JP Morgan - King of Wall Street Documentary

It is October 1907. The financial

markets on Wall Street in New York City are in turmoil. What will become known as the panic has just begun. A stock

market crisis fueled by an attempt to corner the stock of the United Copper Company by its major shareholders. The

collapse of the scheme causes a run on its backers such as the Nicerboka Bank, culminating in the stock market to plummet by nearly 50%.

As the panic spreads, New York's leading businessmen begin making their way to Madison Avenue to consult with the one individual who they believe can come to

the rescue of the market and avert a fullscale crash. Over the coming days,

fullscale crash. Over the coming days, it will fall to America's most powerful banker to stop the panic of 1907,

becoming an early 20th century version of the Wall Street crash. His name, JP

Morgan, the king of Wall Street.

[Music] The man known to history as JP Morgan was born as John Peront Morgan on the

17th of April 1837 in Hartford, Connecticut.

His father was Junius Spencer Morgan. A

Morgan ancestor had arrived at Massachusetts in the 1630s in the earliest days of English colonization of

New England. Junius's father, Joseph,

New England. Junius's father, Joseph, moved to Hartford, Connecticut in 1817 and quickly accumulated substantial

wealth through a range of financial and economic ventures as the American economy was developing its potential in the decades after the Revolutionary War.

Joseph wanted his son to follow in his footsteps and in 1834 he secured the 21-year-old Junius a partnership with

the banker Morris Ketchum on New York's Wall Street. However, amid political and

Wall Street. However, amid political and economic uncertainty, Junius decided to return to Connecticut to work for a

wholesale dry goods firm, How Matherther and Co. He eventually returned to the

and Co. He eventually returned to the banking industry in the 1850s and would be quite successful. Long before this in May 1836,

shortly after Junius joined how Matherther and Co, he married Juliet Peront, the daughter of the Boston clergyman and theologian John Peront,

who championed moral causes such as temperance and the abolition of slavery.

Born within a year of his parents' marriage, JP Morgan was the eldest of the family's five children. Over the

next decade, Junius and Juliet would go on to have three daughters and another son.

At the time of John's birth, it had been just over half a century since the United States of America gained its independence from Britain. The early

American republic was divided between Alexander Hamilton's vision of an integrated national manufacturing economy supported by a dynamic federal

government and Thomas Jefferson's ideal of a self-sufficient agrarian economy based around the small farmer. These

competing economic visions were also reflected in foreign policy debates with Hamiltonian Federalists sympathizing with the British and Jeffersonian

Republicans with the French. Unresolved

tensions between the United States and Britain led to the War of 1812, which the United States survived despite the

sacking of Washington in 1814.

While the war ensured the extinction of the federalists at the national level, Jefferson's protetéé, President James Madison, recognized the necessity of

stronger federal institutions to protect American sovereignty. Having allowed the

American sovereignty. Having allowed the charter of Hamilton's first bank to expire in 1811, Madison authorized the

formation of the second bank of the United States in 1816 to ensure better access to credit for the government.

Madison's successor, James Monroe, placed national infrastructure improvements at the heart of his political agenda, while Kentucky

Congressman Henry Clay championed a national network of roads and canals maintained by the federal government and

financed by a central bank. Clay ran for president in the bitterly contested 1824 election in which none of the candidates

won an electoral college majority.

Clay was unsuccessful but used his influence as speaker of the house to elect John Quincy Adams. This denied the

presidency to the frontr runner Andrew Jackson, the populist war hero from Tennessee. Thereafter, Clay sought to

Tennessee. Thereafter, Clay sought to implement his economic agenda as Adam's Secretary of State, but faced Jonian

opposition in Congress.

The 1830s witnessed the continuation of the power struggle between Jackson, a founder of the Democratic Party, in response to being deprived of the White

House in 1824, as he and his supporters saw it, and opponents like Adams and Clay. Jackson

would eventually win election in 1828 and served two consecutive terms. After winning re-election in 1832,

Jackson spent much of his second term at war with the Second Bank of the United States. Jackson believed that the bank

States. Jackson believed that the bank was fueling financial speculation that enriched northern capitalists at the

expense of impoverished small farmers in the South and West. Cheap credit had fueled the expansion of transportation links to the Great Lakes and the

Mississippi River. leading to soaring

Mississippi River. leading to soaring land prices in places like Illinois and Alabama. However, while Jackson

Alabama. However, while Jackson eventually prevailed against the bank in 1836, the small state banks he favored

increased the circulation of paper money even further, inflating a land bubble which burst in July 1836.

The collapse of land values rippled through the economy, leading to an economic downturn known as the panic of 1837.

A couple of weeks after Jon's birth, his father Junius was obliged to travel south to collect precarious debts for how Matherther and Co, who he was

working for at the time. The company

survived the economic panic, but the ensuing depression, exacerbated by the policies of Jackson's successor as president, Martin Vanburn, further

convinced the Morgans that America's economic prosperity depended on a national bank that could regulate markets and the flow of money. This was

the broader political, financial, and banking environment against which Jon grew up.

Young John was a sickly child and suffered from bouts of serious illness that led his family to fear for his life at times. Despite his fragile health,

at times. Despite his fragile health, which would lead to frequent absences from school, the boy was able to help his grandfather Joseph with domestic

chores.

The family's economic prospects improved in the mid 1840s as the depression caused by the panic of 1837 came to an

end. In the autumn of 1846, 9-year-old

end. In the autumn of 1846, 9-year-old John was sent to the Episcopal Academy in Cheshire between Hartford and New

Haven. When he returned home 3 months

Haven. When he returned home 3 months later for Christmas, Joseph Morgan's health collapsed.

JP was greatly affected by the death of his 67year-old grandfather in July 1847.

He had been particularly close to his paternal grandparents, although he also enjoyed spending his vacations with his maternal grandfather, John Peront, from

whom he inherited a strong sense of moral purpose. His father, Junius, was

moral purpose. His father, Junius, was more concerned about equipping him with the skills to thrive in the commercial world. And in addition to teaching John

world. And in addition to teaching John history, mathematics, and literature, Junius delegated to him simple tasks at

How Matherther and Co. which changed its name to Mather Morgan and Co. when

Junius became a senior partner in 1850.

That spring, Junius spent three months in Britain, the foremost global superpower of the age, marveling at its

history and institutions in a series of letters to his son. John, still in his early teens, responded to his father's correspondence by updating him about

business and local affairs.

After returning home, Junius decided that his ambitions had outgrown Hartford and dissolved his company to partner

with a Boston merchant to form JMBB Morgan and Co. in January 1851.

The family moved to Boston in July and John was enrolled at the Boston English High School where he studied mathematics in preparation for a business career. In

his essays, he wrote about America's commercial future and the inhumanity of slavery. Though unlike his abolitionist

slavery. Though unlike his abolitionist maternal grandfather, he was more concerned about the prospect of the Union breaking apart over the issue than

abolition itself.

JP experienced a prolonged bout of ill health in 1852 which kept him from school for several weeks. Rather than

return to school in the autumn, his parents decided to send him abroad to restore his health. On the 8th of November, he sailed for the Portuguese

Azour's Islands lying remotely in the Atlantic Ocean, accompanied by the US Council, Charles W. Dabney. As his

health gradually improved, he spent much of his time at the harbor, learning about maritime commerce, he kept meticulous accounts of his expenses and

sent letters home with each passing vessel. After 4 months, John was

vessel. After 4 months, John was restored to full health. But rather than returning home, his parents arranged to

meet him in England in early 1853.

Junius Morgan had received an offer to become a junior partner and heir to American banker George Peabody's firm in London. At a time when the American

London. At a time when the American economy was characterized by both technological progress and financial instability,

during the 1840s, Peabody worked to restore American credit in London by persuading several state governments to

repay defaulted loans, making a handsome profit in the process. He had a reputation for making sound and profitable loans during the American

railroad boom and earned the gratitude of US industrialists by financing American exhibits to the great exhibition in 1851.

An unmarried man in his late 50s, Babbody was seeking a successor to his banking empire and reached out to Junius

after a recommendation from the latter's partner JM Bibb. The Morgans arranged to meet with Peabody in May and in

midappril John left for England aboard the Great Western Kingdom Brunell's pioneering steam ship.

After a whistle stop tour of London's major attractions, he traveled up to Manchester to meet his parents, going shopping with his mother and

accompanying his father to business meetings.

Although illness prevented John from joining his parents at dinner with Peabody in London on the 18th of May, 1853, the meeting would nevertheless define

the teenage boy's professional future.

Peabody informed Junius of his plans to retire in 10 years, after which the latter would inherit not only the firm,

but also the right to use Peabody's name and capital. Junius did not immediately

and capital. Junius did not immediately accept the offer, but requested time to examine Peabody's books and tie up loose

ends in Boston. The Morgan family then traveled to the continent, briefly moving through the Netherlands and Germany and spending two weeks in Paris

where young John visited the tomb of his great historical hero Napoleon Bonapart.

He caught a glimpse of the great man's nephew, Napoleon III, who had recently made himself emperor of the French. The

Morgans returned to England in June and went back to the United States in July.

After a year's absence from school, John rejoined his class and caught up on his studies. George Peabody made a second

studies. George Peabody made a second approach to Junius, who agreed to join him in autumn 1854.

By then, Junius's son was in his final year at Boston English. And while he hoped to go into business straight away, Junius decided to send him to the

European continent to study foreign languages. The family left for England

languages. The family left for England in September and Peabody Morgan and Co.

began trading on the 2nd of October 1854.

A month later, 17-year-old John left England for Verve in Switzerland to study French. On his journey, the

study French. On his journey, the teenager was entrusted to deliver documents to Paris on behalf of the American ambassador in Britain and

future president of the United States, James Buchanan. Although John initially

James Buchanan. Although John initially struggled to fit in at school, he became proficient in French and finished at the

top of his class in autumn 1855.

Junius was satisfied with his son's progress and sent him on to study at Gertingen in Germany in early 1856.

He mastered the German language within a year and traveled to Italy in early 1857

before being recalled to London in July.

By this time, John had developed a desire to travel to China, a country that was opening up to Westerners after more than two centuries of isolation

from the Western world. He was also known increasingly by this time to friends and family as Pont, choosing to

use his middle name rather than John as his given name. Pipont's desire to go to China at the end of his studies was vetoed by his mother who had struggled

to settle down in London and returned to the United States.

Instead, Junius had arranged for him to work as a cler at Duncan Sherman and Co.

Thus, Pipont crossed the Atlantic and started his new job in September 1857.

He was unpaid, drawing from a $200 monthly allowance instead from his father to support himself. But the job of copying the firm's correspondence

offered a valuable insight into the banking business. Pont also studied

banking business. Pont also studied bookkeeping from accounting partner Charles H Dabney, a cousin of his host in the Azors and served as an agent for

Peabody's New York operations.

Within weeks of starting his banking career, Pont saw the 1850s economic boom come to an abrupt end.

The end of the Crimean War in 1856 had led to Russian grain returning to the market, impacting American grain exports, while an increase in the Bank

of England's interest rates led investors to sell off American assets for higher returns in London. The

resultant collapse in American markets left Peabody struggling to find the cash to meet payments to British creditors

and the firm only survived with an emergency line of credit of £800,000 from the Bank of England. Junius had

been shaken by the experience which led him to lend more conservatively.

The Bank of England's timely intervention also strengthened the Morgan's belief that the United States needed its own central bank to restore

stability and confidence to the private banking system during crisis.

Pier Pont spent much of his time at Duncan Sherman and Co. working on the financing of railroad companies which were expanding at enormous speed in the

1850s and 1860s as the country was linked up by rail. This brought him into contact with railroad executives such as

William Henry Osborne, the president of the Illinois Central Railroad. During

the summer of 1858, Pipont courted Osbborne's sister-in-law, Amelia Sturgis, whose father, Jonathan Sturgis, had been an early investor in the

Illinois Central. When Junius was

Illinois Central. When Junius was invited to call on the Sturgis during a visit to New York in late 1858, he was delighted by Amelia and invited

her to accompany him to London in February. After being shown around

February. After being shown around London by Junius, Amelia was joined by her family in the spring and they went on a grand tour of the European

continent following an itinerary devised by Pont who was required to stay in New York. By September 1859, Pipont had been

York. By September 1859, Pipont had been at Duncan Sherman and Co. for 2 years and Junius decided that his son was ready for a new challenge.

In November, Bapont went to London to see Amelia for the first time in 9 months and to discuss his future with his father. Junius advised him to go on

his father. Junius advised him to go on a tour of the southern United States where Peabody had interests in the railroads and cotton trade. The

sectional tensions over slavery between North and South were at breaking point and Popon's presence could offer useful

market intelligence to Junius who was now in effective control of Peabody and Co.

Peront spent several weeks in New Orleans gathering intelligence on southern markets. On his way back to New

southern markets. On his way back to New York in April, he stopped by Charleston for the Democratic Party convention.

Since the Democrats had held a near monopoly on the presidency for three decades, Peront expected the next occupant of the White House to be a

Democrat. Instead, the party was split

Democrat. Instead, the party was split over slavery and northern and southern Democrats eventually chose their own nominees.

With the Democratic vote split, the recently formed Republican Party and their presidential candidate, Abraham

Lincoln, won the November 1860 election.

Lincoln's opposition to any further expansion of slavery led a host of southern states to secede from the Union

from December 1860 onwards. By April

1861, the United States was at war with the rebel Confederate States in the South.

The Union's confidence early in the war received a reality check in July 1861 when the Union Army was defeated at the

first Battle of Bull Run in Northern Virginia. The defeat set the stage for a

Virginia. The defeat set the stage for a controversial business transaction known as the Hall Carbine affair. After

receiving orders from Lincoln to take the offensive, General John C. Fremont,

the commander of the Western Department, was desperate for firearms. His New York agent, Simon Stevens, found that an

individual named Arthur Eastman had 5,000 rifles and offered to buy them for $12.50 each. He would then refurbish

$12.50 each. He would then refurbish them and sell them to Fremont for $22 each. Freemont agreed to the terms,

each. Freemont agreed to the terms, oblivious of the fact that the rifles already belonged to the government.

Designed in the 1810s by John Hall and produced between the 1820s and 1840s using pioneering mass manufacturing

techniques. The Hall carbines were left

techniques. The Hall carbines were left over from the Mexican War of 1846 to

1848 and were considered obsolete. In

May, US Ordinance Chief James W. Ripley

agreed to sell them to Eastman for $3.50 50 a piece. But Eastman did not have the $17,500

to pay the government. Nor did Stevens have $62,500 to buy them from Eastman. Stevens

approached JP Morgan, now trading on his own account as JPont Morgan and Co. who

financed the deal with a $20,000 loan.

Under the terms, the rifles were in Morgan's name until Eastman could arrange for the alterations and transfer them to Freemont.

The work took longer than anticipated, and by the end of August, only half of the rifles were sent to Freemont.

At this point, having received payment from Freemont's ordinance officer, Morgan removed himself from the deal and

walked away with over $26,000 after charging 9% interest and over 25% commission. Permont exited early since

commission. Permont exited early since Amelia Sturgis had accepted his marriage proposal in August 1860 and their

wedding was scheduled for October 1861.

Although Amelia had been suffering from poor health, Papont promised his prospective bride that she would improve once they were on their Mediterranean

honeymoon. The couple married on the 7th

honeymoon. The couple married on the 7th of October at the Sturgis's New York house and embarked on the transatlantic

voyage 2 days later. During a brief stop in Paris, Pipont took Amelia for a doctor's examination and was informed that his wife was dying from

tuberculosis.

Keeping the diagnosis to himself, Pipont took Amelia to Alers, then a French colony, and hoped to nurse

her back to health. But her condition deteriorated even further in December.

In mid January, the couple made it back across the Mediterranean to Nice, where Amelia died on the morning of the 17th

of February, 1862, leaving her husband distraught at her bedside.

Although Pont remarried three years later, the memory of his first wife remained important to him and he made

annual visits to her grave in Fairfield, Connecticut.

Pipont remained in Europe for 2 months grieving Amelia before returning to New York in early May. He had left his

cousin Jim Goodwin to manage his business affairs in New York during his absence and made him a junior partner while his father transferred Peabody's

accounts from Duncan Sherman and Co. to

his son's firm. The disruption in cotton markets and railroad construction caused by the civil war had a major impact on the Morgan's banking operations. But

father and son worked together to take advantage of new opportunities.

For instance, the value of US government bonds fluctuated in response to developments on the battlefield.

In London, Junius had taken advantage of the collapse in US government securities after the Battle of Bull Run and made a profit when the Union defeated Robert E.

Lee's advance on Washington at the Battle of Antitum in September 1862.

When General Ulyses S. Grant secured the surrender of the Confederate forces at Vixsburg at the beginning of July 1863,

Pipont sent a telegram to his father via Nova Scotia in time for Junius to buy American securities before they rallied

sharply on the news. The Union victories at Vixsburg and Gettysburg were decisive turning points in the war. Pieront was

drafted after Gettysburg, but his patriotism did not extend to risking his life on the battlefield, and he paid $300

for a substitute.

In October 1864, George Peabody fulfilled his promise to retire and gave Junius Morgan control of

his bank. However, Peabody, who

his bank. However, Peabody, who significantly expanded his philanthropic activities during the Civil War, went

back on his promise to allow Junius to use his name and his capital. Junius was

therefore obliged to reconstitute the firm as JS Morgan and Co. This led to a shakeup in New York as Junius hired

Charles Dabney to join Pipont as senior partner to form Dabney Morgan and Co. In

May 1865, Pipont married his second wife, Francis Louisa Tracy, the 23-year-old daughter of a New York

lawyer. While the marriage proved to be

lawyer. While the marriage proved to be an unhappy one, the couple had three daughters and a son, JP Morgan Jr.,

known as Jack.

After Peabody's retirement, father and son continued to work closely together with Junius visiting the US in the autumn and Theapont traveling to London

each spring. With the end of the

each spring. With the end of the American Civil War in 1865, the Morgans returned to the commodities trade, dealing in American cotton, and

investing in the railroad industry. More

exotic commodities included tobacco from the Philippines, coffee from Brazil, and tea from China. This broader period

between the panic of 1837 and the panic of 1913 is sometimes known as the baronial age

in American economic history when bankers could make or break industrial giants and dictated terms to kings and parliaments.

Although JS Morgan was the largest American bank in London, its capital was a fraction of the major European banking houses such as Bearings Brothers in

London or the Rothschilds whose empire stretched across Europe.

The Rothschilds had financed the British army during the Peninsula and Crimean Wars, while bearings underwrote the

Louisiana purchase in 1803 and financed the indemnity imposed on France after the battle of Waterloo in 1815.

Junius Morgan was desperate to build up his capital to pull off such highprofile financings, but his cautious approach

and desire to preserve his existing capital dissuaded him from taking major risks.

An opportunity came during the Franco-Russian War when Prussian troops decisively defeated the French army at the battle of Seda on the 2nd of

September 1870 and captured Napoleon III. The French political elite deposed

III. The French political elite deposed the emperor, proclaimed a republic, and established a provisional government in

Tur to continue the fight.

When the new French government sought financing from London, the Rothschilds believed that the French would default.

While beerings did not want to undermine its relationship with the Prussian government, despite his advice to his son about making prudent loans, Junius

offered to underwrite a bond worth 10 million for the French. Since he did not have the capital to underwrite the bonds

on his own, he formed a syndicate to share the underwriting risk and offered the bonds at a steep 6% interest rate

over 34 years. The French found the terms of the Morgan loan humiliating, but had no other choice. The rate was

more than justified in early 1871 when Paris was taken first by the Prussians and then by the revolutionary Paris commune. The price of the bonds

Paris commune. The price of the bonds fell and Junius almost bankrupted himself by buying them to prop up the

price. The defeat of the Paris Commune

price. The defeat of the Paris Commune in May saw the bonds recover their value. And when the French government

value. And when the French government paid back the bonds ahead of schedule in 1873, Junius earned a net 1.5 million,

propelling him into the highest ranks of London's financial elite and providing the necessary capital for Peront to

expand his operations in America, where the railroad boom was once again in full swing as the postwar reconstruction

accelerated. Ed. In 1869,

accelerated. Ed. In 1869,

the 32-year-old Peront displayed his financial muscle during a dispute over ownership of the Orban and Saskuana line

in New York State. Although a relatively short line, the railroad magnet Jay Gould hoped to take control to advance

the interests of his eerie railroad. He

quickly bought up stock in the company and sought to remove the Orbany and Susuana's founder Joseph Ramsay from the

board. Ramsay fought back and turned to

board. Ramsay fought back and turned to Peront Morgan who bought 600 shares to challenge Gould stake. Peront found a

friendly judge who helped Ramsay expel Ghoul's men and regain control of the company before advising them to merge with the friendly Delaware and Hudson.

In February 1870, Pipont emerged with a seat on the board of directors of the combined company, strengthening the relationship between

banker and client.

In 1871, Charles Dabney retired and the Dabney Morgan partnership was dissolved.

Junius invited the extremely wealthy Philadelphia banker Anthony Drexel into his banking empire. Peront would

consequently manage a new partnership in New York called Drexel Morgan and Company. Pipon's personal stake in the

Company. Pipon's personal stake in the partnership was a small fraction of the $7 million represented by Drexel and his

brothers. So Junius added $5 million for

brothers. So Junius added $5 million for his son. Rather than getting to work

his son. Rather than getting to work straight away, Pont went on a lengthy vacation to Vienna, Rome, and Egypt to restore his physical and emotional

health. Not long after Peron's returned

health. Not long after Peron's returned to New York in 1873, Drexel Morgan and Co. moved its offices

to the corner of Wall Street and Broad Street, a strategic location that faced the New York Stock Exchange on one side

and an important US Treasury building on the other. In the same year, the US

the other. In the same year, the US government sought to refinance $300 million in debt at lower interest rates.

During the Civil War, Drexel's Philadelphia rival Jay Cook had masterminded the sale of federal government bonds. But Cook was weakened

government bonds. But Cook was weakened in the early 1870s when his interest in the Northern Pacific Railroad collapsed.

Cook brought the Rothschilds into his syndicate while in response Drexel Morgan and Co. formed a rival syndicate that included bearings.

Drexel also leveraged his friendship with Ulyses S. Grant, the Civil War commander who had become president in 1869

and the US Treasury decided to award half the bond issue to each syndicate.

Meanwhile, the Grant administration was rocked by a corruption scandal over the construction of the Union Pacific Railroad at inflated prices.

This resulted in a loss of confidence in American securities which in conjunction with an economic downturn in Europe prevented Jay Cook from obtaining the

finance he required to keep his bank afloat after his losses on Northern Pacific. Cook's bankruptcy in 1873

Pacific. Cook's bankruptcy in 1873 triggered a financial panic in American markets and saw the New York Stock

Exchange close for 10 days. Peront

called in his loans and not only survived the crisis but ended the year with over a million dollar in profit.

Cook's sudden demise left Drexel Morgan and Co. as the most powerful bank in the

and Co. as the most powerful bank in the country.

At 36, Morgan was well on his way to becoming the most famous banker in American history, though a long

depression set in between 1873 and 1879.

Following the experience, Pipont vowed to lend to companies with strong balance sheets and to avoid the more speculative ventures of his early career in banking.

He also recognized that the cutthroat competition in the railroad industry was resulting in bankruptcies.

As Pont's stature increased over the decades, he gained a reputation as a restraining influence during an age of unbridled capitalism.

The standing of Drexel Morgan and Co.

improved further in 1877 when JP underwrote a payment for US Army soldiers and took only 1% commission.

This seeming act of charity towards the government was accompanied by growing philanthropy and engagement with the arts.

In 1876, Junius arranged to buy Thomas Gainesburgh's famed portrait of the Duchess of Devincshire for $50,000

as a gift for Peront. However, the

painting was infamously stolen from the art dealer before the purchase was made.

When it resurfaced in 1901, Peront paid $150,000 for it in memory of his late father's

gesture. Permont also became a patron of

gesture. Permont also became a patron of great cultural institutions such as the Metropolitan Museum of Art and the American Museum of Natural History as

well as hospitals and religious causes in the US.

[Music] Junius went into semi-retirement in late 1877, enabling Pipont to emerge from his

father's shadow. In 1879,

father's shadow. In 1879, JP was approached by the Vanderbilt family to float a large block of shares in the New York Central Railroad. The

family patriarch Cornelius Vanderbilt had died in 1877 and the New York Central passed to his

son William Henry Vanderbilt who became the richest man in the country. After

being on the receiving end of public and congressional scrutiny about the family's management of the railroad, William Henry decided to sell 250,000

shares and asked Peront to market them.

Peron's challenge was to liquidate the position without collapsing New York central share price. He organized a syndicate of investors to acquire a

block of shares at market prices while his father Junius took 50,000 shares to sell to investors in London. Wall Street

was astonished when Peront announced that he had successfully placed all the shares and he walked away with a

commission of $3 million and a seat on the New York Central's board which he used to represent the interests of the more conservative London investors.

Although the arrangements cast some doubt on Popon's patriotism, his successful management of the New York branch of the family banking empire

meant he was in the process of surpassing his father's London enterprise.

Peron's growing wealth allowed him to purchase a large house at 219 Madison Avenue which became the first New York

house to be lit by Thomas Edison's light bulbs in 1882.

Peront had been among the financial backers of the Edison Electric Illuminating Company in 1878 and the Drexel Morgan and Co. office on

Wall Street had also been the first commercial property to draw electricity from Edison.

Despite his wealth and his place within New York's banking aristocracy, Pont Morgan's private life was unhappy.

Francis Morgan was shy and reserved and did not share her husband's social ambitions.

From 1878 onwards, Francis stopped joining Peront on his annual trip to London and her absence encouraged him to

engage in extrammarital affairs abroad.

In 1882, Pieront bought a yacht which he named the Corsair and on which he would entertain his mistresses. The vessel

also served as a discrete venue for settling commercial disputes and Peront earned accolades for brokering a truce between the New York Central and the

Pennsylvania Railroad over the construction of the West Shore Railroad, a line running parallel to the New York Central on the opposite bank of the

Hudson River. The New York Central

Hudson River. The New York Central correctly concluded that the Pennsylvania was behind the enterprise and responded by beginning work on a

South Pennsylvania road to connect Philadelphia to Pittsburgh.

The fierce conflict sent securities and the two companies plunging. With both

companies badly bruised by 1885, Papont invited the presidents of the feuding railroads on board the Corsair for negotiations.

By that evening, they had agreed to stop the mutually destructive competition.

Meanwhile, public outcry over rebates offered by the larger railroads to large clients, such as John D. Rockefeller's

Standard Oil or Andrew Cariegi's Steel Empire led Congress to pass the Interstate Commerce Act of 1887 to

outlaw rebates.

When the legislation proved ineffective, Peront brought railroad executives across the country to New York over two

meetings in December 1888 and January 1889 to form the Interstate Commerce Railway Association under Morgan's

leadership, which would set reasonable rates and punish offenders.

This agreement and a further attempt to regulate western railroads in December 1890 fell apart quickly owing to

competition from smaller competitors outside the cartel. Nevertheless, Pont

had established himself as the great mediator of American business.

In April 1890, 77year-old Junius Morgan died after being thrown from his carriage when his horses were startled

by a passing train. The death of his father left 53-year-old JP Morgan with a fortune of $25 million,

a stride an Anglo-Atlantic banking empire. Although he prudently saved most

empire. Although he prudently saved most of the inheritance from his father, Pipont used part of it to begin building what would become the world's largest

private art collection. Junius's death

made Pipont's 23-year-old son, Jack, the new heir to the House of Morgan. Pont

had resented his father's controlling tendencies and overcompensated by neglecting his own son who complained to his mother about the emotional distance.

Jack had been reluctant to follow in his father's footsteps, but in 1892 he became a partner in the Morgan banks in

New York, Philadelphia, and Paris. A

further reorganization followed the death of Anthony Drexel in June 1893.

Although Drexel's son Anthony Drexel Jr. inherited control of the Philadelphia and Paris operations, he decided to

retire in October 1893.

Hence in 1895, Drexel Morgan and Co. was renamed JP Morgan and Co. While the Philadelphia

firm kept the Drexel name, Peront promoted Edward Stosbury to head the office. JS Morgan in London kept its

office. JS Morgan in London kept its name, though Peront was now the senior partner of all four enterprises and

entitled to a 35% share of combined profits. Peronont Morgan was now the

profits. Peronont Morgan was now the head of a vast organization that he could not manage alone. But he was a

micromanager who struggled to delegate and he continued personally to audit the company's books at the beginning of every year.

While American economic expansion at the end of the 19th century enabled JP Morgan to make healthy returns on capital to strengthen its balance sheet,

the bank thrived during economic crisis by using that balance sheet to take over failing firms. The panic of 1893

not only proved one of the most serious depressions in US economic history, but was accompanied by industrial strife with the Homestead strike against

Cariegi Steel in 1892 and the Pullman strike against the railroad companies in 1894.

While the unions were defeated in both instances, the depression claimed some 15,000 commercial enterprises and over

600 banks. In 1892, Drexel, Morgan, and

600 banks. In 1892, Drexel, Morgan, and Co had encouraged the consolidation of the naent electric power industry by encouraging the Edison General Electric

Company to combine with Thompson Houston Electric, thereby forming General Electric. When General Electric found

Electric. When General Electric found itself in financial difficulty during the panic of 1893, Pipont came to the rescue, thus ensuring

the loyalty of General Electric executives.

The panic of 1893 also gave Pipont another opportunity to rationalize the operation of the railroads.

Having failed to encourage informal cooperation between railroad executives, Pipont now used his financial firepower

to take control of bankrupt railroads himself by placing shares in voting trusts controlled by Peront and his associates.

With the backing of English investors who sought more reliable returns, JP Morgan ended up controlling 16th of the

American railway network. In a process soon labeled morganization, Peront cut costs, forced creditors to

accept lower interest rates, and prevented railroad companies from extracting minerals from their land holdings to keep them focused on core

operations.

During the 1890s, the American railroad industry consolidated into six principal groups with Morgan in effective control

of four.

In 1895, JP Morgan achieved the most remarkable feat of his career to date by ensuring that the United States remained on the

gold standard. The US government had

gold standard. The US government had adopted the gold standard in January 1879 and backed up the promise by holding

$100 million in gold at all times. The

gold standard restricted money supply and was unpopular among indebted farmers in the south and west.

Political pressure from the Free Silver Movement led to the Sherman Silver Purchase Act of 1890 that compelled the

US Treasury to purchase 4.5 million ounces of silver each month and to issue certificates redeemable in gold or

silver. This alarmed British investors

silver. This alarmed British investors who feared that they would be paid back in depreciating silver. British

investors were also retreating from American assets after bets on Argentinian assets went sour in 1890,

leaving the highly exposed bearings on its knees. Although the Sherman Silver

its knees. Although the Sherman Silver Purchase Act had been repealed in 1893, continued uncertainty saw US gold

reserves fall below $und00 million in 1894.

By early February 1895, outflows had accelerated to the extent that the federal government seemed poised to default. While President

Grover Cleveland, a New York Democrat, was in favor of the gold standard, he failed to secure congressional approval

for a public bond issuance to replenish the gold reserves. And while Morgan was waiting in the wings, he knew that a private bailout would spell political

disaster.

Despite Cleveland's reservations, Morgan barged into the president's office on the 5th of February, 1895, and offered

to gather 3.5 million ounces of gold in return for $65 million of 30-year bonds.

He promised Cleveland that the new gold would not flow out of the treasury, effectively offering to manipulate the international currency markets by buying

dollars and selling sterling when required. Cleveland partially agreed to

required. Cleveland partially agreed to a smaller loan along the lines Morgan outlined, a move which immediately calmed the markets. When the syndicate

bonds were offered in London and New York, they were taken up within two hours, allowing Morgan to bank a quick

return on his intervention.

The crisis was over.

Morgan's intervention had quelled the market turmoil, but the issue of the gold and silver standard remained a source of political conflict for years

to come. Ahead of the 1896 presidential

to come. Ahead of the 1896 presidential election, the Democrats nominated populist fire brand William Jennings

Brian, the most prominent advocate of free silver, who famously thundered against his opponents, "You shall not

crucify mankind upon a cross of gold."

The Republican candidate that year was William McKinley of Ohio, whom Morgan supported financially and encouraged to

champion the gold standard. McKinley won

the election, a testament to Morgan's financial power and political influence, which earned him the nickname Zeus or

Jupiter in reference to the ancient Greek and Roman king of the gods.

Although Morgan was opposed to McKinley's decision to launch the SpanishAmerican War of 1898, the American victory brought some of

Spain's few remaining colonies, namely Puerto Rico, Cuba, Guam, and the Philippines under US control.

Some would gradually be granted nominal independence, though Guam and Puerto Rico remain US territories to this day.

America's strengthening military power was accompanied by the growth of its economic power, and American enterprises began seeking international expansion.

Their global ambitions required vast amounts of investment capital and led to the consolidation of industrial companies as trusts.

The Wall Street bankers whose role had hitherto been largely limited to the railroad industry and the financing of things like the textiles and steel

industry were instrumental in the formation of the trusts.

Although Popon's power made him unpopular among the public at large, he was trusted among businessmen as an

impartial broker in disputes. And even

trade union leaders agreed that private industrial behemoths offered more certainty and security for workers than

small businesses, cutting labor costs to the bone to remain viable.

The consolidation of American industry was encouraged by President McKinley, who led the Republican party's pro business wing. The consolidations left

business wing. The consolidations left Morgan with a significant stake in the steel industry. His companies Federal

steel industry. His companies Federal Steel and National Tube were market leaders for finished steel products in

1900 when Cariegi Steel announced plans to enter the market and expand beyond the production of primary steel. Morgan

wanted to avoid a ruinous price war between Cariegi and himself. Charles M.

Schwab, the young president of Cariegi Steel, was likewise unwilling to clash with him. Schwab invited Morgan to a

with him. Schwab invited Morgan to a dinner in December 1900 in which he proposed to amalgamate half the steel

industry into a single trust with the Cariegi and Morgan interests at its core. The deal also involved John D.

core. The deal also involved John D.

Rockefeller, who had iron mining and shipping interests in the Great Lakes and demanded a higher price than Morgan expected. After conducting negotiations

expected. After conducting negotiations with Morgan, Schwab informed Cariegi, who valued his company at $480 million.

Morgan accepted Cariegi's price and congratulated him on becoming the richest man in the world. Though Cariegi

later regretted selling too cheaply, Morgan financed the deal by organizing a syndicate of 300 underwriters and US

Steel launched on the 1st of April 1901 with a $1.4 billion market capitalization, making it the biggest company on the

stock market. At a time when most market

stock market. At a time when most market analysts valued stocks at book value, Morgan justified the valuation in terms of expected profitability.

While his critics appeared vindicated when the stock plunged from a peak of $55 in 1901 to $9 in 1903, the investors

who held on to their shares for the long term were amply rewarded as US steel took advantage of economies of scale and

thrived during and after the first world war.

The creation of US Steel raised concerns about monopoly and the extent of Morgan's control of the American economy. Following the launch of US

economy. Following the launch of US Steel, Morgan went on vacation to the French Riviera.

During his absence, the bank found itself in a titanic battle over control of Northern Pacific, a Morgan Railroad

Company that dominated the Northwest.

Morgan's opponent was the railroad magnet Edward Harimman who controlled the Union Pacific. After recruiting the

Rockefellers and Morgan's New York rival Loben Co to his side, Haramman and his allies began buying up shares in

Northern Pacific. Morgan initially saw

Northern Pacific. Morgan initially saw the rally as a sign of the market exuberance that accompanied McKinley's reelection.

It was only when shares skyrocketed in May that Morgan's partners on the ground suspected that something was up. With

Haramman on the verge of taking control, Morgan gave instructions to buy 150,000 shares at any price. As the power

struggle played out on the New York Stock Exchange, Northern Pacific stock spiked from 143 points to over 1,000 in

the space of a few days between the 7th and 9th of May, squeezing short sellers who realized to their horror that Morgan

and his allies were buying up all the outstanding shares. The market

outstanding shares. The market eventually crashed back down and stabilized after thousands of investors

had been wiped out. Morgan retained

control of Northern Pacific and he and Haramman settled their dispute in November through further railway consolidation.

While President McKinley did not seem particularly concerned about the affair, the political climate changed significantly when he was assassinated

in September 1901.

He was immediately succeeded by his 42-year-old vice president, Theodore Roosevelt, a progressive Republican who would spend his 8 years in the White

House challenging the monopoly power of figures like Morgan and Rockefeller. The

House of Morgan was soon under heavy fire on both sides of the Atlantic.

While Morgan's American critics labeled him a creature of the city of London, British investors were also unnerved by the threat posed by US steel to the

British steel industry. Although by this stage, American steel production was already more efficient than in Britain.

Likewise, Morgan's banking operations had surpassed both bearings and the Rothschilds.

During the Boa War in 1900, the British government turned to the Rothschilds in London and JP Morgan in New York to

issue new debt. Morgan not only claimed half the issue, but secured a higher commission from the British Treasury. In

1902, Morgan sought to finance what would become the Piccadilly line of the London Underground.

Although his bid failed in the end, Morgan's effort to muscle in on construction in the very heart of the British Empire created fears in London

that he planned to take over the city.

Such fears were not assuaged when Morgan attempted to take control of North Atlantic Shipping by forming the International Merkantile Marine Company,

an Angloamerican Trust, which incorporated Peron's private fleet of 120 steam ships and several major

passenger lines, including J. Bruce

Isme's White Star Line. Morgan also

broke at an agreement with German steamship lines, leaving the Cunard line as the major shipping company outside the International Merkantile Marine

Company. The British government

Company. The British government encouraged Cunard to remain independent by subsidizing the construction of two large liners, the Moritania and the

Lucitania.

Competition with Cunard undermined the International Merkantile Marine Company and Morgan struggled to sell shares in

the overvalued company. In an effort to reassure British investors, Bapont restructured the London Bank by bringing British partners like the well-connected

Edward Grenfell on board. Grenfell

became Morgan's conduit to HM Treasury and the Bank of England. And in 1910, JS Morgan and Company was renamed Morgan

Grenfell and Company.

Back in the United States, JP Morgan was firmly in the crosshairs of President Roosevelt.

Taking advantage of the public outcry over the Northern Pacific affair, in February 1902, Roosevelt instructed Attorney General Philander Knox to

initiate proceedings against Morgan's railway holdings under the 1890 Sherman Antitrust Act. The Supreme Court ruled

Antitrust Act. The Supreme Court ruled in favor of the government in 1904.

While Morgan feared that the president would go after his other interests, particularly US steel, the two cooperated in October 1902 to facilitate

arbitration in the anthraite miners strike against a group of Morgan railroads.

Roosevelt was also grateful for Morgan's financing of the construction of the Panama Canal after the US government took the project over from the French in

1904.

In response to public scrutiny, Pont Morgan began stepping back from his professional interests, redirecting his focus towards art collecting and

extrammarital affairs. His passion for

extrammarital affairs. His passion for women and art were united in the person of Belle Green, a 22-year-old woman

whose knowledge of rare books led Morgan to appoint her as librarian of the Morgan Library built in the early 1900s

to house his extensive art collection.

While Morgan was genuinely interested in art and enjoyed visiting museums and galleries across Europe, his collecting was also intended as a display of

American soft power. He was a generous donor to the Metropolitan Museum of Art in New York and after becoming president

of the board in 1904 appointed several of his wealthy friends to support an ambitious acquisition program. Although

Peront bargained hard with dealers, his collecting habit meant that at the end of his life, his collection was valued

at $50 million, upwards of half his estate.

Although Pont was semi-retired, his financial firepower allowed him to save the American financial system once again when markets melted down in

October 1907.

The crisis engulfed trust banks, which had traditionally been considered safe depositories for inheritances and estates held in trust, but had recently

been engaging in speculative behavior.

A collapse in copper shares on the 21st of October 1907 triggered a crash in the Nickerbacher Trust which undermined

market confidence in trusts.

For two weeks, the 70-year-old Peront Morgan rushed around the city fighting financial fires. And while the nicer's

financial fires. And while the nicer's assets were too impaired for a viable rescue operation, on the 23rd, Papont

mobilized $3 million to save the more viable Trust Company of America. The

trusts called in loans from speculators, leaving brokers scrambling for cash, forcing Morgan and the banks to put up

$25 million on the 24th to save the brokerages.

On the 28th, Morgan bailed out New York City for $30 million. And on the 2nd of November, he organized the rescue of Moore and Schlay, a heavily indebted

brokerage that held a large position in Tennessee coal and iron as collateral for its loans. Fearing that a forced sale of Tennessee coal would trigger the

wholesale collapse of the stock market, Morgan devised a rescue on the weekend of the 2nd and 3rd of November that would see US Steel acquire Moore and

Schllay's interest in Tennessee coal.

Such a brazen deal would have fallen foul of President Roosevelt's trustbusting agenda in normal times, but the pragmatic president allowed the deal

to go ahead. Morgan's exploits in 1907 saw him hailed as the savior of the American financial system, but created a

political consensus on the need for a new central bank, resulting in the creation of the Federal Reserve system in 1913,

the year of Morgan's death.

When Roosevelt was succeeded by William Howard Taft in 1909, Morgan hoped that the new Republican president would be friendlier to

business interests.

Instead, Taft continued Roosevelt's antitrust agenda, breaking up Rockefeller's Standard Oil into 34

different companies and launching an unsuccessful suit against US Steel.

Nevertheless, Taft co-opted Morgan and other leading Wall Street financiers into supporting American foreign policy interests.

For instance, from 1909 onwards, JP Morgan headed a syndicate of Wall Street banks to finance railroad construction

and currency reform in China. But the

fall of theQing dynasty in 1911 rendered the enterprise a fiasco. The financial

disaster of the Chinese venture pald in comparison to the human disaster of the sinking of the RMS Titanic on the 15th

of April 1912.

The Titanic was Isme and the White Star Line's response to the success of the Cunards Lucitania and Moritania.

Peront attended the christristening ceremony in Belfast in May 1911 and had his own personal suite on the vessel. He

was due to be on board on its maiden voyage in April 1912, but cancelled his reservation.

Morgan was devastated by the loss of the human lives when he heard the news and both he and Isme were criticized for

prioritizing luxury over safety. The

disaster was the final nail in the coffin for Morgan's shipping trust, which was disbanded in October 1914.

In the meantime, antitrust sentiment became ever stronger in the United States, and in December 1912, the House

Banking and Currency Committee held an investigation into Wall Street's power chaired by Louisiana Democrat Asen Pujo.

Testifying before the committee, Morgan launched a spirited defense of business, proclaiming that credit was based not on

money, but on character, stating, quote, "Because a man I do not trust could not get money from me on all the bonds in

Christrysendom." Morgan's testimony was

Christrysendom." Morgan's testimony was undermined by his insistence that neither he nor his firm controlled any companies.

Morgan then crossed the Atlantic with his daughter Louisa intending to visit British controlled Egypt. His health

deteriorated rapidly and after returning to Europe he died in Rome on the 31st of

March 1913 at the age of 76.

JP Morgan was one of the most famous bankers in history. Unlike

contemporaries like Cornelius Vanderbilt and Andrew Cariegi who built their empires from scratch, he owed much of his success to his father's banking

operations in both New York and London.

Morgan built on this considerably from the late 1850s onwards. He expanded the Morgan banking business in the US even

as his father profited handsomely from initiatives like the Morgan loan to the crisisridden French government in 1871.

From the 1870s onwards, JP began to take over. His capacity for seeing a good

over. His capacity for seeing a good market opportunity and for market manipulation made his banking operations immensely wealthy. From there he became

immensely wealthy. From there he became involved in each of the cornerstones of the gilded age US economy. Railways,

steel, shipping, and oil. By the 1890s, he was the giant of American finance, the Warren Buffett of his day, and the

man who other bankers and even presidents turn to for liquidity in times of crisis. Hence, Morgan was the

figure who ensured the panic of 1907 did not turn into an event on the scale of the Wall Street crash of 1929 or the

great financial crisis of 2008.

At the same time, like his contemporaries such as Cargi and the Vanderbilts, he invested his money in

cultural and philanthropic endeavors.

The Morgan Library and Museum in New York, for instance, is one of the world's great cultural institutions

today. His business legacy remains

today. His business legacy remains strong, too. The Morgan name survives

strong, too. The Morgan name survives and thrives in the United States, and JP Morgan Chase and Morgan Stanley are two

of the most prominent banking and financial institutions in the modern world.

What do you think of JP Morgan? Was he a financial genius who helped to lay the foundation for America's economic

success in the 20th century? Or was he a powerhungry banker who used the capital he inherited from his father to eliminate competitors and enrich

himself?

Please let us know in the comment section. And in the meantime, thank you

section. And in the meantime, thank you very much for watching.

Ah, heat.

Heat. Heat.

Heat. Heat.

Heat. Hey, Heat.

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