John Pierpont Morgan was born April 17, 1837 in Hartford, Connecticut. He was born a very rich person. His father Junius Spencer Morgan was a partner at a firm and soon took it over as the owner retired. That firm later became known as the J.S Morgan and Company. His Grandfather was the founder of Aetna Fire Company. His grandfather also was heavily invested in railroads, steamboats, and real estate. He did all this while Hartford, Connecticut was becoming one of the wealthiest cities in the country. John was a very intelligent man and went to the University of Gottingen in Germany and learned to fluently speak German and French. He was deeply influenced by his father and felt that integrity above all things was key in successful banking. Not only integrity but also a mans character was an important aspect of a banker, because a man who could not be trusted is someone he would not trust with his money or do business with. Morgan was married only twice. His first marriage to Amelia Sturges  lasted only four months as she became ill and was diagnosed with tuberculosis and died at the age of 24. He married again three years later to Frances Louise Tracy. They had four children together, three girls and a boy. All of their children had a combination of their names. Louisa and Juliet named after  his wife and his mother whose name was Juliet both had his middle name of Pierpont. His son became a jr., and their youngest daughter was named Anne Tracy Morgan. When Morgan died March 31, 1913 in Rome, Italy he left his business to his only son.

Financial Power

J.P Morgan & Company was such as power company that even the government asked them for help in the depression of 1895. The president at the time Glover Cleveland made a deal with J.P Morgan that saved the U.S gold reserves. The deal of course was one that J.P Morgan stood to profit a substantial amount. Morgan offered to buy bonds from the United States in exchange for 62 million in European gold. Cleveland at the time with no other option in sight, since reserves would have disappeared in a few days took the deal. Cleveland was losing popularity before the deal, and after news of it broke people were outraged and more turned against him. The fact that the reserves were saved was not what people cared about. They were more upset that the banks made out on top and were selling the bonds at marked up rates.

The panic of 1907 was a short panic that lasted about 6 weeks from October to November. At this time the world was going off of the gold standard. Gold production slowed down in the 1880’s but then soon picked up again with the findings of it in places like South Africa and the supply began to grow quickly. Gold being mined nearly doubled from 1893 at $157 million to $287 only a mere five years later. Gold reached it’s peak production at $400 million in the beginning of the twentieth century, but after that it began to stagnate. Government finances began to grow tight as the demand for capital to finance consolidations of industries ballooned. Not only that but the government also needed to finance the Boer, and Russo-Japanese war. The value of bonds decreased and some could not even be sold. This had a domino effect as gold began to flow out of the U.S. Months after panic hit wall street. Knickerbocker Trust was hit hard when people began to line up outside the building to quickly convert their assets to cash. Also Lincoln Trust lost about 14 million within hours. The only man to turn to at this time was was of course Morgan. Morgan hoped that people would keep their money in banks, but of course that was not going to happen. So Morgan asked that 35 million be deposited into national banks and that the banks lend the money to the Trust Company of America which was a bank able of being saved. The panic with the Trust Company of America ended when people saw that they did not have any trouble withdrawing their money. Morgan then managed to raise millions to keep the New York Stock Exchange a float and worked on a plan to keep it that way.

Some believed that he was creating a monopoly because he made it very hard for other companies to compete against his. He had a strong hold on two industries. The railroad industry was a easy grab. This happened when he got two railroad lines to agree and negotiate on his yacht. The Corsair agreement, named after his yacht brought much more business to his firm. Another industry he had a firm hold on was the steel industry and funny how the two go hand in hand. He formed the United States Steel Company in 1901. Everything seemed fine until president William Howard Taft got into office.He did not take kindly to companies that he believed were being monopolistic. In his terms it was called trust busting. He filed about 90 lawsuits in four years. He filed a lawsuit against Morgans U.S Steel Company which highly upset his close ally Theodore Roosevelt who helped form the company. Although Theodore Roosevelt filed lawsuit against Northern Securities back in 1902 because he felt that the company united several railroads and was powerful. Although United States Steel Company pretty much did the same thing, Roosevelt just felt that Northern Securities was a ” bad monopoly”.

The government ended up losing the case against the U.S Steel Corporation. Although the Sherman Act which was pretty much a competition law was set in place to protect consumers. It’s goal was to prevent arrangements that were intended to raise the cost of goods to the consumers. Some felt that just because a person like J.P Morgan had great skills and had a great business because no one else can do it better, he should not be called a monopolist. Only if it made it impossible for other businesses to engage in fair competition.

Corporations that were organized or underwritten by Morgan

Industrial Companies

• American Bridge Company
• American Telephone & Telegraph
• Federal Steel Company
• General Electric

Railroad Companies

• Chicago & Western Indiana Railroad
• Erie Railroad
• Reading Railroad
• Northern Pacific railway

JP Morgan & Company On The Rise

This company roots begin way back when and was known as Drexel, Morgan & Company. Until 1895 when the named was changed to JP Morgan & Company. Over so many years they have collectively gathered many other companies making them a power house. The name now is JP Morgan Chase & Company.

“The Central Bank–Why should Uncle Sam establish one, when Uncle Pierpont is already on the job?”

Mergers and Acquisitions For The Company

• Guaranty Trust Company of New York
• Washington Mutual
• Bear Stearns
• Bank One
• Chase Manhattan Bank

J.P Morgan Chase today is the largest bank in the United States today in terms of assets which there’s amounts to about $2 Trillion.The company has it’s hands in so many ventures it’s hard for them to fell because they always has something else to pull them back up. The most interesting things that JP Morgan ventured into was making debit cards that people use for food stamps. They say that it’s not to just about making a profit but the cards are helping serve a useful social function. The question is what hasn’t J.P Morgan & Chase ventured into? They have everything from credit cards to food stamp cards!

Sources

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