 Thank you all for coming My name is Patrick Newman the title of my talk today as you can see is the progressive era and the rise of crony capitalism Unlike yesterday's talk. I don't have a funny joke to start off with about the title So I guess I'll just have to jump right into the economics So what exactly is this presentation about? Basically, I'll be discussing crony capitalism or at least one aspect of crony capitalism in Murray Rothbard's book the progressive era Which was a newly published book. It was edited by the by by myself and it contains an unpublished Manuscript and an unfinished manuscript that Rothbard wrote He's planning to write a book on the progressive era as well as later finished essays So it really provides a nice Chronology from basically the railroad interventions of the 1880s really up to the Great Depression So if you haven't bought the book, I highly recommend that you do so I personally find that it's a great gift for weddings funerals mother's days father's days Birthdays Christmases etc. I should preface that at least I think it's a great gift I don't know how the recipients of the gift feel exactly about about receiving this, but you know, oh well in particular I will be looking at sort of you know the chronology, you know the story of the JP Morgan in company Ambit sort of this House of Morgan Remember yesterday. I talked about the House of Cook this famous investment bank situated in Philadelphia After the Panic of 1873 the House of Cook fell and it was replaced by the House of Morgan And this Morgan name is we're very familiar with it Although it they sort of lost power by the time of the the Great Depression It's still a very important name using the JP Morgan Chase Bank. It's very prominent And we'll be looking at this investment bank and its various subsidiary financial You know companies etc during the Theodore Roosevelt Taft and Wilson administration So basically the first 20 years of the 20th century In particular, we'll look at sort of some selective antitrust Prosecution that they were able to do as well as sort of briefly talk about their drives for a central bank in World War One and we'll also sort of go through a general kind of overview of crony capitalism during this era so Here we go. All right, so why should you care so just in general about the book and really just about the progressive era For most people the progressive era was very important and beneficial So the common perception of the 19th century. This was something I alluded to Yesterday in my talk on business cycles was that you had these harmful Monopolies so these large conglomerates these robber barons that exploited the public you have these unsafe working conditions So people were subjected to wage slavery Etc. You had these dangerous consumer goods meat products were adulterated food products were unsafe And so on crippling deflation as well as severe business cycles so basically people say oh these were the ills of the market economy and Yes, they did bring improvements people's living standards went up But there were still many problems and that's why we needed the government to take on a more activist role Which it did in the beginning of the 20th century so the traditional narrative is that against all of these Supposed ills sort of the masses the farmers the populists etc. And these well-intentioned reformers You know the Paul Krugman's the Ben Bernanke's the Elizabeth Warren's of yesteryear They sort of rose up they fought the established interests who sort of resisted these things to you know tooth and nail Etc. And they instituted these enlightened government reforms that we still have with us today a central bank you know an income tax Etc. Rothbard's interpretation is it's not really the progressive era. There wasn't really much progress made It was actually the regressive era. It was sort of a return to mercantilism so political entrepreneurs those entrepreneurs who use the Government to to enhance their own profits sort of allied themselves with court intellectuals so those intellectuals who are sort of less interested in truth, but more interested in Securing a strong bureaucracy or a strong position where they could sort of plan and tinker with the economy Because but that's what most intellectuals like to do as a side point with intellectuals the market doesn't very pay very highly for them That's why many intellectuals are often interventionist because they realize they would mostly just be teachers on the free market most research grants, etc They're by government or various Pro government agencies And this is really the roots of sort of modern government in politics That you know many of these issues that we still have today Okay, so something that's important to note when we talk about big business in the progressive era And this is something that dr. Klein mentioned in his earlier lecture is that businesses are not often advocates of laissez-faire So sort of hands-off or kind of this randian, you know approached where they're they're pure and they might have you know These noble intentions, etc But they're often they can be crony capitalists rent seekers political entrepreneurs, etc so in general a market entrepreneur is someone who Tries to earn profits by producing goods and services that consumers want a Political entrepreneur on the other hand is someone who earns profits by using the government So trying to use the government's laws to their own advantage or even advocating for such laws acquiring subsidies tariffs This the last part is also important regulations that hurt competitors So that raise compliance costs on competitors It makes it harder for them to operate or prohibits restricts the type of products They can sell or how they can price their products, etc It's you know one of my most favorite one of my favorite books on US history This is a book that I read when I just got just getting interested in the Austrian economics of libertarianism It was a book by Burton fulsome. It's called the myth of the robber barons it's a fantastic book if you haven't read it I highly encourage you read it and He really goes through sort of this dichotomy where you have sort of some entrepreneurs who are more market oriented My favorite chapters on railroads. He talks about James J. Hill the great northern And on the other hand you have those entrepreneurs who will use the government for their own advantage So the promoters of other various transcontinental railroads Strictly it makes more sense to talk about market entrepreneurial actions and political entrepreneurial actions. No one's perfect Many political entrepreneurs also were engaged in you know running companies that provided enormous services to the public Likewise many you know advocates of the free market. They just inevitably had to use some government regulation to their advantage So continuing on with this framework Something that's important to note is that not only when we talk about the legislative arena We sort of refer to businesses as okay They will use the laws of the government to obtain net benefits from However, there's also sort of another reason why they participate in the political arena And that's basically to block hostile legislation from other business interests or from other interests such as bureaucracies or social you know socialists, etc. That want to weaken these businesses. So One business might support You know regulation that would you get more favorable dealings with the companies that it sells goods to Or buys inputs from on the other hand those companies are going to want to push for laws that will benefit themselves And in addition, especially large businesses There's still a particular you know hostility to large businesses from parts of the public or intellectuals Who are always just going to be want to want to be trying to push for restrictive legislation, etc So you kind of have to face two threats This is a great quote from uh Rothbard from this uh from the book And this is actually in his world war one its fulfillment and he says big business He's talking about the progressive era He says big business would be able to use the government to cartilize the economy Restrict competition and regulate production and prices And they believe that the big state could thereby provide a middle way Between the extremes of sort of this doggy dog laissez-faire in the bitter conflicts of proletarian Marxism So businesses on the one hand they realize that okay markets They hamper us from achieving monopolies Every business always wants to be the only game in town on the other hand We can use the government and sort of block any sort of you know this radical Marxist or socialist ideas There's a great quote in the book From this guy named Ralph easily and he was the head of the national civic foundation Which was sort of a big business outfit allied themselves with many prominent intellectuals To push for government Regulation and intervention on the federal state and local level and he wrote to one of his contemporaries and he said our enemies are the Are the socialists among the labor people and the anarchists among the capitalists What he means by that is you have these hostile Socialists on one hand and you have not the anarchists in the way we think about it But those people who would prefer to use the free market those businesses because sort of the catchphrase around this time Period became you know markets were you know chaotic they they they were you know It was anarchy again not in the way that we think of it, but in sort of a bad way Okay, so sort of continuing on with this we'll sort of you know have a brief You know we'll describe the history of antitrust during this period antitrust legislation So in the late 19th century in the early 20th century beginning with railroads Uh Various big businesses tried to form cartels mergers trusts etc in an attempt to monopolize markets so All of these are very similar economically a cartel is when a group of people Excuse me a group of you know firms They basically informally work together to restrict production and raise prices a merger is when companies actually Legally form together A trust is sort of similar to a holding company in which one company basically You know a bunch of stock of various companies pooled together And then the they have a value the uh the the stock of the trust is based off the value of the underlying companies Um legally there's differences, but they're all the same Uh without government interventions they'll sort of talk about uh, they were generally very unsuccessful So even with tariffs which blocked out, uh, you know, which blocked out foreign competition Generally monopolies cartels, etc They always on the free market are weakened due to two factors. The first is external pressure Competitors entering in the market. So new firms or existing firms, uh, you know in a different industry now entering a new industry We hear about this a lot with amazon basically moving in on other companies turfs Uh, etc And the second is internal pressure where companies they might form a cartel They say okay, we're gonna raise prices, but then they turn around and they start cheating engaging in secret price cuts, etc So sort of a little prequel to the progressive era related to these large firms Is that you have this very famous act which would be very important in the progressive era Which is the sherman antitrust act of 1890 and this was sponsored by senator john sherman of ohio He's the same guy. I mentioned earlier in the drive for the national banking system See everything kind of flows together. Uh, you know, that's the the the story among uh politicians In bankers, uh during this time period Um and also many big business republicans So why would an act that would ostensibly it's antitrust it's antilarge company Why would it be supported by many politicians who there are many of their constituents or large businesses? Well, it basically fits that procedure I uh described earlier where one antitrust was a blunt to democrats charges that high tariffs caused the monopolies There's an old saying back in the day that said the tariff is the mother of all trusts That meant is that you know large companies they at least they were able to be somewhat successful If you had a large tariff that prevented external foreign competition tariffs back then could be 40 to 50 percent Very high rate, uh, especially compared to what we have now So many democrats said hey, you know one way of getting, you know Blocking these monopolies would just lower tariffs Republicans didn't want to do that because they were heavily in favor of the tariff So instead they said all right. We'll have this law. We won't really enforce it But we can say oh this will break up the uh the monopolies and of course at the same time They deny that the tariffs actually caused the monopolies um So as an example Sherman antitrust act was passed in july of 1890 And then the mckinley tariff which raised rates from 47 percent to 50 percent. It was also supported by john Sherman I was passed on october 18 1890. It's just a couple months later. So it's kind of this awkward. You go. Hmm. I wonder what All right, it's a unique coincidence again Um, and it was also a blunt to sort of more hostile state antitrust So antitrust uh at the state level was supported more by uh smaller businesses Looking to cripple sort of larger businesses that provided Uh benefit from economies of scale to lower prices of goods to consumers An interesting story. This is something that rothbard mentioned in his uh book and I I followed this up with a research paper of mine It's like it was there another motivation for john Sherman And one of these motivations is actually uh, it allowed him to sort of link his rival His political rival russel algor with this notorious diamond match company or at least emphasize it and put it in the public record Uh, john Sherman was a politician. He all his life. He just wanted to get the republican nomination He wanted to be president He's probably one of the most qualified politicians to have never received the presidential nomination despite repeatedly trying for it His last shot was in 1888 Uh, when he thought he had a chance, uh, but russel algor basically at the convention siphoned away delegate votes And uh john Sherman was convinced. This is the reason why he never won. Uh, benjamin harrison eventually got the nomination so Russell algor later sort of became involved in a legal case involving this diamond match company in the senate Floor when he's giving a speech about antitrust He repeatedly mentions john Sherman in this little kind of like rinky dink diamond match company Like he talked about standard oil for two sentences and then he goes through this huge thing about uh russel algor So it was kind of like this very very clear like skewer. Uh, you know this this this revenge sort of um So Sort of look at this at least I you know, I have these two pictures. You can see him john Sherman is on the left Russell algor is on the right russel algor is also a a general Something that's also funny is john Sherman His brother was william tecumseh Sherman who is the famous civil war general And unlike port john whose nickname was the ohio icicle. He wasn't exactly very charismatic John Sherman was repeatedly offered the nomination because he was a military general very successful by the republicans And you know his brother william. He always just sort of turned it down. He's like, I don't want to be president You know, I don't want that job And so he was always very bitter about that too because like here's something he's trying for And his brother, you know, who's not even a politician was basically given what he spent his old life trying to get So this might come as a surprise but politicians can be spiteful. I guess it's the the moral of the story I know this is uh, this is the only cases it's ever happened in Uh, so on okay, so sort of Which was predicted by the initial, uh, you know Founding of the act is that really for the first 10 years of it if its existence in the 1890s Sherman antitrust was rarely used by any of the presidential administrations benjamin harrison administration Uh grover cleveland administration in the william mckinley administration as a funny point. There's sort of an uh A story that went on and rothbard has this quote that when benjamin harrison Signed the antitrust act. He said, you know, john Sherman has fixed general alger So it's kind of like well, he got him sort of, you know He was able to use this whole thing sort of as as a revenge motive Uh, as least was noted by the president summa, which is kind of funny. I guess if you you think about it Um and during this time period There's this great merger movement particularly at the end of the 1890s from 1897 to about 1901 So mergers Reformed were actually companies would literally just try and buy out all their competitors and keep it under their own Company try to monopolize markets. Okay, even with high tariffs 40 to 50 percent And the lack of federal antitrust enforcement There were occasionally antitrust cases But they were almost always decided in favor of the business if anything they were you it was used to break up unions during this time So very favorable to large companies They still failed due to those processes that we mentioned promoters were often over optimistic about the expected revenue So you heard the common thing you hear about is something known as stock watering Where the value of the price of the stock people would complain is is much higher than its underlying value And this is something businesses were trying to swindle people who bought the stock No, this is actually due to they were just so optimistic about their monopolies. They thought it would be that profitable They just made a poor entrepreneurial decision An example of some of these large companies, uh, you have the standard oil trust You have the american sugar refining company The sugar trust so to speak which kept on reforming in the 1890s the beef trust Ironically it was actually never even a trust She'll talk about the national biscuit company as many of us we might still know as nabisco Yes, they tried to initially form a giant cookie monopoly But they were unsuccessful, you know, that's how the cookie crumbles I guess And then you have other companies like us steel which produces steel products And then international harvester which produced agricultural machinery implements So as a result of this they weren't really successful and they would turn to the government to try and help them cartilize Basically they're now trying support regulation that would restrict Smaller competitors or even larger rival competitors as we'll see and we'll go to This is a great quote and this is in the rothbard book It's by a contemporary economist arthur s doing on the quote trust problem So he wrote this in 1914 and he did a study and he showed that well Many of these mergers, uh, they were only profitable at the beginning They were not the leaders in innovative innovation They slowly lost market share market share over time And he says I've been impressed throughout by the powerlessness of merit aggregates of capital to hold monopoly I have been impressed too by the tremendous importance of individual innate ability Or its lack in determining the success or failure of any of any enterprise With these observations in mind one may hazard the belief that whatever trust problem exists will work out its own solution Okay, and uh, he continues here. He says the doom of the inefficient waits on no legislative regulation Is rather delayed thereby. That's an important, uh, emphasis there restrictive regulation will perpetuate the inefficient corporation By furnishing an artificial prop to support natural weakness It will hamper the efficient by impeding the free play of personal ambition It's a pretty good quote by a contemporary economist. He basically says that hey, you know Just buying stuff will not guarantee you a monopoly. It will not guarantee that you will maintain your market share You have to be an innovator even the small guys can win. In fact, the small guys are actually more, uh, They're hungry for the profits. So they're gonna often take the leads in Developing new products, etc. That consumers like, you know, this Austrian solution is laissez-faire the monopolies will get whittled away You don't need government to step in It's a great quote So we moved to about 1901 and things change in terms of antitrust where you have the rise of theodore roosevelt Who's the quote, you know, the trust buster as he's known Um, you know, I it's kind of funny actually is that his successors initiated more antitrust suits than him He just had a, you know, very high profile couple very high profile antitrust cases and he would have this very public persona So it's sort of, you know, stuck in the public's mind to be waging these public battles against the company, you know These companies very charismatic, etc. So in about september 1901, uh, he was mckinley's He wasn't his first vice president. He was a later, uh, vice president Um, yeah, mckinley got assassinated in september 1901. So roosevelt who rothborn and we'll talk about, uh In this presentation had many connections to the investment bank jp morgan and co He sort of now unexpectedly becomes president Back in the day vice president was kind of like the political graveyard, you know, you were putting the vice presidential spot It was sort of like, all right, you know, you know, away with you kind of like after that. It was sort of a dead end Um In december 1901 his first annual address He sort of revives the proposals for the department of commerce and labor And the bureau of corporations, okay Both of these the department of commerce and labor eventually got split into the department of commerce and the department of labor And the bureau of corporations became the much more familiar federal trade commission That was instituted in i think the fall of 1914 Uh, and this was this whole move was to instigate this uh, this compulsory publicity Which is the idea that businesses government can now inspect the books of businesses that have to open up the books Businesses have to comply with reports, etc And this has some cartilizing features Notably it weakens restrictive or excuse me a competitive secret price cutting And two it adds compliance costs, particularly among small businesses Uh, you know, you have to hire more accountants all the paperwork, etc and It can clearly reduce your profitability He sort of clears this with these two morgan partners. So a partner, you know, you you have ownership in the investment bank Uh, george perkins and robert bacon. The first one is particularly important. He's sort of morgan's right-hand man Now a lot of people especially historians will argue that roosevelt wasn't really influenced by the morgan interest because you have this northern securities episode So sort of unexpectedly at the beginning of his administration in february 1902 He unexpectedly launches an antitrust suit against the railroad holding company basically a trust northern securities Which was just recently established It was a combination of jp morgan's interests as well as his rival uh, e.h. Harriman these two giant railroad tycoons Uh, and you know really though what rothbart talks about as well as the historians he cites This is kind of a sort of shadow boxing or you know, people have you know He roosevelt did this more for sort of public reasons to sort of show he was hostile against the morgan interests Even though it didn't really hurt them jp morgan was no doubtably upset at the beginning And he visited roosevelt at the white house and he sort of struck a deal. He sort of got protection for his other companies Even the suit which was decided in about march 1904 only the holding company was banned You know, the railroad ownership was not actually, you know, the railroads were not broken up And morgan's ownership of the railroads was actually strengthened To sort of give you an idea of really how hostile this thing could be to Uh, the morgan company is that the former secretary of war, you know back then it wasn't really the department of defense It was called the department of you know war, which I guess it's a little bit clearer Um, you have a morgan lawyer l o.h. Root Uh, so he left the cabinet to defend morgan In the case and after he was later appointed as the secretary of state So roosevelt really couldn't have been that upset with the you know with the man Uh, I do say oh, you know the secretary of state position Which is you know the most prestigious position in the cabinet or at least around that time period Um, so just to sort of as a picture you have roosevelt on the left You have uh, you have jp, uh, excuse me. You have uh, george perkins in the middle and you have jp morgan on the right And perkins was really the connector between the two of them. There's a great, uh, book that recently came out actually in 2017 Uh, it's called on likely, uh, trust and it talks about the, uh, uh, morgan roosevelt morgan roosevelt relationship and I Contacted the author. I was like, oh, hey, you know, this is actually kind of similar to the progressive era stuff In case you're interested and you know, I send him a copy and all that um, and uh So it goes through a lot of the stuff. This isn't really a conspiracy theory. I mean, this is the historians, you know Admit this, uh, you know those who are willing to sort of uh, look at these relationships Uh, I personally think I I keep bringing this up to people I personally think that jp morgan was the inspiration behind wario. So the uh, the the mario character I don't know. Uh, so sort of as mark Thorin is trying to you know say, oh, okay What did richard kantan look like? I think that you know morgan was the inspiration behind wario evidence here You have wario with gold and this is a quote that morgan he actually said something different But still great quote. He said gold is money. Everything else is credit. He's basically like gold is muffy Only gold is money. Nothing else is and then there's wario with gold. I mean, I think it's I rest my case, uh, to be honest Um, we got a paper on this somewhere. Uh, no So we go through the uh, this philosophy of the good, uh, you know the good trust and the bad trust So roosevelt, uh, who along with uh, george perkins had this philosophy that some trusts were good They were acting in the public interest other trusts were bad. They were monopolistic. They were exploiting the public, etc Now coincidentally, uh, both george perkins, uh, and roosevelt really thought the good trusts were the morgan companies Companies like us steal an international harvester. Some of which george perkins, uh, was very instrumental in setting up So it's no surprise like, oh, yeah the the companies I set up, you know, they're good You know, everyone else is kind of is bad the bad trusts were really those companies that were owned by rival financial interests john d rockefeller The standard oil company Harriman who had rival railroads compared to the morgans, uh, the beef trust, uh, etc So many of these rival financial interests, uh, they were invested in different companies And if you're able to focus the, you know, the the assault anti trust legislation against those companies, you're weakening those financial interests Sort of the economic theory behind this is at least in raffbard and power and market He talks about the difference between an invasive bribe and a defensive bribe Or an invasive bribe is when someone is bribing a politician to get some sort of special privilege And this is kind of the case the morgans were able to basically, uh, almost, you know, in a sense capture or heavily influence roosevelt's decisions Where they got a protection for their own companies, but not a protection for their rivals So they were basically allowed to operate uninhibited while the their rivals had to deal with You know very hostile government and that's obviously unfair, you know, that that's an invasive bribe. It's not really so much as a defensive bribe To sort of continue with the bureau of corporations, uh, the rockefeller's lobby against the bureau, uh And roosevelt sort of demagogically uses this to get the bill passed in february 1903 because rockefeller and standard oil were very heavily hated and roosevelt was able to you know, really bring drive this point home Again coincidentally in the same month the elkins anti rebating act, which was a an act that restricted railroads From giving price discounts or rebates sort of pro morgan railroads anti shipper You know that was passed around the same time elkins anti rebating act would also eventually be used against standard oil Standard oil is was a shipper. They would uh, they would transport their goods on railroads Ironically also the beef trust was a shipper. Uh, the large meat packing companies in chicago Roosevelt held sort of these informal detents or these talks with International harvester u.s. Steel whenever the bureau investigated them It was you know, it was sort of very kind Nothing threatening was done or roosevelt sort of blocked anything threatening from them Um and in addition his administration was sort of dominated by people in the morgan ambit either his unofficial policy advisors Like george perkins The bill that have actually passed the bureau of corporations roosevelt gave one of the pens to george perkins So oh, you're very influential in helping me start this thing. Oh, okay, you know again, that's Interesting fact to sort of consider Um, so this was at least the good trust those trusts who received the favorable You know sort of protection from the government Interestingly enough despite this u.s. Steel international harvester. They were still not successful companies. Why because they still to deal with competition On the other hand you have sort of the bad trusts and this could be an example of this was the beef trust So this is a combination of armor and swift you can actually sometimes still see these names if you go to a deli They weren't actually even a legal trust And it's kind of funny is they actually sold the same amount back then the two major food Beef, excuse me meat products were beef and pork But I guess the beef trust had a better ring than like the beef and pork trust or like the meat trust I don't know. So why was it bad? Well, you know, here's something interesting This is something that some historians have noted. I think it's highly You know, it's important. Roosevelt was a failed South Dakota cattle rancher who had the you know ranchers sold their Cattle to the beef trust they constantly complained about them and he testified against them in the embalmed beef scandal during the Spanish-American war, which is when This general criticized the beef products the company sold to the army They said they were spoiled and rotten testimony actually turned out that well It was really the army's fault because you know, I guess they they they didn't refrigerate the meat Or they opened up canned meat. They just love to hang out in the sun in Cuba for like multiple days It's like that will probably make the meat taste bad. I'm not a chef or you know a scientist but anyone can kind of tell you that And uh, ironically the general Nelson my miles he was married to a A niece of John Sherman and the secretary of war during this time period, which general miles criticized was none other than Russell Alger. So again, you know, there's like these like inner family battles that really continue throughout all this politics Um, so there was antitrust suits initiated them against them in 1902 in 1904 the bureau It's one of its first acts. It investigates them. It says, oh, they're a monopolistic company Um, and in a later research paper, this is something that Rothbard talked about in the book in chapter eight I sort of continue to have been working on this with research of my own Uh, Roosevelt sort of supported these radical socialists Upton Sinclair Who wrote the jungle as well as other uh progressives the institute sort of these crippling health regulations on meatpackers But the meatpackers Classic regulatory capture in the progressive era They were they were able to fight back and secure very beneficial regulation They got this free inspection free of charge. It's this huge subsidy and they increased, um Compliance costs on their smaller firms So actually before the actors passed the beef trust its market share was constant It was only around 30 of total cattle slaughtered But after the meat inspection act it's its market share went up Okay, again, this is the classic compliance costs weakening small Companies and actually a lot of these health scares Uh, they they weren't you know, they they they weren't health scares the beef trust was involved in You know refrigeration, etc other product innovations that improved meat safety Uh, another bad trust is sort of e.h. Harriman's railroads. So Harriman was a Morgan rival They're actually quotes and Morgan is referring to Harriman as a punk He's like how he's his little punk. He's his upstart, you know, he's trying to you know come on You know on my turf and consequently Roosevelt was not a huge fan of Harriman Harriman donated to Roosevelt's reelection in 1904 But it didn't really help because in 1906 Roosevelt sort of rumors are breaking up some of his railroads And one of his attorneys went to see uh, Roosevelt the White House Roosevelt just courted sort of said well, you don't know what Morgan and some of these other people say about Harriman Which is kind of this odd saying like why would this politician be Listening, you know to a rival financial interest about how to you know deal with another financial interest It's kind of you see the favoritism and sort of a revealing quote Um in 1907 Roosevelt played favorites, uh with Morgan With Morgan over Harriman. They were both vying for a purchase of a railroad The boston and main railroad in the northeast and Roosevelt basically let Morgan take any blocked Harriman from being able to purchase it Uh, so he you know he allowed Morgan to buy it. No antitrust suit was really seriously initiated and uh, Harriman done it, uh, you know purchased it most likely an antitrust suit would have been initiated So similar sort of favoritism um The bad trust the the worst the baddest of the trust, I guess you could say uh, the worst of the worst Uh come for for for Roosevelt was john d. Rockefeller standard oil Why because McKinley and more canna has sort of his political guru is uh, his you know, the carl rove Of of of the old days. Uh, we're both Rockefeller Republicans Situated in Ohio where standard oil was initially based In they first resisted roosevelt's vice presidential nomination Then the rockevillars lobbied against roosevelt's bureau of corporations in 1903 They tried to get mark hannah run as a republican challenging roosevelt in 1904 mark hannah died So, you know, it wasn't really successful And then they supported the democratic candidate at least there's evidence they did in 1904 So it's not the best way to uh, you know, to try and curry favor with uh, roosevelt So roosevelt sort of vindictively said later He said it antagonized me before my election when I was getting through the bureau of corporations bill And then I promptly threw it on the gauntlet to it. So I issued the challenge So they tried to fight me with my bureau of corporations bill and you know before my election And now you know, all right now i'm gonna play, you know, i'm done playing games You know, i'm gonna i'm gonna play rough with them in 1906 the uh, the bureau reported that standard oil Violated the anti the elkins anti rebating act as a 29 million dollar fine. It's enormous fine back then You know, I wouldn't want to get fine 20 my 29 million dollars now If you think about how large it was back then it was the largest amount of corporation has ever find They were able to successfully repeal it But more importantly roosevelt in 1907 filed an antitrust suit to break up the company which was successful in 1911 Okay, um So this is an important aspect that you know, again, this is uh, you know Standard oil was a company that for you know lowered prices to consumers Increased product innovation, etc But it was always heavily criticized and public and roosevelt sort of used this and there are various personal reasons Why roosevelt didn't didn't like the company as we see the good trust bad trust dichotomy is really You know, again, it's kind of personal reasons, you know, who's rival financial interests. Are you supporting, etc? Um, so the morgans are really able to successfully protect their companies during the roosevelt administration Insecure sort of some favorable, uh, government regulation Um, but sort of there's some trouble brewing kind of in the taft administration So roosevelt steps down after two terms. This was before you had a constitutional amendment Everyone just sort of followed the tradition of uh, george washington In taft sort of from ohio Uh replaces him the morgans were initially optimistic but taft and you know Rothbard always thought he was sort of closer to the Rockefeller interests Uh, one of the things he points out at least some of his lectures is that he um Uh taft, you know as a supreme court justice appointed Someone who later worked for standard oil and was also in john d Rockefeller jr. You know bible study class And you know, he thought he's like no, it's a it's a Rockefeller counter attack Young it's the morgan administration, you know, it was a total smash, you know, all right, you know, so you take it for what it's worth Um, but so he initiated these antitrust suits, uh against us steel and international harvester in 1911 and 1912 So the morgans were obviously upset And roosevelt's furious since it's basically a slap at his previous administration Taft is implicitly saying that roosevelt did the wrong thing He protected these companies when he should have, uh, you know, you know initiated antitrust, uh suits and you know, Broken them up So roosevelt was sort of induced to run again for a third term He tries to win the republican nomination. He's not successful in 1912 And then he runs as an independent for the progressive party this newly created progressive party that what do you know is headed by George perkins So you can kind of see like, okay, you know, it's sort of a morgan inducement to get roosevelt to run again And the idea was to basically split the republican vote, uh, to make sure taft didn't win So in 1912, uh, this was really the last election in, uh, in american politics where there's a third party that actually had some sort of viable Influence, uh, roosevelt actually got more votes than taft But this split, uh, and the republicans basically caused democrat woodrow wilson who's from new jersey to win Now woodrow wilson as far as i can tell as far as i know, it's still true Is he's the only president to be an academic who's an academic and so he's i think he was one of the worst presidents of all time If not the worst, uh, so this just goes to show that just don't trust any academic Let us a phd economy, you know economists is running for president unless it's me you trust me But everyone else don't don't trust them. Uh, but you so academics do not make great politicians in other words um Now wilson had many connections sort of to the morgan sphere sphere of influence and really there was these two major policies, uh, that the uh, you know They were very beneficial to the morgans during the wilson administration the first was Finally fulfilling the drive for a central bank Which is something that was really started to be in earnest in since 1907 rothbard has spoken about this a lot You had the federal reserve act of 1913 And this was a huge strength to many new york city banks Those dominated by the morgans in particular Increased their bankers balances Protected their bankers balances. Uh, they've been losing reserves to other rival cities Remember when i was talking about the national banking system before New york city was the main center of reserves As time went on people started to switch to other rival Basically, uh cities chicago and st. louis became central reserve cities And in this initially the federal reserve the federal reserve bank of new york Was really the most powerful agency of the federal reserve The federal reserve board or what later became the board of governors was actually almost subordinate To the federal reserve bank of new york and who headed the federal reserve bank of new york from 1914 to by 1928 Was benjamin strong who coincidentally had many connections connections to the jp morgan and co the house of morgan ambit Another huge, uh, you know benefit, uh to the morgans was in terms of foreign policy So you had world war one, which uh, you know started broke out in europe in the middle of 1914 And in 1918 the united states officially intervened on the side of britain and france in april 1917 They were favorable to them before so, but this is you know, we officially enter um Declare war against germany Uh, et cetera and all right. Why were the morgans very enthusiastically in favor of getting uh, sort of Pushing wilson to enter war on the side of the um of britain and france Well, the morgans had a monopoly on selling war munitions munitions and materials to britain and france They had many connections in london and they were able to secure to them many favorable contracts with their companies like us steel And they also had a monopoly on selling, uh, their war bonds in the us So kind of like how j cook and co had had the monopoly on marketing, uh federal bonds to united states citizens The morgan banks had a monopoly on selling british and french bonds In the united states So they clearly have a financial interest in making sure that britain and france win because if not the value of all these contracts War bonds, et cetera is going to go down So they were you know, they Talked they go through this a lot, but the morgans were influential in pushing Basically wilson to declare war on the side of the allies The morgans were extremely dominant in the 1920s This is sort of the the their power when they were the most influential Dominant in the uh in the presidential administrations in the central bank, et cetera They lose power in the second roosevelt administration By that i mean the f dr administration Who's really more favorable to sort of rival financial interests like rockefeller haremann as rather sort of these rival banks, uh getting started investment banks Starting up, uh the morgans were sort of wasp white anglo-saxon Protestants you had many other banks starting up there in his time italian Jewish banks these names would be familiar bank of america Lehman brothers goldman sacks, et cetera. They were sort of able to gain their power during the roosevelt administration um This is a great quote and it's not from uh rothbard. It's from ron churnow So just to show you that the stuff really it's not like sometimes crazy conspiracy theory ron churnow has written many Like authoritative very these exhaustive biographies of people. He's a very serious scholar one of his great books On the it's called that I believe it's called the house of morgan came out in 1990 rothbard cited it in some of his later essays He says the united states emerged from the first world war with thriving industries and a record trade surplus sovereign states city governments Incorporations flocked to wall street as they had once courted london's merchant princes Sunning in post-war glory the house of morgan was the world's most influential bank Able to select the most credit worthy customers and alone capable of handling many huge state loans that that's important um The house of morgan spoke to foreign governments as the official voice of the american capital markets It's influenced innocently stemmed from money, but from intangibles Cache political connections and banking alliances It goes with the jewish banks weakened the yankee axis of jp morgan national city bank first national bank held the keys to the kingdom Okay, so this is you know, and this is basically the High power over the past 20 years the morgan's were able to work through the presidential administrations and at the end of the wilson administration They were at their strongest So at least some of the stuff i consult the progressive era Some of the stuff on the antitrust was a paper i wrote on john sherman On revenge and then the last was a working paper on On the meatpacking companies and you can find all of these online for free Also on ssrn The revenge paper was on the tom woods podcast as well. I think i'm out of time. Thank you very much. I appreciate your attention