J. P. Morgan

J. P. Morgan was born in Hartford, ConnecticutConnecticutConnecticut is a U.S. state in the New England region. Its capital is Hartford and its largest city is Bridgeport (2010 census). It entered the Union on January 9, 1788, as the 5th state, and had a population of 3,605,944 in the 2020 census (April 1, 2020).Open the full entry, on April 17, 1837. His father, Junius Spencer Morgan, was a businessman who trained him from an early age.⁠[1]

He grew up in Hartford and was schooled in Boston, Switzerland and Germany, finishing his studies at the University of Göttingen at about age 19.⁠[2]

His father, Junius Spencer Morgan, moved to London in 1854 and joined the private banking firm George Peabody & Co., which was restyled J. S. Morgan & Co. in 1864.⁠[3]

Morgan began working as an accountant in 1857, the year he joined his father’s bank in London, and moved to New York in 1858, where he lived for the rest of his life.⁠[2][4]

He worked at Peabody, Morgan & Co., Duncan, Sherman & Company and Dabney, Morgan, and Company, and in 1861 became an agent for his father’s banking firm.⁠[1][4]

In 1871 Morgan joined the Philadelphia banker Anthony Drexel in forming Drexel, Morgan & Co., a private merchant banking house in New York. The firm became a major source of financing for the U.S.United StatesThe United States is a federal country in North America made up of 50 states, the District of Columbia as the seat of government, and territories such as Puerto Rico and Guam; its capital is Washington, D.C. The Continental Congress adopted the Declaration of Independence on July 4, 1776. The 2020 census (April 1, 2020) counted a resident population of 331,449,281, and the 435 seats of the House of Representatives are apportioned among the states on the basis of the census.Open the full entry government.⁠[3][4]

In 1879 Drexel, Morgan & Co. sold a large block of New York Central Railroad stock for William H. Vanderbilt, and the next year Morgan financed the Northern Pacific Railroad through a $40 million bond sale. The press called his restructuring of failing railroads “Morganization.”⁠[3]

In the 1880s and 1890s he reorganized several large railroads, including the Erie Railroad and the Northern Pacific, working to stabilize rates and reduce destructive competition; by 1902 he controlled about 5,000 miles (8,000 km) of railway.⁠[4]

Morgan backed Thomas EdisonThomas EdisonThomas Edison (1847–1931) was an American inventor and entrepreneur who received 1,093 U.S. patents in his lifetime. He invented or improved the phonograph, the practical incandescent lamp and its supporting electric power system, motion picture camera and viewing equipment, and the alkaline storage battery, among other things, and established industrial research laboratories at Menlo Park and West Orange, and is regarded as one of the pioneers of the modern industrial research and development model.Open the full entry’s early experiments. In 1881 Edison electrified Morgan’s house, and in 1882 the Drexel, Morgan & Co. building at 23 Wall Street became the first office building in New York to draw power from Edison’s new generating station. In 1892 the firm financed the merger of Edison’s electric companies with Thomson-Houston to form General ElectricGE AerospaceGE Aerospace is the name under which General Electric Company operates, a jet engine maker listed on the New York Stock Exchange under the ticker GE.Open the full entry.⁠[1][3]

By 1892 the nation’s gold reserves had fallen below $100 million, and the Panic of 1893 drained further gold from the Treasury. Between 1894 and 1896 President Grover ClevelandGrover ClevelandGrover Cleveland (1837–1908) was an American politician and Democrat who served as President of the United States from 1885 to 1889 and from 1893 to 1897, as the 22nd and 24th president, the only president to serve two non-consecutive terms.Open the full entry authorized four government bond issues to raise gold and turned to Morgan to support them; for relying on Morgan, Cleveland was derided for allying with powerful Wall Street interests.⁠[5][3]

In the third bond sale, on February 8, 1895, Morgan bought bonds in exchange for $62 million of European gold, organizing a private sale of the government bonds to European buyers. The sale saved the gold reserves but disappointed opponents of the gold standard.⁠[6][3]

The same year the firm was renamed J.P. Morgan & Co., with Morgan heading its four affiliated partnerships in New York, Philadelphia, London and Paris.⁠[3]

In 1901 J.P. Morgan & Co. organized the buyout of Andrew CarnegieAndrew CarnegieAndrew Carnegie (1835–1919) was a Scottish-born American industrialist and philanthropist who led the enormous expansion of the American steel industry in the late 19th century and, after retiring from business, became known for large-scale giving and the foundations he created.Open the full entry’s steel business and combined about 15 companies into the United States Steel Corporation, the world’s first billion-dollar corporation. Morgan also financed the mergers that created International Harvester Co.⁠[3][1][4]

In 1904 J.P. Morgan & Co. helped finance the Panama Canal by arranging $40 million for the U.S. government to buy land rights from the failed French project.⁠[3]

On October 16, 1907, F. Augustus Heinze and Charles W. Morse failed in an attempt to corner the stock of United Copper, setting off runs on banks linked to them. On October 21 the New York Clearing House refused aid to the Knickerbocker Trust; Morgan asked Benjamin Strong to examine its books and initially declined to help. On October 22, after withdrawals of nearly $8 million, the Knickerbocker suspended operations, and a full-scale crisis broke out in New York.⁠[7]

The runs were most severe at the Trust Company of America, which continued to face withdrawals for two weeks after Morgan released aid. The call money rate jumped from 9.5% to 70% on October 22 and reached 100% two days later; the New York Stock Exchange stayed open largely because of Morgan’s efforts to deliver cash to its loan post.⁠[7]

Morgan pledged his own money and persuaded other wealthy men to do the same to stabilize the banking system; he also bought $30 million of New York City bonds to prevent a default and held the major New York banks together for two weeks. The Federal Reserve History essay judges that the panic spurred the monetary reform movement that led to the establishment of the Federal Reserve System.⁠[1][3][7]

A subcommittee of the House Committee on Banking and Currency, known as the Pujo Committee or the Money Trust Investigation, met from May 1912 to January 1913 to examine a small group of Wall Street bankers seen as controlling the nation’s finances. Morgan was a major figure in the inquiry and his testimony drew considerable interest; the record of his testimony is dated December 19, 1912.⁠[1][8]

Morgan died in Rome, Italy, on March 31, 1913, leaving an estate estimated at about $80 million. The New York Stock Exchange closed until noon on the day of his funeral, and his son, J. P. Morgan Jr. (Jack, 1867–1943), became senior partner of the firm.⁠[4][3][2][9]

As early as 1890 Morgan began assembling illuminated, literary and historical manuscripts, early printed books, and old master drawings and prints. From the 1890s until 1913 he spent about $60 million on art in nearly every medium, and in 1909 he lent 14 works, including pieces by Frans Hals, Rembrandt, Vermeer and Hobbema, to the Hudson-Fulton Celebration.⁠[9][10]

In 1902 he commissioned Charles Follen McKim (1847–1909) of McKim, Mead and White to design a library next to his New York home at Madison Avenue and 36th Street. Modeled on Italian Renaissance villas and built of TennesseeTennesseeTennessee is a U.S. state in the southeast-central United States, with its capital at Nashville. It was admitted to the Union on June 1, 1796, as the 16th state, and the 2020 census (April 1, 2020) counted 6,910,840 residents.Open the full entry pink marble, it was completed in 1906, was known for many years as “Mr. Morgan’s Library,” and was designated a National Historic Landmark by the Secretary of the Interior in 1966.⁠[11]

In 1924 his son, J. P. Morgan Jr., made the library a public institution, and it opened its doors to the public in October 1928; it is today The Morgan Library & Museum.⁠[9][12]

Morgan served as president of the Metropolitan Museum of Art and donated many works of art to it. He was a trustee of the American Museum of Natural History from its opening in 1869 until his death in 1913, serving as vice president, treasurer and chairman of its finance committee. In 1892 he gave about $500,000 toward the Cathedral of St. John the Divine; he was also treasurer and senior warden of St. George’s Episcopal Church, and in 1886 he was appointed to a committee revising the Book of Common Prayer.⁠[2][4]

Under the Glass–Steagall Act of 1933, the House of Morgan was split into three firms: J.P. Morgan & Co. (later Morgan Guaranty Trust), Morgan StanleyMorgan StanleyMorgan Stanley is an American global financial services firm that grew from an investment banking partnership into a publicly traded financial group spanning investment banking, securities trading, wealth management, and investment management.Open the full entry and Morgan Grenfell in London; Deutsche Bank acquired Morgan Grenfell in 1990.⁠[1]

J.P. Morgan & Co. Incorporated later merged with The Chase Manhattan Corporation, and the new firm was named J.P. Morgan Chase & Co., today JPMorgan Chase & Co.⁠[3]JPMorgan Chase & Co.JPMorgan Chase & Co. is a financial holding company headquartered in New York that operates investment banking, consumer and small business financial services, commercial banking, financial transaction processing and asset management under its J.P. Morgan and Chase brands; its roots trace back to the Manhattan Company of 1799.Open the full entry

The Morgan Library & Museum: Official website: https://www.themorgan.org/ (opens in a new window).⁠[12]

JPMorgan Chase & Co.: Official website: https://www.jpmorganchase.com/ (opens in a new window).⁠[3]