Before The FED, There Was Leslie Mortimer Shaw: Iowa's Man At The Treasury

Leslie Mortimer Shaw

Leslie Mortimer Shaw came into the world in 1848 in Morristown, Vermont, a place that taught thrift, discipline, and that comfort was something other people had. He grew up believing you survived by grinding harder than the next man. That philosophy followed him west to Iowa, where ambition grew faster than corn.

Shaw arrived in Denison in 1874, opened a law practice, and married the schoolteacher. He served on boards, ran civic committees, and quickly built a reputation as someone who didn’t waste time or patience. People noticed. One Denison editor wrote, “Mr. Shaw has no talent for idleness; he is a steam engine disguised as a lawyer.”

 

By the 1880s, Shaw had taken over Denison’s banks and insurance companies. He studied financial systems with an intensity usually reserved for religious conversions. Currency debates, farm credit, banking power—these were the storms he wanted to steer. The local newspaper called him “a gentleman of firm will and iron reason,” a man who refused to back down once he decided he was right. Another paper noted, “He speaks of money the way a surgeon speaks of pulse—one wrong beat can kill the patient.”

 

In 1898, the Iowa Republican Party nominated him for governor. His speeches hammered stability, sound money, and predictable government. “Shaw speaks as if lecturing Congress from the steps of a barn,” the Des Moines Register wrote, half amused and half impressed. Voters responded. He won the election and walked into the governor’s office with the air of a man who already knew what needed fixing. One supporter said, “We did not elect a showman. We elected a mechanic with a toolbox.”

Mrs. Leslie Mortimer Shaw

As governor, Shaw approached Iowa’s problems like an engineer with a deadline. He tackled railroad abuse, tightened the state’s tax system, and brought order to budgeting. If something broke, he expected it repaired. If someone stalled him, he pushed harder. Legislators rarely saw him raise his voice, but they felt the temperature change when he was displeased. “Shaw did not shout,” one ally recalled. “He simply increased the pressure until everyone else adjusted.” A Democratic legislator complained, “He negotiates like a banker settling a foreclosure—calm, polite, and absolutely ruthless.”

 

His reform streak continued in a second term won handily in 1900. Iowa’s finances steadied, its regulatory systems matured, and its railroads faced rules they could no longer wave off. Shaw cared little for political theatrics. He wanted results. His fast, disciplined approach earned him respect across party lines, even among those who disliked him. A Cedar Rapids writer observed, “Governor Shaw wastes neither words nor minutes—both are currency too valuable for politics.”

 

In 1902, Theodore Roosevelt appointed him Secretary of the Treasury—a position usually filled by New York bankers or Washington insiders. Shaw was neither. He was a Midwestern policy brawler who believed the federal government should use its economic tools aggressively. When he entered the Treasury, the national financial markets were unstable, banks panicked at minor tremors, and the country had no central institution to control liquidity. Shaw improvised. Roosevelt defended him publicly, calling him “a man with the courage to act when action is required.”

 

He used Treasury funds like ballast, moving money into national banks when credit tightened and pulling it back when markets overheated. He extended bank credit terms, adjusted deposit schedules, and treated interest rates as levers instead of sacred objects. The New York Sun observed, “Secretary Shaw regards the Treasury not as a vault but as an instrument,” which was a polite way of saying he was rewriting the rules as he went. The Wall Street Journal added, “Secretary Shaw’s hand is everywhere, and whether one approves or not, one must admit the man keeps the wheels turning.”

 

Wall Street didn’t know whether to cheer or panic. Many historians credit Shaw’s interventions with preventing deeper crises in the early 1900s. Others accused him of destabilizing markets by acting alone. Both sides had a point. Shaw’s policies pushed the United States toward the idea that a central bank was necessary, a notion that would eventually give birth to the Federal Reserve. Whether or not he intended it, he helped lay the foundation. A later economist said, “Shaw governed the Treasury as if the Federal Reserve already existed—and he was the Reserve.”

 

Shaw home at Denison, Iowa

Shaw resigned in 1907 and entered the private financial world. He managed banks, lectured on economics, and stayed active in national Republican politics. He briefly pursued the presidency in 1908, but the party’s power brokers preferred men who spoke more softly and offended fewer people. Shaw lacked both traits. His bluntness had always been his strength and his weakness. One political writer joked, “Mr. Shaw would make an excellent president if the country ever asked for honesty at full volume.”

 

After politics, he continued advocating for stable banking laws and tighter control over national currency systems. He understood the country was drifting toward modern finance, and wanted it done with discipline rather than chaos. “A nation cannot prosper if its money shakes like a leaf,” he warned.

 

Shaw died in 1932 during the Great Depression, a crisis tailor-made for a man like him. He would have relished the chance to testify, lecture, scold, and reorganize. Instead, he watched the financial world collapse from the sidelines. As one Iowa editor wrote in his obituary, “Leslie M. Shaw spent his life arguing that America needed stronger financial guardrails. When they finally snapped, he was no longer in the driver’s seat.”