MORGAN, JOHN PIERPONT

John Pierpont Morgan (1837–1913) was probably the most important and powerful business investment banker in U.S. history. Morgan played a major role in the rescue of the U.S. government in 1893 and 1907, when the United States experienced major economic downturns. However, Morgan's most enduring achievement was probably the crucial role he played in the creation of the United States Steel Corporation.

Morgan was the son of international banker Junius Morgan. He graduated from the famous English High School in Boston and then studied for two years at the University of Gottingen, Germany. He later graduated from Harvard University.

In many ways John walked in his father's footsteps, succeeding his father in most of the senior Morgan's business enterprises. Like his father Morgan made large gifts to educational institutions and to the arts. He became a great collector of art and books, and later in life donated many of his valuable art collections to U.S. libraries and museums. He also was famous as a yachtsman, defending the America's Cup in international yacht races on several occasions.

John entered his father's banking house, The George Peabody Co., in London. A year later his father secured a position for him in New York with Duncan, Sherman and Co., the U.S. agents for the George Peabody firm. Then, at the age of 23, Morgan founded his own company, the J. Pierpont Morgan and Co., to serve as a special agent for the London Peabody Company. And by age 26 Morgan became a member of a firm struggling for financial control of the Albany and Susquehanna Railroad. After his success in this enterprise Morgan grew significantly in personal status within the banking community. He became known as a voice for stabilization in an age noted for its wild and fiery business sectors.

Morgan's motive was to guarantee high profits by stunting competition. His first major effort to create business monopolies during this time was his financial supervision of the reorganization of the railroad industry on the East Coast of the United States. This effort was often dubbed "Morganization." By the beginning of the 20th century Morgan made U.S. railways into a vast inter-related empire.

Morgan financed General Electric and consolidated the railroad industry. Toward the end of his career he negotiated with Carnegie Steel in his greatest economic achievement, the creation of the world's largest steel company, United States Steel. It was the first billion-dollar corporation in the United States.

Though the steel industry became the backbone of business growth in the 20th century its growth did not come easily. Internal conflicts emerged between individual steel manufacturers, and the ups and downs of the U.S. economy almost crushed the industry. In 1911 the presidential administration of William Howard Taft (1909–1913) filed suit against U.S. Steel for possible monopoly practices and illegal business manipulation. Federal committee investigations in 1912 revealed that Morgan's partners held 72 directorships in 47 major corporations in the United States. This may have been admirable as a business achievement, but it was also illegal.

Morgan was one of the few truly vital people of his time. He brought together the financial economics of Europe and the United States. He linked those who had money with those who needed it for the enormous industrial development of the United States that began during the middle of the 19th century. As a result of having so much power and money, he was frequently seen as either a force of great good or the source of great evil in the business world. A few months after his appearance as a defendant in the federal business trial, J. P. Morgan died in Rome, Italy, a broken revolutionary force in U.S. industry.

MORGAN, JOHN PIERPONT

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