Pujo Committee

The Pujo Committee was a United States congressional

subcommittee which was formed between May 1912 and
January 1913 to investigate the so-called money trust,
a community of Wall Street bankers and nanciers that
exerted powerful control over the nations nances. After a resolution introduced by congressman Charles Lindbergh Sr. for a probe on Wall St. power, Arsne Pujo of
Louisiana obtained congressional authorization to form a
subcommittee of the House Committee on Banking and
Currency.

economy were the focus of attention: clearing houses, the

New York Stock Exchange, and the growing concentration of wealth within the economy. Witnesses were rst
examined on May 16, 1912.[4]

3 Findings and Aftermath

3.1 Clearing Houses
The Committee concluded that clearing house associations (associations created for the clearing of checks to
and from individual banks) based in New York were gaining power at the publics expense. This was done via
minimum capital requirements as well as predatory membership and discriminatory member policies. The report
states, Non-member banks must engage a member bank
as its clearing agent, which in eect leaves its future up to
the discretion a single bank."<Pujo, Report of the Committee.</ref> This clause allowed member banks and the
boards of these clearing houses to stie any competition
that might arise from smaller upstart banks by smiply
telling their member banks not to act as their clearing
agents. In fact, the Panic of 1907 started with the closing
of the Knickerbocker Trust Co., when its member clearing bank (the National Bank of Commerce of New York)
refused to act as its clearing agent anymore.[5]

Background

Beginning in the late 1800s, a concern regarding the

power of bankers and monopolies began to grow. This
led to a breaking point in July 1911, when Senator
Charles August Lindbergh asserted that a banking trust
existed within the United States and that it should be
investigated.[1] A move to create an investigation was then
made on February 7, 1912, when the democratic Money
Trust Caucus decided to pass House Resolution 405.[2]
Not long after this resolutions passage, amendments followed placing the investigation of the Money Trusts into
the hands of then-chairman of the Banking and Currency
Committee, Arsne Paulin Pujo of Louisiana. Pujo submitted a resolution, later amended and passed by a vote
of 268-8, to establish the footing upon which the rest of
the investigation would base itself.

3.2 New York Stock Exchange

As early as December 12, 1911, the lawyer Samuel Untermyer supported the creation of such an investigation,
encouraging Lindbergh to continue ghting for its creation despite early setbacks. Untermyer, a strong proponent of the investigation himself, eventually came to
be the committees counsel. [3] Despite being called the
Pujo Committee, in March of 1912, approximately a
month after it received authorization, Pujos wife became
ill, forcing him to take an indenite leave of absence
from the investigation. His successor was Representative
Hubert D. Stephens of Mississippi.

The Committee discovered that, much like the clearing

houses, certain predatory listing practices were forcing
certain restrictions on both members and non-members
of its exchange. Additionally, the Committee discovered
large amounts of Unwholesome speculation and price
manipulation, citing examples of large groups colluding
for prot and ultimately running companies out of business.

3.3 Concentration and control of money

and credit

Overview

The Committee discovered several forces, such as the

consolidation of banks and interlocking directorates
(small groups of the same men serving as directors on
several dierent boards) had led to increased wealth
accumulation of 42.9% of Americas total banking resources held by its twenty largest banks.[6] Furthermore,

The investigation originally intended to include within its

focus data from 1905-1912 relating all loans made of
$1,000,000 or greater, however the Comptroller of Currency furnished only a fraction of the overall data, hampering the investigations scope. Three sections of the
1

with much surprise to the investigators, it was found that

180 individuals covering 341 directorships in 112 corporations...[possessed] $22,245,000,000 in aggregate resources of capitalization.[7] Finally, it was concluded that
a system known counterintuitively as Banking Ethics
prohibited competitions amongst banks and rms.
Despite the fact that lead attorney Samuel Untermyer had
predetermined that no money trust would be found as part
of the Investigation because There is no agreement existing among these men that is in violation of the law
[8]
and despite the refusal of aid by the Comptroller of
the Currency, the failure of the Senate to pass the bill
to amend section 5241 of the Revised Statutes and the
lack of any authoritative decision by the courts sustaining
the committees right to access the books of the national
banks,the Pujo Committee Report concluded in 1913 that
a community of inuential nancial leaders had gained
control of major manufacturing, transportation, mining,
telecommunications and nancial markets of the United
States. The report revealed that at least eighteen dierent
major nancial corporations were under the control of a
cartel led by J.P Morgan, George F Baker and James Stillman. These three men, through the resources of seven
banks and trust companies (Bankers Trust Co., Guaranty
Trust Co., Astor Trust Co., National Bank of Commerce,
Liberty National Bank, Chase National Bank, Farmers
Loan and Trust Co.) controlled an estimated $2.1 billion. The report revealed that a handful of men held manipulative control of the New York Stock Exchange and
attempted to evade interstate trade laws.
The Pujo Report singled out individual bankers including
Paul Warburg, Jacob H. Schi, Felix M. Warburg, Frank
E. Peabody, William Rockefeller and Benjamin Strong,
Jr.. The report identied over $22 billion in resources and
capitalization controlled through 341 directorships held
in 112 corporations by members of the empire headed by
J.P. Morgan.[9]
Although Pujo left Congress in 1913, the ndings of the
committee inspired public support for ratication of the
Sixteenth Amendment in 1913, passage of the Federal
Reserve Act that same year, and passage of the Clayton
Antitrust Act in 1914. They were also widely publicized
in the Louis Brandeis book, Others Peoples Moneyand
How the Bankers Use It.
House of Morgan partners blamed the April 1913 death
of J.P. Morgan on the stress of testifying in the Pujo hearings, though other health factors were certainly involved.

See also
Arsne Pujo
Pecora Commission
United States v. Morgan et al. (the Investment
Bankers Case)

EXTERNAL LINKS

5 Notes
[1] The 'Money Trust.'" The New York Times, July 24, 1911.
[2] To Investigate the Money Trust. The New York Times,
February 8, 1912.
[3] Untermyer to Lead Money Trust Inquiry. The New York
Times, January 12, 1912. See also page 53 of Pujo Committee Report and Plan Inquiry Into the 'Money Trust,'"
The New York Times, December 22, 1911.
[4] Pujo, Arsene. Report of the Committee Appointed Pursuant to House Resolutions 429 and 504 to Investigate the
Concentration of Control of Money and Credit.
[5] Pujo, Report on the Committee.
[6] Pujo, Report of the Committee.
[7] Morgan Reveals Business of Firm. The New York Times.
December 19, 1912.
[8] Say Money Trust is Now Exposed NY
Times
Jan
12,1913
http://query.nytimes.
com/mem/archive-free/pdf?_r=2&res=
9F00E2DB163FE633A25751C1A9679C946296D6CF

[9] Report of the Committee Appointed Pursuant to

House Resolutions 429 and 504 to Investigate the
Concentration of Control of Money and Credit. February 28, 1913 http://www.scribd.com/doc/34121180/
Pujo-Committee-Report-Report-of-the-Committee-Appointed-Pursuant-to-

6 References
Louis Brandeis, Other Peoples Money (1913) ch 1
Ron Chernow, The House of Morgan: An American
Banking Dynasty and the Rise of Modern Finance
(2001) ISBN 0-8021-3829-2

United States. Congress. House. Committee on

Banking and Currency. Money trust investigation.
Investigation of nancial and monetary conditions in
the United States under House resolutions nos.429
and 504, before a subcommittee of the Committee
on Banking and Currency. Washington, Govt. Print.
O., 1913. http://www.scribd.com/doc/34121180/
Pujo-Committee-Report-Report-of-the-Committee-Appointed-Purs

7 External links
Pujo Committee Hearings - searchable full-text Also known as Money Trust Investigation. Investigation of Financial and Monetary Conditions in the
United States Under House Resolutions Nos. 429 and
504.
Pujo Committee Hearings - Exhibit 134-C Explanation of Table of Interlocking Directorates Pujo
Committee 1912

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