Chapter 44 Oil and New York Banking Group - The Oil Wars

An unnoticed result of the extraordinary plundering of the global market by major US oil companies after the war was that the international monopoly power of the New York Bank Group, which is closely related to oil, was correspondingly strengthened.Beginning with the "Dawwes Compensation" loan and related borrowing period in the 1920s, New York banks gradually shifted their business from the domestic financial field to the international market.During World War II, as American oil companies accounted for the largest share of international oil supply, New York banks also benefited immensely from the capital flow of world oil trade.To preserve these advantages, the powerful Bank of New York exerted influence and revised the Bretton Woods plan designed by Keynes and Dexter.

The early 1950s saw a wave of lesser-known mergers in New York banking, which had important implications for increasing the domestic political and financial influence of the banking industry. In 1955, Rockefeller's Chase National Bank merged with Manhattan Bank and Bronx County Trust Company to form Chase Manhattan Bank.National City Bank, like Chase Bank, has close ties to Standard Oil Group's international business. It acquired First National Bank of New York and reorganized it into First National City Bank, which later became Citibank.Bankers Trust acquired Public Bank and Trust, Baume & Mercier Guarantee and Trust, and several smaller regional banks to form another powerful group.At the same time, Chemical Bank and Trust merged with Corn Exchange Bank and Bank of New York Trust Company to form the third largest banking group in New York—Chemical Bank New York Trust Company, which also had close ties to Standard Oil.During the same period, JP Morgan merged with Guaranty Trust Company to form Morgan Guaranty Trust Company, which became the fifth largest bank.

As a direct consequence of the postwar cartelization of the U.S. banking industry and the increasing concentration of financial power in the hands of a small number of New York banks, all of which were oriented towards international oil markets and policies, the subsequent 30-plus years The Bank of New York has been imprinted on every aspect of U.S. financial history, policy, and international policy, with the exception of not having financed the Vietnam War deficit. New York banks have a tradition of international orientation, but this time they have an extraordinary influence on the international financial field compared with the past.Their influence is similar to that of the old imperial banking groups in London such as Midland Bank and Barclays Bank.By 1961, deposits concentrated in the five largest New York banks accounted for 75 percent of all deposits in the entire New York metropolitan area, the largest economic region in the United States.

In the 1950s, New York's Council on Foreign Relations grew in influence, and its membership reflected this concentration of financial and economic power.The chairman of the Council on Foreign Relations was John McCloy, a Wall Street lawyer who was also chairman of Chase Bank and a former lawyer for Rockefeller's Standard Oil interests. In the early 1950s, most Americans only vaguely realized that the concentration of economic and financial power in the hands of a few New York banks, companies, and related law firms was not a good thing, but they were more concerned about not falling into the hands of their British brothers in London. superior.American society was being reshaped along the lines of Britain's "informal empire," based largely on control of finance, raw materials, and the terms of international trade, rather than on technological and industrial progress, which had been the American tradition.