Cover illustration of Harper's Weekly, November 29, 1913 by James Montgomery Flagg
In 1912, Woodrow Wilson campaigned for President using many Progressive ideas about strengthening the economy: banking reform, tariff reduction and the elimination of monopolies and trusts. The consolidation of these ideas became known as the New Freedom. After Wilson's election, Louis Brandeis (who was responsible for many of Wilson's ideas in the first place) wrote a series of articles for Harper's Weekly which outlined why the New Freedom was necessary and how best to implement it. In 1914, the articles were collected in book form and published under the title Other People's Money--and How the Bankers Use It. Brandeis' central thesis was that the large banking houses were colluding with businessmen to create trusts in America's major industries. Brandeis felt that not only did trusts stifle competition, but also they became so large that they became unable to operate efficiently. Brandeis backed up his arguments with facts--copious facts gleaned from his battles against J. P. Morgan and Charles Mellen in the New Haven Railroad merger battle and from the Pujo Committee--a House committee report that investigated the abuses of the "Money Trust." Wilson was able to push through a number of laws regarding the regulation of business and trusts, but in many ways, due to mergers and stock manipulation, conditions in the business world today remain the same. Many of the details in Other People's Money may be dated, but its central ideas remain relevant--so much so that is still in print almost 90 years after it was first published.
Chapter I: Our Financial Oligarchy
Chapter II: How The Combiners Combine
Chapter III: Interlocking Directorates
Chapter IV: Serve One Master Only!
Chapter V: What Publicity Can Do
Chapter VI: Where The Banker Is Superfluous
Chapter VII: Big Men And Little Business
Chapter VIII: A Curse Of Bigness
Chapter IX: The Failure Of Banker-Management
Chapter X: The Inefficiency Of The Oligarchy
CHAPTER I: OUR FINANCIAL OLIGARCHY
Cover illustration of Harper's Weekly December 13, 1913 by James Montgomery Flagg
President Wilson, when Governor, declared in 1911:
"The great monopoly in this country is the money monopoly. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men, who, even if their actions be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who, necessarily, by every reason of their own limitations, chill and check and destroy genuine economic freedom. This is the greatest question of all; and to this, statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men." The Pujo Committee--appointed in 1912--found:
"Far more dangerous than all that has happened to us in the past in the way of elimination of competition in industry is the control of credit through the domination of these groups over our banks and industries."... "Whether under a different currency system the resources in our banks would be greater or less is comparatively immaterial if they continue to be controlled by a small group."... "It is impossible that there should be competition with all the facilities for raising money or selling large issues of bonds in the hands of these few bankers and their partners and allies, who together dominate the financial policies of most of the existing systems. . . . The acts of this inner group, as here described, have nevertheless been more destructive of competition than anything accomplished by the trusts, for they strike...