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Dawes, Charles Gateslocked

(27 August 1865–23 April 1951)
  • Edward A. Goedeken

Charles G. Dawes.

[left to right] Calvin Coolidge and Charles G. Dawes.

Courtesy of the Library of Congress (LC-USZ62-111450).

Dawes, Charles Gates (27 August 1865–23 April 1951), banker and vice president of the United States, was born in Marietta, Ohio, the son of General Rufus R. Dawes and Mary Beman Gates. His father served gallantly in the Civil War and later went into the lumber business and served one term in Congress. Dawes earned his B.A. (1884) and M.A. (1887) from Marietta College and his LL.B. (1886) from the Cincinnati Law School. In 1887 he moved to Lincoln, Nebraska, to practice law. He was an earnest opponent of the entrenched railroad powers, spending hours in court fighting discriminatory rail rates. His initial investments in real estate paid off, however, and he gradually became more sympathetic to conservative business views. For the rest of his life he would promote and defend the contribution of business and businessmen to the increasing wealth of the United States. He married Caro Blymyer of Cincinnati in 1889, and they had two children. After their son drowned in 1912, the couple adopted two more children. Although conservative, Dawes was always willing to hear opposing viewpoints. In Lincoln, Dawes became lifelong friends with John J. Pershing and William Jennings Bryan and, despite Dawes’s unwavering commitment to the Republican party, his respect for Bryan never diminished.

In the 1893 panic, Dawes suffered some financial reverses, from which he soon recovered, but he never forgot the lesson that a “ninety day note falls due.” In 1894 he acquired manufactured gas plants in La Crosse, Wisconsin, and Evanston, Illinois, where he established his home. Dawes maintained strong family ties, bringing his three younger brothers, Beman G., Henry M., and Rufus C. Dawes, into his business enterprises. By the time he was thirty-five Dawes’s shrewd business investments had made him wealthy.

Having known William McKinley from family connections in Ohio, Dawes corralled delegates for him in Illinois and then served as McKinley’s western treasurer during the 1896 presidential campaign. Dawes’s service was rewarded in 1897 with appointment as comptroller of the currency, from which he resigned in 1901 to run against Albert J. Hopkins for the Republican nomination for U.S. senator. After losing the nomination, he turned his attention from politics to banking as president of the new Central Trust Company of Illinois in 1902. During the next fifteen years he earned a national reputation in business circles speaking out on behalf of banking and trust reform. Dawes advocated insuring bank deposits, and during the trust-busting era of Theodore Roosevelt (1858–1919) he opposed condemning all corporations and trusts because of those few who abused the 1890 Sherman Anti-Trust Act.

In 1917 he obtained a commission as a major in the army, joining an engineering unit of the newly formed American Expeditionary Force (AEF). In France, Dawes’s old friend Pershing tapped him to head the General Purchasing Board, established to coordinate the purchasing of supplies by army agents in Europe. Dawes performed in exemplary fashion, and through his work and that of his board the AEF obtained over ten million tons of supplies from war-torn Europe. He also served on the Military Board of Allied Supply, which coordinated purchasing among the Allies. After the war he remained in Europe as a brigadier general and served on the U.S. Liquidation Commission. His vigorous defense of army purchasing before a postwar congressional investigating committee earned him the nickname “Hell ’n Maria Dawes.”

Back home, his banking position seemed too tame, and Dawes accepted Warren Harding’s invitation in 1921 to become the first director of the Bureau of the Budget. A firm believer in balanced budgets, Dawes implemented Harding’s election pledge to trim government expenditures wherever possible. Government purchasing requests were channeled through the Budget Bureau to reduce duplication and increase efficiency. During his year as budget director, Dawes cut expenditures by more than one-third. In 1922 he returned to Chicago and entered local politics, creating the staunchly patriotic Minutemen of the Constitution who opposed radicalism in organized labor.

Germany’s inability to meet its reparations payments in 1922 prompted the creation in 1923 of a Committee of Experts of the Allied Reparations Commission to oversee a revision of the payments schedule. The commission, chaired by Dawes, devised a five-year plan to stabilize the German economy and established a more reasonable repayment scheme. For his work on the “Dawes Plan,” he shared the 1925 Nobel Peace Prize with Sir J. Austen Chamberlain.

In 1924 Dawes was chosen to be Calvin Coolidge’s running mate after Dawes’s close friend and former Illinois governor, Frank O. Lowden, declined. While Coolidge stayed home, Dawes traveled thousands of miles campaigning against the Ku Klux Klan, the Democrats, and the radicalism of the Progressive candidate, Robert M. La Follette (1855–1925). Once elected, Dawes shocked the normally staid inaugural proceedings by demanding in his first speech that a limit be placed on Senate filibustering. His efforts to reform the Senate rules failed. Nonetheless, he worked diligently in the Senate fulfilling his obligations as presiding officer and, despite Coolidge’s opposition, actively promoted passage of the McNary-Haugen farm relief bill. He also rallied Senate support for the 1928 Kellogg-Briand Peace Pact.

Dawes refused to seek nomination for president in 1928 and spent his first months out of office in 1929 serving on a private commission devoted to reorganizing the finances of the Dominican Republic. In June 1929 Herbert Hoover (1874–1964) appointed Dawes ambassador to Great Britain, where he served until January 1932. He participated in pre-conference negotiations for the 1930 London Naval Armaments Conference and served as a member of the U.S. delegation.

In January 1932 Hoover appointed Dawes to head the newly formed Reconstruction Finance Corporation (RFC), which loaned federal funds to shore up the nation’s faltering economy. The pressing needs of his own struggling Chicago bank, however, required him to resign in June 1932 and return home. He reluctantly sought a large RFC loan to prop up the Central Republic Bank & Trust Company, which his bank became as the result of a merger. Although heavily criticized for this action, Dawes managed to stabilize Chicago banking during the grim days of 1932; his reorganized bank survived and eventually repaid its debt.

After 1932 and the election of Franklin D. Roosevelt as president, Dawes’s active political career was over. He remained in Chicago, working at his bank and performing a variety of civic duties. He spoke out against American involvement in World War II but otherwise stayed out of the limelight. He died in Evanston.

Charles Dawes regarded service to community and country as one’s highest calling. He matured in the age of big business, and as a self-made man he extolled the virtues of business in society. His gruff exterior masked a sentimental interior and a well-developed sense of humor. Although brusk, and sometimes profane, he was a good listener, charitable, and quietly religious. Six feet tall, thin, with brown eyes and hair, and seemingly always in a hurry, Dawes had little patience for long-winded speeches or endless meetings. In his own affairs he took control, whether in his bank, or on an international committee of banking experts, or with military officials. An amateur musician, he played the piano and flute and wrote the popular “Melody in A Major.” Dawes served his country and the Republican party in positions of national and international importance. The influence of the successful businessman on government during the first third of the twentieth century is ably represented by Dawes’s public career.

Bibliography

Dawes’s papers are in the Special Collections Department of Deering Library at Northwestern University. The Evanston Historical Society occupies his home in Evanston and contains some scrapbooks and other personal items. Record groups in the National Archives that contain relevant material include: Record Group 101, Office of the Comptroller of the Currency; Record Group 120, American Expeditionary Forces (World War I); Record Group 51, Bureau of the Budget; and Record Group 234, Reconstruction Finance Corporation. Dawes’s published diaries include: A Journal of the Great War (1921); The First Year of the Budget of the United States (1923); Notes as Vice President, 1928–1929 (1935); A Journal of Reparations (1939); Journal as Ambassador to Great Britain (1939); and A Journal of the McKinley Years (1950). His other publications include The Banking System of the United States and Its Relation to the Money and Business of the Country (1894), Essays and Speeches (1915), and How Long Prosperity? (1937). Two published journalistic accounts are Paul R. Leach, That Man Dawes (1930), and Bascom N. Timmons, Portrait of an American (1953). The best biography remains unpublished (a copy is at the Evanston Historical Society), John E. Pixton, Jr., “American Pilgrim: A Biography of Charles Gates Dawes” (1957).