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The Money Trust
12-26-2012, 11:16 PM, (This post was last modified: 01-11-2013, 07:44 AM by macfadden.)
The Money Trust
The main belief behind the concept of a money trust is that the majority of the world's financial wealth and political power could be controlled by a powerful few.

The Pujo Committee was a United States congressional subcommittee which was formed between May 1912 and January 1913 to investigate the so-called "money trust", a community of Wall Street bankers and financiers that exerted powerful control over the nation's finances. After a resolution introduced by congressman Charles Lindbergh Sr. for a probe on Wall St. power, Arsène Pujo of Louisiana obtained congressional authorization to form a subcommittee of the House Committee on Banking and Currency.

Despite the fact that lead attorney Samuel Untermyer had predetermined that no money trust would be found as part of the Investigation because “There is no agreement existing among these men that is in violation of the law” and despite of the refusal of aid by the Comptroller of the Currency, the failure of the Senate pass the bill to amend section 5241 of the Revised Statutes and the lack of any authoritative decision by the courts sustaining the committee's right to access the books of the national banks, the Pujo Committee Report concluded in 1913 that a community of influential financial leaders had gained control of major manufacturing, transportation, mining, telecommunications and financial markets of the United States. The report revealed that no less than eighteen different major financial corporations were under control of a cartel led by J.P Morgan, George F Baker and James Stillman. These three men, through the resources of seven banks and trust companies (Banker’s Trust Co., Guaranty Trust Co., Astor Trust Co., National Bank of Commerce, Liberty National Bank, Chase National Bank, Farmer’s Loan and Trust Co.) controlled an estimated $2.1 billion. The report revealed that a handful of men held manipulative control of the New York Stock Exchange and attempted to evade interstate trade laws.

This idea of a 'Money Trust' was validated in the United States by the Pujo Committee in 1913 which unanimously determined that a small cabal of financiers had gained consolidated control of numerous industries through the abuse of the public trust. The chair of the House Committee on Banking and Currency, Representative Arsène Pujo, (D–La. 7th) convened a special committee to investigate a "money trust", the de facto monopoly of Morgan and New York's other most powerful bankers. The committee issued a scathing report on the banking trade, and found that the officers of J.P. Morgan & Co. also sat on the boards of directors of 112 corporations with a market capitalization of $22.5 billion (the total capitalization of the New York Stock Exchange was then estimated at $26.5 billion).

Attorney Samuel Untermyer who headed the 1913 Pujo Money Trust Investigation Committee to investigate money trusts defined a money trust to George Baker during the Pujo hearings; "We define a money trust as an established identity and community of interest between a few leaders of finance, which has been created and is held together through stock-holding, interlocking directorates, and other forms of domination over banks, trust companies, railroads, public service and industrial corporations, and which has resulted in vast and growing concentration and control of money and credits in the hands of a few men".

The Pujo Report singled out individual bankers including Paul Warburg, Jacob H. Schiff, Felix M. Warburg, Frank E. Peabody, William Rockefeller and Benjamin Strong, Jr.. The report identified over $22 billion in resources and capitalization controlled through 341 directorships held in 112 corporations by members of the empire headed by J.P. Morgan.

Although Pujo left Congress in 1913, the findings of the committee inspired public support for ratification of the Sixteenth Amendment in 1913, passage of the Federal Reserve Act that same year, and passage of the Clayton Antitrust Act in 1914. They were also widely publicized in the Louis Brandeis book, Others People's Money--and How the Bankers Use It.

The Pecora Investigation was an inquiry begun on March 4, 1932 by the United States Senate Committee on Banking and Currency to investigate the causes of the Wall Street Crash of 1929. The name refers to the fourth and final chief counsel for the investigation, Ferdinand Pecora.

The investigation was launched by a majority-Republican Senate, under the Banking Committee's chairman, Senator Peter Norbeck. Hearings began on April 11, 1932, but were criticized by Democratic Party members and their supporters as being little more than an attempt by the Republicans to appease the growing demands of an angry American public suffering through the Great Depression. Two chief counsels were fired for ineffectiveness, and a third resigned after the committee refused to give him broad subpoena power. In January 1933, Ferdinand Pecora, an assistant district attorney for New York County was hired to write the final report. Discovering that the investigation was incomplete, Pecora requested permission to hold an additional month of hearings. His exposé of the National City Bank (now Citibank) made banner headlines and caused the bank's president to resign. Democrats had won the majority in the Senate, and the new President, Franklin D. Roosevelt, urged the new Democratic chairman of the Banking Committee, Senator Duncan U. Fletcher, to let Pecora continue the probe. So actively did Pecora pursue the investigation that his name became publicly identified with it, rather than the committee's chairman.

Following the 1929 Wall Street Crash, the U.S. economy had gone into a depression, and a large number of banks failed. The Pecora Investigation sought to uncover the causes of the financial collapse. As chief counsel, Ferdinand Pecora personally examined many high-profile witnesses, who included some of the nation's most influential bankers and stockbrokers. Among these witnesses were Richard Whitney, president of the New York Stock Exchange, investment bankers Otto H. Kahn, Charles E. Mitchell, Thomas W. Lamont, and Albert H. Wiggin, plus celebrated commodity market speculators such as Arthur W. Cutten. Given wide media coverage, the testimony of the powerful banker J.P. Morgan, Jr. caused a public outcry after he admitted under examination that he and many of his partners had not paid any income taxes in 1931 and 1932.

As reiterated by U.S. Securities and Exchange Commission (SEC) Chairman Arthur Levitt during his 1995 testimony before the United States House of Representatives, the Pecora Investigation uncovered a wide range of abusive practices on the part of banks and bank affiliates. These included a variety of conflicts of interest, such as the underwriting of unsound securities in order to pay off bad bank loans, as well as "pool operations" to support the price of bank stocks. The hearings galvanized broad public support for new banking and securities laws. As a result of the Pecora Commission's findings, the United States Congress passed the Glass–Steagall Banking Act of 1933 to separate commercial and investment banking, the Securities Act of 1933 to set penalties for filing false information about stock offerings, and the Securities Exchange Act of 1934, which formed the SEC, to regulate the stock exchanges.

The Banking Committee's hearings ended on May 4, 1934, after which Pecora was appointed as one of the first commissioners of the SEC.

In 1939 Ferdinand Pecora published a memoir that recounted details of the investigations, Wall Street Under Oath. Pecora wrote: "Bitterly hostile was Wall Street to the enactment of the regulatory legislation." As to disclosure rules, he stated that "Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker's stoutest allies."

U.S. v. Morgan et al., more commonly referred to as the Investment Bankers Case was a multi-year antitrust case against brought by the United States Justice Department against seventeen of the most prominent Wall Street investment banking firms, known as the Wall Street Seventeen.

The Justice Department filed suit against the firms in 1947 claimed that the leading investment banking firms had combined, conspired and agreed, in violation of the Sherman Antitrust Act, to control and monopolize the U.S. Securities markets.

The case, which was brought to trial in the Southern District of New York in 1952 was presided over by Harold Medina. In October 1953, after a year-long trial, Medina found in favor of the investment banking firms.

The 17 Wall Street firms named as defendants in the case, later known as the "Wall Street Seventeen" were as follows:

Morgan Stanley & Co.
Kidder Peabody
Goldman Sachs
White Weld & Co.
Dillon Read & Co.
Drexel & Co.
First Boston Corporation
Smith Barney & Co.
Kuhn, Loeb & Co.
Lehman Brothers
Blyth & Co.
Eastman Dillon & Co.
Harriman Ripley
Stone & Webster Securities Corp.
Harris, Hall & Co.
Glore, Forgan & Co.
Union Securities Corp.

Excluded from the case were a number of prominent Wall Street firms including Bache & Co., Halsey Stuart & Co., Merrill Lynch, Pierce, Fenner & Beane and Salomon Brothers & Hutzler among others.

World's Stocks Controlled by Select Few - In Depth SFIT Statistical Analysis Paper

James B. Glattfelder co-authored the study "The Network of Global Corporate Control" which was widely covered in the international media and sparked controversial discussions.


Interlocking directorates -- defined as the linkages among corporations created by individuals who sit on two or more corporate boards -- have been a source of research attention since the Progressive Era at the turn of the 20th century, when they were used by famous muckraking journalists, and future Supreme Court Justice Louis Brandeis, to claim that a few large commercial and investment banks controlled most major corporations.

Interlocks act as communication channels, enabling information to be shared between boards via multiple directors who have access to inside information for multiple companies. The system of interlocks forms what Michael Useem calls a "transcorporate network, overarching all sectors of business". Interlocks have benefits over trusts, cartels, and other monopolistic/oligopolistic forms of organization, due to their greater fluidity, and lower visibility (making them less open to public scrutiny). They also benefit the involved companies, due to reduced competition, increased information availability for directors, and increased prestige.

multiple directors tend to be more frequently appointed to government positions, and sit on more non-profit/foundation boards than other directors. Thus, these individuals (known as the "inner circle" of the corporate class) tend to contribute disproportionately to the policy-planning and government groups that represent the interests of the corporate class, and are the ones that are most likely to deal with general policy issues and handle political problems for the business class as a whole. These individuals and the people around them are often considered to be the "ruling class" in modern politics.

Interlocks not only occur between corporations, but also between corporations and non-profit institutions such as foundations, think tanks, policy-planning groups, and universities. They can also be seen as a subset of connections in a larger upper class social network which includes all of the aforementioned types of institutions as well as elite social clubs, schools, resorts, and gatherings. Multiple directors are "roughly twice as likely as single directors to be in the Social Register, to have attended a prestigious private school, or to belong to an elite social club."

Analyses of corporate interlocks have found a high degree of interconnectedness amongst large corporations. It has also been shown that in-bound interlocks (i.e. a network link from external firms into a focal firm) are far more impactful that out-bound interlocks, a finding that laid the foundation for further research on inter-organizational networks based on overlapping memberships and other linkages such as joint ventures and patent backward and forward citations. Virtually all large U.S. corporations are linked together in a network of interlocks. Most corporations are within 3 or 4 "steps" from each other within this network. Approximately 15-20% of all directors sit on two or more boards. The largest corporations tend to have the most interlocks, and also tend to have interlocks with each other, placing them at the center of the network. Major banks, in particular, tend to be at the center of the network and have large numbers of interlocks. With the globalization of financial capital following World War II, multinational interlocks have become progressively more common. As the Cold War escalated, well-connected members of the CIA harnessed these interconnections to launder money through front foundations, as well as more substantial institutions such as the Ford Foundation. A relatively small number of individuals—a few dozen—bind this multinational network together by participating in transnational interlocks and sitting on the boards of multiple global policy groups (such as the Council on Foreign Relations).

Quote:According to some observers (John Asimakopoulos), interlocks allow for cohesion, coordinated action, and unified political-economic power of corporate executives. They allow corporations to increase their influence by exerting power as a group, and to work together towards common goals. They help corporate executives maintain an advantage, and gain more power over workers and consumers, by reducing intra-class competition and increasing cooperation. In the words of Scott R. Bowman, interlocks "facilitate a community of interest among the elite of the corporate world that supplants the competitive and socially divisive ethos of an earlier stage of capitalism with an ethic of cooperation and a sense of shared values and goals."

“Competition is a sin.” John D. Rockefeller quote (American Industrialist and Philanthropist, founder of the Standard Oil Company, 1839-1937).
01-11-2013, 07:25 AM, (This post was last modified: 01-11-2013, 07:51 AM by macfadden.)
RE: Money Trust
Basel Banksters: Secretive elite group pulls strings of finance

Gnomes of Zürich is a disparaging term for Swiss bankers. Swiss bankers are popularly associated with extremely secretive policies, while gnomes in fairy tales live underground, in secret, counting their riches. Zürich is the commercial center of Switzerland.

After World War II, British Labour party politicians were worried about speculation against the pound undermining the economic regime. The economic growth in United Kingdom was low, only half of that of Germany and France.The demand for pound sterling started to fall.

The Swiss bankers were being criticised in Britain from the 1950s. The term first originated in a crisis meeting of the Labour politicians in November 1964. The politicians blamed the Swiss bankers for raising speculation against the pound. During the meeting, politician George Brown criticised the Swiss bankers and said: "The Gnomes of Zurich are at work again." The term "Gnomes of Zurich" was then used by many other politicians of the time. Then Prime Minister, Harold Wilson vowed to resist the gnomes' sinister power.

Paul Rossy, a top banker in Zurich at the time stated "In the world it is not the image, but the substance behind the image which counts." The phrase was adopted by the Americans as well.

Soon after the catchphrase becoming famous, a few Swiss bankers started answering their phone as " hello, gnome speaking". An audacious Swiss banker moved to London in order to set up his business and named it "Gnome of Notting Hill".

In recent decades, the Zurich bankers have lost the foothold they had in the global economy due to the rise of London, New York, Dubai and Hong Kong as leading financial capitals. The Zurich Money Museum displays the sculpture of a gnome. Jurg Conzett of Zurich Money Museum says that nowadays, bankers see gnome as "almost" a noble title. Bankers currently based in London agitated by rising taxes, stricter regulation and public animosity towards investment banking are considering moving in large numbers to Zurich itself where banking is "the state religion".

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02-12-2013, 08:17 AM,
RE: The Money Trust

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