The Study Of The Evolution Of Morgan House's Power On American Economy

Morgan house is one of the oldest and most influential families in American economic history. At the turn of the twentieth century, Morgan house's power on American economy achieved to the peak and controlled American finance system, railway industry, transportation and other public areas. J.P.Morgan successfully reorganized the American railway industry through'Morganization', financed the business firm's merger and acquisition, bailout the 1907 economic panic, and stabilized the Gold Standard. Morgan House was the biggest'Money Trust'investigated by Pujo Hearings. However, the capital market of America deeply developed during the 1920s and Roosevelt's New Deal came after the 1929 economic crisis. The Economic power of Morgan House gradually declined. With the decline of Morgan's influence, American economic thoughts evolved and the'Invisible Hand'started the intervention on economy. Government, instead of the private bankers, became the most significant power on economic regulation.The Marxism's Monopoly Capital theory, North's Institutional Change Theory, Alchian, Demsetz and Williamson's New Institutional Firm Theory respectively explained from different aspects the reason why Morgan House's power on American economy changed. By combining the three theories, we can get a comprehensive explanation on this topic. In conclusion, the decline of Morgan House'economic influence results from the replacement of Private Monopoly Capitalism by state Monopoly Capitalism, the fail of the bankers'interest group in the campaign with the farmers'interest group, the institutional change from private banker's monitoring to government supervision on economy, the maturity of American capital market and the descent of the informational advantage of private bankers like the Morgan's.