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Content
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1 – Now Online : Chapter 10 - Bankers of the Gilded Age (Part 1 : Jay
Cooke)
2 – A profile of a wealthy American : John Pierpont Morgan
3 – Thoroughly updated Bibliography pages with direct book links
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Chapter 10 - Bankers of the Gilded Age
(Part 1 : Jay Cooke – Civil War Financier of the Union)
If the Gilded Age is rightly considered the
Golden Age of railroads and the Age of Industrialization, it was also a
time when our nation's banking sector went through profound change to
emerge as the dominant factor in the U.S. economy.
Exceptional situations require exceptional
means. The Secession War was such an exceptional situation and the way
Jay Cooke sold over $ 1 billion US government bonds by appealing to the
patriotism of the common people was equally exceptional. Cooke failed
with his Northern Pacific project in 1873 but other bankers took his
place and propelled investment banking into the major capitalist
activity during the last third of the 19th century. Railroads and
industry prospered during the Gilded Age but investment bankers took the
lead in the consolidation phase of these vital economic activities. The
leading bankers John Pierpont Morgan, George Fisher Baker, Jacob Henry
Schiff and James Stillman were the most influent capitalists of their
days, although not necessarily the richest in personal wealth.
Read more about banking and bankers in the Gilded Age at “A
Classification of American Wealth” [New
Chapter 10].
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Profile of a wealthy American :
John Pierpont Morgan
John Pierpont Morgan ( 1837-1913 ) of Cragston, Bear Mountain, New York
Parents : Junius Spencer Morgan and Juliet Pierpont
Married : Amelia Sturges (d.1862)
Frances Louisa Tracy (d.1862)
Children : Louisa Pierpont (Morgan) Satterlee (1866-1946)
John Pierpont Morgan jr (1867-1943)
Juliet Pierpont (Morgan) Hamilton (1870-1952)
Anne Tracy Morgan (b.1873)
Fortune : $ 78’000’000 (1913)
The greatest banker of all times ! Or so it seemed at the turn of the
20th century, when John Pierpont Morgan’s power in American finance was
unequalled, even by much richer men. The son of a wealthy banker and
grandson of a founder of the Aetna Life Insurance Company, J. Pierpont
Morgan was destined to a career in finance. After studying at Gottingen
University where he excelled in mathematics, Morgan joined the firm of
Duncan, Sherman & Co as a clerk. During Civil War, Morgan had his own
firm in partnership with his cousin James Goodwin jr. During these years
he financed the infamous Hall carbine deal for which he was much
criticized later in his life. In 1864, he took Charles H. Dabney, an
experienced banker, into his firm, which acted as American agent of J.S.
Morgan & Co, which had succeeded to George Peabody’s firm. In 1871, his
father struck a deal with the influent Philadelphia banking house of
Drexel & Co, which effectively launched J. Pierpont Morgan into American
high finance. Morgan became a partner of the Drexels and was put in
charge of their New York branch. His new mentor, Anthony Joseph Drexel,
was one of Philadelphia’s most renowned bankers and financiers. Drexel,
Morgan & Company had substantial equity for a banking partnership, but
their strongest asset was their network of influent partners and agents,
in Philadelphia, New York, London (with J.S. Morgan & Co) and Paris
(with Drexel, Harjes & Co). With the Drexels and a number of other
banking houses, J. Pierpont Morgan participated in the refinancing of
the U.S. government debt contracted during Civil War. The move
contributed to the fall of Jay Cooke, who had anticipated monopoly on
this program and was deeply entangled in the Northern Pacific railroad.
Morgan then led his firm into railroad finance, in which the deal to
sell several hundred thousand shares of New York Central Railroad to
English investors on behalf of William Henry Vanderbilt. The Vanderbilts
consequently became Morgan’s most important private customers, with J.P.
Morgan sitting on the Board of Directors of their New York Central
Railroad. With the Drexels still members of the Pennsylvania (Railroad)
Board, the firm had effective control over the major Eastern trunk lines
and Morgan was able to play his role of railroad pacificator. He later
extended his influence to the anthracite coal fields, the South and the
West, through the reorganization of such lines as the Reading Railroad,
the Southern Railway system and the Northern Pacific. Although other men
usually fronted as entrepreneurs and presidents of these firms, J.P.
Morgan was the driving force in these deals. After railroads, Morgan
dedicated his investment banking efforts to the reorganization and
consolidation of industries, public utilities and international
steamship lines. General Electric, International Harvester, United
States Steel, American Telephone & Telegraph and the International
Mercantile Maritime company became the towering monuments of Morgan’s
financial genius. In 1901, his clash with Edward Henry Harriman for
control of the Chicago Burlington & Quincy railroad, as well as the
Northern Pacific, almost created a panic in Wall Street. His
intervention in 1907, when the failure of the Knickerbocker Trust
Company threatened, helped prevent one. In his private life John
Pierpont Morgan was a mourning widower in his younger years before his
remarriage to Frances Tracy made him a solid family father of four : one
son and three daughters. Morgan was a passionate yachtsman, a regular
traveler to Europe and North Africa and an avid art collector. He died
while on a voyage to Egypt on March 31, 1913. Except a few other
bequests, his $ 78 million estate including the senior partnership of
J.P. Morgan & Co descended upon his son John Pierpont Morgan jr. The
latter also inherited Morgan’s art collection, which he had intended to
leave to the Metropolitan Museum.
Find other profiles of wealthy American individuals or families or browse
our wealth classification lists at “Encyclopedia of American Wealth”.
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Thorougly Updated : American
Wealth Bibliography Section
Books
are still the best source of information about specific topics, such as
the history and genealogy of the wealthy families of America. To help
and guide you on your quest to the most relevant published works about
specific themes or people, we have updated and extended our bibliography
section. Moreover we have rendered it even more useful and dynamic, by
including links for all presently available titles to our book partners
Barnes & Noble (bn.com).
Barnes &
Noble has an excellent “Out of Print” section, of which our author says
“If you can’t find it there, you won’t find it anywhere”.
For
those more specifically interested in genealogical records, we have also
included some links and search boxes pointing to ancestry.com,
the leading genealogical resource on the web.
We
believe these new features nicely complete the growing content of
“A Classification of American Wealth” and “Encyclopedia of
American Wealth”
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