All the Presidents' Bankers

3 ideas

1. J.P. Morgan Rescues Wall Street in 1907

   In the Panic of 1907, with no central bank, J. Pierpont Morgan gathered bankers in his library and organized private bailouts of failing trusts and brokerages. Theodore Roosevelt, a vocal trust-buster, let U.S. Steel acquire Tennessee Coal & Iron as part of the rescue. The episode showed that a private banker could stand in for the state, and it gave bankers the leverage to help design the Federal Reserve, which was drafted in secret at Jekyll Island in 1910 by Senator Nelson Aldrich and a small group of Wall Street bankers.

2. Policy as Output of Personal Networks

   Read financial policy through the relationships behind it: shared schools, family ties, social clubs, campaign money, and the movement of people between Treasury and bank executive jobs. Who has the president's ear during a crisis or a legislative fight often explains the result better than ideology or party. This lens predicts continuity across Democratic and Republican administrations, because the same small group of bank leaders stays close to power.

3. Bank Rivalries Shape Positions on Regulation

   Bankers often backed or fought reforms according to how the rules would affect their competitors. In 1933, Chase chairman Winthrop Aldrich supported Glass-Steagall's separation of commercial and investment banking partly because it would weaken the House of Morgan. In 1998, Sandy Weill's Travelers-Citicorp merger went ahead under temporary legal approval and added pressure for the 1999 repeal, and Treasury Secretary Robert Rubin joined Citigroup in October 1999, shortly before repeal became law in November.

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