Hudspeth in Wilton: Quite a program in the town

Stephen Hudspeth

Stephen Hudspeth

Staff / Hearst Connecticut Media

Have things changed very much when it comes to how tycoons operate in our country? Maybe not so much even though the forms of our technology have so radically changed over the past two centuries.

Consider Nicholas Biddle from two centuries ago. He controlled the Second Bank of the United States. In its time it was the closest thing to the Fed that our country had. Its network of relationships with correspondent banks across the country gave it huge power and influence. Astride it stood the formidable Nicholas Biddle. The power his position as president of the bank gave him rivaled that of the President of the United States, and more than a few in that time asserted that it even exceeded it. One of those was President Andrew Jackson. The confrontation between Biddle and Jackson over reauthorization of the bank by Congress convulsed our country in the early 1830s and became the centerpiece of Jackson’s re-election battle for his second term in office.

In that battle, Biddle marshalled all of his considerable power over politicians at both the national and the local level. For example, Biddle’s bank itself and also its correspondent banks across the country offered sweetheart loans to politicians of all strips who would support the bank’s reauthorization and to that end see that Jackson was not elected to a second term. Biddle ultimately failed in his efforts to unseat Jackson as President, but it certainly was not without vigorous - and almost successful -- trying. Was the bank good for national growth? Probably so. Did it wield far too much political power? Undoubtedly so.

The turn of the 20th Century brought a titan of even greater stature and influence than Biddle: J.P. Morgan. His power was such that he was able to bring all of the railroads west of Chicago to the Pacific under common control through his Northern Securities Trust. The consolidation of all of these railroads gave the trust a stranglehold on farmers and merchants seeking to get their products to market. Morgan had both politicians and judges in his hip pocket, but when he faced off against President Teddy Roosevelt (and a strong public backlash against his stranglehold), he met his match. Teddy Roosevelt had his Attorney General sue Morgan and the trust for monopolization under the newly passed federal antitrust law, the Sherman Act, and Roosevelt won in the U.S. Supreme Court with the trust successfully broken up.

However only three years after that government victory, it was Morgan himself who brought an end to the Panic of 1907 that threatened to take down the U.S. banking system in a scenario not unlike the 2008-2009 financial crisis. Banks had offered loans to support stock-market speculation in a bubble that burst, creating massive financial turmoil. Into that disaster stepped none other than J.P. Morgan himself, committing his personal fortune to shoring up the market and letting the world know that he was all in. That word alone had the power to settle markets and save the U.S. banking system. From a purely selfish standpoint, Morgan’s action certainly saved his investments, but it also rescued our nation’s banking and financial markets; the upshot led to a meeting between Morgan and Roosevelt that established the seminal ideas on which the Federal Reserve System was created a half-dozen years later.

These vignettes from our nation’s history illustrate the great power that tycoons have had in our country for the good and the ill, and it is arguable that the Supreme Court’s Citizens United decision has furthered their power in the political process even more. That power can work for good or ill, sometimes at the same time.

How have tycoons of the past affected national life and what guidance can their roles and fortunes provide for how we address the tycoons of our current age with their enormous power over social media and internet technology? Those are the engines of our economic growth just as railroads, steel producers, and automobile manufacturers were in earlier generations.

That’s the subject of this year’s iteration of the hugely popular Wilton Historical Society and Wilton Library’s joint series on American history. This year’s series is titled, “Tycoons: Bane or Benefactors?” Its opening session is on Feb. 27th with the ever-popular Dr. Matt Warshauer, Central Connecticut State University history professor, kicking it off with his always trenchant overview that focuses on Biddle. Following sessions will take up J.P. Morgan, Henry Ford, and finally the tycoons of our own era. Quite a program.