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

0:00Part III. From Hoover to Roosevelt. The Federal Reserve and the Financial Elites. This chapter is grounded on the insight that American politics, from the turn of the 20th century until World War II, can far better be comprehended by studying the interrelationship of major financial groupings than by studying the superficial and often sham struggles between Democrats and Republicans. In particular, American politics in this period was marked by a fierce struggle between two major financial industrial groupings. The interests clustered around the House of Morgan on the one hand, and an alliance of Rockefeller, oil, Harriman, railroad, and Kuhn-Lebb, investment banking, interests on the other.

0:50The Morgans began in investment banking, and moved out into railroads, commercial banking, and then manufacturing. The Rockefeller-Harriman-Kuhn-Lebb alliance began in their three respective original spheres and moved into commercial banking. In most instances, the two mighty combines clashed, for example, in whether or not Theodore Roosevelt, always closely allied to the Morgans, should use the antitrust weapon to smash Standard Oil, or whether, in his turn, President Taft, allied with the Ohio-based Rockefellers, should would try to break up Morgan trusts such as International Harvester or United States Steel. In other areas, the interests of the two mammoths coincided and they were allies. Thus, both groups were heavily represented in the drive for measures cartelizing industry that were sought and lobbied for by the National Civic Federation during the Progressive Era, and both groups joined to push through the Federal Reserve system.