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NOTE The New Deal and the Displacement of the Morgans

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The New Deal and the Displacement of the Morgans

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It was not only through Benjamin Strong that the Morgans totally dominated American politics and finance during the 1920s.

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President Calvin Coolidge, who succeeded Rockefeller ally President Harding when he died in office,

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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.

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And throughout the Republican administrations of the 1920s, the Secretary of the Treasury was multi-millionaire Pittsburgh tycoon Andrew W. Mellon,

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Mellon, whose Mellon interests were long-time allies of the Morgans.

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And while President Herbert Hoover was not nearly as intimately connected to the Morgans

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as Coolidge, he had long been close to the Morgan interests.

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Ogden Mills, who replaced Mellon as Treasury Secretary in 1931 and was close to Hoover,

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was the son of a leader in such Morgan railroads as New York Central.

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In the meanwhile, Hoover chose as Secretary of State Henry L. Stimson, a prominent disciple

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and law partner of Morgan's one-time personal attorney, Ella Hugh Root.

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More tellingly, two unofficial but powerful Hoover advisors during his administration

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were Morgan partners Thomas W. Lamont, the successor to Davison as Morgan Empire CEO,

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and Dwight Morrow, whom Hoover regularly consulted three times a week.

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A crucial aspect of the first term of the Roosevelt New Deal, however, has been sadly neglected by conventional historians.

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The New Deal constituted a concerted bringing down and displacement of Morgan dominance,

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A coalition of opposition financial out-groups combined in the New Deal to topple it from power.

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This coalition was an alliance of the Rockefellers, a newly burgeoning Harriman power in the Democratic Party,

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newer and brasher Wall Street Jewish investment banks such as Lehman Brothers and Goldman Sachs,

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pushing Kuhn Loeb into the shade and such ethnic outgroups as Irish Catholic Buccaneer

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Joseph P. Kennedy, Italian-Americans such as the Giannini family of California's Bank of

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America and Mormons such as Merrimer Eccles, head of a vast Utah banking holding company

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Construction Conglomerate and allied to the California-based Bechtel Corporation in Construction

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and to the Rockefeller's Standard Oil of California.

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The main harbinger of this financial revolution was the Rockefeller's successful takeover

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of the Morgan's flagship commercial bank, the mighty Chase National Bank of New York.

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After the 1929 crash, Winthrop W. Aldrich, son of Senator Nelson Aldrich and brother-in-law

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Paul John D. Rockefeller Jr. engineered a merger of his Rockefeller controlled equitable trust company into Chase Bank.

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From that point on Aldrich engaged in a titanic struggle within Chase.

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By 1932 managing to oust the Morgans Chase CEO, Albert Wiggin, and to replace him by Aldrich himself.

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Ever since, Chase has been the virtual general headquarters of the Rockefeller Financial Empire.

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The New Coalition conningly drove through the New Deal's Banking Acts of 1933 and 1935,

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which transformed the face of the Fed and permanently shifted the crucial power in the

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Fed from Wall Street, Morgan and the New York Fed, to the politicos in Washington, D.C.

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The result of these two banking acts was to strip the New York Fed of power to conduct

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open market operations and to place it squarely in the hands of the Federal Open Market Committee

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dominated by the Board in Washington, but with regional private bankers playing a subsidiary

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partnership role.

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The other major monetary change accomplished by the New Deal, of course, and done under

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Under cover of a depression emergency in the fractional reserve banking system was to go

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off the gold standard.

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After 1933, Federal Reserve notes and deposits were no longer redeemable in gold coins to

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Americans and after 1971, the dollar was no longer redeemable in gold bullion to foreign

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governments and central banks.

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The gold of Americans was confiscated and exchanged for Federal Reserve notes, which

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became legal tender, and Americans were stuck in a regime of fiat paper issued by the government

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and the Federal Reserve. Over the years, all early restraints on Fed activities or its

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issuing of credit have been lifted. Indeed, since 1980, the Federal Reserve has enjoyed

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is the absolute power to do literally anything it wants, to buy not only U.S. government

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securities but any asset, whatever, and to buy as many assets and to inflate credit as

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much as it pleases. There are no restraints left on the Federal Reserve. The Fed is the

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master of all its surveys. In surveying the changes wrought by the New Deal, however,

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We should refrain from crying for the Morgans. While permanently dethroned by the first term

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of the New Deal and never returned to power, the Morgans were able to take their place,

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though chastened, in the ruling New Deal coalition by the end of the 1930s. There they played

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an important role in the drive by the power elite to enter World War II, particularly

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the War in Europe, once again on the side of Britain and France.

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During World War II, furthermore, the Morgans played a decisive behind-the-scenes role in

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hammering out the Bretton Woods Agreement with Keynes and the British, an agreement

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which the U.S. government presented as a fait accompli to the assembled free world at Bretton

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Woods by the end of the war.

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Since World War II, indeed, the various financial interests have entered into a permanent realignment.

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The Morgans and the other financial groups have taken their place as compliant junior

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partners in a powerful Eastern establishment, led unchallenged by the Rockefellers.

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Since then, these groups, working in tandem, have contributed rulers to the Federal Reserve

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system.

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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.

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His widely revered predecessor as Fed Chairman, the charismatic Paul Volcker, was a long-time prominent servitor of the Rockefeller Empire,

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," having been an economist for the Rockefeller's Exxon Corporation and for their headquarters

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institution the Chase Manhattan Bank.

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In a symbolically important merger, Chase had absorbed Kuhn Loeb's flagship commercial

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bank, the Bank of Manhattan.

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It was indeed a new world, if not a particularly brave one, while there were still to be many

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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.