Not long afterward, the conference room door was pushed open.
Roosevelt was wheeled inside.
Behind him came William Woodin, Arthur Ballantine, Hugh Johnson, and the other key members of the team that had drafted the bill.
Jack Morgan and the others rose to their feet and exchanged polite nods.
Roosevelt lifted a hand, signaling everyone to sit.
They all took their seats.
But the moment they did, someone noticed something was off.
Seated to Roosevelt’s left was a young man.
When they had first entered, everyone had assumed he was merely a secretary responsible for taking notes.
But now, not only had the young man taken a seat, the seat he occupied…
Roosevelt was at the center.
The young man sat on his left, while William Woodin sat on his right.
What did that mean?
It meant that, in this conference room, this young man’s standing might outrank everyone present except the Secretary of the Treasury.
Jack Morgan’s gaze lingered on the young man’s face for two seconds.
Young.
Very young.
No older than twenty-five or twenty-six.
The face was unfamiliar, but those eyes…
As they swept over the room, there wasn’t the slightest hint of nervousness or eagerness to please.
There was only a strange, unwavering calm.
If he had to describe it, it was the look of someone watching a group of animals that had just been herded into a cage.
Jack lowered his eyes, revealing nothing.
But beside him, John D.
Rockefeller Jr.
shifted slightly and exchanged a glance with Albert.
The message in that look was obvious.
Who is this man?
Albert gave the faintest shake of his head.
“Gentlemen.” Roosevelt’s voice cut through the silence, his tone calm.
“First, I’d like to apologize.
I know that over the past few days, some of the things I’ve said, some of the actions I’ve taken, and some of the arrangements I’ve made may have upset you.” “But I hope you’ll understand.
Given the country’s current situation, I had no other choice.” Silence.
No one answered.
But that silence was an answer in itself.
We heard you.
Whether we accept it is another matter.
After a long pause, John Jr.
tilted his head slightly and gave Albert a subtle signal.
The Chase Bank that Albert headed appeared independent of the Rockefeller financial empire.
But everyone familiar with the inside story knew it was one of the central pillars of the Rockefeller family’s banking interests.
As for Albert himself, he was less a professional banker than the Rockefeller family’s spokesman within the banking industry.
“Mr.
President, what we want to know is this.” Albert spoke at last.
“How exactly does the government intend to inspect the banks?
And how does it plan to reopen them?” His tone was neither respectful nor offensive.
It was simply the blunt, businesslike manner characteristic of an old-school banker.
Roosevelt turned toward Ballantine.
Ballantine rose and slid a thick stack of documents to the center of the conference table.
More than a dozen copies had been printed.
On the cover was a simple title: [Draft Emergency Banking Act] “This is the draft we’ve prepared.
Please read it first, and then we’ll continue our discussion.” The documents were quickly distributed to everyone at the table.
The conference room filled with the soft rustle of turning pages.
Jack Morgan put on his glasses and began reading.
His fingers flipped through the pages one after another.
At first, he remained relatively calm.
Some of the provisions made him uncomfortable, but they were still within the bounds of what he could reluctantly accept.
Then he reached Chapter Four, Article Seven.
His fingers stopped.
On that page, printed in unmistakable black and white, was the following: Chapter Four, Article Seven: Pursuant to the authority granted under this Act, when the Treasury Department injects capital into a bank, it shall be entitled to obtain a proportional number of seats on the board of directors and shall have supervisory authority over the assisted institution’s executive compensation, dividend policy, and major business decisions.
The Treasury Department shall establish the specific implementation rules separately.
Assisted institutions shall not refuse or circumvent these provisions under any pretext.
Jack abruptly looked up at Roosevelt across the table.
Roosevelt met his gaze without flinching.
His eyes were as calm as still water, devoid of any emotion, yet they sent an inexplicable chill through Jack.
At the same moment, John D.
Rockefeller Jr.
turned to the same page.
His brow instantly knotted into a deep frown.
He turned once more and glanced at Albert.
Albert immediately understood.
Drawing a deep breath, he closed the document, looked straight at Roosevelt, and said, “Mr.
President, with all due respect, Chapter Four, Article Seven is unacceptable.
These provisions allowing the government to enter bank boards and interfere in management decisions strike at the very heart of bank governance.
They violate the sanctity of private property and fundamentally contradict the principles of banking law.
Wall Street will never agree to this.” The others offered no verbal support.
But at a moment like this, silence itself was an expression of consent.
“I think everyone here has the right to say those things.” Francis spoke for the first time.
“But you, Albert Wiggin, are the one person in this room who has absolutely no right to say them.” Every eye in the room immediately turned toward Francis.
Albert himself froze.
He had expected the first rebuttal to come from the President, the Secretary of the Treasury, or the Assistant Secretary.
Never from that young man.
“What exactly do you mean by that?!” Albert’s face flushed with anger, clearly offended.
“In the summer of 1929, through several private investment companies under your control, you quietly short-sold more than forty-two thousand shares of Chase Bank stock.” “But that’s not the important part.
The important part is that the trade required capital.
And you, Albert, ‘borrowed’ eight million dollars from your own bank, Chase, to finance it.” “Then, in October 1929, the stock market crashed.
Countless people lost everything.
Some jumped from buildings.
Some ended up on the streets.
Others saw the savings of a lifetime wiped out.” “And you?” “You walked away with a four-million-dollar profit from that short sale.” Francis paused.
“So that’s why I say you’re a bastard who has no right to lecture anyone about violating banking law.” The affair would not be exposed until November 1, 1933, when it appeared on the front page of The New York Times.
Later, Albert was summoned to testify before the Senate Committee on Banking and Currency.
When questioned, this was his defense: “I short-sold the stock to ‘defer’ paying taxes and to increase trading activity in my own bank’s shares.
It was entirely legal, and even commendable.” Then the committee’s counsel, Ferdinand Pecora, asked him: “As the head of a bank, do you believe short-selling your own company’s stock is ethical?” Albert’s answer left the entire hearing stunned.
Not only did he deny breaking the law, he denied having done anything unethical.
Even more shamelessly, although the four-million-dollar profit from the short sale should have resulted in four hundred forty thousand dollars in income tax, he managed to avoid paying it through various legal maneuvers.
What angered people most was that, thanks to the work of his lawyers, everything he had done was completely legal at the time.
Because in 1929, there was no law prohibiting corporate executives from short-selling their own company’s stock, no law forbidding a bank president from borrowing money from his own bank to finance such trades, and no law requiring him to disclose such blatant conflicts of interest.
As many experts would later observe, everyone knew what Albert had done was wrong—but under the laws that existed at the time, no one could point to a single statute that could be used to punish him.