A Money Doctor Ignored? Edwin Kemmerer’s Second Mission to Colombia, 1930

Carlos Andres Brando () and Gianandrea Nodari ()
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Carlos Andres Brando: CESA
Gianandrea Nodari: University of Geneva

A chapter in Money Doctors Around the Globe, 2024, pp 295-316 from Springer

Abstract: Abstract This chapter provides a comprehensive narrative on Edwin W. Kemmerer’s second mission to Colombia in 1930. Described by the literature as the money doctor par excellence, Kemmerer was invited to Colombia during the Great Depression to restore domestic financial stability while reorganizing the Central Bank statute. Based on extensive archival research, we show that contrary to conventional wisdom, which portrays Kemmerer's advice as orthodox, the financial medicine proposed by the US money doctor was aimed at increasing the Central Bank’s role as an agent for national economic development. Whilst facing strong resistance from domestic and foreign bankers, Kemmerer suggested to relax reserve requirements, to rise direct lending with national agriculturalists and to reshuffle the decisional power of economic agents by recasting the composition of the board of directors of the CB. The fear of jeopardizing the credibility of the gold standard and the prospects of diminishing private bankers’ power inside the central bank’s board forced local policymakers to ignore Kemmerer’s most critical reformist piece of advice until the crisis had subsided.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:stechp:978-981-97-0134-6_16

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DOI: 10.1007/978-981-97-0134-6_16

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