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The Wall Street Capitalists Who Put Morals Above Money

This is not exactly mini-series material, and the Browns’ stolid rectitude presents any would-be chronicler with a challenge. Indeed, the subjects went out of their way to avoid the headlines. Dissuaded by their so-so investment in B&O, and a more disastrous escapade in shipping, the Browns avoided the rampant railroad speculations of the Gilded Age. As Karabell candidly admits, “Because they sidestepped the railroads, Brown Brothers became relatively less influential and relatively smaller.”

However, in the 20th century, with America nurturing imperial ambitions, the firm uncharacteristically went astray, making a highhanded attempt (with State Department encouragement) to invest in, and reorganize, the finances of Nicaragua. The investment was ultimately rescued by an occupying force of several thousand United States Marines. Karabell frames this episode as a precursor to Brown Brothers’ rise to the pinnacle of American political power. He abruptly transitions to the saga of E. H. Harriman, a railroad baron, and his son Averell. During the Great Depression, Averell’s well-capitalized investment bank merged with the troubled Brown Brothers, and they managed to ride out the storm.

From here, the book is not much about Wall Street at all — rather, it is about the singular careers in public service of three of the partners: Averell, a roving ambassador and high-level minister on call; Robert Lovett, who implemented the Marshall Plan and was a key figure in formulating Cold War-era foreign policy; and Prescott Bush, a plucky Midwestern Yale man and talented salesman, eventually a United States senator, who would sire a political dynasty.

As with the Browns, the Harrimans today are for the most part overlooked (how many visitors to Harriman State Park are even dimly 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 bearing on the firm. The author stitches his story together with gauzy generalizations, like “The rise of a WASP elite that moved seamlessly between government and finance cemented the bonds between money and political power.”

Karabell suggests that during and after the Progressive Era, financiers entered politics to temper the public’s reaction against “wealth and privilege.” He writes of bankers generally that “they realized that if they didn’t step into the political fray, they could be deluged by the tide.” But he does not present evidence that the partners felt “deluged.” Rather, he repeatedly shows that they were animated by a goal of public service, and a general belief that the postwar capitalist democratic order was preferable to communism.

Karabell’s leitmotif is the pre-eminence of money in America’s growth, and in its culture, but his frequent flights of rhetoric — “Money can create a nation,” “Money is the power contained in the atom” — will not be to everyone’s taste.

His narrative of a firm that remained private and true to its credo is engaging and new. But it is hard to credit Karabell’s judgment that despite Brown Brothers’ smaller size, “its influence and reach were as extensive as the flashier J. P. Morgan & Co., or the much larger Chase National Bank.” Similarly, when the author writes that the firm’s “centrality” is easy to overlook, we can hear him straining. Alas, no amplification is needed to elicit our interest in the understated Browns. Shoemaker, stick to thy last.

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