Capital has all grown from small to large, from large to strong, and finally to monopoly. To this end, politicians and capitalists of various countries have experienced a series of open and secret struggles, from the struggle to the compromise, and finally to cooperation, the whole process of intellectual struggle is a wonderful story.
The story begins in 1864: the young John D. Rockefeller married the daughter of the Ohio legislator, in addition to his social status, the old man brought him a lot of financial resources, the local bank provided an abundant loan for the expansion of Rockefeller's oil company, and by 1869, his factory had become cleveland's largest refinery, and when competitors could only refine one or two barrels of oil a day, The Rockefeller Company produced 1500 barrels.
But Rockefeller never liked the stinking oil zone, and the vicious competition in the industry left a terrible impression on him. Despite so-called production restriction agreements among producers, they still go their own way to dig wells and sell oil at a price that is only a little more expensive than water. Such waste convinced Rockefeller that competition was a great evil, and that only the more monopolistic the company, the more efficient it was to make money.
Young Rockefeller
This realization accompanied Rockefeller throughout his business life, prompting him to set up the Ohio Standard Oil Company for $1 million in January 1870 and to persuade other refineries to form a secret alliance with the railroad company. The coalition controlled transportation routes between Ohio and Pennsylvania and secretly stipulated that the open price for crude oil freight rates was 80 cents per barrel, but internal members would only pay 40 cents.
The agreement has been called "the cruelest death pact in the history of American industrial development," and small and medium-sized enterprises that fail to enter interest groups have only two paths to go, waiting for death at high transportation costs or bowing to the Rockefeller-led coalition. Small refineries were pocketed one after another, and Rockefeller tasted for the first time the benefits of a "monopoly."
When the Franco-Prussian War broke out in 1871, Rockefeller took advantage of the shrinking oil export market triggered by the war to buy off the major banks in Cleveland, asking them not to lend money to troubled oil companies and forcing them to agree to be acquired. In this way, Rockefeller pocketed almost all of ohio and Pennsylvania's refineries.
By the end of the 1970s, Rockefeller had mastered every aspect of the oil chain, from extraction to transportation to refining. It is said that in the acquisition negotiations, if the other party hesitates, Rockefeller will open his own ledger and claim that even if he sells oil cheaply, he will make more money than they sell it at cost.
Rockefeller was not satisfied with this, for there would always be someone who quoted a lower price, and what he needed was a supreme, absolute, and sole monopoly.
Rockefeller
In 1879, Rockefeller's lawyers found a genius solution: to persuade the owners of 40 oil companies to hand over their shares to the trustees led by Rockefeller, which meant that 40 companies became in some sense independent companies, which Rockefeller named the Standard Oil Trust.
By this time, Rockefeller's fortune had reached $40 million, but the accusations and curses he had suffered never stopped. In the Pennsylvania oil region, countless producers dreamed of breaking the founder of monopoly capitalism with a Mauser rifle.
All kinds of dirty methods have left Rockefeller with infamy from beginning to end, and legal proceedings and investigations have not stopped. His character was also questioned, and when the American church asked the Christian for $160,000, Rockefeller reluctantly offered only $100,000. When the Colorado Miners' Union organized a strike, Rockefeller did not hesitate to dispatch armored vehicles and heavy machine guns.
Public opinion commented on him: "Rockefeller donated money with two hands, but robbed with many hands." "However, these costs are obviously not worth mentioning compared to the monopoly machines built by one's own hands."
In the shadow of this vast trust, oil workers have to work hard for a salary of $3 to $4 a week, and even children often have to work from 5 a.m. to 8 p.m. — of course, when they can find a job. Due to the overwork of labor brought about by the wave of immigration, the cost increase feared by the capitalists has not occurred, and people have to accept any conditions from their employers in order to support their families.
Perhaps most of these people had read Alger's Chicken Soup for the Soul, but they had obviously not been favored by God. Even Alger himself, after making up one inspirational story after another, could only end up depressed in an apartment on a cold street in New York. If someone had the opportunity to personally rebuke Alger, the chicken soup king would most likely have replied with a smile, "Friend, this is capitalism." ”
After the birth of the Standard Oil Trust, the sugar trust, tobacco trust and rubber trust rose one after another, and these desperate industrial monsters for profit made the United States the largest economy at the end of the 19th century.
Money trusts
The Rockefellers grew bigger, giving birth to the Sherman Antitrust Act of 1890, but this bill only cooled the trust craze slightly. In 1889, a lawyer named James Deere proposed to the governor of New Jersey a new law that would allow New Jersey companies to merge to acquire shares in other companies, and the state government could make money through fees.
For the purpose of increasing fiscal revenue, New Jersey ushered in a new era of American capitalism in which competing companies no longer had to spend much effort to organize into a giant trust, and they only needed a holding company to legally acquire the shares of other companies to achieve the same purpose: monopoly.
In the last decade of the 19th century, a frenzy of mergers and acquisitions of holding companies swept through the United States, and the "promoters" who had the ability to bring companies together made a windfall from it. At the dawn of the 20th century, a consortium led by J.P Morgan served as the initiator and successively formed holding companies such as General Electric and International Harvester Corporation. It was wall Street's most glorious years, and the financial oligarchs became the rulers of the American economy.
J. P. Morgan
When Schwab, Carnegie's deputy to the steel magnate, described the idea of the steel trust to Morgan in 1900, Morgan realized that he would be fortunate enough to operate the largest restructuring in history.
At that time, the family change made Carnegie retreat and plan to sell the company. Schwab convinced Morgan that if there was a major merger of the U.S. steel industry, the company would beat European steel companies and dominate the world steel market. More critically, looking at the United States as a whole, perhaps only Morgan can afford it.
Over the next few months, Morgan organized several secret meetings in the study of the Madison mansion, attended by steel tycoons from afar. The meeting lasted until the spring of the following year, when Morgan finally accepted Schwab's offer on a golf course. When the dust settled, Morgan bid carnegie farewell, "Mr. Carnegie, congratulations on becoming the richest man in the world. ”
A shock to Wall Street was announced: The "American Steel Company," a restructuring of seven companies, will buy Carnegie's steel empire for $480 million. It was the first company in human history to have more than $1 billion in capital, an unprecedented monopoly monster. On the day the company went public, the number of stock transactions forced the New York Stock Exchange to announce a one-day closure to complete the bill consolidation work.
Carnegie
Carnegie was initially very happy with the deal, and his original psychological bottom line was only $320 million. But when he realized that the behemoth monopolized 60 percent of the country's steel production, he couldn't help but complain to Morgan that his bid was too cheap.
The impact of the deal exceeded Morgan's expectations, and the media expressed strong concerns about it: the belief that if these trusts could not be contained, there would be an emperor on Wall Street in less than 25 years.
By serving as directors of each other within companies, one industrial sector after another was conquered, and the physical manufacturing industry in the United States was deeply kidnapped by the financial industry. Popular aversion to trusts has also grown with the rise of Wall Street, strikes have occurred one after another, from struggling workers and farmers to the middle class in the cities, everyone is looking forward to the government to deal with these monopoly giants.
But in the early 20th century, the federal government did not have a ministry of commerce, a ministry of labor, a trade commission, or even a central bank, and they believed that commerce should have little to do with the government. As these trusts grew larger, weak Washington was no longer able to stand up to Morgan's Wall Street, and in fact in 1895, in order to buy gold reserves, the U.S. government had to turn to Morgan to borrow money from Wall Street through his prestige.
Morgan did not have the slightest intention of backing down, he believed in the way of the mighty of that era, and like Rockefeller and Carnegie, he pursued to dominate the wheel of history with his hands, and did not care who would be crushed. In that era of "you are poor and you deserve it", no businessman would care about the lives of poor people, and monopolized interests outweighed all the turmoil and strife.
After the completion of the U.S. Steel transaction, Morgan launched a non-stop attack on the North Pacific Railroad, experienced a fierce battle in the capital market, and won control of the North Pacific Railroad through the new company "Northern Securities". Amid the spat and complaining, the world's largest railroad consortium was born, with 2/3 of the nation's railroads under Morgan's control.
In the fall of 1901, Vice President Theodore Roosevelt succeeded the assassinated President McKinley in the White House. Roosevelt, 43, had given himself many titles, such as patriot, scholar, reformer and even playboy, and he was also a person who "did not like Wall Street."
Roosevelt
But in his first congressional address, the young president told the public not to worry about what was happening in finance and industry, and that he would continue McKinley's policies. This is a good sign for Morgan that the nascent Northern Securities will still need time to stand the test of the law.
But a few months later, the fuse of the bomb was ignited.
Game and compromise
In February 1902, without warning, Nox, the attorney general in the Roosevelt Cabinet, filed a lawsuit in which he overturned the Sherman Antitrust Act, which morgan saw as demystified, and demanded a spin-off of the Northern Securities Corporation.
When the news reached Morgan's home, the 65-year-old Morgan was said to have looked frustrated and angry, unprepared for the punch. An enraged Morgan travels to Washington, wondering why the government can't greet him decently before announcing its decision. In the face of questioning, President Roosevelt replied to him simply, "Greeting Wall Street beforehand?" We are precisely unwilling to do so. ”
This apparently did not calm Morgan's anger, and he told Roosevelt that if the president could send someone to Wall Street, J.P. Morgan would quickly correct the mistake. The president's answer was equally firm and cold, "We don't want to fix mistakes, we just want to end them." ”
The brief conversations ended in vain, the sharp social contradictions at home worried Roosevelt, and the ordinary people who struggled to survive in the haze of trusts were a time bomb that had to pull America back from the brink of a cliff. Roosevelt firmly believed that only by placing the economy under government regulation could the state function stably. Morgan, for his part, insists that the economy can only function well on strong monopolies.
History does not stop for a stubborn old man, and before the lawsuit was launched, Joseph Pulitzer, the publisher of the New York World, had been fighting these big capitalists for many years, and the famous journalist had been the sworn enemy of the trust, and Roosevelt's actions had greatly delighted him.
Militant unions are also supporters of the president, who have longed for the complete subversion of Wall Street, while exploited peasants and urban laborers have longed for revolution.
On March 14, 1904, the U.S. Supreme Court ruled that Northern Securities was an illegal corporate union and must be dissolved. The western transport industry returned to a situation of competition and scuffle, the railway trust ultimately failed to stand the test of time, and the wave of mergers came to an abrupt end.
Although the media did not have a high opinion of President Roosevelt, he did usher in a new era in the United States: Before he punished these monopoly monsters, the government almost never defended the interests of ordinary people. As a traditional American, Roosevelt has always tried to balance the interests of all classes, so that each class has the opportunity to speak out, while carefully improving the gap between rich and poor.
Roosevelt's counterattack further ignited the anger of the people, and Morgan in the spotlight began to be frequently attacked by public opinion. In the decade from 1903 to 1912, more than 2,000 scandals about Wall Street and the Morgan family were published in the press, and after that, as long as the Morgan family was involved in the industry, the black articles followed.
After the Battle of the Northern Securities Company, Roosevelt began to try more moderate means to alleviate class contradictions, and he divided trusts into beneficial and harmful, and treated them differently. When Morgan formed the International Commercial Shipping Corporation, Roosevelt expressed support for the maritime industry trust for reasons of competition with Europe.
Northern Securities' folding made Morgan a little discouraged, and as his son Jack grew up, he retreated. In addition to paving the way for the future of his son Jack, Morgan devoted much of his later years to discussing the planned central banking system with the federal government. But Wall Street couldn't live without J.P. Morgan— who in 1907, morgan led the NYSE and bankers to save the Wall Street panic that year, but it also attracted the attention of the federal government.
The government did not want Morgan's influence to become a power of bankers in the future, leaving it at the mercy of money trusts like J.P. Morgan, Citibank, and Stillman. After the crisis of 1907, calls for a central bank grew louder, and after nearly a decade of playing with the media, the public and the federal government, the aging Morgan chose to compromise.
The product of the compromise was the Federal Reserve Act signed by President Wilson in December 1913 and the subsequent birth of the Federal Reserve, through which the White House regained some of its financial dominance from Wall Street, and although the influence of the Morgan family still existed within the Fed, bankers were still strongly formed.
Morgan failed to see these things happen, and after realizing that his health was deteriorating, he wanted to return to his family's old house in England, but he did not make it to London and died. It is said that at the end of his life, Morgan still pointed his finger above his head and said, "I will persevere." (End of story)
(The story material comes from the Internet, and its authenticity remains to be examined)