Arsène Pujo

Arsène Pujo   (activist, politician)
Born	December 16, 1861
Died	December 31, 1939 (Age 78)
Nationality	US
Member of	Pujo Committee
Interests	The Money Trust
Campaigning member of the US House of Representatives.

Arsène Paulin Pujo was a member of the US House of Representatives.

He chaired the "Pujo Committee" which was charged with exposing The Money Trust, an anticompetitive conspiracy among some of the nation's most powerful financial interests (trusts).

The Pujo Committee Report concluded in 1913 that a community of influential financial leaders had gained control of major manufacturing, transportation, mining, telecommunications and financial markets of the United States. The report revealed that at least eighteen different major financial corporations were under the control of a cartel led by J. P. Morgan, George F. Baker and James Stillman.

Biography

Pujo was born near Lake Charles in Calcasieu Parish to a French-born father. He practiced law in Lake Charles and was a delegate to the state constitutional convention in 1898 before he was elected as a Democrat in 1902. In 1908, he became a member of the National Monetary Commission, a body which sought to study foreign banking systems in search of ways to better the domestic banking system. In 1911, he was appointed to chair the House Committee on Banking and Currency. In 1912, he left the National Monetary Commission and obtained congressional authorization to form a separate committee, which came to be called the Pujo Committee, to investigate the "money trust".

The Pujo Committee

The investigation originally intended to examine data from 1905–1912 regarding all loans of $1,000,000 or greater; however, the Comptroller of the Currency furnished only a fraction of the overall data, hampering the investigation's scope. Three sections of the economy were the focus of attention: clearing houses, the New York Stock Exchange, and the growing concentration of wealth within the economy. Witnesses were first examined on May 16, 1912.

The Pujo Committee found that a cabal of financial leaders were abusing their public trust to consolidate control over many industries.

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 public's 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 effect leaves its future up to the discretion a single bank." This clause allowed member banks and the boards of these clearing houses to stifle any competition that might arise from smaller upstart banks by simply 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.

New York Stock Exchange

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 profit and ultimately running companies out of business.

Concentration and control of money and credit

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 different boards) had led to increased wealth accumulation of 42.9% of America's total banking resources held by its twenty largest banks.

Furthermore, with many surprises 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." Finally, it was concluded that a system is known counterintuitively as "Banking Ethics" prohibited competition among banks and firms.

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”, 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 committee's right to access the books of the national banks, the Pujo Committee Report concluded in 1913 that a community of influential financial leaders had gained control of major manufacturing, transportation, mining, telecommunications and financial markets of the United States.

The report revealed that at least eighteen different major financial 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 (Banker’s Trust Co., Guaranty Trust Co., Astor Trust Co., National Bank of Commerce, Liberty National Bank, Chase National Bank, Farmer’s 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. Schiff, Felix M. Warburg, Frank E. Peabody, William Rockefeller and Benjamin Strong, Jr.. The report identified 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.

Although Pujo left Congress in 1913, the findings of the committee inspired public support for ratification of the Sixteenth Amendment in 1913 that authorized a federal income tax, passage of the Federal Reserve Act that same year, and passage of the Clayton Antitrust Act in 1914. The findings were also widely publicized in the Louis Brandeis book, Others People's Money—and How the Bankers Use It.

After Congress

While still a Congressman Pujo worked as a lumber company lawyer and helped suppress an Industrial Workers of the World (IWW) timber workers strike in 1912, which cumulated in the Grabow riot. Although the coroner charged the Galloway Lumber Company of Grabow, Louisiana with murder for shooting and killing three union strikers on July 7, 1912, the grand jury refused to indict and instead charged 58 union members with first-degree murder. Pujo helped prosecute 9 but the jury returned a dismissal after 1 hour of deliberation and the remaining defendants were released. (Perlman and Taft, p. 246)

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