Lords of Finance

12 By comparison, Britain, with an economy about a third that of the United States, spent a total of $50 billion over a period of four years.

13 He was sufficiently flattered by the attention from cartoonists that, in 1937, he had a collection of cartoons privately published to commemorate his sixtieth birthday.

14 The actual phrase was coined by Sir Eric Geddes, first lord of the admiralty, who while campaigning in Cambridge on December 9, announced that “Germany was going to pay restitution, reparation and indemnity and . . . they would get everything out of her that you could squeeze from a lemon, and a bit more.”

15 In July 1929, he was jailed for passing dud checks and died in prison a year later.

16 Hill, a physiologist and a fellow of Trinity College, would win a Nobel Prize before he was forty.

17 There have been other bad episodes of inflation. Hungary in 1945-46 was worse. The Zimbabwean inflation is as of the writing of this book equally bad—on July 31, 2008, the Financial Times reported that the exchange rate of the Zimbabwean dollar reached 500 billion to the U.S. dollar. But Hungary in 1945 and Zimbabwe in 2008 were tiny economies. Germany in the 1920s was the third largest economy in the world.

18 The Family eventually acquired the house at 1718 H Street and established a tradition that only bachelors could stay the night on the premises.

19 This is roughly equivalent to $9 million today.

20 Fort Knox, where the Treasury gold is now held, was not constructed until 1936.

21 His premonition would eventually prove to be right. In 1931, as the Depression in Germany reached its nadir, the Danatbank would collapse, a victim of Goldschmidt’s risky business strategy. Goldschmidt himself would become a favorite target of Nazi propaganda about the “unwarranted power” and “sinister influence” of Jewish bankers.

22 There was, in addition, a highly potent symbolism to the rate selected. The Rentenmark would now have an exchange rate of 4.2 to the dollar, the rate that had prevailed under the gold standard before the war. This was designed to send a signal to the public, and to the world, that the new currency was to be as stable as the mark had been before the war.

23 He was also a self-taught composer. In 1911, he composed a piece entitled “Melody in A Major,” which, set to words in the 1950s, became the popular hit song “It’s All in the Game.”

24 In 1940, during the German occupation of Paris, the Astoria would be commandeered by the occupation forces. Subsequently, when the city was liberated in 1944 by the Allies, it would be taken over as General Eisenhower’s Paris headquarters. Torn down in the 1950s, its successor building became famous to visitors to Paris in the 1960s as Le Drugstore.

25 Between 1894 and 1914, six heads of state were assassinated by terrorists. See Barbara Tuchman, The Proud Tower (New York: Bantam Books, 1966), p. 72.

26 According to his wife, Clementine, the first time Churchill ever resorted to public transport was when he took the Underground during the 1926 general strike.

27 In old age, Churchill would remark that the only great issue on which they had agreed had been in support of Edward VIII during the abdication crisis and that perhaps

they were both wrong that time.

28 Gladstone held the record for the longest speech at four hours and forty-five minutes, in 1853.

29 Like so many politicians from the left, Painlevé was an intellectual, a brilliant mathematician from the Sorbonne with a particular expertise in nonlinear second-order differential equations.

30 Gerald and Sara Murphy were the models for Dick and Nicole Diver in F. Scott Fitzgerald’s book Tender Is the Night. They were introduced to the south of France in 1922 by their friends Cole and Linda Porter.

31 The mansion belonged to the family of the French politician Daniel Wilson, the son-in-law of President Grévy, who had been accused in 1887 of selling decorations, including nominations to the Légion d’Honneur, from his office in the Elysée Palace.

32 When the royal family was imprisoned at the Temple, the princess de Lamballe had accompanied them. She met a gruesome end in September 1791, when she was handed over to a lynch mob, who stripped her naked, gang-raped her in the streets, then mutilated her body before finally impaling her head upon a pike and parading it in front of Marie Antoinette’s prison window.

33 He made up for his apparent coldness by an obsessive love of animals. He and his wife, Henriette, had no children and lavished their affection on their pet cats and dogs. Poincaré is supposed to have been heartbroken both when his sheepdog Nino died in 1926 and when his favorite Siamese cat, Gris-gris, passed away in 1929.

34 Pierre Quesnay became a close friend of Moreau’s. He drowned in 1937 in a swimming accident in a lake on the grounds of La Frissonaire while staying with Moreau.

35 Édouard’s efforts to keep his family firmly out of the papers except for the society columns were not helped when his cousin Maurice, a flamboyant womanizer and the black sheep of the family, took it into his head to enter politics, ran for the National Assembly, and in early 1926, was found guilty of having bought his seat by offering his constituents cash handouts, ranging from twenty to a thousand francs. Expelled from parliament, he insisted on running again and won.

36 In this book I have chosen to use the Dow Jones Industrial Average as a measure of the average level of the stock market, for all its many deficiencies, the oldest and best known stock average. Introduced by the founder of the Wall Street Journal, Charles Dow, in 1896, it then comprised the average of twelve industrial stocks. The list was expanded to twenty in 1916 and to thirty in 1928. The only index of comparable repute is the S&P, but that was not introduced until 1923 and remained relatively obscure until after the war.

37 By comparison, during the great boom years from 1890 to 1910, it oscillated between 15 and 20. In 1929, it reached a peak of 32; at the height of the Internet bubble, it soared to 45.

38 He also argued that while the franc had been stabilized de facto but not de jure at 25 francs to the dollar, speculators could still harbor the hope that the franc would eventually be fixed at a higher exchange rate, providing those who held francs with windfall gains. Norman insisted that the only way to combat this form of destabilizing speculation was for the French government to fix its rate de jure. It finally did so in June 1928.

39 The Banco d’Italia, which had stabilized the lira in December 1926, only six months after the franc, somehow got the impression that it, too, would be asked to attend, and was much disappointed when no invitation arrived.

40 With his sister, Gladys Livingstone Mills Phipps and his polo-playing brother-in-law, Henry Carnegie Phipps, he owned the Wheatley Stable, which bred the legendary race-horse Seabiscuit.