The Bankers Behind FDR and the Glass-Steagall Act

March 19, 2014 | | Fortune |

It was a quintessential October day in upstate New York. By the banks of the Hudson River, a torrential downpour drenched the fall foliage, obscuring otherwise glorious shades of amber and gold, and forming pools of bubbling mud by the road sides.

My boots soaked, I trudged from the local Quality Inn off the main (and only) thoroughfare of Hyde Park, crossed the street, and headed down the quarter of a mile path to the Franklin D. Roosevelt Library. There was an irony to my mission. I was halfway through investigating presidential archives around the country for my forthcoming book, All the Presidents’ Bankers, but my trip to the Roosevelt Library was as much an exploration of my own childhood as it was of the man who shaped so much of the country’s trajectory. I grew up in Poughkeepsie, near the railroad station whose trains had whisked elite families like the Roosevelt’s, Vanderbilt’s and Rockefeller’s between New York City and their country manors.

As a kid touring Roosevelt’s home, I just thought he was a rich man who became president. After more than a decade of working in international  finance, I came to realize that his views on banking reform were more liberal than his grand abode on the Hudson river banks would have suggested. As an author, I wrote books about FDR’s signature financial legislation, the Glass-Steagall Act, from the perspective of his populist stance, describing how he saved the American people from a Great Depression incurred by a collection of rapacious, criminal bankers who played the markets, made their money, and hung ordinary citizens out to dry (FDR was the crusader that beat the banks; he was famously called a ‘traitor to his class’). There’s more to the story; as it turns out, some of the most powerful bankers at the time, with close connections to FDR, were behind the landmark act.