John Pierpont Morgan
1837 - 1913
John Pierpont Morgan, the most powerful American banker of his
time, helped build a credit bridge between Europe and America
and financially rescued the United States government twice.
17, 1837, J. P. Morgan was born in Harford, Conn. After 2 years
at the University of Göttingen in Germany, he entered the world
of banking and commerce in 1857. In 1895 his firm, a private
bank engaging in commercial as well as investment banking,
adopted its final name of J. P. Morgan & Company.
Early in the Civil War, Morgan lent money to a man who bought
rifles from the Federal government and resold them to it; this
is the notorious Hall carbine affair, but there is no evidence
that Morgan was other than a creditor. Less than 2 decades later
Morgan became instrumental in the periodic reorganization of
American railroads, emerging as a decisive factor in
railroading. He refinanced bankrupt railroads, acted to
stabilize rates, and consolidated competing lines. In addition,
to protect individuals who purchased railroad securities from
his firm, Morgan placed his own representatives on the
railroads' boards of directors.
Financial Rescue of the Government
In 1893 America experienced a major economic downturn which, in
conjunction with questionable monetary policies (resulting from
pressure from the silver inflationists), put an impossible
burden on the U.S. Treasury's gold reserve. President Grover
Cleveland's attempts to replenish the gold reserve were
ineffective. In 1895 Morgan played the role of central banker,
sold government bonds for gold (half obtained abroad through his
foreign affiliates), and guaranteed to protect the gold reserve.
Though Morgan was charged with profiting exorbitantly and taking
advantage of the dire straits of the government, he never
revealed the precise amount of his profits, so the validity of
such allegations is impossible to assess. His syndicate
succeeded temporarily in its objectives; public and private ends
harmonized at a price which was probably not excessive,
considering the service rendered to the nation.
In 1901 a tremendous conflict opened between James J. Hill and
Edward H. Harriman for domination of the railroads west of the
Mississippi and in the northern half of the country. Morgan was
allied with Hill, and in the course of this contest the price of
Northern Pacific stock shares jumped to astronomical heights.
The compromise reached was based on pooling all interests in the
Northern Securities Company. When this company was dissolved in
1904 as a consequence of successful prosecution under the
Sherman Antitrust Act, modern antitrust enforcement had been
Morgan founded the U.S. Steel Corporation in 1901. The
culmination of a wave of similar consolidations, it was the
largest industrial concern of the time. U.S. Steel never
controlled the entire steel industry, and its share of the
market has declined steadily.
Solving the Panic of 1907 represents Morgan's highest
achievement; never again would private power be vested with so
large a public responsibility. When the panic hit, the financial
community of New York rallied around Morgan, and the Federal
government entrusted its funds to his disposition. He recruited
brilliant lieutenants to investigate the resources of the
various New York banks and trust companies, determine which were
solvent, and act to save them. (There was no central bank, as
the Federal Reserve System was created only in 1913 as an
after-math to the panic.) Morgan and his cohorts were, for all
practical purposes, the central bank.
Morgan was preeminently suited to the world in which he lived.
During the years of his power the American economy grew at a
prodigious rate. Morgan was one of the "vital few" who made it
happen. He was a superb organizer in an economy that was
replacing competition with concentration. He chose extremely
able associates but reserved the crucial decisions for himself.
He earned his economic reward by linking those who needed
capital with those who had it to invest, whether in Europe or
America. The success of his endeavour actually lessened the
investment banker's significance, as enterprises became
internally financed and less dependent on external financing.
As an art collector, Morgan avidly sought paintings, sculpture,
and tapestries. He made the Metropolitan Museum of Art in New
York the equal of any museum in the world, although he
contributed to others, too. "The Morgan collections represent
the most grandiose gesture of noblesse oblige the world has ever
known," wrote Aline B. Saarinen (1957). He was a man of genuine
taste. His death in Rome on March 31, 1913, left a void, for his
was a personal, not an institutional, power and hence not
Banker and art collector. Morgan headed J. P. Morgan and
Company, the most important force in American finance in the
quarter century before World War I, a time when the burgeoning
American economy grew to be the largest and most powerful in the
Morgan was born into a wealthy family in Hartford, Connecticut.
In 1854, his father, Junius Spencer Morgan, became a partner of
George Peabody's banking house in London and took over the firm
when Peabody retired, renaming it J. S. Morgan and Co.
From his earliest days Morgan was exposed both to international
banking at the highest levels and to the idea held by Peabody
and his father that personal integrity was indispensable to
success in that field; these were to dominate and characterize
his life. In his last years Morgan was asked by a congressional
committee if money was not the basis of commercial credit. "No
sir," he replied, "the first thing is character.... a man I do
not trust could not get money from me on all the bonds in
After completing his education at the university at Göttingen,
Germany, in 1857, Morgan went to work on Wall Street. In 1862 he
opened his own firm and in 1871 joined forces with the Drexel
firm of Philadelphia. The new firm, Drexel, Morgan and Co.,
opened its offices at the corner of Wall and Broad streets where
the headquarters of the Morgan Bank have been located ever
American railroads expanded rapidly after the Civil War, but
their profitability waned owing to rate wars and competitive
overbuilding. Frequent mergers and bankruptcies often left
railroads with bizarrely complex corporate structures. Morgan's
firm did much to rationalize the companies in the eighties and
nineties, reorganizing, among others, the Baltimore and Ohio,
the Chesapeake and Ohio, and the Erie lines.
Morgan's success as a banker derived from his formidable
physical presence and dominating personality almost as much as
from his capital, expertise, and creativity. He looked and acted
like a man of supreme authority and wisdom, and most people took
him at face value. In 1890, when his father died, he took over
J. S. Morgan and Co. in London and renamed it and the New York
firm J. P. Morgan and Company.
About this time he began to collect art, an interest that soon
became a sort of inspired mania. By the time of his death his
collection was the largest in private hands the world has ever
known and included paintings, drawings, jewelry, ceramics,
sculpture, and manuscripts. Although somewhat dispersed after
his death, the bulk of his collection is today at the
Metropolitan Museum of Art and the Morgan Library in New York
and the Wadsworth Atheneum in Hartford, Connecticut.
As industrial companies came to dominate the American economy,
it was his firm that financed many of them, including General
Electric and International Harvester. In 1901 Morgan was
instrumental in the creation of U.S. Steel, the largest
corporate enterprise in the world at the time, capitalized at
By the turn of the century Morgan had become the very symbol of
Wall Street, the man the financial community looked to for
leadership. In 1907, when a banking panic threatened to spin out
of control, Morgan took command, rallied the other bankers, and
restored confidence. This panic led to the creation of the
Federal Reserve System in 1913, the same year Morgan died in
John Pierpont Morgan (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 1892 Morgan arranged the merger of Edison
General Electric and Thompson-Houston Electric Company to form
General Electric. After financing the creation of the Federal
Steel Company he merged the Carnegie Steel Company and several
other steel and iron businesses to form the United States Steel
Corporation in 1901. He bequeathed much of his large art
collection to the Metropolitan Museum of Art in New York City
and to the Wadsworth Atheneum of Hartford, Connecticut. At the
height of Morgan's career during the early 1900s, he and his
partners had financial investments in many large corporations.
By 1901, he was one of the wealthiest men in the world. He died
in Rome, Italy, in 1913 at the age of 75, leaving his fortune
and business to his son, Jack Pierpont Morgan.
Childhood and education
J.P. Morgan was born in Hartford, Connecticut to Junius Spencer
Morgan (1813–1890) and Juliet Pierpont (1816–1884) of Boston,
Massachusetts. Pierpont, as he preferred to be known, had a
varied education due in part to interference by his father,
Junius. In the fall of 1848, Pierpont transferred to the
Hartford Public School and then to the Episcopal Academy in
Cheshire (now called Cheshire Academy), boarding with the
principal. In September 1851, Morgan passed the entrance exam
for English High School of Boston, a school specializing in
mathematics to prepare young men for careers in commerce.
In the spring of 1852, illness that was to become more common as
his life progressed struck; rheumatic fever left him in so much
pain that he could not walk. Junius booked passage for Pierpont
straight away on the ship Io, owned by Charles Dabney, to the
Azores (Northern Portuguese islands) in order for him to
recover. After convalescing for almost a year, Pierpont returned
to the school in Boston to resume his studies. After graduating,
his father sent him to Bellerive, a school near the Swiss
village of Vevey. When Morgan had attained fluency in French,
his father sent him to the University of Göttingen in order to
improve his German. Attaining a passable level of German within
six months, Morgan traveled back to London via Wiesbaden, his
J. P. Morgan in his earlier years.Morgan entered banking in his
father's London branch in 1857, 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 1864-72, 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.
During the American Civil War, Morgan was approached to finance
the purchase of antiquated rifles being sold by the army for
$3.50 each. Morgan's partner re-machined them and sold the
rifles back to the army for $22 each. The military knew it was
buying back its own guns, so the so-called 'scandal' turned out
to be more about government inefficiency than any chicanery by
Morgan (who never even saw the guns and acted only as a lender).
Morgan himself, like many wealthy persons, including future
Democratic president Grover Cleveland, avoided military service
by paying $300 for a substitute.
After the 1893 death of Tony Drexel, the firm was rechristened
J. P. Morgan & Company in 1895, 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's ascent to power was accompanied by dramatic financial
battles. He wrested control of the Albany and Susquehanna
Railroad 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 handling 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. He was heavily involved with
railroad tycoon James J. Hill and the Great Northern Railway.
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.
Morgan's process of taking over troubled businesses to
reorganize them was known as "Morganization". Morgan reorganized
business structures and management in order to return them to
profitability. His reputation as a banker and financier also
helped bring interest from investors to the businesses he took
In 1895, at the depths of the Panic of 1893, the Federal
Treasury was nearly out of gold. President Grover Cleveland
arranged for Morgan to create a private syndicate on Wall Street
to supply the U.S. Treasury with $65 million in gold, half of it
from Europe, to float a bond issue that restored the treasury
surplus of $100 million. The episode saved the Treasury but hurt
Cleveland with the agrarian wing of his Democratic party and
became an issue in the election of 1896, when banks came under
withering attack from William Jennings Bryan. Morgan and Wall
Street bankers donated heavily to Republican William McKinley,
who was elected in 1896 and re-elected in 1900 on a gold
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.
J.P. Morgan, photographed by Edward Steichen in 1903After the
death of his father in 1890, Morgan took control of J. S. Morgan
& Co (re-named Morgan, Grenfell & Company in 1910). Morgan began
talks with Charles M. Schwab, president of Carnegie Co., and
businessman Andrew Carnegie in 1900 with the intention of buying
Carnegie's business and several other steel and iron businesses
to consolidate them to create the United States Steel
Corporation. Carnegie agreed to sell the business to Morgan for
$480 million. The deal was closed without lawyers and without a
written contract. News of the industrial consolidation arrived
to newspapers in mid-January 1901. U.S. Steel was founded later
that year and was the first billion-dollar company in the world
with an authorized capitalization of $1.4 billion.
U.S. Steel aimed to achieve greater economies of scale, reduce
transportation and resource costs, expand product lines, and
improve distribution. It was also planned to allow the United
States to compete globally with Britain and Germany. U.S.
Steel's size was claimed by Schwab and others to allow the
company to pursue distant international markets-globalization.
U.S. Steel was regarded as a monopoly by critics, as the
business was attempting to dominate not only steel but also the
construction of bridges, ships, railroad cars and rails, wire,
nails, and a host of other products. With U.S. Steel, Morgan had
captured two-thirds of the steel market, and Schwab was
confident that the company would soon hold a 75 percent market
share. However, after 1901 the businesses' market share dropped;
Schwab, himself, played an important role in falsifying his own
prediction: finding the new company unwieldy, Schwab resigned
from U.S. Steel in 1903 to form Bethlehem Steel, which became
the second largest U.S. producer on the strength of such
innovations as the wide flange "H" beam — precursor to the
I-beam — widely used in construction.
Morgan also finance manufacturing and mining businesses and
controlled banks, insurance companies, shipping lines, and
communications systems. Through his firm came enormous funds
from abroad to help develop American resources.
Enemies of banking attacked Morgan 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 and Hartford
Railroad. In December 1912, Morgan testified before the Pujo
Committee, a subcommittee of the House Banking and Currency
committee. The committee ultimately found that a cabal of
financial leaders were abusing their public trust to consolidate
control over many industries: the partners of J.P. Morgan & Co.
along with the directors of First National and National City
Bank controlled aggregate resources of $22.245 billion. Louis
Brandeis, the former U.S. Supreme Court Justice, compared this
sum to the value of all the property in the twenty-two states
west of the Mississippi River.
In 1900, Morgan financed inventor Nikola Tesla and his
Wardenclyffe Tower with $150,000 for experiments in radio.
However, in 1903, when the tower structure was near completion,
it was still not yet functional due to last-minute design
changes that introduced an unintentional defect. When Morgan
wanted to know "Where can I put the meter?", Tesla had no
answer. Tesla's vision of free power did not agree with Morgan's
worldview; nor would it pay for the maintenance of the
transmission system. Construction costs eventually exceeded the
money provided by Morgan, and additional financiers were
reluctant to come forth. By July 1904, Morgan (and the other
investors) finally decided they would not provide any additional
financing. Morgan also encouraged other investors to avoid the
At the height of Morgan's career during the early 1900s, he and
his partners controlled directly and indirectly assets worth
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
In 1861, he married Amelia Sturges, known as Mimi (1835–1862).
After her death the next year, he married Frances Louisa Tracy,
known as Fanny (1842–1924) on May 3, 1863. They had four
He 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 was physically large with
massive shoulders, piercing eyes and a purple nose, because of a
chronic skin disease, rosacea. His grotesquely deformed nose was
due to a disease called rhinophyma, which can result from
rosacea. As the deformity worsens, pits, nodules, fissures,
lobulations, and pedunculation contort the nose into grotesque
cosmetic problems. This condition inspired the crude taunt "Johny
Morgan's nasal organ has a purple hue." Surgeons could have
shaved away the rhinophymous growth of sebaceous tissue during
Morgan's lifetime, but as a child Morgan suffered from infantile
seizures, and it is suspected that he did not seek surgery for
his nose because he feared the seizures would return. His social
and professional self-confidence were too well established to be
undermined by this affliction. It appeared as if he dared people
to meet him squarely and not shrink from the sight, asserting
the force of his character over the ugliness of his face. 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.
Morgan smoked dozens of cigars per day and favored large Havana
cigars dubbed Hercules' Clubs by observers.
His house on Madison Avenue was the first electrically lit
private residence in New York. His interest in the new
technology was a result of his financing Thomas Edison's Edison
Electric Illuminating Company in 1878.
J. P. Morgan's yacht Corsair, later bought by the U.S.
Government and renamed the USS Gloucester to serve in the
Spanish-American War. Photograph by J. S. Johnston. An avid
yachtsman, Morgan owned several sizable yachts. The well-known
quote, "If you have to ask the price, you can't afford it" is
commonly attributed to Morgan in response to a question about
the cost of maintaining a yacht, but the actual wording of the
original statement is a bit obscure.
Morgan was scheduled to travel on the maiden voyage of RMS
Titanic, but canceled at the last minute. The Titanic was owned
and operated by the White Star Line, and Morgan had his very own
private suite and promenade deck on the ship.
Morgan died while traveling abroad in Rome. On March 31, 1913,
just shy of his seventy-sixth birthday, Morgan died in his sleep
at the Grand Hotel. Nearly 4,000 condolence letters were
received there overnight and flags on Wall Street flew at
half-staff. The stock market was also closed for two hours when
his body passed through Wall Street.
At the time of his death, he had an estate worth $68.3 million
($1.39 billion in today's dollars), of which about $30 million
represented his share in the New York and Philadelphia banks.
The value of his art collection was estimated at $50 million.
His remains were interred in the Cedar Hill Cemetery in his
birthplace of Hartford, Connecticut.
His son, J. P. Morgan, Jr., inherited the banking business.
Art, book and gemstone 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 was a major force in its
establishment), 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., made the Pierpont Morgan
Library a public institution 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 painted by many artists
including the Peruvian Baca Flor and the Swiss-born American
Adolfo Müller-Ury, who also painted a double portrait of Morgan
with his favourite grandchild Mabel Satterlee that for some
years stood on an easel in the Satterlee mansion but has now
The J.P. Morgan Library and Art Museum. By the turn of the
century JP Morgan had become one of America's most important
collectors of gems and had assembled the most important gem
collection in the U.S. as well as of American gemstones (over
1000 pieces). Tiffany & Co. actually assembled his first
collection — which basically implied that their "chief
gemologist" George Frederick Kunz built the collection for JP
Morgan — which was exhibited at the World's Fair in Paris in
1889. The exhibit won two golden awards and drew the attention
of important scholars, lapidaries and the general public.
George Frederick Kunz then continued to build a second, even
finer, collection which was exhibited in Paris in 1900.
Collections have been donated to the American Museum of Natural
History in New York where they were known as the Morgan-Tiffany
and the Morgan-Bement collections. In 1911 Kunz named a newly
found gem after his biggest customer: morganite.
A number of U.S. gemstones from the Morgan collection,
considered the best in the world. Morgan was a benefactor of the
American Museum of Natural History, the Metropolitan Museum of
Art, Groton School, Harvard University (especially its medical
school), Trinity College, 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 entitled
"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.
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.
The gemstone Morganite was named in his honour.
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This web page was last updated on:
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