MILLS, OGDEN

Ogden L. Mills (August 23, 1884–October 11, 1937) lawyer, politician, and United States Treasury official, was born in Newport, Rhode Island. After completing an undergraduate degree (1905) and a law degree (1907) at Harvard, he entered law practice in New York City. He became active in Republican politics and won a seat in the New York state Senate in 1914. After war service in the U. S. Army, he was elected in 1920 to represent the 17th District of New York in the U.S. House of Representatives, a position he held until 1927 when he became under-secretary of the Treasury in the Coolidge administration.

President Herbert Hoover, who took office in March 1929, retained his predecessor's Treasury team with Mills as under-secretary and Andrew W. Mellon as secretary. (Mills was to succeed Mellon in the secretaryship in 1932.) Mellon was uncompromising in his opposition to unconventional interventions to stimulate a depressed economy. By contrast, Mills approached economic policymaking with much greater intellectual flexibility. He was a party to Hoover's decision in mid-1931 to declare a moratorium on debt repayments to theUnited States by World War I allies if these governments temporarily waived their claims to reparations from Germany. Mills contributed to the architecture of the Reconstruction Finance Corporation, (RFC), an institution created in 1931 to lend to banks (and other financial institutions) and to railroads, which was a pioneering exercise in off-budget financing. In mid-1932, Mills was the point man in a failed effort to persuade Congress to authorize RFC to function as an investment banker by lending to private businesses to fund capital formation. He was also involved in shaping legislation allowing the Federal Reserve to use government securities, rather than gold, as backing for its currency issues.

Perhaps Mills's most significant contribution to Depression-fighting occurred after he had technically left high office. In the interregnum between President Franklin D. Roosevelt's election in November 1932 and his inauguration in March 1933, an epidemic of bank failures swept over the country. The near paralysis of the financial system threatened the nation's ability to maintain gold convertibility of the dollar, a commitment that Hoover regarded as sacrosanct. Mills anticipated that this position was likely to become untenable and prepared contingency plans for executive orders to suspend gold payments and to close commercial banks until public confidence had been restored. The Bank "Holiday" declared by the Roosevelt administration in March 1933 drew heavily on the script that Mills had written.

See Also: BANKING PANICS (1930–1933); GOLD STANDARD; MELLON, ANDREW.

BIBLIOGRAPHY

Barber, William J. From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921–1933. 1985.

Fausold, Martin L. The Presidency of Herbert C. Hoover. 1985.

Kennedy, Susan. The Banking Crisis of 1933. 1973.

William J. Barber