Pujo Committee

The Pujo Committee was a congressional investigation into the “money trust,” the concentration of power in the financial industry. Its inquiry contributed to Woodrow Wilson’s effort to regulate finance, including the creation of the Federal Reserve Board in 1913. In the book’s account, the committee illustrates how political institutions can act as a counterweight when concentrated economic power threatens to narrow markets and opportunity.

Investigation of the Money Trust

The inquiry addressed the spread of monopoly into finance. The book identifies it as an investigation of the “money trust,” led by Louisiana congressman Arsene Pujo. Its significance lay not simply in documenting concentration: it helped place financial power and its regulation on the political agenda.

Reform and Financial Regulation

Under the impetus of the committee’s investigation, Wilson moved to increase regulation of the financial sector. In 1913 he created the Federal Reserve Board, which the book describes as a body intended to regulate monopolistic activity in finance. The sequence links congressional investigation to a new federal regulatory institution, though the account does not specify the committee’s procedures or findings in detail.

Markets and Political Institutions

The committee appears within a broader discussion of the limits of markets left to themselves. Markets can be dominated by powerful firms that charge high prices and block entry by rivals and new technologies; their existence alone does not guarantee inclusive economic institutions. The book contrasts the United States’ response to monopoly with Mexico, where it says no political body was restricting Carlos Slim’s monopoly, while U.S. antitrust laws had been used repeatedly to curb trusts, monopolies, and cartels.

The inquiry and the regulatory response thus exemplify the book’s account of a countervailing force: inclusive political institutions can restrict a drift away from inclusive markets. Political and economic institutions shape not only whether wealth is created, but also who can participate in markets and influence the rules governing them.