¹ The editors wish to express their appreciation to Milton Friedman and Henry Ford II for reading and commenting upon this article.

² New York Times, December 13, 1966, an obituary of Francis G. Awalt.

³ ibid. Unpublished reminiscences of Francis G. Awalt in the possession of Francis G. Awalt, Jr., 2. The editors thank Mr. Awalt for his permission to publish this portion of his father's reminiscences.

⁴ Schlesinger, Arthur M. Jr., The Crisis of the Old Order, 1919–1933 (Boston, 1957), 474Google Scholar; New York Times, December 31, 1966.

⁵ Awalt reminiscences, 2.

⁶ Moley, Raymond, The First New Deal (New York, 1966), 217.Google Scholar

^a Because of the personal involvement of Henry and Edsel Ford in this event, Henry Ford II, chairman of the Board of the Ford Motor Company, was asked and agreed to examine Awalt's account of the Detroit episode. In a letter to James P. Baughman on March 14, 1969, Chairman Ford stated: “The reminiscences appear to be a significant addition to the historical record of these events. However, I should like to call to your attention that Mr. Awalt's memoir differs in some respects from the account published in Nevins, Allan and Hill, Frank Ernest, Ford: Decline and Rebirth 1933–1962 (New York, Charles Scribner's Sons, 1963), pp. 11–15Google Scholar. I believe the Nevins-Hill account is correct as far as it goes.” Mr. Ford's comments on specific points will be found in the footnotes that follow which are identified with letters.

^b Edsel Ford was a director of the Union Guardian group. Ernest C. Kanzler was chairman of the board. Henry Ford II to James P. Baughman, March 14, 1969; Nevins and Hill, Ford: Decline and Rebirth, 12n.

^c The Ford family and company had already advanced a total of $12,000,000 to the Guardian group, and Edsel Ford had initially agreed to subordinate the $7,500,000 on deposit with the Union Guardian Trust. Ford to Baughman, March 14, 1969; Nevins and Hill, Ford: Decline and Rebirth, 12, 12n.

^d Mr. Awalt's statement of the amounts of Ford money on deposit with the two major bank groups appears to be incorrect. Ford to Baughman, March 14, 1969. Nevins and Hill show $32,500,000 on deposit with the Guardian banks and $18,000,000 with the Detroit Bankers. Ford: Decline and Rebirth, 12n.

¹ This is the subordination to which Mr. Ford would not agree.

^e Nevins and Hill conclude that Senator Couzens played a significant part in the blocking of reorganization plans. Ford to Baughman, March 14, 1969. “Either Ford or Couzens could have met the crisis, or the two jointly could have done so. The clash of personalities blocked action.” Couzens had a large fortune based on the sale of Ford stock which he had received as a director of the company until 1915 when he resigned after a clash with Henry Ford. Nevins and Hill, Ford: Decline and Rebirth, 13, 13n, 14.

^f After the bank closings, Henry and Edsel Ford worked to reestablish normal banking services in the Detroit area. Ford to Baughman, March 14, 1969. On February 24, 1933, Henry and Edsel Ford offered to provide the entire capital needed to create two new banks but they reserved the right to select the officers and directors of the banks. Both the First National and the Guardian group rejected the plan. However, a new bank, the Manufacturers National Bank of Detroit, was organized and began operation in August in which the Fords held a controlling interest, Nevins and Hill, Ford: Decline and Rebirth, 14–15.

² All actions taken and rules, licenses, orders, and proclamations issued by President Roosevelt or Secretary Woodin after March 4, 1933, pursuant to the Trading with the Enemy Act, were approved and confirmed by Section 1 of Title 1 of the Emergency Banking Act of March 9, 1933.

³ Despite Woodm's statement to Raymond Moley, as published in Mr. Moley's book After Seven Years, that Woodin grasped the idea of the Federal Reserve System furnishing currency while playing his guitar, it was passed on to him by Mills in the plan sent with his letter of March 4, but he would not have told Moley the origin at that time.

⁴ Strange as it may seem to some, both Mr. Hoover and Mr. Mills were both greatly interested in new ideas and were not as conservative as one has been led to believe. But both were hammered hard by the New York financial thinking. It was only natural that Mr. Hoover should turn to the Chairman of the Federal Reserve Board, Mr. Eugene Meyer, and to Mr. Mills on any new financial ideas advanced. But the Federal Reserve Board was in large measure dominated by the Federal Reserve Bank of New York, through its brilliant Governor, George Harrison, a disciple of Benjamin Strong, his predecessor, who followed the same line. Moreover, Mr. Mills was in constant contact with New York bankers, such as Winthrop Williams Aldrich, Chairman of the Board of the Chase National Bank of New York, George I. Davison, of the Hanover Bank of New York and Chairman of the New York Clearing House, and others. To my way of thinking, New York had too much to say in the shaping of policies.

One of the instances of Mr. Mills' thinking is illustrated by the fact that in the fall of 1932 he was considering the effect of going off the “gold standard,” and how it could be accomplished. In 1918 Milton Elliott, then counsel for the Federal Reserve Board, had the thought in mind that at some future time the government might desire to place an embargo upon the export of gold and at that time he talked to Walter Wyatt, then a member of his staff, and to Magruder Wingfield, one of Mr. Wyatt's assistants, as to how this might be accomplished. The result was that in amending the Trading with the Enemy Act, certain wording was placed therein which could be relied on to accomplish this purpose.

In June 1932, Dr. Adolf Miller, then a member of the Federal Reserve Board, spoke to Mr. Wyatt about the possibility of placing an embargo on gold, or the hoarding of gold, and whether there was any authority to accomplish this purpose or to go off the gold standard. He requested a memorandum. Mr. Wyatt, in talking with Governor Meyer of the Federal Reserve Board, mentioned the matter, and Governor Meyer suggested that no memorandum be given, but that the matter be answered verbally. Mr. Meyer, in making this comment, stated that the President was so jittery that if he had a memorandum which showed him he had the authority, he might exercise it.

Subsequently, in the fall of 1932, Mr. Ogden Mills spoke to Mr. Wyatt about the matter, and Mr. Wyatt advised Mr. Mills that the Trading with the Enemy Act would accomplish the purposes. Subsequently, when the question came up of the closing of the banks, Mr. Wyatt, having already looked into the matter from the Trading with the Enemy Act, was of the opinion that that Act could be used and had sufficient authority in it to control the entire situation, and an executive order was prepared on the basis of the Trading with the Enemy Act for the signature of President Roosevelt, all being quite contrary to the statements that have been made that Attorney General Cummings, or someone in his office, dug up the authority with the Trading with the Enemy Act to close the banks.

⁵ Mr. Floyd Harrison and Mr. Chester Morrill were conscientious, brilliant public servants, and their loyalty to the Chairman of the Federal Reserve Board, Mr. Eugene Meyer, was unquestioned. They became known as his “watchdogs,” and everything presented to Mr. Meyer was looked over by them for what I considered to be matters which could in any way embarrass him. Consequently, when the Treasury was insisting on its plan to have the Federal Reserve Banks recommend the opening of particular banks in their respective districts, both Harrison and Morrill were zealously attempting to protect Eugene Meyer, and the Federal Reserve System, from any embarrassment or future criticism. Part of their technique, which they claimed to be usual, was to have a stenographer present when Secretary Woodin desired to discuss something, to take down verbatim anything he said. Mr. Woodin resented this and finally told me he would refuse further to go to the Federal Reserve Board to discuss the matters pending, and it was up to me to go in his place. I was just as irritated and made my position very plain. We finally dispensed with the stenographer.

⁶ The long hours and continuous pressure on all of the staff involved was enormous. Sleep was practically unknown to many of us. My usual routine was to arrive home in the morning, around seven, get a hot toddy, prepared by Mrs. Awalt, sleep for at least an hour, have a shower and return to the Treasury. Without Mrs. Awalt's warding off the telephone calls, which came in constantly during the brief period I was home, I undoubtedly would not have survived.