|
Bankers II : Bankers of the Gilded Age
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.
When
the guns of Civil War thundered at Bull Run (Manassas) in July 1861
and the assumed superior Northern forces suffered an unexpected but
not decisive defeat, it became clear that this war would not end
anytime soon and that vast resources would have to be mobilized to
win it. The larger population, better railroad infrastructure and
concentration of factories were widely regarded as the decisive
factors which eventually led the Union side to victory over the
rebel Confederation of Southern States. But the raise of money to
finance the exceptional war effort was in many ways as critical and
decisive to the Union victory.
If
the Union victory on the financial front was to be attributed to one
man, this would be Jay Cooke, who sold more federal bonds to the
common people than any of the nation's leading banking houses could
have marketed to the country's rich. The son of a US Representative
from Sandusky, Ohio started his career as a banker and broker at
E.W. Clark & Company of Philadelphia. He opened Jay Cooke & Company
in January 1861 and consequently became involved in the sale of
civil war bonds on behalf of the Federal Treasury Department. Using
widespread newspaper advertising and appealing to the people's
patriotism, Jay Cooke sold well over $ 1 billion government war
bonds between 1863 and 1865. Whilst generals Grant and Sherman won
the war in their military victories over the Confederate armies of
Robert E. Lee and J.E. Johnston, Jay Cooke almost single handedly
financed the Union war machinery by his bond sales campaigns.
The
decade following Civil War was characterized by both rapid
expansion, fuelled by the winning of the West after the completion
of the first transcontinental railroad, and severe depression
following the banking crisis of 1873, which itself resulted from
overextension, speculative excesses and mischief, notably the
infamous "Credit Mobilier" scandal. Incidentally, the panic of 1873
was precipitated by the failure of J. Cooke & Co, which was due to
its entanglement in the Northern Pacific railroad project. As a
consequence, a new power emerged in American banking, a combination
which would define and dominate the U.S. investment banking sector
during the Gilded Age.
John
Pierpont Morgan was the son of a wealthy American banker, partner
and successor of the venerable George Peabody, whose private banking
house in London was one of the city's foremost financiers of
Anglo-American commerce, along with the Barings and Brown Brothers.
His grandfather Joseph Morgan had already been a wealthy hotel owner
and realtor at Hartford, Connecticut as well as a founder of the
Aetna Fire Insurance Company.
Bankers of the Gilded Age
>
Introduction and Index
: «
Previous
1-
2 -
3
- 4
- 5 Next
»
|
|
