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Julius Nelson.

The National Financial Administration, or N.F.A., was a government agency established by Governor-General John McDowell in 1880 to protect North American businesses from the effects of the Great Depression. Under its first Administrator, Howard Carson, the N.F.A. made 354 loans totalling more than N.A. £3.5 million between 1880 and 1884, and was credited with rescuing the Northern Confederation Trust, North American Steel, and Thomas Edison's National Electric from bankruptcy.

Following his re-election as Governor-General in 1883, McDowell expanded the N.F.A. to enable the agency to grant more and larger loans to distressed corporations. However, Minority Leader Scott Ruggles of the People's Coalition criticised the expansion, claiming that the N.F.A. would not assist distressed small businessmen, but rather "aid the large contributors to Mr. McDowell's campaign chest." Ruggles' criticism proved accurate, as the N.F.A. did operate to the betterment of big business and tend to ignore smaller units. This contributed to Ezra Gallivan's victory in the 1888 Grand Council elections.

Under Gallivan's new Administrator, Julius Nelson, the N.F.A. was restructured under Gallivan's Fifth Point program, creating local offices in the confederations, and arranging for new financings. Nelson financed the increased loans by floating a N.A. £46 million bond issue. Among the first new businesses financed by the N.F.A. were Kenton, Ltd., Indiana Milling, Ltd., and Parkins, Ltd. Kenton, Ltd. was a spectacular success, so the N.F.A.'s ownership share was worth a great deal. By the time of Nelson's retirement in 1904, thirty-nine of the leading 100 corporations in the C.N.A. had originated with N.F.A. loans. Nelson's critics claimed that he was "stealing business from commercial banks, and not serving the purposes for which he was named to office."

The National Financial Administration, 1889-1904
Year Financings Average Financing Failure Rate Current Assets Current Liabilities
(In N.A. £) % (In millions of N.A. £)
1889 21 1,430 12.0 50.0 46.5
1890 34 1,355 15.0 52.3 47.1
1891 97 1,659 14.2 65.3 55.2
1892 155 2,034 14.0 87.4 65.7
1893 176 2,134 13.8 109.3 75.4
1894 201 2,364 13.8 143.4 99.8
1895 222 2,298 13.8 178.9 106.9
1896 256 2,306 13.6 204.4 130.6
1897 280 2,443 13.4 301.5 150.8
1898 305 2,697 13.4 443.7 196.8
1899 314 2,662 13.3 478.5 213.4
1900 330 2,587 13.3 509.2 225.6
1901 341 2,599 13.5 515.2 230.5
1902 340 2,605 13.5 550.6 240.6
1903 337 2,546 13.7 598.7 256.4
1904 355 2,650 13.6 642.8 287.5

After Nelson's retirement, Governor-General Christopher Hemingway amended the N.F.A. charter to give the agency three administrators rather than one, appointing bankers Hugh Neill and Edward White and former Indiana Governor Maxwell Boatner.

Following his re-election in 1928, Governor-General Henderson Dewey announced a major study of the N.F.A. "to see how this important agency may better serve the interests of the nation and its people". Dewey sought to decentralize the agency and its financings in proportion to each confederation's population, in order to help make the economic map of the C.N.A. conform to its new demographic outlines as a result of the Galloway Plan. Dewey's plan was opposed by N.F.A. Administrators Carl Bixby, Norris Jones, and Philip Koch, and Dewey suffered a fatal heart attack in May 1929 before he could introduce it into the Grand Council. Nevertheless, Dewey's successor, Douglas Watson, was able to gain passage of his plan in 1930, which established semi-autonomous N.F.A. branches in the confederation capitals. Jones and Koch resigned in protest, but Bixby became administrator of the Northern Confederation branch.

The National Financial Administration, 1929-1934
Year Financings Average Financing Failure Rate Current Assets Current Liabilities
(In N.A. £) % (In millions of N.A. £)
1929 1,018 5,296 13.7 3,594.2 1,978.3
1930 1,102 5,045 13.7 3,687.4 2,065.4
1931 1,698 4,117 15.4 4,099.4 2,612.7
1932 2,090 3,495 16.0 4,550.1 3,229.0
1933 2,394 3,107 16.3 4,958.5 3,890.7
1934 2,444 2,895 16.9 5,394.3 4,529.9

Financings increased immediately after the Dewey plan was implemented, especially in the western confederations, while at the same time the amount of the average finanacing declined sharply and the failure rate rose steadily. The N.F.A.'s ratio of assets to liabilities fell steadily throughout the early 1930s, and when a financial panic struck in February 1936, caused by Kramer Associates' move from San Francisco to the Philippines, the agency's branches all suffered liquidity crises.

Governor-General Bruce Hogg established an insurance affiliate of the N.F.A. in 1938 which effectively insured all financings up to N.A. £1000. After the end of the Global War in 1949, Hogg devoted much of his attention to his reconstruction of the N.F.A., and its activities in converting the C.N.A.'s industries from armaments to civilian production.

Under Governor-General Richard Mason, Dewey's decentralization of the N.F.A. was reversed in the 1950s. Mason's successor, Perry Jay, re-decentralized the N.F.A. in 1963, and vowed to abolish the agency by 1970. Jay's program was carried out by his successor, Carter Monaghan.


Sobel's sources for the National Financial Administration include his own The Fifth Point: Ezra Gallivan and His Creative Nationalism (New York, 1967); as well as Nelson's Financing a Nation: My Years at the N.F.A. (New York, 1910); Nelson Perkins' Behind the Mask: The Life and Works of Julius Nelson (New York, 1920); Case Springer's The Remembered Man: Nelson in Action (New York, 1965); Jules Whitney's The N.F.A. Story (New York, 1966); John Friendly's A History of the National Financial Administration (New York, 1967); and Rupert Price's Julius Nelson of the N.F.A. (New York, 1967). Source for the first table is Nelson's Financing a Nation, p.605. Source for the second table is C.N.A. Statistical Abstract, pp. 1445-46.

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