The Street

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Dorothy Parker once said that there were two things she could never understand: how a zipper worked and what exactly Bernard Baruch did. Baruch had his own problems describing what he did. When the Money Trust hearings were called in 1913 and he was summoned as a witness, he became flustered enough to seek the advice of one of the new breed of public relations men who had risen recently to counsel business tycoons in the face of reformers, muckrakers, and insurgent politicians. Baruch was told to declare that he was a speculator and then to describe what he did. His candor before the committee was precisely the right approach, and Baruch emerged with his reputation unharmed.

 

Baruch became a big contributor to Woodrow Wilson’s campaign; but not until the coming of World War I did he go into government, and then he was one of the dollar-a-year men who ran the new wartime agencies. Baruch’s baby was the War Industries Board, where he dubbed himself “Dr. Fact,” hired a champion stenographer with the unlikely name of Billy Rose, and proceeded to dictate edicts that set the allocations of the resources of production. We have Baruch to thank for the vogue of the word priority; he set the order of priority for users of precious steel, copper, and the like.

It was not all clear sailing for Dr. Fact in the war years, for some industrialists retained a quaint but annoying affection for the doctrines of laissez-faire. Henry Ford was one, and Ford’s competitor, Mr. Dodge, another. Ford, like most Midwesterners, hated Wall Street and most bankers. Baruch’s suasion did not win them over; nor did it Judge Gary of the Steel Trust. Baruch therefore phoned William Gibbs McAdoo, who, in addition to being the President’s son-in-law, was Secretary of the Treasury, the railroad administrator, and a czar set up over all the other minor czars who were running the war machine. There were czars and then there were real czars. Baruch asked McAdoo to cut off all railroad service to the holdout industrialists. McAdoo agreed. And in the end the industrialists caved in to what they might have seen as the exercise of the sort of sovereign right that had gone out of business with the Glorious Revolution.

Later Baruch said that the greatest accomplishment of his government career was to have helped inter the extreme dogmas of laissez-faire and to have hastened the day of a new economy based—for good and bad—on cooperation and government planning.

The reach of the War Industries Board was long indeed. To save steel, one edict denied metal for the production of stays in the old-fashioned corsets many women still cinched around themselves. So in his way Baruch influenced the flapper fashions of the postwar years and with them a shifting of laissez-faire to the realm of morals and manners.

As a speculator Baruch knew the value of rumor and surmise, and his closeness to Presidents and other politicians gave him an aura of power that he probably never had. He never dared to run for political office and win authority on his own, preferring to remain the “chronic friend of presidents” and self-proclaimed elder statesman, who, as one skeptic said, “stood in awe of himself.”

MR. HAMILTON’S BANK

 

The Bank of New York, at 48 Wall, has been in business since 1784 and boasts among its founders that astonishing all-rounder in war, finance, political philosophy, and campaigning, Alexander Hamilton. Its first home was over eastward in an elegant mansion that stood north of here on what is now Pearl Street. The bank moved westward along Wall Street as finance grew and began to replace the residences and shops of the older town. While his opponents planned a bank that would rest on the value of land pledged by its founders and the mortgage value of their estates, Hamilton planned and succeeded in starting a “specie” bank, to which prosperous associates would subscribe. There had been no commercial banks in the colonies; that was one of the restrictions of the English mercantile system that pinked the ambitions of Americans. But ironically, when Hamilton wrote up the charter of this private bank, he used as his precedent the statute of 1694 that had established the Bank of England. Looking toward England has long been a Wall Street habit, one that has often damned it in the eyes of the rest of the country.

The architecture of this 1920s building looks back to colonial days. Over the entrance there is a broken pediment, such as one might see in Colonial Williamsburg, and there is a splendid Georgian version of a Palladian window to define the banking room on the second floor, one of the loveliest rooms in the city. You reach it by ascending a double wrought-iron staircase that competes with the beautiful curving staircase in City Hall. The top of the building is a Georgian cupola. The Bank of New York is, and has always been, noted for its conservative solidity.