His name is synonymous with money and affluence. He was one of the “robber barons,” along with John D. Rockefeller, Andrew Carnegie, John Jacob Astor, and Jay Gould, who were blamed for hijacking the American financial world and becoming rich in industries like steel, oil, and railroads. Nonetheless, John Pierpont Morgan, a banker, industrialist, and speculator, kept the U.S. government afloat more than once by his financial support, and he himself became one of the country’s richest men. The story of 20th-century American capitalism begins with iconic moneymen like J. P. Morgan who emerged to finance the nation’s burgeoning enterprises and stabilize business development.
Not only did Morgan shore up the U.S. Treasury in 1896 during a crisis over its gold reserves, but he also stepped in and saved the major New York City banks on the verge of bankruptcy during the Panic of 1907, a maneuver that made him a national hero and led to the establishment of the Federal Reserve Bank as a safety net for future such crises. In his lifetime of financial dealing, J. P. Morgan organized or underwrote some 42 corporations, including U.S. Steel, General Electric, the American Telephone and Telegraph Company (AT&T), and International Harvester. In addition, he took control of many of the nation’s railroads, buying them up and consolidating them as the Chesapeake & Ohio, New York Central Railroad, and the Pennsylvania Railroad, among others. A constant target of accusations that he was violating antitrust laws, Morgan, who specialized in mergers and acquisitions, was given legal leeway during the 1907 crisis by then-President Theodore Roosevelt to acquire the stock of a second steel company, thereby shoring up the failing banks (and avoiding antitrust laws). He is thought to be the model for the top-hatted figure “Rich Uncle Pennybags” in the Monopoly board game.
“Robber baron” was a pejorative term at the end of the 19th century, denoting a financier or industrialist who amassed wealth and power in questionable ways. There were plenty of candidates for this title around at that time since there was no income tax yet, the opportunities to get rich were numerous, and little government regulation stood in the way of becoming wealthy in any way one could. John D. Rockefeller was able to amass a huge fortune investing in Standard Oil; Andrew Carnegie became rich owning steel companies; and John Jacob Astor, the richest man in the United States when he died in the mid-19th century, made his money in the fur trade and in buying up huge amounts of real estate in Manhattan.
J. P. Morgan was not ultimately as rich as any of them, but he was a capitalist par excellence and became an icon in popular culture, then and now, of the American financier and banker. American authors have used Morgan in their work as a symbol of the rich and successful, including F. Scott Fitzgerald in his novel The Great Gatsby, John Steinbeck in The Grapes of Wrath, and E. L. Doctorow in Ragtime. Mention was made of J. P. Morgan in the Broadway musical Annie and in Arthur Miller’s Death of a Salesman as well as in movies like On the Waterfront. Perhaps it was his flair for living well and enjoying his money that the general public admired, much as they do Donald Trump today. Morgan’s various homes, yachts, and travels symbolized the dreams of many Americans to become rich (supposedly, it was Morgan who said in regard to one of his yachts, “If you have to ask the price, you can’t afford it”).
Morgan was not only a collector of railroads and industries, but he also had a wide-ranging taste for art, gems, and rare books that his fortune enabled him to acquire. A well-educated man, Morgan reportedly spent the equivalent of what would be $900 million today building his collections. At one time, he was the owner of Napoleon’s watch, Leonardo da Vinci’s notebooks, the Medici family jewelry, first folios of Shakespeare, and other treasures. He bought a house in London to keep them in and then added a separate building to his New York City home for a private library, designed by noted architect Charles McKim of the firm McKim, Mead & White.
Much of the art is now in museums and most of the gem collection was donated to the American Museum of Natural History. The original library adjacent to his home on Madison Avenue in New York City, however, has been preserved on the site and is now the Morgan Library and Museum. It houses in elegant Italian Renaissance style and three tiers of gilded shelves his impressive collection of illuminated manuscripts, early printed books including a Gutenberg Bible, autographs of presidents, first editions of literary works, and more, including Egyptian papyrus, tablets, and ancient seals, which provide a virtual history of writing.
He hired a young librarian from Princeton University, Bella da Costa Greene, to be his private librarian in 1905. She proved to be adept at helping him collect and stayed on as librarian beyond his death until her retirement in 1948. When his father died in 1890, Morgan inherited an estate valued at $12.4 million at that time and began his collecting in earnest. He liked to haggle, and one of the goals of his collecting as in his banking was to give the United States the patina of European culture. As in banking, “he honored Old World traditions even as he ransacked them,” one biographer, Ron Chernow, says.
Morgan’s career and this scale of collecting were made possible by the wealth of his father, Junius Spencer Morgan, whose Welsh forebears had themselves built a fortune in the new world. J. P. Morgan got a significant head start himself as his father spent years preparing and educating his son to join the family banking business. It was centered at the time in London where Junius had been a partner of George Peabody. When Junius inherited his deceased partner’s firm, George Peabody & Company, he renamed it J. S. Morgan and Company. By 1857, he had his son in New York City representing the London firm as an unpaid apprentice at Duncan, Sherman and Company on Wall Street.
But his father worried about his son’s restless and impetuous nature. J. P. had been a sickly boy, suffering from rheumatic fever and skin eruptions that left scars. Junius sent him to recover for a year in the Azores, then, on his return, to the English High School in Boston. When J. P. graduated, his father sent him to Bellerive in Switzerland to learn French and then to the University of Göttingen in Germany to learn German, hoping to prepare him for business on a global scale. Despite this carefully guided education, J. P., who had a bad temper and was prone to foppish dress, tended to go for risky ventures and take high-stakes chances. In one reckless (but profitable) venture known as the Hall Carbine Affair, he bought up 5,000 obsolete and unsafe rifles from the government, which he then had reconditioned and sold back to the government at a big profit for use in the Civil War. He had already paid $1,000 to a substitute draftee to serve in the war in his place. In another venture, he married the fragile Amelia Sturges, who would die of tuberculosis four months after they were married in 1864. Trying to steady his son, Junius arranged for him to partner with Charles H. Dabney, an older investor and father figure, to form Dabney, Morgan and Company and act as New York agents for his London firm.
J. P. settled down. He married a second time, to a more suitable woman, Frances (Fanny) Louisa Tracy, with whom he would have four children. They first lived in a Fifth Avenue brownstone and later on Madison Avenue in Murray Hill in the first electrically lighted home in New York. They spent summers at their country house, Cragston, on the Hudson River. In 1871, thanks to his father’s connections, J. P. became a partner with Anthony Drexel in Drexel, Morgan and Company, opening offices at 23 Wall Street on the corner of Broad. This address would eventually become known as the House of Morgan headquarters and was the most famous address in finance (a bomb set off by reported anarchists in 1920 in front of the building killed 38 people; the FBI never found the perpetrators). Morgan established the J. P. Morgan & Company there in 1895.
He had become a banker at a propitious time. New businesses, railroads, and industries were springing up around the nation and were in need of capital. Bankers could provide it, along with the credibility some start-ups badly needed. J. P. seized the opportunity to build his own fortune, buying up distressed companies and achieving new levels of power by acquiring and consolidating railroads, a maneuver that became known as morganization. For example, he was able to block another powerful financier, Jay Gould, from acquiring the Albany & Susquehanna railroad and eventually consolidated it himself with the Erie Railroad, as he did many other railroad lines. Eventually he had morganized some 33,000 miles of railroad, a sixth of the nation’s tracks. By 1900, U.S. railroads had been consolidated into just six huge systems, all controlled by Wall Street bankers including J. P. Morgan & Company.
Morgan also financed the formation of U.S. Steel Corporation, buying up mills from steel magnate Andrew Carnegie to build the first billion-dollar company; he provided $62 million in gold bullion in 1873 to the U.S. government to restore the Treasury supply; and he rescued General Electric when it was failing in 1892, ensuring its loyalty to the firm. He helped finance Adolph Simon Ochs’s purchase of the New York Times in 1896 as he had helped Thomas Edison finance his Edison Electric Illuminating Company in 1878. In 1904, he handled President Theodore Roosevelt’s financing for the Panama Canal. All of this financing, merging, and acquiring made working at J. P. Morgan something of a sweatshop, and as rich as they had become, some partners dropped dead at a young age. One journalist called the House of Morgan a “partner-killer.”
Morgan himself seemed to thrive on it. He was bossy and ultimately more interested in power than money. A big, portly man, Morgan hated to be photographed, primarily because of the rosacea condition that had plagued him all his life and made his nose bulbous and red (most photos were retouched because of this). He dressed for the office every day in conventional banker garb, donning a black fedora, a jacket, and a starched shirt with a winged collar and an ascot. He smoked big black Cuban cigars, avoided alcohol during the day, and, apparently, had a mistress or two. His wife Fanny was shy and quiet and shunned the social scene. Morgan enjoyed travel in Europe and Egypt and owned several yachts including the 300-foot Corsair III with its crew of 70 (Corsair II had been purchased by the U.S. Navy and turned into a gunboat). The yacht would come out to pick him up on his arrival on a liner from Europe and take him into port. He was commodore of the New York Yacht Club, providing the land for its headquarters, and an investor in the new ship, the Titanic, where he had a private suite reserved but fortunately did not travel on the doomed maiden voyage.
One thing Morgan did not invest in was real estate. He was satisfied, he said, with his New York mansion in Murray Hill and his upstate country house, along with the London house and country estate in England he inherited from his father. He and his wife were not extravagant, and even though he was a member of 19 private clubs and was the president of the board of the Metropolitan Museum, their social life together was limited. They had four children, John Jr. (Jack), Louisa, Juliet, and Anne. Jack was to be his father’s heir in banking and was brought up accordingly. A Harvard graduate, Jack was a much more retiring sort than his father and not as influential, but he did lead the firm into even more powerful territory. Today the largest bank in the nation is JPMorgan Chase, with $2 trillion in assets, as the result of a merger in 2000 with Chase Manhattan Bank.
John Pierpont Morgan Sr. had been raised in Hartford, Connecticut, where he was born on April 17, 1837, to Junius Spencer Morgan and Juliet Pierpont Morgan. He died when he was 75 years old, just after midnight on March 31, 1913, at the Grand Hotel in Rome where he was staying while traveling in Italy. Flags flew at half-staff on Wall Street and the New York Stock Exchange closed. Westminster Abbey in London held a memorial service. The pope at the Vatican sent one of the 3,698 condolence telegrams that arrived at the hotel that day. Morgan’s U.S. memorial service was held at St. George’s Episcopal Church in New York City (Morgan, a lifelong Episcopalian, had been senior warden at the church) and he was buried at Cedar Hill Cemetery in Hartford.
He left an estate valued at $68.3 million, the equivalent of more than $800 million today, and an art collection estimated to be worth $50 million. His son Jack inherited the banking business along with the London properties, the yacht Corsair, and the entire Morgan collections. His father’s will decreed that every employee of J. P. Morgan & Company should receive a free year’s salary, and in addition made $10 million in charitable bequests including $1 million to Harvard for its medical school, adding to the bequest he had given in memory of his father Junius in 1901.
In death, J. P. Morgan was called “the Napoleon of Wall Street,” a titan who could have no successors. His influence was transformative. Morgan had made his money essentially from money, but he has remained an icon as a banker who enabled American business to gain a foothold in the 20th century, who twice rescued and stabilized the U.S. government, and who in spite of all his wheeling and dealing gave capitalism a high culture polish with his art and literary collections.
Auchincloss, Louis. J. P. Morgan: The Financier as Collector. New York: Harry N. Abrams, Inc., 1990.
Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press, 1990.
Strouse, Jean. Morgan: American Financier. New York: Harper Perennial, 2000.