correspondence and public speeches arranged chronologically from 1951 to May 1972, when Eccles gave his last public address, are located in boxes 113-133. During the early 1950s he usually spoke on monetary and fiscal topics. By 1957 he had begun to question US Cold War policies and believed the United States should recognize Red China. By 1959 over-population was an issue which Eccles addressed often. His next area of interest and the one about which he spoke most vociferously was the involvement of the United States in Vietnam. Speeches on this topic are accompanied by related correspondence. Box 133, folder 1, provides an index to Eccles' speeches, statements, and testimonies.

Eccles' interest in politics continued, and he corresponded frequently with political figures boxes 134-147 contain material which cover these topics. Boxes 134-135 feature material from Eccles' unsuccessful campaign for the Utah Republican senatorial nomination against incumbent Arthur Watkins in 1952. United States foreign policy, vis-a-vis China, is the topic of material in boxes 146-147, although correspondence with members of Congress is held in boxes 193-196.

The issue of population control, during the 1950s through the 1970s, is the subject matter of boxes 148-159. Included are addresses by Eccles and others, correspondence, reports, and a sampling of published items from various organizations concerned with the problem of over-population.

Eccles was one of the first members of the business community to protest US involvement in Vietnam. Boxes 160-167 contain articles, speeches, newsclippings, reports, publications, and correspondence of Eccles and others who inveighed against America's Asian policy.

The American Assembly, the Commission on Money and Credit, the Center for the Study of Democratic Institutions, the Atlantic Council, and the Hall of Fame are all organizations with which Eccles was associated in the last two decades of his life. Material reflecting his involvement is found in boxes 168-179.

The largest correspondence section of the collection is located in boxes 180-211. General correspondence is arranged alphabetically in boxes 180-192. Boxes 193-196 hold correspondence with members of Congress box 197 with Federal Reserve Board members and bank officers box 198 with universities boxes 199-203 related to his autobiography and biography. Boxes 204-208 contain invitations boxes 209-210, Christmas greetings, 1934-1974 and, in box 211, are condolences to Mrs. Sallie Eccles upon the death of her husband.

Most of the materials dealing with corporate interests are found in boxes 212-220. Included are limited correspondence and annual reports from Pet Milk Company, Utah International (formerly Utah Construction), Amalgamated Sugar, and the First Security Corporation. In view of the extent of Eccles' participation in these companies, there is little substantive material.

The final general heading for this section is Miscellanea. Included are manuscripts of Eccles' biography and autobiography and manuscripts of other works related to his career. Journal articles written by and about Eccles are in boxes 228-230. In some cases these duplicate the Eccles scrapbooks retained in the Eccles Room, as well as material found in boxes 90-91.

Papers about Eccles from other repositories-the Franklin D. Roosevelt Library, the Harry S. Truman Library, the Library of Congress, the University of Virginia Library, and the National Archives-are found in boxes 231-233.

The final part of this section, boxes 234-240, includes the microfilm by Dean May of the Washington files, cassette and reel-to-reel tape recordings, daybooks from 1966-1977, and materials that have become available since the collection was initially processed.

A second component of the collection is the Eccles library, which consists of approximately 1000 books pertaining to his interests, career, the New Deal, and the 1940s. Government documents relating to the time he spent in Washington, D.C., as well as a number of indexed, bound volumes prepared by Va Lois Egbert, complete the library.

The Eccles Library contains volumes on banking and finance, economic treatises, the Roosevelt years, and a large number of books from the American Assembly series. The library is based on Eccles' original, private collection, which was augmented before the collection was received by the Manuscripts Division. The book collection provides background material for researchers interested not only in Eccles' career, but also the economic and political events occuring during the 1930s and 1940s.

The government documents section of the Eccles Library contains bound copies of the Federal Open Market Committee Minutes, 1936-1975 Federal Reserve Bulletin, 1966-present annual reports from the Federal Reserve Board and other government agencies soft-cover reports from the 1940s dealing with post-war recovery and Proceedings from the Bretton Woods Conference, 1944.

Of the bound volumes of scrapbooks containing newsclippings, magazine articles, testimonies, cartoons, and other items organized by Miss Egbert, the most useful may be the set of newsclippings. The articles begin in 1922, but only ten are dated prior to 1933. These clippings originated from Utah, Washington, D. C., New York, and points between. They provide extensive coverage of Eccles' career from 1933 forward-the period covered by his papers. To ensure their long-term preservation, these clippings were photocopied and placed in archival folders and boxes.

Other scrapbooks include printed copies of Eccles' addresses, 1925-1975 testimonies, 1933-1951 cartoons, 1935-1951 invitations, 1934-1951 magazine articles by and about Eccles day books, 1937-1951 and miscellaneous memoranda and letters and other assorted material.

The Marriner S. Eccles collection provides substantial research material about the Federal Reserve System during the third and fourth decades of the twentieth century. It also provides insight into some of the public issues of the 1960s and 1970s with which Eccles was concerned-over-population and US foreign policy, particularly as it applied to Asia. The collection offers little information about his role in the development of banking in the Intermountain West, or his many other business interests, other than minimal correspondence and annual reports from companies with which he was associated. Some of the correspondence with members of Congress, public figures, friends, and acquaintances reveals his views about issues and events in his life. Because there is almost no family correspondence, it is through his general correspondence that part of Eccles' personal life emerges.

Marriner Stoddard Eccles, intelligent, complex, and ambitious, seemed determined to make his mark in the world, and probably succeeded beyond all his expectations. Although his views were often unpopular, time usually proved them to be correct. Unfortunately, these papers do not convey the full measure of the man, but they are an invaluable source of information about the monetary and fiscal systems of the United States during the 1930s and 1940s, and document the significant financial role Eccles played during these turbulent decades.

Use of the Collection Return to Top

Restrictions on Use

The library does not claim to control copyright for all materials in the collection. An individual depicted in a reproduction has privacy rights as outlined in Title 45 CFR, part 46 (Protection of Human Subjects). For further information, please review the J. Willard Marriott Library’s Use Agreement and Reproduction Request forms.

Preferred Citation

Collection Name, Collection Number, Box Number, Folder Number. Special Collections, J. Willard Marriott Library, The University of Utah.

Administrative Information Return to Top

Arrangement

Organized in eleven series: I.Biographical Materials II. White House Papers III. Federal Reserve Papers IV. Speeches and Correspondence V. Political Files VI. Population Files VII. Vietnam War Files VIII. Organizations IX. Personal Correspondence X. Business and Banking Files XI. Miscellaneous.

Separated Materials

Photographs and audio-visual materials were transferred to Multimedia Division of Special Collections (P0178 and A0178).

Acquisition Information

Donated by Mrs. Marriner S. Eccles in 1979.

Processing Note

Processed by Gwen Gittins and Nancy Young in 1989.

Detailed Description of the Collection Return to Top

I: Background Information Return to Top

A portion of these papers have been digitized and are available online through the Federal Reserve Archive. This section contains biographical information of Eccles correspondence concerning his Senate confirmation as a governor and later as chairman of the Federal Reserve Board his correspondence with biographers and some miscellaneous personal items.

II: The Washington Years Return to Top

This part of the collection contains materials from Eccles' service in Washington, D. C., 1934-1951. It is divided into two sections: White House Paper, boxes 2-7 and Federal Reserve Papers, boxes 8-12. Materials in both sections are arranged categorically, then chronologically or alphabetically within each category.


Banking Act of 1935

In August 1935, President Franklin D. Roosevelt enacted significant reforms to the Federal Reserve and the financial system, including increasing the independence of the Fed from the executive branch and shifting some powers formerly held by the Reserve Banks to the Board of Governors.

The Banking Act of 1935, which President Roosevelt signed on August 23, completed the restructuring of the Federal Reserve and financial system begun during the Hoover administration and continued during the Roosevelt administration. Much of that earlier legislation contained emergency expedients and regulatory experiments that Congress approved on a temporary basis. The Banking Act of 1935 finalized these reforms “to provide for the sound, effective, and uninterrupted operation of the banking system.” 2

The Banking Act of 1935 addressed three broad issues.

The issue that inspired the broadest debate was the structure, powers, and functions of the Federal Reserve System. This issue was the focus of the portion of the act known as Title II, Amendments to the Federal Reserve Act. This portion expanded the powers of the Federal Reserve shifted power from the regional reserve banks to the Board based in Washington, DC clarified and codified the relationship between the Federal Reserve and the executive and legislative branches of the federal government and reorganized the Federal Reserve’s leadership structure.

The reorganization included cosmetic and consequential changes. The Federal Reserve Board became the Board of Governors of the Federal Reserve System. The leader of the Board of Governors (previously called the governor of the Federal Reserve Board) became the chairman of the Board of Governors. The second-in-command (previously titled vice governor) became the vice chairman of the Board of Governors. All members of the Board (formerly just called members) received the title of governor. 3

The Board of Governors became increasingly independent from the executive branch of the federal government. The secretary of treasury, who had served as the chairman of the Federal Reserve Board, and the comptroller of the currency, who had served as a member of the Federal Reserve Board, ceased to serve with the Federal Reserve after 1936. The Federal Reserve moved its meetings from the Treasury Department to a new building constructed on Constitution Avenue and consolidated its staff at that location. Planning for this building began soon after the passage of the act. The Federal Reserve staff occupied the new facility in the fall of 1937. 4

In each Federal Reserve district, the chief executive officer, who had been labeled the governor, received the title of president. The chief operating officer, who had been labeled the vice governor, became the first vice president.

Changing the titles of the Federal Reserve’s leaders had symbolic and legal significance. Around the world, the final decision-maker in a central bank held the title of governor. This tradition probably arose with the Bank of England, which had been led by its governor since 1694. The Federal Reserve Act of 1913 labeled the chief executive officers at reserve banks as governors because the Fed’s founders viewed the system as a confederation of autonomous reserve banks, each operating independently under general oversight of the Federal Reserve Board in Washington, DC. Governors were active executive officers who directed the day-to-day operations of their organization.

The Banking Act of 1935 changed the titles of the System’s leaders to signify the centralization of authority at the Board of Governors and the reduction in the independence and stature of the twelve Federal Reserve District Banks (Friedman and Schwartz 1963, 445-6). These changes required a careful editing of the entire Federal Reserve Act to clearly indicate which powers of the old bank governors transferred to the new board governors and which powers of the old bank CEOs remained with the new bank CEOs.

In this rewriting of the act, the reserve banks lost certain legal powers and much policy independence. Originally, each bank directed open-market operations in its own district. Banks decided what securities to purchase at what price for their own accounts. In the 1920s, the banks realized that each bank’s actions influenced markets in other districts and that uncoordinated simultaneous actions disturbed markets throughout the nation. In 1922, to enhance coordination, the Reserve Banks of New York, Boston, Chicago, Cleveland, and Philadelphia created a committee of governors to plan and execute joint purchases and sales. In 1923, with the concurrence of the Board, that adhoc committee became the formal Open Market Investment Committee (OMIC). The OMIC directed a single account that conducted open-market transactions for the entire system, under the general supervision of the Board, with pro-rata shares of transactions allocated to district banks. This was a voluntary arrangement, with individual banks retaining legal rights to engage in open market operations on their own initiative or to decline to participate in system-wide actions, although deviations from common policy tended to be small and temporary.

In 1930, the Board and the banks altered the arrangement. The five-member OMIC, which had the authority to initiate and execute open market policy, was replaced by the twelve-member Open Market Policy Conference (OMPC), consisting of all twelve bank governors, which planned open market policies in consultation with the Board, and a five-member executive committee (consisting of the members of the old OMIC), which directed the execution of policies. The OMPC remained a voluntary organization of equals. Each bank retained the right to decide whether or not to participate in joint action, the right to act on their own account (except for government securities), and the right to withdraw from the conference.

This arrangement appeared to function effectively for two years. In the fall of 1931, the System coordinated a joint response to the financial crisis in Europe. In the winter and spring of 1932, the System embarked on expansionary open market policies of unprecedented scale. The aggressive policies appeared to be effective. The economy appeared poised to recover. But, in the summer of 1932, disagreements arose, cooperation collapsed, expansion ceased, and contraction resumed. The Depression reached its trough in the winter of 1933, during the nationwide financial crisis in February and March, when several reserve banks refused to cooperate with system-wide open market policies or to rediscount assets of other reserve banks. Congress and the Roosevelt administration responded to this clear failure of cooperation in the Banking Act of 1933 (commonly called Glass-Steagall), which changed the OMPC into the Federal Open Market Committee (FOMC), whose members remained the governors of the twelve regional reserve banks, but whose decisions became binding on the reserve banks.

The Banking Act of 1935 superseded this arrangement by creating the FOMC’s modern structure. The FOMC’s voting members consisted of the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and the presidents of four other banks on a rotating basis. The FOMC directed open market operations for the system as a whole implemented through the trading facilities at the Federal Reserve Bank of New York. Within this structure, the district banks participated in the creation of a coordinated, national monetary policy, rather than pursuing independent policies in their own districts.

Control of the most important tool of monetary policy, open market operations, was vested in the FOMC, where voting rules favored the Board of Governors. The Banking Act of 1935 gave the Board of Governors control over other tools of monetary policy. The act authorized the Board to set reserve requirements and interest rates for deposits at member banks.

The act also provided the Board with additional authority over discount rates in each Federal Reserve district. Originally, decisions about discount rates rested with the Reserve Banks, which set rates independently for their own districts. Changes in discount rates required the approval of the Board in Washington, but the Board could not compel banks to change their rates and the Board was not supposed to set a uniform discount rate throughout the nation. Early drafts of the legislation shifted decisions about discount rates to the Board and increased the Board’s control of discount lending, in a variety of ways. Later versions of the act omitted overt changes in the discount lending process, but required the banks to submit their discount rates to the Board of Governors every fourteen days, enhancing the Board’s authority over discount interest rates.

The final version of Title II arose after a vigorous debate, which lasted throughout the spring and summer, after the Roosevelt administration introduced an initial version of the bill to Congress in February 1935 (Williams 1936, 95).

The initial version of Title II was prepared under the direction of Marriner Eccles, who moved from the Treasury to become governor of the Federal Reserve Board in November 1934 and for the next several months closely supervised the staff who drafted the legislation. 5 The February draft contained provisions similar to those described above and additional clauses (New York Times 1935, 20).

The initial version proposed a national mandate for Federal Reserve policies and altered qualifications for members of the Federal Reserve Board by providing that they should be persons well qualified by education or experience to participate in the formulation of national economic and monetary policies. In the past, the law required members of the Federal Reserve Board to be selected from different Federal Reserve Districts and with due regard to a fair representation of financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.

The initial version proposed to eliminate collateral requirements for Federal Reserve notes and to allow the Federal Reserve Banks to purchase any security guaranteed by the U.S. government, including Treasury notes, bills, and bonds, without regard for maturity. This proposal would have allowed the Federal Reserve to expand the supply of money and credit rapidly and without limit by purchasing government debt. In the past, the supply of Federal Reserve notes rose and fell depending upon the quantity of short-term business loans extended by commercial banks within bounds determined by the available supply of gold coins and bullion. This dynamic arose from the real bills doctrine underlying the original Federal Reserve Act, where the extension of commercial loans created collateral that backed additional issues of currency.

The initial version proposed that the chief executive officers and chairman of the boards of the Federal Reserve Banks be appointed to one year terms, subject to the approval of the Federal Reserve Board, and that the governor and vice-governor of the Federal Reserve Board serve at the discretion of the president of the United States. The secretary of the treasury, who served as the chairman of the Board, and the comptroller of the currency, who served as a member of the Board, already served at the discretion of the president. These changes would have, therefore, enabled the president at any time and for any reason to replace a majority (four of seven) of the members of the Federal Reserve Board with new appointees. They could, in turn, replace the leaders of all of the reserve banks within twelve months.

The initial version also proposed that the FOMC consist of the governor of the Federal Reserve Board, two other members of the Federal Reserve Board (potentially the secretary of treasury and comptroller of the currency), and two governors of Federal Reserve banks, elected annually by a vote among the twelve bank governors, each of whom served annual terms subject to the approval of the Federal Reserve Board. These provisions would have enabled the president to control the actions of the central bank, including open market operations, and directly dictate rates of interest, exchange, and inflation.

These provisions of the initial bill “released a flood of protest and criticism, with a modicum of endorsement, which followed it through the hearings in both the House and the Senate” (Bradford 1935, 663). The House passed the administration’s banking bill with few amendments. When the bill arrived in the Senate, Sen. Carter Glass (D-VA) declared:

“that he had before him a volume of letters that would fill a dozen issues of the Congressional Record from commercial institutions, business institutions, and industrial institutions of every description all protesting against the banking bill as sent over from the House of Representatives” (GFW 1936).

Opposition came from people who feared inflation and worried about the centralization of monetary policy in Washington. Opposition also came from business leaders, bankers, economists, and politicians who doubted the economic theories underlying the controversial provisions of the initial bill and valued ideas embedded in the original Federal Reserve Act, particularly the real bills doctrine, which tied the quantity of currency issued by the central bank to the quantity of short-term business loans extended by commercial banks. “The sections of the original bill which drew the most fire were those which tended to increase political influence in the administration of the system” (Preston 1935, 761).

The Senate Committee on Banking and Currency and its subcommittees held extensive hearings on the bill, which began in April and continued into June. The testimony was “predominantly critical” (Bradford 1935, 668). Those testifying about flaws in the legislation included Winthrop Aldrich, the chairman of Chase National Bank and son of Nelson Aldrich James Warburg, vice chairman of the Bank of the Manhattan Company of New York and son of Paul Warburg Edwin Kemmerer, a professor at Princeton University, author of the well-known A B C of the Federal Reserve System, published in 1922, and a former researcher for the National Monetary Commission and Henry Parker Willis, another noted economist, who had served as the secretary of the Federal Reserve Board, and who wrote the well-known book The Federal Reserve: A Study of the Banking System of the United States, published in 1915. The secretary of the treasury, Henry Morgenthau, and the governor of the Federal Reserve Board, Marriner Eccles, testified in favor of the legislation. Other members of the Federal Reserve Board, some members of the Federal Advisory Council, and leaders of more than twenty leading financial institutions also testified, sometimes positively, but in many cases offering constructive criticism. The hearings held by the Senate in 1935 amounted to the most extensive debate about and analysis of the Federal Reserve since the creation of the system in 1913 and before the Federal Reserve Reform Act of 1977.

After these hearings, the Senate Committee on Banking and Currency passed a series of amendments that increased the independence of the Board of Governors and minimized partisan political influence over monetary policy. Examples included removing the secretary of the treasury and comptroller of the currency from the Board of Governors, providing members of the Board of Governors with terms lasting fourteen years, and appointing the chair and vice chair of the Board of Governors to four-year terms that came up for renewal in the second year of the term of the U.S. president. The Senate preserved qualitative constraints on credit and money underlying the Federal Reserve System, with respect to the types of assets that could back Federal Reserve notes or that could be accepted as collateral for discount loans. The Senate eliminated language changing the mandate and mission of the Federal Reserve. The Senate also eliminated language changing the qualifications for service on the Federal Reserve Board and retained language requiring members of the Board to come from different Federal Reserve Districts and represent the diversity of American economic, geographic, and social interests.

The remaining sections of the act invoked less discussion. Title I, Federal Deposit Insurance, created a permanent Federal Deposit Insurance Corporation (FDIC), modified the structure of deposit insurance, and designated the FDIC to be the liquidator of failed banks. Congress had created a temporary deposit insurance program in 1933.

Title III of the Banking Act of 1935, Technical Amendments to Banking Laws, touched on a wide range of issues. Some altered the investments that banks were allowed to make. Others altered arrangements for voting on bank stock and rules regarding the governance of financial firms. A large literature characterizes the range of changes. Here, we emphasize a particularly important example.

From 1863 until 1935, shareholders of most commercial banks faced double liability. This meant that if banks failed, the stockholders – who typically included the directors and officers of the bank – lost the amount they had invested in the stock of the bank and an additional amount, typically $100, per share. This additional liability gave bank shareholders and managers an incentive to ensure the safe operation of financial institutions, but also deterred investment in commercial banks and impeded the recovery of the financial system following the widespread failures of the early 1930s. To speed the recovery, the Banking Act of 1935 eliminated double liability.

Together, the creation of the FDIC and the elimination of double liability changed the relationship between the federal government, Federal Reserve, and financial industry. Before these changes, bank failures led to harsh consequences for banks’ owners and managers. Fear of these consequences kept risk-taking in check. After 1935, when things went wrong, bankers faced less liability and the FDIC cleaned up the mess. This change aroused little opposition at the time, although academics note its long-run consequences (Mitchener and Richardson 2013).

Eventually, a conference committee composed of senators and representatives met to reconcile differences in different versions of the legislation. The final version closely resembled the Senate’s versions, which was broadly acceptable to bankers and businessmen. When Congress presented the Banking Act of 1935 to the president, the “American Bankers Association endorsed the act as an acceptable piece of legislation and basically sound” (G.F.W. 1936).

Endnotes

Gary Richardson is the historian of the Federal Reserve System in the research department of the Federal Reserve Bank of Richmond. Alejandro Komai is a PhD candidate in economics at the University of California, Irvine. Michael Gou is a PhD student in economics at the University of California, Irvine.

This phrase appears in the preamble of the Banking Act of 1935.

Prior to the Banking Act of 1935, the secretary of the treasury served as the chairman of the Federal Reserve Board. The governor of the Federal Reserve Board served as the active executive officer. The Banking Act of 1935 effectively combined those positions. After the passage of the act, the position of the chairman of the Board of Governors combined the powers previously split between the Board’s chair and governor. For additional information, see the historical notes at the Board of Governors website. Chandler (1971, 305) emphasized the symbolic significance of this provision with this phrase, “Now every member of the Board was a governor!” which may be the only exclamation mark in his opus.

President Roosevelt dedicated this building on October 20, 1937. It was initially known as the Federal Reserve Building. In 1982, an act of Congress named the building after Marriner S. Eccles, who served as governor of the Federal Reserve Board and Chairman of the Board of Governors from November 15, 1934 through April 14, 1948. For more information about the building, see the History of the Marriner S. Eccles Building and William McChesney Martin, Jr. Building.

The staffs under Leo T. Crowley, chairman of the Federal Deposit Insurance Corporation Marriner S. Eccles, governor of the Federal Reserve Board and J.F.T. O’Connor, comptroller of the currency, prepared the initial drafts of the legislation covered in Titles I, II, and III respectively. “The three titles are to some extent interrelated, but each might have been enacted as a separate measure” (Preston 1935 p. 743).

Bibliography

Bradford, Frederick A. “The Banking Act of 1935." American Economic Review 25, no. 4 (1935): 661-72.

Chandler, Lester V. American Monetary Policy, 1928 to 1941. New York: Harper and Row, 1971, pp. 304-7.

Gayer, Arthur D. “The Banking Act of 1935." Quarterly Journal of Economics 50, no. 1 (1935): 97-116.

Friedman, Milton and Anna Schwartz. A Monetary History of the United States: 1867-1960. Princeton: Princeton University Press, 1963, pp. 445-9.

G.F.W., Jr. “Banking Act of 1935." Virginia Law Review 22, no. 3 (1936): 331-42.

Preston, Howard H. “The Banking Act of 1935." Journal of Political Economy 43, no. 6 (1935): 743-62.

Meltzer, Allan H. A History of the Federal Reserve: Volume 1, 1913 to 1951. Chicago: University of Chicago Press, 2003.

Mitchener, Kris James and Gary Richardson. “Does ‘Skin in the Game’ Reduce Risk Taking? Leverage, Liability and the Long-Run Consequences of New Deal Banking Reforms.” Explorations in Economic History 50, no. 4 (October 2013): 508-25.

New York Times. “Summary of the Proposed Administration Banking Act.” February 5, 1925.

Williams, John H. “The Banking Act of 1935." American Economic Review 26, no. 1 (1936): 95-105.


Who are the Eccles?

On Dec. 10, 1912, life in five Western states stood still.

In Ogden streetcars and automobiles stopped, workers in several banks in Salt Lake City and Ogden paused, workmen in sugar factories and lumberyards of Idaho and Oregon stood motionless. In Oregon and other states trains were halted.

For five minutes everyone silently paid tribute as a funeral began. David Eccles was dead.

In his book, David Eccles: Pioneer Western Industrialist, Leonard J. Arrington made the above statement, sighting Eccles as one of Utah’s wealthiest men in his day.

Today David Eccles’ legacy continues. The Eccles name can be seen on buildings in cities around the state including Ogden, Salt Lake City and at least 10 buildings in Logan.

Although David Eccles was the mind behind the fortune, many of the buildings carry the names of his children, all of which grew up in Logan.

According to Arrington’s book, in 1885 David Eccles took Ellen Stoddard as a second wife. During their first years of marriage, Ellen Stoddard Eccles lived in Oregon while his other wife, Bertha Marie Jensen, lived in Ogden. In those days polygamy was still practiced in Utah. The government, however, had begun acting out against it.

Eventually, Ellen Eccles moved to Logan where she lived her married life in complete secrecy. The Church of Jesus Christ of Latter-day Saints issued The Manifesto in 1890 which meant the church did not condone plural marriages anymore.

David Eccles continued his life with his separate families, living with Bertha during the week and Ellen on weekends. The women accepted their lives this way and raised 21 children between them, 12 in Ogden and nine in Logan.

Kathryn Wanlass, one of Ellen Eccles’ oldest living grandchildren, said she remembers her grandmother as being very kind and loving.

“She lived in the house at 250 W. Center St. for a long time and always kept it looking clean and nice,” she said.

Wanlass’ mother was Marie Eccles Caine, one of nine children who grew up in the old house in Logan. Today she is on the board of the Marie Eccles Caine Trust Foundation, along with her sister and brother-in-law, Manon and Dan Russell.

The foundation has been set up to help the community in the fields of art and education, Wanlass said.

“We just keep supporting things they [Marie and her husband George Caine] were interested in,” she said.

In recent years the foundation has been able to help renovate the Caine Lyric Theatre on Center Street, aid in scholarships at Utah State University, assist in building the art program on campus and occasionally buy a new piano for the university, Wanlass said.

According to information provided by Verna Lee Johnston, assistant to Spencer F. Eccles at Wells Fargo Bank, seven of David and Ellen Eccles’ nine children have foundations named after them today, each focusing donations to a different field usually relating to education, health or art.

Johnston said the foundations’ combined assets total over $1 billion, with the George S. and Dolores Dore Eccles Foundation being the largest worth more than $600 million.

Where did the Eccles get all their money?

It began with the entrepreneurial endeavors of David Eccles in the late 1800s, Johnston said.

She said David Eccles moved with his family from Scotland to the Western states at the age of 13. His father, William Eccles, was blind but very skilled at working with a lathe. David Eccles sold spools and other utensils his father made on the street to help support his family after they moved to the United States.

Johnston said David Eccles saw an opportunity in his late teens to rent a wagon and a team of oxen so he could haul lumber to make money. Even after a lot of bad luck and hardships, he was able to continue different business ventures.

“He was an enterprising fellow,” Johnston said. “His mind just understood how businesses worked.”

She said David Eccles never had an office and carried all his business affairs with him in a notebook.

According to Arrington’s book, between the year 1873 and 1912 David Eccles founded at least 56 companies in five western states. Those businesses included sugar factories, banks, railroad lines, coal mining companies, lumberyards and an opera house.

“To a poorly educated person from a family with no savings or social status, the only way out of poverty was hard work and careful uses of time and resources,” Arrington wrote. “Eccles therefore concentrated his efforts toward the goal of accumulation. Every moment, every ounce of energy, every expenditure had to count toward the goal of accumulation and profit.”

After his death in 1912, David Eccles left his $7 million fortune to be divided between his two families, Johnston said. His 12 children in Ogden received five-sevenths of the money while the rest was given to Ellen’s children in Logan.

Because of poor money management, the Ogden family soon depleted their fortune, but Marriner Eccles, David’s oldest son in Logan, took control of the money left to his part of the family and began making wise business ventures, she said.

“Even David’s wife, Ellen, didn’t get anything because of legal issues with the marriage,” Johnston said.

Marriner inherited a mind for business from his father and nurtured the assets he was left very carefully, she said.

“Marriner was taught by the Great Depression,” Johnston said. “He understood how things would play out.”

According to information provided by Johnston, in 1924 Marriner and his brother George Eccles joined with the Browning family in Ogden to form the Eccles-Browning Affiliated Banks. Within three years they acquired control of banks at seven locations in Utah, Idaho and Wyoming. Later the Eccles brothers created First Security Corporation.

During the Great Depression in the 1930s Marriner Eccles played a major role in the reformation of the Federal Reserve system and was the principal sponsor of the Banking Act of 1935.

Johnston said when other banks were going under because of bank runs, Marriner did everything in his power to keep his banks in business.

“On the first day of the bank runs he told his tellers to give out the money as slowly as possible and not to deny the customers anything,” she said. “The next day he realized this might not work again so he gave the money out as fast as possible.

“When people realized there weren’t any problems with his banks they turned around and got back in line to re-deposit their money.”

After working in Washington, D.C., for many year Marriner Eccles returned to participate in his family’s various businesses. One of the largest of these companies was the Utah Construction Company which eventually became Utah International Inc., Johnston said.

Utah International Inc. was the largest of six companies involved in building the Hoover Dam, she said. Under Mariner’s leadership the company sold to General Electric in 1976. The Eccles family still holds large shares in GE today.

Joyce Albrecht, assistant vice president for university advancement, said the Eccles are wonderful friends of USU.

“In some ways the university relies on the Eccles and their donations,” she said. “It isn’t only us, though. They give to organizations and universities all over the state.”

The Eccles seem to be in the business of supporting people and giving away money, Albrecht said. She said they do it because they want the community to be exposed to good things like art and science.

“When we moved from Florida we were amazed such a small community has so much art available to them,” she said.

Albrecht explained the name does not go on a building to show how great the family is. Usually it is done by a university just to honor them.

“They want people to walk around this campus and see that the Eccles really care about this institution,” she said. “In turn, the university has a great resp
onsibility to put this money to good use.”


Marriner Eccles

The career of the Utahn who led the Federal Reserve Board through some of the darkest days of the Great Depression.

With the Federal Reserve System so much in the news these days, let’s take a look at the Utahn Franklin Delano Roosevelt nominated to head the central bank in 1934: Marriner S. Eccles. Only a few years earlier, Eccles, the son of Scottish immigrants, had demonstrated his financial and administrative acumen by successfully shepherding a group of banks organized under the auspices of the First Security Corporation through the initial years of the Great Depression. Such skills did not go unnoticed in Washington. As early as 1933, Eccles became a frequent visitor to the nation’s capital, providing advice, attending conferences, and testifying before Congress about economic matters. By 1934, Treasury Secretary Henry Morgenthau had lured the Utah banker to Washington as his special assistant and Eccles immediately became involved in drafting the Federal Housing Act and advocating for public works programs and deficit spending.

Within a few months of setting himself up at Treasury, Eccles found himself facing yet another career change. Eugene Black, governor of the Federal Reserve Board, had resigned his post and President Roosevelt had put the Utah businessman’s name forward as Black’s replacement. By 1935, with his nomination ratified by the Senate, Eccles unveiled his plans for a reformed and refashioned Federal Reserve System that established the central bank’s independence from the Treasury Department. Eccles remained at the helm of the Federal Reserve through the rest of the Depression and World War Two. In 1944, Eccles represented the United States at the Bretton Woods Conference where the World Bank and International Monetary Funds were created.

Shortly after Harry Truman declined to reappoint Eccles as chair of the Fed, the Utahn resigned his post on the board and returned west to resume his work in the banking industry. He died in 1977.

Creator

Source

Image: Marriner Eccles. Marriner Eccles became the head of the Federal Reserve System, and presided over several other companies, including the Amalgamated Sugar Company, and the Utah Construction Company. Courtesy of J. Willard Marriott Library.
_______________

See Sidney Hyman, Marriner S. Eccles: Private Entrepreneur and Public Servant (Stanford: Stanford University Graduate School of Business, 1976) and Amity Shlaes, The Forgotten Man: A New History of the Great Depression (New York: Harper Collins, 2007). Also see Leonard Arrington’s entry on Eccles in the online Utah History Encyclopedia, as well as Jeff Nichols’ article on Eccles, originally published in the March 1995 issue of the History Blazer, which can now be found on the Utah History To Go website.


Statue of Marriner S. Eccles unveiled at Utah Capitol

History • Marriner S. Eccles served as chairman of the Federal Reserve Board.

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Jumping the Abyss: Marriner S. Eccles and the New Deal, 1933–1940 . By Mark Wayne Nelson. Salt Lake City: University of Utah Press, 2017. Pp xxvi, 424. $39.00, hardcover.

The economic thought and policy activity of the 1930s continue to draw scholars eager to reckon with the Great Recession and plodding recovery by looking to the past. Then as now, a central political and economic question was whether government spending or austerity offered the surest path to recovery. In his recent biography of Marriner S. Eccles, the irascible Utah businessman turned Federal Reserve Chairman, Mark Wayne Nelson offers a significant reevaluation of one of the spending sides’ chief American advocates. Fighting a depression, Eccles observed in a 1934 memo to Franklin D. Roosevelt, “is like jumping over an abyss. If the cleft is 10 feet wide, even a 9-foot jump is worse than no effort at all” (p. 189). Eccles often—but not always—urged the reluctant president to jump the full 10 feet.

Jumping the Abyss returns Eccles to the center of the New Deal's policymaking community, placing him onstage with influential figures such as Harry Hopkins, Frances Perkins, and Henry Morgenthau, Jr. The book carefully documents Eccles's contributions to New Deal policies, like the National Housing Act, where his influence has been neglected, and revisits well-worn areas of Eccles's career, like the 1935 Banking Act that reorganized the Federal Reserve. Nelson builds his narrative on Eccles's personal papers at the University of Utah. Through them and a variety of other sources, he evaluates Eccles's policy decisions at the Treasury and the Fed against the historical judgement of economic scholars. Milton Friedman and Anna Schwartz, David and Christina Romer, and other economic historians feature as prominent interlocutors. Nelson also challenges Eccles's own self-made myth: In the battle between spending and austerity, Eccles was not always on (what Eccles would later portray as) the right side of history.

In the early 1930, Eccles advocated federal spending with the zeal of the recently converted, which, in a manner of speaking, he was. As a private citizen before the Depression, Eccles held the mainstream views of 1920s business and political elites. Balanced budgets were orthodoxy. Facing the maw of the Depression, however, Eccles had an epiphany. Government was the only institution capable of wielding countervailing economic power. It had to act.

A Western bootstrapper up to his bolo tie, Eccles was not prone to intellectual self-reflection. He cloaked his newfound ideology in the garb of common sense and the power of religious revelation. But his ideas had concrete origins, and Nelson sketches a speculative intellectual genealogy for Eccles's economic views. By the 1930s, a host of American thinkers, including William Forester and Lauchlin Currie, advocated government spending to increase aggregate purchasing power. Spending was in the air. Eccles breathed deeply. He even, contra his later claims, had not only read “the great British economist” (p. 49), John Maynard Keynes, but quoted him in speeches. Nelson's recovery of the American spending school helpfully frames Eccles's intellectual lineage, but his shift in Chapter 3 from economics to moral philosophy is less convincing. There, he seeks Eccles's conviction that government “should insist on minimum standards of decency in the mode and conditions of life for its people” (p. 79) in the sentiments of Adam Smith and the politics of Thomas Jefferson, eschewing any discussion of Eccles's Mormonism. Though Eccles appears not to have been especially devout, the articles his native faith nevertheless merit attention.

Nelson returns to solid ground when examining economic policy. He uncovers Eccles' brief stint as the Utah administrator of the Civil Works Administration, a short-lived federal recovery program whose successes validated Eccles's spending philosophy. When Eccles next moved to the Treasury, he helped develop the Federal Housing Administration (FHA), which spurred private housing investment through public lending insurance. Through the FHA, Nelson demonstrates that Eccles was deeply concerned with how federal money was spent, not just that it was spent. Eccles sought policies that multiplied government expenditures by incentivizing private capital, a strategy with deep roots in American political-economic through and practice. Restoring this pre-progressive philosophy to the heart of the New Deal marks a significant, if underemphasized, contribution.

After recounting the intricate legislative fight over the Banking Act of 1935, Nelson turns to the so-called “Roosevelt Recession” of 1937, taking Eccles to task for his policy mistakes and later excision of those mistakes from the historical record. Drawing on Eccles's memoir and a misdated December 1935—not 1936—memo, scholars credit Eccles with opposing Roosevelt's return to balanced budgets that precipitated the downturn. Not so, Nelson concludes. Eccles argued in 1936 that the economy was strong enough to withdraw federal stimulus. With Morgenthau, Eccles also supported increased bank reserves and sterilized gold inflows, all of which likely contributed to the 1937 recession. Nelson even suggests renaming the incident the “New Deal Recession,” since it stemmed not from Roosevelt's stubbornness but from the advice of his economic staff. The name is unlikely to stick, but the point is well taken.

Whatever we call it, the 1937 recession illustrates the extent to which the business cycle dominated Eccles's consciousness. He judged government policies and private economic activities on their relative propensities to exaggerate or dampen its swings. Procyclical forces called out for correction. Eccles's major policy priorities, whether compensatory federal spending, Federal Reserve reorganization, or bank supervisory reform—covered in detail in the final chapter—all revolved around this notion, one which Eccles continued to pursue through WWII and after.

Nelson, though, concludes his account on the eve of war. The conflict bore out the spenders' case for economic recovery, but we miss Eccles's role on the home front, his influence on postwar economic management, his ouster as Fed Chair, and much else. Books, of course, must end, and these later events move beyond Eccles's case for spending as antidote to depression. Though readers may not be as sympathetic to Eccles's spending philosophy as Nelson, Jumping the Abyss will nevertheless be a valuable work for scholars interested in the New Deal's economic policies and their legacies in policy debates today.


Watch the video: Marriner S. Eccles Institute for Economics and Quantitative Analysis (July 2022).


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