J.P. Morgan was one of the most powerful and influential businessmen in history. At the height of his career, he literally held the U.S. economy in his hands. With a simple word or stroke of a pen, he could save a company from collapse or doom it to bankruptcy. Hated by some, admired by others, there will never be another man quite like J.P. Morgan.
Morgan’s Privileged Upbringing But Tragic Early Life
John Pierpont Morgan was born in 1837 in Connecticut into privileged circumstances. His father, Junius Spencer Morgan, was already a successful banker and ensured John had the best education money could buy, expecting John to follow in his footsteps as a financier.
However, despite being born into wealth, John’s childhood was bleak. He was a perpetually sick child, regularly suffering from brutal coughing fits, migraines, seizures and diseases like scarlet fever. Unable to play outside with other kids, John spent his time studying finances instead. At one point, John became incapacitated by rheumatic fever. His father’s solution was to send John to live alone on the Azore Islands, hoping the climate would help him recover. After a year in isolation, a teenaged John continued his education in Boston, Switzerland and Germany.
In 1861, the 24 year old John struck out on his own, founding a merchant banking firm that acted as an agent for his father’s bank in England. That same year, John married his first love Amelia Sturges. Tragically, Amelia soon developed tuberculosis and died just four months after their wedding, leaving the 24 year old John a widower. Inconsolable, John threw himself into his work and began his rise to power.
Consolidating the Railroad Industry
In 1871, John partnered with financier Anthony Drexel to create Drexel, Morgan & Co., later renamed J.P. Morgan & Co. Whereas most investors were happy buying shares and collecting profits, John craved control. He played an active role in managing companies, reshuffling leadership and directing operations to his liking.
John heavily invested in railroads, which he saw as ripe for consolidation. Rather than competing, John acquired and merged small railroad companies into regional monopolies, crushing remaining competitors. This “Morganization” attracted investments from Europe, making John even wealthier. In 1901, John made the landmark $480 million purchase of Carnegie Steel, merging it with others to form the world’s first billion-dollar corporation, U.S. Steel. John now controlled two-thirds of American steel production, having conquered two of the largest industries.
Repeatedly Rescuing the Economy from Disaster
In 1893, the U.S. economy plunged into depression. As foreign investors cashed in bonds for gold, America’s reserves dwindled, putting the dollar at risk of collapse. In 1895, President Cleveland turned to Morgan to save the economy. Morgan swiftly assembled a syndicate that shored up gold reserves by purchasing $65 million in bonds, stabilizing markets in just 22 minutes.
In 1907, another crisis struck as anxious depositors queued to withdraw money. President Roosevelt enlisted the 70 year old Morgan to again rescue the situation. After summoning leading bankers to his library, Morgan injected capital into teetering banks, propping up the economy once more.
But Morgan’s vast influence was raising concerns. The age of unchecked power for business titans was ending. Summoned before Congress in 1912, Morgan became the face of Wall Street power. Despite his success, Morgan struggled mentally with the public backlash, having multiple nervous breakdowns before passing away in 1913 at age 75.
Though divisive, Morgan’s legacy lives on through JP Morgan Chase, the world’s biggest bank. But calls remain for increased regulation, showing the deep impact one man had on America’s fortunes.