Cover image for Morgan : American financier
Title:
Morgan : American financier
Author:
Strouse, Jean.
Personal Author:
Edition:
First edition.
Publication Information:
New York : Random House, [1999]

©1999
Physical Description:
xv, 796 pages, 32 unnumbered pages of plates : illustrations, portraits ; 25 cm
Language:
English
ISBN:
9780375501661
Format :
Book

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Central Library HG2463.M6 S77 1999 Adult Non-Fiction Central Closed Stacks
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Hamburg Library HG2463.M6 S77 1999 Adult Non-Fiction Open Shelf
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Audubon Library HG2463.M6 S77 1999 Adult Non-Fiction Biography
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Summary

Summary

A century ago, J. Pierpont Morgan bestrode the financial world like a colossus. The organizing force behind General Electric, U.S. Steel, and vast railroad empires, he served for decades as America's unofficial central banker: a few months after he died in 1913, the Federal Reserve replaced the private system he had devised. An early supporter of Thomas Edison and Andrew Carnegie, the confidant (and rival) of Theodore Roosevelt, England's Edward VII, and Germany's Kaiser Wilhelm, and the companion of several fascinating women, Morgan shaped his world and ours in countless ways. Yet since his death he has remained a mysterious figure, celebrated as a hero of industrial progress and vilified as a rapacious robber baron. Here for the first time is the biography Morgan has long deserved--a magisterial, full-scale portrait of the man without whose dominating will American finance and culture would be very different from what they are today. In this beautifully crafted account, drawn from more than a decade's work in newly available archives, the award-winning biographer Jean Strouse animates Morgan's life and times to reveal the entirely human character behind the often terrifying visage.          Morganbrings eye-opening perspectives to the role the banker played in the emerging U.S. economy as he raised capital in Europe, reorganized bankrupt railroads, stabilized markets in times of crisis, and set up many of the corporate and financial structures we take for granted. And surprising new stories introduce us in vivid detail to Morgan's childhood in Hartford and Boston, his schooling in Switzerland and Germany, the start of his career in New York--as well as to his relations with his esteemed and exacting father, with his adored first and difficult second wives, with his children, partners, business associates, female consorts, and friends. Morgan had a second major career as a collector of art, stocking America with visual and literary treasures of the past. Called by one contemporary expert "the greatest collector of our time," he spent much of his energy and more than half of his fortune on art.                 Strouse's extraordinary biography gives dramatic new dimension not only to Morgan but to the culture, political struggles, and social conflicts of America's momentous Gilded Age.


Author Notes

A journalist and general editor at Newsweek, Strouse has written a biography of Alice James, the sister of Henry and William James, that one critic observed to be "more than a biography, a complicated work of social history." In Alice James: A Biography (1980), Strouse presents James as a potentially brilliant woman who was emotionally crippled by the conventions of nineteenth-century society. Denied the opportunities available to her brothers, Alice "made a career of emotional collapse." The biography won the Bancroft Prize in American history and was nominated for a National Book Critics Circle Award. (Bowker Author Biography)


Reviews 4

Booklist Review

Strouse's portrait of John Pierpont Morgan is a monumental biography on the scale of last year's Titan, Ron Chernow's remarkable chronicle of another of the so-called robber barons, John D. Rockefeller Sr. Although Rockefeller had already been profiled a number of times, Chernow's account is proving to be the definitive one. Such may also be the case with Strouse's book, even though a number of works have already been devoted to Morgan, including, ironically, Chernow's National Book Award winner The House of Morgan: An American Banking Dynasty (1990). The subject of Strouse's only other foray into biography is far removed from her current one. Strouse won acclaim in 1980 for Alice James, her story of the troubled life of the sister of Henry and William. In Morgan, as did Chernow in Titan, Strouse focuses on the person rather than the enterprise and comes up with a more well rounded and sympathetic picture than has previously been shown. And like Chernow, Strouse was granted access to materials and archives that earlier biographers had been denied or had ignored. --David Rouse


Publisher's Weekly Review

Often celebrated as the ideal capitalist or excoriated as the robber baron who most epitomized the excesses and iniquities of the Gilded Age, J. Pierpont Morgan (1837-1913) has, in Strouse, finally been accorded a biographer whose talents match his enormous legacy. Strouse (whose Alice James won the Bancroft Prize) seamlessly weaves Morgan's exploits as America's leading banker with his frenetic social life, in the process vividly evoking the spirit of the Gilded Age. Though she captures Morgan's famed imperiousness and bluster, she paints a much fuller portrait of Morgan than has hitherto been available. Morgan was the consummate financier. Responsible for the consolidation of most of the nation's railroads as well as the formation of U.S. Steel, he also helped underwrite the creation of General Electric, International Harvester and AT&T. Before there was a Federal Reserve Board, he functioned as America's de facto central banker. He famously enjoyed his wealth and wasn't shy about spreading his money around. A passionate lover of the arts, he served as president of the Metropolitan Museum of Art and played a major role in building that institution into one of the finest of its kind. Strouse spent more than 10 years researching her latest work, and readers are rewarded with numerous nuggets about the colorful people who surrounded Morgan. The Morgan who emerges from these pages is, for all his hard ambition and ruthlessness, not merely ruthless and greedy. By blending the different facets of this most complicated man, Strouse humanizesÄwithout shrinking or whitewashingÄone of America's mythic figures. Photos not seen by PW. Author tour. (Apr.) (c) Copyright PWxyz, LLC. All rights reserved


Library Journal Review

Last year's popular life of John D. Rockefeller signaled that the time was right for a new look at his omnipotent Gilded Age contemporary, J.P. Morgan. Situated ably between his worshippers and his debunkers, Strouse separates fact from Morgan myth and finds beneath the imperious public persona the flesh-and-blood man who was more powerful in his time than Bill Gates. (LJ 3/15/99) (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.


Choice Review

The presence of J.P. Morgan looms large over the financial and economic landscape of the Gilded Age. Either castigated for wielding economic clout or praised for providing stability to the industrial order, Morgan has remained a mystery. Although recent scholars V. Carosso and R. Chernow have studied the financial activities of the House of Morgan, there have been few biographies of Morgan. Making use of new archive sources and the extensive collection of Morgan materials in the Pierpont Morgan Library, Strouse fills this void with a masterful biography. She carefully depicts Morgan's taciturn personality, his financial tutelage under a critical father, and his relations with both wives and his children. Strouse provides a balanced evaluation of Morgan's financial activities, carefully articulating his role as the nation's unofficial central banker. He attracted European capital to American enterprises, organized new corporations to promote efficiency, consolidated bankrupt railroads, worked to stabilize financial markets when crises arose, and established new business structures. While Morgan was frequently demonized for his activities, Strouse argues that he often acted in the nation's best interests (and his own). His role as art collector is also examined. Students of the Gilded Age will find this biography essential reading. Highly recommended for all economic and business history collections. R. M. Hyser; James Madison University


Excerpts

Excerpts

Money and Trust Pierpont Morgan's arrival took the quiet chamber by surprise. It was 2:00 p.m. on a mild Wednesday in December 1912, and the congressional committee did not expect its star witness until the following day. Politicians, lawyers, clerks, reporters, and the casual visitors who had come to watch these proceedings on Capitol Hill stopped what they were doing. All eyes followed the seventy-five-year-old banker and his party as they filed slowly toward seats near the center of the hall. Morgan's matronly daughter, Louisa, stayed close to his side. His son, J. P. Morgan, Jr., walked a step behind. Next came two young partners from Morgan's Wall Street bank--Thomas W. Lamont and Henry P. Davison, with their wives--and a couple of lawyers. From a distance, the two J. P. Morgans looked very much alike. Each stood six feet tall, weighed over two hundred pounds, carried a velvet-collared Chesterfield topcoat, and walked with a tapered mahogany cane. People standing nearby could see the same broad planes in both faces, but the son's hair was dark and his features trim, while the father wore a drooping, grizzled mustache, what hair he still had was white, and his overgrown eyebrows arched up like wide-angled Gothic vaults. It was hard not to stare at the elder Morgan because of the rhinophyma--excess growth of sebaceous tissue--that deformed his nose. No one stared for long. Edward Steichen, who had taken the old man's photograph a few years earlier, said that meeting his gaze was like looking into the lights of an oncoming express train. Once the New Yorkers had found seats, the afternoon's witness--a statistician named Philip Scudder--resumed his testimony, and Mr. Morgan heard his name mentioned several times. Mr. Scudder was describing, with the help of tables, charts, and diagrams, how eighteen financial institutions effectively controlled aggregate capital resources of over $25 billion--comparable to two thirds of the 1912 gross national product. There is no precise way to measure the value of a 1912 dollar nearly a century later, but using a rough equivalent to the consumer price index and adjusting for inflation, $25 billion from 1912 would be worth about $375 billion in the 1990s. A more revealing comparison comes from the percentage of gross national product: two thirds of the 1998 GNP would be about $5 trillion. For months in 1912 this House Banking and Currency subcommittee, headed by Louisiana Representative Arsène Pujo, had been trying to establish that a "money trust" ruled over America's major corporations, railroads, insurance companies, securities markets, and banks. The investigation served as climax to more than two decades of intense popular antagonism to "big money" interests--an antagonism that traced back to the founding of the American colonies. And now here under subpoena was the dominant figure behind all the recent financial consolidations, "the Napoleon of Wall Street." Morgan by 1912 could not cross the street, much less the Atlantic, without arousing speculation in the stock market and the press. He managed to enter the Pujo Committee hearing room with minimal fanfare on Wednesday, December 18, because of a schedule change. The committee's counsel, Samuel Untermyer, had telephoned the Morgan bank on Tuesday morning to say that he would not be ready to examine the financier on Wednesday as originally planned, but would start on Thursday, December 19, instead. Morgan took a private train to Washington on Tuesday anyway, bringing with him an imposing array of counsel that included Joseph Hodges Choate, one of the country's leading corporate lawyers, a former U.S. ambassador to Britain's Court of St. James, and past president of the Bar Association of the City of New York; former Senator John Coit Spooner, once Wisconsin's preeminent railroad attorney; Richard V. Lindabury, who was defending the Morgan-organized U.S. Steel Corporation against a government antitrust suit; De Lancey Nicoll, former district attorney for the City of New York; William F. Sheehan, former lieutenant governor of New York; George B. Case of the New York law firm White & Case; and Francis Lynde Stetson of Stetson, Jennings & Russell, known as "Morgan's Attorney General." None of these men would be allowed to advise the banker as he testified, but they provided weighty political support. The party reached Washington early Tuesday evening and went directly to the Willard Hotel at 14th and Pennsylvania. Morgan was gloomy and irritable. He had a bad cold. After dinner, too tired for any more talk with lawyers, he sat up late smoking his favorite cigar--a large Pedro Murias JPM made especially for him in Havana--and playing solitaire. He disliked everything about these hearings. For years he had worked closely with politicians he trusted, and thought U.S. markets would continue to thrive if the government let financial experts alone to conduct business in the nation's best interests. Neither the government nor the press had left him alone lately, however, and neither seemed willing to take his word about what constituted the country's best interests. Pretty soon, he ruefully told a friend, business would have to be conducted with "glass pockets." The Pujo Committee apparently wanted to go through his pockets, and to score political points with the proceedings. Morgan had some grounds for thinking that the country ought to leave its financial affairs to him. Over the past half century, his bank had helped transform the United States from an economic neophyte into the strongest industrial power in the modern world. In the 1850s, when America needed much more capital than it could generate on its own, the Morgans and their associates had funneled money from Europe to build railroads and float government bonds. By the turn of the century, Pierpont Morgan was organizing giant industrial corporations, largely with American money, and the vital center of world finance had shifted from London to New York. The risks involved in funding the emerging U.S. economy were as enormous as the potential rewards, but investors regarded the Morgan name on issues of stocks and bonds as a warranty. It is a maxim on Wall Street that cash chases performance, and the house of Morgan established its reputation by backing properties that yielded steady profits and long-term growth. Moreover, Morgan personally took on the job of financial disciplinarian, acting as mediator between the owners and the users of capital. His clients, largely foreign at first, were putting up money to build railroads, steel mills, farm equipment, and electrical plants, and when things went wrong with one of those operations, Morgan fired the managers, restructured the finances, and set up a board of trustees to supervise the company until things went right. He was building internationally competitive financial and industrial structures, and his power came not from his own wealth but from a record that led other bankers and industrialists to trust him. It is another Wall Street maxim that markets hate uncertainty. Wars, panics, crashes, and depressions punctuated Morgan's professional life, disrupting the flow of capital toward the future he had appointed himself to guard, and over time he had managed to impose a measure of order on America's turbulent economic development. He reorganized the nation's railroads (the process came to be known as Morganization), put together the world's first billion-dollar corporation (U.S. Steel), and had a hand in setting up International Harvester and General Electric--all on the principle that the combination of rival interests into huge, stable systems was preferable to the boom-and-bust cycles, price wars, waste, and speculative recklessness of internecine competition. The "Napoleon of Wall Street" advocated a kind of managed competition, in which the managing was done not by government bureaucrats but by experienced professionals who understood the complexities of high finance--in other words, by him. Given the arcane nature of capital markets, a private banker with transatlantic authority, access to accurate information, and a high sense of stewardship was able to exercise extraordinary power. Under Morgan's direction, New York's major financial houses in 1912 were serving in effect as a central bank. Andrew Jackson had terminally crippled the Second Bank of the United States in 1836, shortly before Morgan was born, and Woodrow Wilson signed the Federal Reserve System into law in 1913, just after Morgan died. Between 1836 and 1913 there was no central bank to regulate the supply of money and credit in the United States, no official lender of last resort, no federal recourse in times of acute turbulence or panic. America's antiquated banking system had been devised before the Civil War, for a decentralized agricultural society. When the federal government ran out of gold in 1895, Morgan raised $65 million and made sure it stayed in the Treasury's coffers. When a panic started in New York in 1907, he led teams of bankers to stop it. For a moment in 1907 he was a national hero. Crowds cheered as he made his way down Wall Street, and world political leaders saluted his statesmanship with awe. The next moment, however, the exercise of that much power by one private citizen horrified a nation of democrats and revived America's long-standing distrust of concentrated wealth. Morgan's critics charged that he had made huge profits on the rescue operation--even that he had engineered the crisis in order to scoop up assets at fire-sale prices. The 1907 panic convinced the country that its financial welfare could no longer be left in private hands. It led to the setting up of a National Monetary Commission, to the "money trust" investigation, and eventually to the founding of the Federal Reserve. Excerpted from Morgan: American Financier by Jean Strouse All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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