Pujo Committee Hearings Begin: Money Trust Investigation Exposes JP Morgan Control of $22 Billion Through 341 Interlocking Directorships

The U.S. House Committee on Banking and Currency subcommittee headed by Rep. Arsène Pujo of Louisiana began hearings to investigate the “money trust”—a concentrated group of Wall Street bankers exerting powerful control over the nation’s finances. The investigation arose from concerns following the Panic of 1907, when banker JP Morgan prevented economic collapse by raising funds to prop up struggling financial institutions, exposing dangerous concentration of private financial power. The committee, with counsel Samuel Untermyer, held hearings from May 16, 1912 to February 26, 1913. In December 1912, the seventy-six year old Morgan testified for several hours, along with associates James E. Stillman and George F. Baker. The committee identified six banking houses responsible for increasing concentration of money and credit: JP Morgan & Co.; First National Bank of New York; National City Bank of New York; Lee, Higginson & Co.; Kidder, Peabody & Co.; and Kuhn, Loeb & Co. The investigation documented a sophisticated financial network unified by 341 interlocking directorships held in 112 corporations valued at more than $22 billion in resources and capitalization. JP Morgan & Co. was identified as the “heart” of the combination. The committee’s final 1913 report declared that existing banking and credit practices resulted in “a vast and growing concentration of control of money and credit in the hands of a comparatively few men.” The findings influenced passage of the Federal Reserve Act of 1913, Federal Trade Commission Act of 1914, and Clayton Antitrust Act of 1914. Louis Brandeis popularized the findings in his book “Other People’s Money and How the Bankers Use It.” Morgan died in April 1913; House of Morgan partners blamed the stress of testifying in the Pujo hearings.