Brown Brothers’ first priority in the opening weeks of the First World War was to help clients stranded in Europe. At least 5,000 individuals and families had been traveling on the firm’s letters of credit when war was declared. As the financial system seized up, gold and silver coin vanished from circulation, and governments froze foreign currency transactions, rendering letters of credit useless. Noted one traveler stuck in Paris: “the money famine is so complete that a £100 note is of no more use than a piece of paper. Men with their pockets full of bills... could not buy the smallest objects.”
Panicked, many travelers began lining up at consulates and embassies.
A syndicate of banks began to craft a rescue plan, with James Brown, Brown Brothers’ senior member, playing an instrumental role. After frantic negotiations with government officials, the United States Treasury agreed to supply nearly $6 million in gold coin for the relief of the stranded travelers if the syndicate deposited an equivalent amount of cash in the Bankers’ Trust Company. Brown Brothers’ ties to Benjamin Strong, president of Bankers’ Trust Company, helped seal the deal, as did the partners at Brown Shipley, who became a key link in the negotiations.
A few days later, after a last-minute crisis involving skittish insurers, deck hands on the armored cruiser Tennessee loaded the last of the wooden kegs of gold coins and set sail for Europe. The entire enterprise was a success, though travelers trapped in Germany and Austria had a much longer wait. In the end, all the firm’s clients made it home without incident.
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