Abstract
John Pierpont Morgan popularly known as J.P Morgan is famed to be one of the few men who singles handily sustained America’s economy on different occasions. Born on 17th April 1837 to a financier father, J.P Morgan established strong links in the American financial market thus making him one of the most powerful men of his period. Morgan received his formal education first in Boston and later in Germany.
After completing his formal education, Morgan studied accounting at a private firm that was owned by Duncan, Sherman & Company. Immediately after completing his accounting school, Morgan worked at the banking company owned by his father for ten years. In 1877, Morgan became one of the partners in Drexel, Morgan, and Company.
A few years after joining the company, it was renamed J.P. Morgan and Company making it the most powerful bank in the world at that time. Analysts consider J.P. Morgan to be one of the greatest men who made financial decisions, which helped in sustaining America’s economy and that of the world in general. This research paper examines the life of John Pierpont Morgan and the numerous contributions he made into the global economy.
Introduction
John Pierpont Morgan popularly known as J.P Morgan is famed to be one of the few men who singles handily sustained America’s economy on different occasions. Born on 17th April 1837 to a financier father, J.P Morgan established strong links in the American financial market thus making him one of the most powerful men of his period.
Morgan received his formal education first in Boston and later in Germany. After completing his formal education, Morgan studied accounting at a private firm that was owned by Duncan, Sherman & Company. Immediately after completing his accounting school, Morgan worked at the banking company owned by his father for ten years. In 1877, Morgan became one of the partners in Drexel, Morgan, and Company.
Biography
A few years after joining the company, it was renamed J.P. Morgan and Company making it the most powerful bank in the world at that time. Analysts consider J.P. Morgan to be one of the greatest men who made financial decisions, which helped in sustaining America’s economy and that of the world in general. This research paper examines the life of John Pierpont Morgan and the numerous contributions he made into the global economy. (Hovey 2)
Like every other American, John Pierpont Morgan was obsessed with success. From a very young age, Morgan had a dream that one day he would dominate the whole of America together with its capital city, New York. Considered the father of New York, Morgan had a desire to transform the city into a paradise and spent the whole of his time trying to make his dream a reality.
To Morgan, transforming the city to high levels of excellence was a sure way of demonstrating his influence. With this in mind, Morgan helped in building the Hudson-Fulton Celebration, whose success became a turning point for New York. It was in the Hudson-Fulton Commission where Morgan’s desire to conquer the financial world was realized.
Even before he was called to sit in the commission, Morgan had already made a name for himself in the financial world. This was made possible by the strong accounting background that he had acquired at Duncan, Sherman & Company (Jackson 627). Apart from the strong accounting background that Morgan had acquired from Duncan, Sherman & Company, his other influence came from his family background.
Unlike his business colleagues, Morgan had come from a wealthy family, and he had everything cut out for him. In his 76 years of existence, Morgan is believed to have enjoyed the immense wealth that was unequaled even in today’s standards. Even before his birth, his father Junius Spencer had acquired property from his father, which he used to construct JM Beebe, Morgan & company.
A banker by profession, Junius spent almost the whole of his free time grooming his son to take over his vast business empire. To achieve this objective, Junius sent his son to the best schools in Switzerland and Germany thus sharpening him further. (Kessner 283)
Despite the numerous positions that Morgan held in his father’s firms, his star began to shine in 1871 when he collaborated with Drexel to form Drexel, Morgan & Company and its subsequent reorganization to Morgan & Co. After teaming up, the two moved the firm to the heart of New York in the property that they had bought for close to $ 1 million.
This price was considered the most expensive piece of property to be owned by any firm at that time anywhere in the world. Through Morgan’s management style, the firm was able to withstand several financial crises that had knocked down many firms. This gave him even more influence, and he became a respected leader not only in the financial sector but in the political arena as well.
This was witnessed in the 1876 presidential elections where his firm funded the Rutherford B. Hayes’s campaign to the tune of $ 5000. However, Morgan’s reasons for doing this were purely economical since he believed that if Hayes were defeated, then inflation would go up and this would negatively hurt his businesses. (Burgan 10)
Indeed, Morgan’s desire to conquer the financial market world was witnessed early in his life. Only two years after collaborating with Drexel, Morgan bought federal bonds totaling $ 1400 million to help the American government boost its economy, which had taken a beating because of the civil war. This immense contribution led to the financial stability of the entire American economy.
In fact, on several occasions, Morgan is believed to have single-handedly funded the operations of whole sections of the government, especially during the great depression. Whatever he did, Morgan did not want to enrich himself, but he sought endeavors, which would help the whole nation and the world in general.
By using his influence, Morgan set the stage for the amalgamation of Edison General Electric and Thompson House Electric to become General Electric, which eventually became the sole manufacturer of electrical products in the whole world. Another notable merger that he engineered was his own Federal Steel Company with Carnegie Steel Company to become United States Steel Corporation, which finally became the biggest producer of steel in the world. (Wilkinson 2)
Despite the numerous contributions that J.P. Morgan accomplished in all these fields, his biggest contribution that he is remembered for was in the banking sector. As America extended and branched out in the 1800s, there was the formation of new banks across the nation. Research shows (Jackson 631) that JPMorgan Chase Bank has significant associations with these banks.
Among the banks that JPMorgan Chase Bank helped in establishing are The Western Reserve Bank, which was the first bank to be set up in Ohio upon its establishment, The Second Bank of Indiana and Springfield Marine & Fire Insurance, which was established in 1851 in the city of Illinois. Abraham Lincoln is famed to have been the first customer of this bank, depositing the sum of $310.
At this time, it was hard for banks to be granted licenses and J.P Morgan used his political influence to ensure that these banks were given operation licenses. (Wilkinson 6) In 1879, J.P Morgan made a major impact when he sold financier William Vanderbilt’s New York Central Railroad stock without having a major impact on the share price.
The deal, which involved the biggest stock ever traded in the 19th century, was largely successful accentuating Morgan’s strength as a marshal of capital and wholesaler of securities. From that period in time, the Morgan firm was closely linked with the railroad industry. During that period, railroads in the United States were plagued by overloading and speed wars.
Instead of focusing on this situation, J.P Morgan saw an opportunity to streamline an industry, which he considered vital to the future growth of the American economy. Morgan embarked on a venture that was popularly known as “Morganization,” which led to massive restructuring within the industry. By the time he was nearing his death, Morgan had direct control of close to one-sixth of the railroad network in America. (Burgan 15)
When the railroad network was coming to completion in the last decade of the 19th century, Morgan turned his attention to funding great industrial mergers, which included General Electric, U.S Steel and International Harvesters. At this time, J.P. Morgan & Co had become the strongest investment bank in the world, and Morgan had gone down the books of history as the world’s most significant and powerful banker.
This was due to his self assigned the role of intervening in every business dispute and engineering solutions for businesses he did not even own during economic catastrophes. John Pierpont Morgan is famed to have single-handedly formed a group to save the gold standard for the federal government when the gold reserves fell in 1894.
Through his influence, he played a pivotal role during the 1907 financial panic, redeeming several trust companies and a chief brokerage house, bailing out New York City and saving the New York Stock Exchange. (Hovey 5)
Conclusion
John Pierpont Morgan is credited as one of the greatest men who has ever lived. During his time, Morgan is believed to have engineered numerous financial decisions, which saved the world’s economy from crumbling. What made him even more popular is the fact that he could save even companies that were not affiliated to him.
Indeed, his presence is felt even in modern society through his bank JPMorgan Chase Bank, which is one of the strongest banks in the world with a presence in more than 50 countries. Morgan is also credited with having brought a complete revolution in the railroad industry and bailing out the federal government on several occasions.
Works Cited
Burgan, Michael. J. Pierpont Morgan: Industrialist and Financier, 2007. Compass Point Books, 10-28. Print.
Hovey, Carl. The Life Story of J. Pierpont Morgan: A Biography, 1911. Sturgis & Walton Company, 2-10. Print.
Jackson, Kenneth. The Encyclopedia of New York City, 2010. Yale University Press, 627-650. Print.
Kessner, Thomas. Capital City: New York City and the Men behind America’s Rise to Economic Dominance, 1860-1900, 2003. Simon & Schuster, 283-285. Print.
Wilkinson, William. John Pierpont Morgan, n.d. John Pierpont Morgan, 1-6. Print.