Title
J.P. Morgan
Contributor Names
Bain News Service,
publisher
Created / Published
[no date recorded on
caption card]
Format Headings
Glass negatives.
Notes
- Forms part of: George
Grantham Bain
Collection (Library of
Congress).
- Title from unverified
data provided by the
Bain News Service on
the negatives or caption
cards.
- General information
about the Bain
Collection is available
at http://hdl.loc.gov/loc.pnp/pp.ggbain
Medium
1 negative : glass ; 5 x 7 in. or smaller.
Call Number/Physical Location
LC-B2- 1014-11 [P&P]
Repository
Library of Congress Prints and Photographs Division Washington, D.C. 20540
USA http://hdl.loc.gov/loc.pnp/pp.print
Digital Id
ggbain 04719 //hdl.loc.gov/loc.pnp/ggbain.04719
Control Number
ggb2004004719
Reproduction Number
LC-DIG-ggbain-04719 (digital file from original neg.)
Rights Advisory
No known restrictions on publication.
J. P. Morgan was the preeminent banker of the Gilded Age. Born on April 17,
1837, in Hartford, Connecticut, the son of international banker Junius
Spencer Morgan and Juliet Pierpont, daughter of a Unitarian minister, John
Pierpont, Morgan was educated at public schools in Hartford and Boston. Upon
graduating from high school in 1854, he went on to study in Europe. In 1857, when his
father relocated in London, he began his career in finance with Duncan, Sherman &
Company in New York and in 1861 established his own private bank, J. P. Morgan &
Company, becoming his father's agent in New York. During the Civil War he avoided
conscription in the Union army by hiring a substitute and profiteered by speculating in
gold and by purchasing defective carbines from the War Department and reselling them
to the government at a high profit. His father reined him in by pairing him in 1864 with
Charles Dabney in Dabney, Morgan & Company, and in 1871 (again at his father's
urging) Morgan merged with Philadelphia's Drexel & Company to form
Drexel, Morgan & Company. In 1895, after the death of Anthony Drexel in 1893, the
firm became J. P. Morgan & Company. From the start Morgan was the leading spirit in
these firms.
Morgan's main business was underwriting (selling) new issues of bonds and
stocks of railroads and other enterprises. Since railroads and industry were expanding
rapidly and in constant need of capital, they were compelled to listen to Morgan who, to
protect the investments of his clients, sought to eliminate wild speculation and cutthroat
competition. As a result, Morgan emerged as the major force in organizing, integrating,
and stabilizing American railroads and industry in the Gilded Age. In the early 1880s,
for example, the New York Central (NYC)—in which Morgan was deeply interested—and
the Pennsylvania Railroad (PRR) engaged in rate wars and invasions of each other's
territory. The PRR backed the construction of the West Shore line up the Hudson
opposite the NYC's main line, while the NYC was constructing the South Pennsylvania
paralleling the PRR's main line. In July 1885 Morgan invited representatives of the PRR
and the NYC to meet with him on board his yacht the Corsair on the Hudson River.
With his guidance the railroads agreed to cease their rate wars: The NYC got the West
Shore line and the PRR received the South Penn, which it abandoned. (A half century
later the Pennsylvania Turnpike utilized the South Penn's route and tunnels.) Neither
the PRR nor the NYC reneged on their agreement, since Morgan could punish them by
making their future financing difficult.
In the 1880s and 1890s Morgan reorganized many bankrupt railroads (including
the Reading, the Chesapeake & Ohio, the Southern, and the Erie) and saw to it that
dependable allies would sit on their boards of directors and vote against rate wars and
overbuilding, which so often had caused their failures. Morgan came to dominate a vast
transportation network with more than 55,000 miles of rail, but he had no influence
over the systems of both Jay Gould (whom he never trusted) and Edward H. Harriman
(who reminded him of Gould). Harriman was backed by Jacob Schiff of Kuhn, Loeb, &
Company. Morgan and his ally James J. Hill clashed in 1901 with Harriman over control
of the Chicago, Burlington & Quincy (CB&Q), which connected Chicago to both St. Paul,
Minnesota, and Omaha, Nebraska. Hill and Morgan controlled the Great Northern (GN)
and the Northern Pacific (NP), which came no further east than St. Paul, while
Harriman controlled the Southern Pacific and the Union Pacific, which got no closer to
Chicago than Omaha. Their struggle panicked Wall Street, but Morgan and Schiff caught
themselves and compromised, with Harriman getting a share in the management of the
CB&Q. The deal was solidified by establishing the Northern Securities Corporation,
which owned the GN, NP, and CB&Q. To Morgan's disgust it was dissolved by the
Supreme Court in 1904, but a community of interest had been established.
As industrial corporations began to dominate the American economy in the 1890s,
J.P. Morgan & Co. Became a leader in their consolidation and reorganization, financing
many of the country's greatest industrial developments. In 1892 Morgan financed the
organization of General Electric, and in the following years he financed American
Telephone and Telegraph (AT&T) and International Harvester. Morgan's greatest
merger occurred in 1901, when he merged Andrew Carnegie's steel company with other
firms in the steel industry to form the first billion-dollar corporation, United States Steel
("Big Steel").
In his later years Morgan collected art and rare books as compulsively as he had
collected railroads, accumulating by the time of his death what was estimated as the
largest private collection of paintings, sculpture, manuscripts, and jewelry in history. He
became the president of the Metropolitan Museum of Art in New York, to which he left
the bulk of his collection of art, and his personal library was made public after his death.
He was also a major benefactor of the New York Public Library and the Cathedral of St.
John the Divine. Morgan took a strong public stand for moral rectitude and
assisted Anthony Comstock in establishing the New York Society for the Suppression of
Vice in 1873. Nevertheless, though married in 1865 to Frances Louisa Tracy, with whom
he had four children, he had a mistress and was widely criticized for marital infidelity.
For the last 20 years of his life, Morgan was the most powerful financial figure in
America. Indeed, his power was so great that during two notable crises presidents
followed his lead and enabled Morgan to play a statesmanlike role for a price. In
1895 Grover Cleveland was failing in his efforts to keep the nation on the gold standard
as its gold reserves dwindled. Morgan, however, organized a loan to the federal
government of $62 million in gold, which restored confidence, stanched the outflow of
gold from the treasury, saved the gold standard, and netted his firm a $295,000 profit.
In 1907, in the absence of a central bank, Morgan's arbitrary and effective actions (for
which he was harshly criticized) reduced the effect of the Panic of 1907, but he used that
crisis to extract from the TRUST-busting Theodore Roosevelt approval of United States
Steel's acquisition of Tennessee Coal, Iron, & Railroad Company, which under normal
circumstances Roosevelt never would have agreed to. Morgan was not the richest man
in America, but his influence exceeded that of men like John D. Rockefeller and Andrew
Carnegie, who were far wealthier than he. Morgan died on March 31, 1913, in Rome.
Further Information/References
Vincent P. Carosso, The Morgans: Private International Bankers, 1854–
1913 (Cambridge, Mass.: Harvard University Press, 1987)
Ron Chernow, The House of Morgan (New York: Simon & Schuster, 1990), Jean
Strouse, Morgan: American Financier (New York: Random House, 1999).