Morgan and City Bank—“I do not look into other people’s business”—and
about joint transactions between Kuhn, Loeb and the others.
Untermyer led his witness through various aspects of financial concen-
tration—alliances of bankers with other firms and underwriters, interstate
ties, and bankers’ control over smaller firms and industrial companies.
Schiff straddled certain issues. He favored interlocking directorates, but he
supported the requirement that banks publicize their assets. He agreed to
“proper supervision” of banks by the government, but “you can crush the
life out of a bank by too much law.” He termed monopolies “odious,” but
he meant only those established by corporations. Those of individuals
were harmless; if they overreached themselves, they would collapse under
their own weight. Overall, he grudgingly admitted that he was aware of the
trend toward concentration of control but that it did not concern him. Shy-
ing away from labels of right and wrong with respect to banking practices,
he preferred to emphasize what he thought was “prudent” or “practical.”^92
The Pujo committee’s findings were never in question. Concentration
and control of the nation’s banking and credit were thriving under
Morgan’s direction. Kuhn, Loeb, although not a member of Morgan’s
“inner group” of firms, was guilty at least by association, since it was “qual-
ifiedly allied” with the culprits. Congress took no action on the Pujo re-
port, because the Taft administration was winding down. Nevertheless, the
report was kept alive by a scathing critique of the money trust by the
“people’s attorney,” Louis Brandeis. Among other things, his book Other
People’s Moneyrehashed the Union Pacific affair and told of the huge fees
and commissions collected by Kuhn, Loeb.^93 Since the public became
more sensitized to the power of the investment bankers, it was not surpris-
ing that Kuhn, Loeb drew attention when hearings were held in 1914 on
the appointment of Paul Warburg to the Federal Reserve Board. Then
rumor had it that if Warburg was confirmed he would use the post on be-
half of his firm.^94
The Far EastThe international dimension of Kuhn, Loeb’s transactions had begun
early on. Interest in foreign investments sprang initially from the firm’s
ties to European bankers. Since it was dependent on the Europeans for
much of its capital and since Schiff’s associates in England and on the
Continent were eager to fund industrial growth in Europe and to tap the
resources of underdeveloped countries, Kuhn, Loeb willingly followed
suit. In the 1880s, years before the United States emerged as an imperial
power, the firm was involved in business with Mexico and Canada. Within a
short time it widened its focus to include Central America and, as the firm
32 Jacob H. Schiff