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Friday, October 16, 2015

WOODIN | 8A. Norman Davis and Will Woodin (Updated March 24, 2016)

Norman Davis (1878-1944), former Assistant
Secretary of the Treasury and President of
 the Council on Foreign Relations. Photo courtesy
 of Malcolm Smith, his great-grandson.
October 16, 2015–While visiting Bill Phipps in Bloomfield, N.J., I was asked whether Will Woodin was likely to have known Norman H. Davis (1878-1944), a U.S. Treasury official and diplomat.

The question came from Malcolm Smith, a tenant of Bill who is Davis's great-great-grandson. My answer:  Definitely.

Under President Woodrow Wilson, Davis served as Assistant Secretary of Treasury–during the period when both the Federal Reserve System and Internal Revenue Service were created (1913).

These two Washington institutions, both originally headed by the Secretary of the Treasury (the Chairman of the Fed was later made independent), are currently among the most unpopular in the USA.

Will Woodin was not appointed to the Board of the Federal Reserve Bank of New York until the 1920s, but he would surely have come across Davis during that time.

Davis came to New York City from Bedford, Tennessee, son of distiller McClin H. Davis, who perfected the formula for Cascade Whisky, later renamed George Dickel.

Davis made millions of dollars from his financial dealings in Cuba in 1902-1917, as President of the Trust Company of Cuba. During that time he would surely have run across Will Woodin, who was selling railroad cars to Cuba.

Davis became a friend of Henry P. Davison, a partner of J.P. Morgan and Chairman of the International Federation of Red Cross and Red Crescent Societies from 1938 to 1944 . On a radio show in 1931, Woodin promoted the Red Cross and this plug is quite possibly the result of his knowing of Davis's interest in the Red Cross.

Another close friend of Davis was Richard M. Bissell, president of Hartford Fire Insurance and a member of the National Defense Commission. Woodin's hometown of Berwick, Pa. became a hive of activity during World War I as it benefited from defense contracts. Some of these contracts may have come through Woodin, although his cousin (through his mother, née Mary Dickerman) William Dickerman was in charge of defense contracting at American Car & Foundry.

Who's asking? Malcolm Smith, Davis' great-grandson,
tenant of Bill Phipps (great-grandson of Will Woodin)
in Bloomfield, N.J.
Davis was appointed financial adviser to the Secretary of Treasury on foreign loans during World War I, and would have had something to say about lending to foreign countries to enable them to buy ACF rolling stock and American Locomotive engines (Woodin was Chairman of the Board of American Locomotive).

After World War I, Davis was appointed Undersecretary of State.

According to Malcolm's father, Norman Davis was involved in the negotiations surrounding the Treaty of Versailles and gave advice that should have been heeded.

Based on his study of the German economy, Davis advised the chief negotiators for both the British and the French that a high level of punitive war reparations imposed on Germany could not be sustained and would cause serious damage to the German economy, which would bode ill for their recovery and for a stable Europe. (A close friend of Hitler is reported as saying that the resentment in Germany over Versailles, and Hitler's success in creating employment in Germany at the end of the Weimar regime, was at the heart of Hitler's appeal to Germans.)

While the ministers of these two countries agreed with his assessment, the people in both France and Germany wanted revenge and required their representatives to go for a punitive level of reparations. In retrospect, Norman Davis understood the statesmanlike strategy while both Lloyd George and Clemenceau behaved like vengeful local politicians.

The aftermath, of course, proved to follow the worst-case scenario. The German government had no choice but to print huge amounts of paper money to comply with the reparations schedule. The ensuing hyperinflation caused social chaos and paved the way for Hitler's rise to power. All of this is documented, says his great-grandson, in the Norman Davis papers in the Library of Congress.

Subsequently, Davis headed a commission of the League of Nations that negotiated the Klaipėda Convention in 1924, and was a delegate to a General Disarmament Conference in Geneva in 1931.

The clincher is that Norman Davis was promoted by some of FDR's advisers to be his first cabinet appointment, Secretary of State. FDR kept his counsel and Norman Davis did not get the job.  One reason is that Davis had a reputation as a strong internationalist and FDr was more interested in domestic policy. Raymond Moley describes the situation in great detail in his memoirs, Seven Years Later (see p. 90, for example). Later that year, in June 1933, Raymond Moley and Norman Davis were both sailing with FDR on the Amberjack II.

Davis's path surely crossed with Will Woodin's, either before 1933, in Cuba or when Woodin was on the board of the Federal Reserve Bank of New York, or in 1933 when FDR was forming his cabinet.

Starting two years after Woodin's death, from 1936 to 1944, Davis became president of the Council on Foreign Relations.