The Wall Street Beatles

The Wall Street Beatles - November 14, 2024
Journey back to 1964 and experience Beatlemania like never before.
From producer Martin Scorsese and director David Tedeschi, stream Beatles '64, an original documentary /@TheBeatles

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Money has made America a global empire, and for the past 150 years, America's wealth has been controlled by the titans of Wall Street.
Released: January 19, 2022
Genre: Documentary
Cast: Eric Rolland, Production: Stephen David Entertainment

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During the American Civil War, John Pierpont Morgan financed the purchase of 5,000 surplus rifles at $3.50 each, which were then sold back to the government for $22 each. The incident became known as a scandalous example of wartime profiteering. Interest in the incident was revived in 1910 with the indictment of Morgan.

The Affair
The weapons, known as "Hall's Carbines," were purchased in June 1861 by arms dealer Arthur M. Eastman in a deal brokered with James Wolfe Ripley, Brigadier General and head of the U.S. Ordinance Bureau. Eastman subsequently agreed to sell the weapons to Simon Stevens for $12.50 each if Stevens would provide $20,000 in financing to enable Eastman to complete the purchase from the government. Stevens quickly negotiated a sale to Field General John C. Frémont for $22, promising to recalibrate the rifles to 58 caliber. After the deal was completed, Stevens obtained a $20,000 loan from Morgan. The guns were delivered to Eastman in August 1861 at a price of about 75 cents each, and by the end of August, 2,500 guns had been delivered to Fremont. Meanwhile, Stevens obtained a $46,226.31 loan from another banker, Morris Ketchum, of which $37,500 was used to repay Eastman. Morgan still owed him $20,000 and held 2,500 rifles as collateral. On September 14, 1861, the U.S. government paid for the first shipment, and Morgan released the remaining rifles for shipment to Fremont. A receipt in lieu of payment for the remaining amounts due was sent to Morgan, who forwarded it to Ketchum.
Reaction and Evaluation
When the second payment was due in September 1861, a scandal was brewing. Ripley discovered that Fremont had purchased the rifles without his authorization, and he felt Fremont had been overcharged. Ripley complained to the Secretary of War, and on September 26, 1861, the matter was reported in major newspapers. The next day, a House committee of inquiry investigated the matter. In 1863, a congressional committee on government contracts was sharply critical of the gun dealers, writing: "Worse than traitors to arms are those men who, feigning loyalty to the flag, feast and fatten themselves on the nation's misfortunes, while patriotic blood stains the Southern plains crimson and the bodies of their countrymen rot in the dust."

Interest in the affair was rekindled in 1910 with the publication of Gustavus Myers' History of the Great American Fortunes, which included a chapter on J.P. Morgan. The matter then became a cause célèbre, generating a wide range of commentary. Myers claimed that the rifles were more likely to blow off the shooter's thumb than harm the enemy. An earlier version of the rifle was known to be subject to this problem. Gordon Wasson argued that there was no evidence that Morgan knew he was participating in a scheme to profit from the chaotic situation at the beginning of the Civil War. However, Matthew Josephson had previously claimed that Morgan certainly knew, as he had presented the government with an invoice for $58,175 before delivering the remaining rifles, which were held as slave security. In reviewing the evidence, Charles Morris concluded that it was "implausible" that Morgan had no knowledge of the company's profitability. Jan Irvin pointed out that Gordon Wasson became vice president of public relations at J.P. Morgan after completing his book attempting to exonerate Morgan. As early as 1937, Wasson had worked to influence historians Allan Nevins and Charles McLean Andrews regarding Morgan's role in the affair, and then used Nevins's account as a reference for his own book on the subject.