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The Magnitude of J. P. Morgan
It cannot be measured in dollars alone. It involved a kind of personal power no man of affairs will ever have again.
July/August 1989 | Volume 40, Issue 5
A corollary to Morgan’s quickness and decisiveness was a certain willfulness and a stubborn romantic streak that possibly can be traced back to his grandfather Pierpont, not only a preacher but a considerable poet and a fearless crusader for the causes he believed in. This trait often led Morgan to act impulsively when he had been touched in some human way. Morgan once went to considerable trouble to concoct a job for an elderly lady that would give her the sense that she was earning her keep and not just living on his charity. More important, when the great New York publishing house of Harper & Brothers was threatened with bankruptcy in the 1890s, it was Morgan who rescued it with loans of more than a million dollars, not because it made business sense but simply because he thought Harper’s too important to American culture to lose. It was years later and only after Morgan’s death that Harper’s managed to repay this debt.
Certainly his most impulsive and romantic act was to marry Amelia Sturges, better known as Mimi. Mimi was a beautiful woman from one of New York’s finest families, and Morgan fell in love with her soon after he moved to New York. But in the spring of 1861 she contracted tuberculosis, the Victorians’ dreaded, dark disease. She weakened rapidly, and Morgan insisted on abandoning business and marrying her in order to take her to a warmer climate, which was thought the only hope. Although she was too weak to stand, the wedding took place on October 7, 1861. Only four months later she died at Nice. Morgan was a widower at the age of twenty-four.
He recovered quickly and in September of the following year opened the firm of J. Pierpont Morgan and Company. (His father still headed the London firm of J. S. Morgan & Co.) The great boom engendered by the Civil War was in full swing by 1862 and a speculative frenzy had erupted in Wall Street. Huge amounts of money were being made, and as one contemporary described it, “New York never exhibited such wide-spread evidences of prosperity. Broadway was lined with carriages. … The pageant of Fifth Avenue … was bizarre, gorgeous, wonderful! … Vanity Fair was no longer a dream.” In 1864 Morgan, who turned only twenty-seven that year, had a taxable income of $53,286, fifty times a skilled worker’s annual wage.
Business conditions in New York during and immediately after the Civil War were fraught not only with opportunity but with peril too. The government and the courts were sunk in corruption, while the New York Stock Exchange and other Wall Street institutions were only beginning to acquire the power to enforce standards. Those years saw capitalism red in tooth and claw and there were hardly any rules at all beyond caveat emptor.
In two instances during the war Morgan became involved in dubious schemes with men of good family but, it turned out, bad character. Although there is no evidence that Morgan did anything illegal or, in a strict sense, dishonorable, these events have been used ever since by writers trying to tarnish his name. Oddly, for one who deeply believed that character was the only important consideration in a man, Morgan would admit that he was not always perceptive about it. “I am not a good judge of men,” he told his minister. “My first shot is sometimes right. My second never is.” Perhaps sensing this, Morgan, in 1864, took on a senior partner, Charles H. Dabney, and the firm’s name was changed to Dabney, Morgan and Company.
Although used to the best, Morgan had no interest in show for show’s sake.
For a man with a love for both order and the concept of honor, the Civil War era was economic disorder incarnate, and these years could only have had a profound effect upon Morgan’s thinking as an investment banker. Having seen at first hand the deep corruption of the New York courts and legislature during the reign of Boss Tweed and the hog wallow of greed that was the Grant administration in Washington, Morgan would never conceive of government as a means of regulating business conduct. To Morgan, government was part of the problem. He thought, quite honestly, that it was up to men like himself, men of good breeding and character (in other words, those he thought of as gentlemen), to put American business on a sound and honorable basis and keep it there.
In this sense J. P. Morgan was a Tory. He believed his own class had a fiduciary obligation to run things for the benefit of all. By the time he died, this was a very old-fashioned idea. But in his younger days it was entirely understandable. And within the scope of his vision, Morgan was a reformer and progressive, seeking always to bring order out of chaos within the rules of the game as he saw them.
As the war ended, Morgan married a second time. His new wife, Frances Tracy, known as Fanny, was the daughter of a prosperous New York City lawyer. Together they had four children, three daughters and a son. While they often traveled separately and were apart for long periods, their marriage was solid and content.