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| JUPITER MORGAN - A caricatire of J.P. from the 1902 book Millionaires
of America mocks his ambition with a banner in Latin that reads: Either
Caesar or nothing." Morgan's red nose was caused by chronic rosacea.
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I've a fascination for American history, and the people who made us a
success. J.P. Morgan is among the most fascinating, and he wandered
into my head last night.
In 1895, with the economy hemorrhaging jobs since 1893, the US Treasury was verging on collapse. Worry that there wasn't enough
gold to back up paper scrip, caused a run on the banks. At that time, it
was customary for the Treasury to hold a minimum of $100 million in gold reserves. That minimums had been breached.
President Grover Cleveland had resorted to "wishing" for a magical
solution. He was not, however, willing to listen to J.P. Morgan,
who,
as a Wall Street banker and capitalist, was anathema to the Democrat
party. Yes, them roots are deep. Morgan was however the only man
on Earth who could save the day, and he knew it.
He took the train to Washington,
holed up in a hotel, stating that he would not leave until Cleveland
heard him out. With no option remaining, Grover finally gave Morgan the
audience. In a nutshell, J.P. grabbed the President by the lapels,
telling him, You nincompoop, there is but $9
million in gold in the Treasury. I know of one person who holds a draft of
$10 million against treasury gold. If that draft is presented, the
nation will be insolvent before 3PM. For God's sake let me forestall this!
Cleveland, agreed to let Morgan help, even as Democrats screamed in
outrage. However, the very news that Morgan was even "on the job," was
enough to calm the market and the crisis ended. Note what public confidence alone can bring about.
In 1907 the nation's chronic gold shortage caused a run on the
banks; the New York Stock Exchange was about to go belly-up. Again
Morgan rallied bankers - forcing them to purchase treasury bonds. Morgan risked $60 million of his own money, but it worked. Democrats were outraged that
Morgan was involved; worried that he might someday profit from the
bonds he purchased. In 1910 Progressive Democrats took control of
the congress, and by 1913 had given us their permanent solution. The Federal Reserve Board.
As a self professed economic tyro, I have two questions:
1. Why in hell has congress fought like hell to stop a Federal Reserve audit?
2. Is there any gold in Fort Knox?
Do we want to know the answers? Prolly not, but it's time us Joe
six-packs started paying real attention to what these clowns are doing
to us.
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