J. P. Morgan

For the bank and financial sercices company, see JPMorgan Chase.

J. P. Morgan

John Pierpont Morgan I (April 17, 1837 – March 31, 1913) was an American financier, banker, philanthropist, and art collector who dominated corporate finance and industrial consolidation during his time. In 1891 Morgan arranged the merger of Edison General Electric and Thompson-Houson Electric Company to form General Electric. After financing the creation of the Federal Steel Company he joined with Henry Frick to merge it with Carnegie Steel Company to form the United States Steel Corporation. He bequeathed his large art collection to the Museum of Modern Art in New York City. By 1901, he was one of the wealthiest men in the world. He died in Rome, Italy in 1913 at the of age of 76, leaving his fortune and business to his son, Jack Pierpont Morgan.

Early life and education

Morgan was born in Hartford, Connecticut to Junius Spencer Morgan (1813—1890) and Juliet Pierpont (1816—1884) of Boston, Massachusetts. John Morgan was educated at the English High School of Boston, at a school in Vevey, Switzerland, and at the University of Göttingen. He was unpopular at his high school owing to his arrogant manner. He often attempted to impress classmates, such as writing to Paris in fluent French to order a pair of US$900 boots.

Career

Morgan entered banking in his father's London branch in 1856, moving to New York City the next year where he worked at the banking house of Duncan, Sherman & Company, the American representatives of George Peabody & Company. From 1860 to 1864, as J. Pierpont Morgan & Company, he acted as agent in New York for his father's firm. By 1864-71 he was a member of the firm of Dabney, Morgan & Company; in 1871 he partnered with the Drexels of Philadelphia to form the New York firm of Drexel, Morgan & Company.

In 1895 it became J. P. Morgan & Company, and retained close ties with Drexel & Company of Philadelphia, Morgan, Harjes & Company of Paris, and J. S. Morgan & Company (after 1910 Morgan, Grenfell & Company), of London. By 1900 it was one of the most powerful banking houses of the world, carrying through many deals especially reorganizations and consolidations. Morgan had many partners over the years, such as George W. Perkins, but remained in firm charge.

Morgan attempted a scam in 1861 to sell rifles which had been classified as obsolete and dangerous by the US Army. Morgan purchased 5000 of these weapons at $3.50 each. He subsequently sold them back to the Army for $22 each as weapons in "perfect condition", making $92,500. When the weapons were put to use, soldiers "shot off their own thumbs". The government refused to pay Morgan's bill, and he subsequently sued the government. A special commission accepted to pay $13.31 each, but Morgan sued again. The court promptly awarded him the full sum.

Morgan's ascent to power was accompanied by dramatic financial battles. He wrested control of the Albany and Susquehanna RR from Jay Gould and Jim Fisk in 1869, he led the syndicate that broke the government-financing privileges of Jay Cooke, and soon became deeply involved in developing and financing a railroad empire by reorganizations and consolidations in all parts of the United States. He raised large sums in Europe but instead of only handing the funds he helped the railroads reorganize and achieve greater efficiencies. He fought against the speculators interested in speculative profits, and built a vision of an integrated transportation system. In 1885 he reorganized the New York, West Shore & Buffalo Railroad, leasing it to the New York Central. In 1886 he reorganized the Philadelphia & Reading, and in 1888 the Chesapeake & Ohio. After Congress passed the Interstate Commerce Act in 1887, Morgan set up conferences in 1889 and 1890 that brought together railroad presidents in order to help the industry follow the new laws and write agreements for the maintenance of "public, reasonable, uniform and stable rates" The conferences were the first of their kind, and by creating a community of interest among competing lines paved the way for the great consolidations of the early 20th century.

In 1895, J. P. Morgan & Co. supplied the United States government with $62 million in gold to float a bond issue and restored the treasury surplus of $100 million. In 1902, J. P. Morgan & Co. purchased the Leyland line of Atlantic steamships and other British lines, creating an Atlantic shipping combine, the International Mercantile Marine Company, which eventually became the owner of White Star Line, builder and operator of RMS Titanic. In addition, J P Morgan & Co (or the banking houses which it succeeded) reorganised a large number of railroads between 1869 and 1899.

After the death of his father in 1890, Morgan took control of J. S. Morgan & Co (re-named Morgan, Grenfell & Company in 1910). In the industrial field, Morgan financed and co-founded United States Steel Corporation in 1901, the first billion-dollar company in the world with an authorized capitalization of $1.4 billion. He also financed manufacturing and mining and controlled banks, insurance companies, shipping lines, and communications systems. Through his firm came enormous funds from abroad to develop American resources.

Enemies of banking attacked him for selling obsolete carbines to the Union in the Civil War, for the terms of his loan of gold to the federal government in the 1895 crisis, for his financial resolution of the Panic of 1907, and for bringing on the financial ills of the New York, New Haven & Hartford RR. In 1912 he appeared and publicly defended himself before a congressional committee headed by Arsène Pujo, which was investigating the “money trust” and which was aimed particularly at him.

In 1900, Morgan financed inventor Nikola Tesla and his Wardenclyffe Tower with $150,000 for experiments in radio. Tesla was unsuccessful and, in 1904, Morgan pulled out. At the height of Morgan's career during the early 1900s, his interests held 341 directorships and he controlled over 100 corporations worth more than $22 billion in assets, twice the total value of all property in 13 southern U.S. states at the time.

Personal life

Self-conscious about his rosacea, Morgan hated being photographed.

Morgan was a lifelong member of the Protestant Episcopal Church, and by 1890 was one of its most influential leaders.

In 1861, he married Amelia Sturges (1835–1862). After her death the next year, he married Frances Louise Tracy (1842–1924) on May 3, 1863 and they had the following children:

• Louisa Pierpont Morgan (1866–1946) who married Herbert Penny Satterlee (1863–1947),
• Jack Pierpont Morgan (1867–1943),
• Juliet Morgan (1870–1952), and
• Anne Morgan (1873–1952).

Morgan was physically large with massive shoulders, piercing eyes and a purple nose, because of a childhood skin disease, rosacea.He was known to dislike publicity and hated being photographed; as a result of his self-consciousness of his rosacea, all of his professional portraits were retouched. He smoked large Havana cigars called Hercules' Clubs and often had a tremendous physical effect on people; one man said that a visit from Morgan left him feeling "as if a gale had blown through the house."

Morgan lived the end of his life in Rome, where he died on March 31, 1913. At the time of his death, he had an estate worth $80 million (approximately $1.2 billion today). His remains were interred in the Cedar Hill Cemetery in his birthplace of Hartford. His son, J. P. Morgan, Jr., inherited the banking business.

Art and book collector

Morgan was a notable collector of books, pictures, and, other art objects, many loaned or given to the Metropolitan Museum of Art (of which he was president), and many housed in his London house and in his private library on 36th Street, near Madison Avenue in New York City. His son, J. P. Morgan, Jr., created the Pierpont Morgan Library in 1924 as a memorial to his father and kept Belle da Costa Greene, his father's private librarian, as its first director.

Morgan was a benefactor of the American Museum of Natural History, the Metropolitan Museum of Art, Groton School, Harvard University (especially its medical school), the Lying-in Hospital of the City of New York and the New York trade schools.

Morgan was also a patron to photographer Edward S. Curtis, offering Curtis $75,000 in 1906, for a series on the Native Americans. Curtis eventually published a 20-volume work entited "The North American Indian". Curtis went on to produce a motion picture In The Land Of The head Hunters (1914), which was later restored in 1974 and re-released as In The Land Of The War Canoes. Curtis was also famous for a 1911 Magic Lantern slide show The Indian Picture Opera which used his photos and original musical compositions by composer Henry F. Gilbert.

Legacy

His son, J. P. Morgan, Jr. took over the business at his father's death, but was never as influential. As required by the 1933 Glass-Steagall Act, the "House of Morgan" became three entities: J.P. Morgan and Co. and its bank, Morgan Guaranty Trust; Morgan Stanley, an investment house; and Morgan Grenfell in London, an overseas securities house.

See also

• Dwight Morrow
• George Peabody
• H. B. Hollins
• JPMorgan Chase & Co.
• Morgan Stanley
• List of personalities associated with Wall Street

References

• Atwood, Albert W. and Erickson, Erling A. "Morgan, John Pierpont, (Apr. 17, 1837 - Mar. 31, 1913)," in Dictionary of American Biography, Volume 7 (1934)
• Auchincloss, Louis. J.P. Morgan : The Financier as Collector Harry N. Abrams, Inc. (1990) ISBN 0-8109-3610-0
• Bryman Jeremy, J. P. Morgan: Banker to a Growing Nation : Morgan Reynolds Publishing (2001) ISBN 1-883846-60-9
• Carosso, Vincent P. The Morgans: Private International Bankers, 1854-1913. Harvard U. Press, 1987. 888 pp.
• Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance, (2001) ISBN 0-8021-3829-2
• Forbes, John Douglas. J. P. Morgan, Jr., 1867-1943. U. Press of Virginia, 1981. 262 pp. Biography of his son
• Garraty, John A. Right-Hand Man: The Life of George W. Perkins. (1960)
• Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy (2005)
• Strouse, Jean. Morgan: American Financier. Random House, 1999. 796 pp.