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Morgan: American Financier

Morgan: American Financier

4.8 5
by Jean Strouse

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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



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.
Morgan brings 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.

NOTE: This edition does not include photographs.

Praise for Morgan
“Magnificent . . . the fullest and most revealing look at this remarkable, complex man that we are likely to get.”The Wall Street Journal
“A masterpiece . . . No one else has told the tale of Pierpont Morgan in the detail, depth, and understanding of Jean Strouse.”—Robert Heilbroner, Los Angeles Times Book Review
“It is hard to imagine a biographer coming any closer to perfection.”St. Louis Post-Dispatch
“Strouse is in full command of Pierpont Morgan’s personal life, his financial operations, his collecting, and his benefactions, and presents a rich, vivid picture of the background against which they took place. . . . A magnificent biography.”—The New York Review of Books
“With uncommon intelligence, maturity, and psychological insight, Morgan: American Financier is that rare masterpiece biography that enables us to penetrate the soul of a complex human being.”—The Philadelphia Inquirer

Editorial Reviews

The Barnes & Noble Review

A friend of J.P. Morgan once described her reaction upon seeing the great financier make his grand entrance into a room: "He was the king. He was it!" This was the Gilded Age, the Age of Excess, and the tycoons seemed to rule America. Morgan held the formidable moneymen and society ladies of late-19th-century New York in thrall. To farmers and laborers, he was oppression itself, the man who made the industrial trusts that kept prices up and wages down. To his fellow gentlemen of business, he was a force for order at a chaotic time in America's financial history. It is an endlessly interesting question: By what means did a powerful man achieve his power? In Morgan's case, was it connections, native talent, forceful personality, favorable circumstances, or all of the above? Naturally, the final answer is the correct one.

Morgan had an influential banker father, well-placed friends, mathematic and financial acumen, prodigious energy, an irresistible personality, and a business climate conducive to the making of money and the building of fortunes. Jean Strouse, acclaimed author of Alice James: A Biography , is thorough, penetrating, and perhaps a bit revisionist in her treatment of this titan of American banking. (As enjoyable as this book is, at nearly 700 pages, no one will wish it longer.) Strouse has softened the image created by most earlier writers of Morgan as heartless tyrant and bloodsucker of the masses. She sensibly contends that Morgan merely behaved in the way that nature and aristocratic tradition dictated, that we could not expect him to dootherwise,and that he really wasn't as bad as we have been led to believe.

There is a persuasive argument to be made that in the explosion of commercial activity in America following the Civil War, someone had to step in to harness the whirlwind. There were no laws, written or unwritten, capable of doing so. Thus the Morgans, the Vanderbilts, the Carnegies, the Rockefellers, and the Goulds moved into the vacuum. The industrialists appear to us now to have been greedy and rapacious. Morgan does not. While he made money, he seems not to have been motivated so much by the acquisition of wealth as by the patrician's instinctive yearning for stability. Morgan saw his building of railroad, steel, electric, and other trusts as a technique for achieving stability at a time of shocking commercial turbulence.

Born in Connecticut, world-traveled, and perfectly suited to the Big Apple, Morgan was an art collector, bon vivant, social lion, and, most importantly, a conduit for the immense wealth that flowed during this period from Europe to America. He possessed the typical patrician's nose, bulbous and purple, the product of a grotesque skin ailment. But his eyes sparkled, his intelligence shone, his charm bubbled forth when he wished it to, along with frequent ferocity and frequent kindness. He was very religious, yet he kept mistresses. He spent little time worrying about the plight of poor folks, yet he gave millions to social causes, hospitals, churches, relief agencies. He worked hard; he played hard; he enjoyed life. Although supremely self-confident, he was high-strung and prone to ailments such as boils, earaches, seizures, and melancholy. He worked his partners literally to death. He wore them out and he might wear you out, too, but the man that Jean Strouse gives us was something of a wonder of nature, and as you read her book, you will feel his force.

—Richard Norman
Richard Norman, a journalist and freelance writer, lives in Norwich, Connecticut. Norman is currently writing a novel, The City of Goliath .

Albert Mobilio
...Strouse ably separates the facts from the lively fictions....[T]he myths are much more fun....Morgan is revealed for all his wealth and European artto have had the soul of Willy Lomangeting over by force of characteron a shoeshine and a grimace. —Fortune
Christopher Lehmann-Haupt
[Offers] a coherent portrait of Morgan....[S]hows us a man who was mercurial; given to depression and nervous exhaustion...vulnerable to flattery, and occasionally...sensitive to criticism....Ms. Strouse reveals a man whose sensuous nature was deeply attracted to art...[Her] revelations tell a story whose interest is only limited by the inherent dryness of banking as an activity. —The New York Times
Richard Lingeman
...Solidly researched....elucidates in ample detail Morgan's financial maneuverings....If the mysteries of Morgan's inner psyche remain dark, Strouse has clarified the public career and swept away some of the mud slung at him by previous biographers....Yet she does not seek to exculpate her subject...
The New York Times Book Review
David Michaelis
The Morgan that Jean Strouse has brought to life in her masterful, long-awaited biography is deeply human, the most intricate and integrated portrait we have had yet. This Morgan is stripped of varnish but remains grandly scaled and exquisitely rendered. Strouse, a gutsy, sympathetic writer, whose first biography Alice James turned the neglected diarist and remarkable younger sister of William and Henry James into and unexpectedly complex figure, has produced an equally brilliant work with a vastly more intimidating subject.... An exemplar in American biography, Ms Strouse sees deeply into the forest by chopping down every tree.
New York Observer
Maury Klein
...a magnificient, insightful study of the only man who was wven more influential and mysterious than [Rockefeller]....Ms. Strouse's biography is a superb one indeed. Rich in detail, informed by a wealth of new sources, written in a clear style that wears well, it provides the fullest and most revealing look at this remarkable, complex man that we are likely to get.
Wall Street Journal
George J. Church
[Strouse] has produced a more balanced and crisply written—though at times unnecessarily detailed—portrait than her subject could ever have drawn.
Time Magazine
Publishers Weekly - Publisher's Weekly
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 humanizes — without shrinking or whitewashing — one of America's mythic figures.
Library Journal
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) Copyright 2000 Cahners Business Information.
Terry W. Hartle
Her book will lead to a reappraisal of this complex, enigmatic man....[A] well-written, carefully documented, and balanced work that describes Morgan's successes and failures....[C]arefully researched...benefits enormously from her energy and diligence.
Christian Science Monitor
David Gates
...[Strouse has] given us a smart, scrupulous account of what [Morgan] did and what it was like to be in his presence.
Kirkus Reviews
A superbly researched, well-written biography of a great-and, in the author's view, somewhat misrepresented-figure in American history. J. Pierpont Morgan's (1837-1913) every touch, it seemed, yielded pure gold. Some of his contemporaries admired his skill at making money, whereas most others despised him. Bancroft Prize-winning biographer Strouse (Alice James, 1980) writes that their disdain, fueled by populist and progressive views, has colored the historical take on Morgan such that he's seen "as an icon of capitalist greed" — as mere robber baron and plutocrat. She paints a far more complex portrait of someone who, she argues, deserves to be rated as the chief architect of American industrial democracy. At his death, Morgan was the world's most prominent banker; he'd overseen the economic restructuring of America from a debtor nation into self-sufficiency; he built railroads, engineered the mergers of huge corporations (to form, for instance, US Steel), and surrounded himself with rare works of art and literature, now housed in some of the nation's leading museums and libraries. He accomplished all this, says Strouse, with a forceful intellect and a strong character-but also by taking any number of ethical shortcuts: He amassed an early fortune, for example, through profiteering in the Civil War. The author recognizes that Morgan's critics, then as now, had reason to resent the man; after all, he controlled a huge share of the international economy and did much to break unions and thwart the ambitions of workers' organizations. He showed little regard for "class conflicts and social problems," and evidently believed that "his financial expertise conferred politicalprerogatives, and that his larger concerns took precedence over the interests of the people who opposed him." Still, Strouse gives us an eminently human version of Morgan as a man guided always by profit but not without a sense of of social responsibility, a figure who, for good or ill, contributed in many ways to the structure of the modern world. Especially at a time when American wealth and monopoly again reign, this life of a notable dollar-diplomat is most welcome.

From the Publisher
“Magnificent . . . the fullest and most revealing look at this remarkable, complex man that we are likely to get.”The Wall Street Journal
“A masterpiece . . . No one else has told the tale of Pierpont Morgan in the detail, depth, and understanding of Jean Strouse.”—Robert Heilbroner, Los Angeles Times Book Review
“It is hard to imagine a biographer coming any closer to perfection.”St. Louis Post-Dispatch
“Strouse is in full command of Pierpont Morgan’s personal life, his financial operations, his collecting, and his benefactions, and presents a rich, vivid picture of the background against which they took place. . . . A magnificent biography.”—The New York Review of Books
“With uncommon intelligence, maturity, and psychological insight, Morgan: American Financier is that rare masterpiece biography that enables us to penetrate the soul of a complex human being.”—The Philadelphia Inquirer

From the Hardcover edition.

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Read an Excerpt

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.

Meet the Author

Jean Strouse is the author of Alice James, A Biography, which won the Bancroft Prize in American History and Diplomacy, and Morgan, American Financier. Her essays and reviews have appeared in The New Yorker, The New York Review of Books, The New York Times, Newsweek, Architectural Digest, and Slate. She has been president of the Society of American Historians, a consultant (oral historian) to the Bill and Melinda Gates Foundation, and a fellow of the John D. and Catherine T. MacArthur Foundation. A member of the American Academy of Arts and Sciences, the American Philosophical Society, and the executive council of the Authors Guild, she is currently the Sue Ann and John Weinberg Director of the Dorothy and Lewis B. Cullman Center for Scholars and Writers at The New York Public Library.

From the Hardcover edition.

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Morgan: American Financier 4.8 out of 5 based on 0 ratings. 5 reviews.
Avinash_Dixit More than 1 year ago
This is an outstanding biography, well balanced between the personal and the business and economic aspects of Morgan's life. The account of the panic of 1907 is especially noteworthy.
Guest More than 1 year ago
Full Disclosure: The present reviewer is the great-grandson of J. Pierpont Morgan's second cousin. Jean Strouse has done a remarkably detailed job of research. She delves deeply into Morgan's family history, helping the reader understand the contradictions of the great financier's character. He was at once an aristocrat and a public-minded citizen, an optimist given to severe depression, a control freak who took advice surprisingly well, and an Anglophile who loved France. Pierpont Morgan learned merchant banking from his demanding and meticulous father Junius Morgan, who guided his business career well into Pierpont's adulthood. Ms. Strouse highlights the rights-of-passage through which Morgan separated himself from his more conservative parent, thus establishing a domestic merchant banking frontier in the United States that reversed generations of English dominance. The reader senses the conflicts Morgan underwent here. The book's strength is also its weakness. Ms. Strouse is so thorough, and her text so detailed, that a reader unfamiliar with Wall Street's arcane ways gets bogged down. The book is decidedly not for the casual reader. But Ms. Strouse deserves high praise for diligent background work and a well-written piece of scholarship.
Anonymous More than 1 year ago
No spaces = &#9787
Anonymous More than 1 year ago
Morgan don't f**k with me.
Anonymous More than 1 year ago
What is ur problem?