The Money Trust

19 Dec 1912

The hearing

On 19 December 1912 J. P. Morgan sat before a House subcommittee chaired by Arsène Pujo of Louisiana and was questioned by its counsel, the New York lawyer Samuel Untermyer. Asked whether one man could control the nation’s money, he said “All the money in Christendom and all the banks in Christendom can not control it.” On credit, he said it rests on character: “Before money or anything else. Money can not buy it.” This story follows the bankers and steelmen the committee mapped, and what the record shows happened where their companies and clubs worked.

28 Feb 1913

The map of boards

The report listed who sat on whose boards. One bank on its map, the National City Bank, had Henry C. Frick, J. P. Morgan Jr. and William Rockefeller among its directors; William held 10,000 of its 250,000 shares and John D. Rockefeller 1,750. The majority found no written pact, but “surprisingly many of the elements of such a combination exist”, and that the community of interest it defined as a money trust “exists in this country to-day”. The minority found no “Money Trust” but “a dangerous concentration of credit”. A seat on a board is a connection, not evidence of any act.

341 directorshipsHeld in 112 corporations by men of J. P. Morgan & Co. and four banks grouped with it, by the Pujo report, 1913

31 May 1889

The lake

In the hills above Johnstown a private club of Pittsburgh industrialists owned a dam; the National Park Service’s member list names Andrew Carnegie and Henry Clay Frick, but its FAQ names Colonel Elias Unger as the club’s president in 1889, and no source read here says either man decided anything about the dam. The Park Service says “The club spent $17,000 repairing and rebuilding the dam”. The dam failed on 31 May 1889. The club was never held legally responsible, though public opinion blamed it; the only successful suits were against the Pennsylvania Railroad, over lost property. The engineers’ later arguments over the cause are not covered by the sources read here.

2,209Death toll in a list printed fourteen months after the flood. The National Park Service says the true number was probably well over 3,000

6 Jul 1892

The barges

The Homestead works belonged to the Carnegie Steel Company, chaired by Henry Clay Frick. When the union’s contract ran out in 1892, Frick arranged for 300 Pinkerton guards; he told Congress the county sheriff “was powerless to give us the protection which we should have”. On 6 July the guards came upriver on two barges and strikers “pinned the Pinkertons’ barges in a withering crossfire”; witnesses before the House disagreed about who fired first. The marker counts seven strikers and three Pinkertons killed, and quotes a guard: “We were clubbed at every step”.

11 Jul 1892

Two accounts

Carnegie was in Scotland. The state’s marker says “both Henry Clay Frick and Andrew Carnegie agreed that when the contract expired in July 1892, they would break the union”, and that “Carnegie left detailed instructions with Frick before leaving for Scotland”. Carnegie wrote: “No pangs remain of any wound received in my business career save that of Homestead. It was so unnecessary. The men were outrageously wrong.” In 1915 he told a federal commission he “wired at once that I would take the first steamer home, but was requested not to come”. On 12 July the state militia arrived; the marker calls it “a force of occupation”, and local officials jailed the strike leaders.

Jul 1894

Nothing to arbitrate

At Pullman, Illinois, the company was employer and landlord. Wages were cut by about a quarter; the workers’ committee told the Strike Commission that Mr. Pullman said he “could not raise our wages nor lower our rents”. The Commission wrote that the company “had a legal right to take this position” but that a rent cut was “fair and reasonable under all the circumstances”, and that it “maintained that there was nothing to arbitrate”. President Cleveland sent 1,936 federal troops to Chicago; separately, “United States deputy marshals, to the number of 3,600, were selected by and appointed at request of the General Managers’ Association” and paid by the railroads.

about 25 per centAverage wage cut at Pullman before the strike, as the U.S. Strike Commission found, 1894

8 Feb 1895

The gold

By early 1895 “bets were being taken on Wall Street as to exactly when the Treasury would run out of gold and default”. J. P. Morgan went to Washington uninvited; Cleveland at first refused to see him and met him the next morning. The same day it was made, 8 February, Cleveland told Congress of the contract: gold coin for 4 per cent bonds, “At least one half of the coin so delivered was to be obtained in Europe”. American Heritage notes “intense criticism from the left”; Cleveland wrote that the syndicate’s agreement “required of them such labor, risk, and expense as perhaps entitled them to a favorable bargain”.

8 Feb 1895

A public contract

Four firms made the 1895 contract: J. P. Morgan & Co. for itself and J. S. Morgan & Co. of London, and August Belmont & Co. for itself and N. M. Rothschild & Sons of London. American Heritage says Morgan “and the Rothschilds, the two most powerful forces in international banking at that time, would purchase 3.5 million ounces of gold in Europe”. That is documented, and it was not secret: the President told Congress the day it was signed. The story that the Rothschilds secretly control governments is a conspiracy theory, false and antisemitic; Britannica traces its first wide version to an 1846 pamphlet and says “it was both false and dangerous”, and the Holocaust Museum writes that “Such outliers gave rise to distortions and lies about Jewish wealth”.

Mar 1901

The sale

By Carnegie’s account he had already “resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution” when, in March 1901, Morgan let it be known through Charles Schwab that he could arrange a purchase. Carnegie says he “declined to take anything for the common stock”. The Pujo report says the organization and underwriting of the new U.S. Steel “was directed and absolutely dominated by Morgan & Co.”, and that Morgan “named the entire first board of directors”.

24 Oct 1907

Panic

In October 1907 New York trust companies faced runs. The Federal Reserve’s history says the stock exchange stayed open “largely because of the legendary actions of Morgan, who solicited cash from large financial and industrial institutions”. Treasury Secretary Cortelyou offered $25 million; in the account of the business-school authors Bruner and Carr, John D. Rockefeller deposited $10 million and promised $40 million more. The money was other people’s and the public’s as well as theirs.

$23.6 millionRaised by Morgan from 14 banks by 2:16 p.m. on 24 October 1907, in the account of Bruner and Carr

4 Nov 1907

The Tennessee deal

On 4 November 1907 Elbert Gary and Henry Clay Frick called on President Roosevelt for U.S. Steel: an unnamed New York firm would fail unless Steel bought its stock in the Tennessee Coal and Iron Company. The archive’s summary says Roosevelt told them he could not advise it but “it was not his duty to tell them not to”. He later wrote “I was not misled” and “The action was emphatically for the general good.” The Taft government sued over the purchase and others; in 1920 the Supreme Court affirmed the dismissal of the suit.

1888

Convicts

From 1875 Alabama leased prisoners to private users, and in 1888 the Tennessee Coal, Iron and Railroad Company won a ten-year contract for all able-bodied state prisoners. The Encyclopedia of Alabama says “More than 95 percent of county prisoners and 90 percent of state prisoners were African American”, and that contractors whipped prisoners. U.S. Steel bought the company in 1907; in 1912 the company announced it would employ only free workers, and the state took over the prison mines. The system, run by the state, lasted until 1928. These sources do not say what U.S. Steel’s officers knew or ordered.

233 deathsAmong 1,710 Alabama state prisoners in the mines in 1896, in the two years before, by the Encyclopedia of Alabama. County prisoners: 181 deaths among 745

1908

Children in the mines

Lewis Hine, a New York teacher, became a photographer for the National Child Labor Committee and photographed children in coal mines, mills and canneries. The National Archives writes that “The number of children under the age of 15 who worked in industrial jobs for wages climbed from 1.5 million in 1890 to 2 million in 1910”. Congress passed a law in 1916 setting 16 as the minimum age for mine work; a court later ruled it unconstitutional. The sources read here do not tie these pictures to a mine owned by Carnegie, Rockefeller or Morgan: they show an industry, not one company.

15 Apr 1912

The ship

The Titanic was a White Star liner. The Senate committee that investigated its loss traced ownership up to the International Mercantile Marine Company, which, the Pujo report says, “was organized in 1902 by Morgan & Co.” J. P. Morgan Jr. sat on its board. Asked in December 1912 whether he controlled the company, the elder Morgan said no: a voting trust did, of five trustees, of whom the report names him as one. The Senate inquiry was into the causes of the wreck; this story does not say the owners caused it.

20 Apr 1914

Ludlow

In the strike that began in 1913, families lived in tents near Ludlow. The Guard’s own board listed on the Guard’s side uniformed Guardsmen and “the ununiformed members of Troop A, mine guards and deputy sheriffs”. It found the fire began by accident, but that soldiers and others spread it on purpose and that “cans of oil found in the tents were poured upon them”. It found that Lieutenant K. E. Linderfelt struck the colony leader Louis Tikas with his rifle, and that “Shortly afterwards all three prisoners were killed by gunshot wounds”, Tikas “shot three times in the back”.

20 Apr 1914

What each side says

Two women and eleven children were found dead in a pit under a tent. The Guard’s board believed “they died of suffocation hours before the tents caught fire”; Mary Petrucci told the Commission “It was not more than 10 minutes after I was in there that the tent started on fire, and we soon became unconscious”, and an affidavit by Alcarita Pedregon, read by Judge Lindsey, says “I seen a militiaman come over there and look inside the tent and strike a match and set fire to the tent”.

20 Apr 1914

The strikers

Strikers did violence too: the board found Private Albert Martin “horribly mutilated by the strikers”, and the House called a strikers’ attack at Berwind “inexcusable” and the guards’ attack on the Forbes colony “equally unjustifiable”. Fighting ran across the coalfield, with “a number of people were killed and wounded on both sides”; these sources give no agreed total, and the board’s findings use contemptuous language about the immigrant miners that this story does not repeat.

6 Oct 1913

Stand by you

The Rockefellers held a stock and bond interest in the Colorado Fuel & Iron Company, and John D. Rockefeller Jr. was a director. His office’s letters to the company’s chairman, produced to the Commission, include “Whatever the outcome may be, we will stand by you to the end” and later “You are fighting a good fight”. Bowers wrote that bankers were “agreeing to back the State and lend it all the funds necessary to maintain the militia”. After Ludlow Bowers wrote “Suggest your giving this information to friendly papers”, and the reply in Rockefeller’s name said they “profoundly regret this further outbreak of lawlessness”. These letters show backing and knowledge; they show no order for any act of violence.

25 Jan 1915

His answer

In January 1915 Chairman Frank Walsh read Rockefeller his own earlier words. He answered that they had been “purposely unfairly construed” and that the decision on the union was the officers’, reached “without any consultation or communication with me”. In his statement he said “The responsibility of stockholders is practically limited to the election of directors.” but also “A large stockholder, however, is able to exercise considerable moral influence over the directors and officers and is responsible for exercising that influence properly.” He favored unions “most heartily” and wrote “I frankly confess that I felt there was something fundamentally wrong in a condition of affairs which rendered possible the loss of human lives”, then proposed studies of industrial relations to the Rockefeller Foundation. His later plan for Colorado is not in the sources read here.

1915

What was found

Four commissioners (Walsh, Lennon, O’Connell and Garretson) wrote that “the final and full responsibility for the refusal to confer with said representatives, and for all the deplorable results which followed such refusal, must be” placed on John D. Rockefeller and John D. Rockefeller Jr. Three members of a House committee (Foster, Evans and Sutherland) wrote that Rockefeller Jr. “was obstinate and the statement that he was fighting for liberty for the workingman will not bear investigation” and was “a long-distance director”; a fourth member, Byrnes, filed separate views. Neither body cites an order from him for any act of violence.

Feb 1915

They answer

In February 1915 Rockefeller Sr. wrote to the Commission that “The sole motive underlying the various foundations which I have established has been the desire to devote a portion of my fortune to the service of my fellow men.” Carnegie said his foundations and gifts came to $324,657,399, and his first gift on retiring was “four millions of first mortgage 5% Bonds” for his workmen; he told the Commission “We have nothing to conceal.” Five commissioners wrote that “many of these endowments in private hands have a beneficial effect on the work of State and governmental institutions”. A House report said of Rockefeller Jr. that he “has done a great deal for the uplift of people in other parts of the country and in foreign lands, spending millions of dollars in this work”, yet had not improved conditions for the company’s employees.

1916

The finding on the foundations

The Commission’s research director, Basil Manly, reported that “The domination by the men in whose hands the final control of a large part of American industry rests” was spreading to education and social service through foundations, and called the Rockefeller Foundation’s move into industrial relations a menace to the national welfare. Only four of the nine commissioners signed that report; five signed a different one, which took the view quoted in the last scene. This is a minority’s finding, not a court’s.

$250,000,000Funds of the Rockefeller and Carnegie foundations together, at least, as counted in the report of the Commission’s research director, 1915

2000

A name, not a verdict

In 2000 J.P. Morgan & Co. merged with the Chase Manhattan Bank, itself formed in 1955 from the Bank of the Manhattan Company and the Chase National Bank, to form JPMorgan Chase. The bank’s own history counts “predecessor institutions, over 1200 of them”, among them Chemical Bank, Bank One and Bear Stearns. A merger carries a name and accounts, not the acts of people long dead. No source read here ties any of these banks to Johnstown, Homestead, Alabama or Ludlow, and today’s JPMorgan Chase is not answerable for what is told in this story.