The House of Morgan

By Richard Sanders, Editor, Press for Conversion!

Many of those instrumental in the plot to oust FDR were linked to Wall Street’s wealthiest banker, J.P. Morgan, Jr. They connected through a variety of banks and corporations that Morgan controlled. Likewise, many of the American Liberty League’s key organizers and funders were also tied to Morgan’s business concerns.
In 1934, when Jerry MacGuire was in Paris studying how veterans’ groups, such as France’s Croix de feu, were used to empower fascist movements and governments, he worked out of J.P. Morgan’s offices. MacGuire also told General Butler that a meeting was held at Morgan & Harjes offices to discuss who would lead the superarmy that Wall Street plotters wanted to use in their plot to seize the White House.

Pioneering antifascist journalist, John Spivak, considered J.P. Morgan, Jr., to be the “ultimate fountain-head of the whole fascist conspiracy of Wall Street” (New Masses, Feb. 5, 1935). Who was this banker that played such a key part behind the scenes? To understand his role, consider this statement by authors of the groundbreaking 1934 book, Merchants of Death:

"In the U.S., the banker is the all-important person in industry.... While few cases are known where an important government official or member of Congress has been a director of an armament firm, all arms manufacturers have important financial connections. In the Morgan group will be found the DuPont Co., Bethlehem Steel Corp., U.S. Steel Corp., together with copper, oil, electric appliances, locomotive, telephone and telegraph interests. This tie-up also leads over into the great banks, including the National City, Corn Exchange, Chase National, etc. It is the Morgan Group of corporation clients and banks which dominate the American arms industry" (Engelbrecht and Hanighen).

The foundation stones of the great House of Morgan banking empire were laid by Junius Spencer Morgan (1813-1890). Living in England, he hailed from a solid New England family of merchants. In 1854, he became a partner in a London bank owned by George Peabody. Ten years later, Morgan took over the bank, renamed it J.S. Morgan & Co. and engaged in foreign exchange and gold speculation.

Meanwhile, his son, John Pierpont Morgan (1837-1913), was being groomed for business. He was sent to Boston’s English high school and then to German universities in Stutingen and Gottingen. The year 1861, was auspicious for young Pierpont. He started his own bank in New York, calling it J.P. Morgan & Co. He sold European securities underwritten by his father’s bank in England.

That was also the first year of the Civil War. Pierpont was 24 and like Andrew Carnegie, Grover Cleveland, Philip Armour, John D. Rockefeller and other privileged young members of the elite class, he paid to avoid military service. Also, like other Robber Barons, he profited greatly from this war and the string of other U.S. wars that followed.

It was in 1861 that Morgan pulled off a cunning scam foreshadowing his career as a high-class confidence man and his tremendous lack of moral scruples. In the 1850’s, the U.S. army had

“condemned as obsolete and dangerous some rifles…. These rifles were...sold by auction… [for] between $1 and $2, probably as curios.” In 1861, he bought 5,000 of the useless weapons for $3.50 each and sold them back to the Army for $22 apiece, making $92,500, a small fortune.
When [General] Frémont’s soldiers tried to fire these ‘new carbines in perfect condition,’ they shot off their own thumbs…. The government refused to pay Morgan’s bill. Morgan promptly sued the govern-ment…. A special commission… allowed half of [his] claim, and proposed to pay $13.31 a carbine. Morgan… sued [again] …and the court promptly awarded him the full sum, because ‘a contract is sacred’" (Engelbrecht and Hanighen, 1934).

After the Civil War, Morgan loaned money to the U.S. treasury at high interest rates. In 1871, he financing the Army’s payroll and in 1877, he refinanced the government’s debt. After his father, Junius, died in 1890, J.P. Morgan began consolidating the family empire. He put himself at the helm of their four main firms, in New York, Philadelphia, London and Paris. Several times in the 1890s, he sold the government gold to shore up the dollar. He also sold official U.S. and British government bonds.

By 1900, Morgan was the main financial force behind several huge monopolies. In 1901, his wealth pulled together the world’s first billion dollar corporation, U.S. Steel. That year, Morgan and rival John D. Rockefeller, also collaborated by creating the Northern Securities Corporation. Morgan interests held 341 directorships in 112 corporations worth $22.2 billion; twice the total value of all property in 13 southern U.S. states.

"The heart of the American economy had been put under one roof, from banking and steel to railroads, urban transit, communications, the merchant marine, insurance, electric utilities, rubber, paper, sugar refining, copper, and assorted other mainstays of the industrial infrastructure" (Korten, 1995).

In 1913, J.P. Morgan died, and his son, J.P. Morgan, Jr. (1867-1943), took over. That year, Congress passed the Federal Reserve Act giving all responsibility for producing and valuing U.S. money to the Federal Reserve System, a group of privately-owned banks. Although U.S. presidents appoint its chairman, Fed decisions are independent. Its creation gave Morgan even more control over monetary levers of power.

In 1914, Morgan’s company became Britain’s official agent for purchasing U.S. goods such as weapons. This was especially lucrative during WWI, when the Allies, mostly Britain, spent $2 billion in America. Morgan’s interests in military sales explain his role in forming the Navy League, which pushed the U.S. into WWI. The League also represented Bethlehem Steel, International Nickel and Carnegie Steel. In 1915, when President Wilson "lifted the ban on private bank loans to the Allies, Morgan [began] lending money in such great amounts as to both make great profit and tie American finance closely to the interest of a British victory in the war" (Howard Zinn, 1995).

The American Legion was the main WWI veteran’s group. Morgan was among its wealthy financiers. He donated $100,000 to its creation:

"At its core were tens of thousands... committed to doing street battle with ‘reds.’ The Legion had been founded by officers as a conscious attempt to rein in angry soldiers who, it was feared, would come home from the war with their head full of Bolshevik ideas" (Ann Zirin, 2002).

Morgan also funded the rise of Italian fascism, in fact, his company was Mussolini’s main overseas bank. In 1926, Morgan partner, Thomas Lamont, who was later the chair of J.P. Morgan Co., secured a $100 million loan for Mussolini. As Noam Chomsky put it, Morgan’s man Thomas Lamont:

described himself as ‘something like a missionary’ for Italian Fascism, expressing his admiration for Il Duce, ‘a very upstanding chap’ who had ‘done a great job in Italy’ and for the ‘sound ideas’ that guide him in governing the country (1991).

In 1930, the Bank for International Settlements (BIS) was created using the “Young Plan,” after Morgan banker, Owen D. Young. Its supposed purpose was to funnel German money to the Allies in reparation for WWI. In reality, the BIS funneled money into Germany to rebuilt its might. Inspired by Hitler’s Economics Minister and Reichsbank president, Hjalmar Schacht, who had lived in Brooklyn, the BIS was owned by the world’s largest central banks, including Morgan’s First National Bank of New York, the Federal Reserve of New York, the Reichsbank and the central Banks of England, Italy and France.

"Sensing Hitler’s lust for war and conquest, Schacht, even before Hitler rose to power in the Reichstag, pushed for an institution that would retain channels of communication and collusion between the world’s financial leaders even in the event of an international conflict. It was written into the Bank’s charter, concurred in by the respective gov-ernments, that the BIS should be immune from seizure, closure or censure, whether or not its owners were at war. The BIS was com-pletely under Hitler’s control by the outbreak of WWII" (Charles Higham, Trading with the Enemy, 1983).

The BIS board included Hermann Shmitz, head of I.G. Farben, the Nazi’s biggest industrial monopoly; Baron Kurt von Schroder, head of Cologne’s J.H. Stein Bank; Walther Funk, a leading Gestapo officer and Reichsbank financier; and Emil Puhlon, a personal appointee of Hitler. Presiding over the Board between 1939 and 1946, was Thomas McKittrick, a U.S. corporate law-yer from Lee, Higginson & Co, that made large loans to the Third Reich.

In 1944, McKittrick met with “his German, Japanese, Italian, British and American executive staff” to discuss

“the $378 million in gold that had been sent to the Bank by the Nazi government after Pearl Harbor for use by its leaders after the war.” Higham explains that this gold “had been looted from the national banks of Austria, Holland, Belgium and Czechoslovakia, or melted down from the Reichsbank holding of the teeth fillings, spectacle frames, cigarette cases and lighters and wedding rings of the murdered Jews.”

As for Morgan’s own bank, it kept a branch open for business in Nazi-occupied France to serve German interests throughout the war.

Morgan’s banking empire has continued to grow and prosper. When Asian markets collapsed in the 1990s, the IMF and U.S. taxpayers spent billions bailing out huge banks like J.P. Morgan, Chase Manhattan, Citicorp and BankAmerica, even though these Wall Street pirates had raked in Asian profits for decades. When Indonesia finally purged itself of General Suharto, the dictator who took over in a CIA bloodbath killing hundreds of thousands of communists, a J.P. Morgan “currency expert,” Ron Leven, said: “Democracy is a desirable form of government, but it’s not necessarily the most efficient form of government.”

J.P. Morgan Chase and Citigroup provided Enron with billions, stage-managing its huge investment deals around the world and arranging a fire-sale buyout by Dynergy that failed. Morgan also played financial backstop for Enron’s various kinds of trading transactions (William Greider, 2002).

In one of the biggest deals ever, J.P. Morgan and Bank One recently agreed to merge to create the world’s second-largest financial enterprise. It will have $1.1 trillion in assets.


Banking Bonanza, Money & Business, 1/26/04

David C. Korten, When Corporations Rule the World, 1995

Richard Jensen, Civil War part 1 1861-1862

Annie Zirin, Federal Bureau of Intimidation: The FBl's record of repression

JP MorganChase website

L. Wolfe, FDR vs. the Banks, The American Almanac, July 4, 1994

Charles Higham, Trading With The Enemy, How the Allied multinationals supplied Nazi Germany throughout World War Two, 1983

Representative Bernie Sanders, The American Worker in the Global Economy, Spring 1998

Paul Street, Capitalism and Democracy "Don't Mix Very Well" Reflections on globalization, Z magazine, Feb. 2000

Engelbrecht and Hanighen, Merchants of Death, 1934

Howard Zinn, People's History of the United States

Annie Zirin, "Federal Bureau of Intimidation," International Socialist Review, Jan./Feb. 2002.

Noam Chomsky, Deterring Democracy, 1991

Alfred Mendes, "Money Elites," Spectrezine

William Greider, Crime in the Suites, The Nation, Feb. 4, 2002

Source: Press for Conversion! magazine, Issue # 53, "Facing the Corporate Roots of American Fascism," March 2004. Published by the Coalition to Oppose the Arms Trade.

Order a Copy: Order a hard copy of this 54-page issue of Press for Conversion! on the fascist plot to overthrow President F.D.Roosevelt and the corporate leaders who planned and financed this failed coup.