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Research Seminar with Mary O’Sullivan
December 4, 2015 @ 12:00 pm - 1:15 pm
Too Much Ado about Morgan’s Men:
The U.S. Securities Markets, 1908-1914
In their quest to understand the logic of financial capitalism, economists and other social scientists have taken a keen interest in the structure of U.S. securities markets prior to World War 1. What they find there, as Bradford De Long put it, is a “Morgan-dominated ‘money trust’ ”. In characterising U.S. securities markets in the United States in this way, scholars draw direct inspiration from the results of the Pujo investigation, conducted more than a century ago, into the control of credit in the United States. It seems high time, therefore, to take a careful look at the Pujo report’s principal claims to assess whether they accurately capture how the U.S. securities markets operated on the eve of World War 1. In this paper, I assess these claims based on a critical consideration of the statistics and testimony generated in the course of the Pujo investigation as well as new evidence compiled from other sources. My analysis shows that the Pujo report offered important insights on operational features of the U.S. securities markets, notably their tight links to the call market, which had been poorly understood until then and remain obscure even today. Nevertheless, the report can be criticised for failing to present the various activities of the money trust banks in their broader context, which led it to exaggerate the importance and distinctiveness of their behaviour. My overall assessment of the Pujo report, therefore, is that it made too much ado about the money trust for understanding the operation of the U.S. securities markets prior to World War 1.
Bio in brief
Mary O’Sullivan is a Professor of Economic History and director of the Department of Economic History at the University of Geneva. Her research is focused on the history of industries and enterprises, financial history, and the comparative history of economic development. She is the author of Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany (Oxford University Press, 2000) and co-editor ofthe book, Corporate Governance and Sustainable Prosperity (Macmillan, 2002) as well as numerous journal articles.
Before joining the University of Geneva, O’Sullivan was an associate professor of management at the Wharton School of the University of Pennsylvania from 2005 to 2010 and associate professor of strategy at INSEAD (Fontainebleau, France) from 1996 to 2004. She earned her Ph.D. in business economics at Harvard University, an MBA from Harvard Business School and a Bachelor of Commerce from University College Dublin.