Susie Pak's Gentlemen Bankers is an innovative, substantive, and accessible contribution to the increasingly coherent field of the history of capitalism. It complements recent scholarship such as Richard White's Railroaded, Louis Hyman's Debtor Nation, and Jonathan Levy's Freaks of Fortune. Footnote ¹

Through a careful analysis of the cultivation of a gentlemanly disposition and the accumulation of social capital, Pak's Gentlemen Bankers offers a rich picture of the consolidation and reproduction of an elite. In bridging usually discrete subjects—social relations, the power of the state, and the incentives and structures of firms—this work is an exemplary contribution to the history of American capitalism.

Gentlemen Bankers focuses on the House of Morgan, the preeminent private bankers of the Progressive Era, and their competitors, Joseph Schiff's German Jewish firm Kuhn, Loeb & Co. This is not a traditional history of a firm, family, or economic sector, although Pak extends prior work in these areas. It is about networks in the world of elite private bankers. It traces the creation and maintenance of these networks, and their impact on financiers' private and public lives.

Pak reconstructs the formal collaboration among financial houses in syndicates led by J. P. Morgan & Co. Yet Pak insists that historians cannot understand the functioning of these business networks without their broader social context. Thus Pak has also built a dataset showing the affiliations of partners at Morgan and Kuhn; Loeb through membership in social clubs, cultural organizations, and educational institutions; and through residences, marriage patterns, and kinship. By focusing on formal economic ties while largely ignoring social ties, historians and progressive reformers have failed to comprehend the functioning of trust, hierarchy, and power within the world of elite private bankers. J. Pierpont Morgan and Jacob Schiff were gentlemen and bankers. They lived within structures of inclusion and exclusion along carefully patrolled boundaries of race, gender, religion, and ethnicity.

The book first examines the economic structure of private banking in the late nineteenth century and the increasing scrutiny and critique of these practices after the Panic of 1907. The financial relationships of J. P. Morgan and Kuhn, Loeb were “extremely personal” since financiers had “little formal protections or structures to enforce contracts” (14). To explore these relationships, Pak analyzes the structure of 1,827 syndicates in which J. P. Morgan participated from 1894 to 1934. Although Kuhn, Loeb was a major competitor for J. P. Morgan, and the Anglo Saxon and German Jewish partners of the two firms inhabited separate social worlds, the two firms carefully monitored each other's position in the financial community by collaborating in syndicates. The Panic of 1907 led to increased scrutiny of this opaque, internally monitored system of finance, most dramatically in the Pujo Investigation of 1912. Pak argues that the focus of progressive reformers on “formal economic ties within a public sphere” meant that the world of private relationships among individuals and firms remained an arena in “which the state would not infringe” (38). Pak concludes that while there was “certainly more regulation” in the Progressive Era, “the changes did not make the banking community any less hierarchical, any less consolidated, or any less secret” (36). This is a recurrent theme throughout Gentlemen Bankers: formal concessions allow elites to retain the informal social relations and invisible hierarchies at the heart of their power.

Chapters 2 and 3 show how the world of elite financiers was structured and divided along racial, religious, and gendered lines. Entry into prestigious social clubs provided an “affirmation of character” (73), a crucial mark of distinction for gentlemen bankers in an unregulated sector. Pak's network analysis shows that economic success within the House of Morgan (becoming a senior partner) can be predicted by a partner's membership in elite social clubs (75). This was a social world from which the Jewish partners of Kuhn, Loeb were entirely excluded until well into the twentieth century. In the late nineteenth century, social separation was largely accepted: Jewish elites, members of the “Our Crowd” society, “did not need to reference Anglo American social institutions for their own standing and social capital,” since they had elaborated a full set of Jewish social clubs, charities, and cultural organizations. Thus, both Morgan and Schiff were “committed to keeping the social spheres of the two firms separate” (94).

The remaining chapters trace how this world changed but endured through the First World War and Great Depression. The forces reshaping private banking included the expansion of the state; realignments of global empire and finance; the growth of the modern, managerial corporation; and the expansion of formal university training. The 1920s marked a new era in which the state and empire became more central. Morgan and other financial houses came to appreciate “the utility of recruiting partners with government experience and contacts” (216), such as Russell C. Leffingwell, who served as Assistant Secretary of the Treasury (1917–1920) and became a Morgan partner in 1923; or Seymour P. Gilbert, who became the General Agent for Reparations under the Dawes Plan, and gained a partnership in 1931 (215). “[P]olitics was a particularly fraught area for the Morgans,” for although they cultivated close contacts, many arenas of the state were “beholden to other constituencies, who were able to use the politics of national interest to intervene” in the financial world (220). Yet again New Deal policies “reaffirmed the existence of separate social and private spheres,” and thus the informal hierarchies and social networks of the financial elite remained intact (221).

The 1920s also marked new departures in terms of education. Before 1920, only 33% of Morgan partners in the United States had a university education, while after this, 79% had graduated with a university degree, most from Harvard and Yale (139). At this time, Kuhn, Loeb partners began to marry non-Jews, and the decade saw a “much higher rate of social interaction between elite Jewish and non-Jewish men and women than had been possible in Jacob Schiff's generation.” When faced with increasing assimilation, “the Morgan partners in general were more willing to embrace their identity in ethno-racial terms and worked harder to differentiate themselves from Jews and other groups” (130).

Pak illustrates this trajectory with a catalog of anti-Semitic comments by Morgan partners. Jack Morgan and Thomas Lamont, both Morgan senior partners, worked to preserve Harvard as an institution for Anglo Protestant men. As traditional, transparent practices of exclusion came under fire from a “new nationalist rhetoric” (142–143), Harvard, like others, adopted egalitarian rhetoric without “changing the structure of social networks,” thus maintaining the status quo (158).

Pak weaves together social, cultural, and business history, and powerfully deploys network analysis while keeping the text free of jargon. Carefully argued and clearly written, Gentlemen Bankers fully realizes the value of the new history of capitalism field.