American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold.

• Author: Caton, James L.

American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold

By Sebastian Edwards

Princeton, N.J.: Princeton University Press, 2018.

Pp. xxvii, 252. $29.95 hardcover.

Rarely does one read a book on a topic already researched thoroughly and still feel as if one has walked away with a new perspective. More often, authors rehash old arguments, perhaps with a revelation or two that the reader finally earns after a laborious trudge through hundreds of pages whose arguments feign novelty. Sebastian Edwards's new publication, American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold, is not the latter kind of book. This review recapitulates the essence of Edwards's story and highlights his unique contribution.

Edwards opens with an observation: the exit from the gold standard and the abrogation of gold clauses in contracts are practically a forgotten episode, and to the extent it is remembered, recollection of it "has been simplified and sanitized" (p. xvii). My own understanding of it did not successfully avoid this critique. Franklin Roosevelt and Congress successfully challenged gold clauses, which were contractual agreements to pay in terms of gold parity, making them nonbinding as the Supreme Court idly sat by. Right? This is not at all the story told by Edwards. The Supreme Court's de facto approval of the abrogation of the gold contracts by the Roosevelt administration appears to have been a retreat as the Supreme Court prepared for "an open war" with the administration (p. 191). Edwards shows that there was no shortage of intrigue in the development of the policies that led to this event, whether inside or outside the administration.

The road to "an open war" begins with Roosevelt's establishment of his "brain trust," the cohort of professors and professionals from whom the president sought counsel. They included Raymond Moley, a law professor from Columbia University who became FDR's speechwriter and adviser; Rexford Tugwell, an economics professor at Columbia who thought the economy was susceptible to "traps of 'overproduction'"; and Adolf Berle, who was professor of law at Columbia. These three made up the inner circle. The trust also included Robert K. Strauss of Harvard's Business School; General Hugh Johnson; and a handful of others. None of these men was a monetary economist. As Rex Tugwell reflected, "We were not monetary theorists, and we said so repeatedly" (qtd. on p. 7)...