Ron Chernow Quote
Hamilton wanted his central bank to be profitable enough to attract private investors while serving the public interest. He knew the composition of its board would be an inflammatory issue. Directors would consist of a small and select class of men. To prevent an abuse of trust, Hamilton suggested mandatory rotation. The necessary secrecy of directors’ transactions will give unlimited scope to imagination to infer that something is or may be wrong. And this inevitable mystery is a solid reason for inserting in the constitution of a Bank the necessity of a change of men.17 But who would direct this mysterious bastion of money? Its ten million dollars in capital would be several times larger than the combined capital of all existing banks, eclipsing anything ever seen in America. Hamilton, wanting the bank to remain predominantly in private hands, advanced a theory that became a truism of central banking—that monetary policy was so liable to abuse that it needed some insulation from interfering politicians: To attach full confidence to an institution of this nature, it appears to be an essential ingredient in its structure that it shall be under a private not a public direction, under the guidance of individual interest, not of public policy.18
Hamilton wanted his central bank to be profitable enough to attract private investors while serving the public interest. He knew the composition of its board would be an inflammatory issue. Directors would consist of a small and select class of men. To prevent an abuse of trust, Hamilton suggested mandatory rotation. The necessary secrecy of directors’ transactions will give unlimited scope to imagination to infer that something is or may be wrong. And this inevitable mystery is a solid reason for inserting in the constitution of a Bank the necessity of a change of men.17 But who would direct this mysterious bastion of money? Its ten million dollars in capital would be several times larger than the combined capital of all existing banks, eclipsing anything ever seen in America. Hamilton, wanting the bank to remain predominantly in private hands, advanced a theory that became a truism of central banking—that monetary policy was so liable to abuse that it needed some insulation from interfering politicians: To attach full confidence to an institution of this nature, it appears to be an essential ingredient in its structure that it shall be under a private not a public direction, under the guidance of individual interest, not of public policy.18
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About Ron Chernow
Chernow won the 2011 Pulitzer Prize for Biography and the 2011 American History Book Prize for his 2010 book Washington: A Life. He is also the recipient of the National Book Award for Nonfiction for his 1990 book The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. His biographies of Alexander Hamilton (2004) and John D. Rockefeller (1998) were both nominated for National Book Critics Circle Awards. His biography of Hamilton inspired the popular Hamilton musical, which Chernow worked on as a historical consultant. For another book, The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family, he was awarded the 1993 George S. Eccles Prize for Excellence in Economic Writing. As a freelance journalist, Chernow has written over sixty articles for various national publications.