Friday, April 19, 2013

John Pierpont Morgan, born April 17, 1837

John Pierpont "J. P." Morgan was born in Hartford, Connecticut, the first child of  Junius Spencer Morgan and Juliet Pierpont  of Boston, Massachusetts. Pierpont, as he preferred to be known, was raised in Hartford.  

Junius Spencer Morgan
Pierpont Morgan descended from five generations of distinguished citizens of New England—both sides of his family had come to the New World before the Revolution. One of his maternal ancestors was James Pierpont, a founder of Yale, whose daughter married Jonathan Edwards. Further down that line came the Reverend John Pierpont, Pierpont's maternal grandfather, a Unitarian minister, poet, and radical antislavery and temperance activist. 

Julia Pierpont Morgan
On the Morgan side, Pierpont's grandfather, Joseph, co-founded the Aetna Insurance Company and left an estate worth about $1 million in 1847. Junius Morgan (Joseph's son) married the Reverend Pierpont's daughter Juliet in 1836. A year later, their first child, Pierpont, was born in Hartford. 

They also had three daughters—Sarah, Mary, and Juliet—and Pierpont's only brother, Junius, who lived only to the age of eleven.

Pierpoint in 1847 with sisters, Sara and Mary
Not long before Pierpoint was born, his father had received shares in a Connecticut dry goods business from his father, which helped him build J.M. Beebe, Morgan and Co., the largest dry goods exporter in Boston.

In the spring of 1852, the 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. His father sent him to the Azores in the Atlantic to recover. 

After convalescing for almost a year, Pierpont returned to the English High School in Boston to resume his studies. 

After his success with the Hartford dry goods firm, Junius Morgan accepted a partnership in the investment house of George Peabody & Co. (later to become J. S. Morgan & Co.,) and moved his entire family to London in 1854. Pierpont had just graduated from  English High School. To prepare his son for a career in international banking, Junius sent Pierpont 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 Gottingen to improve his German. 

University of Gottingen
Attaining a passable level of German within six months and also a degree in art history, Morgan traveled to London to rejoin his family.

Pierpoint Morgan in 1856

By the time he started work as an apprentice banker in New York in 1857 at the age of twenty, he was fluent in both languages and familiar with more cultures than most Americans of his day. 

He was 24 years old when the Civil War began.

New York City during the Civil War
Morgan went into banking in 1857 at his father's London branch, moving to New York City in 1858 where he worked at the banking house of Duncan, Sherman & Company, the American representatives of George Peabody & Company. The year he came to New York was the year of a terrible crisis in Wall Street; beginning with the crash of the Ohio Life and Trust Company in midsummer, 1857, nine hundred failures were reported.

Morgan in 1862
From 1860 to 1864, at J. Pierpont Morgan & Company, he acted as agent in New York for his father's firm. For the next thirty years, he and his father worked together funneling capital from Europe to the emerging American economy, and Pierpont crossed the Atlantic at least once a year to meet with his London partners and continue his European cultural education.

During the Civil War, he paid the legally allowed fee of $300 to purchase a substitute soldier and evaded military service. 

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.

Amelia "Memie" Sturges

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.

Frances "Fanny" Tracy Morgan
In 1865, just as the Civil War came to an end, Pierpont married again, this time to Frances "Fanny" 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.

Pierpont and Fanny had four children: 

  • Louisa Pierpont Morgan (1866–1946) who married Herbert Satterlee (1863–1947)
  • John "Jack"Pierpoint Morgan, Jr.  (1867–1943) who married Jane Norton Grew
  • Juliet Pierpont Morgan (1870–1952) who married William Pierson Hamilton (1869–1950)
  • Anne Tracy Morgan (1873–1952).

  • Morgan's Children: Jack, Anne, Louisa and Juliet
    Louisa, the first and favorite daughter, was devoted to her father and traveled with him frequently before her marriage to Herbert L. Satterlee.   J. P. Morgan, Jr., called Jack, succeeded his father as head of the house of Morgan.  Juliet married a descendant of Alexander Hamilton, William Pierson Hamilton, who joined his father-in-law's banking firm. Anne, the only free spirit among the Morgan children, went on to found a major relief agency in post-World War I France.

    Edith Randolph Whitney, a socialite linked with Morgan

    Morgan was not discreet about his many affairs, but he and Fanny never divorced.

    Maxine Elliott, an acress linked with Morgan
    In 1871, Morgan partnered with the Drexels of Philadelphia to form the New York firm of Drexel, Morgan & Company. Anthony Drexel became Pierpont's mentor at the request of Junius Morgan.

    Anthony Drexel
    During the turbulent boom years following the Civil War, the house of Morgan gained a reputation for stability and integrity. From the 1850s until Junius's death in 1890, Junius and Pierpont Morgan worked primarily with the railroad industry and largely with foreign investors, both in London and New York.  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 over.
    J.P. Morgan

    Fanny Morgan
    Morgan in 1881
    In 1882, the family moved to a brownstone mansion at 219 Madison Avenue, at 36th Street, which remained the Morgans' New York City residence throughout Pierpont's life. 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.  In 1882, Edison also wired Morgan's office building at 23 Wall Street, the first office in New York City to draw power from the Edison Electric Illuminating Company. 

    Morgan Mansion
    Morgan's Study
    He spent several months of each year abroad and was frequently at his father's London town house at Princes Gate or at Dover House, the family estate at Roehampton in South west London.  Morgan also owned East Island in Glen Cove, New York, where he had a large summer house.

    Long Island Estate

    J.P. Morgan
    After the death of his father in 1890, Morgan took control of  J.S. Morgan & Co., which was renamed Morgan, Grenfell & Company in 1910. Morgan began talks with Charles M. Schwab,   president of Carnegie Co., and businessman Andrew Carnegie in 1900. The goal was to buy out Carnegie's steel business and merge it with several other steel, coal, mining and shipping firms to create the United States Steel Corporation.  His goal was almost completed in late 1900 while negotiating a deal with Robert D. Tobin and Theodore Price III, but was then retracted immediately. In 1901 U.S. Steel was the first billion-dollar company in the world, having an authorized capitalization of $1.4 billion, which was much larger than any other industrial firm and comparable in size to the largest railroads.

    Andrew Carnegie
    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 Charles 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 resigned from U.S. Steel in 1903 to form Bethlehem Steel, which became the second largest U.S. producer on the strength.

    Charles Schwab
    Labor policy was a contentious issue. U.S. Steel was non-union and experienced steel producers, led by Schwab, wanted to keep it that way with aggressive tactics to identify and root out trouble makers. The lawyers and bankers who had organized the merger, notably Morgan and the CEO Elbert "Judge" Gary were more concerned with long-run profits, stability, good public relations, and avoiding trouble. The bankers' views generally prevailed, and the result was a paternalistic labor policy. 

    Morgan was the founder of the Metropolitan Club of New York and its president from 1891 to 1900. When his friend, Erie Railroad president John King, whom he had proposed, was black-balled by the Union Club, Morgan resigned from the Union Club, and then organized the Metropolitan Club.  He donated the land on 5th Avenue and 60th Street at a cost of $125,000, and commanded Stanford White,  "Build me a club fit for gentlemen. Forget the expense."

    Metropolitan Club
    After the 1893 death of Anthony 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 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 firmly in charge.

    George Perkins
    In 1895, at the depths of the Panic of 1893, the Federal Treasury was nearly out of gold. President Grover Cleveland accepted Morgan's offer to join with the Rothschilds and supply the U.S. Treasury with 3.5 million ounces of gold to restore the treasury surplus in exchange for a 30-year bond issue. The episode saved the Treasury but hurt Cleveland with the agrarian wing of the Democratic Party.  It became an issue in the election of 1896, when banks came under a withering attack from William Jennings Bryan.  

    William McKinley
    Morgan and Wall Street bankers donated heavily to Republican William McKinley, who was elected in 1896 and reelected in 1900.

    The Panic of 1907 was a financial crisis that almost crippled the American economy. Major New York banks were on the verge of bankruptcy and there was no mechanism to rescue them until Morgan stepped in personally and took charge, resolving the crisis.  Treasury Secretary George Corteyou earmarked $35 million of federal money to quell the storm but had no easy way to use it.  Morgan took personal charge, meeting with the nation's leading financiers in his New York mansion; he forced them to devise a plan to meet the crisis. Morgan organized a team of bank and trust executives which redirected money between banks, secured further international lines of credit, and bought plummeting stocks of healthy corporations. 

    Wall Street during Panic of 1907
    Vowing to never let it happen again, and realizing that in a future crisis there was not likely to be another Morgan, banking and political leaders, led by Senator Nelson Aldrich, devised a plan that became the Federal Reserve System in 1913.  

    Nelson Adrich
    The crisis underscored the need for a powerful mechanism, and Morgan supported the move to create the Federal Reserve System.
    Morgan and wife, Fanny

    Morgan was physically large with massive shoulders, piercing eyes and a purple nose, because of a chronic skin disease, rosacea. His 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. This condition inspired the crude taunt "Johnny 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 Morgan's son-in-law Herbert L. Satterlee has speculated 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.  


    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 was scheduled to travel on the maiden voyage of the RMS Titanic in April 1912, but canceled at the last minute, choosing to remain at a resort in Aix-les-Baines, France.  

    Morgan at White Star Pier
    White Star Line, Titanic's operator, was part of Morgan's International Mercantile Marine Company, and Morgan was to have his own private suite and promenade deck on the ship.

    RMS Titanic
    The Pujo Committee was a United States congressional subcommittee which was formed between May 1912 and January 1913 to investigate the so-called "money trust", a community of Wall Street bankers and financiers that exerted powerful control over the nation's finances. After a resolution introduced by congressman Charles Lindbergh, Arsene Pujo of Louisiana obtained congressional authorization to form a subcommittee of the House Committee on Banking and Currency.  The report revealed that no less than eighteen different major financial corporations were under control of a cartel led by J.P Morgan, George F. Baker and James Stillman. These three men, through the resources of seven banks and trust companies (Banker’s Trust Co., Guaranty Trust Co., Astor Trust Co., National Bank of Commerce, Liberty National Bank, Chase National Bank, Farmer’s Loan and Trust Co.) controlled an estimated $2.1 billion. The report revealed that a handful of men held manipulative control of the New York Stock Exchange and attempted to evade interstate trade laws.  The findings of the committee inspired public support for ratification of the Sixteenth Amendment in 1913, passage of the Federal Reserve Act that same year, and passage of the  Clayton Antitrust in 1914. They were also widely publicized in the Louis Brandeis book, Others People's Money--and How the Bankers Use It.

    Morgan (center) with son--law Herbert Saterlee and daughter Louisa Morgan Saterlee, walking to Pujo Hearings in Washington, D.C.
    House of Morgan partners blamed the March 1913 death of J.P. Morgan on the stress of testifying in the Pujo hearings, though other health factors were certainly involved.

    Shortly after testifying in the Pujo hearings in 1912, Morgan left with friends and family on a trip to Egypt. During his trip he became nervous and slipped into depression. An Egyptian doctor examined him and pronounced him well. His condition continued to decline, however, as the party traveled to Rome.

    On March 31, 1913, just a few weeks before his seventy-sixth birthday, Pierpont Morgan died in his sleep at the Grand Hotel.

    Grand Hotel in Rome
    Nearly four thousand condolence letters were received there overnight and flags on Wall Street flew at half-mast. The body was taken by train to Paris and Le Havre, and Morgan's daughter Louisa and son-in-law Herbert Satterlee followed the casket as it was loaded onto the ship.  Upon returning to New York, Morgan's body was laid out in his Library.

    Hearse outside Morgan Library
    Wall Street's stock market closed for two hours when his body passed through.

    J.P. Morgan Hearse
    For decades, J.P. Morgan was senior warden at St. George's Episcopal Church and the most influential parishioner.  

    Funeral at St. George's Church
    The church was colloquially referred to as "Morgan's Church".  His funeral was held there on April 14, 1913.

    Morgan Grave
    His remains were interred in the Cedar Hill Cemetery in his birthplace of Hartford, Connecticut.

    John Pierpont "Jack" Morgan, Jr.
    At the time of his death, he held 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.  He left his fortune and business to his son, John Pierpont "Jack" Morgan, Jr.

    Morgan Mansion and Library
    He bequeathed his mansion and large book collections to the Morgan Library & Museum in  New York City.  Morgan's library, as it was known in his lifetime, was built between 1902 and 1906 adjacent to his New York residence at Madison Avenue and 36th Street. 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.

    Interior of Morgan Library


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