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NOTE 41. From Hoover to Roosevelt: The Federal Reserve and the Financial Elites

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Part III.

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From Hoover to Roosevelt.

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The Federal Reserve and the Financial Elites.

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This chapter is grounded on the insight that American politics, from the turn of the 20th

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century until World War II, can far better be comprehended by studying the interrelationship

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of major financial groupings than by studying the superficial and often sham struggles between

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Democrats and Republicans.

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In particular, American politics in this period was marked by a fierce struggle between two

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major financial industrial groupings.

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The interests clustered around the House of Morgan on the one hand, and an alliance of

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Rockefeller, oil, Harriman, railroad, and Kuhn-Lebb, investment banking, interests on

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the other.

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The Morgans began in investment banking, and moved out into railroads, commercial banking,

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and then manufacturing.

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The Rockefeller-Harriman-Kuhn-Lebb alliance began in their three respective original spheres

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and moved into commercial banking.

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In most instances, the two mighty combines clashed, for example, in whether or not Theodore

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Roosevelt, always closely allied to the Morgans, should use the antitrust weapon to smash Standard

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Oil, or whether, in his turn, President Taft, allied with the Ohio-based Rockefellers, should

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would try to break up Morgan trusts such as International Harvester or United States Steel.

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In other areas, the interests of the two mammoths coincided and they were allies. Thus, both

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groups were heavily represented in the drive for measures cartelizing industry that were

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sought and lobbied for by the National Civic Federation during the Progressive Era, and

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both groups joined to push through the Federal Reserve system.