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Back to Business: Marriner Eccles and the Effect of Public Service on Private Enterprise
Back to Business: Marriner Eccles and the Effect of Public Service on Private Enterprise
By STEPHEN S. FRANCIS
In his later years, as he reflected on his acceptance as the Assistant Secretary of the U. S. Treasury in 1934, Marriner S. Eccles observed, “I think most American businessmen have gone through a similar kind of self-examination on being offered a public post. Despite their materialism and their drumfire criticism of all politicians and bureaucrats, governmental service has an attraction for a great many of them. . . . Let them get a taste of the position and the flavor remains with them forever. Most other things afterward seem flat or jaded.”1 Eccles’s sense that few things measured up to his glory days in Washington, D. C. was evident throughout his later business career.
Marriner Eccles in front of the First Security Bank Building near the intersection of 400 South and Main Street in Salt Lake City.
UNIVERSITY OF UTAH LIBRARY
Many historians and economists have examined the abilities, talents, and genius of Marriner S. Eccles. 2 He created one of the first bank holding companies in the country; pioneered what came to be known as Keynesian economics even before Keynes; oversaw the overhaul of the Federal Reserve System; and managed Amalgamated Sugar Company, Sego Milk Company, and Utah Construction Company.3 Most of the research focuses in particular on his exceptional abilities in running the Federal Reserve Board, and justifiably so, for this was his greatest achievement. Few, however, have investigated how his government service affected his managerial skills and style. What seems clear from studying Eccles’s later managerial style is that while a business career made him well prepared for government service, ultimately his government service made it hard for him to return to the private sector. Marriner Eccles’s Mormon background shaped his views and character. Some historians have argued that his ideas about government intervention in the economy came from his Mormon background. Mormonism celebrated the idea of group support of the individual, and the Mormon church had a centralized planning authority over the economy in Utah. 4
Ultimately, however, it was not the collectivism of Mormonism, but rather the isolationism that resulted from the Mormon practice of polygamy that influenced Marriner’s outlook. His grandfather’s family, William Eccles, was sent by church leaders to the harsh environment of Ogden Valley, and there they suffered many hardships, but Marriner’s father, David Eccles, because of his family’s urban roots in Scotland, looked beyond a meager agricultural family economy to an economy based on active commerce, specifically lumber. 5
David Eccles heeded the call of church authorities to take a second wife and from that union, Marriner, the oldest child, was born in 1890. His father’s values of individualism and self-reliance were deeply impressed upon him. During the 1910s and 1920s, Eccles followed the business ideology of his father until the Great Depression hit which caused Marriner to formulate new economic ideas to solve the national economic crisis. These newly developed ideas were contrary to his father’s earlier economic philosophy. Eccles’s biographer, Sidney Hyman, claimed that Marriner, later in his life, felt as if he had committed patricide, because he repudiated his father’s economic beliefs. 6 However, in many ways, Marriner was a true son to his father’s convictions of individual responsibility and hard work, and his career showed the influence of his Mormon upbringing.
The son of Ellen Stoddard Eccles, David’s second wife, Marriner rarely saw his father, and was removed from intimate contact with a paternal figure. The family lived in Baker, Oregon, in order to evade anti-polygamy laws, and to oversee the Eccles lumber operations. Baker was far removed from his father who continued to live with his first wife in Ogden. As the oldest child in the second household, Marriner accepted the responsibility to care for his family’s economic welfare. He had been exposed to the lumber industry at a young age, and was left by his father to learn the business without his father’s constant supervision. David Eccles believed that through hard work and ambition anyone could prosper, and would not need to rely on the support of others.7 Marriner, having learned these traits from his father, believed that he did not need help but through his own abilities he could succeed. It was this isolation and early responsibility for his mother and siblings that affected his economic views. Even when his family returned to Logan in 1907, they remained isolated and separated from David. As a consequence, Marriner continued to look after the welfare of his mother and siblings, and he began to manage the family’s wealth. 8 It was left to Marriner to solve the problems of his mother and her family.
After his father’s death in 1912, Marriner assumed more closely the management of all of his family’s financial affairs. Now in his early twenties, Marriner had developed a strong self-confidence and faith in his own attitudes and vision. Marriner’s self-confidence frequently led him to clash with his elder half-brothers over their management of their father’s businesses, and he was often offended by their refusal to heed his counsel. At one meeting with his half brother David, concerning the poorly managed Oregon Lumber Company, Marriner proposed to buy David’s share or sell his own share of the stock in the company. David responded that Marriner was a “damned nuisance . . . and he didn’t want him to cause any more trouble.”9 After this, Marriner took great satisfaction in analyzing the lumber company, gaining the support of the company’s board of directors for his own plan for the struggling company, and returning to his brother David with his own demands. Marriner recalled, “I had returned not to receive an ultimatum but to serve one. He would have to buy out the interests I represented or he and his managers would have to resign immediately to be replaced by men of our own choice.” 10 David recognized that Marriner had the support of the board of directors and sold his shares in the company to his brother. This episode demonstrates Marriner’s active intervention in the family’s business, and his willingness to discuss and work with others in order to implement his views.
During the 1920s, Eccles, through his business acumen, increased the worth of the Eccles Investment Company, a holding company, created to manage his assets and those of his siblings. He assumed control of the Oregon Lumber Company and also acquired interest in the Amalgamated Sugar Company, Utah Construction, and the Sego Milk Company. Marriner explained how he used his direct hands-on approach to acquire Sego Milk. Thirty-three percent of the company stock was held by Annie B. Rackliffe of Los Angeles. Marriner went to Los Angeles and asked to meet Rackliffe’s brother-in-law, who managed her assets, in his hotel room, where he proposed buying her stock. Mr. Rackliffe said he would need a day to think it over, and Marriner said that he didn’t need a day, that the offer was a good one, and that he would be leaving tomorrow. Rackliffe then said that he would need a lawyer to draw up a contract; Marriner quickly replied that they wouldn’t need a lawyer, that they could put the transaction in plain English themselves, which they did.11 This was a power move by Eccles, and an example of his personal involvement and intimate interest in his businesses. He left no details to be taken care of by others. For Marriner this personal and direct involvement in the management of his companies provided him with the opportunities to further the development of his enterprises. He not only created the policies, but implemented them.
Marriner’s direct hands-on approach in developing and managing his businesses was clearly evident prior to his years of public service beginning in the 1930s. It was Marriner who created First Security Corporation, a bank holding company, and it was Marriner who sat on the boards of Utah Construction Company and Amalgamated Sugar Company as well as serving as the sugar company’s vice-president and treasurer.12 Marriner personally surveyed, evaluated and reported on the progress being made by Utah Construction Company to the board of directors.13 This was a man intimately involved with the procedures, policies, and financial health of his companies.
The stock market crash and the Great Depression which followed changed Eccles’s life forever, as well as his management style. When there occurred a run on his bank in Ogden following the stock market crash, Eccles told his bank employees to examine carefully all signatures on the checks being cashed and then to pay them in small bills, counting them out slowly. At one point, when the bank was close to running out of cash, an armored truck from the Federal Reserve Bank in Salt Lake City arrived. Marriner, realizing the need to calm his customers, leapt on to a marble counter and told the people that there would be enough money for all to make withdrawals, and that the bank would stay open until all had had a chance to make withdrawals or deposits. This seemed to calm the crowd. The next day he told his employees to open early and pay the customers as quickly as possible, so that people coming into the bank would see no lines and feel at ease about the stability of the bank.14 Through quick decisive action and personal intervention, Eccles prevented what would have been financial ruin for his bank. Not only did he save his banks in Ogden and Salt Lake City, but he took over the Deseret National Bank, and saved other banks in Salt Lake City.15 It was his quick mind and decisive action that resulted in not one of his depositors losing a dime.
The direct impact the Great Depression had on his banks caused Eccles to ponder the larger systemic problems of the national economy. He soon came to the conclusion that massive public spending was necessary to pump money back into the economic system, which would then put more people to work. This increased spending power of many individuals would further stimulate the economy and increase production. His quick thinking had saved his banking business, but he soon realized that quick economic action at local levels was not enough to solve the larger national issues. One needed to fix the larger problems rather than implement stopgap solutions on a local level.
This thinking caused him to move away from personal intervention in small issues towards systemic renovations in economic theory. He presented these ideas in an impromptu speech at the University of Utah in February 1933. Later that year, he went to Washington, D. C. where he presented the same ideas to the Senate Finance Committee. A year later, President Roosevelt asked him to become an Assistant to the Secretary of the Treasury, and within a few months Roosevelt named him Governor of the Federal Reserve System. Reflecting on his move into the public sphere, Marriner stated, “. . . a later career in the government service, took its toll in an innocent quarter it never should have touched, but nevertheless did.”16 Eccles believed that his role as manager of his family’s wealth and as manager of his country’s wealth robbed him of his youth and innocence, both on a personal and business level, but that service molded him into the manager he would become.
As head of the Federal Reserve Board, Eccles could not manage that agency like one of his companies; it was too large an entity to micro-manage and he began delegating responsibilities to others. Because Eccles was now living in Washington, D. C., he also adopted this same management practice with his companies in Utah. At the time, there was no legal requirement for Eccles to remove himself from all his business pursuits; but as chairman of the board of governors of the Federal Reserve System, Eccles was barred from running his First Security Corporation, because it was a bank holding company. He left that responsibility to his brother George. Nevertheless, Marriner maintained a fairly strong hold on the Eccles Investment Company, which had large stock holdings in First Security. During his trips to Utah Marriner attended board meetings, took care of business, and discussed policies with the different companies’ board members.
In Washington at the Federal Reserve Board, Eccles soon realized that he needed highly qualified and educated men working for him to implement the ideas he had brought from Utah. He often prided himself that his macro-economic ideas came not from his limited formal education but from personal observation and experience. 17 However, Eccles did rely heavily on men with academic training to help him manage his responsibilities, and to articulate his ideas to others in Washington. He never openly admitted this fact, but his reliance on these men ran throughout his career. As he quickly learned in Washington, a lack of education hampered the ability to express ideas and manage such a large federal system.
Marriner began to rely on academically trained managers in his companies in Utah. For instance, his brother George, who had received a business degree from Columbia University, ran First Security Corporation during Marriner’s absence. Their nephew, Spencer Eccles, who would later become president of First Security, also attended Columbia, and Marriner sent his son, Campbell, to the Wharton School of Business. Eccles hired H. A. Benning who attended the Rochester, New York, Business Institute, to run Amalgamated Sugar, and H. A.’s son, A. E. Benning, later ran the company after attending Yale University. In 1951, Eccles employed Ed Littlefield, a graduate of Stanford, to head Utah Construction. And as much as Marriner claimed to have never read any books on economics written by university professors, he heavily relied on Lauchlin Currie, a Harvard Ph.D., to help him in Washington.18 In the end, Eccles realized that he needed the support of formally educated men, and this realization was the greatest benefit his companies received from his years in Washington.
As head of the Federal Reserve, Eccles found himself lacking the political skills necessary to maneuver in this political world. This became apparent as he tried to make various innovations in the Federal Reserve and needed President Roosevelt to back his initiatives. As Governor and later Chairman of the Federal Reserve, Eccles fought hard for changes in monetary as well as fiscal policy. In his attempts to convince Roosevelt of his ideas, he was consistently challenged by equally strong-willed Henry Morgenthau, the Secretary of the Treasury. Marriner also attempted to centralize authority for the Federal Reserve Board but faced combative regional heads of the Federal Reserve Banks. From his experiences in Utah heading his businesses and his strong will, Eccles believed he held the answers to many of the national banking problems. He believed others should realize those truths, even if presented in a somewhat abrasive style. This approach often rubbed his associates the wrong way.
Lauchlin Currie, his assistant researcher at the Federal Reserve Board, aided Eccles in crafting his ideas so that they would be more easily accepted. Currie, impressed with Eccles’s mind and his grasp of complex economic ideas, recalled of his boss that “Although a fluent talker, he had some difficulty in expressing himself forcibly and coherently in writing. His mind was so active that one thing would suggest another, and this a third, and there was always a danger that the original point would get lost in the shuffle.”19 Currie learned to work with Eccles, and deal with his foibles, and in the end he believed they worked together splendidly. Currie stated that, “[Eccles] would doubtless be astonished if someone told him that he was not the easiest man in the world to work with or under. I had to smile— though ruefully—in reading his stories of his difficulty in getting over a point to the President, as I experienced exactly the same difficulties with him,” but he added, “these criticisms however, are minor. I both admired and was personally very fond of Eccles.” 20
Eccles relied on Currie both for explanations of complex economic concepts, and for his ability to work with other members of Roosevelt’s administration. He also relied on Currie to make his own ideas understandable to the President. Currie crafted most of the memos sent to Roosevelt, and he crafted many of Eccles’s speeches and statements. Currie explained:
In many ways, Eccles was successful because of Currie’s involvement and ability to work with government insiders. Eccles didn’t mind Currie’s relationship with other officials, particularly since Currie made sure that he made Eccles aware of all his discussions.22 Eccles relied heavily on Currie’s abilities. With a large staff working for him in Washington, Eccles no longer needed to be personally active in the presentation and implementation of ideas. This reliance on others became a mainstay in managing his companies when he returned to Utah.
Even with Currie’s efforts to smooth the relationship between his boss and Treasury Secretary Morgenthau, they remained at odds with each other. In 1936, there was an influx of gold into the Federal Reserve Banks, creating the potential for inflation. Morgenthau was livid that Eccles had increased Federal Reserve Bank requirements for gold reserves by 50 percent to offset inflation without notifying Treasury. Morgenthau called Eccles and railed against his actions. Eccles claimed that Morgenthau had been out of town, and that President Roosevelt had given his approval. Morgenthau was not pleased and wrote in his diary, “I certainly put the fear of God into him and doubt if he will pull off another fast one.”23 To soothe the troubled waters, Lauchlin Currie told Eccles, “Make overtures to the Secretary. Tell him you . . . do not question his authority, ability or disinterestedness in connection with monetary control.” Currie added, “I know that you put ideas and objectives above personalities. . . . Since the contribution you can make rests in the final analysis on the degree of cooperation you can obtain from the Secretary, I think you will be prepared to make real sacrifices for the sake of your wider objectives.” 24
SPENCER F. ECCLES
Eccles eventually heeded Currie’s advice. Later that year, he was vehemently fighting with Morgenthau once again over raising the reserve requirements because of the influx of gold when the two decided to take the issue to Roosevelt. In the morning, Roosevelt first met with Morgenthau to hear his side of the issue. Later in the afternoon both Eccles and Morgenthau met with Roosevelt. Eccles presented Morgenthau’s ideas, as if the two were in complete agreement. Later, Morgenthau told his staff, “In my whole experience I have never seen anything like it, and the thing that frightens me . . . is that a man can so completely reverse himself.”25 Unfortunately, the rapprochement did not last long.
In 1939, a nationally syndicated political column, the “Capital Parade,” detailed the animosity between the two. Eccles felt obligated to write to Morgenthau to explain that he was only trying to be a teller of truth. “As you know and as I have long emphasized, I want to cooperate always with you as long as I am here.That does not mean that we are always going to see eye to eye and I have never imagined for a moment that you wanted anything other than my honest opinion . . .whether it happened to be the same as your own or not. Certainly this cannot be fairly represented as meaning there is a clash between us.”26 Eccles believed that any discussion of an idea was good, and that feelings should stay out of deliberations. He truly did not take criticism personally and assumed that others would not either.
Morgenthau was not the only one whom Eccles upset. Currie claimed that some of Eccles’s policies died because of his inability to work with congressional leaders.27 Sam Carpenter, the secretary of the Federal Reserve Board during Eccles’s tenure, recalled, “because he was not a politician, he didn’t think like a politician, he thought of getting things done, and I think that’s one of the things that got in his way when he was working on the Banking Act of ’35. He thought if he came up with the right ideas, everybody would say,‘come on, let’s do it.’ And he didn’t think of it in the sense of getting a thing done politically.” Carpenter continued, “Marriner’s biggest problem was himself . . . he was abrasive in the extent that he knew what to do and the other people resented his pushing and saying,‘come on, now, let’s do this.’” 28
Even Roosevelt attempted to rein him in. In December 1935 the President wrote Eccles: “I have read your press statement for November 22nd and I think it is entirely sound. We must remember, however, that there is real danger in any statement relating, even remotely to actual stock market operations. This is where Coolidge, Mellon and Hoover got into such trouble. A word to the wise!29 Roosevelt later wrote Eccles’s assistant, “Have you arranged for Jimmy Cromwell to have a good long talk with Governor Eccles? Tell Eccles to listen to his ideas and treat him very nicely even if he does not agree with him.” 30
It was Eccles’s goal to strengthen the power of the Federal Reserve Board at the expense of the Treasury, the Federal Reserve Banks, and the Federal Advisory Council. He often took a strong arm approach to getting that power, and alienated many who stood in his way. In May 1940, Rudolph M. Evans of the Tenth District of the Federal Advisory Council, told the Board that he wanted the Council’s written disagreement over Federal Reserve Board policies put into the Board’s annual report. Eccles responded: “It was his judgment that the Council could do nothing that would do more to injure the position of the Council and the banking system as a whole than to issue the above statement.”31 The matter did not die; in October of 1940, the Federal Advisory Council once again wanted their statement in the annual report, and Eccles replied, “that the Board felt that the position taken in the statement was unwarranted in so far as it implied criticism of the Board in connection with the matters over which the Board has little or no authority.”32 Eccles was not about to let the Advisory Council formulate policies for the Board. According to Eccles they were what their name implied: advisory. He dismissed the ideas of the Advisory Council, and resisted any attempts at reconciliation with council members. He firmly believed he was right and that the council should follow his direction. Eccles’s move was an attempt to strengthen the position of the Federal Reserve Board in relation to the Advisory Council, but by creating animosity between himself and the council members through his heavy-handed managerial style, Eccles damaged the cooperative workings of these government agencies, which ultimately led to his isolation in the federal monetary system.
Marriner continued his efforts to limit the power of the Advisory Council. In February 1942, the Advisory Council wanted the governors of the Reserve Board to discuss all of its positions on upcoming economic legislation with the Advisory Council. Eccles claimed that the Advisory Council and the presidents of the Federal Reserve Branches comprised too large a group to consult with on every piece of legislation. 33 Federal Reserve Governor M. S. Szymczak disagreed, and thought that these other agencies should be included in discussions. Eccles understood that while it would be a good idea to include the groups it just might not be practical, and stressed that he was not trying to create an independent central bank.34 However in later actions, Eccles often dictated policy to the Reserve Presidents and the Advisory Council. According to Sam Carpenter, “Marriner would meet with [the Federal Advisory Council] and he’d tell them what he thought ought to be done.They didn’t get much of a chance to advise the Board, and he’d tell ‘em what they ought to have in the way of legislation.” 35 Even when other Council members disagreed with him, Eccles would keep them quiet as well. Carpenter explained, “It was closer to a one-man board than any other time that I was there.The point is . . . Marriner would go home and do his thinking and come down and tell the Board what ought to be done.” 36 While Council members opposed Eccles’s actions and methods, Eccles usually still carried the point. 37
How did Eccles’s government years affect his business holdings in Utah? It allowed his managers to work without his daily oversight, but still allowed for his input. As he dealt with issues of national and international importance, Marriner Eccles thoroughly enjoyed his new position, and this seems to have diminished his interest in the operations of his own companies. Gone were the days of saving a bank by standing on a countertop and telling people not to worry about their deposits. He now was interested in the bank account of the United States. Eccles saw economics on a macrocosmic level, and he left the microcosmic to others. He relied heavily on his brother George to keep him abreast of many of the ventures in Utah.At Amalgamated Sugar, where Marriner Eccles was still President but often absent, George attended directors meetings under the category of “others present,” having no official position within the company. George ran First Security Corp. and kept Marriner apprised of events there as well. Some U. S. Senators argued that this was a conflict of interest, but it appears that Marriner gave no inside information to George. In fact, their relationship seems to have hurt First Security because Marriner was now interested in national monetary issues, rather than what was best for his own bank. For instance, Eccles was against the Federal Reserve’s backing of all government bonds at a pegged rate, but the Treasury demanded that the Reserve back the bonds at the pegged rate. This situation made it possible for banks to buy bonds from the Treasury and sell them to the Reserve at better rates, and thereby make a sizeable profit. Because he knew Marriner was against this practice, George refused to do this, even though it would have meant a profit for First Security. 38
Management delegation was carried over into his other businesses as well.When Marriner returned to Utah he hired Ed Littlefield, who held a MBA degree from Stanford University, as financial vice-president of Utah Construction. He permitted Littlefield to reorganize the management structure of Utah Construction. Littlefield’s decision freed Allen Christensen, general manager and president of the company, from the minutiae of the company which then permitted Christensen to do the things he did best. 39 Littlefield then took care of management details, and to a certain degree kept Eccles and Christensen out of the loop. This arrangement did not seem to bother Eccles, as long as Littlefield succeeded.
While divorcing himself from the daily management of Utah Construction, Marriner was not so distant in his involvement with Amalgamated Sugar Company. In one crucial decision in 1969, the board of directors seriously debated the sugar company becoming involved in the cattle feeding business. Marriner in a management meeting argued that such a venture would be unprofitable for the sugar company. 40
Eccles gave general economic reasons for not entering into the cattle feeding business, but he did not use his knowledge of other companies’ experiences. One of the main reasons companies have people on their boards of directors who sit on other boards, is that the individuals can share knowledge from their experiences with other corporations, but Eccles did not argue his point by using insights gained from interaction with other companies. Utah Construction had previously run cattle operations, and had stopped when they realized they were not profitable; however, Eccles made no allusions to those issues to the Amalgamated Sugar Board of Directors when they discussed their cattle feeding venture. Also, Utah Construction reorganized their corporate structure in the late 1950s, and Amalgamated Sugar did not do so until 1967, and there is no evidence that Eccles used his experience of Utah Construction’s reorganization to help in Amalgamated Sugar’s. This insight could have helped the Amalgamated Sugar Company, but Eccles, who had balked at any cooperation of different agencies in Washington, because he believed that input from other agencies were mere attempts at undermining his power and authority, did not give advice from his experiences working with other companies even though he controlled them. His years in Washington affected the way he did business back in Utah, and in this case not for the betterment of his businesses. It appears that Washington changed him, because before he went to Washington, Eccles believed that the interaction of diverse businesses helped each business do better. 41
In the years before he went to Washington, Marriner Eccles showed through his business practices that he saw his various businesses as connected and mutually beneficial to each other. In the years after his return from the East, it was clear that he viewed his companies as separate entities that bore no relation to each other. For instance, he argued heatedly with George Eccles about getting a prime rate loan from First Security for Utah Construction, and said he would go to another bank if necessary. 42 This interaction occurred during a board meeting of Utah Construction, and Marriner supported Utah Construction’s position against his own bank. This shows integrity on Marriner’s part, but also demonstrates his conception of his corporations as separate and autonomous entities. He had been more involved in banking during the 1920s and supported measures that would benefit the bank, believing banks to be at the center of economic growth and stability; however, his years in Washington had led Eccles to change this view. During his years in Washington, he came to believe that banks existed to stimulate economic growth.They were means to an end, not an end in themselves. Consequently, he supported what was best for Utah Construction, and would go to whatever bank that would give him the best interest rate. George Eccles still held the idea that whatever was best for First Security should be done, but in Marriner’s view it was more important to support Utah Construction and therefore benefit the industrial economy as a whole.
Eccles continued to view his companies as separate entities and did not take a consistent or unified approach to their management. Another example came in 1951 when Ed Littlefield told Marriner that he would take the job of vice president at Utah Construction if he could root out nepotism. Eccles acquiesced, believing it to be a good idea. Littlefield limited nepotism in Utah Construction, but he later complained that First Security Corp. was rife with nepotism.43 Apparently what Eccles thought was good for Utah Construction did not necessarily apply to his other companies. Again, it appears that Eccles did not care about the details of corporate structure. In Washington, Eccles did not enjoy dealing with staff issues and squabbles; he demanded people produce the results he wanted.44 If Littlefield accomplished the larger goals, Eccles did not care how they were achieved.
Eccles did not bring lessons learned from other companies to the various corporations’ board meetings, nor did he encourage his directors of boards to do so. When discussing his time on the board of First Security Corporation, Ed Littlefield claimed that the directors gave little input into the running of the corporation.
Eccles’s biographer, Sidney Hyman claimed that it was his fierce honesty that kept him from sitting on the boards of corporations of which he was not a major stock holder.46 However, it seems more likely that Eccles would not bring much to these other corporations. He was unlikely to share lessons he had learned from his business ventures, and it also seems unlikely he would want to give input where he could not be certain that his policies would be followed. While in Washington, he rarely met with government agencies that he could not control; rather, he enacted his policies and let those agencies deal with the fallout.
From his service in Washington, Eccles gained a taste for national policies and national politics. He found coming back to Utah and running his businesses unfulfilling, and it is therefore not surprising that in 1952, a year after his return to Utah, he ran for the Republican senatorial nomination. Because he had spent all of his public service under Democratic presidents, Eccles had to convince many that he was a Republican. He opposed the incumbent Republican senator, Arthur W. Watkins, and the Republican primary went in Watkins’s favor. After this defeat, Marriner never sought public office again, but this flirtation with electoral politics suggests that Eccles wanted something more than his businesses could offer.
Marriner Eccles, standing on the the far right, and the board of the Utah Construction Company.
STEWART LIBRARY SPECIAL COLLECTIONS, WEBER STATE UNIVERSITY
Since he could not hold public office again, Marriner turned to another means to voice his grand views on national politics and the economy. He used First Security Corporation’s annual reports as the vehicle.These annual reports were his bully pulpit. In these messages, one would never know that he was addressing stockholders. After the discussion of the strength of the company, the letters would then veer off into critiques of government policies, what the Federal Reserve board should do, and later a clear denunciation of the Vietnam War. In the bank’s 1967 annual report, Eccles wrote: “The most important issue before the country today is our involvement in Vietnam. It affects every facet of our lives and our relationship to the rest of the world. Considering the financial and monetary aspects of our involvement, it is primarily responsible for our large budgetary deficit, which is causing inflation. It is mainly responsible for the large and increasing deficiency in our balance of payments.”47 Eccles changed few minds with his annual reports, but he may have found some satisfaction for himself.
Ultimately Eccles found it difficult to return to the private sector, and in some ways his companies suffered because of his lack of interest. Public servants, after their service, often enter into the private sector and sit on companies’ boards.The assumption is that their knowledge and public service aid in the corporate world. Marriner Eccles is an example of the difficulties and pitfalls in that transition. Perhaps, government service is not the means to better corporate leadership. Eccles continued to have good ideas after his return from Washington, but his zest for hands-on business leadership had diminished. He distrusted working with different agencies in Washington, because he believed they did not have the best interests of the country in mind; instead they wanted to increase their own power. Eccles brought that distrust back to Utah, and would not allow his board members to enact policies that might have benefited all of the companies Eccles managed. He had a much larger staff in Washington which took care of policy and staffing details; and upon returning to his Utah companies, he allowed them to run without the close scrutiny he had exhibited prior to his Washington service. He had felt the thrill of a national pulpit where he spoke to millions, and his Utah companies could not replace that excitement. The days of speaking from the top of a bank counter and calming his customers were over. The business world had truly become in his words, “flat or jaded.” 48
NOTES
Stephen S.Francis is an assistant professor of history at Weber State University.The author would like to thank Rebecca Andersen and Kathleen Broeder,who served as research assistants,as well as the Utah International Fellowship Program that supported this research.The author is also indebted to Dr.Susan Matt for her support and assistance and Stewart Library.
1 Marriner S.Eccles, Beckoning Frontiers:Public and Personal Recollections,ed.Sidney Hyman (New York: Alfred A.Knopf,1951),140.
2 See Arthur E.Burns and Donald S.Watson, Government Spending and Economic Expansion (New York: Da Capo Press,1972),William Greider, Secrets of the Temple:How the Federal Reserve Runs the Country (New York:Simon and Schuster,1989),Allan H.Meltzer, A History of the Federal Reserve,vol.1, 1913-1951 (Chicago:University of Chicago Press,2003),Sandra J.Weldin,“A.P.Giannini,Marriner Stoddard Eccles, and the Changing Landscape of American Banking,(Ph.D.diss.,University of North Texas,2000).
3 Keynesian economics are the ideas of British economist John Maynard Keynes,who proposed that economic depression cannot be fixed by the unemployed going back to work merely for lower wages,but rather economic depression needed to be fixed by government deficit spending,either through public projects or industry subsidies,to stimulate the market thus putting people back to work and ultimately reviving the economy.
4 Dean L.May, From New Deal to New Economics:The Liberal Response to the Recession (New York: Garland Publishing,1981),40.Marriner Eccles did not agree with this interpretation,but rather criticized the Mormon church for promoting the migration of Mormon converts to Utah,and then leaving them alone.See Eccles, Beckoning Frontier,8-15.
5 Leonard J.Arrington, David Eccles:Pioneer Western Industrialist (Logan:Utah State University Press, 1975),25-39,83-95.
6 Sidney Hyman,interview by author,July 18,2006,Ogden,Utah,tape recording,Utah International Collection,Stewart Library,Weber State University,Ogden,Utah.
7 Eccles, Beckoning Frontiers,15-16.Arrington, David Eccles,23,43.
8 The separation and isolation of the Ellen Stoddard Eccles family and David’s second family was even more pronounced than many other polygamist families.Leonard Arrington noted that David Eccles and Ellen Stoddard Eccles went to great lengths to hide their marriage not only from outsiders but from other family members as well.Marriner undoubtedly must have felt that separation and isolation.See,Arrington, David Eccles,65-66,99-100.
9 Eccles, Beckoning Frontiers,46.
10 Ibid.,47.
11 Sidney Hyman, Marriner S.Eccles:Private Entrepreneur and Public Servant (Stanford:Graduate School of Business Stanford University,1976),50-51.See also,Eccles, Beckoning Frontiers,42-44.There is a discrepancy between the two accounts,specifically the spelling of Rackliffe’s name.Annie Rackliffe’s brother-inlaw’s first name is not given in any of the accounts.
12 In April he was worried about sugar production.In June,he detailed the use of mortgage bonds,and in November he reported on his trip to the East to secure credit.Board of Directors Minutes,April 20,1932, June 22,November 16,1932,and January 18,1933,Amalgamated Sugar Company Archives,Boise,Idaho.
13 “Minutes of the Board of Directors,”June 6,1932,MS 100,box 1b,fd 4 1/1.4,Utah International Collection,Stewart Library,Weber State University,Ogden,Utah.
14 Eccles, Beckoning Frontiers,57-62.
15 Ibid.,58-70.
16 Eccles, Beckoning Frontiers,39.
17 Ibid.,132.
18 Ibid.
19 Lauchlin Currie,“Lauchlin Currie’s Memoirs,Chapter III:The New Deal,” Journal of Economic Studies 31,no.3/4 (2004):203.
20 Ibid.,203-204.
21 Lauchlin Currie,“Comments and Observations,” History of Political Economy 10 (Winter 1978):543.
22 Currie,“Memoirs,”209.
23 Quoted in John Morton Blum, From the Morgenthau Diaries:Years of Crisis 1928-1938 (Boston: Houghton Mifflin,1959),357.
24 Lauchlin Currie,Washington,D.C.,to Marriner S.Eccles,Washington,D.C.,December 12,1936, MS 178,box 43,fd 1,Marriner S.Eccles Papers,Marriott Library,University of Utah,Salt Lake City, Utah.
25 Quoted in Blum, Morgenthau Diaries,365.
26 Marriner S.Eccles,Washington,D.C.,to Henry Morgenthau,Washington,D.C.,June 23 1939,MS 178,box 10,fd 1,Marriner S.Eccles Papers,.
27 Michael A.Whitehouse,“The Board Celebrates a Golden Anniversary,” Interest Bearing Notes (Fall 1985):6.
28 Sam Carpenter,interview by Gwen Gittens and Everett Cooley,1981,transcript,MS 1787,box 246, fd 8,Marriner S.Eccles Papers.
29 Franklin D.Roosevelt,“Memorandum,”December 3,1936,MS 178,Box 2,fd 11,Marriner S.Eccles Papers.
30 Franklin D.Roosevelt,“Memorandum,”July 2,1936,MS 178,box 2,fd 12,Marriner S.Eccles Papers.
31 Board of Governors of the Federal Reserve System with the Federal Advisory Council,“Minutes,” Washington,D.C.,May 21,1940,741,http://fraser.stlouisfed.org (accessed June 15,2006).
32 Board of Governors of the Federal Reserve System with the Federal Advisory Council,“Minutes,” Washington,D.C.,October 7,1940,1296,http://fraser.stlouisfed.org (accessed June 15,2006).
33 Board of Governors of the Federal Reserve System with the Presidents of the Federal Reserve Banks,“Minutes,”Washington,D.C.,February 3,1942,176,http://fraser.stlouisfed.org (accessed June 15, 2006).
34 Ibid.
35 Sam Carpenter,interview.
36 Ibid.
37 Board of Governors of the Federal Reserve System with members of the Executive Committee of the Federal Advisory Council,“Minutes,”Washington,D.C.,April 9,1942,671-86,http://fraser.stlouisfed.org (accessed June 15,2006).
38 Sidney Hyman, Challenge and Response:The First Security Corporation First Fifty Years,1928-1978 (Salt Lake City:Graduate School of Business,University of Utah,1978),192-95.See also George S.Eccles, The Politics of Banking,ed.Sidney Hyman (Salt Lake City:Graduate School of Business,University of Utah, 1982),111-13.
39 Edmund Littlefield,“A Pattern for Progress,”August 20,1954,MS 100,box 2a,fd 9 28/1.15,Utah International Collection,Stewart Library,Weber State University,Ogden Utah.
40 Amalgamated Sugar Board of Directors, “Minutes,” May 22,1969,Amalgamated Sugar Company Archives, Boise, Idaho.
41 Eccles, Beckoning Frontiers,48-49.
42 Gene A.Sessions and Sterling D.Sessions, Utah International:A Biography of a Business,(Ogden:Weber State University,2002),245-46.
43 Edmund Littlefield,“As I Remember,”(photocopy),150,Utah International Collection.
44 Currie,“Memoirs,”203-204.
45 Littlefield,“As I Remember,”150.
46 Hyman, Marriner S.Eccles,378.
47 First Security Corporation,“Annual Reports,”photocopy,1967,p.2.
48 Eccles, Beckoning Frontiers,140.
