J. P. Morgan

John Pierpont Morgan Sr. (April 17, 1837 – March 31, 1913) was an American financier and investment banker who dominated corporate finance on Wall Street throughout the Gilded Age and Progressive Era. As the head of the banking firm that ultimately became known as JPMorgan Chase & Co., he was the driving force behind a wave of industrial consolidations in the United States at the turn of the twentieth century.

Over the course of his career on Wall Street, Morgan spearheaded the formation of several prominent multinational corporations including U.S. Steel, International Harvester, and General Electric. He and his partners also held controlling interests in numerous other American businesses including Aetna, Western Union, the Pullman Car Company, and 21 railroads. His grandfather Joseph Morgan was one of the co-founders of Aetna. Through his holdings, Morgan exercised enormous influence over capital markets in the United States. During the Panic of 1907, he organized a coalition of financiers that saved the American monetary system from collapse.

As the Progressive Era's leading banker, Morgan's dedication to efficiency and modernization helped transform the shape of the American economy. Adrian Wooldridge characterized Morgan as America's "greatest banker". Morgan died in Rome, Italy, in his sleep in 1913 at the age of 75, leaving his fortune and business to his son, J. P. Morgan Jr. Biographer Ron Chernow estimated his fortune at $80 million (equivalent to $1.9 billion in 2024).

John Pierpont Morgan was born on April 17, 1837, in Hartford, Connecticut, to Junius Spencer Morgan (1813–1890), of the influential Morgan family, and Juliet Pierpont (1816–1884). His father, Junius, was then a partner at Howe Mather & Co., the largest dry goods wholesaler in Hartford. His mother Juliet was the daughter of the poet John Pierpont. His uncle James Lord Pierpont composed the famous Christmas song Jingle Bells. Morgan preferred to be called "Pierpont", as opposed to "John".

In 1847, when Morgan was ten years old, his grandfather Joseph Morgan died and left the family a large fortune.

Pierpont was educated in public and private schools in New England, where he attended West Middle School and Cheshire Academy. Junius soon became a senior partner at the rechristened Mather Morgan & Co. In September 1851, he passed the entrance exam for The English High School of Boston, which specialized in mathematics for careers in commerce. In April 1852, he suffered from rheumatic fever, an illness whose symptoms became more severe as his life progressed and ultimately left him in such pain that he could not walk. Junius sent him to the Azores to recover. He convalesced there for almost a year, then returned to Boston to resume his studies. In 1856, his father sent him to Bellerive, a school in the Swiss village of La Tour-de-Peilz, where he gained fluency in French. His father then sent him to the University of Göttingen to improve his German. He attained passable fluency and a degree in art history within six months, completing his studies in 1857.

After completing his education, Morgan went to London in August 1857 to join his father, now a partner in the merchant banking firm George Peabody & Co. For the next fourteen years, he worked as his father's American representative in a series of affiliated New York City banking houses, learning the trade and lifestyle of a bank partner: Duncan, Sherman & Company (1858–1861), his own firm J. Pierpont Morgan & Co. (1861–1864), and finally Dabney Morgan (1864–1872). Dabney, Morgan & Company was co-founded by Charles H. Dabney and Jim Goodwin.

Morgan soon moved on to New York City to begin work at Duncan Sherman as a junior clerk. Through his father's reputation and his position as the obvious successor to the Peabody house, he was among the most sought-after young men on Wall Street and enjoyed the company of many of New York's leading citizens. Morgan held a great deal of independence in both his investment decisions and lifestyle, owing partly to his father's faith in Morgan's austere religious discipline. "Remember," J.S. Morgan wrote his son, "that there is an Eye above that is ever upon you and that for every act, word, and deed you will one day be called to give account." He adopted a serious, energetic approach to his work and was praised by his father's friends for his work ethic and capacity for business.

At the time Morgan entered the firm, Peabody & Co. was struggling in the wake of the Panic of 1857, a rash of business failures which dramatically damaged investor confidence in American securities. Peabody & Co., whose business was focused on the United States, was particularly threatened when a few of its American correspondent banks were forced to suspend operations. The house's creditors, including Baring Brothers, demanded payment; Peabody defied them, daring his rivals to put him out of business, and turned to the Bank of England for a loan in November 1857. Morgan himself expressed surprise that the famed Barings house was not more accommodating. The loan secured the house's survival and the London office was stabilized, but Duncan Sherman came under criticism on Wall Street, and the Mercantile Agency recommended its dissolution. J. P. Morgan urged his father to stand by Duncan Sherman in the face of "outrageous" reports "of Browns & Barings getting the credit for what they never did".

While at Duncan Sherman, Morgan acquired experience in the financing and reorganization of railroads, including the major Ohio & Mississippi and Illinois Central lines, for which he personally negotiated the loans. Most of his work involved collecting and transmitting interest and dividend payments, executing orders on the New York Stock Exchange, and conducting credit checks on mercantile houses doing business with Peabody & Co.

Starting in early January 1859, Morgan spent several months in the South to visit the firm's correspondents in Georgia, Alabama, and Louisiana and to improve his knowledge of the cotton trade. He briefly visited Cuba, where he developed a lifelong taste for Cuban cigars. Most of his time in the South was spent in New Orleans, a leading cotton export hub. He received a stern warning from Duncan Sherman when he conducted an unauthorized trade of coffee at a profit, which he considered his first totally independent transaction. Later that summer, he visited his father in London. They discussed the prospects of Morgan's going into business for himself, and Morgan courted Amelia Sturges, whom he later married.

In 1871, at the behest of J.S. Morgan, the Philadelphia financier Anthony Joseph Drexel became J. P.'s mentor. They formed Drexel Morgan & Co. This new merchant banking partnership, based in New York, served as an agent for European investment in the United States and assumed the leading role in financing America's railroads and stabilizing and revitalizing American securities markets. The firm created a national capital market for industrial companies, which had previously existed only for railroads and canals. Drexel Morgan also played an important role in government finance. To restore investor confidence, Drexel Morgan underwrote the pay of the entire U.S. Army in 1877 and bailed out the U.S. government in 1895 during the Panic of 1893.

In his ascent to power, Morgan focused on America's largest business enterprises: railroads. He led the syndicate that broke the government-financing privileges of Jay Cooke and developed and financed a national railroad empire by reorganization and consolidation. He raised large sums in Europe, and especially through the American rails section of the London Stock Exchange. Rather than participating solely as a financier, he actively managed and reorganized the railroad corporations, increasing efficiency and acting as an early pioneer in the practice of private equity investing, a process that became known as "Morganization".

In 1883, Morgan successfully marketed a large part of William H. Vanderbilt's New York Central holdings. In 1885, he reorganized the New York, West Shore & Buffalo Railroad and leased it to the New York Central. In 1887, Congress passed the Interstate Commerce Act. Morgan set up industry conferences in 1889 and 1890 which paved the way for a wave of consolidations in the early 20th century. In an unprecedented move, he brought together railroad presidents to follow the new laws and write agreements for the maintenance of "public, reasonable, uniform and stable rates". The first of their kind, the conferences created a community of interest among competing lines, paving the way for the great consolidations of the early 20th century.

After the death of Anthony Drexel, the firm was renamed J. P. Morgan & Company in 1895, retaining close ties with Drexel & Company of Philadelphia; Morgan, Harjes & Company of Paris; and J.S. Morgan & Company (after 1910 Morgan, Grenfell & Company) of London. By 1900, it was one of the world's most powerful banking houses, focused primarily on reorganizations and consolidations.

Morgan had many partners over the years, such as George Walbridge Perkins, but always remained firmly in charge. His international reputation as a financier began to draw investors to the businesses that he took over.

At the depths of the Panic of 1893, around 1895, the U.S. Treasury nearly depleted its gold reserves. Morgan put forward a plan for the federal government to buy gold from his and European banks, but it was declined in favor of a plan to sell government bonds directly to the general public. Morgan demanded a meeting with President Grover Cleveland, where he claimed the United States government could default that day if action was not taken.

Morgan came up with a plan to use an old Civil War statute that allowed Morgan and the Rothschilds to sell 3.5 million ounces of gold directly to the U.S. Treasury in exchange for a 30-year bond issue. The episode saved the Treasury but hurt Cleveland's standing with the populist agrarian wing of the Democratic Party, ensuring his political career was over. In the 1896 United States presidential election, bankers came under a withering attack from William Jennings Bryan, and Morgan was among many who donated heavily to Republican William McKinley.

In 1900, the inventor Nikola Tesla convinced Morgan he could build a trans-Atlantic wireless communication system based on his theories of Earth and atmospheric electrical conduction (eventually sited at Wardenclyffe) that would outperform the short-range radio wave-based wireless telegraph system then being demonstrated by Guglielmo Marconi. In what may have been a philanthropic investment, Morgan gave Tesla $150,000 (equivalent to $4.6 million in 2024) to build the system and Tesla offered him a 51% control of the patents. Almost as soon as the letter of agreement was signed, Tesla decided to scale up the facility to include his ideas of terrestrial wireless power transmission to make what he thought was a more competitive system. Morgan refused to give Tesla any further money towards the project and, with Tesla unable to secure further investment capital, Wardenclyffe's development stalled and the site was abandoned by 1906.

From 1890 to 1913, 42 major corporations were organized or their securities were underwritten, in whole or part, by J.P. Morgan and Company.

In October 1861, Morgan married Amelia "Memi" Sturges (1835–1862) at her home on 5 East Fourteenth Street. He had courted her for two years, and when they married, Memi was already seriously ill with tuberculosis. Morgan had to carry her to the drawing room for a small private ceremony and afterwards to the carriage which took them to the pier. They traveled to Algiers, where he hoped the warm climate would restore their health, but it did not, and she died in Nice in February 1862, four months and ten days after their marriage.

On May 31, 1865, Morgan married Frances Louisa "Fanny" Tracy (1842–1924), whom he met at St. George's Church. They had four children:

It is said in the newspaper on March 31, 1913, that Morgan fell ill to "a long sinking spell" which included symptoms of extreme weakness, nervousness after his realization of the inability to take in food due to a paralysis of the muscles in his throat; no other organic trouble was present. When he tried to speak, contraction of his throat followed. As his condition worsened, he was in and out of consciousness, while they gave him food through "injection". Morgan had been traveling abroad and died of a stroke caused by gastroenteritis on March 31, 1913, in his sleep at the Grand Hotel Plaza in Rome, Italy. His body was brought back to America aboard the SS France, a French Line passenger ship. Flags on Wall Street flew at half-staff, and in an honor usually reserved for heads of state, the stock market closed for two hours when his body passed through New York City. His body was brought to lie in his home and adjacent library the first night of arrival in New York City. His remains were interred in the Cedar Hill Cemetery in his birthplace of Hartford, Connecticut. His son, John Pierpont "Jack" Morgan Jr., inherited the banking business.

His estate was worth $68.3 million ($1.59 billion in 2024 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.

His son, J. P. Morgan Jr., took over the business at his father's death, but he was never as influential. The 1933 Glass–Steagall Act forced the dissolution of the House of Morgan into three entities:

J.P. Morgan & Co., which later became Morgan Guaranty Trust and ended up merging with Chase Bank

Morgan Stanley, an investment house formed by his grandson Henry Sturgis Morgan