Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 by James Livingston

Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 by James Livingston

PART I 
The Decline of CompetitiveEntrepreneurial Capitalism, 188g-1gos 
From 1868 until 18g8 there were these constant frights and uncertain-

ties, which gave gamblers a great chance if they could guess right, and 
which kept decent men in doubt and often in agony. They could not do 
business in a proper way, and I look back on all those years with horror. 
-Henry Lee Higginson, 1915 

CHAPTER l 
The Great Stalemate: The Sources and 
Character of Late-Nineteenth-Century Crisis 
The late nineteenth century has typically been defined as a golden 
age for American business, particularly "big business." Matthew 
Josephson's rendering of the Robber Barons has, of course, been 
disputed if not wholly discredited; but most historians have assumed, 
as Josephson did, that the "people" inevitably and invariably lost 
their battles against "big businessmen." This assumption has tended 
to obscure the fact that most capitalists of the late nineteenth century 
did not see their eventual triumph as inevitable. Until the last few 
years of the century, indeed, they felt almost powerless to create a 
future in which their services and function would be recognized as 
legitimate. From their standpoint in the late 18oos, "ruinous compe-

tition," overproduction, and price deflation had created a secular 
trend toward a stationary state, in which profit incentives and their 
civilizing corollaries would disappear. The social, political, and cul-

tural trends of the time were no less frightening because they 
seemed to sanction the power and ideals of the 'jackleg" farmers 
and organized workers who defined capitalists as alien growths on 
the body politic. 
If we take them at their word, in short, capitalists of the late 
nineteenth century could neither claim a reasonable share of nation-

al income nor shape public discourse in accordance with the require-

ments of large-scale business enterprise. The obvious question is, 
should we take them at their word? Can the order of ideas and the 
order of events in the late nineteenth century be reconciled? Or 
must we dismiss the complaints and fears of capitalists as symptoms 
of paranoia--or worse? The argument of Part I is that their com-

plaints and fears were a reasonably accurate appraisal of their 
situation. 
The evidence available then and now suggests, for example, that a 

Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 by James Livingston