The Great Devaluation

11The Lion King

The mindset of the United States following the first world war may well be summed up by the words of writer William Ernest Henley. His poem Invictus, whose title means “undefeated” or “unconquerable,” ends with the powerful and optimistic words, I am the master of my fate: I am the captain of my soul. This became the mindset of the country following the war. Americans felt invincible.

The war had been a test of American power on the world stage. Similar to a young lion first realizing his unbeatable strength, while simultaneously becoming aware of his royal status as king of the jungle, America had come of age and was now the heir to the throne of world power. The crowning wasn't only ceremonial. It was spiritual, tangible and globally accepted. America was the new and undisputed king.

While World War I would claim casualties of 40 million, killing 17 million and wounding 23 million more, American casualties were relatively modest. Of the nearly 5 million who served in the war from the American side, there were only 116,516 deaths, and of those more were due to illness rather than battle. While the United States survived virtually unharmed, Europe had been decimated. Four empires collapsed. Old world countries were abolished and new ones were formed.

For hundreds of years, the center of power for international finance had been located in London, England. That torch was passed across the Atlantic. New York City would become the new center of international finance. ...