Abstract: The Limits of Government Regulation of Interlocking Directorates: The Social and Economic Ties of J. P. Morgan & Co., 1901-1914

Susie Pak


This paper is a study of the U.S. federal government's attempt to regulate finance capitalism before the First World War. By using the bank of J.P. Morgan & Co. as a case study, the paper argues that the government had a very narrow understanding of the relationships that were important to the work of private bankers. Though the Morgans were resistant to government oversight in general, they were less protective of some relationships than others. A significant fact that has been overlooked is that they were willing to sacrifice formal economic ties and commitments, whose loss they privately and publicly acknowledged would not alter the ways they did business. The paper looks at the social and economic ties of the Morgan bank at three key moments in the firm's history and demonstrates that the Morgans' network, widely defined, was not organized as a homogeneous and collusive unit. I argue that the Morgan bank's network was not tied together only by its formal economic ties, such as interlocking directorships, and that the government's attempts to regulate it as primarily an economic network have failed for that reason.