The long boom

Benjamin Strong ran the Federal Reserve Bank of New York from its founding in 1914, and in practice he ran American money. Tuberculosis was diagnosed in him in 1916, and he governed between sanatorium stays, the one man in the young system with the standing and the nerve to act in a crisis. He had told colleagues what a true panic would require of the Fed: open the taps and flood the street with money. On 16 October 1928, after surgery, Strong died in New York at fifty-five. He missed the crash by one year and eight days. The bank he left behind argued, hesitated, and let the money supply collapse by a third. The slump that followed put a quarter of America out of work.

In the timeline recorded here, the fever breaks. The surgeons close, the infection does not spread, and Strong wakes, grey and furious at his own weakness, on the seventeenth of October. He convalesces through the winter at Colorado Springs with a telephone line to the bank, and in the spring of 1929 he is back at his desk on Liberty Street, thinner, hoarse, and unarguably alive. He does not like what he finds on the tape. Brokers' loans have doubled; shoeshine boys hold margin accounts. Strong has seen manias before, and he knows he cannot stop this one. He spends the summer quietly doing the only thing he trusts: getting ready.