delanceyplace.com 2/16/10 - bombing wall street

In today's excerpt - a bombing on September 16, 1920, in the financial district of New York City killed 38 and seriously injured 143. The primary victims were employees of J.P. Morgan Bank adding to the fears of the firm's head, Jack Morgan, son of the legendary J.P. Morgan. The crime was never solved, though most suspicions surrounded the Italian anarchists prominent during that era:

"In 1920, just a few seconds after the Trinity Church bell tolled noon on a pleasant Thursday in September, a massive shrapnel bomb shook the corner of Wall and Broad Streets in New York. The blast set fire to awnings twelve stories above, sprayed hundreds of slugs into the facade of the Morgan building, and killed thirty employees instantly. The cloud of greenish smoke that rose from the explosion darkened the area for several minutes. When the dust cleared, George Whitney, one of the six Morgan partners, walked outside and found that a fragment of window sash weight had pinned a woman's head and hat against the bank's scarred north facade. He reported, 'I'll always remember that. It hit her so hard that it just took her head off and it stuck right on the wall.'

"At the Stock Exchange, sixty paces around the corner, brokers rushed to the center of the trading floor to avoid falling glass, and trading was suspended within one minute, as William H. Remick, president of the Exchange, mounted the rostrum and rang the gong. Trading on the Curb Market also halted immediately; the downtown area became a mob scene. The boys with the telephones attached to their heads weren't just swinging down from windows—now they were jumping. Brokers scattered, and federal troops rushed from Governors Island to Wall Street.

"When the bomb hit, Jack Morgan was away vacationing at his Scottish shooting lodge. Jack already had been paranoid, even before this attack on his bank's headquarters. Just before the war, a mysterious German man had attempted to assassinate him, and he had almost succeeded. Although Jack had recovered from the gunshot wounds, he still suffered from the emotional blow. He was obsessed with his personal safety and gripped by fear that he had become a terrorist target. He had hired a group of former Marines as bodyguards, and scampered into hiding whenever he heard reports of an escape from a prison or mental asylum.

"Now, after the shrapnel bomb, Jack descended into full-blown panic. When justice Department authorities investigated the blast and pursued dozens of suspects, but could not pin the crime on anyone, Jack concluded that he must have been the target. If he hadn't been off hunting in Scotland, he would have been killed. Who was after him? Would they ever stop?

"He posted thirty private detectives to watch his brownstone on Madison Avenue. He also began to view competition from other banks as more than merely business rivalry. He spun elaborate conspiracy theories involving the Bolsheviks and German-Jewish financiers. Jack and his friends were on one side of Wall Street; on the other side were the enemy bankers—Kuhn Loeb, Lehman, and Goldman Sachs—many of whom were Jewish. Jack Morgan neither trusted nor liked Jews. When Harvard president A. Lawrence Lowell sought to fill a board vacancy, Jack, who was an overseer of Harvard and a devoted alumnus, warned that 'the nominee should by no means be a Jew ... the Jew is always a Jew first and an American second.'

"Unlike Jack, investors ultimately shrugged off the bomb. The new Federal Reserve Bank reduced interest rates and added money to the financial system after the attack. The new Treasury Secretary, Andrew Mellon, brought confidence with a proposal for lower taxes. Investors came to see that neither war nor terrorists could defeat American optimism."


author:

Frank Partnoy

title:

The Match King: Ivar Kreuger, The Financial Genius Behind A Century of Wall Street Scandals

publisher:

Perseus Books Group

date:

Copyright 2009 by Frank Partnoy

pages:

38-39
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