J. P.

Morgan
Born: April 17, 1837 in Hartford, Connecticut, United States
Died: March 31, 1913 in Rome, Italy
Other Names : Morgan, J. Pierpont; Morgan, J.P.
Nationality: American
Occupation: Banker
​
UXL Biographies. Detroit: UXL, 2011.
Full Text: COPYRIGHT UXL, a part of Gale, Cengage Learning

Full Text:
J. P. Morgan, a symbol of an era of aggressive capitalism, grew powerful through an
unusual combination of boldness and good sense, ruthlessness and responsibility.

An extraordinarily successful investment banker and a noted philanthropist, as well as

one of the most prominent art collectors of his day, J. P. Morgan symbolized an era of
aggressive capitalism.

Remarkable parents

Born on April 17, 1837, in Hartford, Connecticut, John Pierpont Morgan had remarkable
parents. Junius Spencer Morgan (1813-1890) owned part of a large mercantile house
(trading company) in Hartford, advanced to a larger one in Boston, Massachusetts, and
finally became partner, then successor, to the very wealthy George Peabody
(1795-1869), an American who made his career banking in London, England. Junius
settled there in 1854 and lived in England for the remainder of his life. Morgan's mother,
Sarah Pierpont, came from the family of a brilliant preacher in Boston, much given to
abolitionism (advocating the end of slavery) and other reforms.

Young J. P. Morgan received his formal education in Hartford; Boston; Vevey,

Switzerland; and Germany, at the University of Göttingen. Seriously ill as a teenager, he
had a long and successful recovery in the Azores (a group of islands in the North
Atlantic located about eight hundred miles west of the coast of Portugal). At age twenty,
he began his career as a clerk in Duncan, Sherman, and Company, a banking house in
New York. Two years later, while traveling in the Caribbean to study the sugar and
cotton markets, he bought, without authorization, a cargo of unwanted coffee using his
employers' money. They complained but accepted the profit of several thousand dollars
he earned by wholesaling the coffee in New Orleans (wholesalers sell goods to
retailers, who in turn resell the goods to their customers).

In 1860 Morgan set up his own company. He had plenty of business from his father in
London and also took advantage of many opportunities to buy and sell in the booming
commercial city of New York. In 1861 he married Amelia Sturges, after courting her for
several years. She was clearly in the advanced stages of tuberculosis (a communicable
disease of the lungs), but Morgan, daring in love as well as in business, gave up all
commercial activities and took his stricken bride to Algiers, Algeria, and then to Nice,
France, hoping to cure her. He failed, returning to the United States as a widower in
1862. He formed a partnership with his cousin, Jim Goodwin, and called the firm J. P.
Morgan and Company, Bankers.

Civil War profiteer?

Writers hostile to Morgan claim that he selfishly pursued profit during the Civil War
years (1861-65). They charge that he traded in gold against the government's
fluctuating dollars, and on one occasion bought obsolete arms from the federal
government in the East and then sold them to General John Charles Frémont
(1813-1890) in the West at an enormous profit. Morgan never apologized for his own
actions, but writers friendly to him have argued that recurrent fainting spells, from which
he suffered as a young man, made him unfit for military duty. These writers claim that
he served the Union cause well as an agent for his father, who was staunchly
pro-Union. As to the affair of the arms, Morgan's supporters say that two other men
arranged and carried out the plan. Morgan was involved only as their banker, extending
a short-term loan. Furthermore, the weapons were improved by rifling the barrels
(making spiral grooves in them), and the young entrepreneurs, whatever their motives,
did what the disorganized Department of the Army could not manage: deliver arms at a
reasonable price to the desperately needy Western army.

On one point, however, there is no dispute: Morgan spent that part of the war that
followed his short-lived first marriage in making money as rapidly as he could. In
September 1864 he took in new partners and reorganized as Dabney, Morgan and
Company. At twenty-seven, he was a leader in the financial life of the United States's
largest city. Yet he was already launched in his career of philanthropy, helping to raise
money for the wounded and widowed and working effectively to establish and enlarge
the Young Men's Christian Association (YMCA), an organization devoted to improving
the lives of young men. In 1865 he married Frances Tracy, one of the six daughters of
attorney Charles Tracy. The Tracys were fellow members of St. George's Episcopal
Church, which Morgan had joined in 1861 and attended for the remainder of his life.

Largely free, at this point, of the illnesses and spells that had marred his youth, Morgan
stood well over six feet, with powerful shoulders, penetrating eyes, and the air of one
born to command. In later life, he would grow portly and suffer painfully from acne
rosacea, an inflammation of the skin, which settled especially in his nose. He doted on
his and Frances's four children, Louisa, Jack (John Pierpont Morgan Jr. [1867-1943]),
Juliet, and Anne. In the summer of 1869, Morgan and his wife, accompanied by two
relatives, rode the new transcontinental railroad to Utah and to California, where they
toured extensively by stagecoach and horseback. Returning East, the Morgans
occupied a comfortable new home at Six West Fortieth Street in New York. In 1871,
troubled by nervous disorders, Morgan briefly considered retiring. Instead, he accepted
a new partnership with the powerful Drexels of Philadelphia. He would be a full partner
and would head their New York office under the title of Drexel, Morgan, and Company.

Railroad financier

Morgan was drawn into railroad affairs by a desire to see that railroads were properly
and efficiently managed, so that stockholders (the owners of a company) and
bondholders (those who lend money to companies) would be properly rewarded for their
investments. Furthermore, he clearly saw what American businessmen Cornelius
Vanderbilt (1794-1877), Thomas A. Scott (1823-1881), and Jay Gould (1836-1892) had
seen earlier: The future of American railroading lay in building large, integrated systems,
in which a single corporation controlled not only trunk (main) lines but also feeders
(branches) and operated without competition.

Morgan's first railroad adventure was a colorful skirmish with the most notorious railroad
pirates of the age, Gould and James "Diamond Jim" Fisk (1834-1872), in a battle for the
control of the Albany and Susquehanna railroad. There is a legend that Morgan kept
control of a crucial stockholders meeting by hurling the burly Fisk down a flight of stairs,
scattering his henchmen as though they were bowling pins. If true, this was the only
time Morgan gained control of a railroad by hand-to-hand combat. In 1879 he performed
a more sedate but much more lucrative feat in selling William Vanderbilt's 250,000
shares of New York Central Railroad stock (87 percent of those in existence) without
suffering any depreciation (loss in value) or inciting anyone to try to displace the
railroad's management.

The year 1880 brought another enormous challenge, converted into enormous profits.
In this case, it was a question of selling $40 million in bonds for the improvement of the
Northern Pacific, a transcontinental that had suffered bankruptcy and reorganization in
the Panic of 1873 (a general financial crisis). Great though his resources were, Morgan
could not finance such enormous sales of stocks and bonds entirely through his own
and his father's partnerships. He brought in other major banking houses, in the United
States and abroad, discreetly organized in syndicates (a syndicate is a group of
companies working together to complete a financial transaction). To help protect the
investments so arranged, Morgan, or one of his trusted partners or friends, became
director of the refinanced railroad. Morgan later helped to finance and manage dozens
of railroads.

Financier to U.S. government

Morgan was involved in the finances of the federal government on four major occasions.
With other leading bankers, he helped refinance the federal debt under President
Ulysses S. Grant (1822-1885). In the summer of 1877, Morgan committed another of his
unexpected and extraordinary moves when he lent the U.S. Army money with which to
pay its troops, after a distracted Congress had adjourned without setting aside the
money. Since the army was not authorized to borrow, Morgan paid out more than $2
million at his own risk; Congress, however, appropriated funds to repay the banker.
Much more effort was required to save the U.S. Treasury's gold reserve in the
depression of 1893. A combination of laws, more popular than wise, had forced the
Treasury to sell gold until it was on the brink of bankruptcy. The Panic of 1893 had
further started a general flight of gold back to Europe. To save the situation, Morgan
had to form a syndicate of American and European bankers both to lend gold to the
government at acceptable rates and to stop the flow of gold from the Treasury out of the
country.

Formed U.S. Steel Corporation

Morgan's greatest triumphs and defeats came at the end of his life. In 1901 he formed
the United States Steel Corporation, the world's first billion-dollar corporation. Morgan
then turned to a merger of the Northern Pacific railroad with its regional rival, the Great
Northern. Theodore Roosevelt (1858-1919), the Progressive president, ordered an
antitrust prosecution, contending that the combination of the two railroads would be too
powerful and in violation of antitrust law. The government won the lawsuit in 1904, and
the merger fell apart. Morgan, however, ever the patriot, returned in 1907 to lead yet
another syndicate of bankers to prevent a financial panic. The depositors at one of the
New York banks saved on that occasion were chiefly working people; Morgan ordered
his company to save them even if he lost money—in fact, he did. In 1912, the year
before his death, Morgan was summoned before the Pujo Committee (headed by U.S.
Representative Arsène Paulin Pujo [1861-1939]), which charged him with destroying
competition by controlling all the large banks, railroads, and steel companies of the
United States through interlocking directorships and stockholdings. Morgan vigorously
denied the charge, claiming that his methods guaranteed the proper management of
business by men of high character.

Active in his church

At St. George's Episcopal Church, Morgan led the vestry (an elected administrative
body in an Episcopal church) in hiring W. S. Rainsford, a Progressive who introduced a
community center, a house for deaconesses (Episcopal women doing social work, in
this case), an industrial school, a summer camp, and a seaside resort for working-class
women and children, all of which Morgan helped plan and most of which he financed.
He also helped maintain the church near his summer home, served on the committee
that planned the cathedral, and attended every national triennial (once every three
years) convention of his church until his death.
Noted art collector

Always something of a collector, Morgan began buying rare and old works of art on an
immense scale after the death of his father in 1890. As a collector, Morgan displayed
the decisiveness and flair that had characterized his business career. A trustee of New
York's Metropolitan Museum of Art from its fledgling days, he became its most active
member in the last fifteen years of his life and left it priceless collections of paintings,
ceramics, armor, and other art objects. For his collection of rare manuscripts and books,
he built his own library next to the home at 219 Madison Avenue that he had built in
1881. It would later be used as a public reference library. Collecting art went nicely with
Morgan's lifelong habit of traveling abroad. He spent almost every summer in England,
France, Italy, and, on several occasions, Egypt, where he often visited archaeological
digs. He died during one of his periods of travel in Rome, Italy, on March 31, 1913.

Unusual personality fueled power

J. P. Morgan's power grew because of the unusual combination of boldness and good
sense, ruthlessness and responsibility, that made up his complex personality. The
failure of the American people, between 1836 and 1913, to have any sort of central
bank created rare opportunities for investment bankers with strong connections to
foreign centers of capital. Hating waste, inefficiency, and conflict, Morgan used his
growing financial power to impose order on the railroad and steel industries, inevitably
reducing competition and calling into question the prevailing economic theories of the
day. Democrats also feared the growing power of rich men who appeared responsible
to no one but themselves. Morgan thus stirred up controversy and antagonism; yet, on
his death in 1913, he left a legacy of responsibility in business and civic affairs and a
priceless collection of art for the enjoyment of, literally, millions.
FURTHER READINGS:

● Allen, Frederick Lewis, ​The Great Pierpont Morgan, Harper and Brothers, 1949.
● Auchincloss, Louis, ​J. P. Morgan: The Financier as Collector, Abrams, 1990.
● Canfield, Cass, ​The Incredible Pierpont Morgan: Financier and Art Collector,
Harper and Row, Publishers, 1974.
● Canfield, Cass, ​Outrageous Fortunes: The Story of the Medici, the Rothschilds,
and J. Pierpont Morgan, Harcourt Brace Jovanovich, 1981.
● Carosso, Vincent P., ​The Morgans: Private International Bankers, 1854-1913,
Harvard University Press, 1987.
● Chandler, Alfred D., Jr., ​The Visible Hand: The Managerial Revolution in
American Business, Belknap Press of Harvard University Press, 1977.
● Chernow, Ron, ​The Death of the Banker: The Decline and Fall of the Great
Financial Dynasties and the Triumph of the Small Investor, Vintage Books, 1997.
● Corey, Lewis, ​The House of Morgan: A Social Biography of the Masters of
Money, AMS Press, 1969.
 ● Gras, N. S. B., and Henrietta Larson, ​The Coming of Managerial Capitalism: A
Casebook on the History of American Economic Institutions, edited by A. D.
Chandler Jr. and Richard S. Tedlow, Richard D. Irwin, 1985, pp. 257-88.
● Hoyt, Edwin P., Jr., ​The House of Morgan, Dodd, Mead and Co., 1966.
● Hughes, Jonathan, ​The Vital Few: American Economic Progress and Its
Protagonists, Houghton Mifflin, 1966.
● Jackson, Stanley, ​J. P. Morgan: A Biography, Stein and Day, 1983.
● McColley, Robert, "J. P. Morgan," in ​Great Lives from History, edited by Frank N.
Magill, vol. 4, Salem Press, 1987, pp. 1580-85.
● Rainsford, W. S., ​The Story of a Varied Life: An Autobiography, Doubleday, Page
and Co., 1922.
● Satterlee, Herbert L., ​J. Pierpont Morgan: An Intimate Portrait, Macmillan, 1939;
reprinted, Arno Press, 1975.
● Sinclair, Andrew, ​Corsair: The Life of J. Pierpont Morgan, Little, Brown, 1981.
● Tomkins, Calvin, ​Merchants and Masterpieces: The Story of the Metropolitan
Museum of Art, E. P. Dutton, 1970.

RELATED INFORMATION
Related Document:
● Morgan, J. P.

Source Citation​ (MLA 8​th​ Edition)

"J. P. Morgan." ​UXL Biographies, UXL, 2011. ​Research in Context,

go.galegroup.com/ps/i.do?p=MSIC&sw=w&u=mnkanokahs&v=2.1&id=GALE%7CE
J2108101611&it=r&asid=b5de1e03c4eb90881f057265837e7e2e. Accessed 9 Jan.
2017.

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