Russell Cornell Leffingwell was an American lawyer, banker and government official. He led the Council on Foreign Relations from 1944 until 1953.
Background
Russell Cornell Leffingwell was born in New York City, the son of Charles Russell Leffingwell and Mary Elizabeth Cornell. The paternal family had, since the seventeenth century, played a leading part in the development of Connecticut, but Charles Leffingwell was an executive in the New York iron business owned by his wife's family.
Education
Russell Leffingwell attended the Yonkers (N. Y. ) Military Academy, graduated from the Halsey School in New York City, and received a B. A. from Yale University in 1899. At Columbia Law School he became the first editor in chief of the law review and was awarded an LL. B.
Career
Leffingwell began his career as a law clerk with Guthrie, Cravath and Henderson, a distinguished Wall Street firm; he was made a partner in January 1907. During the next decade he won growing renown as a specialist in corporate finance. A strong patriot, Leffingwell took part in the Plattsburgh Reserve Officers Training Camp in 1916. When the United States declared war the next spring, he responded to an appeal from Secretary of the Treasury William McAdoo, a long-time friend, and joined the Treasury as a dollar-a-year man. Originally special counsel in charge of floating the first Liberty Loan, Leffingwell became assistant secretary of the Treasury for fiscal affairs when Congress created the post for him in October 1917. Serving in that capacity under both McAdoo and his successor, Carter Glass, he figured as the real architect of American wartime financial policies. He developed the Liberty Loan organization, supervised the vast bond issues, and negotiated loans to the European allies. In 1919, Colonel Edward M. House wanted him named chief financial adviser on the American Commission to Negotiate Peace, but Secretary Glass could not spare him. Nonetheless, Leffingwell helped to determine American strategy in Paris through daily cables to financial advisers Norman Davis and Thomas Lamont. Owing largely to his prudent management, the United States emerged from the war with less inflation and a sounder debt structure than any other belligerent. Although Leffingwell was not a partisan Democrat, his promotion to Treasury secretary was widely expected when Glass resigned in November 1919. Glass and McAdoo recommended him strongly. The White House Press Office intimated that the appointment was pending. Congressional leaders expressed enthusiasm. But, for reasons that remain obscure, a two-month delay ensued; an edict then came from President Woodrow Wilson's sickroom naming David Houston instead. Leffingwell stayed on until May 1920, in order to provide for an orderly transition.
Thereafter he returned to his law firm, which was renamed Cravath, Henderson, Leffingwell and de Gersdorff. In July 1923, Leffingwell joined J. P. Morgan and Company, the foremost investment banking institution in the United States. Although nominally one of fourteen senior partners, he quickly established himself as one of three guiding spirits in the firm, along with Thomas Lamont and J. P. Morgan, Jr. Morgan set general policy; Lamont handled outside negotiations; and Leffingwell bore primary responsibility for financial analysis of pending issues. During the 1920's Morgan and Company floated more than $2 billion in loans to foreign governments and did much to aid European reconstruction; in the troubled 1930's it sought to mitigate the effects of the depression and to promote currency stability.
Leffingwell became vice-chairman of the Morgan executive committee when the firm incorporated in March 1940 in order to do trust business. He was made chairman of the executive committee in 1943 and chairman of the board in 1948. He stepped down to vice-chairman in November 1950, making way for a younger man. Although he retired formally in November 1955, he remained a director of Morgan and Company and of its successor, the Morgan Guaranty Trust Company, until his death. Leffingwell helped found the Council on Foreign Relations and for many years served as chairman of its board. He was also board chairman of the Carnegie Corporation and a patron of the Yale University Library.
On Wall Street, Leffingwell was considered a business intellectual who gained his points by persuasion, not by table-pounding. He was credited with having the keenest analytic mind among the Morgan partners, and in his work demonstrated unfailing rigor and a disdain for cant or loose thinking. Between 1920 and 1950, Leffingwell produced a stream of popular articles that projected his influence beyond the confines of the financial community. In the 1920's he favored "balanced budgets and honest money, " and championed the interests of what his Yale mentor, William Graham Sumner, had called "the Forgotten Man": the producer and taxpayer. But he also advocated the reduction of tariff barriers, a liberal immigration policy, generous treatment of European war debtors, and prudent disarmament. When the depression struck, he modified his belief in classical economics and proclaimed, "A government cannot balance its budget by increasing the tax rate to be imposed upon declining incomes. " In 1933, President Franklin D. Roosevelt vetoed the proposed appointment of Leffingwell as undersecretary of the Treasury on the ground that politically "We simply cannot tie up with 23 [Wall Street]. " Nevertheless, Leffingwell helped to rally business support for the New Deal and backed monetary reflation and suspension of gold payments. He was one of the few Wall Street leaders to support Roosevelt's reelection campaign in 1936. By 1940, though, Leffingwell had become skeptical of the ability of the government to "fine-tune" the economy, and warned that counter-cyclical fiscal-policy theories ignored the political tendency to perpetuate make-work spending. He criticized the "extreme cheap-money policy" of the Treasury during World War II and correctly predicted a postwar inflation when almost everyone else feared another depression. Over a generation few observers described so lucidly the vicissitudes of monetary policy and the structural problems of the American economy. Leffingwell died in New York City.
Achievements
Personality
Leffingwell was highly cultured and possessed a command of English prose style unusual among the financial elite. A trim six-footer with a prominent nose, a shock of white hair, and a piercing gaze, Leffingwell cut an imposing figure. Those who did not know him well thought him courtly but slightly forbidding. In private, though, he exhibited considerable charm and a notable talent for friendship; he encouraged younger men and in turn inspired loyalty and admiration.
Connections
On January 27, 1906, Leffingwell married Lucy Hewitt. They had one daughter.