Otto Niemeyer

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Sir Otto Niemeyer
Lindfield, Sussex, England
EducationBalliol College, Oxford
OccupationBanker
Known forDirector of the Bank of England (1938–1952)
Spouse
Sophie Niemeyer
​
(m. 1910)​

Sir Otto Ernst Niemeyer

KCB (23 November 1883 – 6 February 1971) was a British banker and civil servant. He served as a director of the Bank of England from 1938 to 1952 and a director of the Bank for International Settlements
from 1931 to 1965.

An Oxford graduate, Niemeyer began working for HM Treasury in 1906 and rose rapidly through the ranks, finishing his time there as controller of finance (1922–1927). He was recruited to the Bank of England by Montagu Norman, and represented the bank at the League of Nations and on a number of missions overseas. His visit to Australia in 1930 contributed to a political crisis that resulted in the Australian Labor Party split of 1931 and the collapse of James Scullin's government.

Personal life

Niemeyer was born in

Lindfield, Sussex, dying there in 1971 at the age of 87.[1]

Career

Niemeyer c. 1927

Treasury

Niemeyer joined

Basil Blackett. He held that position until 1927, serving as the chief adviser to the Chancellor of the Exchequer on financial matters. He took Blackett's place on the financial committee of the League of Nations. According to Frederick Leith-Ross, Niemeyer was "the outstanding Treasury official of the post-war years". His advice was instrumental in the introduction of the British Gold Standard Act 1925, which saw the country return to the gold standard. He left the Treasury at the age of 44, feeling he could advance no further within the department.[1]

Bank of England

Niemeyer was recruited to the Bank of England in 1927 by

Cameron Cobbold, and was briefly mooted as successor to Norman in 1944; his candidacy was vetoed by Winston Churchill. He often filled a sort of diplomatic role for the bank, touring a number of different countries in order to provide advice to foreign governments and check up on the bank's debtors. In this capacity he toured Australia and New Zealand (1930), Brazil (1931), Argentina (1933), India (1936), and China (1941).[1]

Advice to Australia

Niemeyer in Australia in 1930

Australia had accrued substantial debt, mainly from Britain's independent banking sector, by the late 1920s – partly as a result of Prime Minister Stanley Bruce's "Men, Money, Markets" economic strategy, and partly because of the large war debt established during

Commonwealth Bank of Australia and agreement by Prime Minister James Scullin
, who hoped to use Niemeyer's advice as an affirmation of his government's financial policy.

Scullin announced the visit in Parliament on 19 June 1930:

"The Commonwealth representative in London has for some time been in close consultation with the Bank of England and other financial authorities with a view to finding a solution of the growing difficulties of providing exchange to cover Australian payments oversea. At the same time the Australian Loan Council has been in close consultation on the same subject with the Commonwealth Bank and the associated banks in Australia. The Government and the banks have already taken important corrective measures for adjusting the trade balance, and the banks have materially assisted the Australian governments to secure exchange on London. The Commonwealth Government is determined that the necessary steps shall be taken to meet promptly all Australian oversea obligations, and as the Bank of England has expressed its willingness to assist Australia to find a solution of its present difficulties the Government and the Bank have mutually agreed that there should be consultation in Australia between a representative of the Bank of England, the Commonwealth Government and the Commonwealth Bank Board. A representative of the Bank of England, Sir Otto Niemeyer, will accordingly visit Australia. He left London yesterday accompanied by an economist and an officer of the Bank of England."[3]

Economic historian Alex Millmow has commented that, when Niemeyer, his adviser Professor Theodore Gregory, and assistant Raymond Kershaw (an Australian economist) arrived in July 1930 they were unaware of the political storm they were to cause, for Niemeyer would bring English orthodox economics down on Australia's head. The high point of Niemeyer's tour was his address at the Melbourne Conference of Commonwealth and State leaders, where he said that the 'cold facts must be faced' ... 'In short, Australia is off budget equilibrium, off exchange equilibrium, and faced by considerable unfunded and maturing debts both internally and externally, in addition to which she has on her hands a very large program of loan works for which no financial provision has been made'. He warned Australia had two years 'to get its house in order' before a tranche of external debt matured in 1932. He believed Australians were too optimistic about the country's prospects.[4]

He was critical of Australia's overconfidence and essentially said that Australia was "living beyond its means" and had become prosperous through "mistakes"; that Australians would have to "accept a lower standard of living"; that Australia should continue to exist only as a means to supply Britain with goods; and that its protectionist attitude was deviating Australia from its true purpose.

The federal and state heads of government gave mixed responses to Niemeyer's plan. The governments of Australia later met to negotiate a compromise in 1931, known as the

anti-Semitism (it being wrongly assumed that he was Jewish). He was seen as promoting the interests of wealthy overseas bankers at the expense of the Australian people, who were struggling to cope with the Great Depression
.

Other activities and honours

Outside the Bank of England, Niemeyer was a director of the

Knight Grand Cross of the Order of the British Empire (GBE) in 1927.[1]

References

  1. ^
    doi:10.1093/ref:odnb/31501. (Subscription or UK public library membership
    required.)
  2. ^ Documents of German Foreign Policy 1918-1945 by an editorial committee, Her Majesty's Stationery Office, London, 1953, p.905-6
  3. ^ HofR Hansard 19 June 1930
  4. ^ Millmow, "Niemeyer, Scullin and the Australian Economists", Australian Economic History Review, vol 44 no 2, July 2004 p. 151.

Further reading

  • Attard, Bernard. The Bank of England and the origins of the Niemeyer mission, 1921–30, University of London, London, 1989.
  • Hughes, W. M. Sir Otto Niemeyer's Report: Bond or Free – Reply by W.M.Hughes, William Homer: Sydney, 1930.
  • Macintyre, Stuart. The Oxford History of Australia – Volume 4 1901–1942 – The Succeeding Age, Oxford University Press, Melbourne, 1986
  • Millmow, Alex. Niemeyer, Scullin and the Australian Economists, Australian Economic History Review, vol 44 no 2, July 2004.
  • Robertson, J. R. Scullin as prime minister: seven critical decisions, Labour History, no. 17, June 1970.

External links

Honorary titles
Preceded by
High Sheriff of the County of London

1945–1946 		Succeeded by
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