''Other People's Money And How the Bankers Use It'' (1914) is a collection of essays written by
Louis Brandeis
Louis Dembitz Brandeis ( ; November 13, 1856 – October 5, 1941) was an American lawyer who served as an Associate Justice of the Supreme Court of the United States, associate justice on the Supreme Court of the United States from 1916 to ...
first published as a book in 1914, and reissued in 1933. This book is critical of banks and
insurance companies
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...
.
Contents
All the chapters of the book appeared as articles in ''
Harper's Weekly
''Harper's Weekly, A Journal of Civilization'' was an American political magazine based in New York City. Published by Harper (publisher), Harper & Brothers from 1857 until 1916, it featured foreign and domestic news, fiction, essays on many su ...
'' between 22 November 1913 and 17 January 1914, and were written before November 1913.
Synopsis
The book attacked the use of investment funds to promote the consolidation of various industries under the control of a small number of corporations, which Brandeis alleged were working in concert to prevent competition. Brandeis harshly criticized
investment bankers
Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by unde ...
who controlled large amounts of money deposited in their banks by middle-class people. The heads of these banks, Brandeis pointed out, routinely sat on the boards of railroad companies and large industrial manufacturers of various products, and routinely directed the resources of their banks to promote the interests of their own companies. These companies, in turn, sought to maintain control of their industries by crushing small businesses and stamping out innovators who developed better products to compete against them.
Brandeis supported his contentions with a discussion of the actual dollar amounts—in millions of dollars—controlled by specific banks, industries, and industrialists such as
J. P. Morgan
John Pierpont Morgan Sr. (April 17, 1837 – March 31, 1913) was an American financier and investment banker who dominated corporate finance on Wall Street throughout the Gilded Age and Progressive Era. As the head of the banking firm that ...
, noting that these interests had recently acquired a far larger proportion of American wealth than corporate entities had ever had before. He extensively cited testimony from a
Congressional investigation performed by the
Pujo Committee, named after
Louisiana
Louisiana ( ; ; ) is a state in the Deep South and South Central regions of the United States. It borders Texas to the west, Arkansas to the north, and Mississippi to the east. Of the 50 U.S. states, it ranks 31st in area and 25 ...
Representative Arsène Pujo, into self-serving and monopolistic business dealing.
Famous quote
Chapter V of the book ("What Publicity Can Do") contains in its opening section a well-known line that has frequently been cited in support of regulation through disclosure obligations: "Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."
Notes
See also
*
US corporate law
United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governa ...
External links
*
"The Value of ''Other People's Money''" in the ''New York Times''*
1914 non-fiction books
Banking controversies
Finance books
Works by Louis Brandeis
Criticisms of companies
Essay collections
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