¹ Dorfman, Joseph, The Economic Mind in American Civilization, III (New York: Viking Press, 1949), 351Google Scholar; Wiebe, Robert H., The Search for Order, 1877–1920 (New York: Hill and Wang, 1967), p. 174Google Scholar.

² Curti, Merle and Birr, Kendall, Prelude to Point Four. American Technical Missions Overseas (Madison: University of Wisconsin Press, 1954)Google Scholar, ch. viii, is a notable, exception to this general neglect. This chapter is a suitable introduction to the subject, although the connection between the financial advisers and the private and public foreign economic policies of the United States is not made clear. The emphasis of Curti and Birr is upon elucidating precedents for American technical assistance abroad, with major focus on the utility, of the missions and with little analysis of their benefits and long-term results. See ibid., ch. x.

The Kemmerer Missions are mentioned superficially in Dorfman, , The Economic Mind, IV (New York: Viking Press, 1959), 308–12Google Scholar; Calcott, Wilfred Hardy, The Western Hemisphere. Its Influence on United States Policies to the End of World War II (Austin: University of Texas Press, 1968), p. 228Google Scholar. They are not mentioned in Bemis, Samuel Flagg, The Latin-American Policy of the United States (New York: Harcourt, Brace and Co., 1943)Google Scholar; Williams, William Appleman, “Latin America: Laboratory of American Foreign Policy in the Nineteen-twenties,” Inter-American Economic Affairs, XI (Autumn, 1957), 3–30Google Scholar; Smith, Robert Freeman, “American Foreign Relations, 1920–1942,” Towards a New Past: Dissenting Essays in American History, ed. Bernstein, Barton J. (New York: Pantheon Books, 1968), pp. 232–62Google Scholar; and Mecham, J. Lloyd, A Survey of United States-Latin American Relations (Boston: Houghton Mifflin Co., 1965)Google Scholar. Kemmerer's papers are located at the Princeton University Library. Family restrictions upon this large and potentially valuable collection have made it impossible for the author to study them at this time.

³ Dorfman, The Economic Mind, IV, p. 308n.

⁴ Warburg, Paul M., The Federal Reserve System, I (New York: Macmillan, 1930), 112–13Google Scholar; Kemmerer, Edwin Walter, “American Banks in Times of Crisis Under the National Banking System,” Academy of Political Science, Proceedings, I (Jan. 1911), 233–53Google Scholar; Kemmerer, , The ABC of the Federal Reserve System (Princeton, New Jersey: Princeton University Press, 1918)Google Scholar, and many other editions.

⁵ Kemmerer, , Modern Currency Reforms, A History and Discussion of Recent Currency Reforms in India, Porto Rico, Philippine Islands, Straits Settlements, and Mexico (New York: Macmillan, 1916), pp. viii, 207, 227Google Scholar.

⁶ Dorfman, The Economic Mind, III, p. 352.

⁷ See, for example, Kemmerer, , “Gold and the Gold Standard,” American Philosophical Society, Proceedings, LXXI, 3 (1932), 85–104Google Scholar; Clarke, Stephen V. O., Central Bank Cooperation, 1924–31 (New York: Federal Reserve Bank of New York, 1967), p. 61Google Scholar.

⁸ Kemmerer, , “A Proposal For Pan-American Monetary Unity,” Political Science Quarterly, XXXI (Mar. 1916), 66–80CrossRefGoogle Scholar.

⁹ These ideas of Kemmerer's should be contrasted with very similar ideas of Warburg, Paul M.; see, e.g., Warburg's address before the International High Commission at Buenos Aires, May 3, 1916, Warburg, Federal Reserve System, II, p. 384Google Scholar.

¹⁰ Davis, Tom E., “Eight Decades of Inflation in Chile, 1879–1959. A Political Interpretation,” Journal of Political Economy, LXXI (Aug. 1963), 389–90CrossRefGoogle Scholar; Fetter, Frank W., Monetary Inflation in Chile (Princeton: Princeton University Press, 1931)Google Scholar, ch. ix and passim. See also Subercaseaux, Guillermo, Monetary and Banking Policy of Chile, ed. Kinley, David (Oxford: Clarendon Press, 1922), pp. 175–85Google Scholar.

¹¹ Kemmerer, , “The Theory of Foreign Investments,” The American Academy of Political and Social Science, Annals, LXVIII (Nov. 1916), 1–9Google Scholar.

¹² The New York Times, October 10, 1926, II, p. 8.

¹³ Traynor, Dean E., International Monetary and Financial Conferences in the Interwar Period (Washington, D.C.: Catholic University of America Press, 1949), ch. ii, iiiGoogle Scholar.

¹⁴ Tamagna, Frank, Central Banking in Latin America (Mexico: Centro de Estudios Monetarios Latinoamericanos, 1965), p. 39Google Scholar; Kemmerer, , Gold and the Gold Standard (New York: McGraw-Hill, 1944), pp. 109–10, 164–66Google Scholar; Traynor, International … Conferences, pp. 73–84.

¹⁵ Based on Halsey, Frederic M., Investments in Latin America and the British West Indies, United States Department of Commerce, Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 169 (Washington, D.C.: G.P.O., 1918), p. 20Google Scholar; Olson, Paul R. and Hickman, C. Addison, Pan American Economics (New York: J. Wiley and Sons, 1943), pp. 416Google Scholar, 417, 419, 420; Winkler, Max, Investments of United States Capital in Latin America (Boston: World Peace Foundation Pamphlets, 1929), pp. 275, 278, 280, 283Google Scholar.

¹⁶ Quoted in Normano, J. F., The Struggle for South America. Economy and Ideology (London: George Allen and Unwin Ltd., 1931), p. 253 n. 36Google Scholar.

¹⁷ The New York Times, June 2, 1922, p. 23.

¹⁸ Assistant Secretary of State Leland Harrison to Francis White, September 30, 1922, National Archives, General Records of the Department of State (Record Group 59) [hereafter cited as NA], 821.51A/2; Young to White, October 2, 1922, NA, 821.51A/3; Young to Harrison, November 7, 1922, NA, 821.51A/4.

Arthur N. Young studied economics at Princeton and took his Ph.D. work under Professor Kemmerer. He had been brought to Mexico in 1917. after the latter had been invited to assist in the work of Henry Bruère in Mexico. See Curti and Birr, Prelude to Point Four …, pp. 160–61. Kemmerer's work in Brazil is elaborated in the National Archives, Records of the Bureau of Foreign and Domestic Commerce (Record Group 151), “Foreign Exchange, Brazil,” Jones to Ackerman, February 9, 1923; Ackerman to Schurz, February 13, 1923; and Schurz to Jones, April 24, 1923.

¹⁹ Harrison to United States Minister in Colombia, Piles, Samuel H., February 13, 1923, United States Department of State, Foreign Relations of the United States, I (Washington, D.C.: G.P.O., 1923)Google Scholar, [hereafter cited as FR], 831–33.

²⁰ Under Secretary of the Treasury S. P. Gilbert to Secretary of State Charles E. Hughes, January 3, 1923, NA, 821.51A/21. These inquiries were being made one month before Kemrnerer and his four aides signed contracts with the Colombian government. The inquiries were directed to placement of the $5 million in the United States Treasury certificates of indebtedness through the Federal Reserve Bank of New York. The members of the Kemmerer Mission to Colombia in 1923 were, in addition to Professor Kemmerer, Howard M. Jefferson of the New York Federal Reserve Bank; Fred R. Fairchild (Yale Ph.D., 1904), professor of economics at Yale University; Thomas Russell Lill, accountant of Searle, Nicholson, Oakey & Lill of New York; and Frederic Bliss Luquiens, secretary of the group, of the Spanish Department of Yale University.

²¹ “Notable Achievement of a Notable Commission,” Pan-American Union, Bulletin, LVIII (Feb. 1924), 164–66Google Scholar; Joslin, David, A Century of Banking in Latin America (London: Oxford University Press, 1963), p. 241Google Scholar; Parks, E. Taylor, Colombia and the United States, 1765–1934 (Durham: Duke University Press, 1935), p. 472Google Scholar; International Bank for Reconstruction and Development, The Basis of a Development Program for Colombia (Washington, D.C.: International Bank for Reconstruction and Development, 1950), pp. 267, 567Google Scholar; Santos, Abel Cruz, Finanzas Publicas (Bogotá: Lerner Ediciones, 1968), p. 205Google Scholar.

²² Piles (Bogotá) to Hughes, June 28, 1923, NA, 821.51/242; Maurice L. Stafford (Baranquilla) to Hughes, July 26, 1923, NA, 821.516/53; Bernstein, Harry, Venezuela, and Colombia (Englewood Cliffs, New Jersey: Prentice-Hall, 1964), p. 122Google Scholar.

²³ “This run [on Banco Lopez] is supposed to have been ultimately caused by an official of the Government telegraph office refusing to accept a bill issued by this bank.” Piles to Hughes, July 21, 1923, NA, 821.516/55; same to same, July 30, 1923, NA, 821.516/58; The reports to The New York Times gave the event a mysterious tone. Banco Lopez's request came late in the day at New York, the situation was confused, and the bankers asserted they had insufficient knowledge of the situation in Colombia. The Lazard Brothers in London granted a loan but afterward withdrew it when they heard New York had refused a similar request. The New York Times, July 20, 1923, p. 23; ibid., July 28, 1923, p. 13.

²⁴ Piles to Hughes, June 25, 1923, NA, 821.51/242; same to same, August 20, 1923, NA, 821.51/246; same to same, October 17, 1923, NA, 821.51A/28. The significance of the kind of expert work a man like Lill could do in South America was not underestimated by the Bureau of Foreign and Domestic Commerce, which, having determined the value of Lill's services in Colombia, tried unsuccessfully to place him in similar positions in Argentina, Chile, and Peru. NA, Record Group 151, “Finance and Investment, Argentina,” R. F. O'Toole to Lew Clark, July 28, 1924; NA, Record Group 151, “Chile,” O'Toole to Ralph H. Ackerman, July 28, 1924; and NA, Record Group 151, “Peru,” W. N. Pearce to Julius Klein, September 4, 1924.

²⁵ Patterson (Bogotá) to Hughes, May 6, 1926, NA, 821.00/599; same to same, May 17, 1926, NA, 821.51A/39.

²⁶ The Economist, CIV (March 26, 1927), p. 635.

²⁷ Caffery (Bogotá) to Secretary of State Stimson, April 20, 1929, NA, 821.51 A/44; same to same, June 24, 1929, NA, 821.51A/45.

²⁸ The 1930 Kemmerer Mission to Colombia included Kemmerer; Joseph T. Byrne, expert in budget and accounting; Walter E. Langerquist, public credit; W. W. Renwick, customs; Kossuth M. Williamson, taxation; William E. Dunn, secretary of the group; J. Louis Schaefer, assistant secretary.

²⁹ The Liberals came to power in the election of 1930 after virtually uninterrupted Conservative domination of Colombian politics since 1880. The new president, Enrique Olaya Herrera (former Colombian representative at Washington) took office on August 7, 1930 in one of the few peaceful transfers of power in Latin America in the depression year of 1930. Conservative control of Congress continued, however, and this remained a check upon Liberal rule and complicated the passage of legislation.

³⁰ Cruz Santos, Finanzas Publicas, pp. 228–29, 344, 382.

³¹ Caffery to Stimson, December 27, 1930, NA, 821.516/112.

³² Parks, Colombia and the United States …. p. 474.

³³ Young, Ralph A., Handbook on American Underwriting of Foreign Securities, United States Department of Commerce, Trade Promotion Series, No. 104 (Washington, D.C.: G.P.O., 1930), pp. 100, 106, 115, 124, 132Google Scholar.

³⁴ Caffery to Stimson, September 5, 1930, NA, 821.51A/49; same to same, September 12, 1930, NA, 821.51A/53; same to same, September 24, 1930, NA, 821.51A/55; same to same, December 22, 1930, NA, 821.51A Kemmerer Commission/25.

³⁵ Kepner, Charles David and Soothill, Jay Henry, The Banana Empire. A Case Study in Economic Imperialism (New York: Vanguard Press, 1935), pp. 212–13, 291–94Google Scholar. The tax was not excessive, since bananas generally brought over $2.00 for a nine-hand bunch in northern wholesale markets throughout the 1920's.

³⁶ Stimson to Caffery, October 6, 1931, FR, 1931, II, pp. 39–40.

³⁷ Collier to Hughes, May 15, 1923, NA, 825.51A/orig. Cumberland was inclined to accept the invitation. He had an important position in Peru, But had expressed his disappointment in not being able sufficiently to institute sound economic measures removed from political control. He was finally convinced to remain in Lima on the grounds that his leaving Peru would reflect on United States prestige there. This is an interesting point, since Cumberland, like Kemmerer, was explicitly a private employee of the Peruvian government. Poindexter (Lima) to Hughes, May 16, 1923, NA, 825.516/27; same to same, July 3, 1923, NA, 825.516/31.

³⁸ A. N. Young, Memorandum, October 13, 1924, NA, 825.51A/2. The following were the members of the Kemmerer Mission to Chile: Kemmerer, expert on central banking and the gold standard; Joseph T. Byrne, of the New York firm, Byrne, Lindberg & Byrne, public accountants, accounting and fiscal control; Harley L. Lutz, of Stanford University, taxation; H. M. Jefferson, of the New York Federal Reserve Bank, banking organization and fiscal control; William W. Renwick, fiscal representative of the trustees of the American loan to San Salvador, customs; G. Van Zandt, Professor of Engineering, consulting engineer for rail transportation; Henry H. West, South American representative of the National Credit office in Buenos Aires, who had been secretary of the American Financial Commission to Peru, 1923; and Frank W. Fetter, secretary to Kemmerer. Renwick became Fiscal Representative of the Republic of El Salvador in December 1925.

³⁸ Collier to Kellogg, August 22, 1925, NA, 825.00/423.

⁴⁰ Collier to Kellogg, September 14, 1925, NA, 825.00/444; same to same, August 11, 1925, NA, 825.51A/10.

⁴¹ The New York Times, June 12, 1925, p. 27; ibid., November 3, 1925, p. 40; Kemmerer, , “Work of the American Financial Commission in Chile,” American Bankers Association, Journal, XVIII (Dec. 1925), 411–12, 460Google Scholar. The laws passed were the Monetary Law, Central Bank Law, General Banking Law, Budget Law, and Railroad Administration Law.

⁴² Kemmerer, , “Chile Returns to the Gold Standard,” The Journal of Political Economy, XXXIV (June 1926), 265–73CrossRefGoogle Scholar.

⁴³ Engert (Santiago) to Kellogg, June 23, 1927, NA, 825.00/525; Cottrell (La Paz) to Kellogg, June 29, 1927, NA, 824.51A/9; The Economist, CVI (Mar. 17, 1928), 529; ibid., CVII (Oct. 13, 1928), 644–45.

⁴⁴ The New York Times, August 14, 1927, II, p. 12Google Scholar; Tom E. Davis, “Eight Decades …,” p. 390.

⁴⁵ R. A. Young, Handbook on American Underwriting …, pp. 81, 86, 99, 106, 115, 124, 132.

⁴⁶ G. A. Bading (Quito) to Hughes, December 28, 1922, NA, 822.51/377.

⁴⁷ Memo of conversation with Dr. Elizalde, Minister of Ecuador, with William Phillips, Under Secretary of State, June 9, 1923, NA, 822.51A/3; Bading to Hughes, June 30, 1924, NA, 822.00/551; R. M. deLambert (Quito) to Kellogg, July 28, 1925, NA, 822.51A/21; Bading to Kellogg, March 6, 1926, NA, 822.51A/26; Winkler, Investments of United States Capital …, p. 132; Lewis, Reuben A. Jr“Drafting the Brains Behind the Dollar,” American Bankers Association, Journal, XVI (May 1924), 702Google Scholar.

⁴⁸ Bading to Kellogg, February 15, 1927, NA, 822.51A/42.

⁴⁹ The Economist, XCIV (Jan. 7, 1922), 6Google Scholar; Marsh, Margaret A., The Bankers in Bolivia (New York: Vanguard Press, 1928), p. 101Google Scholar; Lewis, “Drafting the Brains p. 702; Cottrell (La Paz) to Kellogg, June 3, 1925, NA, 824.51/313.

⁵⁰ Kemmerer actually had had an invitation to advise financial reorganization in Peru in early 1920. The significance of this is not yet explained. Secretary of State Robert Lansing, replying to Kemmerer's inquiry as to whether the State Department would “look with favor on such a mission,” stated the Department's approval. Kemmerer to Lansing, January 23, 1920, NA, 823.51A; Lansing to Kemmerer, January 26, 1920, ibid. The relationship of the State Department to Cumberland is spelled out in Hughes to American Embassy (Lima), September 7, 1921, NA, 823.51/185; Sumner Welles to Federico Alfonso Peset, August 31, 1921, ibid.; Gonzales (Lima) to Hughes, September 20, 1922, NA, 823.51/190; F. A. Sterling (Lima) to Hughes, October 24, 1922, NA, 823.51/276. Cumberland was a foreign trade adviser for the Department of State at the time he decided to go to Peru. After leaving Peru in 1924, he served as financial adviser and general receiver of the Republic of Haiti (1924–1927) and as financial expert for the State Department in Nicaragua (1927–1928). He became a partner of Wellington and Company, members of the New York Stock Exchange. An investigation of Cumberland might be rewarding. For some indication of his role in Leguía's Peru, see Carey, James C., Peru and the United States, 1900–1962 (Notre Dame: University of Notre Dame Press, 1964), pp. 18–19Google Scholar, 71–3; Lewis, “Drafting the Brains,” p. 702; and, to see the similarity between Cumberland and Kemmerer in terms of attitudes, see Cumberland, , “Our Economic Policy Toward Latin America,” The American Academy of Political and Social Science, Annals, CL (July, 1930), 167–78Google Scholar. For some of the financial changes in Peru during Cumberland's stay see Sherwell, G. Butler, “The Federal Reserve System of Peru,” American Bankers Association, Journal, XV (June 1923), 801–05Google Scholar; “Federal Reserve Act of Peru,” Federal Reserve Bulletin, VIII (May, 1922), 515–22Google Scholar; Salomon, Oscar V., “The New State Bank of Peru,” Pan-American Union, Bulletin, LV (Sept. 1922), 262–65Google Scholar; The Economist, XCVII (Dec. 29, 1923), 1147Google Scholar.

⁵¹ The New York Times, Oct. 10, 1926, II, p. 8.

⁵² Cumberland to Assistant Secretary of State Leland Harrison, November 7, 1922, NA, 823.51/287.

⁵³ The Kemmerer Mission to Ecuador had the following members: Kemmerer, expert in central banking and currency; J. T. Byrne, accounting and fiscal control; E. F. Feely; F. W. Fetter; H. M. Jefferson, banking; Oliver C. Lockhart, public finances; B. B. Milner; Robert H. Vorfeld, customs administration. James H. Edwards, William F. Roddy, Earl B. Schwulst, and Harry de la Vergne Tompkins, together with Milner, were employed by the Ecuadorian government to administer the Kemmerer reforms. The Kemmerer Mission to Bolivia was composed of Kemmerer, Byrne, Feely, Fetter, Edward L. Glenn (railroads), Jefferson, Lockhart, Vorfeld. Glenn remained in Bolivia. Feely, who joined Kemmerer's mission to China later served the United States as Minister to Bolivia, 1930–1933.

⁵⁴ The political significance for Ecuador of the institution of central banking and fiscal administration in the capital city of Quito was to ensure the success of the Revolution of July, 1925, the hegemony of the leadership of the Sierra over the country, and the defeat of the coastal “plutocracy,” which was represented by the Commercial and Agricultural Bank of Guayaquil.

⁵⁵ Bading (Quito) to Kellogg, January 30, 1928, NA, 822.51/451; same to same, February 2, 1928, NA, 822.51/449; same to same, March 19, 1928, NA, 822.51/456; same to same, March 29, 1928, NA, 822.51/465.

⁵⁶ Bading to Kellogg, February 11, 1927, NA, 822.51A/41.

⁵⁷ Memo of conversation, Kemmerer and Willoughby, Division of Latin-American Affairs, October 11, 1927, NA, 822.51A/57; memo of conversation, Kemmerer and Morgan, Division of Latin-American Affairs, December 29, 1927, NA, 822.51A/59.

⁵⁸ Collings, Harry T., “Currency Reform in South America,” Current History, XXVI (June, 1927), 475–76Google Scholar; “The Sucre: New Monetary Unit for Ecuador,” Pan-American Union, Bulletin, LXI (Aug., 1927), 787–90Google Scholar; “Currency and Banking Reform in Ecuador,” Federal Reserve Bulletin, XIII (July, 1927), 483–84Google Scholar.

⁵⁹ The New York Times, June 20, 1928, p. 8; June 24, 1928, II, p. 11; July 11, 1928, p. 22; August 16, 1928, p. 2.

⁶⁰ Marsh, The Bankers in Bolivia, p. 90; R. A. Young, Handbook on American Underwriting …, p. 158; Cottrell to Kellogg, June 29, 1927, NA, 824.51A/9; Memorandum of conversation, A. N. Young and Joseph T. Byrne, May 23, 1928, NA, 824.51A/23; David E. Kaufman to Kellogg, August 14, 1928, NA, 824.00 General Conditions/5.

⁶¹ Cottrell to Kellogg, December 19, 1927, NA, 824.00/450. J. F. McGurk, Second Secretary of the United States Legation at La Paz, wrote that Bolivian President Siles “is to all intent and purpose a dictator at the present time. He has stifled all opposition…” McGurk to Kellogg, February 16, 1928, NA, 824.00/456. The implications were that Siles manipulated funds politically in order to secure the passage of the legislation. See also Klein, Herbert S., Parties and Political Change in Bolivia, 1880–1952 (New York: Oxford University Press, 1969), pp. 103–05Google Scholar.

⁶² Hayward to Kellogg, June 13, 1928, NA, 824.51 D581/7. It should be noted that the Departments of Commerce and State differed with regard to approving the Dillon, Read loan to Bolivia. Nathan F. Brown, Acting Secretary of Commerce, wrote Secretary of State Kellogg that Commerce had some objections on economic grounds, but conceded that if State had overriding political reasons to accede to the loan, Commerce would go along. Brown to Kellogg, July 26, 1928, NA, 824.51 D 581/25. Dillon, Read had already extended a loan to Bolivia, the gross amount of which was $14 million, in February 1927. The $23 million loan, completed in September 1928, actually netted Bolivia only $18,880,000. U. S. Senate, Committee on Finance, 72d Congress, 1st Session, Sale of Foreign Bonds or Securities in the United States (Washington, D.C., G.P.O., 1931–1932)Google Scholar, Part 2, p. 505; R. A. Young, Handbook on American Underwriting …, pp. 124, 158.

⁶³ Stinson to Dana G. Munro, May 3, 1929, NA, 824.51/512.

⁶⁴ Mayer to Stimson, Confidential, July 18, 1930, NA, 823.00/584.

⁶⁵ The members of the Kemmerer Mission to Peru and their responsibilities were as follows: Kemmerer, currency and banking; Paul M. Atkins, public credit; Joseph T. Byrne, budget and accounting; William F. Roddy, customs; Walter Van Deusen, banking; John Philip Wemette., taxation; Stokeley W. Morgan, general secretary; and Lindsley Dodd, assistant secretary.

⁶⁶ Dearing (Lima) to Stimson, March 4, 1931, NA 823.00 Revolutions/164; same to same, April 1, 1931, NA, 823.51/634.

⁶⁷ Reserve Bank of Peru, Commission of Financial Advisors on Finances of National Government of Peru, Kemmerer, Edwin Walter, President, Projects of Laws … together with Reports in Support Thereof (Lima, April 17, 1931), (Princeton: Princeton University Press, 1931)Google Scholar; “Stabilization of the Currency in Peru,” Pan-American Union, Bulletin, LXV (Nov. 1931), 1155–72Google Scholar; Kemmerer, , Money (New York, 1935), pp. 162–64Google Scholar; U.S. Senate …, Sale of Foreign Bonds …, Part 4, p. 2122. The report of J. & W. Seligman & Company to the Johnson Committee (last citation above) indicates a continuous flow of American personnel to Peru to “study” financial problems, presumably due to concern over American investments.

⁶⁸ Dearing to Stimson, July 30, 1931, NA, 823.51/720.

⁶⁹ Piles to Hughes, March 23, 1923, NA, 821.51A/25; Leland Harrison to Brigadier General John H. Russell, American High Commissioner, Port au Prince, February 4, 1924, NA, 821.51A/33.

⁷⁰ Kemmerer, , “Economic Advisory Work for Governments,” The American Economic Review, XVII (Mar. 1927), 8Google Scholar, and The New York Times, May 27, 1926, p. 10.