Benjamin Strong Jr.

February 22, 1872 (age 55)

Fishkill, New York, United States

At eighteen, he entered upon duty with the firm of Jesup, Paton & Company (later Cuyler, Morgan & Company), private bankers of New York. In 1901 he became assistant secretary in the Atlantic Trust Company, and in 1903 secretary of the newly organized Bankers' Trust Company. After serving as vice-president, on January 1, 1914, he became president of the Bankers' Trust Company, but soon he was appointed governor of the Federal Reserve Bank of New York, organized in 1914. This selection was unexpected, for Strong had been active in the movement which aimed to secure the adoption of what was known as the Aldrich Bill (the banking reform plan proposed under the authority of the National Monetary Commission) and had supported the congressional campaign against the Federal Reserve Act. Assuming office, he found the country convulsed by the early financial difficulties attendant upon the World War and the government desirous of hastening the organization of the Reserve institutions. Though he sharply opposed the hasty opening of the Federal Reserve banks, a peremptory order issued by the secretary of the treasury, W. G. McAdoo, compelled their opening on November 16, 1914. The Federal Reserve Bank of New York took root slowly, most of the local institutions being opposed to it. Following the entrance of the United States into the war, however, it grew rapidly and was for years largely occupied with the financing of the successive issues of Liberty Bonds, in harmony with policies formulated in Washington. After the close of the World War there was an active movement in New York financial circles for the broadened use, in securities operations and in foreign trade, of the new funds growing out of the war profits of American industry and the inflowing tide of gold. Although Strong had from the first opposed the introduction and development of the "open-market powers" of the Federal Reserve system, he now perceived their great possibilities and began to use them. His object, explained in a memorandum written at the end of 1924, was to produce in that year of recession a condition of "easy money, " designed to foster business activity and to raise commodity and security prices. Later, the Federal Reserve system was unable to cope with the outburst of speculation which reached a climax in 1929, though Strong had advocated a credit pressure which might have averted the ultimate collapse. During its earlier stages his policy probably assisted some of the European countries to facilitate, by international credit expansion, a premature movement toward the restoration of the gold standard. Its ultimate fruits, however, were slow in maturing. Strong paid frequent visits abroad and came to be regarded by many foreigners as the real head of the Federal Reserve system. Meanwhile he had drawn nearer to his end, partly owing to tuberculosis, a disease which he had contracted in 1916. During the post-war period frequent leaves of long duration necessitated his entrusting the management of the bank to others, though he had never been willing to give up control, and at the time of his death in October 1928 he had been absent from active work several months. He died in New York City.

Benjamin Strong Jr. Edit Profile

banker statesman

Background

Benjamin was born on December 22, 1872 at Fishkill on Hudson, New York, United States. He was the son of Benjamin and Adeline Torrey (Schenck) Strong, and a descendant of John Strong who emigrated to Massachusetts in 1630 and in 1659 settled in Northampton. His grandfather, Oliver Smith Strong, had been a merchant in New York, while his father had experience in the management of railroad properties and in financial administration.

Education

He graduated from the high school of Montclair, New Jersey.

Career

At eighteen, he entered upon duty with the firm of Jesup, Paton & Company (later Cuyler, Morgan & Company), private bankers of New York. In 1901 he became assistant secretary in the Atlantic Trust Company, and in 1903 secretary of the newly organized Bankers' Trust Company.

After serving as vice-president, on January 1, 1914, he became president of the Bankers' Trust Company, but soon he was appointed governor of the Federal Reserve Bank of New York, organized in 1914. This selection was unexpected, for Strong had been active in the movement which aimed to secure the adoption of what was known as the Aldrich Bill (the banking reform plan proposed under the authority of the National Monetary Commission) and had supported the congressional campaign against the Federal Reserve Act.

Assuming office, he found the country convulsed by the early financial difficulties attendant upon the World War and the government desirous of hastening the organization of the Reserve institutions. Though he sharply opposed the hasty opening of the Federal Reserve banks, a peremptory order issued by the secretary of the treasury, W. G. McAdoo, compelled their opening on November 16, 1914.

The Federal Reserve Bank of New York took root slowly, most of the local institutions being opposed to it. Following the entrance of the United States into the war, however, it grew rapidly and was for years largely occupied with the financing of the successive issues of Liberty Bonds, in harmony with policies formulated in Washington.

After the close of the World War there was an active movement in New York financial circles for the broadened use, in securities operations and in foreign trade, of the new funds growing out of the war profits of American industry and the inflowing tide of gold. Although Strong had from the first opposed the introduction and development of the "open-market powers" of the Federal Reserve system, he now perceived their great possibilities and began to use them. His object, explained in a memorandum written at the end of 1924, was to produce in that year of recession a condition of "easy money, " designed to foster business activity and to raise commodity and security prices.

Later, the Federal Reserve system was unable to cope with the outburst of speculation which reached a climax in 1929, though Strong had advocated a credit pressure which might have averted the ultimate collapse. During its earlier stages his policy probably assisted some of the European countries to facilitate, by international credit expansion, a premature movement toward the restoration of the gold standard. Its ultimate fruits, however, were slow in maturing.

Strong paid frequent visits abroad and came to be regarded by many foreigners as the real head of the Federal Reserve system. Meanwhile he had drawn nearer to his end, partly owing to tuberculosis, a disease which he had contracted in 1916.

During the post-war period frequent leaves of long duration necessitated his entrusting the management of the bank to others, though he had never been willing to give up control, and at the time of his death in October 1928 he had been absent from active work several months.

He died in New York City.

Achievements

Benjamin Strong has been listed as a noteworthy banker by Marquis Who's Who.

Works

Three Textile Raw Materials and Their Manufacture Three Textile Raw Materials and Their Manufacture

book
- Three Textile Raw Materials and Their Manufacture
  (Cotton, By J. P. Warburg; Wool, By J. P. Warburg; Silk, B...)

Personality

He was a man of positive and dominant personality.

Connections

He married in 1895 Margaret Guitton Le Boutillier, daughter of John Le Boutillier of New York. On April 10, 1907, he married Katherine Converse, a daughter of E. C. Converse, from whom he was divorced in 1920.

Father:: Benjamin Strong
Mother:: Adeline Torrey (Schenck) Strong
Wife:: Katherine Converse
Wife:: Margaret Guitton Le Boutillier

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