World War I Centennial Series – Money Matters

Herrick loaned Baron von Schoen 25,000 francs - Reel 60, Woodrow Wilson Papers, Manuscripts Division, Library of Congress, Washington D.C.

Penniless in Paris! How to solve money matters; 300 francs in gold “insures plenty of good food” August 1914

Between July 28 and mid-August 1914, inability to access funds was a major problem for foreigners as French banks refused to cash traveler’s checks so as to retain currency and gold reserves. Thousands of tourists and expatriate residents in France were thus rendered temporarily penniless. The fiscal crisis hit all strata, including the diplomatic corps. Ambassador Myron T. Herrick lent the German Ambassador nearly 25,000 francs to help tide over German citizens affected by the financial crisis.[1] By July 31, American journalist William J. Guard reported that cafés in Paris refused to change 50- and 100-franc notes.[2]
Word of the fiscal strain reached the United States. Vice Consul to Paris DeWitt Clinton Poole Jr. was recalled from vacation in Madison, Wisconsin, in early August and ordered back to Paris. He relayed that in those early days,
“The foremost piece of advice that we received was to take some gold with us. I went to the Riggs National Bank and bought all my meager resources would allow, which was a few hundred dollars in gold, and also bought a chamois belt. This was August fourth or fifth in Washington and it was a very hot day. I remember this gold principally because by the end of the day I was saddled and would gladly have thrown the gold away.”[3]
In the meantime, back in Paris Herrick convened a committee of U.S. businessmen at his residence at 5, rue François Ier on August 2. He appointed Judge E.H. Gary as Chairman, banker Hermann Harjes as Secretary, and charged the group with devising a way for U.S. citizens to access funds. Fortunately, the French government needed a way to pay for war-related goods purchased in the United States. Thus, facilitated by Harjes, an account was created at Morgan, Harjes & Co. in Paris through which U.S. citizens could withdraw French francs while a reciprocal account was established at J.P. Morgan & Co. in New York so that the Government of France could pay for its U.S.-based purchases.[4]
The program enabled funds to flow from U.S. banks to Americans in France by mid-August.
While the details were hashed out, the U.S. Embassy provided small funds so that U.S. citizens waiting to be evacuated from France could eat. Military attaché Major Spencer Cosby was put in charge of distribution of these relief funds. Each recipient pledged to take the first available transport back to the United States.
Embassy staff and volunteers were also impacted by the lack of currency. Attaché Eric Fisher Wood wrote that when war broke out, he only had 300 francs of his personal funds available. Help arrived on August 14, when he received from his family back home six $10 gold pieces. “When the first one arrived I had spent virtually all the money which I had on hand at the beginning of the war,” he wrote. “This good American gold will tide me over until drafts can be sent through to Paris.” Woods pointed out that $60 was a small amount which would normally not last long in New York, but in France during war, “300 francs in gold looks a small fortune. At least, it insures plenty of good food.”[5]

[image] Herrick loaned Baron von Schoen 25,000 francs – Reel 60, Woodrow Wilson Papers, Manuscripts Division, Library of Congress, Washington D.C.
 Herrick (Paris) to Secretary of State (Washington), August 2, 1914. Foreign Relations of the United States 1914 World War I Supplement,
[2] William J. Guard, Soul of Paris: Two Months in the French Capital During the War of 1914, (The Sun Printing & Publishing Co., 1914), 7.
[3] The Reminiscences of DeWitt Clinton Poole Jr., January –March 1952, 60-61, in the Columbia Center for Oral History Collection.
[4] For further information on this and the role of J.P. Morgan and Morgan, Harjes & Co. in the war, please see Martin Horn, “A Private Bank at War: J.P. Morgan & Co. and France, 1914-1918,” The Business History Review, Vol. 74, No. 2 (Spring, 2000), 85-112.
[5] Eric Fisher Woods, The Notebook of an Attaché: Seven Months in the War Zone, (New York: The Century Co., 1915), 25. Project Gutenberg.