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Eight

   UNDERSTRUCTURE OF THE
   FINPOLITAN ELITE

 

   As the various finpols and finpolities are rivalrousat least in respect to making and retaining money, how and in what way do they actin concert, if they act in concert at all? Do they, in fact, act in concert in imposingfaits accompli and policies on the nation?

   To conclude that they more or less loosely act together as amoneybund is to proclaim oneself at once an adherent to what is pejorativelycalled the conspiracy theory, widely frowned upon by latter-day organizational academicsin grey flannel suits (many of them briskly on the way up to the State, Defense orTreasury Departments or to the foundation refreshment troughs). In a broad sense,as it has been observed by unabashed exponents of the conspiracy theory, all historyis a conspiracy. In this sense the word no more than broadly and perhaps privatelyand even unconsciously indicates coordinated action toward some mutually agreed uponend or ends at variance with public expectations; manifestly it does not have itsspecialized meaning in law.

   In any event, overeager members of the financial elite havebeen caught and convicted in American courts of many literal subconspiracies, sothat even in the narrow juristic sense many of them stand forth individually as certified,simon-pure conspirators. Consequently, even if there is not a single all-embracingconspiracy in juristic terms, it is a fact that there are and have been hundredsof adjudicated single conspiracies. The conspiracy theory, then, has a little moreto it than honors-bouond academics concede.

Three Theories

   There are in fact three major sociological theories, academicallycertified in all solemnity, to account for the phenomenon of socio-economic decision-making,the recondite problem being to determine: Who, if anybody in particular, really makesthe basic decisions that govern society? Who calls the shots?

   To a considerable extent this is a pseudo-problem, for virtuallyevery person knows that he isn't calling the shots nor are any of his neighbors,co-workers or acquaintances. Everybody knows it is some distant and obscure "they."But this fact (evident to any intelligent person) is not at all evident to many academics,who have made quite a scholastic mystery out of the whole business. Doubt is raisedby some that any individual whatever makes any decisions; the theory is advancedthat the entire process is occultly collective.

   There is, first, the theory of an elite, which is employed bysome masterful investigators.

   Next, there is the theory of an inert, apathetic, partiallyalienated mass society, consisting largely of P. T. Barnum's myriad suckers and H.L. Mencken's swarming booboisie--the denizens of the grandstands and taverns. Accordingto this theory, as most people are supine, unresponsive, childishly credulous andseeking no more than a job, diversion and comfortable mediocrity for themselves,the few who are seriously active emerge spontaneously at the decision-making level,more or less by default. As Tom, Dick and Harry won't bestir themselves and Georgethe doer does, George finds himself willy-nilly among the decision-makers, a naturalleader. But he got there more by chance than design, chosen if at all merely by fittinginto the pattern of things and events. No conspirator he, no boob and no elitist.

   There is, finally, the pluralist theory, according to whichmany diverse groups, individuals and forces confront each other in various ways,and under various cultural auspices arrive after debate by consensus or compromiseat decisions, a notion that fits in neatly with democratic prescriptions. The processis presented as one of mutual accommodation.

   There is something to be said for each of these theories, aseach explains some of the data. Obviously a single synthesizing theory would be preferable.Lacking such, one can, and many sociologists do, attempt to blend them or to usethem all. But as this is eclectic, theoretical purists are offended. The world, however--eventhe small world of society--is more complex than any all-embracing theory about it.

   My own tacit use of these theories with respect to our subjectis hierarchical and eclectic in the order stated. The facts strongly suggest to me,in other words, that the elitist theory best explains the facts. Whatever it failsto explain is then explained by the concept of the mass society. Finally, in manymatters, less paramount in almost every single case, the pluralistic theory doescome into play as it finds supporting data. But it is far less often significantlyapplicable than its sponsors suppose.

   Actually. the elitist theory presupposes or implies the theoryof the mass society. One could hardly have an elite without a mass. If everyone wasalert and on his toes, how could an elite ever show itself? The mass itself paradoxically,would be an elite, and perfect high-level democracy would prevail. The mass-societytheory, then, does not stand separately. If one has an elite, one must have a massand, if society is to survive, vice versa. The uninspired mass team, in brief,must have a quarterback and, preferably, a coach or set of coaches. If the eliteis truly aristocratic, selecting only the best, so much the better.

   These theories and some of their prominent adherents are brieflydealt with by a voting sociologist in an interesting book; 1 there is,of course, a rather large literature about them. He himself found it necessary toapply them eclectically, although he believes in the greater inclusiveness of thepluralist view. As his attention was centered upon community decision-making in asmall California town, the pluralist view is most serviceable; for its most fruitfulapplication is on lower levels that are of little interest to the financial elite.But it would plainly be useless if applied to a company or white-supremacy town.

   He objects to the elitist theory because it allegedly imputesmotivations to covert leadership groups. If they are covert by definition they cannot,he believes, be investigated by rational methods. Next, he holds, the elitist theorysmooths over and obscures the many internal struggles over decisions within an elite.With such struggles in mind, it would seem that one must apply the pluralist theoryto the operations of the elite itself, a logically well-taken point certainly germaneto the paramountcy of theory. Thirdly, the theory of the elite must rely on the impactof events outside the elite system to explain changes within the system itself; forthe elite, which does indeed change, does not change spontaneously. Most importantly,"elitist studies of community power typically do not present data to supporttheir contentions that all major decision-making rests in the hands of singleleadership groups."

   While I recoil from the operative "all," which I haveemphasized, it is clearly incumbent upon anyone utilizing the elitist approach toshow major decisions emanating from the elite group--decisions at variance with someestablished consensus. If such decisions are made, and are made to stick, then Ithink it may fairly be deduced that other decisions are similarly made. It isn'tthe general consuming public, we may say in a preliminary way, that decides to raisethe prices. Nor is it, in view of the system of corporately administered prices,an automatic free market. It is clearly some distant and popularly distasteful "they"who decide this.

   The elitist theory most broadly stated, holds that the UnitedStates, for example, is a society of many dominant elites. The elite levels of science,scholarship, the arts, entertainment and sports (but not politics or finance) areopen to anyone of ability. These are, therefore "open" elites, and consonantwith the democratic bias. But there is, it is asserted or implied by a variety ofwriters, a politico-economic elite of elites, which is a "closed" elite.It is closed because something other than personal ability is required to belongto it. The main although not exclusive qualification for membership, it is here contended,is money. This elite has been referred to as the moneybund-- the complex offinpolities. Its leading members, I suggest, are finpols. This moneybundis different from C. Wright Mills's "power elite," which is a somewhatfanciful and highly personal embroidery upon the old-established basic idea of amoneyed elite. Take the money crowd away and Mills' "power elite" crumblesinto verbal dust.

   Now, while the moneyed elite no doubt is pluralistically structuredinternally, toward the outside world it presents itself as a rather solid, small,coherent entity. Its decisions once having been taken or not taken (a decision initself)--and we can obtain at least glimpses of some of its decision-making processes--itpresents to the world pretty much of a united front even if it is not always unifiedinternally in its views. Its members, at any rate, have various ways of knowing thedifference between insiders and outsiders.*

   (*The idea of an elite does not necessarily imply that it is homogeneous. Thus, Albert Mathiez, the French historian on the subject of the French nobility. says: "The nobility consisted, in fact, of distinct and rival castes, the most powerful of which were not those who could point to the longest pedigrees. Side by side with the old hereditary or military nobility, there had sprung tip in the course of the last two centuries a nobility 'of the long robe' (noblesse de robe); that is to say, an official nobility which monopolized administrative and judicial offices. This new caste, which was as proud as the old nobility, and perhaps richer, was headed by the members of the parlements, or courts of appeal," This new nobility, as Mathiez goes on to show. was in many ways more powerful than the old nobility, Albert Mathiez, The French Revolution, Alfred A. Knopf, Inc., N.Y., 1926; Universal Library, N.Y., 1964, pp. 6-7. One could similarly divide the American elite into the old and new money and the leading corporate officials and corporation lawyers.)

   As for motivations, it is, first, surely possible to deducecertain over-riding motivations in the moneyed elite by the way its members conducttheir worldly affairs. One doesn't need to tap their telephones or induce their psychoanalyststo break confidences to see that they are nearly all motivated (1) to retain theirmoney and power; (2) to add to money and power if possible; (3) to make use of allthe resources of modern science, technology and politics in the retention and expansionof their power; (4) to keep their share of the tax burden as low as possible; (5)to support whatever politico-economic policies support or improve their positionand to struggle against those which seem likely to diminish it; and (6) to have themselvespresented to the world as especially worthy people.

   What they want more specifically is shown by. their legislativelobbyists, trade association spokesmen and newspapers. Fortune, the WallStreet Journal and similar publications consciously and unconsciously tell usmuch about what they want. Beyond this, public inquiries, the taking of testimonies,the massing of evidence in the courts and occasional books by insiders have donemuch to reveal motivations. There have been memoirs such as those of the late ClarenceW. Barron, critical and friendly biographies and even letters (although collectionsof letters, as in the case of the elder J. P. Morgan, have often been ordered burnedby testamentary prescription) This in itself seems a bit conspiratorial.

   The major ends of the moneyed elite are clearer, it must beconfessed, than the devious means often used to attain those ends.

   In view of this elite (judging purely by their outward behavior)what's good for them is good for the United States. They see their personal pecuniaryinterests as identical with the complex interests of the nation. This elite is knownto favor, among other things, a minimum of government regulation of their corporateinstrumentalities; they openly talk to this end and work to achieve it. Society,they feel, should be subject to minimal direction. Would anyone wish to assert thereis any doubt about this?

   As far as motivations go, it is not a difficulty that inherespeculiarly in the theory of an elite; in this day of Freudian psychology the motivationsof every individual are a mystery even to himself. What are the motivations of participantsin a pluralist decision-making process? If it is said, "How can we know whatthe elite is up to and why?" one may reply with another question: "Howcan we know what pluralists are up to and why?" Not being able to look insidepeople's heads, one makes deductions from external behavior. If a man hoards moneyin a hole in the floor we conclude that he is a miser. Can we be wrong? Can it bethat he is in fact a spendthrift? As to why he does it, we turn to the psychoanalystand hear talk about feelings of insecurity, inadequacy, rejection, alienation. Hoarding,it seems, makes him feel less anxious. Yet, he remains a miser vis-à-visothers, an objective phenomenon. He is not merely a psychiatric case.

   The theoretical objections to the theory of the elite, at anyrate, are not nearly so compelling as they may seem when viewed only dialecticallyon the purely theoretical level, before testing against the facts.

   But there are stronger reasons, compelling to any rational mind,for rejecting the idea of the greater serviceability of the pluralist theory in explainingdecision-making on the national level. For if the pluralist theory indeed held, ifmajor decisions in the United States were in fact the product of countervailing andbalanced groups, with each group element of society making itself fully heard, theoutcome in terms of money, position and prestige would be a great deal more equitablethan it is. Sociologists can indeed show many decisions arrived at by pluralist means.But we are talking now about the humanly fundamental decisions--the decisions aboutwho gets what, where, how and why. Those decisions, I assert, are elitely determined,sometimes against considerable opposition.

   If the decision about the distribution of the basic economicmeans is arrived at pluralistically, why is the payoff so uneven? If one goes alongwith the. pluralist view we must conclude that people have acquiesced in their relativelylow reward by the economic system. Yet millions of people protest all the time thatthey are being underpaid, They sound as though they had not consented to the decision-makingabout the distribution of money.

   Most people in the United States, including very many outstandinglyintelligent and highly trained, are much like the participants in a dice game inwhich the opponent throws a long series of 7's and 11's, losing seldom; but whenthe dice change hands it develops that they follow the laws of randomness and showno runs of 7's and 11's. In a real dice game, most such losers would quickly concludethat the dice were loaded and they were being rooked.

   Now, if the social dice weren't subject to manipulation frombehind the scenes, would so many people be so far below par in the matter of moneyand property? Such subparity elements, it is often said by way of explanation, arethe no-goods, without ambition or energy. But, we may ask, is this also true of Nobellaureates, university professors in general, the trained professional classes, whosepay in comparison with that of corporation executives and big dividend recipientsis absurdly meager? Are we to suppose that highly skilled professionals have acquiescedin their relatively niggardly compensation? Hearing them complain, reading theircomplaints in professional journals, one would not suppose so. They sound very muchas though they are complaining futilely against loaded dice.

   Again, to look at the bottom of the labor force, are we to supposethat the poverty-stricken itinerant agricultural worker or the ghetto denizen hasacquiesced through some pluralistic decision-making process in his low estate?

   In looking at the history of organized labor, the long recordof anti-labor violence and counter-violence, one gets the strong impression thatbasic decisions were imposed upon unwilling and eventually maddened victims. Thosewho worked in Andrew Carnegie's steel mills at $10 for a seventy-two-hour (and longer)week of punishing effort under intense heat had never willingly, agreed to performin this manner. Nobody had ever asked them or their representatives. They were drivenby stark necessity to accept a one-sided bargain.

   It is true that all the persons to whom I refer have their compensationdetermined by a market. The elite, however, do not have their revenues impersonallydetermined by a market, to the dictates of which they submit. They make market rulespretty much to suit their inclinations.

   It does, then, look as though members of the labor force, highand low, have come up against a decree that says: So far and no further. They havenot acquiesced in this decree; they have not been consulted about it. They are oftenopposed to it, but are as powerless to push it aside as Russian workers are powerlessto push aside a state decree.

   It looks very much as though this decree has been handed downfrom some esoteric group, for there is no general rule against having an expansiveincome in a booming economy.

   In any play against the socio-economic elite of finpolswith a view to, participating in its inner decisions, few--indeed, none--of the membersof the various open elites find they can make it. They don't have the hereditarytickets; and even if they had the tickets they might not possess other qualifications.

   What, precisely, is the understructure of the top elite of finpolity?

Intermarriage of the Elite

   Largely headquartered in the East, this elite, first of all,is heavily intermarried . This fact has been shown in great detail and need not detainus. 2 Most of the world of finpolity and its environs is interlacedby complicated cousinages, as in the case of the longer established European nobility.Intermarriage among the big propertied elite--the bourgeosie, the finpols--continues, as the "society" pages of newspapers show nearly every week.

   As a fairly recent and uncomplicated example of upper-crustfamily structure let us take the Fords. Edsel, the only child of grass-roots Henry,had four children. Henry Ford II, one of Edsel's three sons, married Anne McDonnell,a Catholic socialite by whom he had three children. His daughter Charlotte, twenty-four,in 1965 married the off-the-beach Greek shipping magnate Stavros Spiros Niarchos,fifty-six, reputed to be worth a minimal $260 million. 3 Her coming accouchementwas duly announced early in February, 1966; not long thereafter a prospective divorce.Her debut in 1959, according to the Times, took a year to plan, was attendedby 1,200 guests and cost about $250,000, of which 860,000 went for flowers alone.Recalled the Times nostalgically (December 17, 1965): "Two million magnolialeaves were flown from Mississippi and were used to cover the walls of the corridorsleading to the reception room in the Country Club of Detroit, which had been redecoratedto look like an eighteenth-century French chateau." Sister Anne Ford, twenty-two,was married with less fanfare a few days later to Giancario Uzielli, an internationalstockbroker of New York. Henry Ford II in his second marital venture, after a divorcethat led to his excommunication from the Catholic Church, married the divorced, alsoexcommunicant, Mrs. Maria Christina Vettore Austin, of Italy and England, who ismore particularly one of the European Rothschilds of pecuniary repute. William Ford,another of Edsel's sons, married Martha Firestone of the rubber fortune, by whomhe has three children.

   Here, among the comparatively late-arriving Fords, one findsa rococo interlacing of diverse elements the common social denominator of which isproperty, and this is typical of the upper ownership strata.

   As to inward and outward twining cousinages among the moneyedelite, the Du Ponts provide perhaps the most spectacular example, interlinking witha number of other established and unlikely cousinages such as the Peabodys and Roosevelts.It is not usually easy in the hereditary strata of wealth to find someone unjoinedto one or more other wealthy families by cousinly ties, and many of them link withwhat in Europe is known as nobility. Consinage threads through many apparently disparatepropertied families.

   To avoid detention here by details readily available elsewhere,let it simply be said that much about the affairs of the finpolities is afamily matter. These families, it is true, are often subject to strains within themselvesand vis-a-vis other families (pluralism); but they together present prettymuch of a unified front to the world (eliteness).

Pretensions to Aristocracy

   The American wealthy, as Cleveland Amory shows in considerablediverting detail, have confused money, ostentatious partying, politico-economic positionand far-ranging power with aristocracy, of which they very commonly think themselvesrepresentative. 4 By the hundreds they have dug up for themselves, orcaused to be devised, European coats of arms, more than 500 of which have been suitablyproved and registered with the New England Historic and Genealogical Society "easilythe country's outstanding authority on coats of arms." 5

   The stress on coats of arms, both among bearers and disappointednonbearers suggests that the wealthy themselves, unlike some unaccountably obtuseoutside investigators, regard themselves as part of family enterprises, not as isolatedpersons who have won in an individualistic rat race. These families, to be sure,are placed within a certain setting of historically developed institutions of whichAmerican children sing innocently in school.

   As the redoubtable H. L. Mencken remarked in 1926, "theplutocracy, in a democratic state, tends to take the place of the missing aristocracy,and even to be mistaken for it. It is, of course, something quite different. It lacksall the essential characters of a true aristocracy: a clean tradition, culture, publicspirit, honesty, honour, courage--above all, courage. It stands under no bond ofobligation to the state; it has no public duty; it is transient and lacks a goal.Its most puissant dignitaries of to-day came out of the mob) only yesterday--andfrom the mob they bring its peculiar ignobilities. As practically encountered, theplutocracy stands quite as far from the honnête homme as it stands fromthe Holy Saints. Its main character is its incurable timourouosness it is forevergrasping at the straws held out by demagogues. . . . Its dreams are of banshees,hobgoblins, bugaboos. The honest, untroubled snores of a Percy or a Hohenstaufenare quite beyond it.

   "The plutocracy, as I say, is comprehensible to the mobbecause its aspirations are essentially those of inferior men money. . . . What itlacks is aristocratic disinterestedness, born of aristocratic security. There isno body of opinion behind it that is, in the strictest sense, a free opinion. Itschief exponents, by some divine irony, are pedagogues of one sort or another. . .. Whatever the label on the parties, or the war cries issuing from the demagogueswho lead them, the practical choice is between the plutocracy on the one side anda rabble of preposterous impossibilists on the other . . . what democracy needs mostof all is a party that will separate the good that is in it theoretically from theevils that beset it practically, and then try to erect that good into workable system"(Notes on Democracy, Alfred A. Knopf, N.Y., pp. 203-6).

Schools of the Elite

   The children of the finpols and their higher servitorsare early separated from the common run of children by being sent to special privateschools, which exist as part of a different world. This point was inquired into byC. Wright Mills. 6 Not all the children in these schools are from theelite, because such a prescription would defeat educational ends. The private schoolsare "democratic," in that they take students, many on scholarships, froma wide social spectrum. Some now take able Negroes, although their quest is not exclusivelyfor intellectual ability. But firmly sandwiched into the unquestionably mixed andin part subsidized mass are the children of the moneyed elite.

   The formal education offered by the best of these private schoolsis no better, as far as any evidence shows, than that offered by the best publicschools. But they do a better job for laggards, who are numerous in all strata, becausetheir classes are smaller, the schools are isolated from distracting influences andthe faculty supervision over studies is stricter. A highly motivated student in agood public school (which is not too frequently encountered) can get as much outof his school experience as he could at one of the better private schools; but theless scholastically motivated will probably get greater benefit from the good privateschool, which is more of a hothouse.

   The products of the older private schools, at least, tend toform much closer ties to each other than are formed at the public school or collegelevel. They are cemented, as it were, by the bonds of exile. Indeed, if asked abouthis educational background, the private school product is far less apt to say thathe went to Harvard, Yale or Princeton, even though he did so, than to say he wentto Exeter, Andover, Choate, Groton, Hotchkiss or whatever the case may be.

   Few children of the rich attend public schools, although thereare rare exceptions. As inquiry will convince anyone, most of them attended one ofthe old-line private "prestige" schools. People who like to make the point,as though it was significant, that Jack Kennedy attended Harvard and Adlai StevensonPrinceton, simply aren't aware of the nuances. Both were Choate school boys and wouldstill be Choate boys if they had gone on to Swampwater College, Okefenoke Universityor Oxford. Anybody might go to Harvard, Yale or Princeton. But anybody cannot goto Choate. 7

   As Mills points out, the private-school boys do tend to sticktogether and to be found disproportionately later in or near the upper echelons ofinsurance companies, banks, investment trusts and general corporations. For the bigowners of these enterprises are themselves products of the same schools. 8The schools serve as unintended centers to bring bright members of lower social classesin as corporate personnel.

   Until the recent past, the products of the private schools tendedto monopolize Harvard, Yale, Princeton and other Ivy League universities. This trendhas been diminished as private universities have intensified the intellectual rigorof their undergraduate colleges with a view to producing more teachers and scientistsand fewer executives and salesmen.

   The big rich, then, are more and more closely intermarried andgenerally send their children to a relatively small number of private schools. Somesend them abroad to Switzerland or England.

   Upon graduation from college, the children of the rich findthemselves entering a world wherein many of their relatives are big owners of propertyand perhaps ensconced in important corporate or near-corporate positions. They movelargely in a world which in England, whence the pattern came, would be familiarlydescribed as the world of upper-class families, hunt clubs and the Old School Tie.The chances are high that they are going to marry someone whose family, like theirown, is at least in the Social Register. They are on the estate and trust-fund circuit.

   If they do not marry someone of the world of established property,if they marry instead a Rumanian chauffeur or the daughter of a Lithuanian iron puddler,they become the subject of excited newspaper accounts. For whenever wealth marriesnonwealth it is a case, to the newspaper editors, of man bites dog. Although suchmarriages are not uncommon, the plain implication of all the fuss is that the marriageshould not have taken place, any more than the King of England in the eyes of BritishTories should have married Mrs. Simpson, Readers await news of the almost inevitabledivorce.

The Exclusive Clubs

   Neither family, coats of arms, nor attendance at private schoolsguarantees elite soundness. Elite families, lamentably, sometimes produce odd characters.The best private schools unfortunately turn out people who sometimes become song-writers,actors, photographers or even Kennedys, Stevensons or Roosevelts.

   The higher elite must therefore mark itself off more preciselythan either family, coat of arms, school or the possession of money can do. It doesmark itself off through the system of private clubs, which in the East are so exclusivethat neither the pope nor most presidents of the United States could qualify formembership.

   The private clubs are the most "in" thing about thefinpol and corp-pol elite. These clubs constitute the societal control centersof the elite.

   There is at least one central club of the wealthy in every largecity--the Chicago Club, the Cleveland Club, the Houston Petroleum Club, the DuquesneClub of Pittsburgh, etc. These are all imitations or outgrowths of earlier Boston,New York, Philadelphia and Baltimore clubs, which were imitations of English clubs.But the New York clubs are now the most important because the big money is centeredin New York and the leading New York clubs include the wealthiest of the out-of-townersand many foreigners.

   Which of the New York clubs is most exclusive, or most important,is a matter of opinion. The Knickerbocker Club requires that its members be eitherborn New Yorkers, of New York descent, or at least occasional New York residents.But The Links, formed in 1921 ostensibly to promote the game of golf, seems to representheavier money on the whole. Distinctions among the leading clubs are obscure to outsiders."At the Metropolitan or the Union League or the University," ClevelandAmory quotes a clubman, "you might do a $10,000 deal, but you'd use the Knickerbockeror the Union or the Racquet for $100,000 and then, for $1,000,000 you move on tothe Brook or the Links." 9 Some big wheels, to be safe, belong tothem all.

   My own rating of the New York clubs in order of finpolitanweight is as follows:

   1. The Links. 2. The Knickerbocker Club. 3. The MetropolitanClub. 4. Racquet and Tennis Club. 5. The Brook. 6. The Union. 7. The Union League.

   These are, except perhaps the last two, the exclusive, highlyrestricted inner-circle clubs. The University Club, in addition to claiming a largermembership, also includes professionals, administrators and below-the-top executives--thatis, not only chairmen, presidents and executive vice presidents of corporations.Although it includes unquestionably elite elements like Allan P. Kirby, ClevelandE. Dodge, the Goelets and others, it is more like a transmission connection betweenthe elite clubs and the world of general management. The Union and the Union Leaguealso have much of this transmission character in the club hierarchy.

   An even broader transmission link or meeting ground betweenthe higher club strata and the world of public affairs is The Century Association,the membership of which is heavily composed of approved artists, musicians, columnists,writers, lawyers, editors and book-reading executives (a rare and special breed!).A very few of the members of the top elite clubs mingle with the comparatively bohemianand always literate element of The Century. A careful review of the 1965 list ofmembers-showing names like Dean Rusk, Isaac Stern, Eric Sevareid, Walter Lippmarm,Yehudi Menuhin, James Reston and Arnold Toynbee along with three Rockefellers andother indomitable men of the supra-corporate spaces--suggests that few would be inclinedto question the essential rightness and goodness of the finpolitan world.Many of its members are its eloquent spokesmen and apologists; some express mildand at times melancholy dubiety. None flatly challenges the essential beneficenceof the finpolitan course.

   But the brains and wit of the big New York clubs are unquestionablyconcentrated most conspicuously in The Century, a few of whose members at least seemcapable of arriving at independent judgments. The membership list has never wanderedfar enough to the left to take in people like Norman Thomas, Scott Nearing, C. WrightMills, Thorstein Veblen or even John R. Commons, all keen discussants. It did, however,include Franklin D. Roosevelt and Herbert Hoover, which about fixes its politicalpoles. Investigators and questioners of the social frontiers are conspicuously lackingamong its scholars.

   An examination of its membership list up to 1965 fails to disclosethe names of able organizational Negroes like Thurgood Marshall, Whitney Young, MartinLuther King, Roy Wilkins or Robert C. Weaver. Walter White never belonged.

   The precise scope of The Century, founded in 1847, can perhapsbest be shown by citing the names of some others who never belonged. These were H.L. Mencken (but Andrew Mellon did), Mark Twain (but Cornelius Vanderbilt did), LincolnSteffens, Joseph Pulitzer, Charles Beard, Edmund Wilson, Sinclair Lewis, G. StanleyHall, Eugene O'Neill, Herbert Bayard Swope, Theodore Dreiser, Henry David Thoreau,Herman Melville (but J. Pierpont Morgan I and II did), Morris Rafael Cohen, ClevelandAmory, Bennett Cerf, William James of Harvard and so on. But John Dewey, Oliver Lafarge,Oswald Garrison Villard and Charles Peirce did belong.

   In any event, The Century does not appear, either today or yesterday,to be intellectually, morally and artistically representative. Its precise rationalefor membership selection does not readily show itself. The heterogeneous membershipshows little common denominator, and some mighty big intellectual guns, past andpresent, are conspicuously missing. Deeply critical temperaments or anyone who "comeson strong" are notably absent.

   But a function the University and Century Clubs also performis that of reciprocal transmission: The finpol members in them also hear much aboutthe outside world, the below-stairs world as it were, from the more bohemian elementswho may move easily from the club precincts to a Greenwich Village coffee house orYorkville saloon and then back. The bohemian element's greater down-ranging mobilitymay at times be the envy of some of the finpols.

   Each of the leading clubs appears to have spawned a clusterof offspring or imitators, founded sometimes by dissidents. They specialize in variousthings, some such as The Brook (touchingly named after Tennyson's poem) in continuoustwenty-four-hour service.

   Lesser clubs, in the opinion of Amory and other alert club-watchers,appear to be the nonexclusive Manhattan, Lotos, the Coffee House (of which NelsonA. Rockefeller is a member), the Harvard, the Yale and the Princeton. Better knownto the public perhaps because of their association with the entertainment world arethe Lambs, the Friars and the Players but these, in all candor, are the bottom ofthe barrel in relation to the clubdom with which we are concerned and should reallynot be mentioned except by way of indicating what an upper-class club, properly speaking,is not.

   The only one of the New York clubs John D. ("Big John")Rockefeller got into was the Union League. His son, "John the Good," hadno interest in belonging and was advised against it by his investment mentor, FrederickT. Gates. However, he did join the University and The Century. The grandsons belongto the cream--variously The Links, Knickerbocker, the Metropolitan of Washingtonand others. None lists the Union League.

   The original Rockefeller was not only in bad odor with radicals,populists and liberals but, it may come as strange to some readers, he was lookedupon askance in the old-established elite. Says Cleveland Amory, "Only a generationago, for example, Mrs. David Lion Gardiner, dowager empress of New York's proud GardinerFamily, was informed that her young grandson, Robert David Lion Gardiner, was aboutto go out and play with the Rockefeller children. Mrs. Gardiner forbade it. 'No Gardinerwill ever play,' she said, 'with the grandchild of a gangster.'" And De Golyer,dean of oilmen, told Amory he could never decide "whether John D. Rockefellerwas the greatest oil man who ever lived, or a goddam lying pirate who made a monkeyout of the whole capitalistic svstem." 10

   Nelson Rockefeller is looked upon today as the savior of theKnickerbocker Club, which in 1954 was nearly submerged into the Union Club out ofwhich it had sprung. A few leading members agreed to accept ten cents on the dollarfor its bonded indebtedness and Rockefeller bought the premises and permitted theclub to occupy them rent-free for ten years and then rent-free for ten more yearsif he was still alive. 11 It seems fair to conclude that the Rockefellershave an interest, perhaps only sentimental, in keeping this distinctive club extant.

   It should not be thought that the top clubs are purely sociablehaunts where the rich idle away the time, although such is the impression conveyedby Amory, Wecter and the long line of cartoonists and satirists who have shown elderlymembers snoozing over newspapers in the windows and who have derisively quoted clubnincompoops. The clubs, one may be sure, enjoy being mildly derided as centers offutility and senile naivete. As they say in spydom, this gives their serious membersa good "cover" for serious purposes.

   Nor should it be thought that the big tycoons are in constantattendance. The membership of even the biggest clubs is obviously layered or hierarchical,and consists of inner coteries according to specific serious and frivolous interests.There are, of course, always some amiable hangers-on and some retired from activelife, and these provide something of a background Greek chorus or mob scene for themembers with weightier concerns on their minds.

   The clubs, in point of fact, have underlying deeply serioussystemic functions behind their facades, as follows:

   1. Their membership hierarchies from the leading to the minorclubs show in general who is A.O.K. by degrees in what is now variously referredto as the national power structure, the Establishment (in imitation of English jargon),the power elite (after Mills) and so on. Newer designations for the phenomena willno doubt turn up and, as the reader will recall, I seem to find the situation bestsummarized in the term finpolity. If one wants to know who really mattersbehind the scenes of national affairs, in the order that they matter, one can hardlydo better than to line up the memberships of the New York clubs in the order given.Now add each of the central non-New York clubs: Boston, Philadelphia, Chicago, Pittsburgh,Washington, Cleveland, etc., in about that order. Strike out duplications as theyappear.

   Here one gets, with few exceptions, the entire power structure.Everybody on the list will be A.O.K., rarely voicing anything except what John KennethGalbraith calls "conventional wisdom"--that is, trite and shallow commonplaces.

   2. The clubs are the scene, at least in the preliminary stages,of some of the biggest deals in the capitalist world. It is not denied that suchdeals are also broached on golf courses, yachts and perhaps even in exclusive executivewashrooms and Turkish baths; it is only asserted that a very heavy documentationcould be supplied showing that some of the biggest deals, consortiums, syndicates,raids and campaigns were first proposed in one of the clubs.

   3. The clubs are to the general corporate world of finpolitywhat the boardrooms are to individual corporations and what Congress is to the Americanpopulace. They are the places where attitudes are shaped toward proposed nationalpolicies. Once a consensus has been reached, the clubs serve to hand down a general"party-line" of finpolity to members, who carry it to the worldin their various functional capacities. For with the big proprietors sit the bigexecutives, many big (usually Republican) political figures and leading owners ofthe 'biggest enterprises in mass media.

   In saying that a party line is handed down, I do not suggestthat members must accept the verdict of an always free and informal running discussion.Some members do object to and refuse to implement conclusions in whole or in part.Nobody is formally bound by any preponderant opinion, but everybody appears to beinfluenced by tendencies.

   How, for example, should a particular president of the UnitedStates be presented in the mass media? Should the verdict be favorable, on the fenceor unfavorable? Club talk will determine something of this. And if the drift is towardaccepting him as favorable or unfavorable, some member or members may interpose acogent objection that reverses or halts some emerging conclusion. One will get theverdict, whatever it is, in one's favorite newspaper or periodical.

   Of one thing all club participants may always be sure: Viewsare invariably expressed in the light of some propertied interest. The discussionsare never cluttered with extraneous and (by definition) ridiculous considerationsthat might occur to single-taxers, pacifists, social reformers, social workers, socialists,communists, populists, trade unionists, anti-vivisectionists, idealists, civil libertarians,utopians, New Dealers, unconventional ideologists, uplifters or even detached on-the-targetscholars. The ideological center of all the discussion is, odd though it may seem,freedom, pointed simply to freedom of these elements to preserve and expand theirpropertied interests.

   These clubs are the most intense partisans of freedom--theirfreedom--in the world today. While considerable imagination and ingenuity often enterinto club discussions, to judge by leaked reports from occasional defectors, oneelement is invariably lacking: sympathy or concern for the rabble in the outer world.

   In an earlier work I pointed out that often a uniform attitudecomes suddenly to be expressed in the press from coast to coast on some topic, asthough a hidden politburo had come to a decision. Never a dissent, never adeviation appears, as though one were reading the Russian press. The source--or sources--ofsuch uniformity, as in the 85 per cent press opposition to Roosevelt, is the deliberationsof the tycoons and tycoonlets in their clubs.

   Unlike Congress, whose members must go home now and then toget re-elected, the clubs are always in session, unimpeded by parliamentary procedures,and the members need not fear being deposed from their positions. Congressmen andpresidents come and go. The club members continue until death or disability doespart them from the club discussions.

   Discussions through the entire hierarchy of clubs, New Yorkand provincial, are an important part of the informal process of government in theUnited States--far more important, say, than the political conventions, which oftenmerely ratify what has been antecedently decided in the clubs. For these are theplaces where citizens of weight, of property, lawfully assemble and freelyair their views and criticize the views of their peers. These are the democraticdebating grounds of the first citizens, the people with the means and instrumentalitiesfor making their views effective in the world. There are thousands of lesser clubsand associations throughout the United States; but a difference between them andthe metropolitan clubs is that the formal resolutions of the lesser clubs, as contrastedwith the purely informal resolutions of the metropolitan clubs, are usually ineffective.Nothing much, if anything, happens nationally after the passage of the solemn formalresolutions.

   To control or influence public policy one is better placed ifone has a strong voice in the clubs than if one has a strong voice in the Senateof the United States, yet the clubs draw little attention from the sociologists orpolitical scientists, a serious oversight.

   The leading clubs, such as The Links and the Knickerbocker Club,in their yearly alphabetical directories list members living and dead. These arelike roll calls of American finpolity and corp-polity, past and present.Among the dead are many extensive family groups still with living members. Includedamong these, of course, is the coat-of-arms and inner private-school crowd.

   The Links directory for 1964 includes such significant namesas Winthrop Aldrich, former chairman of the Chase National Bank; Lester Armour ofChicago; Stephen D. Bechtel, Jr. and Sr., of San Francisco; Charles H. Bell of Minneapolis;August Belmont; George R. Brown of Houston; Nicholas F. and James C. Brady; PaulC. Cabot of Boston; Lammot du Pont Copeland of Wilmington; C. Douglas Dillon; WilliamH. Doheny; John T. Dorrance, Jr.; William Hincks Duke; Pierre S. du Pont III; BensonFord; Henry Ford II; G. Peabody Gardner of Boston; Robert Goelet; Joseph P. Grace,Jr.; Crawford H. Greenewalt of Wilmington; E. Roland Harriman; John A. Hill; W. E.Hutton; Amory Houghton, Jr. and Sr.; B. Brewster Jennings; Robert E. McCormick; WilliamG. McKnight, Jr.; Paul and Richard K. Mellon of Upperville and Pittsburgh, respectively;Jeremiah Milbank; Henry S. Morgan; John M. and Spencer T. Olin of East Alton; HowardPhipps, Jr. and Sr.; John S. Pillsbury of Minneapolis; Frank C. and William B. Rand;David, James S., Laurance S., Avery, Jr., William and Winthrop Rockefeller; CharlesP. Stetson; Oliver de Gray Vanderbilt III; John Hay Whitney, publisher of the nowdefunct New York Herald Tribune; Robert E. Wilson of Chicago, and others.

   The foregoing list culls the names of a few of the big proprietors.But The Links includes among its members also top-level corporation executives, bankpresidents, special-entree journalists, upper-echelon Pentagon and diplomatic figures,corporation lawyers and Republican political figures of the inner sanctum-peoplelike Joseph W. Alsop of Washington; Owen R. Cheatham of Georgia-Pacific Plywood;General Lucius D. Clay; S. Sloan Colt of Bankers Trust; Ralph J. Cordiner, formerchairman 'of General Electric (during its conspiracy conviction); Arthur H. Deanof the key law firm of Sullivan and Cromwell and numerous top-level diplomatic conferences;Thomas E. Dewey; Nelson Doubleday of the book publishing world; Lewis W. Douglasof Arizona; Frederic W. and Frederick H. Ecker of Metropolitan Life Insurance Company;Dwight D. Eisenhower; the late Walter S. Gifford, former head of AT&T; GabrielHauge, president of Manufacturers Hanover Trust; Herbert C. Hoover; George M. Humphreyof Cleveland and the U.S. Treasury; Grayson Kirk, president of Columbia University;the late Henry R. Luce of Time-Life-Fortune; Air Force General Lauris Norstad;and, to arbitrarily end a list replete with many other gilt-edged rag-paper names,jean Monnet of Paris, architect of the European Common Market.

   Financially and corporately speaking, there is little or nodeadwood in the Links roster. If its membership does not exactly run the countryit has much to say about its course. Here are what the Russian and Chinese pressmorosely refer to as "American ruling circles."

   A similar and sometimes overlapping cross-section of the upperelite is displayed by the 1965 list of the Knickerbocker Club. Here we obtain manyother history-evoking names, past and current, such as Prince Amyn M. Aga Khan; GiovanniAgnelli, Italian industrialist; Winthrop W. Aldrich; John D. Archbold; Count Alessandrode Asarta Guiccioli; John Astor; Count Bertil Bernadotte of Sweden; Oliver C. Biddle;Francis H., Henry B., Jr., and Powell Cabot; Lord Camoys; Rear Admiral Grayson B.Carter; Anthony Drexel Cassatt; Rear Admiral Hubert Winthrop Chanler; Charles W.Chatfield; Joseph H. Choate; Grenville Clark, Jr.; Henry Clews; Count Charles-Louisde Cosse Brissac; William D. Crane; Seymour L. Cromwell; Lieutenant Colonel CharlesC. Crossfield III (USMC); Major Robert Dickey III (USMC); C. Douglas Dillon; ColonelJoy Dow; John R. Drexel III; Henry Francis du Pont; Dwight D. Eisenhower; ThomasK. Finletter; Hamilton Fish, Jr.; Peter O. Forrestal; Caspar C. de Gersdorff; Francis,John and Robert Goelet; George and Michael Gould; Charles B. and William Grosvenor;Ogden H., Jr., and William C. Hammond; Henry Upham Harris; Abram S. Hewitt; JamesT., Nathaniel P., and Patrick Hill; Arthur A. Houghton, Jr.; R. E. K. Hutton; ViceAdmiral Stuart H. Ingersoll; Ernest and O'Donnell Iselin; Commander John DandridgeHenley Kane; Hamilton Fish Kean; Moorhead C. Kennedy, Jr. and Sr.; Count Jean deLagarde; Brigadier Charles L. Lindemann, DSO; Count Marc de Logeres; Townsend M.McAlpin; Charles E. Mather III; Paul Mellon; Edmund C. Monell; Ivan Obolensky; CountOgier d'Ivry; Cecil C. Olmstead; Thomas I. Parkinson, Jr.; George B. Post; Sir AlecRandall; David, Laurance S. and Nelson A. Rockefeller; Kermit Roosevelt; Elibu Root,Jr.; Prince Sadduddin Aga Khan; Ellery Sedgwick, Jr.; Jean de Sieyes; Mortimer M.Singer; Alfred P. Sloan, Jr.; Chauncey D. Stillman; Count Anthony Szapary; MarcheseFilippo Theodoli; Brigadier General Clarence P. Townsley; Count Mario di Valmarana;Harold S. and William H. Vanderbilt; F. Skiddy von Stade; Count Leonardo Vitetti;George D. Widener; William Wood Prince; Lieutenant Commander Cameron Mc. R. Winslow;Admiral Jerauld Wright; and Sophocles N. Zoullas.

   This partial list, through which shine sections of Debrett andthe Almanach de Gotha, also reads in part like a diplomatic and military roll callof the upper echelons. The list of deceased members is even more impressive; it readslike the index of names to a complete financial and industrial history of the UnitedStates.

   Through the memberships of The Links and the Knickerbocker Clubone could obviously obtain instant entree to any financial-political circle in theworld. These are the very penthouses of finpolity.

   Where does the harried staff of a new president of the UnitedStates look for candidates for Cabinet and other high-level posts? The membershiplists of the leading clubs serve at least as aides-memoires. Not all the members,admittedly, are of sufficient personal calibre; but it is a fact that many names,previously little known to the public, have appeared on these club rosters long beforethey emerged in Washington and on the world scene. Interspersed with the playboysand club hangers-on are names that recognizably belong only on the upper circuitsof finpolitan affairs, the fellows who in the shadow of the heavy weaponryfinally get down to talking very cold turkey with De Gaulle, Gromyko, Nasser, theoil sheiks, Chou En Lai, Erhard, and Ho Chi Mihn about who takes over what lush terrainand who gets the dirty end of the international stick (which one fears is prettymuch the general myth-befuddled populace all over).

   The leading clubs, though, are decidedly Republican in statisticalorientation. This fact does not, of course, prevent Democratic Administrations frommaking use of valuable members such as Douglas Dillon. Nearly everybody in high appointiveoffice, indeed, can be traced to one of the clubs, either the high or the lesserones.

   As Amory observes, the leading freedom of the top clubs is thefreedom to be anti-democratic and (self-deludedly) pro-aristocratic; in an earlierday they would have been Federalist, although now one hears in them lamentation aboutlost states' rights that would have astonished the Founding Fathers. 12Truman was merely disliked by most of the New York clubmen, Amory notes, but FranklinD. Roosevelt was apoplectically feared and consequently hated. Opinion about FDReven at the relatively cosmopolitan Harvard Club was sharply divided and feelingswere intense. FDR, who did more to save their rickety world than any other man, wasthe bête noir of the clubmen.

   Many of the upper club members look back nostalgically to thegood old days under Harding, Coolidge and Hoover and do not show much enthusiasmover Eisenhower, much less over Kennedy. But as of well into 1967, the clubs werereported to feel rather enthusiastic about Lyndon B. Johnson, a big depletion-allowanceman, who could, if he continues to deal his cards right, become a club member himself.After all, Eisenhower, born in Abilene, made The Links, Tap day could well come forthe statesman of the Pedernales River valley who is committed to the propositionthat a bomb is mightier than any valid syllogism or statement of fact.

Decision-Making by the Elite

   We have been setting the stage for an answer to the questionthat opened this chapter: How and in what way do the finpolitan elite actin concert, if they do act in concert?

   Any elite, in order to be an elite, must possess considerableautonomy within its special jurisdiction. This is true of all elites: of lawyers,artists, scientists, entertainers, philosophers or whatever. If the conditions arecorrectly stated here, they must also hold for a politico-economic elite. One wouldhardly have an elite if it had to be bound by ordinary rules or by some hard-and-fasttradition--if it had no area of privileged action.

   The freedom to improvise as it sees its own interests must belongto any elite. If it doesn't have this freedom then it is just part of the mass. Physicistsand mathematicians, for example, don't submit their differences to popular polls.

   The closed American politico-economic elite, like any elite,does make its own rules, and it enforces its rulings in those areas where it believesits vital interests are involved; other areas it ignores. The task, now, is to showsuch elite rulings, and to show that they stick even against the opposition of Congresses,Supreme Courts, presidents and popular opinion. To claim that there is a privilegedclass and then not to be able to show it exercising privileges would be absurd.

   Returning to the higher clubs, then, it should first be noticedthat they do not allow any outright or avowed Jews to become members. Jews are notspecifically barred in the by-laws but the procedure for admitting new members issuch that none gets in, a fact noted by close students of the clubs. 13

   The term "outright Jews" is used advisedly becausein certain cases Jews on the family tree, as in the case of the Belin line of DuPonts or the Belmonts, do not apparently provide sufficient ground to bar from membershipin the leading metropolitan clubs like The Links and Knickerbocker where names suchas Rosenwald, Warburg, Lehman, Baruch, Schiff, Kuhn, Loeb, Gimbel, Guggenheim andthe like simply do not appear even though their holders are of big-money statureand even though the grounds for claims to gentility of some, such as Baruch and Warburg,antedate those of the most ancient transplanted Bostonians. Gentility has nothingto do with it. But what all this shows is only that the Hitlerian racist definitionof what constitutes a Jew is not applied. What Professor Baltzell calls "gentlemanlyanti-Semitism" is not, in fact, racist or religious. It relates to propertyand position.

   But even in the case of approved persons with Jews in the familytree, the barriers often go down slowly, as in the case of Douglas Dillon, memberof The Links and the Knickerbocker Club, whose "paternal grandfather was SamLapowski, son of a Polish Jew and a French Catholic, who emigrated to Texas afterthe Civil War, adopted his mother's maiden name of Dillon, prospered as a clothingmerchant in San Antonio and Abilene, and finally moved to Milwaukee, where he enteredthe machinery-manufacturing business." 14

   But while a very few top-ranking people with Jews on the familytree are found in the top New York clubs, there are no avowed or full-fledged Jews,whatever their qualifications, none at all such as the otherwise technically eligibleMeyer Kastenbaum or corporate bigwig Sidney Weinberg of Goldman Sachs and Company,with multiple upper-level corporate directorships and yachting companion of the mighty.15 It is Weinberg who is credited with the scheme for preserving the Fordfortune in the Ford Foundation, thereby eluding a mountain of taxes. How much morecooperative can anyone ever be?

   The first of the well-known middle-level clubs in which unambiguouslyJewish names are encountered is The Century, with two Warburgs as well as others.The Manhattan Club, founded in 1865, has many Jewish as well as a few local Italianand Irish names. Its roster shows that it is obviously a nonelite Democratic oppositenumber to the Republican Union League Club; it included Franklin D. Roosevelt, Herbertand Irving Lehman, Alvin and Irwin Untermyer, Joseph M. Proskauer and Alfred E. Smith.But the Manhattan, like the Century, is not considered by club experts to be an upper-strataclub. Clubwise, in terms of inner corporate power, it is merely so-so. This isn'twhere the massed armored divisions of finpolity are controlled.

   Hope is expressed by some optimists that the pattern of clubexclusion may be changing: "In Boston, Chicago, Minneapolis, Newark, New York,Philadelphia, Pittsburgh, Portland, Syracuse and other cities, prestige clubs haveadmitted Jews--in some cases ending nearly a century of exclusion," say twoobservers. "The change has begun to affect all three of the major groupingsof prestige clubs in the country; the University Club, Union Club and Union LeagueClub. In addition, new, equally distinguished clubs without discriminatory policieshave been launched in Atlanta, Dallas and Denver. . . .

   "In 1960, only two of the 28 University Clubs in the countryhad any Jews on their rolls. Two years later, the University Club of New York City. . . began to accept Jewish members. This breakthrough paved the way for similardevelopments elsewhere. . . . As of 1965, seven University Clubs had accepted Jewsto membership, one was about to do so, and five were engaged in exploratory discussion.. . . Thus, thirteen University Clubs had dispensed or were about to dispense withthe discriminatory process, in contrast to two only five years earlier.

   "The Union Club in Boston has enrolled its first Jewishmembers, and the Union League Club in Philadelphia is taking a similar step. Thelatter development is truly historic; for one of the founders of the Union LeagueClub more than a century ago was the banker Joseph Seligman, who is remembered todayas the first prominent victim of social discrimination against Jews. In 1877, Seligmanand his family were refused accommodations at the fashionable resort of SaratogaSprings, New York; in the years that followed, the anti-Semitic virus spread rapidly,and soon Seligman's own club instituted an exclusionary policy." 16

   While the foregoing is true of what the authors call prestigeclubs it is not yet true of the five top finpolitan elite clubs nor, for thatmatter, of the central elite club in each of the leading cities. The Union, Universityand Union League constitute pretty much a national club chain, offering inter-regionalclub privileges mainly to intermediate people. There may, in time, be a breakthrough,so that at least some token Jews are accepted as members of the very top clubs; buteven that is doubtful, for reasons we shall see.

   Something to be noticed is that the anti-Semitic bias, neverprior to the 1870's a feature of American life, entered with the new industrialists,themselves from the Fundamentalist grassroots, poor boys like Rockefeller, Carnegie,Frick and others who "struck it rich."

   Professor Baltzell ascribes the barring of Jews to "Protestantvalues" but here I think he commits the post hoc fallacy. True, the membersof the clubs are almost exclusively if nominally Protestant; but they would justabout all find the writings of Martin Luther, John Calvin and Sören Kierkegaardso much gibberish, the utterances of far-out clowns. The club members of late industrialderivation, the top dogs, came from the grassroots Horatio Algers who introducedthe anti-Semitic rules. In addition to being nominally Protestant they were culturallyand educationally of no higher level than the nineteenth-century immigrants fromEurope whom they despised. Not only were they of poverty-stricken origins but theywere all educationally distinctly en retard. It was the attenuated and confusedcultural values of this element, straight from the cracker barrel, that were applied.To trace it to Protestantism, especially in view of the long European Catholic anti-Semitictradition, seems to me off target.

   Earlier American attitudes toward Jews, though tinged here andthere with the European virus of anti-Semitism, were on the whole respectful, perhapsunduly so, for Jews were widely regarded as children of the Holy Book. Some Americansclaimed to belong to "lost" Jewish tribes. American Protestant collegesmade a point in the eighteenth and early nineteenth centuries of offering Hebrewas well as Latin and ancient Greek as the classical languages, in part because ofthe mistaken belief that the original New Testament had been written in Hebrew andthat Jesus spoke this language. An early American classicist had to know Hebrew aswell as Greek and Latin. Jews were friends and collaborators of a number of the ProtestantFounding Fathers, were received into leadership circles North and South and wereassociated in vital early federal affairs. The idea of treating Jews as pariahs wouldhave been deemed aberrant.

   The exclusionary treatment of Jews in American life stemmedfrom a decision by the new financial elite, which elbowed to one side persons ofthe earlier aristocratic temper. Money became king, not Protestantism. The stockticker became the dominant symbol, not the flag or the cross.

   The exclusion of Jews from the inner metropolitan clubs is alsoimitatively enforced in elite and nonelite country clubs and in the old-line collegefraternities. Actually, the Jewish exclusion serves to confer the special cachetof distinction on such clubs, most of the members of which are tedious Babbitts.A club or fraternity that does not exclude Jews is by this token advertising itselfas an undistinguished affair, which it really is on the ground that its members arealmost invariably persons of no intellectual or moral distinction. That the country-cluband fraternity crowd consists in large part of simple animals, not always fully housebroken,one can ascertain by reading the novels of F. Scott Fitzgerald, John O'Hara and otherswho specialize in doings on the country-club circuit.

   Catholics, although few and far between because most importantCatholic money is concentrated in the hands of the Church hierarchy and because Catholicsuntil very recently have been something of a self-segregated caste in American society,are not barred from the metropolitan clubs and one sees Nicholas F. Brady, ConsolidatedEdison tycoon, for example, as a member of The Links. There are others, such as HenryFord II, but not many. John F. Kennedy became a member of The Brook.

   It is doubtful if any Negro has ever been so much as proposedfor membership. It would be erroneous to say Negroes are barred. They are simplynot noticed. Negroes fall under the latter-day integrationist rule: They are notdiscriminated against as Negroes but it so happens they are found to be unqualifiedbecause of a tragic history over which the latter-day keepers of the keys have noretroactive control. The point is only: They couldn't get accepted even if they couldfly to the moon and back in a kite.

   Beyond this, as far as the clubs are concerned, Negroes notonly lack titles to property (as quite a few Jews do not) but no one of them seemsto be within 250 years of ever having them in any significant proportions. Who woulda Negro be likely to inherit from?

   As large property holdings are now mainly inherited and hardeven for an occasional white nonproprietor to come by, it would seem that Negroesare forever circumstantially barred from becoming considerable American propertyowners. This is not to deny that some Negro, some day, may in some flukey situationrun a small stake up into a big corporate nest egg and then turn out to be one ofthe larger swindling wheeler-dealers.

   One can see two roads opening up to a very few Negroes, eventhough not to an entire stratum of wealthy Negroes.

   One of these roads might be the entertainment or sports world,where a successful Negro might use his earned stake to become an impresario, thenperhaps an owner of chain hotels, eventually the Empire State Building and perhapsa 5 per cent cut of one of the big banks.

   Another road would be through politics and the participationin its many slushy inside contracts of the kind that have lifted many shadowy politicalfigures from hamburgers to affluence. Early in 1966 a New York State investigationof large-scale housing developments in Harlem with public money indicated that aNegro political leader who had put up $2,000 stood to make $250,000, not a bad orunusual prelude to larger operations. For great family oaks from such little acornshave grown all over the American scene since the Civil Way,

   But that this sort of thing is going to happen to many Negroesand that they or their increasingly light-skinned progeny are going to be taken readilyinto the caste-iron clubs seems improbable.

   We find, then, that at least 15 per cent of the population (Jews,Puerto Ricans and Negroes) is effectively barred from the clubs on intrinsic grounds.The remainder of the population is barred on extrinsic grounds: It has neither largeproperties nor high functional positions.

   All this, it might be argued, is perfectly reasonable. Theseare private clubs, and clubs may choose their own clubmates. But these are not onlysocial clubs; they are the staging areas of national policy and of the big dealsthat make Harlem real-estate deals look like pennyante poker.

   Some of the clubs, indeed, in court actions over tax privilegeshave denied pointblank that they are social clubs, have claimed that they are infact business clubs. This is true of the ninety-year-old Merchants Club of New York,located in the old textile district and allowing no Jews to belong, and it is trueof the ultra-ultra Duquesne Club of Pittsburgh. 17

   As it can be shown that many of the progenitors of club memberscame into their money via party politics, such as through early public utility andrailroad franchises, and as their members shuttle in and out of high government postswith almost metronomic regularity, and are big political campaign contributors, itmust be evident, prima facie, that they are also political clubs. They areconcerned with finance and with politics. They are, in brief, finpolitan,perhaps 45 per cent devoted to business, 45 per cent to politics and 10 per centto blessed sociability.

   While the inner pattern of arrangements differs from club toclub, we may take a look at the redoubtable Duquesne Club to find out what they areall really about.

   "It is when you go upstairs in the Duquesne that you beginto enter the substratosphere of executive power," says Osborn Elliott. "Onthe second floor there are no fewer than five dining rooms, including the main one;and in each of these., day after day, the same people sit at the same tables. Asyou enter the main dining room, the Gulf Oil table is across the way; Gulf's chairmanDavid Proctor sits facing the door, surrounded by his senior vice presidents. Inthe corner over to the right is the Koppers table, populated by most of the top menin that company, and next to it is the U.S. Steel table, where sales vice presidentsbreak bread together. In another smaller room nearby, Pittsburgh Coke & Chemical'spresident, chairman and vice presidents gather daily; in still another, PittsburghPlate Glass has a central spot, while Alcoa's executive committee chairman, Boy Hunt,holds forth in the corner--next to Jack Heinz's table.

   "If the Duquesne's second floor feeds the captains of industry,many of the field marshals are to be found on the fourth and fifth floors, wherethirty-five suites are rented out by the year (at $12,000 and up) to such companiesas U.S. Steel, Gulf Oil, Jones & Laughlin, Blaw-Knox, and Alcoa, to name justa few. These attractively decorated apartments usually have a bedroom, living roomand dining room; they are used by the companies' topmost brass for meetings and lunchalmost very day, and for dinners perhaps two or three times a week, particularlywhen a visiting fireman, or rather fire chief, comes to town. . . .

   "In these company suites new products and mergers are planned,bargaining strategy for labor negotiations is hammered out, multi-million-dollarfinancing arrangements are made. Here, and in the public dining rooms below, theprofessionals of production get together and exchange ideas, day by day. There isa daily exposure of people to people who are all of the same mold or forced intothe same mold. This tends, no doubt, to channel their interests and energies towardthe mono-purpose goal of production; and it may well be, as has been said, that Pittsburghwould not be the production marvel it is without the exchange of information, techniquesand ideas that take place every noontime at the Duquesne." 18

   This continuous-performance center is obviously a caucus roomand continuous seminar of finpolity. Jews, of course, and anyone without bigmoney or high position, are barred. Baltzell relates that "Even today thereis in Pittsburgh an executive at the very top level of leadership in one of the nation'smajor corporations who has never been taken into the Duquesne because of his Jewishorigins (even though he has never been associated in any way with the city's Jewishcommunity). But as this executive's high functional position would ordinarily demandDuquesne Club membership, other arrangements have been made. In other words, althoughit may seem absurd, he is allowed and encouraged to entertain important businessassociates in his company's private suite on the upper floor of the Duquesne. Andhe does this in spite of being barred from membership in the club! It may seem hardto believe that such a dehumanizing situation would be tolerated either by this talentedexecutive of Jewish antecedents or by his gentile office colleagues who are alsoleaders at the Duquesne." 19

   Baltzell also tells of a high Jewish executive in Chicago whowas denied the presidency of a corporation founded by Jews because he would be barredfrom membership on "religious" grounds from the leading club. He resignedand, a man of proper temper, refused to reconsider when the board of directors changedits mind. 20

   "Many such dreams of corporate and financial empire-buildinghave been consummated within the halls of America's more exclusive clubs," notesProfessor Baltzell after relating how Cecil Rhodes had used his club to buy out JewishBarney Barnato in the De Beers diamond syndicate, "The greatest financial imperialistof them all, J. Pierpont Morgan, belonged to no less than nineteen clubs in thiscountry and along Pall Mall. One of his dreams was realized on the night of December12, 1900, in the course of a private dinner at the University Club in New York. Carnegie'sman, Charles M. Schwab, was the guest of honor and the steel trust was planned thatnight." 21

   Not only are the big deals arranged in the comfortable privacyof the interlocking clubs, where nosey journalists, repelled by the claim of privacy,are not about watching the comings and goings of the sociable principals but, asalready indicated, general policy governing the interlocking corporate world, asdistinct from the specific policy of each company, is there determined. Even bigtycoons must eat; and they eat together in their clubs. As it happens, during themeals, arrangements are made for organizing the world after their hearts' desires.

 The Corporate Rule: Gentiles Only

   The club rule against Jews, not at all strangely, turns outalso to be the corporate rule. Some writers deplore, directly or by implication,the nonadmittance of Jews (and Negroes) to the clubs; but even if they were admittedmatters would be little different. What significant alteration of the world for thebetter would follow if Sidney Weinberg, Meyer Kastenbaum or Thurgood Marshall weremade members of The Links or the Knickerbocker Club? Could they, even if they wantedto, change the finpolitan outlook? For the clubs make sure, in advance, thatanyone taken in agrees broadly with their weltaunschauung.

   If Jews were suddenly admitted to the clubs and upper corporatepositions would it be a gain for liberalism? In view of Baltzell it would (and heis probably right in this) result in a strengthening of the ruling class, in makingit more competent, less mindlessly castelike. It would make the ruling class moreeffective, would make it, as far as sheer merit is concerned, more aristocratic.But merely the selection of the best people in a certain limited scale of valuesis no guarantee of general aristocracy. The best gangster, although he may be anaristocrat among gangsters, can hardly be taken as an aristocrat.

   Baltzell defines aristocracy as follows: "By an aristocracyI mean (1) a community of upper-class families whose members are born to positionsof high prestige and assured dignity because their ancestors have been leaders (elitemembers) for one generation or more; (2) that these families are carriers of a setof traditional values which command authority because they represent the aspirationsof both the elite and the rest of the population; and (3) that this class continueto justify its authority (a) by contributing its share of contemporary leaders and(b) by continuing to assimilate, in each generation, the families of new membersof the elite. As with the elite concept, I do not conceive of the aristocracy asthe 'best' or the 'fittest' in the sense of the term 'natural aristocracy' as usedby Jefferson. The aristocratic process means that the upper class is open."22

   He is not, however, making a plea for aristocratic rule but,as he stresses, "it is the central thesis of this book that no nation can longendure without both the liberal democratic and the authoritative aristocratic processes."23 He sees the true aristocrat as a public leader.

   But aristocrats, in Jefferson's sense of the naturally best,are not produced invariably or even generally from a community of hereditary upper-classfamilies, as Baltzell's tracing of the class origins of Abraham Lincoln shows.

   "If an upper class degenerates into a caste, moreover,"as Baltzell so well puts it, "the traditional authority of an establishmentis in grave danger of disintegrating, while society becomes a field for careeristsseeking success and affluence." And this is the present American position.

   A true aristocracy developed in the clubs (or elsewhere)might indeed change the world for the better. But merely lowering the barriers toJews and Negroes would not accomplish this, as the clubs also bar on other castegrounds. It is the general values of the clubs more than their exclusionary policythat are most open to question.

   The very caste structure of the American propertied elite--asBaltzell agrees--shows it not to be an aristocracy, shows that it is afraid of competitionfrom natural excellence. Plato, an aristocrat, would not have barred a man from hisAcademy because he was a Jew but he did bar him if he did not know geometry. Norwould he have barred from discourse a man just because he disagreed with him; heeven reported for history the crucial difficulties for his beloved theory of ideasraised by Parmenides.

   The nonadmittance of Jews (and Negroes) to the upper rulingclubs is cited here not to reiterate the truism that the finpols are illiberaland narrow-minded or to imply that Jews and Negroes should in the name of democracyor aristocracy be admitted to their circle. My observations, unlike those of Baltzelland others, are made only descriptively, to establish a tracer, as is done when physiciansinject radioactive isotopes in order to make some determination about an organism.The nonadmittance of Jews to the central clubs enables us to make a vital determination:that decisions made in the clubs hold with rigor out in the corporate world and insociety. If Jews and Negroes should now suddenly be admitted, the determination heremade would still stand, for all time. It would signal only that the finpolshad changed their minds: The acceptance of Jews and Negroes in the clubs and corporationswould still show they had determining power. Whatever they do in this matter, proor con, it is still their decision before history.

   Jews, we may remind ourselves, are and have been members ofthe United States Supreme Court, the Cabinet and both houses of Congress. They havebeen high in the armed forces, often charged with the most vital matters of nationaldefense, as in the case of Admiral Hyman Rickover. They have been governors of leadingstates such as New York and Connecticut, have been deep in the construction of delicatenational policy in war and in peace. They are neither formally excluded by Americanpublic institutions nor informally excluded by the popular political process. Theinstrumentality of their entrance into political life has been, largely, the post-CivilWar Democratic Party, and in this sense the latter-day urban Democratic Party hasbeen more democratic (as well as more republican) than the Republican Party. Jewslike Jacob Javits, Louis Lefkowitz and even Barry Goldwater in the Republican Partyare distinct odd numbers.

   But Jews, although very much to the fore in public life, andquite distinguished (Brandeis, Cardozo, Frankfurter, Lehman, Rickover, Baruch, ArthurJ. Goldberg, Morgenthau, Ribicoff and others), disproportionately distinguished inthe fields of learning and the arts and disproportionately few in prisons, are rarelyacceptable as middle-range executives of the leading corporations and seldom appearas chief executive officers.

   Now, it may be purely coincidental that we have before us thesetwo parallel facts: exclusion of Jews from the leading clubs and from the corporateranks. But this seems extremely doubtful. For the clubs have as their members virtuallyevery leading stockholder, higher executive and key corporation lawyer. The policyvis-à-vis Jews which they collectively enforce in the clubs in the nameof personal selection of associates is the same policy they separately enforce inthe quasi-public corporations.

   Considering the wide acceptance of Jews in public life and inthe elites of science, scholarship, professions, the arts, entertainment and organizedsports and their simultaneous nonadmittance to the entirely private metropolitanclubs and quasi-public corporations, we are forced to conclude that elitist decisionshave been made, pro in some quarters, contra in others.

   It might be argued in the light of the evidence thus far thatJews are not admitted to the clubs because they are not admitted to the corporations,that the corporations control the club people rather than the club people the corporations.But as this is a uniform policy and the corporations have no unified meeting groundof their own, it seems evidentially preferable to conclude that the unified rulingmust come from the locus of unified membership, the clubs.

   In any event, we know on the basis of very careful direct researchthat the club is primary to the corporation. For if one is not admitted to one ofthe clubs first--in New York the leading clubs that have been mentioned or in oneof the provincial cities to the central club, such as the Duquesne in Pittsburgh--onewill never move into the upper corporate executive echelons. Admission to one ofthe prime clubs of, say, a vice president or general manager, is the general signalthat one is regarded as a Coming Man, that one is either at or very near the top.Shades of deference the man was never before accorded now become his due. Not beingadmitted usually signals that a man has reached the end of his climb.

   This general fact is precisely established by E. Digby Baltzell.24 The evidence, says Professor Baltzell, shows that the club is the tailthat wags the corporate dog.

   Others, such as Osborn Elliott, traversing the same ground,cite evidence pointing to the same conclusion. 25

   As a purely mechanical matter it would be difficult for a rulingby the corporations to be transmitted to the clubs; but it is easy for a consensusruling to go from the clubs to the corporations. The leading stockholders and corporateofficers all meet and mingle in the clubs; they do not meet and mingle in the corporationswhere they are limited to one or a few companies each. Unified policy comes, then,from the clubs, not from the corporations. The clubs are the centers of finpolitaneliteness.

   For the purposes of this presentation it makes no differencewhere the discrimination begins--the clubs or the corporations. But by reason ofthe fact that it prevails in the leading clubs as well as the leading corporations,in the private sanctuaries of the controlling large stockholders, it seems clearlyevident that the discrimination is the consequence of a decision in a closelyknit group at the top. As we have seen, the corporations are controlled by very smallgroups, with ownership stakes ranging from 10 to 100 per cent. If these owner-controllerswished policy to be otherwise they could easily order it, in the corporations aswell as the clubs. They do not want a different policy, however--at least not yet--sothe present policy prevails.

   As this is a policy neither required by law nor sanctioned byformal public policy, it clearly emanates from control quarters outside the frameworkof formal government or public discussion. It is policy based upon an autonomouselite decision. That decision was probably never taken after a full-dress discussionbut originally emanated from, and has since been repeatedly endorsed in, innumerableinformal club conversations.

   Now, what are the grounds for saying that Jews are excludedfrom corporate managerial employment?

   "In the United States," says a key University of Michiganstudy, "Jews are no longer disadvantaged with respect to education or income.Their training and educational background are conspicuously underutilized, however,in the executive ranks of most major corporations. The evidence need not be recapitulatedhere; every serious effort to collect data on this subject has yielded the same generalconclusions. In recent years, for example, Jews have comprised 12 to 15 per centof the graduating classes of the Harvard Graduate School of Business Administration,an institution to which the executive recruiters of many large companies regularlyturn. Among the executives of such companies appearing at Harvard's seminars andtraining programs for businessmen, fewer than 0.5 per cent were estimated to be Jewish."26

   Exclusion is contrived, says this study, by the ostensible utilizationof easily manipulated "nonability" factors in evaluating prospective personnel--socialconnections, religious background, attendance at the right schools, membership inthe right clubs and fraternities, appearance, residence in good neighborhoods andcircumspectly self-assured deportment. Baltzell, however, cites instances where highlycompetent applicants for corporate entry who had all the "nonability" factorson their side in abundance, and seemed to be on the way in, were turned down as soonas it became clear they were Jewish. One sees this, in fact, very frequently.

   "Approximately 8 per cent of the college-trained populationof the United States is Jewish," says Vance Packard; "against this, considerthe fact that Jews constitute less than one half of 1 per cent of the total executivepersonnel in leading American industrial companies." 27 This figureshould also be considered in relation to the fact that 3 per cent of the populationis Jewish. Jews, very clearly, are glaringly underrepresented in corporate managementin relation to their frequency in the population and among college graduates.

   Out of 2,000 management people at U.S. Steel a researcher forthe American Jewish Committee could find only nine or ten who were Jews, less than0.5 per cent. 28

   The facts are established as well in a number of careful specialstudies, national and local. Even in cities with large Jewish populations, like NewYork and Philadelphia, where frequency in the population might be expected to bereflected at least locally in management ranks, the percentage of Jewish participationis negligible. 29

   Exceptions have been few. Gerard Swope, one-time president ofGeneral Electric, was never accepted by the leading clubs, nor was David Sarnoffof the Radio Corporation of America, which was developed with Jewish money. Sears,Roebuck, although built by Jews, goes along with the practice of preferring non-Jewishexecutives.

   Of perhaps more significance to most people is the fact thatthis exclusion extends to lower levels of employment in companies and industries.Many companies and industries discriminate boldly in lower-level employment of Jewsas well as Negroes; some discriminate only against Negroes.

   It was reported in 1965 to Secretary of Labor W. Willard Wirtzthat major corporations, recipients of huge government defense contracts financedout of public tax money, were discriminating against Jews and Catholics as well onmanagerial and lower levels. Secretary Wirtz promised to seek laws to stop the practice.30 When discrimination against Catholics can be shown, it becomes politicaldynamite owing to the frequency of Catholics in the national electorate. Jews, inaddition to being fewer, are more concentrated in certain regions, and anti-Jewishdiscrimination is more easily and slyly applied. It is, moreover, approved by themindless generally, Catholic or Protestant.

   Because corporations have grown so that they extend over sucha great portion of daily life, discrimination in corporations on managerial and lowerlevels serves to cut people off from positions where they can function. Among themany things corporations are tending more and more to monopolize are human functions.Most members of the labor force now work for a large organization--the $50-million-asset-pluscorporations, government or the public-private educational system; it is increasinglydifficult to find people who do not work for one of these. When corporations, thrustinginto larger and larger areas of local and personal life, practice discriminationit simply cuts the victims off from a chance to function. Jews particularly, andNegroes, sometimes Catholics, are denied such functional opportunities, althoughsome Jews have unwittingly benefited by being forced into independent though marginalenterprises of their own.

   The most keenly felt loss, perhaps--and loss to the country--stemsfrom the fact that many positions are classified as managerial when they are reallytechnical and semiprofessional.

   But the reason the barriers will not be as easily removed assome seem to suppose is this: The modern corporation is organized very much alongmilitary lines, although its military lineaments are carefully cloaked in all sortsof public-relations formulas. There is a chain of command, from the directors andtop officers down to the department foremen. In this chain of command one obeys orders.The orders are not usually passed on brusquely, as in an army, and failure to obeythe orders does not bring one before a courtmartial. The process is much subtler.The successful organization man can hear orders that are never uttered. In orderto move up in the managerial ranks one must be "smart" enough to "catchon" without being told everything.

   As William Whyte makes clear in The Organization Man,the members of the managerial chain of command are carefully selected with the minutestattention to detail. One can be shunted into numberless corporate Siberias, neverto emerge, for all sorts of sins of omission and commission. If one's wife does notqualify for the country-club set this can impede promotion. Queer people in the familylike pacifists or single-taxers can create doubts. Wearing the wrong clothes--toogay, too funereal, inharmonious--can earn disapproval and lack of promotion.

   One is usually fired only for some overt infraction or glaringblunder. But not being promoted is often tantamount to being fired.

   What is wanted, as Whyte makes clear, is the pleasantly agreeableconformist--an intellectual and moral castrate. Like the German soldier, it is notfor him to reason why, but only to follow orders or to anticipate unvoiced orders.The aim of it all is maximum profitability amid public acceptance for the corporation.

   The basic rule of the corporation is that which Theodore Rooseveltsaid was the ultimate criterion of his social class: "Does it pay?" 31

   This chain of command in the corporations with their huge assetsis obviously very important. It is no place for deviants, real or supposed. And thebig owners of property are extremely nervous, very defensive, as some of their memoirsshow. 32 One could deduce the same conclusion by considering their elaborateelectronically guarded safe-deposit vaults, high electrified fences and stone wallsaround estates and complicated systems of guards, watchmen and locks in their dwellings.And it is true, as demonstrated by the existence of bank robbers and safe crackersand the utterances of radicals of the Left, that many persons have designs on theirenormous wealth and position.

   They are, therefore, unduly sensitive, perhaps hypersensitive,about their propertied domains. They don't want any wrong elements in their preciouschain of command, and any element they don't fully understand is apt to seem unsuitable.

   While Jews--and Catholics and Negroes--like other groupingsof people, distribute according to the normal curve of probability, showing certainpercentages of every type and most of them concentrated in the middle area, Jewslike Negroes have a higher visibility. In the case of Jews the higher visibility,where it is present, comes from cultural differences.

   Again, a number of prominent Jews appear to have taken seriously,too seriously, the formal documents of the American legal system, the Declarationof Independence, the Constitution and perhaps Lincoln's Gettysburg Address. Suchwere, obviously, Joseph Pulitzer and Louis D. Brandeis, who did not see the emergingcorporation as an unalloyed boon. These were public men rather than finpols.How many other Jews, the finpols no doubt ask themselves, are like these?

   Within the corporations, as the recent electrical-industry scandalshows, many things go on that are bound to be viewed askance by the public. Whenthe milk is watered it is necessary to have a line of loyal managers, to have nobodypresent who is apt to blow the whistle and call in the police. To insure this oneneeds carefully screened people. People who are excluded are, then, not basicallyexcluded on racial or religious grounds--for the corporate men have no more interestin ideology than has a giraffe--but on grounds of reliability, real or supposed.Anyone about whom there is doubt that his primary loyalty will be to the corporationmust be left out--and this goes for Jew, Catholic, deeply committed Protestant orany overt moralist, unorthodox ideologist or detached scholar.

   In objecting to the exclusion of Jews it is overlooked thatcorporations exclude on other grounds as well. They wouldn't knowingly hire a DavidThoreau for example. They aren't partial to liberals, and Jews are associated historicallywith liberalism. The exclusion of Jews, then, even by some corporate people who marryJews, traces back today to the general fear of any disturbing influence along thechain of command. It is not that the corporations want passive people. They wantaggressive, ambitious people, but aggressiveness and ambition must be channelizedtoward one goal: making money. Any other interest is disturbing.

   While it is no doubt galling for any people, especially peoplewithin a supposedly democratic society, to be stigmatized in advance of performance,this whole prospect is not as bleak as it at first seems. Corporations (on behalfof their owners.) get their way in society by both the proper and improper use ofmoney. In one of the approved ways, they constantly entice personnel away from government,the educational system and other socially supportive areas. A man may be doing anexcellent job as a personnel director for a school or hospital at, say, $8,000-$9,000a year when he is spotted by an alert corporation scout, who offers him, say, $18,000a year plus other prospects. As the saying goes, the man cannot afford to turn downthis opportunity to better his condition, and few would ask him to; his family stagesa celebration over father's "promotion." He joins the corporation, wherehis work may not be nearly as socially effective as it was; it may, indeed, be sociallydestructive, depending upon what policies he is required to implement. He may havechosen people before on the basis purely of talent; now he must take into account"nonability factors."

   The corporations in this way constantly drain to themselvesdirecting personnel of talent, whose talent they often misuse in the service of profitabilityand a sense of corporate security.

   But an uncalculated social advantage to the barring of Jewsby the corporations, although not relished by Jews themselves, is that they are leftundisturbed in society as free-lance teachers, lawyers, physicians, editors, publishers,writers, surgeons, accountants and what-not. As the corporations don't want them,they come to form something of a reflex professional caste. Their services, thus,are available to noncorporation elements.

   Lest some readers think I strain at a minor point, let it benoticed that many lawyers, physicians, surgeons, even publishers, refuse to handlecertain types of cases or accounts for purely caste reasons. They feel the eye ofBig Brother in the clubs, in the newspapers, is upon them. Many lawyers won't takecertain cases because the elite of the community frown on the plaintiff or defendant(who presumably is not entitled to due process). Some doctors won't heed the wishesof those who call them if handling the case by purely medical canons violates therule of some perhaps religious caste to which they belong (won't abort at the requestof a patient but will remove a wart or lift a face, won't give godless injections,etc.). Certain publishers won't publish books that reflect upon the nobly born andwell connected or upon caste-approved ideas although they will publish books thatshow such in a deceptively favorable light. It is an advantage, then, for the majorityof noncaste people to have available to them the services of competent people uncontrolledand left at liberty by the corporations. One is more apt to get untrammeled skill.

   We see in prospect, similarly, the lifting of Negroes from acaste of unskilled workers to one of prizefighters, athletes, entertainers and purelyNegro politicians--the American Dream converted into a comedy of errors.

   The unsought creative effects of barring Jews from corporationsare perhaps most evident in publishing, although they may be found elsewhere as well.For the American cultural scene is incalculably richer for the presence of Jewishpublishers, originally barred as higher functionaries for the older Anglo-Saxon publishinghouses. Jewish publishers have been willing to publish all sorts of books that caste-mindedAnglo-Saxon publishers were afraid to publish. Thus Simon and Schuster publishedBertrand Russell, an Anglo-Saxon; and Alfred Knopf published the books of the verySaxon H. L. Mencken. Random House, Inc., and Viking Press have been right up in linealso publishing various non-Establishment Anglo-Saxon writers. There was, too, JosephPulitzer.

   Now, if the Jews who founded these and other publishing houseshad been initially taken into the older houses they would have been absorbed intothe Anglo-Saxon nest, their best ideas blunted in the name of organizational gemutlichkeit.This is not to say there are no independent publishers other than Jews; but Jewswere clearly the pace-setters who kept the publishing tracks wide open, as anyonecan see by looking up the early experiences of American writers like Theodore Dreiser.

   The most threatening feature about Jewish and Negro exclusionby elite establishments, though, is that it reinforces the ever-present biases ofthe mindless, who are always with us. "Gentlemanly anti-Semitism" in Germany,as Baltzell points out, paved the way for the later demonism of Nazism. "Gentlemanlyanti-Semitism," in other words, is a charge of unfused dynamite lying about,waiting for the circumstance and the paranoid personality to supply the fuse.

   Baltzell, citing memoirs and biographies, tells of a numberof instances in which rejection of Jews in the financial world by the clubs inducedmuch anguish of spirit. But just how sympathetic one ought to feel about someone--Jew,Gentile or Negro--being denied acceptance in the inner finpolitan world Iwouldn't know, because I feel that being barred by The Links is about on a par, froma purely human point of view, with being barred by The Elks. The clubs, in otherwords, are not centers of excellence.

   Baltzell relates that Bernard Baruch, an admirer of clubmanJ. P. Morgan, felt hurt at being excluded from the inner club circles of finpolity.Doesn't it seem as though his admiration was misplaced? Moneyed Jews, instead offeeling personally affronted at what would pass for insulting behavior in the worldof ordinary men, surely ought to be able to see that finpolity precedes ordinarycivility. What matter the opinions of curbstone moralists and liberals when billionsare felt to be at stake?

   What this pattern of discrimination imposed by the elite clubson the corporate world, the country clubs and the college fraternities shows (leavingaside the alleged good or bad effects or the reasons for it all) is that (1) an elitedecision has been effectively imposed on the country without leave of the governmentor any pluralist plebiscite and (2) that it is possible to impose effectively suchelite decisions.

   If it is possible to impose such decisions--in corporations,college fraternities and suburban residential areas--it is equally possible to imposethem with respect to any individual or to any types-- ethnic, political,intellectual. The prejudices of the upper clubs, in other words, have the force ofeffective law throughout the land.

   It is not unusual in history for the prejudices of a rulingclass to prevail over a society as law, but it is the general supposition that theUnited States is sharply divorced from such a state of affairs. The supposition,however, is mistaken. Operatively the United States is not so new a model in theworld as commonly thought.

   The question now is: Are other such elite decisions made andimposed?

Other Finpolitan Elite Decisions

   A casuist might counter what has been shown with this response:It is true that an effective decision has been made by the financial elite againstJews, Negroes and sometimes Catholics but this does not prove that similar decisionsof sweeping effect are imposed. All that has been shown is that it is possible toimpose such decisions and that one has indeed been imposed.

   It is necessary, then, to show that the same sort of decision-makingtakes place in various momentous areas whenever the finpolitans feel theirvital interests are concerned. It is not denied that other people make decisions,that there is a formal governmental structure for decision-making, as when PresidentTruman decided in person to drop atomic bombs on Japan or President Johnson decidedafter consultation only with the joint Chiefs of Staff to involve the United Statesin futile large-scale warfare in Vietnam.

   What is asserted is that often, in contravention or supplementationof formal government, effective, informal and momentous decisions are made by thefinancial elite without consulting anyone else. These decisions pragmatically havethe force of law. They enable certain things to happen, prevent other things fromhappening. Furthermore, these decisions relate to fundamental dollars-and-cents areasin the life of the American people.

   Our next area for consideration will be that of regulation ofthe corporations, long a vexing subject.

   Many laws have been placed on the books for the ostensible purposeof regulating corporations, and they do regulate the corporations in those respectsin which the corporations resign themselves to being regulated. Among these lawsare the Sherman Anti-Trust Act as amended, the Clayton Act and various others thatcan be read about in a wide literature devoted to describing, analyzing and criticizingthe anti-trust laws.

   The proclaimed purpose of these laws is to preserve competition.Supplementing the work of the courts in applying these laws is the Federal TradeCommission and other quasi-judicial regulatory bodies.

   Yet, despite token prosecutions under these laws and repeatedinvestigations and disclosures by Congress and the regulatory agencies, competitiondwindles steadily in American economic life. Fewer and fewer companies, as we haveseen, control wider and wider areas of economic activity, more and more jobs. Excepton the margins, small, independent owner-operated businesses are being slowly squeezedout of existence, nearly everybody is being forced to work for the corporations--ornot to work at all.

   As Professor Sutherland of Indiana University has pointed out,the token regulation of corporations follows the same lines as the probation systemfor juvenile delinquents, who are irresponsibles of tender years. The corporationlike the delinquent is found to be doing something forbidden by law and is hailedbefore the court or commission. Light punishment and a suspended sentence are prescribedfor both, and from each is exacted a promise not to repeat the forbidden act. Infact, each is enjoined against a repetition and is told that if it does repeat itwill be called back and--now--seriously treated; the delinquent will be sent to jail,the corporation could be fined for contempt of court. This last proviso is a criminalsanction, held in reserve.

   But the corporation, unlike the juvenile, may offend againstsome other law, and may indeed be a constant offender over the legal spectrum, asmany have been. If the juvenile delinquent did this he would be locked up for a longstretch.

   Despite the continuous outcry about antitrust law enforcementit was demonstrated to the country recently in The Great Electrical Industry Casethat the big enterprises are no more impressed by the government than are gangstersby a "fixed" police force. It will also be recalled that those officerswho were convicted and fined and either made to serve thirty days in jail, or givensuspended sentences, felt greatly put upon because they had done nothing thatwas not being done throughout every industry.

   Not all monopolistic trusts break the law so precisely as theelectrical industry brazenly did, carefully touching all the illegal bases, and thosethat do are careful to avoid having the proof as available as it was in the electricalindustry case. The same situation prevails, there is strong reason to believe, inmany industries but the judicial proof is not at hand or is not sought.

   The laws usually, except in the case of vague charges like obscenityand blasphemy, state precisely what series of acts constitute the offense and underwhat conditions. Evidence must show that these acts and conditions were plainly present.In the case of something so complicated as a conspiracy to restrain trade, it isoften difficult to muster the requisite evidence.

   Not many open-and-shut convictions, therefore, have taken placeunder the antitrust laws. And they have not been much of a deterrent, as the electrical-industrycase showed.

   But, as we have seen, monopoly proceeds to establish itselfalso in many ways not stylistically forbidden by law, as in the case of heterogeneousor conglomerate mergers. Here we see companies in one central industry gobbling upcompanies in all sorts of directly unrelated industries, finally producing a giantfinpolity of massive proportions with much concentrated economic and politicalpower. There is up to this writing no law whatever against such combinations, whichhave the effect of giving a small group of owners and controllers monopolistic controlover huge sectors of the economic system itself.

   The antitrust laws did not apply at all to the public utilityholding companies which had acquired operating companies all over the country andwere "milking" them for excessive service charges, which were passed onto the public in the form of higher rates. The participants favor mergers becausethey broaden opportunities for screened internal, intra-divisional lucrative transactions,all ultimately affecting the prices paid by the public. Prices in the wake of themerger movement, as anyone can see, do not go down; they go up, and up, and up.

   Instead of proving monopoly now, so much of it having been shownin hundreds of court cases, Federal Trade Commission hearings, congressional investigationsand a voluminous scholarly literature devoted to the subject, the burden of proofhas shifted to the other side. What must now be done as far as a public defense ofthe big corporations is concerned is to show a single clear instance of free competitionon the upper corporate circuit. One doubts that this can be shown.

   Now, it will be noticed that virtually all the leadingstockholders, all the leading executives and all the leading lawyers of (1) big corporationsthat have been convicted in open court of monopoly or restraint of trade or relatedpractices, (2) big corporations that have consented under threat of judicial proceedingsto desist from certain practices, (3) big corporations that have been shown in congressionaland Federal Trade Commission investigations to be monopolistic or quasi-monopolisticand (4) big corporations that have been found guilty in open court of breaking otherlaws and ordered either to desist or fined--all these leading stockholders, executivesand lawyers are members of the restricted clubs of the finpolitan elite.

   If it could be shown as positively that they were all membersof the Communist Party everybody would agree that the corporate practices were unquestionablypart of a subversive Communist plot, directed from Moscow. The cry of "subversiveconspiracy" would be raised from coast to coast.

   There is, of course, no "plot." There are certainshared attitudes and ways of doing business in a small continually consulting group,and these are reflected in the public behavior of the corporations. In a group committedto pecuniary aggrandizement as a major aim in life there will, naturally, be calculatedbreaking of rules made by plebeian outsiders who are, by definition, cranks, screwballsand crackpots.

   The dominant feeling in the clubs, one may surmise from publicationsowned and religiously patronized by club members, is basic opposition to any andall effective antitrust laws. For regulation of the corporations by government agenciesamounts to "interference" in private business affairs, one of the worstsins government can commit in the finpolitan view. Less bad, to be sure, ispurely token regulation, which is mere insistence upon a principle, but even it isbad enough. "Hands off the corporations" is the covert club slogan vis-à-visthe government. No club member would seriously disagree with it.

Still Other Finpolitan Decisions

   In the clubs, too, are matured various campaigns to influencepublic opinion with a view to making it possible for basically accommodating governmentto modify policies. As such campaigns number into the hundreds, there will be mentionedhere only the postwar campaign to remove price controls, which were very irksometo the corporations. The case was loudly made throughout the press that the economywould do much better with the controls removed. They were removed and the economymoved on, as predicted by experts, into endlessly troublesome inflation. Leadingclub people, such as Henry Ford II, spoke out in this campaign. But as profits outpacedthe inflation, and eventually outpaced lower taxes, the decision to remove pricecontrols was correct from the finpolitan point of view. The populace as awhole, however, grew poorer and proceeded to run over its neck into personal debt.

   Here we may ask: Did the populace want higher prices? Does itever?

   Another type of case is this: It is shown by the governmentthat some huge consolidation is clearly illegal and the Department of Justice callsfor its termination under the threat of submitting the issue to the courts, whoseruling is a foregone conclusion. The offending party thereupon sets its agents towork on Congress with a view to getting the law changed so as to permit the particularconsolidation, and succeeds in its efforts. This, of course, takes power, especiallyas many congressmen initially opposed to passing the enabling legislation must bewon over. But, apparently so strong is the case for the consolidation, or the radiantpower of money, that even the most antitrust congressmen finally agree.

   Such a case was in 1965 and 1966 provided by the giant ManufacturersTrust Company of New York (Kirby), which had merged with the competing Hanover Bankand Trust Company and had absorbed the many directly competing Hanover branches intoits system. The more the Department of Justice studied this merger, undertaken withoutanyone's by-your-leave, the more it was convinced that it violated the applicablelaw all around. The Department served notice it was going to the courts.

   Efforts thereupon began with Congress, which in 1966 passedthe enabling legislation that permitted this and some other challenged bank mergersto stand.

   Here is a clear case of a corporate decision that was made inviolation of the law, with the law later changed in order to permit the initial elite-leveldecision to stand.

   Again, many persons, some in Congress, made pointed note ofhow rapidly Congress (after the Supreme Court ordered Du Pont to divest itself ofimproperly held General Motors shares) acted to exempt the recipients of the GeneralMotors distribution from a capital gains tax. The oldest and largest holders, ownersof the greatest capital gains, were the Du Ponts themselves. Many observers thoughtit would have been more seemly if Congress had at least dragged its feet (as it ordinarilydoes) before passing this special bill. But congressional leaders, it seemed, wereanxious in this matter to give especially rapid service, thus showing profound deference.Had Congress not acted as it did the Internal Revenue Service would have reachedout for all the taxes it could get in the situation, as it usually does whether gainshave been made legally or illegally.

   So here is a case of another after-the-fact law being passedto facilitate top elitists in holding on to gains made out of what the Supreme Courtconsidered a legally dubious situation.

Controlling Police Actions in Personal Affairs

   Private elite decision-making extends to more personal mattersinvolving the violation of the law, literally to murder. For the elite decision-makingprocess can interfere with and prevent investigations and prosecutions for murder.

   Cleveland Amory notes that in the case of at least seven notorious"Society" murders since 1920 the investigations were quashed "forthe sake of the families." 33 The greatest amount of publicity hadattended all these cases, and yet investigations fizzled out. The killings were all"unsolved."

   The pattern in every case was of wealthy, black-sheep philanderersor cut-ups-rebels-who were variously shot, stabbed or bludgeoned, sometimes in theproximity of other people, often in peculiar, veiled circumstances.

   While the plea of dropping investigations "for the sakeof the family" has a sentimental appeal, in all the cases the waywardness ofthe victims was known to family and social set and in some instances had been bruitedabout in the tabloids. News about the black sheep would hardly be novel or undulyshocking to family or friends.

   But a broader reason for quashing the investigations is found,perhaps, in the idea that ventilating all the circumstances would tend to indicta broad class of moneyed people in the eyes of the populace, which retains certainillusions about the gentry. The painstaking presentation of evidence in court, thenblazoned in the circulation-hungry tabloids, and the sketching in of sordid backgroundhigh jinks, would tend to document many doubts about the aristocratic pretensionsof the moneyed "social leaders."

   There is no suggestion here that initial steps to quash investigationswere taken in any of the metropolitan clubs--although they could have been--or thatthe police were the initiators of negative action. The police, as professionals,are normally inclined to proceed with investigations. Nor, in any of the cases, isit necessary to suppose that any of the families in any of the cases initiated thenegative action.

   The mechanics of these affairs are, in general, as follows:After the crime, with the police beginning to set up their lines of investigation,prominent individuals in the same social set, with at least the consent of the family(which could rightfully insist upon full investigation) get in touch with the leadingpolitician or politicians upon whom the police are dependent for their jobs. Theright politician, responsive to the halo of money, tells the chief of police: "Dropthis investigation, for the sake of the grief-stricken family. The guy got what hedeserved anyhow and the family knows it."

   Here the police instincts are satisfied on two counts: first,on sentimental grounds (and most police are basically conventionally sentimental)and, second, on retributional grounds. Lost in the shuffle is the fact that someone,no doubt of high social position, has committed murder and is about to get away withit, law or no law.

   Now, in the case of most murders, the victim has a family; andin many cases the family is as sick of the victim as any Society Family of its blacksheep. But this does not deter police from delving into every aspect of his careerthat might point to his murderer. Even if it is thought the victim got preciselywhat he deserved, the police probe in every direction, and family now be damned.For the family involved is not an Important Family.

   Whatever one thinks of all this, one must agree that the policein such quashed cases act in response to an elite decision.

Congressional Endorsement of Elite Decisions

   Elite decisions are most often, perhaps, implemented by legislativebodies, Congress or the state legislatures. It would take hundreds of pages to showall of these in detail. Here I shall take space only to mention two conclusive examples,leaving Congress for scrutiny until later.

   In the early 1960's there were before Congress two proposals,one to terminate tax-free expense account privileges of corporation executives andanother to enforce by law greater truth in advertising. After some minor trimmingwith respect to the first, much to the disgust of the New York Times editorialboard, which favored an end to the tax privileges, the tax-free fringe benefits wereallowed to stand virtually unchanged. In the second instance, with newspapers andmagazines taking a hand behind the inspiriting slogan of "freedom of the press,"the call for more stringent policing of misleading advertising claims was defeated.Similarly, the cigarette industry succeeded in having watered down the anti-cancerwarning proposed for cigarette packages.

   Even though the outcome was determined in Congress it can hardlybe doubted the decisions were made on high, for special interests, and were simplyvalidated in congressional horse trading.

   Who in the country, apart from the corporations, corporationexecutives and pleasure resorts, want these executives to have untaxed expense-accountprivileges, which amount to a hidden, untaxed raise in pay? The ordinary citizencannot deduct the cost of carfare to or lunch on his job even though these are clearlyexpenses in his way of doing business.

   Again, who in the country aside from advertisers and their publicationsand other outlets will stand up in favor of free and easy deception in advertising?

   Both of these are clearly elite decisions carried out againstwhat would be the true wishes of nearly all people if the issue were ever effectivelysubmitted to them.

   Let us recall another among many salient cases wherein Congressobliged. In 1948, as mentioned earlier, Congress changed the inheritance tax lawso that half of a married person's estate would be untaxed--the marital deduction.As most people are married, they no doubt favor anything that favors the maritalstate, and "marital deduction" has a fine, solid, homebuilding ring. Whowould be so abandoned as to oppose a marital deduction?

   Again, as we live under the principle of equality before thelaw, it is well to notice that this law applies to everyone--provided only that hehave a taxable estate, which means that it does not in fact apply to about 95 percent of people.

   In the present law the first $60,000 in any estate is tax free.Thus, if a married man dies and leaves a net estate of $100,000, only $40,000 ofit was taxable before the revision of the law and only $20,000 after the revision.In each case only a small tax was paid.

   But after the law was revised a married man who left an estateof $100 million was subject, first, to the deduction of $60,000 of taxable estateand then of $50 million! As of 1966, the estate would have paid a tax under the pre-1948law of $75,342,000. But under the revised law such an estate would pay only $36,149,000!This represents a saving of $40 million, worth going to some trouble to obtain.

   Cui bono (Who benefits?) was a Roman principle used fordetermining the instigator of an action. Could anyone claim that the decision torevise this tax law, of appreciable benefit to very, very few people, was the consequenceof some pluralist process? The country was not even aware that the law was beingrevised in this sleight-of-hand fashion, thus tending to preserve the very largeestates and giving a minor tax benefit to small taxable estates.

   The decision to revise this law was obviously taken among somewealthy discussants, possibly in one of the clubs, and the assignment to procureits revision was obviously given to some legislative representative of the elite.

   Not only do the finpolitan elite make decisions suchas the foregoing, mostly in their clubs, but they make all other decisions deemedrelevant to, their vital interests--on taxes, wages, prices, price controls, interestrates, ethnic and religious employment policies, investment expansion or contraction,the evaluation of public personalities in the mass media, etc., etc. Hence the proprietyof referring to them as a ruling class.

   But they don't, it will be said, make the decisions on war orpeace. This is usually true, although they did make the decision to involve the countryin World War I, a decision fraught with many troublesome consequences for themselvesand the world. But at other times they are usually not heard on the question of waror peace, which they leave to constitutional officers, because they are ready toplay their cards either way. Whether there is war or peace, they adjust their profitenterprises to the situation and make out very well in either case. No doubt, likemost people, particularly in the age of catastrophic weapons, they prefer peace.But if constitutionally formal decision makers decide for war they interpose no visibleobjection. They are, however, always interested in "defense" contracts.

   None of these decisions is made conspiratorially. All are arrivedat after purely informal discussion, although now and then leading figures may retireto some private club room when delicate subject matter is to be broached. But thegeneral atmosphere in the clubs is quite free and easy, open and aboveboard, withno hint of conspiracy afoot. These matters are just part of the ordinary course offinpolitan affairs, like shop talk in any professional or vocational club.New ways of contriving mergers, avoiding taxes or circumventing labor unions amountto so much club chit-chat, but one should always note that club chit-chat on variousmatters becomes translated into external effective action in society. If club membershappen to feel that Jews are not suitable as corporation executives it just so happens,without any fuss or noise, that Jews do not become corporation executives. Smooth,smooth. . . .

   Everything about club decisions is in this way informal, offhand,in a low key--unhurried, unhysterical, gentlemanly. The high pressure atmosphereof the corporation sales meetings is noticeably lacking.*

   (*Here, if not elsewhere, the judicious reader may pause and ask himself: "How can a writer, and an outsider at that, be so sure projects are handled so easily on the upper strata?" The answer is: one turns to entirely credible, literal reports. Thus, George Santavana, long a professor of philosophy at Harvard and for many yeares an intimate friend of Charles A. Strong, son-in-law of John D. Rockefeller, report's an incident in the first decade of this century at Rockefeller's Lakewood, New Jersey, between-seasons residence: "One day when I had mentioned Spain, he (Rockefeller) asked me, after a little pause, what was the population of Spain. I said I believed it was then nineteen millions. There was another pause, this time rather longer, and then he said, half to himself : 'I must tell them at the office that they don't sell enough oil in Spain. They must look the matter up.'" George Santayana, Persons and Places: The Middle Span, Vol. II, Charles Scribner's Sons, N.Y., 1945, p. 134.

   Santayana makes this penetrating observation about Rockefeller: "He was beyond comParing himself with his competitors; he compared himself with himself." Ibid.)

    As it seems to me, it has been shown that the finpolitanelite unilaterally makes momentous decisions that in one way or the other, in contextslarge or small, are imposed on the country whenever the elite feels its vital interestsare affected. Where it does not see its vital interests involved, either collectivelyor singly, it simply stands aside and lets others decide in issues such as, say,whether or not a new school should be built or whether a park should be located hereor there. The finpolitans have little interest in such details and allow anyonewho presses to make the decision.

   There may be some, however, who will say that I haven't provedmy case. Although many other supporting instances could be mentioned in this chapter,it should be evident that for those determined not to accept the clearly warrantedconclusion there would be no admission that the case was proved if instance werepiled on instance in detailed profusion for hundreds of pages.

   One either intelligently sees the force of the proof offeredor goes on muttering idiotically forever, no matter how much evidence is adduced,"Not proven, not proven."

Toward a Domestic Kremlinology

   Since World War II and the upthrust of Russia there have emerged"Russian Institutes" in various of the universities, devoted to studyingall things Russian. Some of the scholars focus directly on the ruling group in theKremlin, attempting at a distance, amid considerable difficulty, to deduce what isgoing on at the top. They pore over Russian newspapers, study the order of precedenceof names of officials, examine budgets, make note of who appears and who does notappear at diplomatic receptions, analyze Russian jokes, and subject every conceivableaspect of Kremlin affairs to minute scrutiny.

   Many problems challenge attention: Who is the No. 1 man, whois No. 2 and what is the likely line of succession? What are the rivalrous groupswithin the top leadership and what policies does each stand for? What is the currentdominant policy? What are the temperaments of the top men--irascible, bland, suspicious,etc.?

   With this in mind, it may be said that a purely domestic varietyof Kremlinology or American finpology could well be developed as a subsectionto university departments of political science.

   What is the main current orientation of the finpols? Whatare their alternate policies in the event of a variety of possible occurrences?

   Who, if anyone, is the chief arbiter of the finpols?If they have no chief arbiter do they have a committee, a sort of sub-executive committeeof the ruling class; or may any accredited person take a hand?

   This sub-executive committee, if it exists, has how many members--five,eleven, twenty-six" Where, if it exists, does it meet0at The Links, The KnickerbockerClub or in one of the suites at the Waldorf Astoria Hotel? What does it call itself,if it answers to a name?

   Who is the top man or is there collective leadership? What arethe respective orders of priority among Richard King Mellon, Crawford Greenewaltand, say, David Rockefeller? Do these ever consult? Does Nelson Rockefeller jointhem with an admonitory word? Is anyone else ever consulted? Where do they go? Whatdo they say? Do their jokes, if any, have hidden meanings of national or world significance?

   Or, if they do exchange views, is such exchanging done throughunderlings? What, in other words, is the procedure, always assuming there is somesort of at least informal procedure?

   The answers to these questions I do not know. That would besomething for finpologists to determine. Not to know the answers is not toknow what is taking place in an important sector of American government.

   But we do already possess certain deductions in finpologyanalogous to those in Kremlinology in our knowledge of how to determine who is movingto the top in the corporations. As E. Digby Baltzell and Osborn Elliott tell us,one can spot the Coming Men in the corporations by their admission to the metropolitanclubs. This is as good as seeing a name unaccountably moved up nearer the top ina list of officials published in Pravda and Izvestia. Some corporatevice president, not a member of the clubs, suddenly is made a member. We know enoughnow to know he is next in line for executive vice president or president.

   Again, we know where to look for who really counts. We lookto the metropolitan clubs. There we find future Cabinet officers and diplomatic negotiators.If I have arranged the clubs in their right order of priority we know in what laverof eminence personalities are to be found. Some other finpologist might wantto dispute the point. Some, I know, would have their reasons for rating The Brookand the Racquet and Tennis ahead of the Metropolitan Club. They should make theirreasons known and we might, as the Kremlinologists do, thrash it all out in a weekendseminar at Aspen financed by the Ford Foundation.

   It is more difficult today than it was thirty-five years ago,it seems to me, to determine precisely where the center of gravity in all this lies.Perhaps there is now no center of gravity and perhaps the issue of dominance in finpolityis being left in abeyance or quietly fought out behind the scenes. Is there, as inthe Kremlin, a behind-the-scenes struggle for power?

   Thirty-five years ago, prior to the disruption caused by theDepression and the New Deal, any knowledgeable Wall Streeter could have named theinner executive committee in the exact order of precedence: J. P. Morgan (or 23 WallStreet), John D. Rockefeller I (or 26 Broadway) and Andrew W. Mellon of Pittsburgh.Anything these three agreed on happened as they said it would, including sometimesas in 1916-1917 the decision to enter the war.

   One thing they agreed upon basically: not to meddle in eachother's respective domains. None wished to tangle at close quarters with either ofthe others.

   But 23 Wall Street, without downrating the others, made itswords felt over the most varied domain. That was where newsmen went for tips on whatwas likely to happen--in Washington, in London, in Paris, at the Federal Reserve.If no tips were available there, the pickings were apt to become slim; although sometimesWinthrop Aldrich at the Rockefellers' Chase Bank, only figuratively at 26 Broadway,might be able to give some special insight.

   But when Aldrich spoke, newsmen understood that although thewords were his the dramatic line was surely approved by "Big John," dodderingalong the golf course at Ormond Beach and manically handing out shiny dimes to everyonewho came near. J. P. Morgan II rarely spoke. In his place spoke Thomas W. Lamont,the eminence grise of the firm, whose mind perceived so many aspects to anysimple question that he could, if he had wished (which he rarely did), have discoursedwith visitors for hours about them. Mellon, except when he was Secretary of the Treasury,rarely bothered to cue any outsider into his thinking.

   But Morgan's, 23 Wall Street, was the center of the action,a fact often alleged but rarely shown. For example: A. P. Giannini, the self-erectedSan Francisco banking tycoon, in 1928 bought control of the 116-year-old Bank ofAmerica, of New York, from Ralph Jonas and associates, paying $510 a share for 35,000of 65,000 outstanding shares. He then absorbed the Bowery East River National Bankand the Commercial Exchange National Bank and formed the Bancamerica Corporationas a securities-underwritirig affiliate.

   But before he bought the Bank of America Giannini needed theconsent of J. P. Morgan and Company.

   "I don't want it unless I have the consent of 'The Corner,'"Giannini told his agent.

   "I can get that consent," the agent said.

   A meeting was arranged between Giannini and Morgan.

   "I'll see Seward Prosser and the Federal Reserve officialsat once," the New York tycoon told him. "You will certainly be welcomedinto the banking picture here." 34

   Said Seward Prosser, chairman of the New York Clearing Houseand president of the Bankers Trust Company, to Giannini:

   "We don't favor ownership of banks by holding corporations.However, we'll be glad to welcome you to the Street if you will agree to do awaywith all but twenty per cent of your holdings of this consolidated bank." 35

   Giannini agreed reluctantly. While he was distributing thisstock, says his biographer, he was informed that an official of the commercial bank-controlledFederal Reserve Bank of New York, speaking for the chairman, had said the ReserveBank would not transmit to the Federal Reserve Board in Washington the applicationfor trust powers unless Bancitaly Corporation of San Francisco agreed to divest itselfof every share it owned of Bank of America in New York.

   Giannini immediately went to Washington, where he was told byRoy Young, governor of the Reserve Board, that the Board had no legal right to takeover the trust department. Whereupon Giannini refused to distribute the remainderof the stock and went into the market to buy back what he had sold.

   "If you don't conform to our wishes here," said FrancisD. Bartow, a Morgan partner, to Giannini back in New York, "we must ask youto take your various accounts out of J. P. Morgan and Company. Right or wrong, youdo as you're told down here."

   "The hell I will," retorted Giannini. "If youboys want a fight I'll see that you get it." 36

   The next day, reports Julian Dana, a meeting was arranged withJackson Reynolds, head of the First National Bank, a Morgan satellite. "Reynolds,always an admirer of Giannini, had a word of caution for his ear. 'You have madesuch a tremendous success that I'm not trying to give you advice on what you shoulddo, A. P.,' said Reynolds frankly. 'You know your own business better than I do.You may have been badly treated--have all the law on your side. But if I were youI'd take my orders and say nothing. If you don't--well, they'll knock you down andwalk all over you.'

   "'They can't do that to a red-blooded California boy,'said A. P. coolly. 'If they try it they'll have the biggest damn scrap on their handsthey ever tackled.'" 37

   Several years later Giannini, by rallying his stockholders,fought back a complicated attempt by Morgan associates to take over his giant TransamericaCorporation from the inside. The story is told in detail by Giannini's biographer.38

   Morgan dominance, so thorough that no outsider could enter WallStreet without Morgan consent (gained at a price) was broken by a host of New Dealbanking laws that shifted control over many key financial matters to Washington--tothe Federal Reserve Board, which had previously been informally circumvented by theFederal Reserve Bank of New York, to the Securities and Exchange Commission and otheragencies. Morgan power thereafter declined; in its day it was great.

   This is the way it was, at any rate, up to the date that A.P. Giannini successfully challenged it and until the Depression and New Deal lawsundermined it. The Morgan word in Wall Street and far beyond, without the consentof Congress or any president, was law. Morgan's ran Wall Street, not in the sensethat it initiated whatever went on down there but in the sense that it could vetoanything it didn't like. Mellon and Rockefeller stayed out of its way; only A. P.Giannini was foolish and lucky enough to put the Morgan power to the final test,when Morgan's was under other pressures.

   Says Elliott V. Bell, a one-time member of the staff of theNew York Times (writing in 1938) and more recently chairman of the executivecommittee of McGraw-Hill Publishing Company and a director of the Chase ManhattanBank, the New York Life Insurance Company, the New York Telephone Company, the Tri-ContinentalCorporation and other stratospheric entities:

   "The position of the House of Morgan is unique and in thosedays [prior to the New Deal] its right to leadership was undisputed. The basis ofthe Morgan power is not easy to explain. It is not a large bank, as Wall Street banksgo. A dozen other institutions have much larger resources. True, the firm exercisesa strong influence over a number of these larger banks--the so-called Morgan banks--butit has never been established to what extent that influence is based on financialcontrol. The sheer money power of the Corner is, of course, great; but my own beliefis that this is a minor factor in the firm's leadership. What really counts is notso much its money as its reputation and brains. . . .

   "But to get back to the Corner. It is not a mere bank;it is an institution. It has become a symbol of Wall Street itself, viewed variouslyas a predatory creature, exercising a 'spider-web' control over most of the bankingand business resources of the country, or, at the other extreme, as a semiphilanthropicorganization whose benign ministrations cause great banks and corporations to flourish,giving employment to millions of workers and causing the stocks of 'widows and orphans'to rise in value and give off dividends.

   "There was a time, still within the memory of many in WallStreet, when financial titans booted the stock market about to satisfy their ownfeuds or ambitions; a time when the elder J. P. Morgan could call a handful of bankersinto his awe-inspiring presence and bark out orders that would stop a panic. Therewas a time, much more recent, when government turned first to Wall Street's leadersfor advice and means in meeting economic problems; when it almost seemed as thoughWall Street regulated Washington.

   "In the early years of the depression it was not unusualfor one of the big bankers to tell me that he had just been talking to PresidentHoover on the telephone about this or that proposal to accelerate prosperity's comingaround the corner. The comments on these consultations were often by no means flatteringto the Chief Executive." 39

   Although the Rockefellers and Morgan partners never tangledand sedulously kept to their own back yards as far as they were each concerned, Mr.Bell relates succinctly the Rockefeller thrust that really undid Morgan's. John D.Rockefeller, actually, had never liked the bullying elder Morgan.

   This thrust was administered in 1933 by Winthrop W. Aldrich,then head of the Chase Bank, when he publicly proposed precisely those banking reformsthat struck at the heart of the Morgan financial empire and which were later enactedinto law: notably the elimination of joint investment and deposit banking.

   "In openly challenging the Morgan system," says Mr.Bell, "Mr. Aldrich displayed at its most daring his flair for anticipating events.Probably few people realized at that time, despite the attendant collapse of thebanking system, how greatly the power and prestige of the Morgan firm had been impairedand how much it was to be clipped in the events that were to come. Mr. Aldrich byhis action made certain that the searchlight of the Senate investigation (alreadybearing upon his own bank) should be turned with full force upon the Morgans."

   What has been shown here, now, is what once was and is no more.But the crucial question is: What, if anything, has replaced the old order behindthe scenes, if it has been replaced?

   To believe that all the strings have been moved to Washingtonwould be too naive, although elected officials now do unquestionably have more tosay about the country than they had prior to the New Deal. But they don't appearto have enough say-so to open all opportunities in the economic and social systemto Jews--or Negroes, Puerto Ricans, Mexican-Americans or intellectual independents--orto stop the continuing concentration of more and more assets into fewer and fewerhands. One assumes, as they don't oppose it, that they tacitly consent to all ofthese as well as other practices such as informal publication censorship.

   The finpols we do know, after actions by Presidents Kennedyand Johnson, can no longer dictate prices; they must at least get acquiescence fromWashington, which appears to have moved into a closer partnership with finpolitywhether the finpols like it or not. They can no longer dictate interest rateseither.

   As long as affairs proceed more or less smoothly, this unsolemnizedpartnership will no doubt continue: Money talks. But when, as and if matters getout of hand and crises strike, it will again be a case of each for himself. Whilethe Crown and the Baronage appear to be honeymooning just now in the Welfare-WarfareState it is probable that in some great crisis analogous to the Great Depressionthey will find they are pulling in different directions, have different basic interests.

   Should that happen, should the finpols find they areonce again confronted by pubpols with overwhelming problems on their hands,what will happen? Assuming that the crisis is not too great it seems that the pubpols,always able to wrap themselves in the flag and point to the apostolic successionsince George Washington, will have the edge. The finpols are at their bestin behind-the-scenes maneuvering. When public questions must be openly dealt withthe pubpols are able to make use of the vast (if temporary in the, life ofevery pubpol) reserve powers conferred upon them by the Constitution.

   What will happen, though, if the pubpols in charge areabject servitors of the finpols, their sincere admirers? What happens to pubpolswho follow too slavishly the finpol script was shown by Herbert Hoover. Theyexpire in futility and the national situation deteriorates. Sooner or later (andfor the sake of the public one hopes it is always sooner) the pubpols mustbe guided by the remorseless logic of the situation as it confronts them and mustaddress it forthrightly in terms of the values their culture has provided them.

   The newspapers, largely owned, controlled or patronized withadvertising by the finpols do, with the emphasis on Washington affairs, practicepubpology assiduously. Not much in the goings, comings and doings, even privatethinking, of the pubpols escapes minute scrutiny and repeated review. It wouldbe too much to expect these same finpolitan newspapers to turn the spotlightof critical attention on their esteemed friends, the finpols. But what thenewspapers don't do, perhaps some nonconformist political scientists might do.

   Very possibly what we have today at the top is not a tight littlecommittee that hands out the "party line" of finpolity. The leadingclubs appear to function more as a Committee of the Whole, with no personality presentlythrusting itself forward. They function, not as an open Vatican Council nor as anorganization under a pope, but more as the secretive Roman Curia; though always very,very informally. Their determinations, however, are far-reaching and penetrating,having the operative force on true believers of a papal decree.



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