THE LONDON CONNECTION
417
houses told Morgan they would bail out the firm—but only if Peabody shut down the bank within a year.'1 Jackson continues the narrative:
The clouds lifted dramatically when the Bank of England
announced a loan to Peabody's of ?800,000, at very reasonable interest, with the promise of further funds up to a million sterling if and when required. It was a remarkable vote of confidence as Thomas Hankey
[governor of the Bank of England] had already rejected similar appeals from various American firms who did not measure up to his standards.... Peabody & Company recovered almost overnight and indeed hoisted its turnover above pre-slump levels.2
With an almost unlimited access to cash and credit backed by the Bank of England, Peabody and Morgan were able to wade hip deep through the depreciated stocks and bonds that were sold to them at sacrifice prices on Wall Street. Within only a few years, when sanity had been restored to American markets, the assets of the firm had grown to gigantic proportions.3
This event tells us a great deal about relationships. If the Rothschilds truly had been competitors, they would have seized upon this opportunity and used their great influence within the Bank of England and the other investment houses in London to squeeze out Peabody, not to assist him. The Barings, in particular, were already trying to accomplish exactly that. The Rothschilds must have believed that a successful Peabody firm ultimately would be in their own best interest.
ANTI-SEMITISM WAS PROFITABLE
In later years, Jack Morgan (J.P., Jr.) would assume the role of a staunch anti-Semite, and this undoubtedly strengthened his hand at dealing with American investors and borrowers who were loath to have anything to do with Jewish bankers. That, of course, included officials of the U.S. Treasury. It was particularly helpful during the 1896 rescue of the federal government from a decline in its gold reserves. Fearing that it would not be able to honor its promise to exchange paper money for gold coins, the government was forced to borrow $62 million in gold. The House of Rothschild was an obvious source for such a loan, but the Treasury wanted to avoid an 1 • Chernow, p. 11.
2. Jackson, pp. 56-57.
3. Josephson, p. 60.
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418 THE CREATURE FROM JEKYLL ISLAND
anti-Semitic backlash. Everything fell into place, however, when Morgan and Company became the
The consummate politicians of the Cleveland administration ...
were certainly aware of the dangers inherent in promoting a rescue effort for the United States Treasury that would be financed by those archetypes of 'international Jewish financiers,' the Rothschilds....
During these developments, Pierpont Morgan took no direct part in the s a l v a g e effort. Up to this point it l o o k e d as if the aging financier—he would be fifty-eight in two months—would be merely one among many in this and whatever subsequent bond arrangements would be necessary. It seemed as though he would move on into old age with little more to round out his obituary than his awkward attempt to profiteer on the sale of rifles at the start of the Civil War, his minor shorting of the Union in gold trading toward the close, and a bold but largely unsuccessful move in the 1880s to impose an eastern capitalist cease-fire on the country's warring railroads.
But there were steps being taken even now to bring him out of the financial backwaters—and they were not being taken by Pierpont Morgan himself. The first suggestion of his n a m e for a role in the recharging of the reserve originated with the London branch of the House of Rothschild.1
The apparent anti-Semitism of J.P. Morgan, Jr., was again extremely profitable during World War 1, when it was widely publicized that the Kaiser was funded by German-Jew bankers. To deal with the Morgan group, therefore, as opposed to Kuhn Loeb, for example, was in some circles almost a point of national patriotism.
When J.P. Morgan, Sr., died in 1913, people were shocked to learn that his estate was valued at only $68 million, a paltry sum compared to the fortunes held by the Vanderbilts, Astors, and Rockefellers. It was even more unbelievable when Jack Morgan died in 1943 and left an estate valued at only $16 million. A small amount had been transferred to members of their families prior to their deaths, but that did not account for the vast fortunes which they visibly controlled during their lives. Surely, there had been a bookkeeping sleight-of-hand. On the other hand, it may have been true. When Alphonse Rothschild died in Paris in 1905, it was revealed that
1. Wheeler, pp. 16-17.
