The Great Pierpont Morgan

by Allen, Frederick Lewis;

  There were to be sure other men, like the Astors and Vanderbilts, who had inherited wealth and were forces to be reckoned with at the turn of the century by reason of that wealth; but they represented a waning and undynamic authority compared with the Rockefellers and Carnegies and Harrimans. Morgan was unique. Nobody could call him undynamic. Yet by contrast with the Horatio Alger heroes of his time he had been born to rising wealth and social position, and before he was twenty had enjoyed opportunities for travel, university education, and international acquaintance such as Rockefeller and Carnegie could hardly have dreamed of.

  Morgan’s grandfather, Joseph Morgan, came from a Massachusetts farm to Hartford, Connecticut, in 1817; ran a coffee house or tavern, and then sold it to become the proprietor of the City Hotel in Hartford; prospered as a hotel-keeper, and invested on a considerable scale in Hartford real estate; helped to organize a canal company and steamboat lines and the new railroad which connected Hartford with Springfield; and finally became one of the founders of the Aetna Fire Insurance Company. A solid citizen, hearty, hardworking, shrewd in a bargain, and God-fearing withal, Joseph Morgan was the perfect pattern of the up-and-coming Yankee enterpriser of the early nineteenth century.

  Joseph Morgan’s son, Junius Spencer Morgan, was born in 1813, before his father arrived in Hartford; and Junius, too, was put into business without benefit of a college education. He got a taste of commercial life in New York and then spent a number of years in a drygoods merchant’s firm in Hartford. But in his late thirties he moved to Boston to become a partner in the booming firm of James M. Beebe & Co., which conducted and financed foreign trade transactions, particularly in cotton; and by that time, as a result of his father’s expanding wealth, he was able to bring considerable capital with him to put into the Boston firm, which thereupon became J. M. Beebe, Morgan & Co. But Junius Morgan did not remain long in the work of financing those exports and imports which made the Boston of the eighteen-fifties a hustling center of clipper-ship trade with Europe and Asia. After only a few years he was invited to go to London to become a partner of George Peabody, a Yankee who had built up a respected and very profitable international banking house there. And when, during our Civil War, George Peabody retired, the Peabody firm—an important link in the system of financial communications between imperial London and industrializing America—took the name of J. S. Morgan & Co. In short, Junius Morgan, helped along on his career by his Hartford father’s well-invested savings, became a man of wealth and of international influence.

  Thus it happened that Junius Morgan’s son, John Pierpont Morgan, grew up in an atmosphere of financial security, rising business prestige, and rising worldly consequence.

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  The house in which Pierpont Morgan was born on April 17, 1837, was an ample one, his grandfather’s house at 26 Asylum Street, Hartford; nothing palatial, but a substantial urban building three stories high and six windows wide across the front. (It is gone now; in 1948 its site, in a somewhat run-down commercial district between more progressive business areas, was part of a lot occupied by a six-story branch office building of The Travelers—with a paint shop and a record shop on the ground floor, and bowling alleys next door, and a technical institute and movie theater across the way.) At the time of Pierpont Morgan’s birth, his father was still a young Hartford merchant, but his grandfather was already a man of considerable means.

  Young Pierpont—“Pip,” as they called him in his boyhood—went first to a small private school for young children in Hartford, then to a public grammar school, then to a boarding school at Cheshire, Connecticut (while his father was moving to Boston and becoming established there); then to the English High School in Boston, a public school of exceptionally high standards; then (as the family moved abroad to London) to a private school in Vevey, Switzerland; and finally for over a year to the University of Göttingen in Germany. There was always plenty of money behind him, and of educational opportunity, and of New England belief in breadth of education.

  Inevitably he early absorbed, through inheritance and through the very air of the commercial Hartford of the eighteen-forties, certain traditions and tastes characteristic of the Yankee business community. First, there was the tradition of businesslike thrift. There was nothing finer than to be a good business man, and the very mechanics of a business operation were alluring. When Pierpont was just reaching his twelfth birthday, he and his cousin Jim Goodwin, after the immemorial fashion of twelve-year-olds, got up a show for which they sold tickets to their families and indulgent friends—a Grand Diorama of the Landing of Columbus; not only did Pierpont keep strict account of every penny received and disbursed, but he prepared afterward an accurate balance sheet of the whole operation, headed “Morgan & Goodwin, Grand Diorama Balance Sheet, April 20, 1849.” Other boys in other eras might play at being sea captains, or firemen, or airplane pilots; to this boy in pre-Civil War Hartford there was a tingle of fascination in being able to set down assets and liabilities in perfect order. After Pierpont had moved to Boston, in his mid-teens, he and Jim Goodwin carried on a steady correspondence which combined boyishly occult references to girls they both knew in Hartford, with reports of purchases they had made for one another; and Pierpont used to like to sign his letters to Jim, “Truly yours, Goodwin, Morgan & Co.—J.P.M.—To Messrs. Goodwin, Morgan & Co.’s Agent at Hartford.”

  He not only kept a diary, in a clear handwriting that by the time he was fifteen was graceful and well formed, but kept a series of precise personal account books; and so firmly was this habit acquired that twenty years later, when he was married and traveling abroad with his wife and children, he still committed to a blue leather account book, in his fine slanting hand, the exact record of the francs he had spent on such items as 3 bouquets, 18; postage, 1.40; cab, 1.80; oranges, 1.70; mineral water, 18; postage, 1.50.

  Along with the thrift went godliness: church attendance twice on Sundays, family hymn-singing Sunday evenings, and the building of a robust religious faith, which was destined to stand almost unmodified throughout his life. Long afterward Morgan’s friend, Dr. William S. Rainsford, the rector of St. George’s Church in New York, wrote that Morgan’s faith was like a “precious heirloom”—“a talent to be wrapped in its own napkin and venerated in the secret place of his soul … in safe disuse.” But this did not mean that it was something with which he appeased God and the congregation on Sunday for ungodly conduct during the week. It meant simply that to him religion was something as solid and unquestionable as the stones of St. George’s, even though most of the time it was out of sight and out of mind; and that business success, too, while quite separate and on a more mundane level, was indubitably valid. In the Hartford and Boston of the mid-nineteenth century, devotion to the competitive warfare of business—with few holds barred—and devotion to God and the church and the creed had been two mutually comfortable parts of a whole life.

  The first thing Morgan ever collected in his youth, aside from stamps, was the autographs of Episcopal bishops. He went on to become not only a formidably successful banker but a tireless vestryman and church warden, a giver of parish houses and cathedral chapels, an energetic attender of triennial Episcopal Conventions. When in the skeptical year 1913 he died, and his will was made public, those who had known him only by reputation gasped at the way in which the document began; how on earth could this monarch of Wall Street, this worldly yachtsman, this lordly spender of millions, have written those tremendous introductory words?—

  “I commit my soul into the hands of my Saviour, in full confidence that having redeemed it and washed it in His most precious blood He will present it faultless before my Heavenly Father; and I entreat my children to maintain and defend, at all hazard and at any cost of personal sacrifice, the blessed doctrine of the complete atonement for sin through the blood of Jesus Christ, once offered, and through that alone.”

  There was no mystery: this, deepened but unchanged, was the faith in which Pierpont Morgan had been rais
ed in the Hartford of the eighteen-forties.

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  In such communities, Yankee penny-counting thrift was often mitigated by the conviction that travel was a sound investment; and as Junius Morgan moved along from Hartford to Boston and then to London, his son was able to profit increasingly by chances to see the wide world. When Pierpont was a pupil at the English High School in Boston, at the age of fifteen, he was crippled by a bad attack of inflammatory rheumatism and needed a rest and change. Thereupon his family packed him off in a sailing ship to the Azores, in company with their friend Mr. Dabney, the American consul at Horta on the island of Fayal; and there the boy spent several months—living alone at Silva’s Hotel in Horta, spending only part of his time with the Dabneys, and learning otherwise to enjoy being quite on his own.

  His letters home from Horta give us a revealing glimpse of him at fifteen. They were exceptionally mature for a boy of his age—long, clearly and capably written, marred by only a few youthful clichés, and packed with varied and detailed observation. They showed a zeal for factual precision, as when, in his account of the voyage from the States on the sailing ship Io, he noted, “We had five ladies on board and three gentlemen besides myself. Of these, three ladies and one gentleman were seasick, and as it very singularly happened those who escaped with the exception of Mr. Dabney were those who had never been to sea before.” He set down for his parents careful accounts of the whitewashed stuccoedover houses, of the gardens and what grew in them, of the currency and prices of Horta, and of the ships and shipping; the latter he studied with especially close attention, liking to go aboard the ships in port and hear about their trade. And he wrote at length about the presents he was sending home to his family—oranges, bottles of wine, baskets, silk stockings and a bonnet for his mother, and artificial flowers made of feathers, which he packed most carefully so that they would not be damaged. He was methodical, too: noted in his diary the temperature on rising, at noon, and at bedtime.

  Some signs of aesthetic appreciation appeared in his letters: of the mountain toward which his hotel window looked, across the water, he wrote: “Pico is a very beautiful mountain and it seems to me as if I should never tire of looking at it. It varies so both as to clearness and color. I often sit before a window facing it and watch the various changes which take place so often.” But mainly he was a tireless factual observer with an eye for the business aspect of events. When the Io, on a subsequent visit to Horta, was badly damaged in a heavy storm while in port, Pierpont reported: “Later in the day I went with Captain Pillsbury to examine the rigging, etc., but it was so broken that he thought it was not good for anything. Had the Io gone ashore the Underwriters would have had a nice bill to pay, for she is insured for $25,000 and her cargo for $10,000 more, and none of the cargo had been landed at all. Mr. Dabney of course and everyone else here seems to be so delighted that she escaped, for she would have been a great loss to the whole island. Towards night the gale moderated. Thermometer 57.57.59.”

  When Pierpont arrived at Horta he had been very weak from his illness, and spent much of his time playing chess with a certain Dr. Cole who had also come to Horta for his health, and reading and writing letters; but his condition improved so rapidly that before long he was taking considerable walks and going to parties with the Dabney girls; and his gain in size was prodigious. On his arrival on November 20 (1852) his weight was 126 pounds; a month later it was 138 and he was complaining that his pantaloons were too tight; by March 21 it had reached 150. In April, his island cure successfully completed, he left the Azores by steamship for England in order to join his family for a tour of the Continent. It was on his solitary voyage to England that he formed the enduring habit of jotting down each day, in orderly figures clearly legible even when crowded into the limited space of the back of a calling card, the exact latitude and longitude reached at noon and the mileage of the day’s run.

  This prolonged boyhood expedition, along with his subsequent schooling among students of many nationalities at Vevey and at Göttingen, and his holiday visits to his family in London, gave Pierpont Morgan while he was still in his teens a familiarity with foreign life and ideas and an international outlook which in those days of slow ocean travel were exceptional for a young American. The farthest west he ever went in the United States as a boy was to Buffalo and Niagara Falls; in August 1854, when he was seventeen and about to enter school at Vevey, he and Jim Goodwin set out by the newly built Erie Railroad to Buffalo, returned by rail to the Hudson Valley, visited Saratoga, Lake George, and Lake Champlain, crossed Vermont and New Hampshire by stage to Crawford’s Inn in the White Mountains—and then, because their cash was giving out and they would not appeal to their families for help, proceeded partly on foot and partly by stage to Portland, where they took an inexpensive boat to Boston, arriving with their money quite gone. Not a very extended American trip for a boy who was about to live for years abroad; but in those days the New England of the merchants and the bankers faced east.

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  The level-eyed, methodical boy was growing up to be a big, bulky man, a six-footer. You would hardly have called him handsome, but he was responsible looking, with round strong features, a rather large and expressive mouth, and a fine direct gaze. He was not athletic, though in those days—and until he was well on in years—he was active and liked to walk and climb mountains and had a normal enjoyment of sports. It was perhaps the result of frequent invalidism as a boy that his favorite games should have been whist and chess. Like many youths, he was cursed with a bad complexion; at least once, when he was nineteen, he stayed away from a dance at Göttingen that he had very much wanted to go to because he was ashamed of the eruption on his forehead. In school he was by no means a conspicuous student, though in his later years at English High he stood near the top of his class. But he developed a very sharp head for mathematics, and when he left Göttingen, the professor of mathematics there assured him that he was making a great mistake to go into business: he should stay on, perhaps become the professor’s assistant, and even possibly—if he worked diligently and fortune favored him—succeed to the professor’s own august chair.

  He was a sociable fellow, with a relish both for playing chess with men of twice or thrice his years and for organizing dances at Vevey, where—as he wrote to Jim Goodwin—his participation would cost him “about $5.75 a night, but that is dog cheap when you can laugh, talk, and dance with such a beautiful girl as Miss H. as much as you choose.”

  In the year 1857, when Pierpont was twenty, there was a farewell party at Göttingen and his university days were over. After a short visit to England, he left his family and crossed to America to begin his business career as a junior accountant with Duncan, Sherman & Co., private bankers, in New York.

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  To the business of Duncan, Sherman & Co. at 11 Pine Street in downtown Manhattan this six-foot youth brought an energetic and enterprising spirit, mathematical acumen, great confidence, and a useful tie with the Peabody banking house in London. Within a year he demonstrated the enterprise and confidence in a way that brought acute if momentary alarm to his business seniors.

  He had gone to New Orleans to make a several weeks’ firsthand study of the cotton and shipping business. He spent a good deal of time exploring the waterfront, ranging from dock to dock and boarding the vessels tied up there to find out how their imports and exports were handled. One day, boarding a ship, he found it loaded with coffee in bags and learned that its captain was in a quandary: the man to whom the shipment had been consigned could not be found, and the captain, consulting his Brazilian headquarters, had been instructed to dispose of the cargo of coffee as best he could. Pierpont saw an opportunity. He went off with samples of the coffee in his pockets, made the rounds of the local merchants, collected orders, returned to the ship, and bought the entire cargo with a sight draft on Duncan, Sherman & Co. The next day, within a few hours of the time when his superiors in New York began spluttering with rage at his temerity, he was
able to telegraph them that he had sold every bag of coffee in the cargo to various merchants at a neat profit, and was forwarding to Duncan, Sherman & Co. the checks made out in payment. What the men in New York had supposed to be a foolhardy operation had been a methodically prudent one; he had collected orders for every bag before he bought the shipload. But it had been a bold transaction for a neophyte of twenty-one, and characteristic in that he had not bargained for a quarter or a half of the cargo, but for the whole thing. No half-measures for him.

  Pierpont’s most obvious asset—his intimate connection with the English banking world—was imperiled very soon after he took his desk at Pine Street; for the Panic of 1857 was raging, the Peabody firm in London was in dire straits, and one day the rumor ran about New York that it had had to suspend. Finding that the new transatlantic cable lines were being monopolized at the moment by press messages, Pierpont went down “to Mr. Field’s”—the office of Cyrus W. Field, who had laid the cable only a few years before—and was able to bring back the welcome news that George Peabody & Co. had been saved by a credit of a million pounds from the Bank of England. As the panic abated the connection began to regain its value, for the shortage in the Peabody till had been merely temporary; and within four years it enabled Pierpont, at twenty-four, to leave Duncan, Sherman & Co. and go into business on his own.