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The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

Page 110

by Ron Chernow


  decline in power and size of, 486, 488–89, 492–93, 496, 501, 511, 530

  Depression and, 322, 323

  described, 256–57

  explosion on Wall Street and, 212–14; 15

  Broad Street property, 531–32

  foreign loans of, 230–53, 323, 486–87, 488, 504, 551

  incorporation of, 469, 470

  insider trading by, 305–307

  Korean War and, 490

  merger with Guaranty Trust, 237, 304, 532–35

  Morgan et Compagnie and, 450–54

  Morgan Grenfell and, 270–71, 331–34, 385, 396–99, 431–35, 465–66, 501, 520, 534

  Morgan Stanley and, 470–71, 500–501, 504, 509

  origin of, 21, 34, 65

  partners at, 256–62, 322, 348, 371, 431, 469, 473

  political attacks on, 496–97

  pre-crash 1920s and, 304–19

  proposed merger with Chase, 496

  public relations and, 510

  Pujo Committee and, 153, 156

  Trust Department, 469, 546, 559

  World War I and, 186, 191, 200, 201, 205

  World War II and, 450–54, 460, 466; see also Morgan, House of

  Morgan and Company, J. S., 36, 43, 65, 71, 74, 98, 133

  lack at, 95

  origin of, 14–15

  partners at, 103–105

  successor to, 145

  Morgan and Company, Inc., J. P. (holding company for Morgan Guaranty), 591–92, 624, 636, 654, 660–61, 704, 705

  Morgan et Compagnie, 286, 359

  during World War II, 450–54

  Morgan et Compagnie International, 549–50, 578, 586, 591, 594

  Morgan et Compagnie, S. A., 544, 545, 547–59

  headquarters of, 545–46

  Morgan family, 17–20

  ancestral home of, 18, 59, 160

  Baronial Age and, 23–24

  “British Morgans,” 95

  surrender of absolute power, 334–36

  as Wall Street’s conscience, 19

  Morgan Grenfell and Company, 105, 159, 217, 246, 256, 266, 286, 431, 476, 477, 501, 518, 519–26, 637

  Arab petrodollars and, 612–18

  domination of industrial accounts, 519

  Euromarkets and, 544, 546, 547

  firings at, 714

  global expansion of, 589–90, 613, 654

  Guinness scandal, 672, 676, 679–85, 686–89

  hostile takeovers and, 524–26, 570–79, 671, 676–89, 714

  J. P. Morgan and Company and, 270–71, 331–34, 385, 396–99, 431–35, 465–66, 501, 520, 534

  Morgan Guaranty and, 548, 549, 568, 569, 589, 591–94, 608, 653–54

  Morgan Stanley and, 570–71, 590, 591–94, 595

  new headquarters of, 270

  in the 1980s, 671–89, 713–15

  origin of, 145

  partners at, 270–73, 349, 431–32

  passive attitude of, 519–20, 522, 523, 526, 545, 568–69, 590, 593, 671

  public offering of stock of, 676

  response to Big Bang, 674–76, 714, 715

  transformation of, 526, 569, 575, 578–79, 671

  World War I and, 185, 200

  World War II and, 459, 460, 461

  Morgan Guaranty, 659, 677, 701

  Arab petrodollars and, 604–10, 614

  corporate culture of, 533–36, 704

  Euromarkets and, 541–49, 550, 567, 590, 592, 594

  headquarters of, 537–38, 718–19

  Japanese business, 551–58

  Latin American loans and, 637–52

  mergers and takeovers handled by, 567, 571, 705–709

  merger to form, 237, 304, 532–36

  Morgan Grenfell and, 548, 549, 568, 569, 589–90, 591–94, 608, 653–54

  negotiable CDs and federal funds markets, 538–41

  New York City financial crisis and, 618–21

  in the 1980s, 653–54, 655–56, 660–61, 703–709, 715–19

  one-bank holding company created by, see Morgan and Company, Inc., J. P.

  overseas success of, 593, 704–705

  relationship with Morgan Stanley, 550, 557, 589, 590, 591–94, 608, 653, 669–70, 716, 718

  strength of, 535–36

  Trust Committee, 562

  Trust Department, 559–67, 706

  Morgan Guaranty Limited, 594, 653, 705

  Morgan, Harjes, 65, 76, 93, 145, 247, 256, 450, 518

  successor to, see Morgan et Compagnie

  Morgan Memorial Park, 268–69

  Morgan New York State, 537

  Morgan Securities, J. P., 665, 705, 718

  Morgan Stanley, 414, 421, 480, 492, 500–518, 570, 594–603, 637

  American Viscose and, 462–63

  anti-nepotism rule, 515–16

  Arab petrodollars and, 610–12, 622

  Arbitrage Department, 630–31

  becomes a partnership, 470

  client list of, 390–91, 511–12, 513, 549, 594–95, 626, 661, 667

  creation of, 384–88

  early days of, 388–91

  entry into trading and sales, 585–86, 622–23, 665

  Euromarkets and, 544, 546, 549–50, 591, 594, 625

  financing of, 387–88

  foreign clients, 517, 518

  incorporation of, 586, 600

  “irreverent group of six” at, 584, 597

  Japanese business, 552–54, 557

  junk bonds and, 666, 694, 697, 710

  Justice Department lawsuit against Club of Seventeen and, 502–506, 507

  as leading investment bank, 470, 500, 501, 513, 516, 517, 580, 581, 584, 595, 623–24, 662, 663, 710

  leveraged buyouts by, 669, 693–99, 711–12, 717

  Mergers and Acquisitions Department, 595, 596, 602, 627–35, 665–68; 691–93, 701, 703, 705, 707, 708, 710

  as money manager for individuals and institutions, 669, 673

  J. P. Morgan and Company and, 470–71, 500–501, 504, 509, 624

  Morgan Grenfell and, 570–71, 590, 591–94, 595

  move to Exxon building, 588–89

  mystique of, 513

  in the 1980s, 661–70, 691–703, 710–13, 717

  overseas trade and distribution of securities, 665

  partners at, 515, 516, 549, 553–54, 580–87, 595–99, 623, 625

  philosophy of, 386

  public offering of stock of, 695, 712, 716–17

  public relations at, 510, 516–17

  recruitment by, 516

  relationship with Morgan Guaranty, 550, 557, 589, 590, 591–94, 608, 653, 669–70, 716, 718

  solo-manager policy, 623–27, 662

  Stock Research Department, 587, 628

  transformation of, 582, 583, 585–89, 592–93, 622, 663–64

  women at, 602, 664, 695

  World Bank and, 517–18, 553, 557, 585, 587

  Morgan Stanley International, 594, 625

  Morgan Stanley Leveraged Equity Fund II, 695

  Morgenthau, Henry, Jr., 358, 373, 410

  World War II and, 442, 444, 462

  Morita, Akio, 557

  Morris, Benjamin Wistar, 266

  Morrow, Anne, 206–207, 261–62, 271, 290; see also Lindbergh, Anne Morrow

  Morrow, Betty, 262, 289–90, 292–93, 295, 300, 445–47

  Morrow, Dwight, 87, 144, 213, 234, 243, 257, 262, 350, 445–46, 495, 522, 559

  as ambassador to Mexico, 292–99

  Coolidge and, 251–52, 254, 287–93, 298

  death of, 300–301

  described, 288–90

  Durant and, 223–24

  German loan and, 251–53

  Lamont and, 287, 289, 293, 297–99

  postwar period and, 206–207, 208

  as senator from New Jersey, 296, 298–300, 321

  World War I and, 184, 197, 202, 204

  Morrow, Elisabeth, 295

  Morton, Bliss, 36

  Moss, Fred, 501

  Motley, Langhorne, 642

  Moxley, Regis,
552

  Muenter, Erich, 193–94

  Mulholland, William D., 582

  Munich Pact, 437–39, 451

  Municipal Assistance Corporation (“Big MAC”), 620, 621

  Munroe, Vernon, 298, 344

  Murdoch, Anna, 575

  Murdoch, Rupert, 573–79

  Murray, Philip, 420

  Murrow, Edward R., 459

  Mussolini, Benito (il Duce), 308, 341, 343, 407

  death of, 479

  Hitler and, 403, 437, 454–56

  invasion of Ethiopia, 402–407, 437

  loan to, 277–86, 479, 481

  N

  Nabisco Brands, 711

  Nassau Hospital Association, 564

  Nasser, Gamal Abdel, 529

  National Bank of Commerce, 153, 180, 532

  National City Bank of New York, 76, 88, 90–91, 324, 338, 362, 451, 496, 508, 527, 530, 551

  Big Three and, 132, 137, 153, 180, 205, 304–305

  foreign loans and, 225, 236, 237

  Pecora hearings and, 355–56, 375

  Pujo Committee and, 153, 156

  National City Company, 304, 324, 356, 362, 375

  National Monetary Commission, 129, 144

  National Westminster, 674

  NATO, 488, 529, 543

  Nazis, 312, 328, 339, 345, 369, 477–79

  appeasement of, 434, 437–39

  Axis and, 403, 407

  Lindbergh and, 444–47

  Morgan et Compagnie and, 450–54

  occupation of Rhineland, 399–400

  propaganda of, 249, 253, 398–99

  repayment of Austrian loans and, 432–35

  Neckermann, 547, 548

  Negotiable certificates of deposit, see Certificates of deposit, negotiable

  Netherlands Trading Society, 605, 606

  Netto, Delfim, 641, 642, 646

  Neutrality Acts, 401, 407, 442

  New Deal, 181, 258, 374, 378–429, 496, 498, 503, 511

  Brandeis and, 378–79

  factions within, 418–19

  House of Morgan and, 357, 359, 381–84, 417–20

  Jack and, 369, 379–80, 408–12, 417

  legislation of, see specific acts

  securities reform and, 362, 377, 378

  tax evasion and, 410–11

  Willkie and, 447–48

  New Haven Railroad (New York, New Haven and Hartford), 18, 137–38, 149, 290, 378, 412

  crisis surrounding, 174–81

  Newman, James, 632–33, 634

  Newmont Mining, 598

  New School for Social Research, 201

  News International, 578

  News of the World, 573–78, 687

  New York Central Railroad, 24, 178, 180, 309, 507–508, 509, 510, 511, 625

  dispute over West Shore line, 53–55

  sale of Vanderbilt’s stock in, 42–45

  New York City, Morgan-led rescues of, 126, 185, 618–21

  New York Clearing House, 125

  New York Life Insurance Company, 108, 110, 142, 152

  New York Lying-in Hospital, 50–51, 159, 169

  New York Stock Exchange, 67, 103, 214, 469, 472, 654, 700, 702

  crash of 1929, see Stock market crash of 1929

  gutter market, 184

  institutional investors and, 584–85

  Northern Pacific corner and, 91–93

  panic of 1873 and, 36–37

  panic of 1907 and, 124–25

  panic of 1914 and, 183–84

  post-crash bottom of market, 323, 346

  Whitney embezzlement and, 421–28

  World War II and, 441, 470; see also Wall Street

  New York Times, The, 64, 70, 92, 99, 102, 157, 165–66, 310, 318, 327, 337, 339–40, 367, 373, 388, 407, 472, 494, 565, 625, 628, 633, 665, 716

  New York Trust, 530

  New York World, 76, 100, 255, 280, 283

  New York Yacht Club, 53, 80, 87, 169, 170, 266, 514, 535

  embezzlement from, 424, 426

  Nicholas II, Czar, 183–84, 195, 196, 210

  Nicholas, Bruce, 537

  Nicolson, Sir Harold, 204, 290, 291, 297, 300–301, 445, 459

  Nimitz, Chester M., 490, 583

  Nippon Steel, 557

  Nippon Tel and Tel, 557

  Nixon, Richard, 528–29, 536, 542, 619

  Nogara, Bernardino, 285–86, 546

  World War II and, 451, 455–59

  Nomura Securities, 552, 673

  Norman, Montagu (Monty), 202, 277, 312, 313, 323, 355, 383, 475–77, 478, 479, 519, 521, 644

  at the Bank of England, 244–52, 327–30, 391, 476

  death of, 477

  German loan and, 247–52

  gold standard and, 273–77, 329–30, 331, 334, 359, 475

  Schacht and, 393–94, 434, 439, 478

  World War II and, 439–40, 460, 461

  North American Philips, 633

  Northcliffe, Lord, 200

  Northern Pacific Railroad, 35–36, 67–68, 598

  corner, 88–94

  Northern Securities Company, 94, 106

  North German Lloyd, 102

  Noyes, Alexander Dana, 37, 48, 76, 184

  Nuremberg Trials, 393, 478–79

  Nye, Gerald P., 400

  Nye hearings, 400–401, 409, 437

  O

  Obregón, Álvaro, 239–43

  O’Brien, Sir Leslie, 571, 577, 687

  Ochs, Adolf, 373–74

  Olayan, Suliman, 606

  Olds, Irving S., 497

  Olds, Ransom E., 223

  Olinkraft, 629–31

  Olney, Richard, 75

  O’Mahoney, Joseph, 470

  Oppenheimer, Sir Ernest, 350

  Oppenheimer family, 559

  Orteig Prize, 291

  Other People’s Money—and How the Bankers Use It, 178–79, 378, 379

  Otis and Company, 416, 502–503

  Owens-Illinois, 694

  P

  Page, Walter Hines, Jr., 431, 541, 545, 592, 593, 604, 608, 636, 641, 648

  Paine Webber, 382, 702

  Paish, Sir George, 187

  Palmer, A. Mitchell, 210

  Panama Canal, 111

  Panic of 1857, 11–12

  Panic of 1873, 36–38, 39

  Panic of 1893, 58, 66, 71–73

  Panic of 1907, 90, 116, 121–29, 143, 144, 148, 166, 202

  consequences of, 128–30

  Panic of 1914, 183–84

  Pankhurst, Sylvia, 272, 273

  Pan Ocean Oil, 633

  Pantry Pride, 692

  Paris Peace Conference, 206, 207

  Parker, Larry, 585, 587

  Patman, Wright, 536, 537

  Patterson, Ellmore C., 388, 592, 600, 609, 619, 620–21, 636, 641, 706

  Payne, Samuel B., 581–82

  Peabody, Reverend Endicott, 50, 429

  Peabody, George, 3–16, 19, 72, 263, 637

  Bank of England bailout of, 11, 12

  death of, 15

  described, 4, 5, 15–16

  as a miser, 5, 7–8

  mistress and illegitimate children of, 9, 16

  partner of, 8–15

  personal fortune of, 7–8

  as a philanthropist, 7, 9, 10, 13–16

  state bond crises and, 3–7, 14

  Peabody, S. Endicott, 50

  Peacock, Edward, 330, 334, 521

  Peacock Point, 144, 211, 217, 219, 240

  Pearl Harbor, 466

  Pecora, Ferdinand, 353, 379, 421, 501, 565

  described, 355, 360

  Pecora hearings, 353, 355–74, 389, 391, 400–401, 562, 698

  anger against Wall Street and, 355–57, 362

  Black Thurday “heroes” and, 355–56

  Glass-Steagall Act and, 374–77

  holding companies and, 369–70

  income taxes and, 366, 375

  Jack and, 361, 363–69, 409

  preferred list of friends revelation and, 370–74

  private bankers and, 360�
��74

  smoking gun discovered by, 370

  Pember and Boyle, 675

  Penn Central, 567

  Pennoyer, Paul G., 260

  Penn Square Bank, 657

  Pennsylvania Railroad, 53–55

  Pension funds management, 533, 559, 560–62, 616, 673

  People Express, 666–67

  Perella, Joe, 602, 632, 692, 711

  Perelman, Ronald O., 691, 692

  Pergamon Press, 574, 575

  Perkins, George W., 85, 92, 102, 114, 175, 221

  described, 108–11, 142–43

  panic of 1907 and, 122, 124, 128, 129

  Roosevelt and, 105–11, 419

  Taft and, 130, 148, 149

  Perkins, Thomas W., 310

  Perlman, Alfred E., 511

  Perman, Thomas, 8, 9, 16

  Perón, Juan, 487

  Pershing, General, 202, 210, 217, 371

  Peru, 487, 638–39

  Pesson-Didion, Maurice, 452, 453

  Petain, Marshall Henri Philippe, 450, 452

  Petito, Frank A., 549, 580, 581, 587, 593, 599, 601, 630

  Phelan, John, 700

  Phelps, Isaac N., 46

  Phelps, Dodge, 598

  Phillips, Charles G., 666, 667

  Phillips, David (né Sugiyama), 556–57

  Phillips, John, 556

  Phillips, William, 405

  Phillips Exeter Academy, 480, 559, 562, 583

  Phillips Petroleum, 668

  Phoenix Securities, 713, 714

  Physick, Henry, 192–93, 263, 347, 472

  Pickens, T. Boone, 667–68, 692

  Pierpont, Reverend John, 18–19, 22, 52

  Pierpont Fund, 669–70

  Pierpont Morgan Library, 116–17, 160, 169–70, 173, 265–66, 469, 473, 475, 517

  Pietruski, John, 707–708

  Pinchin Denny, 675

  Pinchot, Gifford, 148

  Pirrie, Lord, 101, 103, 146

  Pius X, Pope, 79, 285

  Pius XI, Pope, 262, 285–86, 455, 457

  Pius XII, Pope, 457

  Poincaré, Raymond, 205

  Poland, 438, 440

  Ponce, Joe, 543

  Poor, Sheppard, 505, 516, 549, 584, 593

  Populism, 72–77, 94, 129, 362, 374, 381–82, 415, 444

  Port, Fred, 600, 601

  Portal of Hungerford, Lord, 523–24, 525

  Porter, Captain W. B., 159

  Potter, William C., 237, 315, 362, 364, 480

  Preferred list of friends, 370–74, 414

  Preston, Lew, 557–58, 568, 590, 592, 608, 637, 654–61, 704, 719

  described, 654–55

  Glass-Steagall and, 716

  hostile takeovers and, 707, 708, 709

  Latin American debt crisis and, 643, 645, 646, 647, 649

  rescue of Continental Illinois, 656, 658–60

  sale of Morgan Grenfell stake and, 653–54

  Volcker and, 643, 645, 658, 659, 716, 717

 

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