NOTES

Introduction. The Wise Old Parrot

“its aptitude and tendency to produce”: Alexander Hamilton, James Madison and John Jay, The Federalist Papers (New York, New American Library of World Literature, 1961), 414.

“Polls show fewer than 20 percent of Americans”: Pew Research Center, “Public Trust in Government: 1958–2017,” http://www.people-press.org/2017/12/14/public-trust-in-government-1958-2017/.

Chapter 1. Growing Up

“Government is a science”: “1st City Manager in Jersey to Quit,” New York Times, July 26, 1948, 9, https://timesmachine.nytimes.com/timesmachine/1948/07/26/85298535.pdf.

his childhood in Brooklyn, New York: Program from retirement dinner honoring Paul A. Volcker, still available on the town’s website: http://www.tea neck.org/virtualvillage/Manager/volcker.pdf.

“As the first official in such a capacity”: “Paul A. Volcker for Municipal Manager of Cape May City,” Lebanon Daily News, March 25, 1925, 1.

No young Cape May maiden: A quote attributed to my father at the time was “We cannot see the propriety of the most charming young women, many of them mere children, from other coast cities and inland communities, being sent with pomp and circumstance to Atlantic City, or any other city, once a year to be measured, weighed, appraised and gazed upon by a curious multitude.” (“Beauty to Stay Home,” Wilmington Morning News, June 12, 1925, 7.)

“Do not suffer your good nature”: The original quote was in a letter from Washington to Colonel George Baylor, January 9, 1777, https://founders.archives.gov/documents/Washington/03-08-02-0018.

The Saturday Evening Post carried an article: Edward T. Radin, “There’s No Crime in Teaneck,” Saturday Evening Post, July 28, 1945, http://www.tea neck.org/virtualvillage/police/no_crime_in_teaneck.htm.

the US Army selected: Kalman Seigel, “Teaneck on Film as Model Town,” New York Times, September 22, 1949, 28, https://timesmachine.nytimes.com/timesmachine/1949/09/22/84279327.pdf.

He once took me out of school: Here’s how my teacher, Bill Moore, told it in a 1984 oral history interview: “Well, Paul Jr. was in my homeroom in 217 at the high school and he was absent one day and the next day he brought in the usual parental note, although it was a bit extraordinary coming from the township manager and it was a typewritten letter that read: ‘Dear Mr. Moore, Please excuse Paul’s absence from school yesterday. I took him fishing. I figure that a day of fishing is worth as much as a day in Teaneck high school. Paul A. Volcker, Sr.’ Well, I didn’t know what to do at first. There was nothing on the slip that we use, homeroom teachers use, to pass on to the other teachers that says, ‘excused, went fishing.’ But I excused Paul anyway and I have been glad ever since that I did. First of all, I have come to believe that Mr. Volcker was absolutely right and secondly, Paul still loves to go fishing and I think that a day of fishing with his dad was worth as much as a day at Teaneck High school,” http://www.teaneck.org/virtualvillage/OralHistory2/moorewilliam.html.

It was at Beaver Lake that I heard: John Drebinger, “61,808 Fans Roar Tribute to Gehrig,” New York Times, July 5, 1939, 1, https://timesmachine.ny times.com/timesmachine/1939/07/05/112698231.html?pageNumber=1.

the very cream of women’s colleges: One of her classmates went on to marry Henry Morgenthau Jr., FDR’s Treasury secretary.

Chapter 2. Getting an Education

“training and education of men and women”: Form 4653, “Notification Concerning Foundation Status,” signed by Charles Robertson on August 20, 1970. Cited in Doug White, Abusing Donor Intent: The Robertson Family’s Epic Lawsuit Against Princeton University (Paragon House, 2014), 96.

twenty years later, it changed again: Karin Dienst, “Princeton’s informal motto recast to emphasize service to humanity,” October 24, 2016, Princeton University website: https://www.princeton.edu/news/2016/10/24/princetons-informal-motto-recast-emphasize-service-humanity.

President Truman remembered feeling cheated: Federal Reserve transcript of the Federal Open Market Committee’s January 31, 1951, meeting, p. 24, https://www.federalreserve.gov/monetarypolicy/files/FOMChistmin1951 0131.pdf.

and Willy Fellner: Fellner, a visiting professor from Wesleyan, impressed me in particular one day when, in contrast to so many of my professors, he expressed uncertainty about a broadly accepted economic doctrine. He made it apparent that there were problems in economic theory, including interest-rate analysis, for which he, a leading scholar, didn’t know the answers.

“All of us have seen”: Associated Press, “Morgenthau’s Talk to Monetary Conference,” New York Times, July 2, 1944, 14, https://timesmachine.ny times.com/timesmachine/1944/07/02/85184564.pdf.

known for its corrupt local politics: At the time, Kansas City was notorious for the power of its Pendergast political machine.

Chapter 3. Early Experience

“just when the party was really warming up”: In the second to last paragraph of this 1955 speech he attributes the idea to another, unidentified, writer. See https://fraser.stlouisfed.org/scribd/?item_id=7800&filepath=/files/docs/historical/martin/martin55_1019.pdf.

sixteen inches shorter: Friedman was five feet, three inches tall, according to Milton Viorst, “friedmanism, n. doctrine of most audacious U.S. economist, esp. theory ‘only money matters,’” New York Times, January 25, 1970, 196, https://www.nytimes.com/1970/01/25/archives/freidmanism-n-doctrine-of-most-audacious-us-economist-esp-theory.html.

Much later I depended on: September 12, 1979, letter to Milton Friedman from Paul Volcker papers, MC279, Box 1, September 1979 folder, Seeley G. Mudd Library, Princeton University archives.

a report that, in his nineties: Simon London, “Lunch with the FT, Milton Friedman: The Long View,” Financial Times magazine supplement, issue no. 7, June 7, 2003, 12–13.

had served in an Office of Strategic Services: Charles Kindleberger, an economist best known for his 1978 book Manias, Panics, and Crashes: A History of Financial Crises, described the unique Office of Strategic Services unit of economists that he led, and in which Roosa served, in this oral history conducted for the Harry S. Truman Library. See https://www.trumanlibrary.org/oralhist/kindbrgr.htm.

The dealers themselves were: There’s a helpful Federal Reserve research paper on the history of primary dealers at https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr777.pdf?la=en.

The combined Chase Manhattan: Bank of America, allowed by California to establish branches throughout the state, was also large but was disparaged as a savings bank in commercial bank clothing.

The comprehensive commission report: The report was presented to President John F. Kennedy in June 1961. (John F. Kennedy: “Remarks to the Members of the Commission on Money and Credit,” June 19, 1961. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=8195.)

that wasn’t where my heart lay: A colleague, who ranked well above me and no doubt had his eye on future Chase leadership, asked me one day: “Where do you think you could go in the bank?” My model at the time was Citibank’s strong economics department, where there were three people that held a lot of respect in the profession. One of them was vice chairman of the bank. So my answer was that I might like to become vice chairman of the bank and be, not a line officer, but a consultant, a consigliere. In a big institution with a lot of decisions to be made, it would be an honorable role and comfortable financially.

Chapter 4. Off to Washington

running a balance-of-payments deficit: The United States ran a balance-of-payments deficit for most of the 1950s, but foreign governments were willing to hold dollars and converted relatively little into gold. When foreign currencies became freely convertible in 1958, more capital moved overseas to earn higher interest rates and foreign central banks demanded more of the influx of dollars be converted into gold. See Federal Reserve Bank of St. Louis, “The United States Balance of Payments,” March 1961, https://fraser.stlouisfed.org/files/docs/publications/frbslreview/rev_stls_196103.pdf/.

he would not devalue the dollar: Wayne Phillips, “Kennedy Pledges He Will Maintain Value of Dollar,” New York Times, October 31, 1960, 1, https://timesmachine.nytimes.com/timesmachine/1960/10/31/105454271.pdf.

my Washington opportunity: My appointment was announced on December 28, 1961, and I started on January 8, 1962. Associated Press, “Fiscal Job Filled,” Wilmington Morning News, December 29, 1961, 29.

(such as a 5 percent economic growth target): Walter Heller, head of Kennedy’s Council of Economic Advisers, later remembered that Kennedy’s first question to him in October 1960 was whether they could really attain the 5 percent growth target they’d promised during the campaign. (JFK Library, Council of Economic Advisers Oral History interview, JFK#1 08/1/1964, https://archive1.jfklibrary.org/JFKOH/Council%20of%20Economic%20Advisers/JFKOH-CEA-01/JFKOH-CEA-01-TR.pdf.)

The tax program the president outlined: The text of JFK’s June 7, 1962, press conference is available at http://www.presidency.ucsb.edu/ws/index.php ?pid=8698&st=&st1=. (John F. Kennedy: “The President’s News Conference,” June 7, 1962. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=8698.)

our gold stock was $20 billion: These figures are derived from “Gold Reserves of Central Banks and Governments” charts contained in monthly Federal Reserve bulletins as well as Chart 15.1, “U.S. Liquid and Nonliquid Liabilities to Foreign Institutions and Liquid Liabilities to All Other Foreigners” from the Federal Reserve’s “Banking and Monetary Statistics: 1941–1970.” All are online at the St. Louis Fed’s online FRASER service.

the Treasury had practical support: The balance of payments deficit and nuclear war were his two biggest worries, Kennedy used to tell his advisors, according to Arthur M. Schlesinger Jr. in A Thousand Days: John F. Kennedy Jr. in the White House (Houghton Mifflin Co., 1965, 652–665).

interest equalization tax: John F. Kennedy: “Special Message to the Congress on Balance of Payments,” July 18, 1963. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=9349.

dollar deposits ordinarily kept in New York: Clyde H. Farnsworth, “City of London Regains Status as Market for Raising Capital,” New York Times, November 2, 1963, 45, https://timesmachine.nytimes.com/timesmachine/1963/11/02/89971248.pdf.

(an under secretary’s annual salary at the time): Adren Cooper, Associated Press, “3½ Years of Robert V. Roosa Won’t Be Easily Forgotten,” Cincinnati Inquirer, December 6, 1964, 14D.

“We’re going to have a program”: And, indeed, one year after he was reelected, Johnson signed into law the Higher Education Act of 1965. (Lyndon B. Johnson: “Remarks at Southwest Texas State College Upon Signing the Higher Education Act of 1965,” November 8, 1965. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=27356.)

he gave me a draft of a long speech: “Remarks by Fowler on the International Monetary System,” New York Times, July 11, 1965, 57, https://timesmachine.nytimes.com/timesmachine/1965/07/11/101555669.pdf.

released a disappointed statement: Lyndon B. Johnson, “Statement by the President on the Raising of the Discount Rate by the Federal Reserve Board,” December 5, 1965. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=27395.

the dramatic new Chase skyscraper: The 813-foot building was the sixth-tallest in the world when it opened in 1961. Charles Grutzner, “Chase Opens 64-Story Tower,” New York Times, May 18, 1961, 24, https://timesmachine.nytimes.com/timesmachine/1961/05/18/101463880.pdf.

Chapter 5. “The Best Job in the World”

(dated January 21): The memo can be found at https://www.nixonlibrary.gov/virtuallibrary/documents/nssm/nssm_007.pdf. (Memo: Henry Kissinger to Secretaries of State, Treasury, Chairmen of the CEA and Federal Reserve, National Security Study Memorandum No. 7; January 21, 1969; Richard Nixon Presidential Library and Museum, Yorba Linda, California.)

The conversation was not prolonged: After the meeting Kennedy announced that Charls and I had been nominated, adding a statement that the United States wouldn’t seek to change the price of gold. (Edwin L. Dale Jr., “Treasury’s Chief Rules Out Change in $35 Gold Price,” New York Times, January 23, 1969, 1.) Other reports said he made assurances the United States would act to curb inflation. (John R. Cauley, “Vows Drive on Inflation,” Kansas City Times, January 23, 1969, 1.)

At an emergency meeting: Edwin L. Dale Jr., “7 Nations Back Dual Gold Price, Bar Selling to Private Buyers,” New York Times, March 18, 1968, 1, https://timesmachine.nytimes.com/timesmachine/1968/03/18/79937229.pdf.

He blamed the franc’s weakness: Henry Tanner, “De Gaulle Orders Austerity Plan, Wage-Price Freeze, Budget Cuts; Blames Spring Strikes for Crisis,” New York Times, November 25, 1968, 1, https://timesmachine.nytimes.com/timesmachine/1968/11/25/76972133.pdf.

Five months later: Henry Tanner, “De Gaulle Quits After Losing Referendum; Senate Leader to Serve Pending Election,” New York Times, April 28, 1969, 1, https://timesmachine.nytimes.com/timesmachine/1969/04/28/90099539.pdf.

His principal intellectual opponent: Their 1967 debate was preserved in a book by the Washington-based American Enterprise Institute. (Milton Friedman and Robert V. Roosa, “The Balance of Payments: Free Versus Fixed Exchange Rates,” Washington, DC, American Enterprise Institute for Public Policy Research, 1967.)

There had been “a lot of discussion”: Clyde Farnsworth, “U.S. Scores Idea of Money Reform,” New York Times, February, 13, 1969, 63, https://times machine.nytimes.com/timesmachine/1969/02/13/77439795.pdf.

Our remaining gold reserves: Data compiled from “Banking and Monetary Statistics: 1941–1970, Board of Governors of the Federal Reserve System” and from Federal Reserve Bulletin July 1969, https://fraser.stlouisfed.org/scribd/?toc_id=333555&filepath=/files/docs/publications/FRB/1960s/frb_071969.pdf&start_page=144.

the French did devalue: Clyde H. Farnsworth, “Franc Is Devalued to 18C,” New York Times, August 9, 1969, 1, https://timesmachine.nytimes.com/times machine/1969/08/09/78389549.pdf.

It made for a rather long: See summary at https://history.state.gov/historical documents/frus1969-76v03/d130. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 130.)

We succeeded, but with a reduced amount: Edwin L. Dale Jr., “I.M.F. Nations Vote for ‘Paper Gold’ as a World Money,” New York Times, October 4, 1969, 1, https://timesmachine.nytimes.com/timesmachine/1969/10/04/81867494.pdf.

“If they aren’t willing to accept Iowa beef”: This line and its anti-Japan protectionist sentiment became a prominent feature in his later, and unsuccessful, 1980 presidential campaign. Paul Burka, “The Truth About John Connally,” Texas Monthly, November 1979, https://www.texasmonthly.com/politics/the-truth-about-john-connally/.

Arthur Burns’s own diaries: Robert H. Farrell, ed., Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969–1974 (University Press of Kansas, 2010).

In early May: Clyde H. Farnsworth, “Germans Decide to ‘Float’ Mark in Money Crisis,” New York Times, May 9, 1971, 1, https://timesmachine.ny times.com/timesmachine/1971/05/09/91298207.pdf.

“Helpful to the solution of any problem”: Paul Volcker and Toyoo Gyohten, Changing Fortunes (Times Books, 1992), 74–75.

The world of finance quickly understood: Clyde H. Farnsworth, “Connally Tells Bankers U.S. Will Defend Dollar,” New York Times, 28, May 29, 1971, 28, https://www.nytimes.com/1971/05/29/archives/connally-tells-bankers-us-will-defend-dollar-burns-also-at-munich.html.

After a lot of internal debate: James M. Naughton, “Nixon Vetoes a Works Plan; Bars Tax Cut,” New York Times, June 30, 1971, 1, https://www.nytimes.com/1971/06/30/archives/nixon-vetoes-a-works-plan-bars-tax-cut-confidence-cited-connally-to.html.

He reported to me by early August: An account of Connally’s discussions with Nixon in the White House, saved on taped recordings, is available at https://history.state.gov/historicaldocuments/frus1969-76v03/d164. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 164.)

The activist and ambitious Henry Reuss: Edwin L. Dale, “Devalued Dollar Is Asked in Study,” New York Times, August 8, 1971, 1, https://www.nytimes.com/1971/08/08/archives/devalued-dollar-is-asked-in-study-congress-unit-sees-benefits-in.html.

Two months earlier: Edwin L. Dale Jr., “Shift in Monetary Set-Up Is Proposed in House,” New York Times, June 4, 1971, 45, https://www.nytimes.com/1971/06/04/archives/shift-in-monetary-setup-is-proposed-in-the-house-reuss-resolution.html.

He rushed back: An account of their discussions is available at https://history.state.gov/historicaldocuments/frus1969-76v03/d165. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 165.)

All of the discussion was later reported: William Safire, Before the Fall: An Inside View of the Pre-Watergate White House (Doubleday, 1975).

justifying the import surcharge: Richard Nixon: “Proclamation 4074—Imposition of Supplemental Duty for Balance of Payments Purposes,” August 15, 1971. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=107023.

The State Department wasn’t represented: On an August 2, 1971, White House tape, Nixon can be heard telling Connally that any consultations abroad about the potential program should be handled by Kissinger: “Under no circumstances was the State Department to be consulted as that agency represented foreign governments.” Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, 455, https://history.state.gov/historicaldocuments/frus 1969-76v03/d164.

So far as I know, no one really cared: Amending the Canadian-American Automotive Agreement was, however, included among a broader discussion of “trade irritants” between United States and Canadian economic officials on December 6, 1971. See https://history.state.gov/historicaldocuments/frus1969-76v03/d85. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 85.)

Chapter 6. Monetary Reform Frustrated

He was instead taking “bold leadership”: Richard Nixon, “Address to the Nation Outlining a New Economic Policy: ‘The Challenge of Peace,’” August 15, 1971. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=3115.

Stocks soared: “Ebullient Investors Send Stocks Soaring in Record Day’s Climb,” Wall Street Journal, August 17, 1971, 1.

Full reform of the system: A summary of the discussion, prepared by Sam Cross, is available at https://history.state.gov/historicaldocuments/frus 1969-76v03/d170. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 170.)

An emergency Group of Ten meeting: John M. Lee, “Currency Parley Enlivens Trading,” New York Times, September 20, 1971, 39, https://www.nytimes.com/1971/09/20/archives/currency-parley-elivens-trading-one-result-of-group-of-10s-meeting.html.

Connally called for a $13 billion swing: A description of our reasoning is available at https://history.state.gov/historicaldocuments/frus1969-76v03/d76. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 76.)

we were looking toward an 11 percent drop: Clyde H. Farnsworth, “U.S. Ready to End Surtax If Currencies Go Up 11%,” New York Times, November 30, 1971, 1, https://www.nytimes.com/1971/11/30/archives/us-ready-to-end-sur tax-if-currencies-go-up-11-group-of-10-seeking.html.

That offer, we explained: Connally’s memo to Nixon from Rome outlining our position can be accessed at https://history.state.gov/historicaldocu ments/frus1969-76v03/d211. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 211.)

progress had been made: Clyde H. Farnsworth, “Progress at the Palazzo Corsini,” New York Times, December 5, 1971, 315, https://www.nytimes.com/1971/12/05/archives/progress-at-the-palazzo-corsini-devaluation-hint-by-us-unlocks.html.

The terms were pretty well settled: Tad Szulc, “Nixon Agrees to a Devaluation of Dollar as Part of Revision of Major Currencies,” New York Times, December 15, 1971, 1, https://www.nytimes.com/1971/12/15/archives/pact-with-france-azores-talks-opening-way-to-wide-accord-in.html.

That would depreciate the dollar: A copy of the memo signed by Pompidou and Nixon is available at https://history.state.gov/historicaldocuments/frus 1969-76v03/d220. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 220.)

realigning so many currencies: Connally said at the press conference after the Smithsonian meeting that the dollar would depreciate by an average of 12 percent against other OECD countries, without providing specific exchange rates. See https://history.state.gov/historicaldocuments/frus1969-76v03/d221. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 221.)

He did so in grand style: The text of Nixon’s statement can be accessed at http://www.presidency.ucsb.edu/ws/index.php?pid=3268&st=&st1=. (Richard Nixon: “Remarks Announcing a Monetary Agreement Following a Meeting of the Group of Ten,” December 18, 1971. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=3268.)

some official intervention was required: Michael Stern, “Devaluation Fear Spurs a Renewal of Dollar Sales,” New York Times, February 9, 1973, 1, https://www.nytimes.com/1973/02/09/archives/devaluation-fear-spurs-a-renewal-of-dollar-sales-bonn-buys-up-16.html.

Secretary Connally had resigned: In his memoir, Connally explained that he resigned after Nixon failed to keep his promise to consult with Connally on appointments to the Treasury. John Connally with Mickey Herkowitz, In History’s Shadow: An American Odyssey (Hyperion, 1993).

Secretary Shultz unveiled the changes: Edwin L. Dale Jr., “U.S. Orders Dollar Devalued 10 Per Cent; Japanese Yen Will Be Allowed to Float; Nixon to Submit Trade Plan to Congress,” New York Times, February 13, 1973, 1, https://www.nytimes.com/1973/02/13/archives/gold-to-be-4222-controls-on-lending-abroad-also-will-be-phased-out.html.

soon jumped sharply higher: Clyde H. Farnsworth, “Gold Touches $90 as Dollar Erodes in Trade Abroad,” New York Times, February 23, , https://www.nytimes.com/1973/02/23/archives/gold-touches-90-as-dollar-erodes-in-trade-abroad-renewed.html.

By early March, speculative pressures: Clyde H. Farnsworth, “Monetary Crisis Flares Up Again; Dollar Weakens,” New York Times, March 2, 1973, 1, https://www.nytimes.com/1973/03/02/archives/monetary-crisis-flares-up-again-dollar-weakens-markets-closed-us-is.html.

“Whatever happens to the discount rate”: Clyde H. Farnsworth, “U.S. and 13 Others Adopt Measures on Dollar Crisis,” New York Times, March 17, 1973, 1, https://www.nytimes.com/1973/03/17/archives/us-and-130-others-adopt-measures-on-dollar-crisis-plans-are.html.

a forward-looking speech: “Text of Shultz Talk Before International Monetary Fund and World Bank,” New York Times, September 27, 1972, 70, https://www.nytimes.com/1972/09/27/archives/text-of-shultz-talk-before-international-monetary-fund-and-world.html.

Schweitzer recognized that: Edwin L. Dale Jr., “Schweitzer of I.M.F. Won’t Quit His Post Despite U.S. Stand,” New York Times, September 24, 1972, 1, https://www.nytimes.com/1972/09/24/archives/schweitzer-of-imf-wont-quit-his-post-despite-us-stand-schweitzer.html.

Secretary Shultz’s constructive speech: Edwin L. Dale, “New U.S. Monetary Plan Asks Wider Fluctuation in World Exchange Rates,” New York Times, September 27, 1972, 1. https://timesmachine.nytimes.com/timesmachine/1972/09/27/91349838.pdf

Floating would remain as a last resort: See “Major Elements of Plan X” at https://history.state.gov/historicaldocuments/frus1969-76v03/d239. (Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972, Document 239.)

He patiently tested my ideas: The rather complicated proposal was fully laid out in the 1973 annual report of the Council of Economic Advisers.

Fannie Mae squeaked through: Kenneth B. Noble, “Fannie Mae Loses $70 Million,” New York Times, January 19, 1982, D3, https://www.nytimes.com/1982/01/19/business/fannie-mae-loses-70-million.html.

six- or seven-figure compensation: See November 23, 1973, letter from headhunter Russell Reynolds seeking a meeting about just such a position at a leading financial firm. Balance of Payments folder 1, Box 23, MC279, Paul Volcker papers, Mudd Library, Princeton University special collection.

when we moved to Cleveland Avenue: The Cleveland Avenue home in DC was about half the size of my beloved Montclair house. It was located on a fifty-foot lot that had been carved out of the estate of Cliff Folger, founder of the investment bank Folger, Nolan & Company. He later bought the house and tore it down.

Chapter 7. Back to the Beginning

from a 1974 peak near 5,300: Chart 8, Federal Reserve Bank of New York, annual report, 1979.

declined to bring any action: Jeff Gerth, “S.E.C. Overruled Staff on Finding That Citicorp Hid Foreign Profits,” New York Times, February 18, 1982, 1, https://www.nytimes.com/1982/02/18/business/sec-overruled-staff-on-finding-that-citicorp-hid-foreign-profits.html.

“maintain long run growth”: The text of the act, Public Law 95-188, 95th Congress, H.R. 9710 is available online through the Government Publishing Office at https://www.gpo.gov/fdsys/pkg/STATUTE-91/pdf/STATUTE-91-Pg1387.pdf.

The following year, Congress passed: President Jimmy Carter’s comments upon signing the bill are available at Jimmy Carter: “Full Employment and Comprehensive Employment and Training Act Bills Remarks on Signing H.R. 50 and S. 2570 Into Law,” October 27, 1978. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=30057.

He found himself outvoted: The June 30, 1978, decision to raise the discount rate to 7.25 percent was passed with a three to two vote, in which Miller was in the minority. Steven Rattner, “Miller Opposes Move to 7 ¼% Discount Level,” New York Times, July 1, 1978, 23, https://www.nytimes.com/1978/07/01/archives/miller-opposes-move-to-7-discount-level-fed-acts.html.

Chapter 8. Attacking Inflation

rising 13 percent a year: Clyde H. Farnsworth, “Prices Rose Sharply Again in May, Spurred by Increasing Costs of Fuel,” New York Times, June 27, 1979, 1, https://www.nytimes.com/1979/06/27/archives/prices-rose-sharply-again-in-may-spurred-by-increasing-costs-of.html.

and made a speech: Jimmy Carter: “Address to the Nation on Energy and National Goals: ‘The Malaise Speech,’” July 15, 1979. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=32596.

was not confidence building: Indeed, by the end of the week, on Friday, July 20, the Fed had to raise the discount rate half a percentage point to 10 percent and intervened in markets to support the dollar.

I got on the shuttle: The New York–Washington shuttle at that time was a true shuttle. The planes were smaller, but they were available every hour and if they filled up, additional planes came into service. It was possible to make the entire trip, door to door, in less than two hours in those pre-September 11 days.

the board took action: Karen W. Arenson, “Reserve Raises Loan Rate to Banks to Record 10½% from 10% Level,” New York Times, August 17, 1979, 1, https://www.nytimes.com/1979/08/17/archives/reserve-raises-loan-rate-to-banks-to-record-10-from-10-level.html.

The vote was split 4-3: Robert A. Bennett, “Reserve Board, by 4-3, Raises Rate on Loans to Banks to Record 11%,” New York Times, September 19, 1979, 1, https://www.nytimes.com/1979/09/19/archives/reserve-board-by-43-raises-rate-on-loans-to-banks-to-record-11.html.

But the market saw it differently: A typical comment came from Lawrence Kudlow, then an economist at Bear Stearns. The split vote “suggests circumstantially that future policy adjustments will be of a timid nature.” Associated Press, “Fed Boosts Discount Rate But Vote Is Not Unanimous,” St. Louis Post-Dispatch, September 19, 1979, 6.

gold hit a new record: Robert D. Hershey Jr. “Gold Price Soars at Record Pace in Wild Trading,” New York Times, September 19, 1979, 1, https://www.nytimes.com/1979/09/19/archives/gold-price-soars-at-record-pace-in-wild-trading-hits-37778-at.html.

I myself, some years ago: Paul A. Volcker, “The Contributions and Limitations of ‘Monetary’ Analysis” address delivered before the Joint Luncheon of the American Economic Association and the American Finance Association in Atlantic City, New Jersey, September 16, 1976. FRBNY Quarterly Review, https://www.newyorkfed.org/medialibrary/media/aboutthefed/monanal.pdf.

in which he (infamously) expressed doubt: Clyde H. Farnsworth, “Burns Cites Limits on Fed Powers,” New York Times, October 1, 1979, 45, https://timesmachine.nytimes.com/timesmachine/1979/10/01/112122164.html?page Number=45.

including that I had resigned or died: I jokingly referred to these rumors to begin the October 6 press conference: “I will tell you that the major purpose of this press conference is to show you that I have not resigned—the way the early rumor had it yesterday—and I am still alive—contrary to the latest rumor.” (Transcript of Federal Reserve press conference, October 6, 1979, Paul A. Volcker papers (MC279), folder October 6, 1979 action, Box 29, Mudd Manuscript Library, Department of Rare Books and Special Collections, Princeton University Library.)

I did read this one: The transcript is available on the Federal Reserve’s website at https://www.federalreserve.gov/monetarypolicy/files/FOMC197910 06meeting.pdf.

The rate on three-month Treasury bills: Data on Treasury bills and commercial prime bank lending rates were collected from Federal Reserve Board H.15 reports from 1979 to 1987; data on mortgage rates from weekly thirty-year mortgage rates are from Freddie Mac at http://www.freddiemac.com/pmms. Compiled with help from Kenneth Garbade at the New York Fed.

For half an hour we exchanged views: Associated Press, “Demonstrators Protest High Interest Rates,” Tampa Times, April 14, 1980, 11.

The Fed insisted I agree to: This decision was referenced in the April 15, 1981, Federal Reserve memo “Personal Security” to Volcker from John M. Denkler. Paul A. Volcker papers (MC279), folder memoranda from Michael Bradfield, Box 29, Mudd Manuscript Library, Department of Rare Books and Special Collections, Princeton University Library.

A year later an armed man: UPI, “Suspect Is Seized in Capital in Threat at Federal Reserve,” New York Times, December 8, 1981, 19, https://www.ny times.com/1981/12/08/us/suspect-is-seized-in-capital-in-threat-at-federal-reserve.html.

The president’s initial budget: Jimmy Carter: “Budget Message: Message to the Congress Transmitting the Fiscal Year 1981 Budget,” January 28, 1980. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=32851.

the message of restraint was diluted: Carter’s revamped budget, submitted on March 31, estimated a $16.5 billion surplus. Spending was down just $4.3 billion from the January version and the surplus was mostly from a $12.6 billion oil import fee. Jimmy Carter: “Budget Revisions Message to the Congress Transmitting Revisions to the Fiscal Year 1981 Budget,” March 31, 1980. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=33205.

The president’s anti-inflation program: Jimmy Carter: ”Anti-Inflation Program Remarks Announcing the Administration’s Program,” March 14, 1980. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=33142.

a mildly critical comment: Clyde H. Farnsworth, “Volcker Criticized by Carter on Rates,” New York Times, October 3, 1980, 1, https://timesmachine.ny times.com/timesmachine/1980/10/03/111177523.pdf.

the threats of impeachment: Democratic Texas Rep. Henry B. Gonzalez, in particular, introduced legislation calling for my impeachment and the impeachment of the other members of the FOMC. It went nowhere. See https://www.congress.gov/bill/97th-congress/house-resolution/196.

I was invited to address: “Housing Recovery Tied to Inflation,” New York Times, January 26, 1982, D11, http://www.nytimes.com/1982/01/26/business/housing-recovery-tied-to-inflation.html?scp=787&sq=volcker&st=nyt.

The markets took off: Michael Quint, “Interest Plunges, Elevating Stocks to a Record Gain,” New York Times, August 18,1982, 1, https://www.nytimes.com/1982/08/18/business/interest-plunges-elevating-stocks-to-a-record-gain.html.

its price had been marked down: I told a version of this story to journalist Andrew Tobias in 1982. He included it in his piece “A Talk with Paul Volcker,” New York Times, September 19, 1982, 271, https://timesmachine.nytimes.com/timesmachine/1982/09/19/issue.html.

it was a matter of tactics: Peter T. Kilborn, “Volcker Suggests Federal Reserve May Shift Tactics,” New York Times, October 10, 1982, 1, https://www.nytimes.com/1982/10/10/us/volcker-suggests-federal-reserve-may-shift-tactics.html.

The president recorded that: see entry for Tuesday, June 7, 1983 in Ronald Reagan, “The Reagan Diaries” (HarperCollins, 2007), 158.

It split symmetrically: CQ Almanac, 1983, https://library.cqpress.com/cq almanac/document.php?id=cqal83-1198874.

I was summoned to a meeting: The 3:30 p.m. July 24, 1984, meeting in the library is recorded in Reagan’s daily schedule, although it says Edwin Meese, Richard Darman, and Michael Deaver were present and to my memory they were certainly not. Reagan didn’t write anything about the meeting in his daily diary. See https://www.reaganfoundation.org/ronald-reagan/white-house-diaries/diary-entry-07241984/.

Chapter 9. Financial Crises, Domestic and International

He famously complained: “Bank Failures Lag; Patman Is Worried,” New York Times, June 17, 1963, 48, https://timesmachine.nytimes.com/timesmachine/1963/06/17/89537226.pdf.

Federal assistance was considered: Robert B. Semple Jr., “Rejection of Pennsy Loan Is Laid to Political Risks,” New York Times, 1, June 23, 1970, https://www.nytimes.com/1970/06/23/archives/rejection-of-pennsy-loan-is-laid-to-political-risks-sidetracking-of.html.

The sudden shutdown: Reuters, “Big Bank Closed by West Germany,” New York Times, June 27, 1974, 65, https://www.nytimes.com/1974/06/27/archives/big-bank-closed-by-west-germany-privatee-institution-herstat-of.html.

So was the failure: John H. Allan, “Franklin Found Insolvent by U.S. and Taken Over,” New York Times, October 9, 1974, 1, https://www.nytimes.com/1974/10/09/archives/franklin-found-insolvent-by-us-and-taken-over-european-group-in.html.

a victim of fraud: Arnold H. Lubasch, “Sindona Is Convicted by U.S. Jury of Fraud in Franklin Bank Failure,” New York Times, March 28, 1980, 1, https://timesmachine.nytimes.com/timesmachine/1980/03/28/112148354.pdf.

Congress created a three-man committee: Judmi Miller, “Congress Approves a Compromise Plan on Aid to Chrysler,” New York Times, December 21, 1979, 1, https://www.nytimes.com/1979/12/21/archives/congress-approves-a-compromise-plan-on-aid-to-chrysler-15-billion.html.

New management was brought aboard: Bernard D. Nossiter, “Chrysler Chairman Will Retire Early,” New York Times, September 18, 1979, 1, https://www.nytimes.com/1979/09/18/archives/chrysler-chairman-will-retire-early-riccardo-plans-to-leave.html.

They agreed to take the haircut: UPI, “Chrysler Announces Accord with Banks,” New York Times, February 26, 1981, D5, https://www.nytimes.com/1981/02/26/business/chrysler-announces-accord-with-banks.html.

Chrysler ended up paying: Thomas J. Lueck, “Chrysler Tops Bids to Buy Back Stock Rights,” New York Times, September 13, 1983, 1, https://www.nytimes.com/1983/09/13/business/chrysler-top-bids-to-buy-back-stock-rights.html.

first imposing position limits: Robert A. Bennett, “Position Limits Adopted in Comex Silver Futures,” New York Times, January 8, 1980, D1, https://times machine.nytimes.com/timesmachine/1980/01/08/111760374.pdf.

then limiting trades: H. J. Maidenberg, “Comex Curbs Trade in Silver Futures,” New York Times, January 22, 1980, D1, https://timesmachine.nytimes.com/timesmachine/1980/01/22/111137098.pdf.

“purely speculative holdings”: Federal Reserve Press Release, March 14, 1980, 3. Papers of Paul A. Volcker (MC279), Folder: Monetary Improvement Program, Box 29. Mudd Library, Department of Rare Books and Special Collections, Princeton University Library.

attracted congressional and public attention: Paul A. Volcker, Statement Before the Subcommittee on Agricultural Research and General Legislation, U.S. Senate Committee on Agriculture, Nutrition and Forestry, May 1, 1980, https://fraser.stlouisfed.org/files/docs/historical/volcker/Volcker_1980 0501.pdf.

Led by John Bunting: Mario A. Milletti, “First Pennsy’s Golden Boy,” New York Times, September 25, 1977, 119, https://www.nytimes.com/1977/09/25/archives/first-pennsys-golden-boy.html.

provided a $1.5 billion rescue: “First Penn to Receive Rescue Aid,” New York Times, April 29, 1980, D1, https://timesmachine.nytimes.com/timesmachine/1980/04/29/111234761.pdf.

enough to provide a controlling majority: Irvine H. Sprague, Bailout: An Insider’s Account of Bank Failures and Rescues (Basic Books, 1986) 96.

The failure of two: Vartanig G. Vartan, “Drysdale Securities Out of Business,” New York Times, June 16, 1982, D1, https://www.nytimes.com/1982/06/16/business/drysdale-securities-out-of-business.html.

notably to Continental Illinois: Robert A. Bennett, “Bigger Banks Are Hurt by Failure in Oklahoma,” New York Times, July 7, 1982, D1, https://www.nytimes.com/1982/07/07/business/bigger-banks-are-hurt-by-failure-in-oklahoma.html.

who had already agreed to: Robert A. Bennett, “$4.5 Billion Credit for Chicago Bank Set by 16 Others,” New York Times, May 15, 1984, 1.

needed to restore full confidence: Winston Williams, “U.S. Puts Together $7.5 Billion in Aid for Illinois Bank,” New York Times, May 18, 1984, 1, https://www.nytimes.com/1984/05/18/business/us-puts-together-7.5-billion-in-aid-for-illinois-bank.html.

The de facto guarantee of the FDIC: The press release included this key sentence: “In view of all the circumstances surrounding Continental Illinois Bank, the FDIC provides assurance that, in any arrangements that may be necessary to find a permanent solution, all depositors and other general creditors of the bank will be fully protected and service to the bank’s customers will not be interrupted.” Reprinted on p. 70, William H. Isaac, Senseless Panic: How Washington Failed America (John Wiley & Sons, 2010).

the FDIC negotiated a second rescue: Robert A. Bennett, “U.S. Will Invest $4.5 Billion in Rescue of Chicago Bank, Vowing More Aid If Needed,” New York Times, July 27, 1984, 1, https://www.nytimes.com/1984/07/27/business/us-will-invest-4.5-billion-in-rescue-of-chicago-bank-vowing-more-aid-if-needed.html.

Newly appointed by President Reagan: Ronald Reagan: “Nomination of Edwin J. Gray to Be a Member of the Federal Home Loan Bank Board,” February 17, 1983. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=40941.

got caught up in an attempt to browbeat Gray: Dan Fesperman, “Former Regulator Blames S&L Crisis on Congress,” Baltimore Sun, November 27, 1990, http://articles.baltimoresun.com/1990-11-27/news/1990331046_1_loan-crisis-ethics-committee-gray.

The ultimate cost to the federal government: “U.S. taxpayer losses amounted to $123.8 billion, or 81 percent of the total costs.” Timothy Curry and Lynn Shibut, “The Cost of the Savings and Loan Crisis: Truth and Consequences,” FDIC Banking Review, December 2000, https://www.fdic.gov/bank/analytical/banking/br2000v13n2.pdf.

in today’s money: Calculated from $123.8 billion in June 1989 using the Bureau of Labor Statistics Inflation Calculator: https://www.bls.gov/data/inflation_calculator.htm.

The Best Way to Rob a Bank Is to Own One: University of Texas Press, 2005.

more than twice the capital of the eight largest: FDIC Division of Research and Statistics, “An Examination of the Banking Crises of the 1980s and early 1990s,” ch. 5. “The LDC Debt Crisis,” https://www.fdic.gov/bank/historical/history/191_210.pdf.

a fluent English speaker with a graduate degree: Alan Riding, “Man in the News; Survivor: Jesus Silva Herzog,” New York Times, August 21, 1982, 29, http://www.nytimes.com/1982/08/21/business/man-in-the-news-survivor-jesus-silva-herzog.html.

the huge consequences a Mexican default: Edward Cowan, “Loans and Credits for Aiding Mexico Are Mapped by U.S.,” New York Times, August 21, 1982, 1, https://www.nytimes.com/1982/08/21/business/loans-and-credits-for-aiding-mexico-are-mapped-by-us.html.

he explained to the press: Robert A. Bennett, “Bankers Pressured to Assist Mexico,” New York Times, August 21, 1982, 32, https://www.nytimes.com/1982/08/21/business/bankers-pressured-to-assist-mexico.html.

De Larosière instinctively moved rapidly: Jacques de Larosière has written his own memoir, published in 2017 by Éditions Odile Jacob. The title of the English translation is 50 Years of Financial Crises.

announced at the October 1985 IMF meeting: Ronald E. Yates, “Baker’s Plan May Be Too Late,” Chicago Tribune, October 9, 1985, http://articles.chicago tribune.com/1985-10-09/business/8503080744_1_debt-crisis-world-bank-baker-plan.

Chapter 10. Unfinished Business: Repairing the Financial System

some analysts compared the German effort: James Sterngold, “Dollar Falls Sharply on Bonn Move,” New York Times, September 22, 1984, 39, https://www.nytimes.com/1984/09/22/business/dollar-falls-sharply-on-bonn-move.html.

the Treasury responded to a plea: Peter F. Kilborn, “Reagan’s New Dollar Strategy,” New York Times, March 3, 1985, 141, https://www.nytimes.com/1985/03/03/business/reagan-s-new-dollar-strategy.html.

were becoming intrigued by: Paul Lewis, “Plan Emerging on Currency Rates,” New York Times, March 18, 1985, D1, https://www.nytimes.com/1985/03/18/business/plan-emerging-on-currency-rates.html.

I was shoved to the front: Peter T. Kilborn, “U.S. and 4 Allies Plan Move to Cut Value of Dollar,” New York Times, September 23, 1985, 1, https://www.nytimes.com/1985/09/23/business/us-and-4-allies-plan-move-to-cut-value-of-dollar.html.

A front-page story the next day: Peter T. Kilborn, “Group of 5 Hints at Effort to Cut Interest Charges,” New York Times, January 20, 1986, 1, https://www.nytimes.com/1986/01/20/business/group-of-5-hints-at-effort-to-cut-interest-charges.html.

a public reprimand was in order: From a conference I was attending in Tokyo, I released a statement calling Martin’s suggestions for a policy shift in Latin America “incomprehensible” and praised the efforts then under way by Latin American governments to manage their debt. (Robert A. Bennett, “Volcker Rebukes Martin on 3d-World Debt Ideas,” New York Times, June 21, 1985, D2, https://www.nytimes.com/1985/06/21/business/volcker-rebukes-martin-on-3d-world-debt-ideas.html).

That is what happened in early March: Susan Chira, “Japan Says It Will Join in Rate Cut; French, Dutch Follow Lead of West Germans,” New York Times, March 7, 1986, D1, https://www.nytimes.com/1986/03/07/business/japan-says-it-will-join-in-rate-cut.html.

Preston Martin resigned: Robert D. Hershey, “Martin Resigning from Fed; Denies Move Is Tied to Dispute with Volcker,” New York Times, March 22, 1986, 35, http://www.nytimes.com/1986/03/22/business/martin-resigning-from-fed.html.

hands full with Irangate: Irangate, also known as the “Iran-Contra affair,” was a political scandal that involved covert sales of arms to Iran, in violation of an arms embargo, to help fund anti-communist Contras in Nicaragua after Congress had prohibited further funding.

it called for a G-5 meeting: Peter T. Kilborn, “Accord on Dollar Appears Remote,” New York Times, 13, February 22, 1987, https://www.nytimes.com/1987/02/22/world/accord-on-dollar-appears-remote.html.

the dollar was slipping below its band: Robert D. Hershey Jr., “Volcker Sees Danger to Economy of U.S. If Dollar Falls More,” New York Times, April 8, 1987, 1. https://www.nytimes.com/1987/04/08/business/volcker-sees-danger-to-economy-of-us-if-dollar-falls-more.html.

called for greater attention to exchange rates: The text of the speech is at https://piie.com/commentary/speeches-papers/quest-exchange-rate-stability-realistic-or-quixotic.

At the end of a European tour: Charles Goodhart, The Basel Committee on Banking Supervision: A History of the Early Years, 1974–1997 (Cambridge University Press, 2011).

announced in early 1987: Nathaniel C. Nash, “Similar Standards for Banks Are Set by U.S. and Britain,” New York Times, January 9, 1987, 1, https://www.nytimes.com/1987/01/09/business/similar-standards-for-banks-are-set-by-us-and-britain.html.

the final rules later that year: Nathaniel C. Nash, “12 Countries Want Banks to Increase Capital,” New York Times, December 11, 1987, 1, https://www.nytimes.com/1987/12/11/business/12-countries-want-banks-to-increase-capital.html.

completed the third iteration: Jack Ewing, “Global Regulators Make Move to Prevent Next Financial Crisis,” New York Times, December 8, 2017, B1, https://www.nytimes.com/2017/12/07/business/global-regulators-agree-on-rules-to-prevent-financial-crises.html.

began to be diluted: Ryan Tracy and Lalita Clozel, “Plan Aims to Ease Bank Rule on Capital,” Wall Street Journal, April 12, 2018, https://www.wsj.com/articles/u-s-proposes-retooling-big-bank-capital-rule-1523478608.

according to one report he thought: This is based on an eyewitness account of a Republican meeting about my reappointment that’s cited in Thomas Ferguson, Paul Jorgenson, and Jie Chen, “Fifty Shares of Green: High Finance, Political Money and the U.S. Congress,” Roosevelt Institute, May 2017, http://rooseveltinstitute.org/wp-content/uploads/2017/05/FiftyShadesof Green_0517.pdf.

Chapter 11. After the Fed

“we want to be perceived”: Michael Quint, “Saudi Prince to Become Citicorp’s Top Stockholder,” New York Times, February 22, 1991, 1, https://www.nytimes.com/1991/02/22/business/saudi-prince-to-become-citicorp-s-top-stockholder.html.

We wrote a book: Paul Volcker and Toyoo Gyohten, Changing Fortunes: The World’s Money and the Threat to American Leadership (Times Books, 1992).

(almost $300 million in today’s dollars): Calculated with the Bureau of Labor Statistics’ Inflation Calculator. See https://www.bls.gov/data/inflation_calculator.htm.

to support a new graduate program: A detailed description of the donation and the subsequent dispute over it is available in Doug White, Abusing Donor Intent: The Robertson Family’s Epic Lawsuit Against Princeton University (Paragon House, 2014).

“comparable to the country’s best schools”: Fred M. Hechinger, “Gift of 35 Million Goes to Princeton,” New York Times, August 6, 1961, 1, https://times machine.nytimes.com/timesmachine/1961/08/06/118046661.pdf.

for “managers or bureaucratic cogs”: This is from the Princeton University website that’s dedicated to explaining the mission of the Woodrow Wilson School in the aftermath of the Robertson donation. See https://www.prince ton.edu/robertson/documents/implementing_mission/.

as early as 1970: Doug White, Abusing Donor Intent: The Robertson Family’s Epic Lawsuit Against Princeton University (Paragon House, 2014), 97–99.

My understanding is that: The text of the settlement agreement is available at https://www.princeton.edu/robertson/documents/docs/Robertson_Set tlement_Agreement-Executed.pdf.

Chapter 12. Mr. Chairman in Several Guises

acquiring one of our boutique rivals: Peter Truell, “NatWest to Buy Gleacher in $135 Million Stock Deal,” New York Times, October 18, 1995, D2, https://www.nytimes.com/1995/10/18/business/natwest-to-buy-gleacher-in-135-million-stock-deal.html.

In May 1996 the firm was sold: Saul Hansell, “Bankers Trust to Acquire Wolfensohn,” New York Times, May 23, 1996, http://www.nytimes.com/1996/05/23/business/bankers-trust-to-acquire-wolfensohn.html.

For too many years: From May 1988 until May 2168 to be precise. See https://www.nestle.com/media/pressreleases/allpressreleases/recordperformance-25feb00.

possibility of criminal indictments: In March 1999, almost six months after agreeing to be acquired by Deutsche Bank, Bankers Trust did end up pleading guilty to federal criminal charges that it had used unclaimed customer money to enhance the bank’s own financial performance. Benjamin Weiser, “Bankers Trust Admits Diverting Unclaimed Money,” New York Times, March 12, 1999, https://www.nytimes.com/1999/03/12/nyregion/bankers-trust-admits-diverting-unclaimed-money.html.

Hundreds of thousands of foreign students: Total foreign enrollment reached a record of 1.08 million students in 2016 before dipping in 2017. Nick Anderson, “Report finds fewer new international students on U.S. college campuses,” Washington Post, November 13, 2017, https://www.washingtonpost.com/local/education/report-finds-fewer-new-international-students-on-us-college-campuses/2017/11/12/5933fe02-c61d-11e7-aae0-cb18a8c29c65_story.html?utm_term=.4997869e8653.

thirty or so board members: A full list is available at https://www.ihouse-nyc.org/about-student-housing-in-ny/board-of-trustees/.

a definitive report on derivatives: The report is available at http://group30.org/images/uploads/publications/G30_Derivatives-PracticesandPrinciples.pdf.

the report, published in January 2009: The report is available online at http://group30.org/images/uploads/publications/G30_FinancialReformFrame workFinStability.pdf.

the 2015 report: “Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform,” published in July 2015, http://group30.org/images/uploads/publications/G30_BankingConductandCulture.pdf.

we produced a forceful report: The National Commission on the Public Service, “Leadership for America: Rebuilding the Public Service,” Washington Post, 1989, http://www.washingtonpost.com/wp-srv/opinions/documents/Leadership_for_America_Rebuilding_the_Public_Service.pdf.

he was sympathetic to our cause: Robert D. Hershey, “The Government Is Hiring, Which Isn’t Easy,” New York Times, July 23, 1989, 115, https://www.nytimes.com/1989/07/23/weekinreview/nation-government-hiring-which-isn-t-easy-civil-service-doubts-within-without.html.

and freezing salaries: “Tonight I call for an across-the-board freeze in Federal Government salaries for one year. And thereafter, during this 4-year period, I recommend that salaries rise at one point lower than the cost of living allowance normally involved in Federal pay increases. Next, I recommend that we make 150 specific budget cuts, as you know, and that all those who say we should cut more be as specific as I have been.” (William J. Clinton: “Address Before a Joint Session of Congress on Administration Goals,” February 17, 1993. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=47232).

the long-defunct Bicentennial Commission: “Government is great at starting things and bad at stopping things. So we’re still, believe it or not, you’re still paying for a bicentennial commission. That was over in 1976. And there are lots of things. It’s a little bit of money, but you can’t justify it. It’s just terrible.” (William J. Clinton: “Remarks and a Question-and-Answer Session on the Economic Program in Chillicothe, Ohio,” February 19, 1993. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=45998).

a follow-on commission: National Commission on the State and Local Public Service, also known as the “Winter Commission.”

its recommendations were even broader: The report was called “Urgent Business for America: Revitalizing the Federal Government for the 21st Century.” A link is available at https://ourpublicservice.org/publications/view contentdetails.php?id=314.

Chapter 13. The Search for Integrity

his decision pending settlement negotiations: See chronology in “Swiss Banks Settlement: In re Holocaust Victim Assets Litigation,” official website: http://www.swissbankclaims.com/Chronology.aspx.

What soon became known as: Detail on the composition of the committee is available in our final report: Independent Committee of Eminent Persons, “Report on Dormant Accounts of Victims of Nazi Persecution in Swiss Banks,” 1999, http://www.crt-ii.org/ICEP/ICEP_Report_english.pdf.

could and finally did uncover: “In May 1954, the legal representatives of the big banks coordinated their response to heirs so that the banks would have at their disposal a concerted mechanism for deflecting any kind of enquiry.” (Bergier Commission Final Report).

his lasting legacy: A complete guide to the awards is available at http://www.crt-ii.org/_awards/index.phtm.

“Henceforth, the most comprehensive”: Cited in The United Nations Security Council from the Cold War to the 21st Century, David Malone, ed. (Lynne Reinner, 2004), 182.

Weir Group in effect voluntarily disclosed: “Weir Group Admits Iraq Oil for Food Contracts Were Inflated,” Herald of Scotland, July 22, 2004, http://www.heraldscotland.com/news/12497592.Weir_Group_admits_Iraq_Oil_for_Food_contracts_were_inflated/.

forced the SFO to shut down: David Leigh and Rob Evans, “‘National Interest’ Halts Arms Corruption Inquiry,” Guardian, December 15, 2006, https://www.theguardian.com/uk/2006/dec/15/saudiarabia.armstrade.

Lord Goldsmith said in Parliament: A transcript of Lord Goldsmith’s statement in the House of Lords on December 14, 2006, is available online at https://www.theyworkforyou.com/lords/?id=2006-12-14d.1711.2.

The committee could itself investigate: A full report by two senior staff members entitled “Good Intentions Corrupted,” with an introduction by me, tells the full story in all of its complexity. It’s worth reading for insights into the mismanagement of an international organization. Jeffrey A. Meyer and Mark G. Califano, Good Intentions Corrupted: The Oil-for-Food Scandal and the Threat to the U.N. (PublicAffairs, 2006).

the “Volcker Effect”: Press Trust of India, “Volcker Effect: Natwar Singh Removed as Foreign Minister,” Times of India, November 7, 2005, https://timesofindia.indiatimes.com/india/Volcker-effect-Natwar-Singh-removed-as-Foreign-Minister/articleshow/1287392.cms.

the “Volcker Report”: Saurabh Shukla, “Volcker Report: Aniel Matherani’s revelations leads to Natwar Singh’s resignation,” India Today, December 19, 2005, https://www.indiatoday.in/magazine/nation/story/20051219-volcker-report-aniel-matherani-s-revelations-leads-to-natwar-singh-resignation-786387-2005-12-19.

the “cancer of corruption”: See http://www.worldbank.org/en/about/archives/history/past-presidents/james-david-wolfensohn and speech at http://documents.worldbank.org/curated/en/135801467993234363/pdf/99712-WP-Box393210B-PUBLIC-1996-10-01-People-and-Development.pdf.

became yet another “Volcker panel”: See http://www.worldbank.org/en/news/press-release/2007/09/13/world-bank-president-robert-zoellick-welcomes-volcker-panel-review-world-bank-institutional-integrity-department.

were no longer ignoring the issue: The Siemens corruption case started with the Munich prosecutor’s office before including authorities in several other countries and at international institutions.

The World Bank itself won: See http://www.worldbank.org/en/news/press-release/2009/07/02/siemens-pay-million-fight-fraud-corruption-part-world-bank-group-settlement.

found prone to corruption: World Bank statement: http://www.worldbank.org/en/news/press-release/2012/06/29/world-bank-statement-padma-bridge.

Chapter 14. Setting Standards

It became the nineteen-person board of trustees: See https://www.iasplus.com/en/binary/resource/01iascfar.pdf.

In mid-2001 the firm agreed: Floyd Norris, “Accounting Firm to Pay a Big Fine,” New York Times, June 20, 2001, http://www.nytimes.com/2001/06/20/business/accounting-firm-to-pay-a-big-fine.html.

My lecture, calling for reforms: A text of my remarks is available at http://www.kellogg.northwestern.edu/news_articles/2002/volcker_text.aspx.

There was bipartisan disgust: During my testimony, Alabama Republican Senator Richard Shelby made the following statement: “I just want to repeat what was part of my opening statement, what Dr. Volcker said. He said: ‘We have had too many restatements of earnings, too many doubts about pro forma earnings, too many sudden charges of billions of dollars to goodwill, too many perceived auditing failures accompanying bankruptcies to make us all comfortable. To the contrary, it has become clear that some fundamental changes and reforms will be required to provide assurance that our financial reporting will be accurate, transparent, and meaningful.’ I could not say it as well as you have, Dr. Volcker.” (Transcript of S. Hrg. 107–948, Volume 2—Accounting Reform and Investor Protection Volume 1 S. Hrg. 107–948 Accounting Reform and Investor Protection).

“the most far-reaching reforms”: George W. Bush: “Remarks on Signing the Sarbanes-Oxley Act of 2002,” July 30, 2002. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=73333.

“an exploding crisis in a once-noble profession”: Paul Volcker testimony before the Senate Banking Committee, February 14, 2002. (Transcript of S. Hrg. 107–948, Volume 2—Accounting Reform and Investor Protection Volume 1 S. Hrg. 107–948 Accounting Reform and Investor Protection).

urged a forced breakup: Madison Marriage, “Big Four accountancy firms plan for forced break-up,” Financial Times, May 16, 2018, https://www.ft.com/content/6c07f5d8-591b-11e8-bdb7-f6677d2e1ce8.

the series in the Financial Times: Jonathan Ford and Madison Marriage, “The big flaw: auditing in crisis,” Financial Times, August 1, 2018, https://www.ft.com/content/29ccd60a-85c8-11e8-a29d-73e3d454535d.

Chapter 15. The New Financial World: Breakdown and Reform

it disclosed a $15 billion shortfall: Sonali Basak, Katherine Chiglinsky, and Rick Clough, “GE’s Surprise $15 Billion Shortfall Was 14 Years in the Making,” Bloomberg News, January 25, 2018, https://www.bloomberg.com/news/articles/2018-01-25/ge-s-surprise-15-billion-shortfall-was-14-years-in-the-making.

In his 2002 letter to shareholders: Available online at http://www.berkshire hathaway.com/letters/2002pdf.pdf.

As mentioned earlier: See chapter 11.

At least one member of the press was there: The comment was reported in Georgie Ann Geyer’s Universal Press Syndicate column in August 2004. Georgie Ann Geyer, “Economic Experts Outline Precarious Financial Situation,” Daily Spectrum (Saint George, Utah), August 23, 2004, A6.

I prepared a careful speech: The Washington Post published an adapted version of the speech: Paul A. Volcker, “An Economy on Thin Ice,” Washington Post, April 10, 2005, B7, http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html.

Stock markets tumbled: Eric Dash and Jack Healy, “New Plan, Old Doubts: Investors Register Disappointment, Sending Markets Into a Swoon,” New York Times, February 11, 2009, B1, https://archive.nytimes.com/www.ny times.com/2009/02/11/business/11markets.html.

proposed a sweeping overhaul: Barack Obama: “Remarks on Financial Regulatory Reform,” June 17, 2009. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=86287.

later printed in full: “Paul Volcker: Think More Boldly,” Wall Street Journal, December 14, 2009, R7, https://www.wsj.com/articles/SB10001424052748704825504574586330960597134.

“which we’re calling the Volcker Rule”: Barack Obama: “Remarks on Financial Regulatory Reform and Consumer Protection Legislation,” January 21, 2010. Online by Gerhard Peters and John T. Woolley, American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=87436.

Chapter 16. The Three Verities

“knee-jerk inflation fighters”: Federal Open Market Committee meeting transcript, July 17, 1984, 67, https://www.federalreserve.gov/monetarypolicy/files/FOMC19840717meeting.pdf.

The new government set an annual inflation rate: Reserve Bank of New Zealand, Policy Targets Agreement 1990, https://www.rbnz.govt.nz/monetary-policy/policy-targets-agreements.

a colloquy in a July 1996 FOMC meeting: Federal Open Market Committee meeting transcript, July 2–3, 1996, 50–51, https://www.federalreserve.gov/monetarypolicy/files/FOMC19960703meeting.pdf.

a front-page story warning about: Peter T. Kilborn, “After Years of Absence, Deflation Causes Worries,” New York Times, July 23, 1984, 1, https://www.nytimes.com/1984/07/23/business/after-years-of-absence-deflation-causes-worries.html.

“We were focused on the banking system”: Janet Yellen interview with Financial Crisis Inquiry Commission, November 15, 2010, https://fcic.law.stanford.edu/interviews/view/201.

permitted the Treasury to use taxpayer money: Details on the October 2008 TARP legislation are available at https://www.treasury.gov/initiatives/financial-stability/TARP-Programs/Pages/default.aspx#).

Only 20 percent or so: Examples of these polls include the Pew Research Center’s Public Trust in Government survey, http://www.people-press.org/2017/12/14/public-trust-in-government-1958-2017/.

in an issue paper: Paul C. Light, “Vision + Action = Faithful Execution: Why Government Daydreams and How to Stop the Cascade of Breakdowns That Now Haunts It,” Volcker Alliance, December 2015, https://www.volckeralliance.org/sites/default/files/attachments/Vision%20%2B%20Action%20-%20The%20Volcker%20Alliance.pdf.

Has nearly doubled: US Census data projects the total population in 2018 is about 328 million (see https://www.census.gov/popclock/), compared with an estimated 186 million in 1962 (see World Bank data available via the St. Louis Federal Reserve Bank here: https://fred.stlouisfed.org/series/POP TOTUSA647NWDB).

GDP and federal spending have soared: US annual GDP was about $19.4 trillion in 2017 compared with $605.1 billion in 1962. (Federal Reserve: https://fred.stlouisfed.org/series/GDP#0). Total federal outlays in 2017 were $3.98 trillion compared with $106.8 billion in 1962. (Office of Management and Budget, table 14.2, “Total Government Expenditures 1948–2017”).

Epilogue. Credit Where Credit Is Due

an earlier graduate: Dewey was, in fact, the first PhD in public administration from the Littauer school. See Federal Reserve, https://www.federal reservehistory.org/people/j_dewey_daane.