Francis fixed William with a steady gaze.
“Last November, I was reading the Federal Reserve Bulletin and the Commercial Paper Daily while also studying the data from the crises of 1807, 1873, 1893, and 1907.
The shape of those crises, how they spread, the psychological breaking points—they were almost identical.
The only difference was that this time our leverage was higher, globalization ran deeper, and the gold standard was far more fragile.” “So, Mr.
William, if you had been looking at the same evidence back then and believed that history does not lie, you could have reached the same conclusion I did.” Francis fell silent.
The conference room sank into a deathly hush.
William’s lips parted, but for a long time, no words came out.
For the first time, the face that had weathered countless congressional hearings, Wall Street negotiations, and international financial conferences revealed an expression that defied description.
It wasn’t anger.
It was the awkwardness of a man more than forty years older, someone who had just been cornered on his own field of expertise by a young man and was still trying to process what had happened.
Helen stared fixedly at Francis’s profile, as though she were seeing him for the first time.
The entire drive over, she had been preparing herself—thinking of how she could gracefully step in to smooth things over and preserve her uncle’s dignity if Francis was overwhelmed by the cabinet members’ questions.
But now, it wasn’t Francis who had been left speechless.
It was William Woodin, the incoming Secretary of the Treasury of the United States, who had just received a thorough lesson in financial history, data, and logic from a Harvard dropout who happened to be an illegitimate son.
Helen felt dizzy.
Was this really the Francis she knew?
Roosevelt gave a soft cough from across the conference table.
“My boy, since you foresaw this disaster…
do you also have a solution?” “I do.
The moment the new administration takes office, we must move as quickly as possible to pass emergency banking legislation.” “Go on.” “First, immediately after the President is sworn in, he should declare a nationwide bank holiday.
Not the patchwork of state-by-state closures we’re seeing now, but a mandatory shutdown ordered by the federal government and carried out simultaneously across the entire country.
I recommend four days, and no longer than a week at the absolute maximum…” “Wait!” William cut him off almost instinctively.
“Have you thought about the political situation?
You’ve already seen how the public reacts when individual states declare bank holidays.
Right now, they can still blame Hoover.
But if we take office and the federal government itself orders every bank in the country to close, every ounce of public anger will be directed at us.
It will create a massive crisis of confidence for the new administration.” “Mr.
William, I completely understand your concern.
But allow me to ask you one question.
Under what circumstances have the states declared bank holidays?” William said nothing, because he knew Francis was about to answer it himself.
“Only after bank runs had already begun.” “Michigan, Maryland, Ohio…
every state shut its banks only after panicked depositors had overwhelmed them and there was no other choice.
From the public’s perspective, the government wasn’t protecting their savings—it was slamming the doors shut in a panic after the bank runs had already started, denying them even one last chance to see their own deposits.” “But if we do it, it’s an entirely different matter.
We wouldn’t be reacting to bank runs—we would be proactively declaring a nationwide banking holiday after the crisis had erupted.
That isn’t surrender.
It’s a strategic freeze.” “People panic because of uncertainty.
But if the new President personally tells them, ‘Give me four days.
Give me four days to determine which banks are safe and which are not.
Four days from now, I’ll tell you myself…'” “Then that panic can be calmed.” “So what do you think, Mr.
William?” William fell silent.
“Go on,” Roosevelt said.
“Once in office, we must immediately assemble enough personnel to conduct a lightning-fast review of every bank in the country.
There’s no need for a full audit—we only need to divide them into three categories.” “The first category: banks with adequate capital and sound operations.
They can reopen immediately after the four-day holiday.” “The second: banks with problems but still salvageable.
They should receive emergency loans or capital injections from the Reconstruction Finance Corporation.” “The third: banks that are hopelessly insolvent.
They must be liquidated or placed into receivership.” Over the next ten-plus minutes, one framework after another flowed from Francis’s mouth.
These weren’t scattered flashes of inspiration, but a complete emergency response plan—clear, coherent, and internally consistent.
William’s pen raced across his notebook.
At first, it was simply professional instinct.
Gradually, however, his writing slowed.
Because he realized he wasn’t recording a young man’s suggestions.
He was copying the outline of a fully developed piece of legislation.
What sent a chill down his spine was that many of its specific provisions were issues even he, the incoming Secretary of the Treasury, had not yet fully worked out how to implement.
Then Francis reached one particular point.
“At the same time, the legislation should authorize the Treasury Department to restructure the ownership of banks applying to reopen.
For institutions that are critically undercapitalized but systemically important, the Treasury should have the authority to inject capital by purchasing preferred stock, while receiving seats on the board of directors and the power to oversee executive compensation in return.” “Hold on.
Do you realize what you’re saying?” William’s pen came to an abrupt stop.
“The government taking equity in banks?
Gaining seats on their boards?
Wall Street will never accept that!” “Morgan, Rockefeller, DuPont…
they might accept government liquidity support.
They might even tolerate temporary oversight.
But you’re talking about letting the government walk straight into their boardrooms!” “That crosses the bottom line of private property rights.
If even they unite in opposition to the new administration…” “…then the United States really will be finished!” Francis did not back down.
“Mr.
William, what is capital?” William froze.
“Capital is like water.
It always flows downhill—toward wherever profits are greatest.
That’s not a question of morality.
It’s a law of nature.” “But if the entire river basin has dried up—if factories have shut down, workers are unemployed, shops have gone out of business, and farmers are bankrupt—where is that water supposed to flow?” No one answered.
“Capital pursues profit.
But profit depends on transactions, and transactions depend on people having money to spend and needs to fulfill.
If tens of millions of unemployed Americans can’t even afford a loaf of bread, who is Ford supposed to sell cars to?” “If forty thousand businesses go under, who is going to buy Morgan’s bonds?” “If farmers are burning corn they can’t sell, what will Rockefeller’s refineries have to process?” He paused before continuing.
“The Great Depression is not divine punishment.
It’s the result of capital spending the last thirty years flowing to the highest mountaintop, where it built the most magnificent palace imaginable.
Meanwhile, the vast lands at the foot of the mountain—where the overwhelming majority of people live—have cracked into a barren desert.” “And now that desert is spreading toward the summit.
Even Wall Street’s palace has begun to shake.
So tell me, do you really think they’d rather go down with the palace…
or would they rather accept reforms they may dislike, but that can still save its foundations before the ground beneath their feet completely gives way?” —