What Was the Pujo Committee?
The Pujo Committee was a Congressional subcommittee that issued an influential report in 1913 concluding that a small group of plutocrats based in New York City had achieved virtual monopoly control over the American financial system.
This group of business titans, which included some of the legendary business figures of the era, became known as the money trust.
Understanding the Pujo Committee
Concerns about the concentration of financial power in the U.S. began to grow in the late 19th century with the rise of the "robber barons," the men who accumulated vast wealth and power by building dominant roles in banking, the railroads, oil, and other industries that were key to the nation's growth.
- The Pujo Committee was a response to growing concern about the concentration of financial power in the hands of a few.
- The committee concluded that these few exercised virtual monopoly power over the U.S. financial system.
- Its findings led to several actions including passage of the Clayton Antitrust Act.
Their names included J.P. Morgan, the banker, and William and John D. Rockefeller, founders of Standard Oil, among others.
Congress decided to investigate whether this group of men constituted a monopoly over American banking, finance, and stock trading.
Report on the Money Trust
A resolution to investigate the so-called money trust was introduced in the House of Representatives in 1911 by Rep. Charles Lindbergh Sr., father of the aviator Charles Lindbergh. In 1912, Rep. Arsène Pujo, of Louisiana, a Democrat who served from 1903 to 1913, was authorized to form a subcommittee of the House Committee on Banking and Currency. The committee became known as the Pujo Committee, although, in fact, its chairman took a leave of absence for family reasons shortly after the committee's creation and was replaced by Rep. Hubert D. Stephens, of Mississippi.
On Feb. 28, 1913, the committee’s report was submitted. It concluded that “the finances of many of the great industrial and railroad corporations of the country engaged in interstate commerce [are] rapidly concentrating in the hands of a few groups of financiers in the city of New York… and that these groups, by reason of their control over the funds of such corporations and the power to dictate the depositories of such funds…have secured domination over many of the leading national banks and other moneyed institutions… and are being used to further the enterprises and increase the profits of these groups of individuals from such transactions.”
The Pujo Committee's report maintained that a cabal of financial leaders had abused the public’s trust by consolidating control over many of its critical industries, and ultimately its banking system.
Impact of the Pujo Committee
Although little remembered today, the Pujo Committee was a sensation in its day and influenced several pieces of legislation that had a substantial and lasting impact on the American system. They include:
- Creation of the Federal Reserve central bank to oversee the U.S. financial system and set monetary policy.
- Passage of the Clayton Antitrust Act, which defined and prohibited price-fixing and monopolies.
- Ratification of the Sixteenth Amendment to the U.S. Constitution, which authorized a federal income tax.