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JP MORGAN CHASE BANK – BANK, CRIMINAL ENTERPRISE, OR BOTH? (PART III)

April 18, 2014

JP MORGAN CHASE BANK – BANK, CRIMINAL ENTERPRISE, OR BOTH? (PART III)
As I have blogged before, bank panics occurred periodically in American history until FDR’s New Deal gave us the FDIC (federal insurance of accounts). We haven’t had a panic since (a situation where those with bank accounts are beating on the doors and windows of banks to get their money out before their banks lost it). We had such a “panic” in 1907, when the Knickerbocker Trust Company in New York City was being besieged by depositors on rumors that the bank had made bad debts on copper contracts and was going to go under (exactly 100 years from when Wall Street banks “made bad debts” on derivatives that drove their bailout and our further impoverishment under then President George W. Bush, Jr.).
Then President Teddy Roosevelt, fearful that the panic would spread, called in a banker to help in nipping this spread of panic in the bud. He called in J. P. Morgan to head up a midnight meeting of other bankers and promised them $25 million dollars to use in ending the panic before it got out of hand. Under Morgan’s leadership, the group backed the Trust Company of America, the then “too big to fail bank” of that time, in deciding which banks survived and which did not. It worked. New York City’s newspapers hailed Morgan as a “king;” he had “saved” the city and the country. New York’s press neglected to inform us that Morgan pulled it off without spending a dime of his own money. The money came from the public’s coffers, just as our public coffers shored up insolvent Wall Street banks recently under the “brilliant” leadership of Bush and his Treasury Secretary (a former CEO of Goldman Sachs).
While the “Panic of 1907” withered, bankers who took risks with their depositors’ money did not. From that point through WW I and years of scams and speculative investments, the stock market was ready for not just a panic but a full-blown collapse, and collapse it did in October of 1929. Then President Hoover called another bankers’ meeting. They met at the House of Morgan on 23 Wall Street under the leadership of Thomas Lamont, Acting Morgan chairman (CEO) at the time. The gathering came up with a plan to submit to Hoover, who was sitting in Washington waiting for their advice. The bankers agreed to come up with $25 million each to go stock-buying, and they were temporarily successful in blunting the worst of the depression to come. New York City’s media again was jubilant; the country was again saved! It didn’t work this time. The citizen-crushing Great Depression followed. What the New York City’s newspapers didn’t again tell us was that those banks gathered at the House of Morgan were not really using their own money but rather the money of depositors in their respective banks. Then as now, the banks want to be saved from the excesses they cause or caused, but with your and my money.
Banks failed by the thousands during the Depression, but the big Wall Street banks all survived, and gobbled up such failed banks for a song. The merger mania of the 1990s added to their trophies; then came Clinton’s catastrophic signature (on the advice of his treasury secretary, Bob Rubin, a former CEO of a big Wall Street bank) on a bill repealing Glass-Steagall (a bill passed in 1933 specifically for the purpose of divorcing banks’ commercial from their speculative investment banking). Even with the FDIC in place which insured depositors’ accounts in their banks, the banks found a way to do an end around the FDIC to get to the public purse with their mortgage securities and derivatives games. They got to not only their depositors but to all of us with their antics (now available with the repeal of Glass-Steagall) and their “too big to fail” propaganda. We continue to pay dearly for their under-regulated speculation.
Yes, J. P. Morgan once put the public interest over his own, but his legacy bank of today, profit-driven, elitist and still speculating with our money, doesn’t. Reenactment of Glass-Steagall, anybody? GERALD E

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