Last Monday, I sent you an excerpt from my 2014 book, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power.
(With kind permission from my publisher, Bold Type Books, formerly Nation Books).
We traveled back to 1913, the year the Federal Reserve was born.
Our excerpt showed how wealthy Wall Street bankers formed cozy relationships with the U.S. president at the time, Woodrow Wilson…
And how they pushed the White House to create America’s central bank, the Fed, in 1913.
Just a few months later, World War I broke out in Europe.
Today, I’m sharing an excerpt from my book about that. I promised you I would, after reader John G. wrote in last week.
John told us the reason the U.S. entered World War I was to keep the family of J.P. Morgan, the American financier, rich.
Now, when I wrote All the Presidents’ Bankers, I discovered something else… It’s a key element of the relationship between Morgan’s son and President Wilson at the start of World War I.
It’s in my book. It had never been disclosed before. And it’s particularly timely today…
Where War and Finance Collide
War is unfortunately on our minds again. And over the weekend, the connection between war and the financial system became even more relevant.
The U.S. and Canadian governments moved to bar some Russian banks from using the SWIFT system. So did governments and central banks across Europe.
SWIFT is an important financial messaging system. This move would disconnect Russia from much of the global financial system.
This morning, the Treasury Department also announced it would freeze Russian central bank assets held in American financial institutions.
In other words, the world’s leaders are coming together. They’re trying to halt Russia’s invasion of Ukraine.
Now, the Federal Reserve is due to meet in a couple of weeks. I will come back to its likely next steps in light of the situation in Ukraine before that…
But one thing is sure. The Fed wants to calm the markets.
To do that, it will need to work with banks, the Treasury Department, and the White House to preserve liquidity in the economy.
Which brings us back to today’s book excerpt…
Wealth Equals Influence
The section I’m sharing from my book today shows the power wealthy American bankers had during World War I.
Not just over the Federal Reserve and the Oval Office… But also over U.S. foreign policy, and the war itself.
You’ll find a link to the excerpt at the end of today’s dispatch. But first, here are some names you’ll want to keep in mind as you read it…
William Jennings Bryan: U.S. Secretary of State, March 1913-June 1915.
Henry Davison: Senior partner at J. P. Morgan.
Thomas Lamont: Partner, then acting head of J. P. Morgan Bank, 1911-1943. Chairman of J. P. Morgan & Company, 1943-1948. Worked closely with Wilson on the Treaty of Versailles and promoted the League of Nations. Also allied with Hoover and FDR.
Jack “J. P.” Morgan (J. P. Morgan Jr.): Head of the Morgan Bank, 1913-1943. Allied with Wilson for war financing effort in World War I. Supported FDR.
John Pierpont “J. P.” Morgan: Head of the Morgan Bank, 1893-1913. Sponsored Jekyll Island meeting in 1910. Butted heads with Theodore Roosevelt over trustbusting.
James Stillman Rockefeller: Chairman of National City Bank, 1959-1967 (joined the bank in 1930). Allied with Eisenhower.
Frank Vanderlip: Vice president, then president, of National City Bank, 1909-1919. Assistant secretary of the Treasury under President William McKinley. Worked with Nelson Aldrich on the Aldrich plan. Early friend of Wilson, later distant.
Thomas Woodrow Wilson: President of the United States, 1913-1921.
To read the excerpt, follow this link.
Editor, Inside Wall Street with Nomi Prins
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