If you are familiar with the world of finance, you must have heard of the titanic bank J.P. Morgan. But who was the founder, and who turned it into the giant financial institution we know today? John Pierpoint Morgan, the great financier and Industrial organiser of his time.
Proceed with this post, and we will discuss the biography and life of J.P. Morgan.
Who was J.P. Morgan? His life story
John Pierpont (J.P.) Morgan was an American financier and Industrial Organizer born in Hartford (Connecticut) on April 17, 1837. His father, Junius Spencer Morgan, a businessman with companies in the United States and Europe, educated his son early in life to manage the family assets as he would one day pass his wealth on to little John.
J.P. Morgan studied at the English College of Boston and in Switzerland, showing the magnificent qualities of a good student, to later enrol in the prestigious University of Göttingen, Germany, where he obtained an excellent record in all mathematics-related subjects. When he was 15, he travelled around Europe, and it was here that he began to feel admiration for works of art, which later became his true passion.
At 20 years old, he graduated from the university and moved to New York, where he began his career in the exciting world of finance. He worked in a financial entity (Duncan, Sherman & Co), the American representation of George Peabody & Co., of which his father was the owner. The role provided him an excellent base for a good career path for his own company (J.P. Morgan & Co.).
From Dabney, Morgan & Co. to Drexel, Morgan & Co.
In 1864, J.P. Morgan agreed with Charles Dabney, a versatile businessman of the time, creating the financial entity Dabney, Morgan & Co. But in 1871, Dabney retired, and Anthony J. Drexel became his new partner, founding Drexel, Morgan & Co.
At that time, Anthony owned a large investment bank. After the merger, they became the largest and most successful investment company on Wall Street, the primary source of finance for the United States government. Before the merger, J.P. Morgan had considered leaving the banking sector to retire to a quieter life until his father introduced him to Anthony Drexel. He made a juicy offer to his company, a position that made him acquire great experience in the business world.
In 1890, his father died, and he was in charge of all the family businesses, with banks in London and Paris. Three years later, his partner Anthony Drexel also passed away, granting him the quality of sole administrator of the financial lordship across the American borders. This helped him carry out transcendent and beneficial financial operations, beginning the hegemony of the greatest banker of all time known as “The Master of Money”.
While his fortune grew, Morgan continued to undertake investments and acquisitions. He focused on new generation companies to the point that during the ’70s and ’80s, he permitted the very Thomas Edison to work in his premises, experimenting with new projects, financially supporting him and allowing Thomas’s company to merge with the Thomson Houston Electrical Corporation, birthing the world-renowned General Electric.
John Pierpont’s investments in the railroad
After the Civil War, many small railroad companies were going through bad times, and the financiers of the time began a fierce war in the sector to acquire them. In 1900, J. P. Morgan owned 5,000 miles of railroad, restructured the sector and restored the new regulations that the government had yet to be able to draft.
One of John’s main expenses when in charge of the railroad companies was the steel budget. To solve this problem, he bought different steel companies until 1901, when he established the U.S. Steel Company, one of the most important operations of his life. There, he acquired the company of Mr. Andrew Carnegie, another of the most influential businessmen of the time, forming the first company in the United States valued at more than one billion dollars.
J.P. Morgan’s performance in the financial crises of the time
After the financial panic of 1893, gold reserves drastically reduced, which shook the stability of the US Treasury. Morgan met with other bankers to combat this situation and agreed to buy $200 million in Treasury bonds, paying them in gold. This operation preserved the credit of the United States, but John and his colleagues were publicly denounced in Congress for the amount they had pocketed in commissions.
In March 1907, the situation repeated itself, and once again, a crash occurred in the stock market, brokerage houses closed, and interest rates skyrocketed. These circumstances forced the government to ask for help from Morgan to alleviate the stock market crisis. As in other moments, John met with Rockefeller, Harrigan, Frick, Schiff and Rodgers, deciding to inject enough liquidity into the financial system to avoid its collapse.
The general public has always questioned the large amounts of money that Morgan was pocketing, thanks to all this government aid. But President Cleveland always emphasised the service and the public good these contributions represented, downplaying the extra income the aid provided to J. P. Morgan.
In 1912, when he controlled two-thirds of the country’s sources of financing, and his company was valued at more than 25 trillion dollars, he was subjected to an investigation process. The investigation intended to demonstrate that the most flamboyant banker of all time was monopolising many sectors and carrying out economic practices for mutual benefits.
But at the end of the process, it was demonstrated that there had been no intention of creating any monopoly, and the empire he had founded resulted from the new economy being created.
On March 31, 1913, John Pieport Morgan died at 79, leaving the most prominent financial empire ever seen. He earned the respect of all those who initially labelled him greedy, representing the beginning of the new modern economy of the United States. He established companies that today are true giants in their sectors, such as General Electric and AT&T.
Everyone who knew Morgan qualified him as a man with a killer look and a disfigured nose. He is somewhat obese, which had a tremendous physical effect on everyone who knew him personally.
Unlike other businessmen of that time, including Andrew Carnegie, Morgan was raised in a family of bankers. His grandfather, Joseph Morgan, the family’s first entrepreneur, founded various steamboat line companies.
Morgan had another vision of capitalism than his contemporaries. He strove from their competition position to gain market share, something he hated, doing his best to absorb them and create monopolies to control prices. He developed genuine business networks to his liking and whim, something that led him to preside over the following companies:
- The National Bank of Commerce.
- The New York Central and Hudson River Railroad.
- The Lake Shore and Michigan Southern Railroad.
- The West Shore Railroad.
- The New York, New Haven and Hartford Railroad.
- The Pullman Palace Car Company.
- The Mexican Telegraph Company.
- The Western Union Telegraph Company.
- The Manufacturing Investment Company.
- The Federal Steel Company.
- The General Electric Company.
- The Madison Square Garden Company.
- The Metropolitan Opera House Company.
Morgan’s defenders have always argued that he never abused his power. However, the question many ask is if one man, in a time when there were significant legal gaps in full democracy that a few millionaires lived a life full of luxuries while 80% of American families earned less than 500 dollars a year, only one man could control more than half of the American capital. In addition, they argued on numerous occasions that his bank had contributed to the nation’s development, and thanks to him, the new capitalist era was being lived.
One of his great passions during his life was the collection of paintings, books, yachts and houses. When he died, most of his works of art were donated to the Metropolitan Museum of New York.
He also made important works of charity, donating substantial sums to hospitals, churches and universities, since he has always been very committed to the humanitarian cause.
Best phrases in the life of the titanic banker
Like all great historical figures, John Pierpoint Morgan has phrases that have been left for posterity, and that is what we are going to collect below:
Go as far as you can see. When you get there, you will be able to see further.J.P. Morgan
You can’t pick cherries with your back to the tree.J.P. Morgan
Gold is money. Everything else is credit.J.P. Morgan
Let every lion do its duty.J.P. Morgan
The first step to getting somewhere is deciding you’re not going to stay where you are.J.P. Morgan
When I have unfinished business, I think it’s best to do it quickly.J.P. Morgan
If you owe the bank a hundred dollars, you have a problem. If you owe them a million dollars, they have a problem.J.P. Morgan
When things are expected to happen, strangely enough, they do.J.P. Morgan
In the history of the world, no man has ever achieved anything worthy and valuable through begging and pleading.J.P. Morgan
FAQs about J.P. Morgan
What Industry is J.P. Morgan known for?
Throughout his lifestyle, J.P. Morgan is known for investment banking, commercial banking, financial transaction processing and asset management.
How did J.P. Morgan become so Successful?
J.P. Morgan grew to follow his father’s step in the banking system, where he harnessed wealth, which he passed on to John to manage. With his father’s inheritance, he built one of America’s most successful business empires.
How much money did J.P. Morgan have when he died?
Upon his death in Rome on March 31, 1913, J.P. Morgan’s net worth was estimated to have been about $80 million. In 2022 dollars, it is equivalent to $2.3 billion. Some speculate that his fortune at the peak of his career might have been worth as much as $60 billion in 2022 dollars.