New light on Lauchlin Currie's monetary economics in the new deal and beyond

The Editor's introduction to this special issue reviews the contributions of Lauchlin Currie (1902-1993) to monetary theory and policy over the six decades of his professional career. This is followed by 27 of Currie's hitherto unpublished papers and memoranda. These include Currie's own memoirs of his work at Harvard, 1925-1934, when he was almost alone in blaming the Fed for its failure to prevent the Great Depression of 1929-1933; and of his work at the US Treasury and Fed, 1934-1939. During this latter period he drafted the 1935 Banking Act that shifted the power base of the monetary system from New York to Washington and gave the Federal Reserve Board enhanced powers to control money in a more effectively counter-cyclical manner. He became the intellectual leader of the "spending wing" of the New Deal, and this eventually led to his being drafted into the White House as FDR's administrative assistant for economic affairs, 1939-1945. Also published here for the first time are numerous memoranda, reports, and speeches on various aspects of monetary policy in the USA and, later, in Colombia too. They include his work in developing a "net Federal income-increasing expenditures" series for the USA that showed the impact of fiscal policy more accurately than did the official cash deficit series; and there is also his controversial defence of the raising of reserve requirements in 1936-1937 to mop up the unprecedentedly large accumulation of excess reserves. His memoranda reveal new insights into the thinking of the Fed at that time, and offer a fuller perspective on the causes of the sharp recession of 1937-1938. Also included are several letters and memoranda prepared for President Roosevelt: on the role of gold in 1933, the causes of the 1937 recession, and on unemployment figures and the expansion possibilities of the economy in 1940. Finally,