BOOK REVIEW BY MICHAEL A. MARTORELLI
Wall Street Wars: The Epic Battles with Washington
That Created the Modern Financial System
By Richard E. Farley
Regan Arts, 2015
320 pages, $27.95
In Wall Street Wars, Richard E. Farley
presents a very readable account of the
crafting and passage of four important
financial elements of President Franklin
D. Roosevelt’s New Deal. He does so with
separate chapters on The Emergency Banking Act, Glass-Steagall Banking Act and the
Securities Act of 1933, as well as the Securities Exchange Act of 1934 and its Securities
and Exchange Commission. Direct quotations from contemporaneous speeches,
letters and newspaper accounts, some of
which take up an entire page, provide the
kind of color that is lacking in many other
published accounts on this
subject.
Historians give FDR
much credit for persuading the general public that
the bold actions he took in
the first week of his administration would indeed
restore the crippled banking system he had inherited. After reading Farley’s
account of the Emergency
Banking Act and the text
of Roosevelt’s fireside chat
describing his unprecedented steps to meet the
crisis, this reviewer has a
new appreciation for that
suggestion. The administration’s bold plan to counteract the drain on bank
deposits by issuing up to
$2 billion of emergency
currency was greeted with
howls of disapproval from
many quarters. However,
because FDR had convinced the public that their
bank deposits would be
safe, very little of that supply was needed when the
nation’s banks re-opened a week after the
president had closed them.
Like much New Deal legislation, the
follow-up law that would address the
banking system’s longer-term flaws was
not a reflection of any one person’s desires,
but a complicated compromise containing
many disparate ideas. Congressmen, such
as Carter Glass and Henry Steagall, had
begun investigating the undesirable effects
of intermingling the activities of commercial banks and their securities affiliates
even before the 1929 stock market crash.
And banking reform had been an important plank in the 1932 Democratic Party
platform. That year, candidate Roosevelt
issued a laundry list of seven reforms of
the securities and banking businesses.
38 FINANCIAL HISTORY | Fall 2015 | www.MoAF.org
As Farley makes clear, however, while
the new president sought to incorporate
certain principals into laws, he was quite
willin