The day Keynes read his own obituary
70 years ago this month, John Maynard Keynes nearly died.
It was about two thirds of the way through the Bretton Woods conference in New Hampshire. The delegates were within a whisker of agreeing upon a new deal on currencies and money which would, once and for all, repair the financial system after the Great Depression (and, they maintained, would prevent World War Three). But everyone was still very much on edge: if the deal fell apart at the last minute it could mean a return to financial chaos for many years to come.
As the journalists went down to the hotel bar for their habitual post-dinner drink, a rumour started to spread around the room. Keynes had died. The man with the news was a reporter from Reuters, who had, he claimed, got it from the best source of all: Keynes’s wife Lydia.
The grand old man of 20th century economics had collapsed from a heart attack as he rushed from a meeting with US Treasury Secretary Henry Morgenthau (about shutting down the BIS, as it happened). He had been advised by his doctor to avoid taking the stairs and only to use the elevator. The problem was (as you can see in the plan below), there was only one elevator, on the other side of the building, and Keynes was a man in a hurry. So he ran up the service staircase instead.
By the time he reached his room, he was “noticeably puffed”, according to this letter latterly written to a newspaper by his colleague Nigel Ronald (click here for the full thing). It was, he wrote, a “sharp attack”. And while Keynes himself tried to play down the severity, repeatedly joking about it whenever anyone asked, it was clear that he was barely clinging to life.
He had suffered a number of heart attacks in recent years, and while his doctor, Janos Plesch (nicknamed the Ogre for his rather brutal medical remedies) had made some progress in getting him on his feet, he was far from healthy. His colleague Lionel Robbins wrote in his diary that “‘I now feel that it is a race between the exhaustion of his powers and the termination of the conference.”
And when news of the attack reached the Treasury and the Bank of England back home, they were deeply panicked. A number of cables were sent across to the UK delegation at the hotel, including this one from the Chancellor:
And this one from the Bank of England Governor, Lord Catto:
As it was, Keynes recovered from the attack. According to a letter he sent to Colin Clark of the Bureau of Industry, Australia, not long afterwards, “This was due to a false report by Reuter. By the time it reached Germany, the rumour said that I was dead and I am told I received most satisfactory obituaries!”
However, his health, already on the precipice, would founder in the following months. By 1945, when he was negotiating the Anglo-American post-war loan, he was even more ill. He suffered another major heart attack on the way home from the Savannah conference that officially created the IMF and World Bank. He died shortly afterwards.
More on this, and the conference, and the economics behind it, in my book, The Summit.