-Liaquat Ahamed
Montagu Norman, Benjamin Strong, Emile Moreau and Hjalmer Schact make up the titular ‘Lords of finance.’ Norman was an eccentric Etonian, the son of board members of the Bank of England and related to a former Governor. He wore a top hat and carried a cane in an era where both were losing their popularity: the press described him as a “chief conspirator in an Italian opera.”
Norman’s closest friend in this gang of four was Benjamin Strong of the New York Federal Reserve. Strong’s façade was, as his surname suggests, a powerful one: he came of age just before the outbreak of the Great War and was incredibly optimistic about the future of the United States. He wanted and pressed for greater American involvement on the world stage and became the Governor of the New York Fed at the age of 41. In that sense, he was his country personified. His personal life was nothing short of a disaster, however. He first married in 1895 and, along with his wife and two newly born children, moved to New Jersey. In 1905, Margaret (his wife) shot herself while her husband was away. The next year, Strong’s eldest daughter died of scarlet fever. He remarried two years later, only for that marriage to end in divorce. Worse still, shortly after his second wife left him, Benjamin caught Tuberculosis and was medically required to spend a lot of his time in Colorado (mountain air was supposed to be good for sufferers of TB).
Emile Moreau, of le Banque de France, was practically an American caricature of the Frenchman. He believed that international finance was a giant Anglo-Saxon conspiracy meant to keep France in its place: after the fall of Napoleon, the British had rigged the system to always favor London over Paris. He was, then, the odd man out.
Hjalmar Schact was a brilliant and opportunistic young banker. In 1923, he almost single=-andedly saved a broken Germany from hyperinflation. He was fiercely proud of Germany and, like Moreau, believed that the “…villain of the piece was a fading Britain conspiring to deny Germany its rightful place among the Great Powers…German’s steady advance in the world’s markets had aroused the atagonism of those older industrial countries, who felt their chances in the markets were threatened…England in particular.” Schact’s ambition eventually found him to be head of the Reichsbank by 1923.
Aside from historical narrative, Ahamed’s Lords of Finance is a polemic against the gold standard, named as the key error which created the Great Depression. In July of 1927, the four ‘Lords’ attended a secret meeting on Long Island (of all places) and decided to put the world back onto the gold standard and ease interest rates/credit in order to prop up the Pound Sterling. The Pound was the lynchpin of the international economy but was always teetering on collapse: bankers everywhere, the Lords included, did everything they could to maintain Sterling’s position. Moreau and Schact were simultaneously vindicated and forced to abandon their principles: the Pound must not collapse. This meeting in July is, Ahamed reasons, the exact date when the bubble which broke the world was created.
Lords of Finance is Sherlock Holmes for bankers, filled with Viscounts and Rothschilds (Rothschildren?); Prussians and people named Reginald. The language of Empire is on display: Ahamed twice uses the phrase ‘Meanwhile, on the Continent…’ and it is commonplace for Lord Kitchener and ‘Russian mobilization’ to appear in the same paragraph. It almost feels like Ahamed is cheating, turning the perennially dry and vague story of an economic collapse into a jaunt across interbellum Europe. Graphs displaying US stock prices and corporate profits are much easier to swallow when covered in Ahamed’s prose. This is more of an open relationship agreed to by both parties than cheating: Lords of Finance is faithful to the numbers in every way that matters but allows itself the welcome luxury of reading like a political thriller.
