Paul Cravath , Francis Lynde Stetson , William Nelson Cromwell , Elihu Root and a handful of other elite members of the New York bar were instrumental in forging the great capitalist enterprises that emerged in late Gilded Age America and continued their growth into the following century . Their influence was felt mainly during that period in American history , from roughly 1890 to 1916 , known as the Progressive Era and encompassing the Roosevelt and Taft presidencies and Wilson ’ s first term . During this period , and extending through World War I , the basic elements of America ’ s liberal democratic order took root : corporate industrial capitalism , the administrative-regulatory state and an internationalist foreign policy .
The story of the early white shoe lawyers has rarely been told , and never in assembled form . To some extent they have been dismissed or denigrated as mere tools of the oft-maligned robber barons . And there is some validity to the charge . As handmaidens to their corporate clients , these lawyers were architects of the monopolistic new corporations so despised by many . They also acted as guardians who helped the kings of industry fight off what they considered to be government overreaching . Depending on one ’ s point of view , the original Wall Street lawyers taught their clients either how to circumvent restrictive legislation or , as Untermyer put it , how to keep “ prayerfully within the law .” Popular humorist Finley Peter Dunne said the corporation lawyer could take a law that looked like a stone wall to a layman and turn it into a triumphal arch .
And yet the excesses of those years tend to obscure these lawyers ’ achievements . They devised new , more flexible forms of borrowing and financing that provided lubrication for the growth of American business . They also made it easier for bankrupt companies to rehabilitate themselves financially and get back on their feet following the economic panics and depressions that so frequently afflicted the nation in those years . They helped create a New York City transportation system without equal in the world . As one legal scholar put it , many decades after their heyday had passed , “ In a ... Cromwell , a Cravath , or a Stetson , we shall find builders of American society as intellectually bold as a John Marshall whose molding of Constitutional interpretation and whose fashioning of the Union are familiar to all of us .”
The issue that consumed the nation during the Progressive Era was the concentration of wealth and power in the hands of a small group of plutocrats who controlled such industries as oil , steel , tobacco , banking and the railroads . And in the debates over this issue , the leading Wall Street lawyers had a major voice . Although resistant to radical reform , the most influential of them came to accept the need for more extensive market regulation to prevent the abuses of the past and to increase trust in the system . They recognized that the law had not kept pace with the nation ’ s astoundingly rapid industrial growth and that new rules were needed so the law might catch up with economic reality .
Given their druthers , men such as J . P . Morgan and John D . Rockefeller would have preferred no rules at all constraining their business behavior . It was left to their lawyers to check their baser impulses and to navigate them through the maze of a new , more progressive legal regime . The top corporate lawyers pushed their clients away from a Wild West mentality toward greater transparency and concern for investors , and thereby served as a mediating and stabilizing force in a time of turbulent change . Having helped create the vast new impersonal corporations , the great Wall Street lawyers became part of the effort to tame them .
To help harness the growth of corporate capitalism , some of the most talented private practitioners on Wall Street took on active reform roles in government , often shuttling between private practice and public service . Who better , for example , than a Charles Evans Hughes , who had represented major life insurance companies , to expose corruption within the life insurance industry through a public investigation ? And what better attorney general to prosecute big antitrust cases than George Wickersham , who had made a practice of defending large corporations before he entered Taft ’ s cabinet ?
The white shoe lawyers also exerted their influence in foreign affairs . Almost all of them strongly supported American intervention in World War I . Wall Street lawyers assisted their clients in supplying and financing the Allied war effort and pushed for American “ preparedness .” Cravath and some of his brethren went to Europe on wartime missions and , in the course of their work , put themselves in harm ’ s way . A number of white shoe lawyers , including a young John Foster Dulles ( a protégé of Cromwell ’ s and a future Secretary of State ), also helped negotiate the Treaty of Versailles , which ended the war , and actively participated in the debates over American entry into the League of Nations .
Both at home and abroad , the white shoe lawyers were at the forefront of what has been called the “ search for order ” that characterized the period from 1890 to 1920 and led to the creation of a new organizational society . They began by imposing structure and efficiency on their own private law firms . They helped create the legal system that governs corporate behavior to this day . And they laid the foundations for an international order that eventually took hold . In doing so , the white shoe lawyers helped shape the new American century .
John Oller is a retired white shoe Wall Street lawyer who spent 30 years as an associate and then partner at Willkie Farr & Gallagher LLC , one of New York City ’ s most venerable law firms . He is the author of six books .
This article was adapted from White Shoe : How a New Breed of Wall Street Lawyers Changed Big Business and the American Century ( Dutton , 2019 ).
40 FINANCIAL HISTORY | Fall 2020 | www . MoAF . org