Корпорация и двадцатый век. История американского делового предпринимательства - Richard N. Langlois;

193. “Aldrich Hits at Private Bankers in Sweeping Plan for Reforms,” New York Times,

March 9, 1933, p. A1.

194. Schlesinger (1958, pp. 434–35); Tabarrok (1998). National City had been the principal

bank of William Rockefeller, the brother of John D. Rockefeller Sr.; and the William Rockefeller family had intermarried with the family of National City president James Stillman. Winthrop Aldrich was the son of Senator Nelson Aldrich and the brother-in-law of John D. Rockefeller Jr. He had only recently taken charge of Chase, which had grown through mergers and acquisitions. Aldrich was in the process of remaking the bank and purging older directors and officers, including those with Morgan associations. (One particularly lavish golden parachute raised eyebrows at the Pecora hearings.) Aldrich’s proposals for the Glass-Steagall Act were arguably part of this process, as the Act’s provisions would give banks authority to limit the number of their direc- tors. Amusingly, in the year 2000 Chase would merge with J. P. Morgan & Co. to form today’s JPMorgan Chase.

195. Kelly (1985, p. 53).

196. Chernow (1990, p. 375).

197. Tabarrok (1998, p. 11).

198. Chernow (1990, pp. 384–87).

199. Carosso (1970, pp. 371–75).

200. DeLong (1992, p. 22).

201. The “firewall” provisions would be repealed in 1999. After the financial crisis of 2008,

there were calls for a “new Glass-Steagall Act.” This despite the fact that most of the entities that failed in the crisis—including Bear Stearns, Lehman Brothers, Merrill Lynch, and Morgan Stanley—were pure investment houses, whereas the entities called upon to bail them out—like JPMorgan Chase and Bank of America—were integrated operations. William D. Cohan, “Bring Back Glass-Steagall? Goldman Sachs Would Love That,” New York Times, April 21, 2017.

202. Gilbert (1986). The Banking Act of 1933 covered only Fed member banks; the ceilings were extended to all commercial banks by the Banking Act of 1935.

203. In the 1960s, the Vietnam War inflation and the rise of mutual funds combined to in- duce savers to withdraw their funds from the banking system. Commercial banks were reduced to giving away steak knives and toasters to attract depositors, and they clamored for repeal (Calomiris and Haber 2014, p. 194). Regulation Q was eventually phased out in the 1980s.

204. Kennedy (1973, pp. 205–8).

205. Calomiris and White (1995).

206. Deposit insurance of the kind set up under the Glass-Steagall Act also creates serious

problems of moral hazard: because premiums aren’t tied to the riskiness of a bank’s loans and because the bank’s liability is limited to the value of its net worth, the system encourage risky lending; and because deposits are insured, it eliminates the incentive for depositors to monitor the quality of banks. This is why the earlier state experiments with deposit insurance failed. In the 1980s, a similar insurance system would take down the entire American savings-and-loan industry (White 1989).

207. Chernow (1990, p. 374). 208. Brandeis (1914, p. 92).

Notes to Chapter 6 607

209. Keller and Gehlmann (1988); Schlesinger (1958, pp. 440–42); Seligman (1982, pp. 39–72).

210. Landis (1959, p. 32).

211. Keller and Gehlmann (1988, p. 339); Seligman (1982, p. 54).

212. Mahoney (2001).

213. Parrish (1970, pp. 108–44); Seligman (1982, pp. 73–100).

214. Seligman (1982, p. 99).

215. McCraw (1984, pp. 153–209).

216. The code had been devised as one of many industry codes under the National Industrial

Recovery Act (on which more below), and indeed the SEC agreed to administer the code just days before the NIRA was declared unconstitutional by the Supreme Court.

217. Easterbrook and Fischel (1984).

218. Mahoney (2015, p. 98); Neal and White (2012, p. 111).

219. McCraw (1984, p. 191).

220. Kandel et al. (2015).

221. Cudahy and Henderson (2005, pp. 41–71); Hughes (1983, pp. 201–26).

222. Indeed, Insull’s sympathetic biographer attributes the downfall of the Chicago empire

not to the crash or to Insull’s own missteps but to the House of Morgan, which was attempting though its United Corporation to create a nationwide monopoly in electricity akin to the Bell monopoly in telephony (McDonald 1962, p. 250).

223. In fact, revenue in the electricity sector declined only 6 percent during the early years of the Depression. Reductions in demand from industry were partly counterbalanced by in- creases in the consumer sector, where those workers still employed spent their increased real incomes on energy-using appliances (Ramsay 1975, p. 78).

224. Perino (2010, pp. 118–20). The elder Insull was extradited back to the US from Turkey in 1934 to face charges that included federal mail fraud. He would be acquitted of all the charges. 225. “Franklin D. Roosevelt’s Political Ascension,” The Master Speech Files, 1898, 1910–1945, Franklin D. Roosevelt Presidential Library and Museum, http://www.fdrlibrary.marist.edu/

_resources/images/msf/msf00530 (accessed August 9, 2022). 226. Mahoney (2012, p. 39).

227. Mahoney (2012, p. 44).

228. Leuchtenburg (1963, pp. 154–56).

229. Leuchtenburg (1963, p. 157).

230. Katznelson (2013, p. 162).

231. Kandel et al. (2015, p. 17).

232. Morck (2005); Roe (1994, p. 107). 233. Prasad (2012, p. 19).

234. The yardstick claim was manifestly untrue, of course, as the very different costs struc- tures of federal power facilities made them entirely incommensurate with private utilities (Mc- Craw 1971, p. 73; Neufeld 2016, p. 180). Based archival records of the TVA, the Federal Power Commission, the Rural Electrification Administration, the National Electric Light Association, and the Edison Electric Institute, Kitchens (2014) determined that the average monthly bills paid by TVA residential consumers differed little from what consumers paid private firms op- erating in the same area.

608 Notes to Chapter 6

235. McCraw (1971); Neufeld (2016, pp. 155–202).

236. Between 1920 and 1929, the US farm population declined by more than 4 percent. Between 1929 and 1933, it actually increased by almost 6 percent, not returning to 1929 levels until the beginning of war mobilization in 1939 and 1940. Joseph