The Essential Rothbard - Ludwig von Mises Institute

The Essential Rothbard 53
Investment bankers do much of their business underwriting
government bonds, in the United States and abroad. Therefore,
they have a vested interest in promoting deficits and in
forcing taxpayers to redeem government debt. Both sets of
bankers [i.e., commercial and investment], then, tend to be
tied in with government policy, and try to influence and control
government actions in domestic and foreign affairs. 129
He applies this thesis to interpret American foreign policy:
The great turning point of American foreign policy came in
the early 1890s, during the second Cleveland Administration.
It was then that the U.S. turned sharply and permanently
from a foreign policy of peace and non-intervention to an
aggressive program of economic and political expansion
abroad. 130
The turn came at the behest of the House of Morgan, which
had already obtained the controlling influence on American foreign
policy it was to retain until the onset of the New Deal.
Under the new activist policy, the United States vigorously
sought to wrest control of the Latin American market from Great
Britain. In spite of the later partnership between the Morgan
interests and Britain, the United States was very far indeed from
alliance with Britain during most of the 1890s.
But a British-American partnership was not long in coming,
and Rothbard finds in the close ties between the House of Morgan
and British financial interests an underlying cause of American
entry into World War I. Because of Morgan investments in allied
war bonds and in the export of war munitions, “J.P. Morgan and
his associates did everything they possibly could to push the supposedly
neutral United States into the war on the side of England
129 Wall Street, Banks, and American Foreign Policy, p. 1.
130 Ibid., p. 4.