7 - J.P. Morgan & Co. and the Foreign Policy of the New Deal

Summary

This chapter discusses J.P. Morgan & Co., Nazi Germany, Fascist Italy, imperial Japan, and the spectre of another war. It argues that the Morgan partners misunderstood the Nazi regime, in large degree because they attributed a far more influential role to Hjalmar Schacht than was warranted. If Morgan incomprehension about Nazism attested to how even the well-informed in the 1930s failed to descry Nazi radicalism, the Morgan tie with Fascist Italy was different. While the Corner was ignorant of Mussolini’s ambitions, aggression in Ethiopia provoked a reassessment. It was the desire to remain aligned with Washington and the hope of garnering Vatican business that preserved the tie. As for Japan, Lamont believed in the existence of two Japans: one Western oriented, open to liberal democratic capitalism; the other militarist and aggressive. He forgave, as did his partners, Japanese expansionism as the expression of the second strand. Between 1933 and 1937 Lamont’s attitude changed, moving to support Roosevelt’s famous October 1937 “Quarantine Speech.” For many, such as Senator Gerald P. Nye, the Morgan bank, complicit in American entry into war in 1917, was leading the United States down the same road. The chapter demonstrates that this was not so.