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Our New Yorker of the Day for April 17th is J. Pierpont Morgan

LEGACY


Morgan was a central figure in many of the most important transactions of the Industrial Revolution. He was an active investor in railroads, reorganizing the Albany & Susquehanna (1869), the New York Central (1885), the Philadelphia & Reading (1886), and the Chesapeake & Ohio (1888). In 1892, Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric, leading to the creation of General Electric. In 1901, he led the consolidation of Carnegie Steel Company with several other similar concerns, creating history’s first billion-dollar corporation in U.S. Steel.


When a financial panic gripped Wall Street in October 1907, Morgan took charge, convincing New York bankers and businessmen to pledge their own assets to provide liquidity to the faltering financial system. Thanks to his intervention, the crisis was averted, and by November financial markets returned to relative stability.

Morgan's astounding success transformed the financial industry and left behind a powerful legacy. Although he twice bailed out the U.S. Treasury, his ability to do so left many unsettled, spurring the creation of the Federal Reserve System in late 1913. His name lives on through the massive international banking firm he created, which entered the 21st century as JPMorgan Chase & Co.


Morgan was among the most maligned of the so-called “Robber Barons.” He is remembered as a beefy, red-faced bully, fierce and lonely, possessed of small ideas and consumed by enormous greed. All of this is deeply unfair to Morgan. Recent biographers—most notably Jean Strouse—have looked at Morgan with fresh eyes, finding a much more subtle and interesting character than his caricature would allow. He was a genuine polymath, fluent in French and German, steeped in literature and the arts, whose aptitude for mathematics prompted one of his professors at the University of Göttingen to encourage him to consider an academic appointment. He was remarkably generous, and devoted his considerable wealth and energy to a few, favored causes. J. Pierpont Morgan was also a voracious collector and selective philanthropist, with great financial contributions to the Metropolitan Museum of Art, American Museum of Natural History and the Cathedral of St. John the Divine. He bought on an astonishing scale, collecting art objects in virtually every medium, including the rare books, manuscripts, drawings, prints, and ancient artifacts that are the core of The Morgan Library & Museum's holdings. Now recognized as one of the world's greatest treasuries of seminal artistic, literary, musical, and historical works.


EARLY YEARS


John Pierpont Morgan was born into a distinguished New England family on April 17, 1837, in Hartford, Connecticut. One of his maternal relatives, James Pierpont (1659-1714), was a founder of Yale University; his paternal grandfather was a founder of the Aetna Insurance Company; and his father, Junius Spencer Morgan (1813-90), ran a successful Hartford dry-goods company before becoming a partner in a London-based merchant banking firm.


A sickly child who suffered seizures and other mysterious ailments, Pierpont, as he was known, spent long periods sheltered at home. When healthy, he frequented galleries and concerts with his parents, sparking a lifelong fascination with the arts. Initially a smart but indifferent student, he began showing improved grades by the time he attended English High School in Boston.


After graduating from high school in Boston in 1854, Pierpont, as he was known, studied in Europe, where he learned French and German, then returned to New York in 1857 to begin his finance career. In 1854, his firm moved the family to London to begin his new career as a partner in the banking firm of George Peabody & Co. Pierpont was sent to the Institute Sillig in Switzerland, where he became fluent in French and displayed an aptitude for mathematics, and then to Göttingen University in Germany.


After finishing his education in 1857, the younger Morgan moved to New York to work as a clerk at Duncan, Sherman & Co., the American branch of his father's firm. In one early example of his ingenuity, Morgan was in New Orleans for business when he encountered a ship captain with a boatload of coffee and no buyer. Morgan used his company's funds to purchase the coffee, and then sold it to local merchants for a profit. His success emboldened him to strike out on his own, and he continued to work with his father after founding J. Pierpont Morgan & Co. in the early 1860s.


Through his New York social circle, Morgan grew close to Amelia "Memie" Sturges, the daughter of a successful merchant. Their blossoming romance was jarred by her diagnosis of tuberculosis in 1861, and they quickly married and moved to Algiers with the hope of spurring a recovery. However, despite Morgan's best efforts to nurse his bride back to health, she passed away in February 1862. In 1865, Morgan married Frances Louisa Tracy (1842-1924), the daughter of a New York lawyer, and the pair eventually had four children.


In 1871, Morgan joined forces with Philadelphia banker Anthony Drexel to found Drexel, Morgan & Co., which took up residence in a towering new building in lower Manhattan. Entering his mid-30s, Morgan was developing into the outsized figure that would dominate the financial world with his enormous frame, piercing eyes and brusque nature.


Morgan's already successful career took a leap forward in 1879 when William Vanderbilt approached him about the sale of 250,000 shares of stock in the New York Central Railroad. Morgan pulled off the massive transaction without driving down the share price, and in return he secured a seat on the New York Central board of directors. The following year, he fronted a syndicate that sold $40 million in bonds to finance the Northern Pacific Railroad, then the largest transaction of railroad bonds in U.S. history.


Morgan's life and career took another turn after the death of his father in 1890. Following a decade of railroad consolidation, he broke new ground by arranging the merger of Edison General Electric and Thomson-Houston Company to form General Electric in 1892. Additionally, the lifelong art enthusiast began exponentially expanding an already impressive collection of valuable works.


In 1871, Morgan joined forces with Philadelphia banker Anthony Drexel to found Drexel, Morgan & Co., which took up residence in a towering new building in lower Manhattan. Entering his mid-30s, Morgan was developing into the outsized figure that would dominate the financial world with his enormous frame, piercing eyes and brusque nature.


The Morgan Years


Morgan's already successful career took a leap forward in 1879 when William Vanderbilt approached him about the sale of 250,000 shares of stock in the New York Central Railroad. Morgan pulled off the massive transaction without driving down the share price, and in return he secured a seat on the New York Central board of directors. The following year, he fronted a syndicate that sold $40 million in bonds to finance the Northern Pacific Railroad, then the largest transaction of railroad bonds in U.S. history.

Morgan's life and career took another turn after the death of his father in 1890.


Following a decade of railroad consolidation, he broke new ground by arranging the merger of Edison General Electric and Thomson-Houston Company to form General Electric in 1892. Additionally, the lifelong art enthusiast began exponentially expanding an already impressive collection of valuable works.


In 1895, Morgan’s firm was reorganized as J.P. Morgan & Company, a predecessor of the modern-day financial giant JPMorgan Chase. The firm soon became a major player in the steel industry by financing the formation of Federal Steel in 1898. Three years later, after purchasing Andrew Carnegie’s steel company for nearly $500 million, Morgan merged the entities into U.S. Steel, creating the first billion-dollar corporation.

During the late 19th century, a period when the U.S. railroad industry experienced rapid overexpansion and heated competition (the nation’s first transcontinental rail line was completed in 1869), Morgan was heavily involved in reorganizing and consolidating several financially troubled railroads. In the process, he gained control of significant portions of these railroads’ stock and eventually controlled an estimated one-sixth of America’s rail lines.


During Morgan’s era, the United States had no central bank, so he used his influence to help save the nation from disaster during several economic crises. In 1895, Morgan assisted in rescuing America’s gold standard when he headed a banking syndicate that loaned the federal government more than $60 million. In another instance, the financial panic of 1907, Morgan held a meeting of the country’s top financiers at his New York City home and convinced them to bail out various faltering financial institutions in order to stabilize the markets.


Morgan initially was widely commended for leading Wall Street out of the 1907 financial crisis; however, in the ensuing years the portly banker with the handlebar mustache and gruff manner faced increasing criticism from muckraking journalists, progressive politicians and others that he had too much power and could manipulate the financial system for his own gain.


In 1912, Morgan was called to testify before a congressional committee chaired by U.S. Representative Arsene Pujo (1861-1939) of Louisiana that was investigating the existence of a “money trust,” a small cabal of elite Wall Street financiers, including Morgan, who allegedly colluded to control American banking and industry. The Pujo Committee hearings helped bring about the creation of the Federal Reserve System in December 1913 and spurred passage of the Clayton Antitrust Act of 1914.

J.P. MORGAN IN NEW YORK CITY


At the turn of the century, Morgan was America’s greatest patron of the fine arts. He began collecting art while touring Rome, not long after finishing at Göttingen at the age of 19. It was the start of a lifelong love affair. He was the driving force behind the rise of the Metropolitan Museum of Art, serving as president and donating extensively from his personal acquisitions.


Morgan was a man of truly catholic charitable interests. In addition to his lifelong engagement with the arts, he was deeply interested in the natural sciences. A trustee of the American Museum of Natural History for 44 years, Morgan served on the board from the museum’s opening in 1869 until his death in 1913. He was often the museum’s lead donor—frequently giving under condition of anonymity—and he served at various times as vice president, treasurer, and finance committee chairman. Among his many contributions to the museum, notes Strouse, were “collections of minerals, gems, meteorites, amber, books, prehistoric South American relics, American Indian costumes, fossil vertebrates, skeletons, and the mummy of a pre-Columbian miner preserved in copper salts.”


Third among Morgan’s great philanthropic interests was the Episcopal Church. Throughout his working life, he set aside three weeks every third year to meet with Episcopalian bishops and discuss theology. He served as treasurer and senior warden at St. George’s Episcopal Church. In 1886, he was appointed to a committee responsible for revising the Book of Common Prayer, which, writes Strouse, “he knew practically by heart.” He quietly underwrote the salaries of scores of Manhattan clergymen and contributed heavily—$500,000 in 1892 alone—to the construction of Manhattan’s (as-yet unfinished) Cathedral of St. John the Divine.


The J.P. Morgan Library on Madison Avenue between 36th and 37th streets is one of NYC’s great museums and cultural institutions The library was founded to house the Morgan’s library in 1906, which included manuscripts and printed books, some of them in rare bindings, as well as his collection of prints and drawings. The library was designed by Charles McKim of the firm of McKim, Mead and White and cost $1.2 million. It was made a public institution in 1924 by J. P. Morgan's son John Pierpont Morgan, Jr., in accordance with his father's will.


Morgan’s home stood at the corner of 36th Street and Madison Avenue. It was demolished in 1928 to make way for the library’s annex.


The famous financier died at age 75 on March 31, 1913, in Rome, Italy. On April 14, the day of his funeral, the New York Stock Exchange closed in his honor until noon. He was buried in the Morgan family mausoleum at a Hartford cemetery.


(sources: biography.com; wikipedia; themorgan.org; https://daytoninmanhattan.blogspot.com)

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