Other People's Money and How The Bankers Use It
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Louis D. Brandeis was a Supreme Court Justice and a patriot. He wrote "Other People's Money and How Bankers Use It" to warn the American people about the greedy bankers that control the United States and drive us into financial ruin.
Morgan & Co. buy an issue of securities the purchase money, instead of being paid over to the corporation, is retained by the banker for the corporation, to be drawn upon only as the funds are needed by the corporation. And as the securities are issued in large blocks, and the money raised is often not all spent until long thereafter, the aggregate of the balances remaining in the bankers' hands are huge. Thus J. P. Morgan & Co. (including their Philadelphia house, called Drexel & Co.) held on
reaper. That made it possible to increase the grain harvest twenty-or thirty-fold. No investment banker had any part in introducing this great businessman's invention. McCormick was without means; but William Butler Ogden, a railroad builder, ex-Mayor and leading citizen of Chicago, supplied $25,000 with which the first factory was built there in 1847. Fifty-five years later, J. P. Morgan & Co. performed the service of combining the five great harvester companies, and received a commission of
directors' meetings. His will was law. President Mellen indicated this in his statement before Interstate Commerce Commissioner Prouty, while discussing the New York, Westchester & Boston—the railroad without a terminal in New York, which cost the New Haven $1,500,000 a mile to acquire, and was then costing it, in operating deficits and interest charges, $100,000 a month to run: I am in a very embarrassing position, Mr. Commissioner, regarding the New York, Westchester & Boston. I have never
Rockefeller. Mr. Morgan was, until his death in 1913, the head of perhaps the largest banking house in the world. Mr. Baker was, until 1909, president and then chairman of the board of directors of one of America's leading banks (the First National of New York), and Mr. Rockefeller was, until 1911, president of the Standard Oil Company. Each was well advanced in years. Yet each of these men, besides the duties of his own vast business, and important private interests, undertook to "guide,
against when offered to the banks and trust companies, as collateral for loans. Furthermore, it is the investment banker's access to other people's money in controlled banks and trust companies which alone enables any individual banking concern to take so large part of the annual output of bonds and stocks. The banker's own capital, however large, would soon be exhausted. And even the loanable funds of the banks would often be exhausted, but for the large deposits made in those banks by the life