Takes a pillaging black tuesday. She joins me today to discuss all the president s banker presie hidden alliances that drives american power. Welcome and congratulations on such a fabulous book. As we take a look into washington, wall street, and the families that have had such an enormous impact on our nations and the world. Guest thank you so much for that lovel the lovely intro. Host my pleasure and it was easily done again, given a fabulous career that you have had to move on wall street and now off wall street in the literary world it is a pleasure to have you. Lets dive right in. This is an incredibly unparalleled in history of the relationship between wall street, the large banks that have dominated the nation in washington. What motivated you to take on such an incredible amount of effort and exercise to produce this book . Guest a slight bit of insanity i guess. But actually, the novel that i had written, black tuesday, which was on the clash of 29 had a scene that i have researched, nothing near the research i did on this book on six bankers that have gotten together in the house and on 21 wall street to decide to try to save the markets that were crashing around them in late october by themselves and a fellow named tom lamont at morgan bank at the time, the chair jack morgan was elsewhere gathered at the bankers together into powerful families of painters an dangerst powerful banks on wall street to say we need to do something to see these markets and they decided with just 20 minutes to throw in 25 million each into a buying pool to go and buy a lot of stock and basically by themselves try to boost its market that was falling around them and i found that fascinating as these big banks and i started to notice today we had six bankers and i looked back in time of the analysis and there were six banks on hundred years ago in the panic of 1907 that were largely the same banks in the first part, they were now similar legacies. But i started to wonder what is the relationship. And i was fascinated and the other works i done at the Political Association of bankers and so what i decided to do is take a look at the histor histon period and look at the real relationship between the bankers, whoever the most important one was at any point in time in the nations history and what their connections were to the president s. And what i found, because i didnt know that every single president since Teddy Roosevelt to barack obama had a strong associations. But certainly with a subset at least ive got six bankers through documents and letters and phone calls and all sorts of other forms of communication as well as social and harvard and other types of places where they would meet. Host clearly the relationships are everything whether they want to promote them or not. But take a step and go behind the scenes. Could you take us into your research . Where did you go, who did you meet to unearth the truly incredible material . Guest i decided to go to all of the president ial libraries to make the research easy and start from the president out whether they had associations with particular bankers comes over every period of time i wanted to make sure that i had the appropriate events that would have occurred at that time. For example i used to joke with my editor and say i dont want to forget that world war i happened. I dont want to forget about vietnam, so i had outlines of major events that happened and each president of course and treasury secretary. And i went to all of the archives, all of the president ial archives that existed throughout the country. For example in kansas and one half august working with the archives of president Dwight Eisenhower from where i went to independence missouri to look at the archives of president truman. I started actually in austin with obj and i went back several times throughout the period of research because i found that period very critical in terms of relationships into changing attitudes in america between the presidency and bankers and the citizens and so forth. And i really just dug in deep and i did as well but i would find in some cases i had to submit acts to unearth certain documents for the more recent president s of it hasnt been unearthed yet and in some cases for example the Ronald Reagan library in california the archive really kind of took my projects to hard and spent some of her own time really trying to look for documents for me as i was sitting there going through the boxes i had you research they bring out the boxes and it is almost like a race. You know, youre going through the boxes what can i find. And there can be anything. So it could be anything from letters about, you know, why did you drop the atomic bomb letter is from bankers saying thank you very much for your support and handwriting back saying i couldnt have done it without you. Theres all sorts of things you find a and q. Just to get into this mode of being in that time and that president into those kind of people going through these amounts of documents and then a sort of typing everything up while youre there and editing throughout the process and then sort of going on to the next location. Host were there any that you deem to be somewhat reluctant to share information . Guest from fdr until the Ronald Reagan library in a, there was a certain code under which everything is classified. For the military information, finance information from economics, personal relationships come and its a very clear code and identification and very almost easy to access information. The Carter Library i went there shortly after the film came out and there have been a whole team of researchers down there slightly before the movie looking up information about the iran hostage crisis and you could actually go in and look digitally at a lot of documents. Not every library has that. But in some of the more recent libraries like the Clinton Library there is little been and that is for the announce of information. Plus now you have emails and everything needs to go through security clearances and its in a different code. It was a lot harder to find information. The reason i could find it in the Ronald Reagan library is because she kind of new difference between the new code into the old codes. But i still have stories outstanding in the clinton at tn library and outstanding at the George Bush Library in texas and of course the george w. Bush library opened so i didnt have the opportunity to look at anything there. Host was there a point in time when the story started to sharpen in terms of the nature of some of these relationships where you started to realize while, this actually goes deeper than perhaps either your self as well as the public would have imagined or might even still imagine . Guest yes and because i didnt really far at the beginning i kind of looked more on geography and the flight pattern. I was doing a little bit of jumping back and forth and so for example i would go to the lbj library and i would see his relationship with Sandy Weinberg was thwho was the chairman of gn sachs at the time and at the fdr library to see how they have been very Close Friends because something lbj had decided during the 60s we were both fdr men back then. Its good to have you on my team again. Of course they were just on the same team, and then when i went to the fdr library to see for example the beginnings of that relationship. So, a lot of times starting in the middle of history and going backwards allows me to then catch up in the middle and go to the same bankers and to see what the relationships were with all of the president s in between. And what i found in many instances is that you have a relationship with many. And going back even further in time i mentioned in the beginning how tom lamont was the chairman at the j. P. Morgan in the crash of 29. I knew that from black tuesday. But i didnt know and i found this out at the fdr library in hyde park which is near where i grew up. Id gone there as a kid but certainly not as research. He actually had rented out his townhouse on a 65th street manhattan to thomas law and for several years while fdr was the assistant Navy Secretary under Woodrow Wilson. So, the tie that happened after the crash and into the Great Depression when fdr was was president had started way back. They had gone back to harvard. They had both been involved in the crimson harvard paper over there. Thomas lamont had actually been one of the editors, very young editor when he was at harvard and a heavy very long history, which then lasted through several decades. And so, you just kind of there was this kind of effect where it was history going backwards into there were a lot of decades in between. Host so the relationships really went from not only the business end of the political but often into the social as well. Guest exactly. One of the other bankers went from suzanne in the Great Depression who was a friend of roosevelt and he was also one of his votes won in the 1930s or Something Like that so yes. So there was all of that going on back then as well and fdr and his sons were interested in that answer, of course then j. P. Morgan had a tremendous fiat at the time comes where the equal the length of what we have now with Larry Ellison so there were similar tastes as well that came into play. And so, there were social gatherings Going Forward in history, for example in 1938 fdr had this point appointed a wellknown family name Joseph Kennedy two b. The first head of the fcc when it was created and also he was the ambassador in the late 30s after kennedy was the head of the fcc. So he is having a Comingout Party with his daughter who died in another kennedy tragedy but a young john f. Kennedy was at that event. David rockefeller, who was part of a long history of the Industrial Financial family strength was also there. In fact, he somewhat dated Kathleen Kennedy for a minute back at the time. So at the time these connections were all sorts of social events that people wouldnt be involved in. Host so it isnt just the social individuals but as we were just eluting t to come up e strength of the families as well. And the family ties run deep from the morgan and rockefeller and kennedy. Guest they were immensely famous and powerful creative together among a few other established families in new york which was a very exclusive club where these men could get together and talk about affairs of the day and decide things in a very small and tight environment. Host it is on royalty almost. Guest it really was even when you do get out today how it is used for the throne of the hierarchy of the young terms that we use even in the industry and banking today. Who is the heir to the throne of j. P. Morgan chase . So even the terminology has that sense of monarchy. Certainly back in the beginning of the 20th century and throughout, a good portion of that there were only three or four families that were the most instrumental in running the top three Financial Institutions the country that also had the tightest personal and Financial Connections with the president s that were i in that time althouh in some cases the differences were that these people dont get elected they are the family appointed. One of the other families running the National City bank in the part of the 20th century and of course the National City bank is part of what we know as the citigroup. He had two daughters and they married the two sons of one of the rockefellers and together they produced the rockefeller then ran what was city bank in the late 50s and early 60s. So these lines host guest sometimes money where they were connected. Host i guess when you combine all of them, blood, money, Power Committee on guest game of thrones. It ends up in an incredibl incre book. Lets go back towards the beginning of the book. Set the scene for us please. We go off the coast of georgia to a place called Jekyll Island. What happened and who was involved, what came out of it and were the motivations of the people in your opinion, would each really pure and sincere . Guest what happened was in november of 1910 there was a meeting that was called by senator Nelson Aldrich. Aldrich is were also very famous and powerful political families that integrated into being a political financial family. And theyll send aldrich as the finance chairman was tasked with trying to create a central bank that would appease the public as well as pass politically in washington. And the reason for that was there have been a panic a major banking panic in 1907 a few years before that. At which Teddy Roosevelt had asked j. P. Morgan to get his people together to try to save the market. And it was the government calling the bankers to try to help the general economy. And after that panic and after j. P. Morgan got a bunch of his friends together to decide which banks or trust companies could live or die and how much money each had to back them up, he was a little afraid and thought i dont want to have to do this exercise again. I would prefer a central bank as well. So the bankers adopted this idea of having the central bank to help subsidize or stabilize them so that they wouldnt have to put their own when he and whether or not they have caused a panic. And from a government standpoint, Teddy Roosevelt didnt talk about it so much, but when they came in as the president , he very much pushed this idea of having the central bank and the aldrich family that was close to the taft family basically decided that they would do these expeditions into europe and see what was going on in the bank of england and with france and see if america couldnt duplicate something that was more american but still enable them to have a powerful central bank and also to back the emerging currency was going to be the most powerful currency in the world, the dollar. Dollar. Its a fastforward a few years in the factfinding and the traveling around europe and nelson and aldrich went around quite often as the head of the National City bank and he got back and of course feingold blocks of documents at the official level. The Jekyll Island happened because it was time to make it official. And j. P. Morgan said you know, you need to do this somewhere someone privately only after Nelson Aldrich was hit by a car on madison avenue. He was in new york and discussing things with bankers. His son did in new york as well, and he got hit on 60th street by this madison ave. Horse. He didnt plan to have a big meeting at his estate in rhode island, but now hes in new york and hes with bankers and morgan has a Club Membership at the Jekyll Island club off the coast of georgia and really sponsored, which is something i found out when i went, they sponsored this again to work at the secrecy to bash out this idea of the fed. Now the sort of cloak and dagger stuff i think is a little bit exaggerated. I mean it wasnt like you have paparazzi sort of flying in them. And it is generally at the time it was off of coast. You couldnt really get their. They would come in to make sure they couldnt even dock near the island. So that is really the plan. And at the end of them bashing out of this plan hes going to go back to washington to present it to the senate and what happened is he still wasnt feeling well from the trolley car situation. So wha what had occurred as theo of the bankers that have been at the meeting, frank who was the number two at the National City bank and henry davidson, who was one of the Senior Partners at the morgan Bank Actually presented the plan to washington, which i didnt know either. This is something i discovered another. So they planned this whole thing and they actually went to washington to present the findings. The actual Federal Reserve act was passed ultimately under Woodrow Wilson looked a little bit different from that plan. But it had a lot of similar aspects. The idea of the central bank, the concession is that there would be a new york fed that would be close to the wall street banks and then there would be the Federal Reserve, which the president would appoint the chair man and so there was kind of this idea of a balance of power and everybody was happy and if there were a whole bunch of stuff in the book about all of the enumerating is at midnight and 1 a. M. In the white house until they finally did get passed and signed. Host clearly the Federal Reserve is a lightning rod currently give given them of the quantitative easing programs that are going on right now. But right from its outset, its always been promoted as an independent institution. In your opinion, can it be independent giving the nature of the relationships as you have laid out . Exquisitely in your bookmarks guest its really nice to think that it can be independent. Number one because the very structure has a number of banks in the Federal Reserve banks serving only shares as a full entity, so that is number one. There is an even ownership type of relationship. But beyond that, the philosophical relationship which is a strong one that started back on Jekyll Island and has gone through the day has actually been strong with the first he was one of those that t had been at the Jekyll Island to say he was the head of the new york fed and then paul who was another of the men w