Men of Wealth (1944) - Ludwig von Mises Institute

508 MEN OF WEALTH
Before the transaction was completed it required an exertion
of Morgan's power. Stories of the weakness of the Trust Company
of America made their way into the press. A run began on
that bank. Oakleigh Thorne, its president, went to Morgan's
library for help. He got the help. But he had to agree to give up
a huge block of stock of Tennessee Coal & Iron he held as
security for a loan made to Payne and others and accept U. S.
Steel stock instead. He owned 12,500 shares of unpledged stock
himself and these too he had to give up to the Steel Corporation.
The Steel Corporation, through Morgan, rounded up about
$32,000,000 of these shares from banks and brokerage houses.
XII
What was the secret of all this power? What was it that made
it possible for Morgan to compel bankers to disgorge shares they
wished to hold; to issue orders to corporation executives, to
bang his fist on the table and order a vote of directors? The
explanation is simple. The investment banker sells stocks and
bonds. His clients are corporations. He sells them to those who
have money. The nation's money is lodged in its banks, insurance
companies, trust companies, corporation treasuries. Morgan's
technique, therefore, was to get control of or to dominate directly
or indirectly the corporations that issued securities; also to rule
the money companies—banks, trust companies, and insurance companies—which
had the money to buy or to lend.
For this reason, therefore, little by little he penetrated one
railroad and industrial corporation after another by getting directorships
for himself and his partners and his numerous satraps,
by getting absolute control in many cases by means of voting
trusts. Also slowly he made his way into the domination of many
banks, trust companies, and insurance companies by the same
means. The story of this spider's web of interlocking interests
and directorates has been told many times and has hardly been
exaggerated. When the elder J. P. Morgan was alive the Pujo