Morgan's Activities in 1895-1896 in Selling U.S. Gold Bonds in Europe Were Based on His Alliance with the House of Rothschild; These Activities Added to His Reputation as a Rescuer of Governments

The power of J. P. Morgan and Co. was based initially on its ability to sell railroad stocks and bonds in the English and European markets. European investors placed $2.4 billion in the United States during 1880-1895, and owned a total of $4.5 billion in government and nongovernment bonds and shares in 1914. Morgan's activities in 1895-1896 in selling U.S. gold bonds in Europe were based on  his alliance with the House of Rothschild; these activities added to Morgan's reputation as a rescuer of governments. That reputation was often the key to his power, and it lasted long after the power was greatly diluted. Morgan and a few large bankers saved the New York Clearing House in 1893, and, seemingly, the United States' financial standing only a few years later. Accomplishments of this  magnitude enhance one's reputation indeed!

--Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (New York: The Free Press, 1977), 142.

Under These Circumstances the Power of a Giant Corporation Is Based on Transitory or Variable Factors

The failure of the merger movement to attain control over the economic conditions in the various industries was brought about by the inability of the consolidated firms to attain sufficient technological advantages or economies of size over their smaller competitors--contrary to common belief and the promises of promoters. The consolidations were formed not because of technological considerations but primarily to create profits for promoters and incidentally because of the desire to eliminate competition. The amalgamation of industrial facilities and resources on a massive scale often has the sort of "efficiency" in a capitalist economy which is guided less by purely technological considerations than by uniquely capitalist ones--economic warfare, private profit, market instabilities. But such considerations are insufficient to prevent the entry of competitors who often can operate successfully at levels of production well below those of the larger combinations, and can exploit new opportunities for profit more ably. In these circumstances the power of a giant corporation is based on transitory or variable factors, and the decentralization movement within many large corporations is a concession to the efficiency of the successful smaller competitors.

--Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (New York: The Free Press, 1977), 55.