A Private Bank at War: J.P Morgan & Co. and France, 1914-1918.

This article examines the relationship between J.P. Morgan & Co. and France during the First World War. It argues that the dealings between the French government and the partners of J.P. Morgan & Co. from 1914 to 1918 were characterized by personal difficulties between successive French representatives and the partners of J.P. Morgan & Co. Contributing to a strained relationship was the place of Morgan, Harjes, the French affiliate of J.P. Morgan & Co., within the House of Morgan. Herman Harjes, the senior partner in Morgan, Harjes, though a proponent of Franco-American amity, became disenchanted with his New York partners as the war continued. The feeling was shared by those in New York, who reevaluated the role of Morgan, Harjes within the House of Morgan--until the French affiliate's eventual disappearance in 1926. While sympathetic to France, and instrumental in sustaining French credit during the war, the partners of J.P. Morgan & Co. conceived of the Allied cause as the British cause, a perspective that led them to rebuff calls for greater Franco-American financial cooperation.

The role played by the House of Morgan--consisting of J.P. Morgan & Co. in New York, Morgan Grenfell & Co. in London, Drexel & Go. in Philadelphia, and Morgan, Harjes in Paris--during World War I is well known. From August 1914 to April 1917, while the United States was neutral, the Morgan banks worked assiduously to further the Allied cause. Once it was apparent that the war was not going to end imminently, a formal relationship was established linking the House of Morgan and two of the principal Allies. In January 1915, J.P. Morgan & Go. was appointed the British government's purchasing agent in the U.S.; some months later, in May 1915, they assumed the same position for the French government. Acting through its Export Department, J.P. Morgan & Co. coordinated the purchasing requirements of the Allies in the United States, a task that became progressively larger as the scope of Allied buying increased. [1]

While J.P. Morgan & Co. was never designated Allied financial agent in the United States, the bank floated loans for Britain and France, handled foreign exchange operations, and advised British and French officials. J.P. Morgan & Co. developed a cordial relationship with Britain, but its dealings with France became strained over the course of the war. Once the U.S. entered the war as an associated belligerent, easing the acute dollar shortage facing the Allies, J.P. Morgan & Co. gradually withdrew from its former role. By 1918, the firm's work was confined to the liquidation of unsettled matters. As the war came to a close, it was apparent that the conflict had benefited the United States financially. Pre-war a debtor nation, the U.S. emerged as the strongest financial power in the world. J.P. Morgan & Co., the dominant Wall Street bank, was especially favored by this outcome.

Since its rise to prominence in the last quarter of the nineteenth century, the bank has attracted the attention of essayists, polemicists, Senate commissions, and historians. Much of this attention derived from three developments: first, Pierpont Morgan's role in the transformation of American finance and industry in the decades before World War I; second, the aforementioned involvement with the Allies, which led to charges that the bank, along with other financial institutions, conspired to maneuver the U.S. into the war on the Allied side to rescue its loans; and finally, the bank's role in postwar European reconstruction, which has attracted the attention of scholars interested in both the failure of stabilization and in Anglo-American rivalry.

The resulting historiography is lengthy but has omissions. There is no scholarly monograph devoted solely to the history of J.P. Morgan & Co. after 1913, and in particular to its relations with France. [2] Ron Chernow's The House of Morgan, a sweeping, popular history, discusses World War I in only one chapter, since the book is concerned with tracing the evolution of the modern bank in its entirety. [3] Vincent Carosso's The Morgans: Private International Bankers, 1854-1913, an exhaustive work, draws upon the full range of archival material, but ends with the death of Pierpont Morgan in 1913. [4]

Kathleen Burk has written important studies on Morgan Grenfell & Co. and on the Anglo-American financial relationship from 1914 to 1918. [5] Morgan Crenfell, 1838-1988 (1989), which covers the long history of the firm, mentions World War I briefly. Britain, America and the Sinews of War (1985), while dealing extensively with J.P. Morgan & Co. and Britain, does so in the framework of Anglo-American diplomacy. Likewise, Burk's 1988 article on the House of Morgan at war rests on Anglo-American archival research and does not incorporate any French material. [6] Priscilla Roberts has written an article on the quixotic figure of Willard D. Straight, a Morgan employee in 1914-1915. [7] As Roberts put it recently, these works stress the "Anglo-American theme." [8]

Examinations of the wartime relationship between France and J.P. Morgan & Co. have remained almost entirely the province of historians based in France, from Pierre Renouvin's article in the 1950s, through the work of Andr[acute{e}] Kaspi, Yves-Henri Nouailhat, and Georges-Henri Soutou. [9] With the exception of Soutou, this literature is written from a French archival perspective, coloring the portrait that has emerged. This has resulted partly from limitations of archival access and partly from a desire to explore how French policies were shaped by interaction with the Morgan bank, rather than considering how the relationship affected the bank as well. In fairness, none of this work was explicitly concerned with J.P. Morgan & Co. and France, instead delving into broader issues of Franco-American relations or, in Soutou's case, the question of the economic war aims of Germany, France, the United Kingdom, and the United States.