regulatory policies were to blame. Speaking usually for the railroad com-
bines, Schiff disagreed. To be sure, the president had acted in a spirit of
“vengeance” against Harriman and the roads, but hard times would have
come even without his antitrust actions. He explained to Fleming in Lon-
don that investors had become discouraged when the government, labor,
and the people dug in their heels. The prospects were gloomy if the situa-
tion persisted, because it was “easier to conjure up ghosts than to lay
them.” He believed, however, that Roosevelt could still speed up the return
of confidence were he to adopt a protective attitude toward the railroads.
Meantime Schiff, like Morgan, worked for cooperation among banks to
prevent a total collapse of the market. The initiative was Morgan’s, and
again Schiff praised his former rival. No one else could have accomplished
what Morgan had despite his “autocratic” manner.^90
Nonetheless, the panic fueled public outcries against Wall Street. As
Vincent Carosso has explained, fear of a conspiracy involving a few inter-
national bankers for control of the nation’s economy, if not the nation it-
self, grew from early antebellum roots. Now, in the first decade of the new
century, muckrakers and others urged federal curbs on the “money trust”
and its alleged abuses. In 1912 the House of Representatives authorized an
investigation of the most prominent Wall Street banks by a subcommittee
under the chairmanship of Arsène Pujo. The Pujo committee engaged able
counsel in the person of Samuel Untermyer, a multimillionaire and corpo-
ration lawyer turned critic of big business. All understood that in the legal
sense no money trust existed, but the term was used to describe the consol-
idation and concentrated control of industry by the major bankers. Under
the glare of the public spotlight, Untermeyer questioned leading bankers
on their business methods, their stock holdings, the control they exercised
over the companies whose stock issues they had underwritten, and their
ties to one another. The House of Morgan was the prime focus, but Kuhn,
Loeb was targeted as well.^91
Like the other banking houses, Kuhn, Loeb was required to complete a
detailed questionnaire for the committee, but the firm stated in its cover-
ing letter that it was under no legal obligation to furnish most, if not all, of
the information requested. The testimony of two other bankers shed a bit
of light on the practices of Kuhn, Loeb; but Schiff, resentful of the investi-
gation, was a reluctant and even a hostile witness. If he didn’t answer
Untermyer’s questions with “I do not remember,” his best responses were
“I believe,” “I think so,” or “it may be.” A sparring match developed when
counsel reiterated that the banker hadn’t answered the question. Tempers
flared; to Untermyer’s “Will you not answer the question?” Schiff snapped
back, “I shall answer... in my own way.” Nor was the latter forthcoming
on the investments and directorships of his partners and of Kuhn, Loeb.
He was especially vague when asked about the practices of other firms, like
The Making of a Leader 31