Book Review by Greg Lubrano (Masters Student, St. John's University)
Susie J. Pak. Gentlemen Bankers: The World of J.P. Morgan. Cambridge: Harvard University Press, 2013. ISBN: 9780674073036. $55.00. 368pp.
Link to purchase from press.
In
her detailed analysis of J.P. Morgan & Co. in Gentlemen Bankers: The World
of J.P. Morgan, Susie
Pak examines the late-nineteenth and early-twentieth-century banking community
and the intricate subtleties that underlie the changes that the firm underwent in
this firm in this period. Discussing the
multiple relationships that J.P. Morgan & Co had with other banks or financial
groups, and the people who headed them, Pak explores how the firm conducted
business with those from significantly different ethno-cultural social
spheres. Her conclusion argues that the
nature of the American banking system at this time was based not only on the
separation of the private and professional worlds of individual bankers, it was also predicated on formally
established relationships founded on trust, “that character and confidence were
the foundations of their business”(p.2).
Providing a new outlook with which to view financial institutions, Pak
asserts that banks such as Morgan are part of a complex network of
interactions, and it is necessary to carefully investigate these relationships
in order to understand this community.
In her introduction to Gentlemen Bankers, Pak establishes why
J.P. Morgan & Co., and the banking community of the early-twentieth
century, possessed relationships with firms or groups separate from their
social sphere. Explaining how such rules
of banking etiquette were developed, Chapter One examines not only the creation
of the House of Morgan as a private and commercial bank but also the ‘gentlemen
banker’s code.’ This code established
the premise of the banking community’s standard of relations, basing it on a
banker’s reputation (p.20). Chapter Two analyzes
the social interests of the Morgan partners, including the social clubs they
belonged to, as well as the nature of high-society marriages. All of this centered on the public image that
bankers aspired to demonstrate amongst the members of their community and
society at large. The subsequent chapter
discussed the social separation of J.P. Morgan & Co. and German Jewish
bankers, particularly the firm of Kuhn, Loeb & Co. Although possessing many structural
similarities in their banking methods, the ethno-cultural distinction between
the two firms demonstrated that if such barriers were present, “Financial
efficiency was not the goal of all economic decisions” (p.84).
The remaining chapters of Pak’s work
concern the successive issues that gradually changed the nature and structure
of the Morgan’s business model. In
Chapter Four, Pak describes how the shift in leadership from Pierpont Morgan to
his son Jack mirrored the changes that occurred in the United States with the
First World War. This conflict had a
fundamental influence on how J.P. Morgan & Co. would conduct business and
its relation to the authority of the United States government. Chapter Five examines the increase in the
Morgan firm’s inclusivity after the war, admitting men who lacked any kinship
relationship to the firm but who had managed to achieve success through elite
university education. Desirous of preserving
their exclusive public appearance and the networks where future partners were
produced, however, the Morgans made sure to maintain the segregationist
standards at Harvard University and other schools to keep these groups socially
separate. Chapter Six explains the
conflict that the Morgan firm faced in doing business with Japan, including
suppressing their racial beliefs and dealing with the belligerent actions of
the nation prior to the Second World War.
In her final chapter, Pak asserts that the apparent change in J.P.
Morgan & Co.’s role from private bank to “public servant” benefitted the
firm, gaining the, “formal backing of their government” (p.218). In her conclusion, Pak contends that while
many changes had affected the Morgans, the firm was able to preserve such
aspects of their community as the distinction between the private and public sphere
and the importance of trust, which remained central to the complex network of
banking (p.225).
In revealing how J.P. Morgan &
Co. and the American banking community was able to alter its structure, while
at the same time preserving the essential facets of its business relationships,
Pak has produced a work that displays how the private and professional worlds
of these bankers were completely distinct from each other. Despite this separation, the means with which
they kept these pillars in place reveals the morally objectionable ideology of
America’s elite businessmen.
Nevertheless, Pak, through her impressive use of quantitative history, demonstrates
how the Morgan firm was not impervious to the changes of history, such as the
greater public awareness and responsibility that New Deal politics fomented; in
the end, though, their private ideology remained. This book would appeal to a wide general
readership; not only to those who wish to know more about the nature of one of
the financial community’s most famous banks, but also those interested in the
structure of elite society at the turn of the twentieth century.
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