A Very OK Podcast
Episode 43: “Robert Owen and the Creation of the Federal Reserve”
January 21, 2025
Episode Transcript
(upbeat music playing)
Trait Thompson: Hello, and welcome to A Very OK Podcast. My name is Trait Thompson, and here with me, as always, is Dr. Bob Blackburn. Bob, it’s great to be with you today. We are in 2025. Happy New Year to you. It’s great to be once again recording our podcast together.
Dr. Bob Blackburn: Well, thank you, Trait. I sure enjoy this, and looking ahead, thank you for choosing interesting topics and chasing the guests who come in and join us. It’s always fun to share stories with others and academia and historical business and to hear their own stories, whether it was, you know, something they’ve studied or something they’ve actually done. I enjoy this process.
Thompson: Well, one of the things I love about this podcast is not only do we help our listeners get to know some more aspects of Oklahoma history, but I always learn something when I’m doing the research and getting ready for this podcast, and I learn some nuance or some interesting fact, or learn about a person I may not have known before. And invariably, as I’m researching one podcast, I get a good idea for another podcast as well.
Blackburn: And of course, one thing you learn with a PhD is how much you don’t know, and life should be a learning process, and some of the happiest people I’ve known in my life are those who are curious about learning and never quit, and that’s one reason I keep doing my historical projects. I’m working on a museum project in Chelsea right now. I just finished a book on parks in Oklahoma City. I’m writing a history of the history of the History Center itself, which is a fun process of kind of going down memory lane. But I just am learning all the time. That keeps driving me to keep being a historian.
Thompson: Yeah. You know, I’m good at, over the Christmas holidays, I went to Chicago to visit my brother and his family. Of course we did a big family road trip up there because, you know, for some of these trips, it’s just not worth it to fly anymore. And I stumbled on a podcast that, I did a deep dive over the Christmas holidays into Henry the Fifth and the Battle of Agincourt in France, and I never intended to do that. But this podcast is hosted by two British professors, and it was just fascinating. And I want to tell you, it’s a 12-hour road trip to Chicago, at least for us it is. And about four good hours of that trip were eaten up with me doing a deep dive into Henry the Fifth and the political situation in France in the early 1400s and and that Battle of Agincourt, which, you know, I’d never really studied all of that much. And when I got home, I wanted to watch Henry V, the Kenneth Branagh version that was done in the late ’80s. And so, yeah, discovering all of these things, and it doesn’t even have to be Oklahoma history. Anything you discover, all of these stories can be just fascinating.
Blackburn: Well, a book I’m reading right now is a biography of law school Dean Monnet, M-O-N-N-E-T, at the University of Oklahoma. He came in as the the first dean of the law school, and his life in Iowa, North Dakota, and I’m learning so much, you know, and I studied frontier history now for 50 years. And reading a book like that still opens my eyes to more stories, and why people come to Oklahoma, and the resources they bring with them. There’s just so much to learn.
Thompson: Well, for those who may be interested, the podcast that I was listening to is called The Rest is History. So if anybody wants to check that out, and it’s a very popular podcast, so many of you might have already listened to it. But that was my deep dive over the Christmas holidays and it was pretty interesting. I also finished reading a book by H. G. Brands called The Search for El Dorado, and it was sort of a brief history, and by brief, I say about 400 pages, of the American West. And, you know, you always think, what more can you learn about the American West? So much has been written about it, but I’ll be darned if I didn’t discover some new things through his book as well. So we’re always out there discovering new things and to that point, let’s discover something new today about Oklahoma history.
A few, I want to say last year, I’m a member of the Downtown Oklahoma City Rotary Club, and once a year, we have an opportunity to go experience different businesses across the city, and you could pick from these different places to go. And the place that I picked to go was the downtown Oklahoma City office of the Federal Reserve. Of course, we are part of the Federal Reserve branch that’s headquartered in Kansas City. And I went there, and they have a great display there, an exhibit there on the history of the Federal Reserve. And I found out that an Oklahoman, Senator Robert Owen, was instrumental in the creation of the Federal Reserve. And, of course, I took out my phone, and I have a running list of notes on what would be future, good future podcast topics, and I wrote this down. And so today’s the day we’re going to tackle Senator Robert Owen and the creation of the Federal Reserve, and I think that everyone will enjoy learning more about it. He was a fascinating man, came from a pretty fascinating family. And, I’m looking forward to diving in today. Let’s talk, we haven’t done this in a while, but maybe we should talk about some movies that we like that deal with banking or finance, and what would be on your list in that realm of movies? It’s pretty specific, but we’re talking about it. Yeah.
Blackburn: Looking at the story of Robert L. Owen, the Federal Reserve, and then the Populist Movement coming out of the 1890s, the Progressive Movement, roughly the same time period, a lot of it was how do we make financial resources more available to the general public? When it was a nation of farmers, you know, how much currency do you need? A couple of hundred dollars a year would be income of a typical farm family. Pretty self-sufficient. Well, that was all changing in the Industrial Age. So how do you get money into the hands of people to invest? Well, the movie that comes to my mind that’s one of the best examples of wanting to share financial resources, do the right thing, is It’s a Wonderful Life with Jimmy Stewart. My wife and I have seen that probably 20 times. Watched it again just recently on Roku. Even though it had commercials, we went through it. But it’s one of those movies that you just, tears are running down your cheek because of this one man’s story of trying to serve his community, of trying to make money available so people can buy a home, back when homes are costing $4,000 and $5,000. But that was beyond the means of most middle-class people. In the 19, well, this would have started in the ’20s and the Federal Reserve was doing the same thing. How do we make currency available to people around the country to buy homes? And you can trace the construction industry in Oklahoma back to that availability of cash. But in a Wonderful Life, Jimmy Stewart as a savings and loan, and it’s always right on the edge of bankruptcy because he’ll get a few people to put their deposit of the the savings and loan. Then he’ll accumulate money, and then he’ll loan it to a family. And there are many families in this movie. But then there’s this evil capitalist in the town, Mr. Potter, and Mr. Potter wants everything, and he wants people to rent from him. He wants people to come to his bank. He wants people to basically do what he wants to do with the economy. And here’s Jimmy Stewart fighting hard as man of the people saying, no, we need the savings and loan. A couple of impassioned speeches. If our listeners have not seen that movie in a while, look it up. It’s a good check against whether we’re living good lives and wanting to share and help people and the importance of friends and family and community. And instead of just accumulating money. As shallow and generally, it’s not very satisfying. And the Wonderful Life really goes back and shows what is important—family, friends, community.
Thompson: It’s one of my wife’s all-time favorite movies. So invariably, she watches it every Christmas season, like a lot of people do. A movie that kind of has an opposite effect on your emotions, because it certainly deals with a little bit of different subject matter, is Wall Street, and Wall Street is ranked usually as one of the best movies when it comes to dealing with finance. And of course, we have Michael Douglas, who personifies the Gordon Gekko character. And, Michael Douglas is the quintessential example of the slick Wall Street trader, the man who lives and dies by the stock market, who makes money, who typically will exploit other people and other companies’ weaknesses. In fact, one of the things he’s known for in the movie is buying up the shares of stock and then sort of breaking apart the company and selling it. And in the movie, we have Charlie Sheen, who’s the young person who wants to sit at Michael Douglas’ feet and learn more about how he does it because he wants to get rich. But then the heart of the movie is really, interestingly enough, Martin Sheen is, in real life, Charlie Sheen’s father and plays his father in the movie as well. And Martin Sheen works for this struggling airline corporation and ends up, Gordon Gekko ends up taking over the airline company and ends up firing and laying off a bunch of people. And Charlie Sheen begins to feel remorse for his role in all of that, but the movie is famous for this idea. During one of the conferences in the movie, Gordon Gekko says, “Greed, for lack of a better term, is good.” And he describes how the Americans’ need for greed, for passion, for money and greed, for, you know, getting more and gaining more resources.
Over time, that’s what has built America. In other words, you wouldn’t have Westward Expansion. You wouldn’t have the Industrial Revolution. You wouldn’t have all of these things that have sort of made America what it is today without this, this notion that people want to experience. They have this greed for getting more into themselves. It’s sort of a, waving a flag and in support of capitalism and capitalism, maybe at its extreme ends, for sure. It’s a good movie. I certainly, I think it holds up pretty well. There’s some great ‘80s hairstyles in that movie, for sure, but it is one that if you want to do the dive into someone who is doing things maybe for the wrong reasons and not the right reasons, like Jimmy Stewart’s character, Wall Street is certainly one of those movies to look up.
Blackburn: Well, another one that deals with a similar subject of greed, making people go nuts and leading to speculation, would be The Big Short. That’s where the economy starts growing on this real estate bubble, and people are investing and flipping and going, and people just get so into it. It creates this bubble in a few different organizations, and individuals see it coming, and they’re betting on the big shot and shorting that stock, thinking that it’s going to crash, and that they’ll make money as it goes down. And it’s kind of almost a mystery movie, where you’re never sure what they’re going to do, and these different individuals and companies are treating it differently and going after it. And, it’s a good movie about speculation. And that’s one of the problems we’ve had with financial crises over the centuries, going all the way back to colonial times.
And, it ties in with the theme of Robert L. Owen, the Federal Reserve, of some regulation on the excesses of free enterprise. We need free enterprise. It works. It drives the economy. It pays those taxes, like you said. But, regulation is needed because it’s a self-destructive process. They’re always going to be winners and losers. How do you balance out the winners and losers? And how do you avoid the excesses and the speculation and people just getting under these bubbles and and really based not on value, but on just what people think is going to happen in the future. So it really it’s not based on labor, it’s not based on production, just based on speculation.
Thompson: Right. Yeah. There are quite a few poignant scenes in The Big Short. Of course this is, you know, I didn’t live through the Great Depression, and I was a kid on Black Monday, I believe, in 1987 when the stock market had its big crash then, and so, but I do remember the 2008 financial crisis, and I remember all of the speculation at the time, people saying that this is going to be our generation’s version of possibly the Great Depression.
Thankfully, it didn’t turn out like that, but hundreds and hundreds of thousands of people did end up losing their homes because of greed and speculation. And I remember the scene in the movie, and I forget the name of the character that Brad Pitt plays in this, but once again, he’s playing a mentor to two of these young finance guys who have seen what’s going to happen in the housing market. And when they’re right, and they sell their shorted stock, and they make tons and tons of money, and they start celebrating, and Brad Pitt has to admonish them and say, you know, hey, don’t celebrate this. Hundreds of thousands of people have just lost everything that they have. And so that movie is incredibly well-written. It’s one of my favorite movies about that era. And of course, you got such great actors in that movie. Everyone from Steve Carell to, you have Christian Bale, who I just felt so bad for his character because he shorted that stock very early on. And by the time that it actually happened, most of his investors had left him by that point, and he was getting sued. And so, but he kept believing that he had read the market correctly, and of course, we know now that that he did.
So, a few good movies about banking and finance to check out if you want to get into that realm. Of course, there’s lots and lots more of them, but probably don’t have time to dive into those today. Let’s talk a little bit about Senator Robert Owen, because I found him to be a very interesting person as I was doing this. He was born in Lynchburg, Virginia, on February 2, 1856. His father was Robert Latham Owen, who is the president of the Virginia and Tennessee Railroad. His mother was Narcissa Chisholm Owen. She was Cherokee. Her grandfather’s name was Oconostota, a principal chief of the Cherokee Nation during the 17th century. So, she was born in 1831 at Webbers Falls in Indian Territory, and she had been a teacher in her former life. Unfortunately, Robert’s father got really involved in the Confederate cause in the Civil War, and bankrolled military operations during the Civil War, and he ended up dying in debt in 1873. And that precipitated Narcissa and her son Robert to move to Indian Territory in 1879. And, of course, coming into Indian Territory, she was entitled to a share of the communal Cherokee property. She built a home she loved. Thomas Jefferson, and her family had been friends with Thomas Jefferson, and she built a home that she called Monticello near Salina, became an accomplished painter, in addition to becoming a teacher. Robert had gone to the, gone to Washington and Lee University and earned a master of arts degree, had been valedictorian at the university. And so when he came to Oklahoma and came of age, he became a teacher at the Cherokee Orphan Asylum in Salina, a school, which had 150 students. So that’s how he gets his start in Indian Territory. And then later in 1881, he becomes the secretary of the Cherokee National Board of Education.
Blackburn: Yeah. Interesting man. He really embraced his Cherokee heritage, and I truly believe, and it’s a question I’m going to pose to Dr. Brown when we get him on the line here in a little bit, our guest speaker of the day, is about his Cherokee identity. He supported communal ownership of the land, even after Congress was passing the General Allotment Act. He saw the advantages of Cherokees working with each other, this sense of sharing resources, and that always reminds me of that famous quote from Senator Dawes who led the Dawes Commission. He was giving testimony at a conference and talking about how the Cherokee Nation just had plentiful resources, and that people shared with each other, and if one family ran out of corn before they needed a plant, they could borrow some from their neighbor and everyone. No one was hungry. You didn’t see any abject poverty, but he said they’re missing one thing that’s needed for a modern community. That’s greed.
Well, Robert L. Owen, I think, would have thought differently. I think he saw the benefits of the Cherokee identity of sharing. We’re in this, we got to support our family, our clan, the community. And I really believe that he was Cherokee at heart. And at that time, Cherokees did not care that much about blood quantum. They would they would not have said, oh, he’s one-sixteenth Cherokee, so he’s only part Cherokee. You are either Cherokee or you are not. It was your attitude, the way you looked at the world and spirituality and in each other. And I truly believe that even though he was brought up outside of the Cherokee Nation, his mother had deep roots here. And he spent many years here, and I think he embraced it totally.
Thompson: You wonder what would have happened to them had they not had the Cherokee ancestry to fall back on, where they could come to Indian Territory and they could come back into the tribe, and participate in the tribal lands and all of those kinds of things. You know, you wonder, you know, in that day and age, when the husband dies and the income producing ability of the husband goes away, there’s just not a lot of opportunities for a woman to be able to support her family after that.
Blackburn: Right. And coming back to family, extended relationships. Robert would have seen that with his own mother, and he would have appreciated that. And when he appointed the agent to the Cherokees at Union Agency, I think he was a good agent, tried to do what he could to help the Cherokee people. Of course, he had to carry out United States policy as the agent, and he had some, some agency policemen that worked for him. But they tended at that time, they tended to work more closely with tribal law enforcement trying to make things work. And it was kind of a federal system itself with the the federal government, territorial government, and tribal governments. He was trying to make it work, and he was trying to make it work the Cherokee way.
Thompson: Yeah. To your point, so in 1885, he seeks the the appointment as Indian agent from Grover Cleveland, and that has to be appointed by the president and supported by the Senate. He goes to Washington, DC, and this shows his early political ability. He meets with all of the senators, and he gets enough letters of recommendation to get the appointment from the presidency. And he ends up serving as the Indian agent until 1890, when there was a change in administration. But to your point as well, he is very supportive of the right of tribes to hold their land in common. He believes that those treaties should be upheld, that, you know, he didn’t necessarily agree with the allotment process. But one of the things he also advocated for was economic development opportunities in the Indian Territory, to be able to lift the people up and give them more opportunity as well. And after his time as Indian agent, this is another part where his early career begins to intersect with his future, in terms of being a United States senator. In 1890, the National Banking Act was passed, and he became the first person to get a national bank into Indian Territory. He organizes the First National Bank of Muskogee, and he ended up being president of that bank for 10 years, ends up diversifying his businesses into real estate, farming, cattle, and then becomes, going down this road of politics once again, he organizes the first Democratic convention in Indian Territory in 1892. And this is one thing I love, and, you know, we talked about this on our women’s suffrage podcast that we did, and we mentioned, you know, Narcissa Owen was a big supporter of women’s suffrage, and Robert Owen joined with her just as vociferously as she was, and he always supported the idea of women’s suffrage. So this is something he’s working on in the territory as well. And then finally we get to the Sequoyah Convention of 1905, and Owen was named to the to the subcommittee that was going to draft that constitution.
Blackburn: Well, and speaking of suffrage, again, getting back to his Cherokee heritage, that’s the way it was in the a Cherokee Nation. It’s a matrilineal organized society. You trace your family heritage through your mom, you know. There were women who were leaders of the tribe, you know, throughout Cherokee history. That respect for women, I can see that coming out of this Cherokee heritage as well. And then when he would get to the Sequoyah Commission again, at the Constitutional Convention, he’d bump up against some old white guys, Charles Haskell and William Murray, who did not want women to vote, which would have represented more of this American frontier society bumping up against this Cherokee attitude about equality for all people, men and women.
Thompson: Well, he ends up being a party to drafting the Sequoyah Constitution. And as we know from the history, this was an effort that the original territory held by what we used to call the Five Civilized Tribes, now we call the Five Tribes, to make that a state. And of course, that idea was dead on arrival in Washington, DC, because at that point you have Republican administration that is taking over with Theodore Roosevelt. You have a Republican Congress. There’s no way in the world that they’re going to allow Oklahoma Territory to come in as a state, Sequoyah to come in as a state, and bring in four new Democratic senators into the United States Senate. So, I suspect that many of the people involved in the drafting of the Sequoyah Constitution knew that that was probably not a great chance of that actually happening, but I suspect it was also an attempt to assert some political power before the two territories were merged, and we ended up getting the state of Oklahoma. And of course, the constitution that Owen helped write for the state of Sequoyah was a very progressive and populist constitution, and it had many of the aspects that would later be upheld when the Oklahoma Constitution was written. Now, Owen wasn’t a delegate to the Constitutional Convention for the state of Oklahoma in 1906, but he did lobby for prohibition and women’s suffrage to be included in the new constitution. And, of course, he was successful in the prohibition part, not so successful on the women’s suffrage part of that. And then, after that, Oklahoma Constitution was approved on September 17, 1907, by the people.
There was a, I would say, a gentleman’s agreement, if you will, that when we elect our two United States senators, which there was an election, although that the territory, or the state legislature ultimately was the one that picked the two senators. But there was a gentlemen’s agreement that one would come from old Oklahoma Territory, one would come from old Indian Territory. And so our two senators that we elect, the one from Indian Territory ended up being Robert Owen, and then the one from Indian Territory ended up being Thomas Gore. In his first political speech, Owen said he supported the right of the initiative in the referendum, suggested direct election of US senators, opposed high tariffs, advocated for the removal of restrictions on the sale and lease of Indian lands. So, once he saw the writing on the wall for, that we’re not going to be able to own our land in common, and we’re here in statehood. He wanted to remove those restrictions on the ownership of Indian lands and what Indians could do with their land is he saw this as an opportunity for economic development in the new state. So he was, he ended up getting, there were seven candidates in the field for the United States Senate. He got the most out of all seven, got a little over 48,000 votes.
Blackburn: Yeah. And of course, campaigning that he was a businessman and an Indian, and he may have been the only one who could do that, but I think he used those roots in the Cherokee Nation very effectively and learned a lot of lessons as a banker, probably was involved in building railroads because there were more miles of railroad track laid in Oklahoma from 1900 to 1910 than all the other decades combined. So this is the decade when he’s a banker and a community leader and is in a position to be an insider with a lot of these, these corporations. And so, he was very much a part of the early history of Oklahoma political, economic, and now, of course, as we’ll talk about here in a few minutes with the Federal Reserve, important on the national level as well.
Thompson: And he was a true progressive. He really did embrace these ideals that were espoused by the Progressive and Populist Movement in the late 1800s, in the early 1900s. And we’ve spent some time in other podcasts talking about some of the conditions, economically, that were present not only in Oklahoma, in the United States, at that particular time. We have a podcast that we talked about labor unions and the rise of labor unions during this particular period in history, and we’ve talked about the rise of corporations and these consolidation of corporate entities into trusts, which really, during this particular time, it made people extremely distrustful of the large trusts because of the power that they had over the common man. And some of those would have been Standard Oil, the railroad corporations, the big steel corporations. And so, our constitution was written to be able to put a curb on some of that and to give power to the people to regulate these corporations that were seen as being out of control.
Blackburn: Well, and in that constitution, when we talk about monopolies, they were so fearful, especially of railroads. Railroads were the evil people of the day. In popular culture today, you say, you know, different villains, but in that time and era, it would have been the railroads were the bad guys, and in the constitution was a clause that the big boys, Santa Fe, Rock Island, Frisco, could not buy shortline railroad. So if there was a railroad between Lehigh and Chickasha, as there was the Oklahoma central, it could not be sold to one of the big boys. It was in the constitution, and that had to be changed, which it was in the 1920s. But that’s the way people felt about railroads and monopolies. We don’t want them. We think they’re predatory. Probably where Owen came down on the issue is that, you know, they may be good for economic development, but they need to be regulated. So let’s have those regulations. Let’s have some rules, some plain rules that cannot be abused with the authority you get with a monopoly. Let’s use the benefits of a monopoly, which is efficiency. If you’re not having competition, you’re much more efficient, and so he could see that advantage. But at the same time, where’s the balancing act? That had to be government in Robert L. Owen’s mind.
Thompson: Right, right. Well, Bob, I think we should bring Dr. Ken Brown into the conversation. And so we will do that right after this short message.
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Thompson: Well, Bob, I am very excited to welcome into the podcast Dr. Ken Brown. He was born in southeast Oklahoma. He’s got roots in the Choctaw Nation, and he was an undergrad and PhD in history from Oklahoma State University. He did his dissertation on Robert L. Owen, which was praised by Angie Debo, which I want to learn a little bit more about that. He has been a professor at Panhandle State University and a professor at the University of Central Oklahoma. He’s a published author and speaker and has many awards to his name. He’s now retired and lives in the Boulder, Colorado, area. Dr. Brown, thank you so much for being with us today, and I’m very glad you could join us.
Dr. Ken Brown: You’re welcome, and thank you for allowing me to speak with you.
Thompson: Well, I know you and Bob have known each other for quite some time. Bob, why don’t you talk about your history with Dr. Brown?
Blackburn: Yeah, when I enrolled at my master’s program at Oklahoma State University, Ken was already there, and he was one of the leaders of the pack. You know, he was one of the smart guys. And, I always admired Ken’s ethics and willingness to learn, and he earned a lot of respect from different professors there, and found a good job, and many of us took any job we could find at the time. Ken earned his stripes out at Panhandle and got the job at UCO that had a very strong regional history. Don Green, before Ken, and Jimme Rogers and Royce Peterson and that group, But Ken kind of carried on, and I bet half of our employees here at the Historical Society over a couple of decades came from UCO. So Ken had a real impact, not only on his colleagues when we were all at OSU, but people in the profession, the students who worked their way through the University of Central Oklahoma. So, Ken, you’ve always been one of my favorites. And I admire the way that you have lived your life and really been a good public servant.
Brown: Well, I appreciate all that, Bob. Thank you.
Thompson: Well, Ken, we have, Bob and I have been talking a little bit to kind of set the scene for today, talking about some of the early history of Senator Owen, and we made it all the way up to about 1907 when he was elected into the Senate. And I want to pick up there, but before we do that, I really want to get, in your bio that Bob gave me, it says that your dissertation was praised by Angie Debo. Can you tell us a little bit more about that? And how well did you know Ms. Debo?
Brown: Well, I had met her on a couple of different occasions when she spoke for different activities and went up and talked to her and had her autograph a book or two for me over a period of a few years. When I finished my dissertation, I, about 1985, shortly after I finished my dissertation then, I went, I wrote her a letter, and I said that I would like to come by and talk to her some time and and give her a copy of my dissertation if she would like for me to do that, and told her the topic. And of course, she had written extensively about Owen in And Still the Waters Run, her book that she believes, and I agree with that, was the best book that she wrote, had the most impact.
Thompson: Yeah.
Brown: And so she was very interested in seeing what I’d done. So I happened to be taking a trip to Stillwater for a conference at that point. And so I went by her house, and the evening before going to Stillwater, went by her house in Marshall, where she lived most of her life, and chatted with her quite a bit. And then I asked her if it would be okay if I would return the next day with a tape recorder and also talk to her and record many of the things that she had told me and other things as well. So I did that, eventually donated that recording to the Angie Debo archives there at the OSU library, and then went back home. And about a year later, I got a nice letter from her, and with the return of my dissertation, and she said that she enjoyed it a lot. She commented that most people do not do all the work that I did for a dissertation. And then she said that she predicted that I would go far in the profession and that she had made these predictions in the past, and, they had come true. So that’s, I obviously have kept that letter, and I should have framed it, but I wouldn’t want it to deteriorate if you do that.
And, I was telling Bob that it’s those comments like that, from folks like Angie Debo and some others that I’ve run into and interacted with, those positive comments like that that have kept me going, and at times when I’m down have allowed me to say, well, maybe I’m doing okay. So that was, and I didn’t have much contact with her after that, maybe saw her one or two other times. And I did, for several years later, I read an article that Larry McMurtry had written about Angie Debo and what she had meant to him. He decided when he was fairly young to get into writing because the book that he happened to accidentally find in the parking lot of stockyards down in north Texas, and it happened to be her history of the Muscogee (Creek) Indians, and he decided, hey, I could write something like this, maybe. And then he became quite a scholar of Angie Debo’s work, did write a nice little historiography of her work. And I went by and talked to him briefly, or I tried to interrupt him when he was down in Archer City, right next door. Later wrote him a nice long letter and so forth. And so anyway, Angie Debo has been important in my career. Just the thought. Also, I was somewhat instrumental in getting the Angie Debo Elementary School in the Edmond School District in Oklahoma City named after her. So I helped out with that as well. So that’s, you know, that’s the story behind that.
Thompson: What was your inspiration, or what drew you to writing your dissertation on Robert Owen?
Brown: Well, I had been a student at OSU as an undergraduate, and Norbert Manken was one of my favorite mentors there from when I worked on my master’s degree. He was my major advisor. He retired soon after that. In the course that he had in Oklahoma history, he had talked about Owen in early statehood, and so when I was hunting for a doctoral dissertation, I looked around and thought, well, who has not been written on and extensively? And I thought, well Owen would be a good topic. And my first naive notion was, I’ll write about an Oklahoma statesman and, he warned me, you may find out that you might not want to use that label “statesman.” If you, there may be more complications. He turned out to be right. But, that is, and then once I got into it, I, as Bob pointed out, or as you pointed out, I went to Panhandle State University first, and teaching there with a heavy load, having kids.
It took me a while to do the dissertation, and I traveled extensively. I went to Virginia, to the University of Virginia, Lexington, where Washington Lee is, in DC, at Yale University, Duke University, and the Jewish Archives in Cincinnati. And of course OU and the Historical Society. So I did a nationwide research because he did not keep his papers from his senatorial career, and so I had to kind of piece them together and, so that, once I got into it, it was intriguing because there are so many facets to him and his life.
Blackburn: Ken, something that intrigues me about Owen, how would you characterize his self-identity as a Cherokee? I can, you know, an introduction. In our conversation with just me and Trait, before I talked about how it, to me, anecdotally and in very maybe in a shallow way, but so much of what he did reflects what I know about the Cherokee people. How do you think he felt? Or did he write about his own identity as a Cherokee? And after you studied him so extensively, do you think that he really expressed the Cherokee way, especially of the mixed bloods, you know, pro-business, wanting economic development, but also trying to preserve that that identity?
Brown: Well, I found actually very little of that, of his attachment to being Cherokee in a strong way. More so from his mother, Narcissa Owen, who was a Chisholm and her maiden name related to the famous Chisholm family among the Cherokees. And he was, at least according to the Dawes Rolls, was one-sixteenth Cherokee. I am one-sixteenth Choctaw. And so, in terms of the blood lineage, as some would call it, is very little. And of course, he grew up and probably discussed this earlier, but he grew up in, Lynchburg, Virginia, was schooled there in Baltimore and then went to private schools and then went to Washington and Lee University and had a classic education. He was quite a student, finished in three years with the masters, awarded a master’s degree, as they called it then. And so he was well-educated, came from a prominent family within Lynchburg, his father being president of the railroad there and, so he came from, and living in the most prestigious mansion in Lynchburg, Point of Honor. And so there was very little about his upbringing other than maybe what his mother told him and so forth. In 1879, when he came to Indian Territory after his father’s death, few years after his father passed away, and he became the head of the Cherokee Orphan Asylum in Salina.
He quickly rose in the ranks there, largely because of his ability and education. And if you do a little arithmetic, you will find that at age 29, he became the head of the Five Civilized Union agency, Five Civilized Tribes agency. I look back when I was 29 and think, well, I was barely getting started at Panhandle State then. And so he was in charge of government operations for half of what is now Oklahoma. But in that time period, he did not necessarily favor the Cherokees, but he certainly, fit the bill in terms of well-educated Cherokees. It wasn’t because he grew up in the Cherokee Nation and was trained in Cherokee schools, but he stood out among them. Now, of course, when he ran for office, he pointed out his Cherokee lineage where it would help him. And, from what I can tell, there were a number of Cherokees, particularly of the more traditional Cherokees, who were not particularly fond of him because of many of the things that he did in terms of speculating in Indian lands, and taking land from untutored Indians, you might say. And, but so I think, and then what he does in Congress, of course, especially when he first arrived, there was a big noise about them being part-Indian, since he was only the second one in Congress, along with Charles Curtis from Kansas. And so he, I, my answer would be that that there was not a whole lot of embracing of the Cherokee heritage, although he certainly was capable of interacting with the the leadership with Chief Bushyhead, for instance, who was chief when he arrived in the late 1870s, 1880s, and that his mother had connections with. So it, it’s a hard thing to answer, but I would say in terms of speaking the Cherokee language, being involved in the in the culture in the major way, it was minimal. But in terms of interacting as a leader of the Cherokees was substantial.
Blackburn: you know, kind of a parallel might be Elias C. Boudinot. And there’s a good book just came out a couple of years about Boudinot, but he was kind of the same way, educated in the East, came back, used his connections with the tribe to become a businessman, a little bit probably more of a scoundrel, but there’s some parallels there in those two careers. I was thinking of that as you were describing that experience.
Brown: Right. Yes. And they linked up with each other in some of their, some of their activities as well. And, but he died much earlier than Owen did. Well, but, yes. And they connected particularly on the Cherokee Outlet issue of opening that Cherokee Outlet. They were involved in both together, trying to promote the notion that instead of opening it to non-whites, that it ought to be allotted to Cherokees. They kind of coauthored that concept in 1892–93.
Thompson: I’d like to get into, as we move into talking about the Federal Reserve and the creation of it, could you give us a sense of the economic situation that in the late 1800s, early 1900s? And, you know, it seemed like we faced these panics. We had the Panic of 1893, the Panic of 1907. And that really threw instability into our financial system, which seemed to be what Senator Owen and Representative Glass were trying to address with their legislation in 1912–1913. Can you talk about that turbulent period in the economics of that period of time?
Brown: Yes. You know, speaking of, Representative Carter Glass from Virginia, I might point out that he, and he was also from Lynchburg, and that he and Robert L. Owen knew each other as children. Glass was a couple of years younger than Robert L. Owen, but and, Samuel Untermyer, who was the major player in leading to the Federal Reserve, was also born in Lynchburg. And, you know, if you’re saying what state produced the people most responsible for the Federal Reserve Act, you’d have to say Virginia instead of Oklahoma for sure, because all three of those people, and then on top of that, of course, Woodrow Wilson was from Virginia. So, and in terms of state pride, that would be it. But the conditions of the, the conditions of the currency at the time, the banking system in the 1870s, 1873, there was a panic caused largely by the railroads going under. Then in 1893, was the next big one, and Owen was very active in the 1890s right after he left as Indian agent at 1889. The next year, in 1890, he helped organize the First National Bank of Muskogee and became the president for a decade. And so he was there when the crash occurred and pointed out in a book that he wrote in 1919, a little book talking about the Federal Reserve, he pointed out his background in this way, and so that caused him to wonder what needed to be done differently after the banks failed in ’93. And a large part of that had to do with some foreign issues as well. And the issue of gold and silver and conflict that occurred during the Populist Era, and then taking silver off the standard, and then no longer subsidizing the production of silver in 1893. And so he pondered what needed to be done differently.
And in 1898, he took a trip to Europe. Many of his trips that he took, including his honeymoon, also included business of this sort. So he talked to several major bankers in France and Britain, Germany, and various other countries in Europe, and looked at their central banking system to see how they operated. And then when he came back in 1899, 1900, he began writing extensively about what he thought needed to be done, and that was part of his narrative. That book that he wrote in 1919 was one of three books, short books, that he wrote that he was preparing to run for president in 1920. So of course, he was the hero of the little book that he wrote in explaining that he was the author. This was one of the things that upset Carter Glass a lot in 1919, because Carter Glass read what he wrote about him. And it was Carter, “The Honorable Carter Glass was entitled to very great credit for his able and admirable work on this measure.” And that was his long comment.
Thompson: They have a bit understated.
Brown: That’s right. And so Glass went berserk over that. And for the rest of their careers, they battled with each other of who was the real author. But, in any case, in 1899, he wrote extensively. In 1900, he prevailed upon James K. Jones, senator from Arkansas, whom he got to know from some of his activities and lobbying that he did as an attorney in Washington, and he prevailed upon Jones to add an amendment to what was called the Aldrich Bill. Nelson Aldrich was a senator from Rhode Island, the son-in-law of John D. Rockefeller, and was, a well, he was a favorite target of the anti-monopoly people because he often carried water for the banks and big businesses in New York. And so Owen asked that he add a component to that, that would have done some of the things that the Federal Reserve would later do, which would provide some liquid assets in times of stringency, when there was a downturn in the economy, and you needed inflation. Then he came up with a system of how to do that. And so prior to becoming elected US senator, he had had those experiences. Then after he was elected, of course, the same year he was elected is when the Panic of 1907 occurred, which caused another legislative crisis to try to figure out how to deal with it.
And in 1908, Congress passed the Aldrich-Vreeland Act, and in fact, Owen’s first speech that he gave, a meaningful, lengthy speech in the Senate, was an attack on the original version of that bill and an attack personally against Nelson Aldrich, the senator from Rhode Island. And he said, here are the weaknesses. Here’s what needs to be done instead. The way it was organized was that it for time, stringency that a number of national banks could come together and they could issue some temporary currency that had to be retired later on with penalty if you didn’t. And that currency could be flooded throughout the country. And he pointed out that once the panic occurs, it’s too late to start that process and too cumbersome. And particularly since there are over 6,000 national banks issuing currency, that getting that spread throughout the country was almost impossible.
Thompson: Yeah, and that’s a point that I want to pick up on, because I don’t think that that’s something that most of our listeners, if you don’t really study this, that you would probably be aware of. You probably think, well, we became a country in 1789, and we’ve always had a currency. And, you know, so this idea that banks would issue their own currency is probably foreign to most people. But if you look at the history of our currency in the United States, yes, we’ve always kind of had some form of United States currency, but it hasn’t been maybe all of that prevalent, and it’s changed over time. And currency would be issued by banks, too. So it was really kind of a fragmented system, correct?
Brown: Yes. That’s right. Each bank would have its own plates and produce its own prints on currency and distribute it. And there were, there were clearinghouses that would, let’s say you’re in Vermont, and you get something from Tahlequah, Indian Territory, from a bank there, and you don’t know, well, is this bank still operating? Is it sound? If I accept this money from this person who’s trying to deposit with me, will it work or not? And so there were clearinghouses, sort of like blue books or automobiles that we’ve used in more recent times, where you look and see how good is it. And, so it was very cumbersome and awkward. And that was one of the main points of switching to a common currency under the Federal Reserve is that you would eliminate that process and that fragmentation.
Thompson: Yeah. So if you look on your currency that you have in your pocket today, it’ll say it’s a Federal Reserve note,
Brown: Right.
Thompson: So, the Aldrich Bill, it had some weaknesses to it. And of course, we used to have a national bank in the United States, and Andrew Jackson killed that. And so we really didn’t have any tool or mechanism to be able to address these economic situations that would pop up over time. There wasn’t really the ability to do that, correct? Until we get the Federal Reserve.
Brown: That’s right. And that’s what the Aldrich-Vreeland Act of 1908 was a patchwork, a band-aid to try to deal with the current situation at the time. But it also created a National Monetary Commission, which was chaired by Aldrich, and had, I think about nine members of the Senate, nine members of the House that studied this issue to figure out what needed to be done, and that became the proposal from that was issued in 1912. And, and it favored large banks, and particularly those in New York City in the northeast. And so the, the Aldrich Bill was the first to be considered or first that was sent out for people to look at, but it was done at the tail end of the Taft administration, and there was the switch over from the Republican control of the presidency in the House and Senate to Democratic control. So the Democrats were now in charge after, in early 1913. So they outright rejected the Aldrich proposal that would have, it was was extremely cumbersome itself. There would be a national banking system, the reserve system, that would be made up of 46 different members from different categories of the economy, and only four of those would be represented inside the government. And the way it was engineered it indeed gave favor to the northeastern part of the United States and particularly to the New York banks. And so that’s the reason that the Democrats rejected it.
Thompson: When you have the blueprint for the Federal Reserve System that starts to come out and go public, what’s the reaction of the the banking and finance industry in the United States?
Brown: Well, that varied, and that was one of the problems. Now, one thing to keep in mind is that there was a consensus that something needed to be done. And once you start saying what needed to be done, that’s where you get the disagreement. But the fact that you, it was like a perfect positive storm in this case, because you had the Panic of 1907 creating the commission and people saying we need to do something at all levels in all regions of the country. And then you had the additional thing. You know, the Democrats are now in charge of all three branches of the government, or at least the Congress and the presidency, controlling that and wanting to prove to the world that they could run the government, since it had been decades and decades since they had had this. And so the Democrats were motivated to compromise if they needed to, more than the Republicans had been. And so, the differences in opinion included the small banks throughout the country that didn’t like the large banks. Often you would have banks in Oklahoma, Muskogee, or McAlester, Tulsa, or Oklahoma City. And those smaller banks would have to have relationships with banks in Kansas City, larger ones in Kansas City or St. Louis in order to be able to keep their operations going and get notes from them and borrow money from them to keep things going. And so they did not want a centralized system for sure. They did not want an all-encompassing central bank that would be in charge. They wanted regional banks, and the Aldrich Bill provided the regional banks.
But it was so cumbersome and so many of them, there were 15 to there would possibly be, but a lot of them be concentrated in one geographic area. And then there were the sort of the banks like Kansas City and St. Louis that were Dallas a little bit larger that would certainly not want the New York to be doing it. Then you had the populist-minded people, the followers of William Jennings Bryan and others who wanted inflation and wanted the remonetize, the remonetization of silver. And so those folks wanted more government control because they believed that the government would represent the people better than the banks would. And so you had all of those different, differing opinions all mixed in together. And then even among themselves, the various politicians like Glass and Owen would be jealous of who’s going to win the debate here and so forth. So, despite that, those conflicts, there was an overarching desire to get something done, both because the system needed it and among the Democrats because they had the chance to get it done.
Blackburn: What would have been Senator Owen’s relationship with President Wilson? Had they known each other very well before Wilson was elected president?
Brown: They had met a couple of times before and had communicated a little bit. They were not well-acquainted. Of course, I’m sure that, I’m not sure, but I would suspect, would suspect that, once they met each other, Owen pointed out to Wilson that he was a native Virginian as well. I would bet that $100 on that, but that they were, Wilson knew about him, respected him, and he respected Wilson from what I could tell. And both were wanting to get things done. So it was a matter of opportunism, positive opportunism among the two as well. Now, as time went by and that Owen carried water for him and did things for him, Wilson liked him more and more. And Arthur Link, who was the first great biographer of Wilson, pointed out that Wilson valued Owen very much. Maybe not at first, but certainly because he might not have known him well enough. But as time went by, he was one of his favorites in Congress.
Thompson: And ultimately the bills passed in December of 1913. It had 30 sections of law in it, and it basically, it sets up this idea that the Federal Reserve has five key functions. It conducts the nation’s monetary policy. It promotes system financial stability. It supervises and regulates financial institutions. It fosters payment and settlement system safety. And it promotes consumer protection and community development. And I got that right off the Federal Reserve’s website, just in case anybody’s curious about that. And the structure is, going back to your point, is there are these 12 Federal Reserve banks in these 12 Federal Reserve districts, and there’s a board of governors over the whole system. And these 12 banks acts, the best way I can describe it is, they’re the banks for the other national banks. And so they’re the ones that are helping control the flow of currency. And of course, most people today, if you see the Fed in the news, it’s all about interest rates, right, Dr. Brown?
Brown: Yeah. Yes. That’s what most people hear.
Thompson: So, you know, we’ve heard it a lot, back when, back after the pandemic, the Fed started to raise interest rates to control inflation, and I won’t go too much into an economic lesson out there for everybody. But, when you have a lot of currency in the market, that’s going to accelerate inflation. And so by raising interest rates, it makes it more expensive to buy things, and so you constrict the amount of currency in the market, and that helps to control the inflation. And so these are tools at the disposal to keep those old panics from coming back about every 20 years, correct?
Brown: Yes, and they have other tools such as either selling, putting US bonds that they control, the central bank controls US balance and can sell it to national banks, and thereby, take money out of circulation. Or they can purchase, those kinds of US holdings, US government holdings from individual banks, and that puts more money into the hands of the banks because they’re being paid money by. So there are there are tools like that that they use in addition to interest rates and a number of other things. But those are two of the major ones. And those regional banks, you’re right. They control, they were crafted in a way that might control the region for the people who are governors of those regional banks, like the one for Oklahoma is Kansas City, and it includes Kansas. Nebraska, Colorado, about seven or eight states or portions of states as well, and Missouri. And those bankers that help loan money in the regions know the economy of those regions, and that’s the advantage of that. So you have the central bank that sets rules overarching and the regional banks that implement them and respond to those tools that the central bank can use.
Thompson: In the end, how did Senator Owen feel about his work on the Federal Reserve?
Brown: Well, it’s a mixed bag, depending on the time frame. At first he was very proud of it. Of course, touted his role on it. He was up for reelection in 1918, for instance, and then in that little book that he wrote on the Federal Reserve Act in 1919, he explained how wonderful it was working and so forth. But then in the 1920s, after the war was over, and again, and of course, the war itself complicated things. It was probably good that the Federal Reserve started working about the time we entered the war, because they helped sell the bonds that helped finance the war. Yeah, and that was perhaps the most important function in those years. And there was more central control because during war time, central control is the name of the game. And so there was more central control and patriotism involved. But then after the war, the going theory among most big bankers and even medium-sized bankers was that you needed to, the economy was going too fast at the end of the war. It hadn’t yet started shutting down yet, so you had to shut it down, so they raised interest rates dramatically. And that helped cause the recession, and particularly in different regions of the country, like rural areas with farmers and so forth. They were run out of business pretty quickly because they had a double whammy of interest rates going up. Plus, they weren’t selling as much because there wasn’t much demand to work because the war was over.
At that point, Owen came in and said, they’re doing this wrong. This is exactly the opposite of what they should be doing. As the economy is slowing down, they need to start the inflation again, and so he saw them as being too in tune to what the big bankers wanted. The big bankers would say, we need to slow this down for a couple of years. It might cause unemployment elsewhere, but they’ll have to live through that, and then we’ll come back. And that was Owen’s attitude about what the big bankers were doing and then those who had influence with the central Federal Reserve board. And so he wanted more of a stable, kind of, instead of up and down of the economy, more of a straight line for the economy. And there’d be a slight increase in inflation over time.
Now, when Milton Friedman became one of the favorites in the Reagan administration, a conservative economist, he actually sided Owen and said Owen was exactly correct. And of course, Friedman’s criticism of the Federal Reserve was that it’s not scientific in the way that they do things, and they caused it to go up and down by their decisions. And if you just had a steady about 2.5, 3% inflation rate over time, then you could factor everything else into that rate. And so Owen was, that was the argument that he was making much earlier than Friedman did, that we need something even more stable than what these decisions are. And then, of course, with the big crash in 1929, 1930–31, Owen once again came back and said, you’ve done exactly the opposite of what you should be doing here in 1930 and ‘31. You’re closing more and more down, and a number of historians since then have said that that helped worsen the Depression, and some even said that actually caused the Depression. The increase in interest rates and the deflation that occurred after the crash on Wall Street.
Thompson: Well, I have to say, Dr. Brown, it’s been such a pleasure talking to you and getting the benefit of all your years of study and your insight into this. This has been absolutely fascinating.
Brown: Well, I like I said, I appreciate the opportunity to be here, and I’m doing my part here in Colorado to keep Oklahoma issues alive. If you saw the movie, My Big Fat Greek Wedding, and the father of the bride in that was from Greece, and he was constantly telling people how great everything is started with Greece and with the Greeks. They started it. Well, I do that here in Colorado. I’ll say, well, Casa Bonita, that started in Oklahoma, you know that, don’t you? How about the Gaylord Convention Center hotel out by the airport? Gaylord started in Oklahoma. Sonic, Oklahoma, shopping cart, Oklahoma.
Blackburn: Hobby Lobby. Yeah, on and on. Love’s. Yeah.
Brown: The parking meter and so forth. And my wife has to hit me in the shoulder when I’m doing that and being too obnoxious with people.
Thompson: We appreciate you being an evangelist for Oklahoma out there.
Blackburn: Well and I’m glad you can enjoy your family, your grandchildren, and your daughters out there, too. And that warms my heart when I hear your stories, picking up your grandkids. I hope to do that someday.
Brown: Yeah. And please come and visit me, and Trait, I’m in Oklahoma City again, we plan maybe coming back in the summer, I might drop by and get acquainted with you better.
Thompson: I would love to meet you in person, sir. That would be just great. Okay, well, we’re going to let you go, and we appreciate your time today.
Brown: Again, glad to do it. Thank you.
Thompson: Okay. Thank you.
Blackburn: Bye-bye. His personal integrity has come out in his work over the years. Angie Debo set a standard for all of us on ethics and in history. She told it like it was, even when it was not popular, and Kenny has followed that very closely in his career.
Thompson: Well, you know, to his comments at the end, you know, the saying, it goes something along the lines of, that democracy, democracy’s the worst system of government in the world, except for all the others. And I suspect that that plays into our view of the Federal Reserve too. You know, the Federal Reserve, you know, we could talk probably for another two hours about some of the flaws in the system, and certainly Senator Owen was pointing out some of the flaws in the system as well. But then when you talk about the successes that it’s had over the years too, you don’t want to start doing too many tweaks to it because, by and large, since it was created, we have enjoyed economic prosperity in the United States. Of course, we’ve had a few hiccups along the way. So I found this to be a fascinating conversation, and I learned a lot from this.
I do want to point out one before we close, a quote that Owen gave in a speech to a group of bankers in 1919. And he said, “Every businessman, banker, and capitalist knows what it is and what it has done. It is the best financial system the world has ever seen. It has made this nation and government and impregnable financial force and the strongest the mind of man has devised. That one measure won the war and enabled our finances to endure, without a quiver, every shock and strain.” So that was, of course, in that time, in 1919 when he was getting ready to run for president. But I think that’s a good quote to end on here about the view of the Federal Reserve.
Blackburn: Yeah. And I would encourage everyone to to learn more about Owen and E. C. Boudinot and a lot of those people who were kind of on both sides of the fence, exploitation, but also regulation and moderation. Oklahoma history is full of of colorful people, and Robert L. Owen is one of them.
Thompson: Well, Bob, it’s been a great time as always, and I look forward to our next discussion in February.
Blackburn: Thank you very much.
Thompson: You’ve been listening to A Very OK Podcast, hosted by Trait Thompson and Dr. Bob Blackburn. The podcast is produced by the Oklahoma Historical Society. Visit us at okhistory.org, and find us on social media by searching for @okhistory. I encourage you to purchase a membership to OHS to help us continue our mission to collect, preserve, and share Oklahoma’s unique and fascinating history.
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