Wall Street Capitalists Who Put Morality Before Money
It’s not exactly miniseries material, and the Browns’ deadpan straightness presents a challenge to any potential columnist. Indeed, the subjects went out of their way to avoid the headlines. Dissuaded by their mediocre investment in B&O and a more disastrous escapade in shipping, the Browns avoided rampant speculation about the railroads of the Golden Age. As Karabell bluntly admits, “Because they bypassed the railroads, Brown Brothers became relatively less influential and relatively smaller.”
However, in the 20th century, as America nurtured imperial ambitions, society unusually strayed, attempting in an authoritarian manner (with the encouragement of the State Department) to invest and reorganize the finances of the Nicaragua. The investment was ultimately rescued by an occupying force of several thousand US Marines. Karabell frames this episode as a precursor to Brown Brothers’ rise to the top of American political power. He abruptly moves on to the saga of EH Harriman, a railroad baron, and his son Averell. During the Great Depression, Averell’s well-capitalized investment bank merged with the ailing Brown Brothers, and they weathered the storm.
From there, the book isn’t about Wall Street at all – rather, it talks about the singular public service careers of three of the partners: Averell, traveling ambassador and high-level minister on call; Robert lovett, who implemented the Marshall Plan and played a key role in the formulation of Cold War-era foreign policy; and Prescott Bush, a brave Midwestern Yale man and talented salesman, possibly a United States Senator, who would spawn a political dynasty.
As with the Browns, the Harrimans today are mostly overlooked (how many visitors to Harriman State Park are even vaguely aware of the park’s benefactor?). Karabell rightly describes these banker-financiers as pillars of the American establishment. But their public careers, while interesting, have little impact on the company. The author associates his story with vague generalizations, such as “The rise of a WASP elite that moved seamlessly between government and finance cemented the links between money and political power.”
Karabell suggests that during and after the progressive era, financiers entered politics to temper the public reaction against “wealth and privilege.” He writes of bankers in general that “they realized that if they did not get into the political fray they could be overwhelmed by the tide.” But it does not present evidence that the partners felt “overwhelmed”. On the contrary, it repeatedly shows that they were driven by a public service objective and a general belief that the post-war capitalist democratic order was preferable to communism.
Karabell’s leitmotif is the preeminence of money in American growth and in its culture, but its frequent flights of rhetoric – “Money can create a nation”, “Money is the power contained in the atom” – will not be to everyone’s liking.
His story of a business that has remained private and true to its credo is engaging and new. But it’s hard to credit Karabell’s judgment that, despite Brown Brothers’ small size, “its influence and reach was as extensive as the flashier JP Morgan & Co., or the much larger Chase National Bank. Likewise, when the author writes that the “centrality” of the business is easy to ignore, he can be heard straining. Alas, no amplification is necessary to spark our interest in the low-key Browns. Shoemaker, stick to your last one.