[...]... for the first time Such revelations were the last thing Wall Street needed Financial power depended to a great extent upon operating successfully behind the scenes rather than in full public view Before World War I, the best that could be hoped for when conducting hearings was what later would be called “transparency.” The clearer financial processes appeared, the less chance there was of chicanery... like J.P Morgan & Co and Brown Brothers Harriman, but conspiracies between them were far-fetched notions not based on reality Despite decades of Wall Street history indicating the opposite, the ideas remained strong during the 1920s The 1920s were characterized by conspiracy theories, and bankers’ connections proved attractive to the subscribers of vague power connections The foreign connection was... interest under which they are exercising that power with constantly increasing effectiveness They are acting, with rare exceptions, strictly within their legal rights but the results are none the less oppressive and perilous for the country In fact, they seem far more so for that reason.”2 The comment echoed the complaints of many other critics and described the insidious power that the money trust purportedly... than statistical aberrations Risk management reigned supreme in the New Era The marketplace would not be dissuaded from “modernizing” despite the spotty historical record The Financial Services Modernization Act passed in late 1999, sweeping away the restrictive parts of the 1933 law The Travelers/Citicorp merger was officially recognized as the biggest financial merger of the century Other significant... critics further Soon, the harshest critics would see conspiracies around every corner and a banker beneath every bed In the 1920s, these critics were both loud and marginal at the same time The press acknowledged them, but were they a real force in public affairs? Many of these ideas were directly inherited from the Progressives Others were inherited from agrarian groups whose appeal became timely in the. .. Chrysler Corporation He had also beaten J.P Morgan & Co to the punch in the process and helped strengthen the presence of the newcomers on Wall Street against the traditional banking powerhouses Wealth accumulation for its own sake became a goal for the financial oligarchy In order to protect it, acquiring political 22 UNDUE INFLUENCE power seemed a natural corollary But combining the two in nineteenth century... from customers was not permitted to underwrite corporate stocks or bonds The securities markets were considered too risky to use customer deposits for underwriting The conditions that caused the Crash of 1929 were not going to be repeated again Over the course of the next 70 years, the Wall Street securities houses came to love Glass-Steagall because it created a virtually oligopoly among the major... twentieth centuries The practice worked pragmatically, but many outside Wall Street and Washington began to openly question the authority of these unofficial emissaries How could they exercise such far-reaching authority when they were private citizens? Who elected them? Bankers’ relations with their foreign counterparts would be a central issue in the 1920s When the Federal Reserve was cre- 14 UNDUE INFLUENCE. .. back into the nineteenth century But his relations with Wall Street deteriorated during his second term, and when he decided not to run again in 1908, Morgan and Wall Street breathed a sigh of relief Robert La Follette did not recognize Roosevelt as a true Progressive, criticizing him for the same trait that many others would criticize the latter-day Progressives in the 1920s—inconsistency During the. .. helped the country during financial crises, for a price His performance before the com- DISTRUST OF WALL STREET IN THE 1920S 27 mittee helped deflect the ogre image, and Wall Street celebrated by staging a rally, a “Morgan market.” But the victory was shortlived at best Pierpont died several months later Most of his partners attributed his death to the questioning at the Pujo hearings, which apparently . restric- tive parts of the 1933 law. The Travelers/Citicorp merger was officially recognized as the biggest financial merger of the cen- tury. Other significant mergers occurred between financial insti- tutions. information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data Geisst, Charles R. Undue influence : how the Wall Street elite put the. world characterized by fewer barriers than at any time since the 1920s. The old Progressive arguments still reverberate occasionally when financial scandals erupt, but current thinking considers regulation