Creature From Jekyll Island by G. Edward полностью

One more problem facing Wall Street was the fact that thebiggest investment houses, such as Morgan & Company and Kuhn,Loeb & Company, although they remained as competitors, were bythis time so large they had ceased doing serious battle against eachother. The concept of trusts and cartels had dawned in Americaand, to those who already had made it to the top, joint ventures,market sharing, price fixing, and mergers were far more profitablethan free-enterprise competition. Ron Chernow explains: Wall Street was snowballing into one big, Morgan-dominated institution. In December 1909, Pierpont had bought a majority stake in the Equitable Life Assurance Society from Thomas Fortune Ryan. This gave him strong influence over America's three biggest insurance companies—Mutual Life, Equitable, and N e w York Life.... His Bankers Trust had taken over three other banks. In 1909, he had gained control of Guaranty Trust, which through a series of mergers he converted into America's largest trust.... The core Money Trust group included J.P. Morgan and Company, First National Bank, and National City Bank....

Wall Street bankers incestuously swapped seats on each others boards. Some banks had so many overlapping directors it was hard to separate them.... The banks also shared large equity stakes in each other....

Why didn't banks just merge instead of carrying out the charade of swapping shares and board members? Most were private

partnerships or closely held banks and could have done so. The answer harked back to traditional American antipathy against concentrated financial power. The Morgan-First National-National City trio feared public retribution if it openly declared its allegiance.1

*• Chernow, pp. 152-53.

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THE CREATURE FROM JEKYLL ISLAND

Interlocking directorates and other forms of hidden controlwere far more safe than open consolidation but they, too, had theirlimitations. For one thing, they could not penetrate the barriers ofsimilar competitive groupings. As these combines became largerand larger, ways were sought to bring them together at the toprather than to capture the corporate entities which comprised them.

Thus was born the concept of a cartel, a "community of interest"

among businessmen in the same field, a mechanism for comingtogether as partners at a high level and to reduce or eliminatealtogether the harsh necessity of competition.

All cartels, however, have an internal self-destruct mechanism.