John Pierpont Morgan was born on April 17, 1837 in Hartford, Connecticut
, USA to Junius Spencer Morgan, a respected financer. His father had already established a considerable fortune
and through the stock market
. Junius was a partner in an international banking
firm that eventually grew into J.S. Morgan & Co., a major broker
of U.S. stocks abroad.
During his life, J.P. Morgan restored European confidence in American markets. He completely reorganized the bankrupt and fragmented railroad system. He worked to establish corporate and financial institutions that still exist today. It was due to his funding and efforts that the American Industrial Revolution was possible.
By the time he was 15, he had already travelled through most of Europe and had started his art collection. Morgan graduated from the University of Göttingen in Germany at 20. He began his career as an accountant for Duncan, Sherman & Co. in New York City. When the American Civil War broke out, he became employed by his father's bank and in 1861 founded J.P. Morgan & Co. as a branch. Morgan's first wife died of turberculosis only four months after they were married, however, his second marriage produced four children.
Morgan's work with the railroad industry began in the 1880's, when he convinced executives to pool their traffic and settle their disputes with competitors. He then issued stocks and bonds to refinance several major railroads. By doing so, he gained control over the boards and grew to control one-sixth of the American railroad systemsome 5,000 miles of rail. This included the New York Central, New Haven and Hartford, Lehigh Valley, Pennsylvania, Reading, Erie, Southern, Chesapeake and Ohio, and the Northern Pacific systems. His other holdings included coal mines, insurance, communications, as well as providing financial backing for the U.S. government itself. The United States government began to distrust his power, and trust busters broke up his company in the early 1900s. At the beginning of the 20th century, Morgan created several mergers, forming the companies of General Electric, U.S. Steel (by merging Carnegie Steel with several smaller companies) and International Harvester along with several others. The 1907 panic on Wall Street saw a collected man rescue the banking system and the New York Stock Exchange from further decline. He brought bankers together, arranging a $25 million aid package and created a $25 million line of credit from the U.S. Treasury that added liquidity to the banking system. He also got a further $20 million in financing that kept NYSE open.
Morgan's critics maintained that he had collected huge profits during the operation and some went so far as to say that he had engineered the entire panic to create assets for himself. Criticism that he had done similar things during the Civil War surfaced, some saying that he had bought guns from the government and resold them for profits. He fought against labor movements and organizations.
Despite the muckrakers and critics, Morgan concerned himself with many areas besides business. He funded Thomas Edison throughout the 1870's and 1880's, helping him lay the groundwork for the Edison Electric Company. He gave much of his time and wealth towards philanthropic endeavors as well. He donated to churches, hospitals and schools. His art collection was enormous, and upon his death, most of it went to the Metropolitan Museum of Art.
J.P. Morgan died on March 31, 1913 in Rome. At the time, his net worth was $80 million. This reportedly caused John D. Rockefeller, worth $1 billion at the time, to comment, " ... and to think he wasn't even a rich man."
Jean Strouse. Morgan: American Financier. © 2000