The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

by Ron Chernow

A proud prima donna, he would say he felt “faint” for “want of food” if he didn’t eat every two hours.

Immediately reminded me of my wife

“There are people trading in Wall Street and many over the country who have never seen a real bear market.”

Reminiscent of many young investors today!

We shall never know whether wise economic management might have averted the Great Depression. But two events led to a frightful, downward momentum. On June 17, 1930, ignoring the pleas of over a thousand American economists, President Hoover took up six gold pens and signed the Hawley-Smoot Tariff Act. Its heavy tariffs would account for more than

half the price of some imports. The day before Hoover signed the bill, the stock market, in nervous anticipation, suffered its worst day since Tragic Tuesday.

“If I were married to you, I would put poison in your coffee.” Churchill replied, “And if I were married to you, I would drink it.”16

“Never invest in companies run by fat men.”

Bob Baldwin probably saved the firm and destroyed its soul.

Who created that preoccupation with share prices and quarterly earnings from which companies were now being rescued? Ironically, many LBO specialists were being transferred over from merger work, where they suddenly had to adopt a long-term perspective. This defense also sounded odd coming from a firm that had managed the initial public offering of several companies in the 1980s. Finally, it ignored the simple fact that the objective of taking companies private was to take them public at a later date and reap a quick killing. Presumably, the firms would then tout the benefits of public ownership.