Biography of J.P. Morgan

Hartford, Connecticut was the birthplace of J. P. Morgan. His parents, Junius Spencer Morgan and Juliet Pierpont, hailed from Boston, Massachusetts. J. P. Morgan was educated partly at the English High School in Boston and finished his education at the University of Gottingen in Germany. After leaving the University he had entered his father's office in London. He was an extraordinary mathematician and had been strongly tempted to take up the career of professor of mathematics.But his father thought otherwise, and in the offices of George Peabody and Company young Pierpont got his first training in the technicalities of commercial banking and no doubt began the development of that unusual cepacity for accurate and quick decision which so strongly characterized his entire career. (Hovey, 2) He suffered with rheumatic fever in the spring of 1852. The illness took such a toll on him that he was left unable to walk. This was the start of a life long battle with diseases of different sort s that recurred throughout his lifetime.As part of a recovery effort, his father sent him to the Azores on a ship owned by Charles Dabney, named Io. It took him an year to fully recover and be able to attend school again. After graduating from Boston, a school named Bellerive at Vevey in Switzerland became his home. Once he gained command on the French language, the University of Gottingen became his new abode where he worked on his German. Within half an year, he developed a satisfactory base in that language. Done with his studies, he arrived in the English capital passing through Wiesbaden on the way..Personality Description John Pierpont Morgan was an example of moral excellence, singing the old hymns his mother taught him, fraternizing with bishops, forgiving his enemies, loving those who hated him, visiting sick friends and going sorrowfully to their funerals, bouncing his grandchildren on his knees, and molding his numerous corporate reorganizations for the good of the countr y. The man was magnificently endowed to play the role of financial imperator. There was the necessary bulk of bone and flesh.He was six feet tall, weighed two hundred pounds. Standing with feet apart, looking forward, he seemed poised to make a formidable advance. His head was large, craglike, well poised on his broad shoulders, his countenance rough-hewn. The upper lip, even as a boy, was heavy, and as he grew older, hidden behind his unruly mustache, it gave to his face an aspect of cruelty. His powerful jaws and rugged brow were drawn down in an imperious scowl. His bulbous nose accentuated the dark aspect of his visage.His large, wide-opened hazel eyes bent upon a visitor or suppliant with terrifying attentiveness and made him a formidable man in conference. (Hovey, 2-3) As a boy in high school his teacher said he was little short of a prodigy and could solve mentally problems in cubic root and numerous decimals. He could speak French and German because he had spent two years in a French school in Switzerland and two at the University of Gottingen. But he had no use for the classics. He could express himself in written English in a clear, direct, and vigorous style.Furthermore, even as a youth, he could put these excellent sentences down in a hand of great neatness and symmetry. He was superlatively choosy about his friends. Even as a boy in school he mixed with but few. But he was deeply devoted to them as well as to his family, his parents particularly. From the time he returned to America from school at Gottingen in 1857 to 1890, when his father died in Europe, he never let a ship leave for England without writing him a letter. Often he had to write these letters late at night after the rush of the day's work.His father preserved them in a series of books in his library. Twenty years after his father died, Morgan, looking through them, put them into the furnace. That was in 1911, a year of magnate hunting. He was growing old, and these letters were full of news, comments, opinions on the events and men of his time. Early Life John Pierpont was successively academy teacher, private tutor, lawyer and merchant. Urged to the church, he was ordained minister in 1819, accepting a call to become pastor of the Hollis Street Church, Boston.Pierpont was a vital force in the Unitarian Church and one of the most active organizers of the American Unitarian Association. But the man was more than a minister, he was a social rebel. Compact of scriptural austerity, righteous indignation and moral passion, John Pierpont's religion was warmed by humanitarian aspirations for social betterment. (Magill, 15) It was in 1857, the year of a great financial panic in the United States, that John Pierpont Morgan, a tall, taciturn young man of twenty, stepped on the stage of American business.At that time the house of George Peabody and Company was doing its American business through the New York firm of Duncan, Sherman and Company, and this firm was so serio usly crippled in the financial crisis that in order to save the situation George Peabody and Company had to appeal to the Bank of England for assistance. This experience impressed the London house with the vital importance of closer control of its American business, and it was decided to send young Pierpont Morgan to represent the firm in New York as cashier of Duncan, Sherman and Company.In the offices of Duncan, Sherman and Company, Pierpont Morgan met Charles H. Dabney, a partner in the firm and also the accountant. It was through association with Dabney that Morgan acquired his remarkable and accurate knowledge of bookkeeping and accounting. (Brandeis, 56) But the connection of the Peabody firm with Duncan, Sherman and Company was not destined to last very long. In 1864, the year in which George Peabody retired and was succeeded by Junius S. Morgan, Pierpont Morgan and Dabney formed a new firm under the name of Dabney, Morgan and Company, with offices in Exchange Place, New York .This new firm became the correspondents of J. S. Morgan and Company of London. A few years later, Duncan, Sherman and Company failed and faded from view. 1871 saw the establishment of Drexel, Morgan & Company. Based in New York, it was the result of Morgan joining hands with the Drexels of Philadelphia. By 1895, the company became to be known as J. P. Morgan & Company. It preserved its earlier relationships with Drexel & Company, Philadelphia in the USA. On the other side of the Atlantic, close relationships were also maintained with Morgan, Harjes & Company in Paris, and J. S. Morgan & Company in London.From 1910 onwards, the latter came to be known as Morgan, Grenfell & Company. (Magill, 17) The group turned into an influential banking concern by the turn of the century, brokering big money deals in the corporate world relating to reorganizations, mergers, acquisitions and takeovers. Although Morgan worked with a number of partners including George W. Perkins, he managed to keep managerial control with him over the course of his career. Morgan rose to prominenece through his constant involvement in large corporate and financial deals that seemed more like wars then mere business.He stripped Jay Gould and Jim Fisk of the Albany and Susquehanna Railroad in 1869, and then lobbied Washington DC to put an end to the financial assistanc granted to Jay Cooke by the government. This was folowed by the development of a kingdom of railroads across the USA. (Brandeis, 62) This was accomplished through, M & A activity and monetary assistance. Morgan then went on to raise huge funds on the other side of the Atlantic. This money was utilized in the restructuring of the rail roads so that higher productivity could be attained.Speculation was discouraged by Morgan as he purported a plan to transform the existing transport infrastructure ino a unique connected and inter linked mechanism. In 1885 he reorganized the New York, West Shore & Buffalo Railroad, leasing it to the N ew York Central. 1886 saw Morgan putting his efforts into the Philadelphia & Reading rail road followed by Chesapeake & Ohio in 1888. Following the the Interstate Commerce Act in 1887, Morgan hosted industry conferences in 1889 and 1890. (Hovey, 3) It served as a forum for railroad bosses to highlight the oppurtunities that the new legislation provided.Consensus was obtained for the charging of â€Å"public, reasonable, uniform and stable rates† to consumers. This was a unique initiative on the behalf of Morgan, the outfall of which were the M & A activities in the 20th century. About the time he went into business for himself he also fell in love with a young woman named Amelia Sturgis. And this romantic episode forms one of the most appealing incidents in the life of this grim man. It revealed in him depths of tenderness, which his later life in Wall Street concealed wholly from the public.She was perhaps the first or at least among the first young women he met when he arri ved from Europe. His attachment to her deepened slowly but it was probably begun in those first meetings at Newport in the very first week he spent in America. In the spring and summer of 1861 he was completely immersed in the personal problem created by Mimi Sturgis' condition. She had contracted tuberculosis. She was wasting away rapidly. There was very little that could be done then against the ravages of this dread enemy.Before the summer was over he made up his mind to marry Mimi, to give up his business and devote him completely to saving her life. Her parents tried to induce him to give up his chivalrous project. But he was not to be turned aside. And so in early October, in the Sturgis home in East Fourteenth Street, with only the family present, young Morgan carried the frail Mimi downstairs in his arms, held her at his side while the marriage ceremony was performed, and then tenderly lifted her again in his strong arms and bore her to the waiting carriage and on to the pie r.They went to London and then to Algiers with its warm sun and then, as she continued to fade, to Nice. There she died four months after the marriage. Two months later, in May, he brought her body home and laid it to rest at Fairfield. This tragedy crushed him, for a time seemed to have broken his spirit and watered down his ambition to utter frustration. But slowly he took up the broken threads, brought his old Cheshire school friend, Jim Goodwin, into partnership with him, and set off again upon his course. Later Years Following the elderly Morgan’s death in 1890, J.S. Morgan & Co, known as Morgan, Grenfell & Company from 1910 onwards came under the leadership of the son. In 1900, he began negotiations with Charles M. Schwab then head of Carnegie Co. Andrew Carnegie had a direct stake in the company. Morgan aimed to takeover a number of steel and iron businesses including Carnegie's. The final plan was to merge them into one, thus giving birth to the United States Steel Co rporation. The deal was struck for a staggering sum of $480 million. No lawyers and no written proof of the sale were the highlights of this deal.By 15h of January 1901, newspapers were filled with the news of the impending merger. Late 1901, saw the birth of U. S. Steel with a capitalization of $1. 4 billion. (Hovey, 5) Given its financial strength, it was the first company of its kind. The mission of the new coompany was to gain the advantages offered by economies of scale. These included cutting down transportation and resource costs, diversifying product lines and focusing on efficient delivery. Moreover, now the USA was in direct competition with the likes of Brit steel and and the German steel giants.(Forbes 15) The sheer size of the company was instrumental as it paved the way for a global market for steel and its products. The company came under heavy fire from industry observers who blamed the company’s management of trying to establish an industrial hegemony by vent uring into the construction of all products that embodied the use of steel as a major raw material. Morgan soon controlled 67 percent of the market share and Schwab predicted the company to hold three quarters of the industry under its belt. However, time proved otherwise as the market share detoriated, proving his prediction wrong.(Brandeis, 63) Morgan also ventured into the manufacturing and mining sectors. Morgan also had stakes in Banks, insurance companies, shipping lines and communications systems providers. His concern routed large amounts of capital that was instrumental in the development of America. (Magill, 16) Morgan was criticised for financing the federal government in the 1895 crisis through the use of gold. The critics disagreed with him on his proposed solution to the Panic of 1907, and blamed him for the poor economic state of New York, New Haven & Hartford RR. It was discovered that the J. P. Morgan & Co.coupled with the board of the First National and National Ci ty Bank had a resource pool of $22,245,000,000. This fact was made public in 1912 by a a subcommittee of the House Banking and Currency committee. This financial resource pool was equavivalent to the valu of real estate in the twenty-two states that lies west of the Mississippi River, according to Louis Brandies, former Judge of the Supreme Court. (Forbes 15) Nikola Tesla and his Wardenclyffe Tower were recipents of monetary support from Morgan worth $150,000. Following Tesla’s failure, Morgan pulled out of the venture in 1904.It is estimated that Morgan and his firm of partners controlled assets worth $1. 3 billion during the peak of their power in the dawning years of the 20th century. Works Cited Magill, Frank N. Great Lives from History. Michigan: Salem Press Inc. 1987. Pg 15-17. Hovey, Carl. The Life Story of J. Pierpont Morgan. New York: Sturgis & Walton Company. 1911. Pg 2,3,5. Brandeis, Louis D. Other People's Money: And how the Bankers Use it. Sunnyvale: Stokes. 1914 . Pg 56, 62, 63. Forbes Bertie C. Men who are Making the West. Emeryville: Forbes publishing Company. 1923. Pg 15.