Evan Soltas
May 18, 2012

On Marriner Eccles

FRASER, the St. Louis Fed's archive of Federal Reserve documents, has uploaded a huge new trove of materials -- roughly 6,500 letters, reports, and statements -- on Marriner Stoddard Eccles which had previously sat in boxes in the library of the University of Utah.

Eccles, for whom the Federal Reserve System's main building in D.C. is named, was the Chairman of the Federal Reserve from 1934 to 1948. It's stunning, actually, to go through these documents -- Eccles was a visionary, a Keynesian before Keynes, and although I do not agree with everything I found or quote below that he wrote or said, the continued relevance of Eccles is striking.

I'm surprised, actually, that the economist Left has not sought to restore his legacy. Paul Krugman, as a matter of fact, has mentioned Eccles all of zero times on his New York Times blog, "The Conscience of a Liberal." Maybe there is something I am missing, some reason for the fact that Eccles seems to have been wrongly forgotten by history.

Eccles on the confidence fairy, 1951, in a commencement speech: "The watchword of that day was 'balance the budget and restore confidence,' an empty and since exploded concept if ever there was one." (1)

Eccles on monetary policy, 1937, in a statement to the press: "I have been and still am an advocate of an easy money policy and expect to continue to be an advocate of such a policy so long as there are large numbers of people who are unable to find employment in private industry, which means that the full productive capacity of the nation is not being utilized. Under such conditions, to restrict the available supply of capital and thus to make it difficult, if not impossible, to employ these people would not only be anti-social but uneconomic." (2)

Eccles in a letter to Senator Harry Byrd of Virginia, 1938: "You [Senator Byrd] stated that you are concerned about 'the character of the individual citizen' and 'the dignity and the rights of the individual.' So am I. I believe, however, that the most basic right of all is the right to live and next to that, the right to work. I do not think empty stomachs build character, nor do I think the substitution of idleness and a dole for useful work relief will improve either the dignity or the character of the people affected. We cannot expect to preserve our free institutions in this country if we condemn a substantial proportion of our people to prolonged idleness on a bare subsistence level of existence. Further than the right to eat and the right to a position, I think the individual, whether rich or poor, has a right to a decent place to live. I think he has a right to security in old age and to protection against temporary unemployment. I think he has a right to adequate medical attention and to equal educational opportunities with the rest of his countrymen. The government expenditures which you condemn have in large part been the means of translating these basic rights into realities. Anyone who is genuinely sincere in his concern about the rights, the dignity, and the character of the individual citizen, far from seeking to tear down what has already been done, will want to have a hand in expanding and improving this work for the future." (3)