Tuesday, May 9 at 5:00 pm: Nadav Orian Peer, A Question of Accommodation: The Origins of the Fed & the Debate over Credit Distribution

Please join us for our next meeting of the Money, Markets and Governance workshop on Tuesday, May 9, 5:00 – 6:30 p.m in SSRB 404.

Nadav Orian Peer

SJD, Harvard Law School

A Question of Accommodation: The Origins of the Fed &
the Debate over Credit Distribution

Discussant:  Annette Burkeen,
Ph.D. Student, Political Science, University of Chicago

*Refreshments will be served.*

Abstract:

The subject of this article is the politics of credit distribution and their place within the broader context of financial reform. The setting of the article is a transformative moment in U.S. financial and political history: the creation of the Federal Reserve System in 1913. The history of the Fed Act is intended as a counterpoint to the financial reform debates of our own generation. These debates have revolved exclusively around questions of financial stability, thus failing to address important distributive concerns. To demonstrate a distributive-minded reform in action, the article reinterprets the history of the Fed Act as a debate between three competing visions for the U.S. economy. On the one hand, investment bankers and business leaders supported corporate monopoly as a form of rationalizing production. On the other hand, the Democrat framers of the Fed Act ran and won an election campaign calling for a return to decentralized competition. A third vision was held by country bankers and their customers and emphasized the development needs of the rural economy. Each of these three visions had its counterpart in a credit instrument that was used to finance the type of economic activity that vision promoted. Thus the corporate vision revolved around “call loans” collateralized by corporate securities; the Democrats’ competitive vision around short-term commercial paper; and the regional development vision around flexible lending known as “accommodation paper”. In order to prevail, each vision had to promote a reform design that would put its own brand of credit instrument at the center of the monetary system.

Questions about the workshop or accessibility concerns can be addressed to amburkeen{at}uchicago{dot}edu.