THE DISCUSSION IS OPEN - WEEK FOUR - PRESIDENTIAL SERIES: UNREASONABLE MEN - May 2nd - May 8th - Chapter Four- The Panic - (pages 79 - 106) - No Spoilers, please

[Pamela]

Thanks Bentley. I knew I was doing sometyhing wrong but got more and more mixed up trying to figure it out. Been a busy week.

[Jovita]

Initial Topics for Discussion

What are your thoughts about Uncle Joe or this quote? Do you agree or disagree? Why or why not? This seemed so regional as if he were the head of the House which had nothing to do with New York or Wall Street - out of sight - out of mind.

I agree that Uncle Joe had a terribly narrow view of the economy. I was amazed by how the leader of the US House of representatives could assume that the health of his local, rural economy would be an indication of the general health of the national economy as a whole.


1. How many of you heard of the 1906 Earthquake of 1906? I think we are all familiar with the California propensity for earthquakes - but how many of you realized the extent of this disaster or that it caused the Panic of 1907? Or that it had such an effect on our GNP (a drop of 11%) - Or that unemployment settled in and jumped from 3 to 8%. Or that deflation set in? How would you explain the differences between inflation and deflation to a fellow group member? What is GNP?

I knew about both the 1906 earthquake and the Panic as significant events in the nation’s history, but have never correlated the two, or realized the role of the Earthquake in shifting currency out of the north-east, ultimately leading to the cash shortages that would cause the Panic. I would compare inflation and deflation to blowing up or slowly letting the air out of a balloon. Inflation is like blowing up a balloon in that, just as a balloon grows, inflation causes the cost of goods and services to grow, while deflation is just like slowly letting the air out of a balloon, the cost of goods and services decrease.

2. There are always signs or red flags that disaster is around the corner. Why were these red flags ignored? What were the red flags in 1894? 1906? 1907 - before the Panic and before that recession?, before the Crash of 1929? Before the Depression? Before the Recession of 2008?

One of the primary reasons the signs would have been ignored would have been plain ignorance. As the quote from Uncle Joe at the beginning of the chapter suggests, many people, including many legislators not directly involved in the banking industry or big business, did not have a full grasp of how the economy and currency stability worked. For most people, if business was booming and money was flowing, that, to them, equated to a stable economy.

[Jovita]

Michael wrote: "Question for readers: What was your impression of Morgan..."

I must say I was impressed by Morgan in this instance. He really took charge of the situation and used both his knowledge of finance and his persuasiveness to convince the other bankers of what needed to be done to avert further crisis. I was also impressed by his willingness to put his own money where his mouth was in order to prevent any further bank failings. What I am still grappling with is whether or not his actions were driven more by a true desire to heroicly save the nation's economy, or by a selfish desire to save his own business interests. I would assume it was a little of both.

Also, its pretty cool that you did your research on Morgan at the actual location of the late-night meetings referenced in the text. I'm sure that made it all the more easy to imagine the events and how they transpired.

[Pamela]

I'm going to toss the cat among the pigeons here and relate a point of view from another book I'm currently reading, Only Yesterday: An Informal History of the 1920's, by Frederick Lewis Allen. It was published in 1931 and in discussing the Congess that dealt with the Treaty of Versailles, he describes Robert La Follette. Allen says this, "United with Lodge in skepticism about the Treaty, if in nothing else, was a curious combination of men and of influences. ...there were chronic dissenters like LaFollette and Reed..."

Now, my question is this: Is Allen's opinion a common one by this time? Was La Follette viewed as someone who took the opposite stand all of the time? Had he pushed his agenda so far that no one was really listening any more or is Mr. Allen maybe prejudiced in his view?

by Frederick Lewis Allen

[Robyn]

Jason wrote: "Robyn wrote: "Bentley wrote: "The Year was 1906:

The Great 1906 San Francisco Earthquake
5:12 AM - April 18, 1906

San Francisco City Hall after the 1906 Earthquake. (from Steenbrugge Collection o..."

I guess southern Cal is due for another big one, although I don't know how good we are at guessing in geologic time.

Great to be reading with you too Jason!

[Robyn]

I have to applaud Morgan's desire and commitment to personally address the panic. As Michael mentioned, he was getting older and had just been ill, yet, he was traveling around building support. I'm not sure how everything would have been different without Morgan stepping in. I'm not sure that Roosevelt would have - any thoughts?

[Helga]

I'm looking for the new thread for week 5. Is it posted?

[Teri]

Not yet, Helga. Bentley is working to get it setup soon.

[Bentley, Group Founder, Leader, Chief]

I am working on it Helga. (smile)

[Helga]

Okay, thanks. No hurry.

[Bentley, Group Founder, Leader, Chief]

It is coming - (smile) - usually I am ahead of the curve not behind the eight ball.

[Helga]

I know you are but you have alot going and you do a terrific job getting the posts ready. They always have so much material and great information.

[Kressel]

My most recent post on this thread was meant for Week Five. As soon as the thread is up, I'm cut-pasting it.

[Savannah]

Pamela wrote: "I'm going to toss the cat among the pigeons here and relate a point of view from another book I'm currently reading, Only Yesterday: An Informal History of the 1920's, by Frederick Lewis Allen. It ..."

That's an interesting question. I don't know the answer but perhaps Michael can tell you.

[Michael]

Pamela wrote: "Is Allen's opinion a common one by this time? Was La Follette viewed as someone who took the opposite stand all of the time? Had he pushed his agenda so far that no one was really listening any more or is Mr. Allen maybe prejudiced in his view?
"

Hi Pamela, I can't know Allen's mind, but I'll take a stab at it. In the context of the Versailles, Allen was likely referring to LF's fervent opposition to American involvement in WWI. Before the U.S. joined the war, he filibustered an act that would have armed merchant vessels to defend themselves from German attacks, and he was one of only six senators to vote against declaring war on Germany after the Lusitania sinking.

LF's anti-war stance made him a national pariah. President Wilson denounced him and his allies as "willful men." TR called him a heck of a lot worse. I imagine that the patriotic fever during WWI, which demonized (and imprisoned) many war objectors, may not have entirely faded by the time Allen wrote his history. In hindsight, however, many others came to view LF's conscientious stand against the war as courageous.

[Bentley, Group Founder, Leader, Chief]

Folks, Week Five is open

[Pamela]

Thanks, Michael. That does help. That particular chapter did discuss a lot of the anti-war feeling as well as the desire not to continue to be involved in European affairs prevalent at that time. So I can understand that he might be disliked. I just thought it was an odd thing for an historian to say unless public opinion of the time ('31) supported it.

[Mary Ellen]

This chapter was gripping: the description of the efforts to ward off economic disaster and curtail panic was like a thriller!

RE: the Cannon quote at the beginning of the chapter: I have an impression of Cannon playing the "folksy" card all the time...I'm just a simple man of the people.... I believe in an earlier chapter Michael wrote that much as one might disagree with him, he was hard to dislike ... in person... because of this humorous, down-to-earth demeanor. Did he really not understand the connection of stock market with the rest of the economy (here kind of like the canary in the mine!) - well, if he didn't, I guess that is one thing Uncle Joe & I have in common, because my grasp of economics is pretty shaky. (I decline to make a connection with San Francisco 1906!)

As to the earthquake: I had heard of it, but anything I had learned of the panic had gone quite out of my head, so I did not make a connection.

Morgan's power, the extent of his reach and control, were kind of scary, IMHO. He was in himself "too big to fail"! Yes, it was great that he curbed the panic by strength of will and a bit of arm-twisting (and literally, by holding financiers captive!). But should anyone have that much influence on the financial life of a country? He was a member of the 0.00001%!

I came to the reading of this book with ambivalent feelings about TR, and his backing down and away from previous positions in this chapter makes me think less of him.

[Jill]

"Uncle Joe's" statement that nobody cared what the speculators were howling about was nearer to the truth than we might want to believe.. Even in this day of endless media, there are many of the "common folk" pay no attention to the stock market and the dealings of big business. At the turn of the century, the country knew little of high finance and as long as it appeared that things were going along just fine, the term "panic" and "bank runs" had no meaning. The press was no helpf by calling it a rich man's problem. The United States had outgrown its financial system but few seemed to realize it. It took the Panic to take a second look at financial reform.

[Tomi]

Bentley wrote: "More on William Taft that is interesting - (smile) - from the Yale Alumni magazine:

Big man on campus

After he left the White House, William Howard Taft spent eight years teaching at Yale. He lef..."

This is neat! Wish I had known this when I was teaching - students love this kind of information!

[Bentley, Group Founder, Leader, Chief]

Folks, Week Seven is now open and we move to that thread and its assignment:

The seventh week's reading assignment is:

Week Seven - May 23rd - May 29th
Chapter Seven - The Tariff - (pages 123 - 142)

https://www.goodreads.com/topic/show/...

For those of you who need to catch up check each of the previous six threads including this one and make sure that you have posted on that thread and it is noted. If in fact you have not posted, make sure you respond on that thread to the topics for discussion and the next time I do an update - I will note your new responses so that you can get caught up.

You can still post on all of the Weekly threads to get caught up or if you are starting out new and want to read the book by all means post any time.

Book Recipients however should get caught up as soon as you can and are able (we realize everybody reads at different speeds) - we have reached the mid point of the book discussion. There are ten chapters in the book and this is Week Seven.
So try to catch up on your posting and your reading.

Here are the links to the previous Weekly Chapters to check your progress:

Week Six - https://www.goodreads.com/topic/show/...

Week Five - https://www.goodreads.com/topic/show/...

Week Four
https://www.goodreads.com/topic/show/...

Week Three
https://www.goodreads.com/topic/show/...

Week Two
https://www.goodreads.com/topic/show/...

Week One
https://www.goodreads.com/topic/show/...

And also part of the T's and C's is interacting with the author and asking a question or two - here is that link to the Q&A thread:
https://www.goodreads.com/topic/show/...

Take advantage of the author being with us on this journey.

Remember everybody - you can always get caught up - we are here waiting to read your posts and look forward to it.

[Bentley, Group Founder, Leader, Chief]

This is current:

Aside from the folks who have never posted or participated - (Cosmic, Steven M, Michael F, Karen L or Harold J) - these are the folks who need to respond to the questions and post on this thread:

Nita
Holly
Hana
Mark
Betty
Jason Page
Rhonda
Teresa
Lacey from Mississippi
Ann D
Steve D
Jan from Southern Cal
Jason Page
Laura R
Alice
Mary B from Tennessee
Nathan C
Paul W
Kristie
obs20
Lewis

[Lewis]

It is astounding to observe the power, persuasion, and influence that one man can so broadly exert as we see the actions of J. P. Morgan during the Panic of 1907 (page 105). Could that same influence be exhibited today?