A Classification of American Wealth
History and genealogy of the wealthy families of America - Sponsors


 Part 1 : Colonial and Mercantile America  Part 2 : America in the Gilded Age
 Part 3 : America in the Twentieth Century  Encyclopedia of American Wealth

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  Part II-Chapter 10 : Bankers of the Gilded Age  >   Introduction and Index :   Previous  1 2 - 3 - 45   Next

 

Through his association with Philadelphia's old established firm of Drexel & Co, J. P. Morgan came to the forefront of American finance, at a time of big opportunity. Morgan seized them and became the leading railroad financier, after William Henry Vanderbilt, the Commodore's eldest son and heir, entrusted him with the sale of 100'000 New York Central Railroad shares in London. Building also on the Drexel's connections to the Pennsylvania Railroad, Morgan took the role of pacificator in the clash between this powerful group and the Vanderbilt family. He later extended his influence as a railroad pacificator and reorganizer to the West and the South.

During the 1890's, as the focus of capitalist concentration shifted from railroads to industry and public utilities, J.P. Morgan & Co became a leader in the organization of large corporations, popularly called "trusts". His influence culminated with the formation of United States Steel in 1901, the first corporation with securities worth over $ 1 billion in the market. But Morgan's name was also associated with General Electric, International Harvester, International Mercantile Maritime and scores of lesser corporations. These operations made J. Pierpont Morgan into America's most prestigious banker and also it's most powerful capitalist.

He was not unchallenged though. When his associate and customer, the railroad tycoon of the Northwest James Jerome Hill clashed with the mighty [Edward Henry] Harriman, the savior of the Union Pacific, over control of the Forbes-Perkins promoted Chicago, Burlington & Quincy Railroad in 1901, Morgan sided with Hill in a battle of titans, where yet unseen financial forces were aligned on both sides. The struggle over the Burlington extended to the Morgan-Hill controlled Northern Pacific Railroad, when Harriman enrolled the Jewish banker Jacob Henry Schiff of Kuhn Loeb & Company, as well as the Standard Oil controlled National City Bank of New York, to raid into the heart of Morgan's railroad properties.

Were it not for Schiff's devout Judaism, which prevented him from operating on Saturday, May 4, 1901, Harriman would have won control of both the Northern Pacific and the Chicago, Burlington & Quincy railroads. The corner of such a large issue as the Northern Pacific, nearly provoked a panic on the financial markets. In a truce the tycoons created Northern Securities, a holding company which received the controlling shares of Northern Pacific from both factions, plus enough stock of Great Northern Railroad to give the Morgan-Hill side full control. The holding, capitalized at $ 400 million, was the epitome of Morgan's railroad empire, but it was dissolved in 1904, a victim of Theodore Roosevelt's campaign against the trusts.

Kuhn, Loeb & Company was just one of many Jewish banking houses, which successfully established themselves, in the aftermath of the American Civil War. Unlike in Europe, where the Rothschilds had built a banking empire spanning the Continent,  apparently immune to the influence of wars between the nations, and where such families as the Warburgs and the Mendelssohns dominated private banking in Germany, there were no significant Jewish bankers in America before Civil War. Haym Solomon, the Jewish financier of the American Revolution and nascent US nation, was ruined as a consequence of his financial dedication to the revolutionary cause. August Belmont, the American agent of the Rothschilds, was established in New York before Civil War, but his influence was still marginal and his wealth limited. There were rich Jews in Antebellum America, but they were essentially merchants and, except maybe for the Hendricks of New York, they hardly ranked among the nation's richest families.
 

Bankers of the Gilded Age >   Introduction and Index :   Previous  1 2 - 3 - 45   Next

The Mining Bonanza Kings

The Railroad Barons



The Trusts


 

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