Chapter Twenty-One

 

 

 

The Corner of Wall and Broad

New York City

 

 

It was a ceremony of sorts, a kind of testament to the courageous and forward-thinking actions of a man several hundred years before. It was a tribute to his service to his country.

Connor walked slowly down Broad Street in front of the New York Stock Exchange. The J.P. Morgan building was on his right, the House of Morgan. Here, the United States was saved, rescued by this banker decades before during another financial crisis. John Pierpont Morgan used millions of his own money to stop the financial panic of 1907.

At the time, the charter of the Bank of the United States was allowed to lapse by President Andrew Jackson before the Civil War. Therefore there was no central bank that could act as a lender of last resort. When the federal government couldn’t act, Morgan did. Convincing other tycoons to put up money with his own, he staved off a crisis. His legacy still existed today in the form of J.P. Morgan Chase, Morgan Stanley, and others. The crisis also gave weight again to Hamilton’s idea of a Bank of the United States. This eventually became the Federal Reserve Bank of the United States.

Much had happened in this small corner of real estate. Connor gazed at the impressive, smooth, stone blocks that comprised the building. “The Corner,” as it was called, was intimidating. It was probably designed that way, he thought.

A large bomb detonated here in September of 1920. The pockmarks in the granite slabs of the building were still visible with the naked eye. The perpetrators were never identified, and the event further inflamed the Red Scare that was sweeping the country. The area was deep with history.

The treasury secretary walked beside him. They both wore long coats, as winter was approaching. It was an unusually cold morning for this part of the year.

They turned left at Wall Street. The street got its name from its origin as the northern wall of New Amsterdam, the original city on Manhattan Island. The wall kept the Indians out of the settlement. Traders would gather here under a buttonwood tree hundreds of years ago to exchange goods and eventually shares of companies. Eventually they formalized the trading process. This was the beginning of the New York Stock Exchange.

The two men soon passed the Bank of New York on their left. They stopped and turned to face it. Alexander Hamilton built this bank. It was his baby, in addition to the Bank of the United States, the Coast Guard, and many other pillars of American society.

After a brief moment of silence, they turned and continued down Wall Street to Trinity Church. The street was blocked off by the police to give them security. They could now roam the area freely. They passed through the entrance and then through the gate to the cemetery on the south side. They continued to Hamilton’s grave, where Connor stood months before.

The secretary spoke as they faced the grave.

“Secretary Hamilton, we are here today to thank you for your efforts on behalf of your country. They have endured over the centuries and are helping us immensely today. Your gold has been returned to the United States Treasury at a time of great need. I assure you that the wealth will be used with the utmost of care and frugality. Thank you again.”

“Thank you Secretary Hamilton,” Connor added as the events of the last few months flashed through his mind. Snow began to fall.

They left the cemetery and headed back to the waiting limousine.

“So how do we get out of this mess?” Connor asked the secretary as they were whisked back to Midtown New York on their way to JFK airport. The police escort made the usual thirty-minute drive much shorter. It was the kind of interference that New Yorkers hated in their daily lives. Connor winced as he saw the pedestrians not being able to cross the road due to police barricades. Many times he had cursed the occupants of vehicles like the one he was in now.

The secretary didn’t answer right away. He just shook his head in disgust.

Finally he said, “Well one thing for sure is it’s not gonna be easy. We have dug ourselves a giant hole. We have to get the economy growing for one thing. We can pay off our debts if we unleash the American people. We have to get government off their backs and allow them to do what the American people have always done─innovate and make money.

“And we must have sound economic policies. Many of the imbalances of the past few decades are starting to be unwound through whatever means. The American economy is very resilient. We are changing from an energy importer to exporter. We must further that process. Although our defaulting on our debt to the Chinese was undesirable, it was necessary. The president was right to do so. We will achieve peace only through strength, not weakness. The reduction in interest expense will give us some breathing room to build up our defenses again.

“We must reform entitlements. They are killing us. Reducing spending and reforming our entitlement culture is a priority. It doesn’t work. It hasn’t ever worked. Even the communists know that. Look at China, Russia, Vietnam. The list goes on and on. They are capitalists now. We have here the greatest economic and political experiment in human history, and we are blowing it. Unbelievable actually.”

They sat in silence.

“What about the currency?” Connor finally asked.

“If we can do all the things I mentioned, the dollar will take care of itself. With your trillion-dollar find, I believe there is enough gold to return to the gold standard. We have to peg the currency to something of value. Right now, the paper is worthless. Relying on fiat money opens the door to central banks printing money to pay off debts. It allows for massive government spending, keeping the current government in power. However, in the long run, it only brings economic misery in the form of inflation and loss of purchasing power, a lower standard of living for everyone. We have to base our currency off our hard work and economic and fiscal discipline and something of value. Then we will be okay.”

Connor looked out the window as they passed the Empire State Building. He marveled at this monument to America’s financial strength in the past, and he wondered if the country still had the fortitude to make it so again.

 

 

 

Oval Office

 

 

He felt cold. It was a strange feeling. It was plenty warm inside, as the winter was approaching, and the staff had increased the indoor temperature. But he still felt cold. President Walker glanced at the bust of Churchill that was returned to the White House by the British after an absence. It was placed prominently in his office. Perhaps he was feeling what Churchill must have felt, staring down the Third Reich. It was a chilling experience. He tried to draw strength from those who had sat here before him.

The European Monetary Union was gone. The euro had collapsed. The Europeans were now conducting transactions in yuan. NATO was finished. To save itself, Europe─with the exception of England─had given in to Chinese demands. The special relationship still existed after all, he thought. Australia was also still with him, in addition to Israel. It was as if the old British Empire held together against the mysterious Asian world.

What was he to do? What should he tell the American people? Of course, they would survive, but the world was very different now, much more dangerous. Sacrifice would be the name of the game going forward. That is what he had to tell the American people. He had to be honest with them about where they stood, where they stood together. He would be strong and would rally the people to the occasion. Just as we have done many times before, he thought. This is no different.

Yes, he would be strong for them. He shivered with the cold.