expand. It was now time to sharpen the pin. On April 19, the Fed held an emergency meeting under cloak of great secrecy. The following day, the New York Times reported as follows:
RESERVE COUNCIL CONFERS IN HASTE
Atmosphere of Mystery Is Thrown
about Its Meeting in Washington
An atmosphere of deep mystery was thrown about the
proceedings both by the board and the council. No advance announcement had been made that an extraordinary session of the council was contemplated, and the fact that the members were in the city became known only when
1. Quoted by Greider, p. 298.
498
THE CREATURE FROM JEKYLL ISLAND
newspaper correspondents happened to see some of them
entering the Treasury Department building. Even after that,evasive replies were given.... While the joint meeting w a sin progress at the Treasury Department, every effort w a sm a d e to guard the proceedings, and a group of newspapercorrespondents w e r e asked to leave the corridor.
Let us return briefly to Montagu Norman. His biographer tells us that, after he became head of the Bank of England, his custom was to journey to the United States several times each year, although his arrival was seldom noted by the press. He travelled in disguise, wearing a long, black cloak and a large, broad-brimmed hat, and he used the pseudonym of Professor Skinner. It was on one of those unpublicized trips that he ran into a young Australian by the name of W.C. Wentworth. Sixty years later, Wentworth wrote a letter to The Australian, a newspaper in Sydney, and told of his encounter:
In 1929 I was a member of the Oxford and Cambridge athleticteam, visiting America to run against American Universities. Late inJuly we split up to return, and I, together with some other members,boarded a smallish passenger vessel in New York. (There were, ofcourse, no aeroplanes in those days.)
A fellow passenger was "Mr. Skinner," and a member of our teamrecognized him. He was Montagu Norman, returning to London, aftera secret visit to the US Central Bank, travelling incognito.
When we told him we knew who he was, he asked us not to blowhis cover, because if the details of his movement were made public, itcould have serious financial consequences. Naturally, we agreed, andon the days following, as we crossed the Atlantic, he talked to us veryfrankly.
He said, "In the next few months there is going to be a shake-outBut don't worry—it won't last for long."3
On August 9, just a few weeks after that ship-board encounter, the Federal Reserve Board reversed its easy-credit policy and raised the discount rate to six per cent. A few days later, the Bank of England raised its rate also. Bank reserves in both countries began to shrink and, along with them, so did the money supply. Simulta-1. "Reserve Council Confers in Haste,"
2. Hargrave, p. 1.
3. "Letters to the editor,"
THE GREAT DUCK DINNER
499
neously, the System began to sell securities in the open market, a maneuver that also contracts the money supply. Call rates on margin loans had jumped to fifteen, then twenty per cent. The pin had been inserted.
THE DUCK DINNER BEGINS
The securities market reached its high point on September 19.
