Other People's Money and How the Bankers Use It

E-189: Frederick A Stokes Company. Very Good in Good+ dust jacket. 1914. Eighth Edition. Hardcover. Hardcover. 8vo. Frederick A. Stokes New York 1932. 223 pgs. 8th Printing. DJ has shelf-wear present to the DJ extremities (chipping present to the spine ends). Bound in cloth with titles present to the spine. Boards have light wear present to the extremities of the boards. No ownership marks present. Text is clean and free of marks. Binding tight and solid. This book by a well known Supreme Court justice attacked the arrogance of American business leadership and raised questions about corporate capitalism. Brandeis feared the concentration and centralized power of corporate bigness. He felt it would force the transfer of privilege in America social policy from innovative to vested interests. It was therefore a political and moral fear rather than a economic one. Whatever the reasons, Brandeis was committed to the dissolution of the big corporations and interlocking directorates regardless of the costs in efficiency. The book contains his arguments in support of his views.1. They were too large to manage.2. Bankers who dominated management responsibilities had a conflict of interest.3. Reduced competition contributed to economic inefficiency.4. Interlocking directorates led to misallocation of resources and maldistribution of income.5. Monopolies suppressed competition. New entries into an industry were tied up because innovation jeopardized capital investments.6. Concentration of money was conducive to discriminatory credit practices, and inflated cost of money to new capital investment. The feature of this book is Brandeis' resentment over investment bankers and Wall Street achieving their wealth without risk. They used "other people's money." Their power and growth came from wielding the savings and capital of others. "The goose that lays golden eggs has been considered a most valuable possession. But more profitable is the privilege of taking golden eggs laid by somebody else's goose." The investment bankers had that privilege. They controlled people through the use of people's own money. The Pujo Committee investigated the evils which Brandeis had described, but the legislation that resulted from their findings did not go far enough. The Federal Reserve Act, the Federal Trade Commission, and the Clayton Anti-Trust Act fell short of what Justice Brandeis had wanted. The did little to reduce the concentration of control in the economy. In 1915, 1925, and 1935 Brandeis continued to advise curbing economic concentration, but nothing was done. Arsene Pujo's investigation determined that J. P. Morgan members and directors of their controlled trust companies (the First National Bank and the National City Bank) held 341 directorships in 112 corporations with capitalizations of over $22 billion. The sphere of influence of the bankers led to many industrial evils: 1. Prices were determined by agreement and not competition.2. The money trust extorted excessive profits by suppressing competition.3. Industrial liberty was suppressed. The intimidation of financial power was extended to the small, independent business man, professional man, and others who needed credit and had to buy products from the corporations controlled by the money lords. Brandeis cited the endless chain of control through which the financial oligarchy operated. U. S. Steel was the nexus of big business. The few men who controlled steel were directors of 29 railroads and steam-ship companies, the largest steel customers. Brandeis stated that before American business could regain its freedom, interlocking directorates had to be prohibited. The issues brought forth in this book are as fresh and vital today as they were over 100 years ago. E-189; 8vo 8" - 9" tall; 223 pages .