What We Are Reading Today: American Default by Sebastian Edwards

Updated 27 September 2018
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What We Are Reading Today: American Default by Sebastian Edwards

  • In 1933, when in a bid to pull the US out of depression, President Franklin D. Roosevelt depreciated the US dollar in relation to gold, effectively annulling all debt contracts
  • Revaluing the dollar imposed a hefty loss on investors and savers, many of them middle-class American families

JEDDAH: The American economy is strong in large part because nobody believes that America would ever default on its debt. Yet in 1933, Franklin D. Roosevelt did just that, when in a bid to pull the country out of depression, he depreciated the US dollar in relation to gold, effectively annulling all debt contracts. American Default is the story of this forgotten chapter in America’s history.

Sebastian Edwards provides a compelling account of the economic and legal drama that embroiled a nation already reeling from global financial collapse.

It began on April 5, 1933, when FDR ordered Americans to sell all their gold holdings to the government. This was followed by the abandonment of the gold standard, the unilateral and retroactive rewriting of contracts, and the devaluation of the dollar.

Anyone who held public and private debt suddenly saw its value reduced by nearly half, and debtors — including the US government — suddenly owed their creditors far less.

Revaluing the dollar imposed a hefty loss on investors and savers, many of them middle-class American families. The banks fought back, and a bitter battle for gold ensued. In early 1935, the case went to the Supreme Court. 

Edwards describes FDR’s rancorous clashes with conservative Chief Justice Charles Evans Hughes, a confrontation that threatened to finish the New Deal for good— and that led to FDR’s attempt to pack the court in 1937.

At a time when several major economies never approached the brink of default or devaluing or recalling currencies, American Default is a timely account of a little-known yet drastic experiment with these policies, the inevitable backlash, and the ultimate result.

 


What We Are Reading Today: The Dreamt Land by Mark Arax

Updated 17 June 2019
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What We Are Reading Today: The Dreamt Land by Mark Arax

  • The Dreamt Land weaves reportage, history, and memoir to confront the “golden state” myth in riveting fashion

California-style agriculture has created one of the most unequal societies on earth because extensive irrigation requires large corporations with deep pockets, says Mark Arax, author of The Dreamt Land.

The Dreamt Land weaves reportage, history, and memoir to confront the “golden state” myth in riveting fashion. 

“Arax is persistent and tough as he treks from desert to delta, mountain to valley. What he finds is hard earned, awe-inspiring, tragic and revelatory. In the end, his compassion for the land becomes an elegy to the dream that created California and now threatens to undo it,” said a review in goodreads.com. “It is a beautifully written book and one that lots of people ought to be required to read,” the review said.

Critic Gary Krist says in a review for The New York Times: “Granted, there are times when The Dreamt Land feels overstuffed and chaotically organized, as if Arax decided to include every relevant newspaper feature he’s ever proposed to an editor. But I suspect that few other journalists could have written a book as personal and authoritative.”