John Pierpont Morgan was an American financier. banker, philanthropist, and art collector. Morgan was one of the world’s foremost financial figures during the two pre-World War I decades. He reorganized several major railroads and financed industrial consolidations that formed the United States Steel, International Harvester, and General Electric corporations.
Background
Ethnicity:
The Morgan family's roots in the United States stretched back to 1636 with the arrival of one Miles Morgan from Wales.
John Pierpont Morgan was born on April 17, 1837, in Hartford, Connecticut, the United States, to Junius Spencer Morgan, a wealthy financier, and his wife Juliet Pierpont. They also had three daughters - Sarah, Mary, and Juliet - and Pierpont's only brother, Junius, who lived only to the age of eleven.
John's paternal grandfather, Joseph, was a founder of the Aetna Insurance Company, and his father, Junius, became a partner in a successful dry goods business around the time he married Juliet Pierpont, daughter of a noted minister and poet John Pierpont. One of his maternal relatives, James Pierpont (1659-1714), was a founder of Yale University
Education
J. P. Morgan had a varied education. In 1848, Pierpont attended the Hartford Public School and then to the Episcopal Academy in Cheshire, Connecticut (now called Cheshire Academy). A sickly child who suffered seizures and other mysterious ailments, Pierpont, as he was known, spent long periods sheltered at home. When healthy, he frequented galleries and concerts with his parents, sparking a lifelong fascination with the arts. Initially a smart but indifferent student, he began showing improved grades by the time he attended English High School in Boston.
After graduating from high school in Boston in 1854, Morgan studied in Europe. He was sent to the Institute Sillig in Switzerland, where he became fluent in French and displayed an aptitude for mathematics, and then to Göttingen University in Germany. After improving his German and obtaining a degree in art history from Gottingen, Morgan returned to begin his career in finance.
After finishing his education in 1857, Morgan began his career as an accountant with the New York banking firm of Duncan, Sherman, and Company, which was the American representative of the London firm George Peabody and Company. In one early example of his ingenuity, Morgan was in New Orleans for business when he encountered a ship captain with a boatload of coffee and no buyer. Morgan used his company's funds to purchase the coffee and then sold it to local merchants for a profit. His success emboldened him to strike out on his own, and he continued to work with his father after founding J. Pierpont Morgan & Co. in the early 1860s.
Morgan returned to New York and plunged himself into his work. In 1864, at the urging of his father, he paired with senior partner Charles Dabney to form Dabney, Morgan & Co. With Junius Morgan now heading the London banking firm, the Morgans continued to expand their wealth and influence by funneling overseas investments into American businesses.
With the retirement of Dabney in 1871, Morgan joined forces with Philadelphia banker Anthony Drexel to found Drexel, Morgan & Co., which took up residence in a towering new building in lower Manhattan. Entering his mid-30s, Morgan was developing into the outsized figure that would dominate the financial world with his enormous frame, piercing eyes, and brusque nature.
Morgan's already successful career took a leap forward in 1879 when William Vanderbilt approached him about the sale of 250,000 shares of stock in the New York Central Railroad. Morgan pulled off the massive transaction without driving down the share price, and in return, he secured a seat on the New York Central board of directors. The following year, he fronted a syndicate that sold $40 million in bonds to finance the Northern Pacific Railroad, then the largest transaction of railroad bonds in the United States history.
Underscoring his influence in the industry, Morgan in 1885 arranged a meeting with the feuding directors of the New York Central and Pennsylvania Railroad aboard his yacht, the Corsair. As they sailed up and down the Hudson River, Morgan made it clear that the yacht would not return to port until they reached a compromise that fostered suitable competition. The executives eventually agreed to terms in what became known as the Corsair Compact.
Between 1885 and 1888 he extended his influence to lines based in Pennsylvania and Ohio, and after the financial panic of 1893, he was called upon to rehabilitate a large number of the leading rail lines in the country, including the Southern Railroad, the Erie Railroad, and the Northern Pacific. He helped to achieve railroad rate stability and discouraged overly chaotic competition in the East. By gaining control of much of the stock of the railroads that he reorganized, he became one of the world’s most powerful railroad magnates, controlling about 5,000 miles (8,000 km) of American railroads by 1902.
Morgan's life and career took another turn after the death of his father in 1890. Following a decade of railroad consolidation, he broke new ground by arranging the merger of Edison General Electric and Thomson-Houston Company to form General Electric in 1892. Additionally, the lifelong art enthusiast began exponentially expanding an already impressive collection of valuable works.
During the depression that followed the panic of 1893, Morgan formed a syndicate that resupplied the United States government’s depleted gold reserve with $62 million in gold in order to relieve a Treasury crisis. He then reassured a skeptical President Grover Cleveland by citing an obscure 1862 statute that gave the Secretary of the Treasury the power to pull off such a transaction without congressional approval. The syndicate bought and quickly resold the bonds in early 1895, stabilizing the shaky economy.
Following the death of Drexel that year, Pierpont again reorganized his company into J.P. Morgan & Co. The firm soon became a major player in the steel industry by financing the formation of Federal Steel in 1898. Three years later, after purchasing Andrew Carnegie’s steel company for nearly $500 million, Morgan merged the entities into United States Steel, creating the first billion-dollar corporation.
Also in 1901, Morgan teamed with James J. Hill to form the Northern Securities Company. Northern Securities held the majority of shares in the Northern Pacific, the Great Northern, and the CB&Q railroads, giving Morgan control of approximately one-third of the country's railways. However, he soon encountered resistance from President Theodore Roosevelt, who sought to leverage the populist tide against the wealthy "robber barons" of Wall Street. In 1902, the Justice Department charged Northern Securities with violating the Sherman Antitrust Act of 1890. A protracted legal battle was settled when the Supreme Court ruled in favor of the government in 1904.
Regardless, Morgan continued to exert his authority in both industries and in government. In 1903, J.P. Morgan & Co. was appointed fiscal agent for a newly independent Panama, with responsibilities that included overseeing the transfer of $40 million to the New Panama Canal Co. Morgan successfully led the American financial community’s attempt to avert a general financial collapse following the stock market panic of 1907. He headed a group of bankers who took in large government deposits and decided how the money was to be used for purposes of financial relief, thereby preserving the solvency of many major banks and corporations. Having ceased to undertake large industrial reorganizations, Morgan thereafter concentrated on amassing control of various banks and insurance companies. Through a system of interlocking memberships on the boards of companies he had reorganized or influenced, Morgan and his banking house achieved a top-heavy concentration of control over some of the nation’s leading corporations and financial institutions. This earned Morgan the occasional distrust of the federal government and the enmity of reformers and muckrakers throughout the country, but he remained the dominant figure in American capitalism.
In semi-retirement by the time the crisis was resolved, Morgan devoted much of his energy to his art collection and philanthropy. He returned to the spotlight one final time in 1912 when he testified before the Pujo Committee's congressional investigation into the collaborations of Wall Street bankers. Morgan set sail on an overseas voyage after the hearings, but his health steadily declined, and he died at a hotel in Rome, Italy, on March 31, 1913. To commemorate his passing, the New York Stock Exchange remained closed until noon on the day of his funeral.
J. P. Morgan is best known for his financial might, through which he could save nations from financial ruin. The Connecticut native followed his wealthy father into the banking business in the late 1850s, and in 1871 formed a partnership with Philadelphia banker Anthony Drexel. In 1895, their firm was reorganized as J.P. Morgan & Company, a predecessor of the modern-day financial giant JPMorgan Chase. Morgan used his influence to help stabilize American financial markets during several economic crises, including the panic of 1907. However, he faced criticism that he had too much power and was accused of manipulating the nation’s financial system for his own gain. The Gilded Age titan spent a significant portion of his wealth amassing a vast art collection.
From 1890 to 1913, 42 major corporations were organized or their securities were underwritten, in whole or part, by J.P. Morgan and Company.
Morgan was one of the greatest art and book collectors of his day, and he donated many works of art to the Metropolitan Museum of Art in New York City. His book collection and the building that housed them in New York City became a public reference library in 1924. Today it is the Morgan Library & Museum.
The gemstone morganite was named in his honor. The Cragston Dependencies, associated with his estate, Cragston (at Highlands, New York), was listed on the National Register of Historic Places in 1982.
Religion
Morgan was a lifelong dedicated Episcopalian. His maternal grandfather was a priest known for his fiery sermons, and the young Morgan enjoyed his time in church, especially singing the hymns. He found great solace in St. George’s Episcopal Church in New York after his first wife died, and then met his second wife there.
He was often spotted by the clergy sitting in church in the middle of the week worshiping and singing hymns to himself. Through his leading position in the vestry at St. George’s he was directly involved in the affairs of the church, and much of his philanthropic work was through that organization.
Politics
Morgan was greatly involved in the partisan politics of his time. The first president who earned his significant financial weight was Republican Rutherford B. Hayes. Morgan said about the election simply, "Defeat means inflation." Morgan would continue to invest in presidential candidates who he thought would govern sympathetically to big business and financial institutions, and to fight populism.
Morgan’s real role in the politics of the United States came less in his support or opposition to political movements. Instead, his great wealth, power, and drive granted him the position to single-handedly control the finances of the entire country. Morgan acted as Congress, President, and Central Bank all wrapped into one head-strong package.
In 1877, when Congress failed to adopt a military budget, Morgan stepped in. He gave $2.5 million to the military payroll, all of which was eventually paid back by the government, angering some Congressmen who grumbled that they had never approved the loan. In 1894, when the country was in danger of defaulting on its loans, Morgan demanded a meeting with President Grover Cleveland who eventually accepted his solution to the crisis, one which would benefit him and his corporations.
And then finally in 1907, when Theodore Roosevelt - who was no fan of big business or J. P. Morgan - was confronted with the collapse of several banking trusts, he saw no alternative but to involve the financial magnate. Morgan forced the presidents of the larger and more successful trusts to bail out the smaller, weaker ones - saving the country from financial disaster.
Views
Apart from being a successful financier, Morgan was a prominent philanthropist who bestowed his wealth in numerous humanitarian endeavors. He donated a substantial portion of his personal fortune to charities, churches, hospitals, and schools.
Quotations:
"A man generally has two reasons for doing a thing. One that sounds good, and a real one."
"When you expect things to happen - strangely enough - they do happen."
"Go as far as you can see; when you get there, you'll be able to see farther."
"Well, I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell how to do what I want to do."
Membership
The private member's Metropolitan Club was founded by Morgan after his friend John King was rejected by the prestigious Union Club in 1891, donating land on 5th avenue worth $125,000.
Morgan was the first president of the Metropolitan Club.
Metropolitan Club
,
United States
1891
Personality
Morgan hated being photographed, as a result of a chronic skin condition which disfigured his nose, though he was the patron of the photographer Edward S. Curtis, giving him $75,000 in 1906.
Morgan was a notable collector of books, pictures, paintings, clocks, and other art objects. Morgan was also a great gem and mineral collector with over 1000 pieces in his collection. In 1911, the pink variety of beryl was named "morganite" in his honor. He also was famous as a yachtsman, defending America's Cup in international yacht races on several occasions. He owned a series of ocean-going yachts he named Corsair and traveled to Europe at least once a year.
As an owner of White Star Line, Morgan was scheduled to travel on the Titanic but decided to remain on holiday in France instead.
Interests
Politicians
William McKinley
Artists
Edward S. Curtis
Sport & Clubs
Yachting
Connections
In 1861, Morgan married Amelia Sturges, the daughter of a wealthy New York businessman. Amelia Morgan died of tuberculosis four months after the couple’s wedding. In 1865, Morgan married Frances Louisa Tracy (1842-1924), the daughter of a New York lawyer, also known as Fanny. The couple had four children together; Louisa, John Pierpont Jr., Juliet, and Anne.
Father:
Junius Spencer Morgan
The American banker Junius Spencer Morgan (1813-1890) was a key participant in the credit bridge between America and Britain in the mid-19th century.
Mother:
Juliet Pierpont
Spouse:
Frances Louisa Tracy Morgan
In 1865, just as the Civil War came to an end, Pierpont married again, this time to Frances Louisa Tracy, a woman from his New York social circle. The two proved incompatible in temperament and had widely different instincts and tastes. Morgan loved New York City, hard work, a hectic social life, adventurous travel, and sumptuous luxury in art, houses, interior decor, clothing, and yachts. Fanny preferred a quieter, more domestic life with her children and a few intimate friends.
late spouse:
Amelia Sturges Morgan
Not long after he arrived in New York, Pierpont fell in love with Amelia Sturges (called Memie), the daughter of Jonathan Sturges, a well-known merchant, and patron of the arts. When Memie and her parents decided to take a grand tour of their own in 1859, Pierpont drew them up an itinerary. He met them in London at the end of their tour, saw Memie every day for the next two weeks, and escorted her family back across the Atlantic.
In the spring of 1860 she agreed to marry him, but early the following winter she came down with a severe cough that did not go away. Refusing to postpone the wedding, they were married on October 7, 1861, and the couple went to the Mediterranean for a honeymoon cure. In Paris, lung specialists diagnosed Memie’s illness as tuberculosis. She wrote to her mother: "I wish you could see his loving devoted care of me, he spares nothing for my comfort & improvement." Despite his care, four months after her wedding, in February 1862, Memie died. Pierpont was twenty-four years old.
Daughter:
Louisa Pierpont Morgan
Louisa, the first and favorite daughter, was devoted to her father and traveled with him frequently before her marriage to Herbert L. Satterlee.
Son:
John Pierpont "Jack" Morgan Jr.
Morgan Jr. succeeded his father as head of the firm in 1913 upon the latter’s death, becoming heir to an estate of more than $50,000,000.
Daughter:
Juliet Pierpont Morgan
Daughter:
Anne Tracy Morgan
Anne Morgan was the youngest of the four children of Pierpont Morgan and his second wife, Fanny. Anne and her brother, Jack, would both play key roles during the First World War. While Anne founded a major civilian relief organization, Jack led the firm J. P. Morgan & Co., which heavily financed the Western Allies even as the United States remained officially neutral.
When the Second World War again brought devastation to northeastern France - including Anne Morgan's beloved Blérancourt - she took action a second time. Joining with veterans of her World War I committee and their sons and daughters, she formed the American Friends of France and the Comité Americain de Secours Civil, its French counterpart.
Sister:
Sarah Spencer Morgan
Sister:
Mary Lyman Morgan Burns
Brother:
Junius Spencer Morgan
Sister:
Juliet Pierpont Morgan
Acquaintance:
Nikola Tesla
Morgan funded Tesla’s electrical projects for a while. When Tesla explained to him that his wireless transmitter-receiver would produce free electricity for the whole planet, and Morgan realized that it would not bring any profits for him, he withdrew his support.
