SAMUEL UNTERMYER
The speeches and writings of Senator LaFollette and Congressman Lindbergh had become rallying points for opposition to the Aldrich Plan in 1912. They had also aroused popular feeling against the power of the Money Trust, so that Congress was forced to consider taking action. Congressman Lindbergh said:
“The government prosecutes other trusts, but supports the money trust. I have been waiting patiently for several years for an opportunity to expose the false money standard, and to show that the greatest of all favoritism is that extended by the government to the money trust.”
Senator LaFollette made a speech charging that a money trust of fifty men controlled the nation. George F. Baker, partner of J. P. Morgan, on being queried by reporters as to the truth of this sensational accusation, replied that it was absolutely in error. He said that he knew personally that not more than eight men ran this country.
Nation magazine replied editorially to Senator LaFollette that:
“If there is a Money Trust, it will not be practical to establish that it exercises its influence either for good or for bad.”
The editors of the Nation apparently had never heard of the Panic of 1907. However, it certainly was not practical to establish the power of the Money Trust. Senator LaFollette remarks in his Memoirs that that speech cost him the Presidency of the United States, just as Woodrow Wilson’s speech in favor of the Aldrich Plan had brought him at once to consideration for that office.
Despite the Nation’s high-minded detachment, there did seem to be plenty of evidence that the Money Trust exercised its influence for bad. Not only was it despoiling the natural resources of the United States at a rapid rate, but it was not above the most ruthless application of gangster tactics in politics. There were more than reasonable grounds for suspecting that the National City Bank had blown up the Maine to precipitate the Spanish-American War and win the sugar industry of Cuba. Kuhn, Loeb’s sponsorship of Rockefeller had brought hardship and ruin to thousands of small oil producers all over the country, while instances of the destructive influence of Morgan and other New York bankers could be cited for many pages.
Congress finally made a gesture of appeasing popular feeling by appointing a committee to investigate the control of money and credit in the United States. This was the Pujo Committee, which conducted the famous “Money Trust” hearings in 1912, under the leadership of Congressman Arsene Pujo of Louisiana. Pujo had been sent to Congress by the oil interests of his state.
The testimony given at these hearings, which dragged on for five months, made four volumes of some six thousand pages. The bankers, month after month, made the train trip down to Washington from New York, testified before the Committee, and returned to New York. The hearings were extremely dull, and those who had expected that much startling information would be turned up at these examinations were disappointed. The bankers solemnly agreed that they were bankers, insisted they operated in the public’s interest, and claimed that they were animated by the highest ideals of public service, like the Congressmen. Insofar as the hearings were concerned, this seemed to be true. The bankers were asked few questions which were embarrassing, and nothing was brought out which the public might have been excited by. The newspapers played up the hearings, carrying headlines each day about the Money Trust, but the paragraphs below the headlines had little in them that was interesting.
The nature of the hearings may be better understood if we look at the man who single-handedly carried on the entire investigation, Samuel Untermyer. He was also one of the main contributors to Woodrow Wilson’s campaign fund. Untermyer was one of the wealthiest corporation lawyers in New York. He states in his autobiography in “Who’s Who in American Jewry” of 1926, that he once received a $775,000 fee for a single legal transaction, the carrying through of the merger of the Utah Copper Company and the Boston Consolidated and Nevada Company, a firm which had at that time a market value of more than a hundred million dollars. A man who could make nearly a million dollars in one operation would not be likely to sincerely attack the wealthy men of his own class.
Neither Lindbergh nor LaFollette, who were responsible for the Money Trust Hearings, were asked to testify or aid in the investigation. A great deal of favorable publicity accrues to politicians associated with such hearings, and the bankers did not wish either of these men to be noticed by the public.
Samuel Untermyer was Special Counsel for the Pujo Committee. The Congressional members of the Committee, including its chairman, Arsene Pujo, seem to have been struck dumb from the moment of the hearings’ commencement to their conclusion. An examination of the thousands of pages of minutes reveals that these eleven Congressmen did not ask a dozen questions apiece during the months of investigation. One of these silent servants of the public was James Byrnes, of South Carolina, who later achieved fame as Bernard Baruch’s man in charge of the Office of War Mobilization during the Second World War.
Such delicate subjects as the system of interlocking directorates by which a few bankers controlled the nation’s finance and heavy industry were not gone into at the Pujo Committee hearings, nor did Samuel Untermyer see fit to dwell upon such items as international gold movements (the cause of money panics), or the international relationships between American bankers and European bankers. The international banking houses of Eugene Meyer, Lazard Freres, J. & W. Seligman, Speyer Brothers, M. M. Warburg, and the Rothschild brothers, did not arouse Mr. Untermyer’s curiosity, although it was known that all of these family banking houses either had branches or controlled banking houses in New York City. When Jacob Schiff appeared before the Committee, Mr. Untermyer’s adroit questioning allowed Schiff to talk for some minutes without revealing any information about the banking house of Kuhn, Loeb Co., which Senator Robert L. Owen had defined as the representatives of the European Rothschilds in New York.
The aging J. P. Morgan, with only a few more months to live, came before the Committee to justify a half-century of financial piracy. He stated for Mr. Untermyer’s edification that “Money is a commodity.” Mr. Untermyer did not quarrel with that statement.
J. P. Morgan also declared that, in making a loan, he always considered a man’s character before any other factor; even the man’s collateral or his ability to repay were not as important. This astonishing observation startled the blase members of the Committee. Here was a banker who began his career by swindling his own government. He sold faulty rifles to the Union Government at a great profit during the Civil War, collecting his money from the Treasury before he paid for his original purchase. He was charged with defrauding the United States. In 1895, he forced President Grover Cleveland to purchase a hundred million dollars worth of gold from the Rothschild brothers, after threatening to paralyze the country with another money panic. Mr. Untermyer, however, did not touch upon these incidents in the great man’s career.
The farce of the Pujo Committee finally ended. The country was convinced that the New York bankers did have a monopoly on the nation’s money and credit. However, the bankers and their subsidized newspapers claimed that the only way to break that monopoly was to enact the banking the currency legislation then before Congress, the bill which was to be passed in the following year as the Federal Reserve Act. The New York monopoly was to be broken by turning over administration of the System to the most powerful of their number, Paul Warburg.