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  5. Twentieth-Century Economic History
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Twentieth-Century Economic History

Paper Session

Saturday, Jan. 4, 2025 8:00 AM - 10:00 AM (PST)

Hilton San Francisco Union Square, Union Square 6
Hosted By: Cliometric Society
  • Chair: Kris Mitchner, Santa Clara University

Operation Paperclip: Nazi Scientists and U.S. Innovation

Bang Nguyen
,
University of Bayreuth
Petra Moser
,
New York University

Abstract

After WWII, Operation Paperclip recruited German scientists to advance US technological capabilities in rocketry, space technology, and nuclear physics. Many of these scientists were long-standing members of the NSDAP, and some were convicted war criminals. We explore how these scientists influenced US science and whether their status as Nazis hindered collaborations with American scientists. Comparing changes in patenting in pre-1947 fields of Paperclip scientists to fields of interrogated scientists who remained in Germany, we find that US invention increased by at least 27 percent in Paperclip fields. Regressions which use pre-1947 fields of German scientists who were taken to the USSR after the war as an instrument for Paperclip fields confirm a significant increase in US invention. To identify Nazi scientists, we match Paperclip scientists with archival data on NSDAP memberships. We find that political ideology – whether the scientist joined the party before or after the NSDAP took power in 1933 – did not influence collaboration with American scientists, if Nazi scientists were highly published.

How Much Monetary Stimulus Could the Fed Have Provided in the Great Contraction?

Gabriel Mathy
,
American University

Abstract

Friedman and Schwartz (1963) famously argued that the Federal Reserve’s failure to stem the collapse of the money stock (and with it, the US banking system) was the primary reason for the U.S. Great Depression. This argument assumes that the Fed was legally able to expand the money stock as a modern central bank could. The Fed was constrained by the gold standard, as each Fed branch had to keep a backing of at least 40% of its Federal Reserve Notes outstanding in gold. While the US had significant “free” gold reserves, an expansionary monetary policy would push this ratio closer to the legal minimum. Moreover, the Federal Reserve System was set up so that all new Federal Reserve Notes had to be backed by either gold or “eligible paper” that had been discounted. Before this constraint was loosened in 1932, this constrained the Fed’s ability to conduct open market operations, which would have created new monetary base, including Federal Reserves notes, in exchange for government bonds. As Treasury bonds were neither gold nor eligible paper, the Fed needed banks to discount paper to increase lending. I calculate how large open market operations could have been from 1929-1932 given these constraints, and provide some estimates for the maximum impact on the monetary stock. Unconstrained, the Fed could have done a lot more to mitigate the Great Depression, but legal constraints on its operations meant that the Fed’s hands were tied.

Pollution-Income Tradeoffs of Industrialization: Evidence from World War I

Mark Van Orden
,
University of California-Irvine

Abstract

This paper examines the pollution-income tradeoffs associated with steel industry growth in Ohio induced by the onset of World War I. I combine individual-level and spatially-fine infant mortality data, city-level public water supply data, and newly digitized steel production and plant location data, to estimate the effect of rapid industrial growth on infant mortality risk from 1909-1925. Increased demand for steel during the war led to disproportionate wage growth for steelworkers, but exposed cities specializing in steel to increased water and air pollution. Using a difference-in-differences identification strategy, I compare infant mortality risk in steel cities with similar manufacturing cities. I further exploit differences in drinking water sources to disentangle the effects of water and air pollution. Steel growth imposed increased mortality risk in cities supplied with surface water, but had no effect in cities supplied by groundwater. Despite the wage benefits, the consequences of steel growth were most severe for households employed in the steel industry. These findings underscore the inequalities engendered by industrial growth.
JEL Classifications
  • N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
  • N9 - Regional and Urban History