The Panic of 1907, 2nd Edition

Chapter 21Money Trust

In 1873, … [t]he Money Trust began forming soon after the [Civil War] to control the volume and issue of money, the same as Industrial Trusts have since sought to control the products in which they deal… . This organization is the principal ally of the political party that champions the interests of the privileged classes… . What is the outcome if class legislation and Trusts continue unchecked? … The Financial Trust will own all the other Trusts.

—William H. “Coin” Harvey, 1899¹

Conspiracy theories of a moneyed elite taking over American society had sprouted episodically since the founding of the Republic. In the 1890s, the populist reaction to growing industrial concentration and financial crises spawned the notion of a “money trust.” Books and articles by William Harvey (under the pen name “Coin”) promoted the idea. But it circulated mainly among activists until the Panic of 1907, after which it entered the political mainstream.

On March 17, 1908, Senator Robert La Follette resurrected the money trust idea to claim that the Aldrich–Vreeland Act was a sop to some 100 financial leaders, a “comparatively small clique, which has succeeded in dominating the finances of the country.” Furthermore, La Follette argued that this group plotted the Panic of 1907, “to satisfy business, legislative and political grudges, and to advance their own selfish interests.” He said, “Morgan was especially wroth with Morse, while Standard Oil had long awaited opportunity ...