THE CABINET: Meyer to Reserve

When fortnight ago Roy Archibald Young resigned as governor of the Federal Reserve Board (salary: $12,000 per year) to become governor of the Federal Reserve Bank of Boston (salary: $30,000 per year), President Hoover courteously wrote him: “I shall find it difficult to replace you.” But the replacement of Mr. Young was not so difficult as the President had anticipated, for last week he made up his mind to appoint Eugene Meyer Jr., potent onetime New York financier and longtime Treasury officeholder.*

But the President’s decision did not instantly clear away all his difficulties. The Federal Reserve Act prohibits the appointment of more than one board member from any of the dozen reserve districts throughout the land. New York is already represented on the Board by Vice Governor Edmund Plate, Poughkeepsie publisher, onetime (1913-21) Congressman. Last week the President was pictured as trying to “circumvent” the law in such a way as to get Mr. Meyer on the board. Circumvention, however, was unnecessary when Vice Governor Platt conveniently resigned to join Marine Midland Corp., thus making way on the Board for Mr. Meyer. (Prohibited by law from taking a bank job, Mr. Platt can nevertheless serve the potent Buffalo-centered holding company which owns many a bank.)

New York bankers and financiers were as glad to see Mr. Meyer go in as they were to see Mr. Young go out. Mr. Young as Board Governor, had been largely blamed for the Board’s failure to check last year’s stockmarket crash. His warnings had been ineffectual, his restrictive policies barren of results. Mr. Meyer, on the other hand, is a forceful aggressive character who has known Wall Street from his youth. (He was perhaps the first man to make a thorough statistical analysis of U. S. Steel’s investment possibilities.)

But if Wall Street liked Mr. Meyer, the insurgent farm members of Congress did not. When his confirmation comes before the Senate, it was predicted that all the old hue and cry about turning the Federal Reserve Board over to Wall Street would be raised against him. This complaint, plus the fact that he is a Jew of French extraction, has in the past seriously retarded able Mr. Meyer’s political progress.

Born of wealthy parents in Los Angeles 55 years ago, Mr. Meyer was graduated from Yale (1895), studied banking and finance abroad for two years, set himself up in Wall Street in 1901 as Eugene Meyer Jr. & Co. He prospered not by playing hunches but by carefully analyzing companies in which he was about to invest. Once he explained his success thus: “You just go to New York and take an interest in things. You just look around.” In 16 years Mr. Meyer had made all the money he wanted and more. When War came in 1917 he was only too glad to quit the financial district and go to Washington at the call of his great & good friend Bernard Mannes Baruch to take an advisory position with the War Industries Board. When Congress created War Finance Corp. to make loans to industries essential to the War, President Wilson made Mr. Meyer a director, later managing director. When War Finance Corp. lapsed in 1920, Mr. Meyer successfully argued for its resurrection and continuance, was reappointed by President Harding. Through it he loaned some $690,000,000 to deflated husbandry, got it all back, plus $64,000,000 in interest —an unparalleled feat. With War Finance Corp.’s liquidation in 1927, President Coolidge appointed Mr. Meyer to the Federal Farm Loan Board where as No. 1 Commissioner he continued his able work as banker and credit manager for U. S. Agriculture. Radical farm organizations grew to hate him because he would not give them something for nothing, but required sound security for each loan.

In April 1929 Mr. Meyer resigned from Government service, loitered expectantly about Washington where he had a large house on Meridian Heights, just off 16th Street. He and his wife, who was the classically beautiful Agnes Elizabeth Ernst, had become an integral part of the capital’s society. Their entertainments were lavish compared to the stylelessness of other Washington parties. Just before her husband’s retirement Mrs. Meyer had unsuccessfully attempted to restore social peace between Mrs. Dolly Gann and Mrs. Nicholas Longworth at an elaborate garden fête (TIME, May 13, 1929).

Many a Washington tourist could identify the next Governor of the Federal Reserve Board as the gilt-lettered name of the donor of a fine head of Abraham Lincoln, sculptured by famed Gutzon Borglum and standing in the rotunda of the Capitol.

* Still unplaced is Seymour Parker Gilbert, Agent General of Reparations who, his friends say, aspires to a big public rather than private financial job.