The New Deal and the Displacement of the Morgans
It was not only through Benjamin Strong that the Morgans totally dominated American politics and finance during the 1920s.
President Calvin Coolidge, who succeeded Rockefeller ally President Harding when he died in office,
was a close personal friend of J.P. Morgan Jr. and a political protege of Coolidge's Amherst College classmate, Morgan partner Dwight Morrow, as well as a fellow Morgan partner, Thomas Cochran.
And throughout the Republican administrations of the 1920s, the Secretary of the Treasury was multi-millionaire Pittsburgh tycoon Andrew W. Mellon,
Mellon, whose Mellon interests were long-time allies of the Morgans.
And while President Herbert Hoover was not nearly as intimately connected to the Morgans
as Coolidge, he had long been close to the Morgan interests.
Ogden Mills, who replaced Mellon as Treasury Secretary in 1931 and was close to Hoover,
was the son of a leader in such Morgan railroads as New York Central.
In the meanwhile, Hoover chose as Secretary of State Henry L. Stimson, a prominent disciple
and law partner of Morgan's one-time personal attorney, Ella Hugh Root.
More tellingly, two unofficial but powerful Hoover advisors during his administration
were Morgan partners Thomas W. Lamont, the successor to Davison as Morgan Empire CEO,
and Dwight Morrow, whom Hoover regularly consulted three times a week.
A crucial aspect of the first term of the Roosevelt New Deal, however, has been sadly neglected by conventional historians.
The New Deal constituted a concerted bringing down and displacement of Morgan dominance,
A coalition of opposition financial out-groups combined in the New Deal to topple it from power.
This coalition was an alliance of the Rockefellers, a newly burgeoning Harriman power in the Democratic Party,
newer and brasher Wall Street Jewish investment banks such as Lehman Brothers and Goldman Sachs,
pushing Kuhn Loeb into the shade and such ethnic outgroups as Irish Catholic Buccaneer
Joseph P. Kennedy, Italian-Americans such as the Giannini family of California's Bank of
America and Mormons such as Merrimer Eccles, head of a vast Utah banking holding company
Construction Conglomerate and allied to the California-based Bechtel Corporation in Construction
and to the Rockefeller's Standard Oil of California.
The main harbinger of this financial revolution was the Rockefeller's successful takeover
of the Morgan's flagship commercial bank, the mighty Chase National Bank of New York.
After the 1929 crash, Winthrop W. Aldrich, son of Senator Nelson Aldrich and brother-in-law
Paul John D. Rockefeller Jr. engineered a merger of his Rockefeller controlled equitable trust company into Chase Bank.
From that point on Aldrich engaged in a titanic struggle within Chase.
By 1932 managing to oust the Morgans Chase CEO, Albert Wiggin, and to replace him by Aldrich himself.
Ever since, Chase has been the virtual general headquarters of the Rockefeller Financial Empire.
The New Coalition conningly drove through the New Deal's Banking Acts of 1933 and 1935,
which transformed the face of the Fed and permanently shifted the crucial power in the
Fed from Wall Street, Morgan and the New York Fed, to the politicos in Washington, D.C.
The result of these two banking acts was to strip the New York Fed of power to conduct
open market operations and to place it squarely in the hands of the Federal Open Market Committee
dominated by the Board in Washington, but with regional private bankers playing a subsidiary
partnership role.
The other major monetary change accomplished by the New Deal, of course, and done under
Under cover of a depression emergency in the fractional reserve banking system was to go
off the gold standard.
After 1933, Federal Reserve notes and deposits were no longer redeemable in gold coins to
Americans and after 1971, the dollar was no longer redeemable in gold bullion to foreign
governments and central banks.
The gold of Americans was confiscated and exchanged for Federal Reserve notes, which
became legal tender, and Americans were stuck in a regime of fiat paper issued by the government
and the Federal Reserve. Over the years, all early restraints on Fed activities or its
issuing of credit have been lifted. Indeed, since 1980, the Federal Reserve has enjoyed
is the absolute power to do literally anything it wants, to buy not only U.S. government
securities but any asset, whatever, and to buy as many assets and to inflate credit as
much as it pleases. There are no restraints left on the Federal Reserve. The Fed is the
master of all its surveys. In surveying the changes wrought by the New Deal, however,
We should refrain from crying for the Morgans. While permanently dethroned by the first term
of the New Deal and never returned to power, the Morgans were able to take their place,
though chastened, in the ruling New Deal coalition by the end of the 1930s. There they played
an important role in the drive by the power elite to enter World War II, particularly
the War in Europe, once again on the side of Britain and France.
During World War II, furthermore, the Morgans played a decisive behind-the-scenes role in
hammering out the Bretton Woods Agreement with Keynes and the British, an agreement
which the U.S. government presented as a fait accompli to the assembled free world at Bretton
Woods by the end of the war.
Since World War II, indeed, the various financial interests have entered into a permanent realignment.
The Morgans and the other financial groups have taken their place as compliant junior
partners in a powerful Eastern establishment, led unchallenged by the Rockefellers.
Since then, these groups, working in tandem, have contributed rulers to the Federal Reserve
system.
Thus, the present Fed Chairman, Alan Greenspan, was, before his accession to the throne, a member of the executive committee of the Morgan's flagship commercial bank, Morgan Guarantee Trust Company.
His widely revered predecessor as Fed Chairman, the charismatic Paul Volcker, was a long-time prominent servitor of the Rockefeller Empire,
," having been an economist for the Rockefeller's Exxon Corporation and for their headquarters
institution the Chase Manhattan Bank.
In a symbolically important merger, Chase had absorbed Kuhn Loeb's flagship commercial
bank, the Bank of Manhattan.
It was indeed a new world, if not a particularly brave one, while there were still to be many
Despite the many challenges to Eastern establishment financial and political power by brash newcomers and takeover buccaneers from Texas and California, the old-line Northeastern interest had themselves become harmoniously solidified under Rockefeller rule.