My conclusion was that there was indeed such a thing in America as sovereignty, a throne, which, as in Europe, had slipped from under the kings and the president and away from the people, too. It was the unidentified seat of actual power, which in the final analysis, was the absolute control of credit; political power and business power and money were only phases of this business man's political control of the function of money-lending, of credit-lending. The bosses did not have to buy companies as they had to bribe political parties; like the political bosses, they had only to command the owners of property and the possessors of votes (whether ballots or proxies) to gain obedience. All but the few, very few, exceptional men wanted someone else to decide and command. What this instinctive drift toward dictatorship meant I did not see; all I could see was that it was universal; it occurred in politics, business, society, journalism. While men cried aloud for liberty they called secretly for a boss. And what the boss was working with and for what privileges. In a bank he wanted to say what loans should be made and who should have them; in politics he wanted to say who is to have privileges, and the political boss lets his business boss decide that. The business boss then is the sovereign. In all my time J. P. Morgan sat on the American throne as the boss of bosses, as the ultimate American sovereign.

One day soon after my article to this effect was published, I was in the Morgan bank. A junior partner tapped on his glass cage and beckoned me in. He said that he had laid on J.P.'s desk the magazine, open at my article, saw him read it and read it again and then shake his head. He didn't understand it. The junior partner said that J.P. had no sense of "absolute power" and that as a matter of fact his power was not absolute; it was very limited, and he told me an incident to prove it. J.P. had discovered that he could not make the New York, New Haven and Hartford Railroad, which he controlled, buy its coal from a coal company he controlled, without the consent of "Diamond Jim" Brady. He was so enraged that he was going to fight Brady; "if he did nothing else the rest of his life, he would lick that man." But he didn't; he accepted him, and the reason was that Brady represented a company in which the officers of the New Haven and other railroads held shares; the company had the exclusive privilege of selling supplies to those railroads. It was a racket, of course, but the ramifications of its business, influence, and power were so complex that even Morgan dared not touch it. Therefore he was not a sovereign.

It is a very common error to think of sovereignty as absolute. Rasputin, a sovereign in Russia made that mistake; many kings have made it and so lost their power to premiers and ministers who represented the “vested interests" of powerful classes, groups, and individuals. A dictator is never absolute. Nothing is absolute. A political boss concentrates in himself and personifies a very "wise" adjustment of the grafts upon which his throne is established. He must know these, reckon their power, and bring them all to the support of his power, which is, therefore, representative and limited. Mussolini, in our day, had to "deal with" the Church of Rome. A business boss has to yield to the powerful men who support him. The Southern Pacific Railroad had to "let the city grafters get theirs." The big bankers had to let the life insurance officers and employees get theirs. J.P. Morgan should have known what he soon found out, that he could not lick Diamond Jim Brady. Under a dictatorship nobody is free, not even the dictator; sovereign power is as representative as a democracy. It's all a matter of what is represented by His Majesty on the throne. In short, what I got out of my second period in Wall Street was this perception that everything I looked into in organized society was really a dictatorship, in this sense, that it was an organization of the privileged for the control of privileges, of the sources of privilege, and of the thoughts and acts of the unprivileged; and that neither the privileged nor the unprivileged, neither the bosses nor the bossed, understood this or meant it.

 

REFERENCE

Lincoln Steffens. The Autobiography of Lincoln Steffens. New York: Harcourt Brace, 1931. 588-91.