By Evan Sparks
A century ago, in March 1925, Charles G. Dawes was sworn in as vice president of the United States. Being elected vice president of the United States—as Dawes was, alongside Calvin Coolidge, in a landslide—is usually a career pinnacle for an American politician. Dawes’ vice presidency turned out to be more of a footnote in his eventful life.
In addition to being vice president from 1925 to 1929, Dawes was the youngest ever comptroller of the currency, the head of logistics for the American Expeditionary Forces in World War I, the first head of the federal Office of Management and Budget, a winner of the Nobel Peace Prize, the first head of the Reconstruction Finance Corporation during the Great Depression—and the only vice president ever to write a No. 1 single (“It’s All in the Game,” a 1951 song set to a tune composed by Dawes).
And through it all, Dawes was a banker, one of the most influential bankers in American history. In fact, his vice presidency was the last time that a banker would be elevated to either of the two highest offices in the land. (As noted in the ABA Banking Journal at the time of Dawes’ elections, three previous vice presidents—William Wheeler, Garret Hobart and James Sherman—had worked in banking.) But despite Dawes’ accomplishments, his intersecting interests in banking, politics and business generated inevitable conflicts of interests—conflicts that were eventually borne out in scandal.
Thus, at this centennial moment—and in this 150th anniversary year for ABA—it’s worth reflecting on the fascinating and complex life of Charley Dawes.
Beginning a life in business
Charley Dawes was born in 1865 to a locally prominent family in Marietta, Ohio, then a prosperous town on the Ohio River. His grandfather had founded a bank and the family was very politically active. The unusually intelligent Dawes went to college and then law school, graduating from the latter at 21, and rather than settling down in Marietta, he went west to find his future in the future of the country.
Dawes set out for Lincoln, Nebraska, where he opened a successful law practice. “He pretty quickly realized that the money wasn’t going to be made in doing wills, trusts and business transactions,” says Annette Dunlap, the author of the biography Charles Gates Dawes: A Life, in an interview. He began to make investments in real estate and in banking, and within a few years he realized he needed to move to a bigger city to match his ambitions. Dawes chose Chicago, which he would call home for the rest of his life.
Big banking ideas
The Panic of 1893 was a disruptive moment in the U.S. economy. The most serious recession prior to the Great Depression, it resulted in the bankruptcies of 15,000 companies—including some of the largest railroad lines—and the failure of 500 banks. As many as one in five American workers was unemployed at the peak of the panic. Not even 30 years old, Dawes formulated some ideas on how to prevent a similar panic and published them in a short book called The Banking System of the United States.
Dawes proposed two main approaches: a gold standard and what we now know as deposit insurance. “The way that Charley posed it in the book was that it would be a tax on the bank based on the value of its deposits,” says Dunlap. “That tax would become a form of insurance.” Here’s how Dawes described it:
There is one law, however, which has already been considered somewhat in Congress, the passage of which, in’ a proper form, seems to us of vital importance. That law is one which should levy a tax upon National banks for the purpose of creating a fund to be held by the United States Treasury for the re-imbursement of depositors in failed National banks. National banking statistics show that a fund of the necessary amount would soon be created by a comparatively small tax upon each National bank. The Government, in the interests of the fund, would, of course, take an assignment of the claims of depositors against the assets of the failed institution.
Dawes also proposed a national entity to oversee interbank exchanges and that would have some say in monetary policy. “He was ahead of his time,” says Dunlap, who points out that everything Dawes proposed came to pass—the gold standard under President William McKinley, the establishment of the Federal Reserve in 1913 and eventually the first federal deposit guarantee system in 1933 with the FDIC. “Basically everything that Charley lays out eventually happens and is now a part of today’s current banking world.”
Not long after Dawes’ book came out, McKinley was elected president. As a prominent McKinley surrogate in Illinois, Dawes expected to get a political appointment. In 1898, at the age of 32, he was named comptroller of the currency, a role he held until shortly after Theodore Roosevelt became president in 1901.
Dawes’ tenure as comptroller was not free of controversy. According to business historian Raymond Vickers, his political rivals alleged that he had frittered away depositors’ funds by hiring political allies as attorneys to represent failed banks in receivership. When he returned to Chicago, he ran unsuccessfully for Senate, then put politics aside to start the Central Bank and Trust Company. In an era where the line separating banking and commerce was blurrier to nonexistent, Dawes also began investing in manufactured gas utilities. He chose a key moment to do so—electrification was replacing gas for interior illumination. “Charley was nimble as a businessman and he turned that into what today we would call the natural gas business,” says Dunlap. “He was able to make a conversion and then promote natural gas as a heating fuel.” He and his brothers built a vertically integrated set of businesses by investing in oil production to generate the raw material for the utilities, and Dawes Brothers Inc., the holding company for the Dawes’ business interests, ultimately became the source of Charley’s significant wealth.
The Great War
Dawes had lived his life during a long period of peace, punctuated only by the Spanish-American War, which occurred while he was serving as comptroller. So it struck many around him as a surprise that in 1917, Dawes—a 51-year-old husband and father of two—enlisted in the Army as a private. However, Dawes did not stay a private for long. An old acquaintance from his Nebraska days, General John J. Pershing, was made commander of the American Expeditionary Forces. Pershing faced a major logistical challenge in entering the war. Apart from the Mexican War, the U.S. Army outside the borders of the United States—and American forces had never fought a land war on another continent, separated by an ocean still crawling with German U-boats seeking to sink allied shipping.
To navigate the logistical challenges, Pershing tapped Dawes as quartermaster for the allied forces. “He’s the person who is responsible for securing all the necessary supplies,” says Dunlap, “Food for the troops, material to build shelters for the troops, gasoline for the the Jeeps and the tanks, keeping the machinery maintained.” She points out that while World War I was the first mechanized conflict, it was the last one in which mounted cavalry played a role. “So you also have to take care of horses, too. And Charley is responsible for the entirety of the war materiel that is necessary for the United States to prosecute the war.”
The role honed the diplomatic instincts of Dawes—who was nicknamed “Hell and Maria” for his liberal use of profanity and for his plain temper—in trying to source supplies from and manage the demands of our French and British allies. “He has to find ways to assuage their egos and their senses of superiority that could very easily just undermine and derail any efforts to become a truly allied expeditionary force,” Dunlap explains.
Peak of influence
The war made the careers of many of the leaders—Pershing became America’s first “general of the armies” and became a national celebrity. For coordinating the postwar humanitarian relief, future president Herbert Hoover became known around the world. And Dawes returned home as a brigadier general and with the sense that he could write his own ticket in Republican politics.
With Warren G. Harding’s victory in 1920, Dawes became the first head of the new Bureau of the Budget. The federal budget had grown substantially, as it always does during wartime, and Dawes did to the federal budget what Elon Musk and DOGE are doing in 2025: sliced out what he sees as spurious and duplicative spending, resulting in a balanced budget. After a year in the role—a job that would in the future become a cabinet-rank position—he saw his work complete and he returned to banking in Chicago.
The next few years saw Dawes being asked to take on high-level diplomatic tasks that called on the connections and goodwill he had earned in Europe during the war. When the struggling German economy failed to generate enough funds to pay its reparations to the Allied powers, France seized Germany’s industrial Ruhr heartland, raising concerns about the outbreak of a new war. The Dawes Commission was sent to Europe to negotiate a new solution. The commission renegotiated the payment plans, allowing Germany to reinvest in rebuilding its industrial capacity in order to pay its reparations. They designed what eventually became known as the triangle flow of capital.
The Dawes Commission plan was not successful in the long run—spoiler alert: World War II breaks out—but it averted war in the immediate term. In 1925, Dawes was awarded the Nobel Peace Prize for his work on it. (At the time, the Peace Prize was usually given for peacemaking efforts in the immediately preceding year or two, rather than as the lifetime achievement award for humanitarianism that it principally is today.)
Now a bona fide national celebrity, the Republican National Convention selected Dawes to run alongside Coolidge in 1924. Presidential nominees did not choose their running mates, and Coolidge and Dawes were always relatively cool toward each other. While Dawes accepted the nomination, he ended up not particularly liking the job. When presiding over the Senate, he was frustrated by the filibuster procedure, seeing endless debate as a waste of government resources.
He did not endear himself to the Senate, either. He barnstormed the country in a futile effort to promote filibuster reform and then undermined his case when he missed a tiebreaking vote on one of Coolidge’s nominees because he was napping at his hotel. (Despite hustling over to the Capitol, one senator switched his vote before Dawes arrived, resulting in the nomination failing.)
Dawes seemed relieved to no longer be vice president at the end of his term, Dunlap says. Under Hoover, Dawes took up the post of ambassador to the United Kingdom, where he had a front-row seat for the deterioration of peace in Europe. He participated in negotiations to design a new plan to deal with the challenges of reparations and war debt, and this plan resulted in the creation of the Bank for International Settlements in Basel, Switzerland—best known today as the place where bank supervisors get together to do their best to harmonize financial rules around the world. But ultimately, these efforts failed. Watching the collapse of peace in Europe as Hitler rose to power was a deep grief to Dawes.
The final chapter
Amid the widening depression and banking crisis in 1931 and 1932, Congress created the Reconstruction Finance Corporation to serve as a lender of last resort to troubled banks and businesses. Hoover summoned Dawes back from London to be the first president of the RFC.
But the Dawes-owned bank was also in trouble. Dawes was a major lender to Samuel Insull, a utility magnate who had rolled up a massive electricity-generation empire. Dawes not only financed Insull’s businesses, the two men served on various of each other’s boards. Insull overextended himself, and the value of stock in Insull’s companies began to plummet. But the Dawes bank continued lending to Insull, right up until he went bankrupt in April 1932. Insull fled the country. “He just leaves Charley with trying to figure out how to keep his own bank solvent in the wake of the default of one of his absolutely largest creditors,” says Dunlap.
However, in the deeply researched book Panic in the Loop, Vickers argues that Dawes used his position at the RFC to protect his bank from losses. By the end of June 1932, Vickers writes, the RFC had approved 130 loans amounting to $113 million to 63 Chicago banks. Of this total, $90 million went to the Dawes bank. Millions more went to correspondent banks of Dawes’ bank that were also at risk because of the weakness of the bank’s condition. Dawes abruptly resigned from the RFC and returned to Chicago, where the crisis was to a head in a six-day run later in the month of June. In that one week, Dawes saw 14 percent of deposits disappear.
Dawes contacted the RFC and asked for a $16 million loan—Vickers notes that this loan would have been improper give the state of the bank and the loan size, so “Dawes did not even bother to fill out a loan application.” The Dawes bank was technically insolvent. Two days later, he upped his ask to $95 million, paired with an implicit threat to liquidate his bank and plunge Chicago and the Midwest into an even deeper crisis. With Hoover’s encouragement, the RFC board approved the loan, which amounted to more than three times the (heavily inflated) book value of the company, according to Vickers.
The loan approved, Dawes then immediately set to liquidating the old bank and organizing a new one under the name City National Bank and Trust. Shareholders were wiped out in the process. Dunlap notes that “ultimately he is successful in keeping the bank solvent and keeping the bank operational all through the Great Depression, which in turn helped other Loop banks to be able to stay successful.” But the coziness of the transaction caused a scandal at the time and became a campaign trail talking point for Hoover’s political enemies.
Dawes remained active in banking but not in politics until his death in 1951. But the RFC loan was never fully repaid; by 1943 it was written off with $23.2 million left to return to the taxpayers, according to Vickers.
Dawes was a complex man—a wizard at organizing men, materiel and business activity; a visionary who could see the needs of the future; but also one who, when it came to it, put his own financial interests first and saw no apparent conflict in doing so. For better or for worse, Dawes’ life is one full of lessons for today’s financial professionals.
