Morgan
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“It takes an endless amount of history to make even a little tradition,” James later wrote, “and an endless amount of tradition to make even a little taste.” Looking back on one hundred years of its own history in 1876, the United States did not yet have much aesthetic tradition or taste; it did have ardent cultural nationalism, and its cities were becoming vital centers for the arts. The careers of John Singer Sargent, Thomas Eakins, Winslow Homer, John La Farge, and Augustus St. Gaudens were getting under way, as were those of the architects Henry Hobson Richardson, Ralph Adams Cram, Richard Morris Hunt, Charles Follen McKim, and Stanford White.
Several of the institutions built by America’s wealthy elite to endow the country with cosmopolitan culture were completed in the 1870s. The banker William W. Corcoran created the Corcoran Gallery in Washington, D.C., in 1870, to house his private collection of American paintings (by Cole, Bierstadt, Remington, Durand), and Boston’s Museum of Fine Arts opened on the Fenway in 1876. In New York the architectural firm of Calvert Vaux and Jacob Wrey Mould was designing the building that would house the Metropolitan Museum on the eastern edge of Central Park (which Vaux had also designed). The museum installed its collections in temporary headquarters during the seventies—first in a dancing academy on 53rd Street and Fifth Avenue, then in a private brownstone called the Douglas Mansion at 128 West 14th Street. Henry James pronounced the Met’s early collection not brilliant but useful: “it contains no first-rate example of a first-rate genius; but it may claim within its limits a unity and a continuity which cannot fail to make it a source of profit to students debarred from European opportunities.”
Directly across the Park at 77th and Central Park West, President Grant laid the cornerstone for the American Museum of Natural History building in 1874. This five-story red-granite structure, also by Vaux and Mould, was so far from the center of the city that its superintendent found the prospect “desolate and forbidding … my only companions were scores of goats.… [S]outh of us there was no building near, except the ‘Dacotah,’ a fine apartment hotel at the corner of Central Park West and Seventy-second Street.”
The Morgans played supporting roles in the early lives of these New York institutions—Pierpont as a founding trustee of the Museum of Natural History and a patron of the Met. Junius helped finance one of the art museum’s important early acquisitions, a collection of Cypriot antiquities unearthed by the American consul in Cyprus (and the Russian consul as well), the Italian-born General Luigi Palma di Cesnola. The museum’s president, John Taylor Johnston, paid $60,000 for the Cesnola collections through J. S. Morgan & Co. in 1872–73, and another $60,000 for a second installment three years later. Cesnola was excavating in Cyprus at the same time that Heinrich Schliemann, a self-made German American millionaire, was looking for the sites and objects described by Homer in the Iliad and the Odyssey. To great public fanfare, Schliemann found the legendary cities of Mycenae and Troy in 1873 (although the materials he discovered actually antedated the Trojan War by almost one thousand years). Cesnola made no such dramatic discovery, but ultimately sent about 35,000 objects to New York—sculpture, vases, bronzes, jewelry, sealstones—dating from prehistoric to Roman times, roughly 3000 B.C. to A.D. 200.
Lax laws in the eastern Mediterranean allowed foreign excavators to take much of what they found, and with the Cesnola purchase New York’s Metropolitan Museum secured a wide-ranging collection that remains the finest body of Cypriot antiquities outside Cyprus. The Met repaid Johnston for his advances through donor subscriptions, to which Pierpont contributed $2,500 in 1877. Cesnola, who knew more about these objects than anyone else, was appointed the museum’s first director two years later.
In New York in the autumn of 1877, a year after America’s centennial jubilee, several of the men who had the most to celebrate met for a dinner in honor of Junius Morgan. The Morgan men alternated transatlantic trips, with Pierpont going to England every spring and Junius to America in the fall. On November 8, 1877, ninety-four of America’s leading politicians, businessmen, and bankers gathered at Delmonico’s Restaurant on Fifth Avenue at 26th Street to pay tribute to “the great service” Junius had rendered his country “in upholding its credit and its honor in the commercial capital of the world.”
The guests that Thursday night included the governors of New York, Massachusetts, Connecticut, and Pennsylvania, former Treasury Secretary Hugh McCulloch, railroad presidents Thomas Scott (of the Pennsylvania) and John W. Garrett (the Baltimore & Ohio), along with Cyrus Field, George M. Pullman, Jesse Seligman (Joseph’s brother and head of the New York firm), Levi Morton’s partner George Bliss, Charles Tracy, A. A. Low, August Belmont, and General Cesnola. Among the Morgan partners were Tony Drexel, Egisto Fabbri, J. Hood Wright, and S. Endicott Peabody, who had just retired from the London bank. Seated together at one end of the M-shaped table was the younger set, including Pierpont (age forty), Jim Goodwin (forty-two), Theodore Roosevelt, Sr. (forty-six, just appointed collector of customs for the Port of New York by President Hayes), Henry Adams (thirty-nine), the bankers Charles Lanier and Morris K. Jesup, and railroad attorney George MacCulloch Miller. The New York Times the next day called the event “one of the most extraordinary testimonials ever offered to a private citizen”: “the wealth and brains of the Union … turned out a representation that has probably never before been equaled at any gathering of the sort in the history of the Metropolis.”
An orchestra played as the guests assembled in an upstairs parlor under British and American flags. Promptly at seven, New York’s Democratic Governor Tilden led the party in to dinner with Junius on his arm. Flowers adorned tables, balconies, and wall brackets. Elaborate sugar sculptures showed the American journalist H. M. Stanley traveling through Africa to rescue the British explorer David Livingstone, and a locomotive and cars passing through a tunnel under a mountain of candy. The dinner included oysters, a “timbale à la Périgourdine” (foie gras in a pastry shell), filets of beef, woodcock, canvasbacks, partridge with truffles, baby hens, a “gelée Orientale,” “Charlotte Doris,” apple pudding, vintage wines and Champagne.
Governor Tilden, who but for a roll of the political dice might have been President Tilden, rose to address the group over coffee and cigars. With an odd mix of irony, sanctimony, flag-waving, and economic acumen, he glancingly acknowledged the country’s depression-era conflicts, and referred in wry amusement to his audience’s collective wealth.
He opened by assuring the gathering that “every man who, by any effort, reduces the cost or increases the fruits of any service demanded by society, to that extent enlarges the productive capacity of human labor and increases the results of its exercise [Applause].” Although the “owners of colossal capitals and managers of colossal capitals” before him might be under the illusion that they were working for themselves, he—only partly tongue-in-cheek—had “the satisfaction to be able to claim, on behalf of the general public, that they are chiefly working for that public [Applause].” Had they not brought about the nation’s great transportation revolution? Tilden remembered when bringing crops to market cost more than the crops. Now, produce from all over the country could be shipped to the East Coast cheaply enough to compete in international markets.
At this moment of intense democratic hostility to private wealth, Tilden repeatedly congratulated his listeners for the noble public service they were performing. Though they might seem “to all human eyes” to be seeking selfish gain, there was “a wise and beneficent over-ruling Providence which directs events so that nearly all they do in lessening the cost of these [transport] services results, not in enlarged profits, but in diminished charges; and thus inures to the benefit of the mass of the people [Applause].” As long as the railroads reinvested the “comparatively small share” of income that did count as profit, they created “better machinery, better processes, and more competition—all resulting in cheaper service to the public.” Whatever fraction of profit was taken out for personal use would do its beneficiaries no go
od at all “when they go on that long journey to the bourne from which no traveller returns [Laughter and applause].”
Tilden then recalled a visit he had paid the previous summer to Junius Morgan at Dover House in Roehampton. While being shown over the estate, “inspecting with pleasure the appliances of comfort and luxury” in its mansion, gardens, stables, dairies, and lawns, the governor had found himself “thinking how much, after all, [Mr. Morgan had] got for himself out of his great wealth and great business [Laughter].” He had remarked to his host at the time, “I don’t see but what you are a trustee here; you get only your food, your clothing, your shelter”—and added to the Delmonico’s assembly: “Of course, a man may have some delight in a sense of power, in a sense of consequence; but I rather thought his hostler beat him in that particular [Laughter].”
In closing, Tilden saluted Junius’s quarter century of service as America’s economic standard-bearer in London. He trusted that Morgan, like everyone else in the room, had discovered there was something finer than money—“the merited esteem of their fellows”—and something finer even than that: “a consciousness that human society is better because we have existed.”
Junius stood, nodding his white head to quiet the long ovation. As the applause died down he told his hosts that receiving this assurance of their respect and friendship was full compensation “for a life of labor, of responsibilities and of anxieties; a compensation beside which mere money results sink into insignificance. It is the proudest moment of my life.”
Paying warm tribute to his mentors, partners, and colleagues, he noted that he had been received in England with such cordiality and confidence “that I should be the most ungrateful of men, if I did not repay it by endeavoring to create the kindest feelings between the two countries.” The “three and twenty years” of his London career had begun when few American securities were quoted on any European bourse. Then came the Civil War and a huge national debt. In a first-person plural that accurately reflected his sense of personal responsibility for guiding U.S. economic affairs, Junius described how the country had reduced that debt “with resolution and determination, and with a sound financial intelligence, which enabled us to lighten some of its burdens within an almost unprecedented space of time.” Postwar America still needed European funding, but “those who controlled that capital responded liberally to our requirements, because they believed in the ability, in the honor, and in the integrity of our people”—and, Junius did not have to add, because they believed in the bankers who represented American interests abroad. By 1877 U.S. bonds were quoted on almost every exchange in Europe, ranking “side by side with those of the oldest and most wealthy of those countries.”
Junius owned a letter that George Washington wrote to an English friend in 1788, just as the States were forging their confederation. He now brought it out and read aloud: “If this people continue to be animated by the same feelings of patriotism,” Washington had predicted, “if they shall continue true to themselves, no power on earth can prevent their becoming a great, a commercial, and a powerful nation.”
That forecast had been “wonderfully” fulfilled, Junius Morgan concluded in New York nearly a hundred years later. Would not a similar prediction in 1877 be just as sure to come true? If the nation’s legislators were careful to pass only laws that promoted the “honor and integrity of this country in its highest sense” and preserved our “good name pure and unspotted”—that is, if they returned the country to the gold standard—“no power on earth can prevent our continuing to be a free, a powerful, and a respected people.” Thanking his hosts again for “the honor you have done me to-night,” Junius closed by acknowledging his high sense of stewardship and its even higher source: “A kind Providence has been very bountiful to us, and under this guidance, the future is in our own hands.”
It is impossible, another hundred years later, to hear the self-righteousness, jingoism, and presumption in these speeches without a measure of late-twentieth-century cynicism. Even at the end of the Victorian century, Henry James characterized this kind of American triumphalism as “the Eagle’s scream.” Yet where Tilden winked at democratic doubts about the integrity of the rich, Junius spoke from heartfelt conviction. He saw himself piloting the U.S. economic ship through turbulent seas (his favorite metaphor), and earnestly believed that a republican noblesse oblige had placed the country’s future in his hands.
The speakers who followed him that night extolled the nation’s “measureless” natural resources, great manufacturing capacity, enterprising people, and infinite prospects. Several addressed the question that was haunting them all—the Bland silver bill recently passed by the House—but former Treasury Secretary McCulloch, now a merchant banker in London, took it up directly.‡ If ratified, he warned this audience of the converted, the bill would deal a “dangerous, if not fatal blow” to the national credit Junius Morgan had done so much to uphold. It would check the tide of returning prosperity, disrupt business in general, break the pledge under which federal bonds had been sold, and bring debt reduction to a halt. There could be no such thing as a “double standard” of gold and silver: silver would drive gold out of circulation and leave the country with a currency “subject to constant and most injurious fluctuations [Applause].” McCulloch concluded with the hope that the Senate would defeat the Bland bill, “and that our distinguished friend, soon after his return to his English home, will receive the glad tidings that the national honor is to remain inviolate [Great applause].” The party broke up at midnight.
Early in the new year, former Treasury Secretary Bristow, now practicing law in New York, told Pierpont he had seen nothing like the “fever” over the probable success of the Bland bill in the pro-silver South and West since the secessionist frenzy at the outbreak of the Civil War. Pierpont reported to Junius in mid-January that the press and the public were attacking the refunding syndicate as “interested opposers of the Silver legislation.”
The syndicate members were interested opponents of the Bland bill—more than ever after Congress passed a resolution at the end of January 1878, authorizing payment of the interest and principal on U.S. bonds in silver. Investors panicked and sold American securities for gold. The bond market collapsed. In early February Pierpont and several associates went to see Treasury Secretary Sherman.
Under the circumstances, Sherman was willing to let them out of their contract to take a new allotment of bonds that March, but he warned that the question of their liability was likely to be brought up and adjudicated in public: the bankers had to decide whether they wanted to take that risk. They unanimously did not. In the current political climate “we should certainly be attacked from one end of the country to the other,” Pierpont told Junius, and “I had rather make a loss than have anyone have the right to say that we did not come right up to the scratch in meeting the obligations we had assumed.” In fact, when he made this trip to Washington, “it was reported that we had gone there expressly to get rid of our liability for the 6th March call—and it made quite a stir.” From now on, the Morgans would take public scrutiny into account.
Later that month the Senate passed a modified silver bill called the Bland-Allison Act, which provided not for unlimited coinage of silver but for $2 million to $4 million a month. Though President Hayes vetoed it, Congress rallied enough votes to override the veto. Pierpont reported to Junius on the “alarming spirit” in Congress: silverites were “elated” at even this limited “victory over Eastern hard money men.”
The victory proved hollow. Sherman issued only the minimum amount of silver the law required—$2 million a month—and by slightly expanding the money supply in the six months between March and December 1878 the Bland-Allison Act eased the country back toward the gold standard without a drastic social upheaval, which ultimately helped the hard-money men.
In April Sherman contracted with the Rothschild/Morgan syndicate for a $50 million loan specifically payable in gold, the proceeds to go into the Treas
ury to prepare for the return to hard currency on January 1, 1879, as dictated by the 1875 Specie Resumption Act. The issue sold quickly, and with its success the country returned to the single standard of gold.§ Through a combination of the depression, long-term postwar deflation, and the Treasury’s gradual tightening of the money supply, prices had fallen to prewar levels, and by the end of 1878 the reduced volume of paper currency was roughly equal to the expanded gold reserve. In mid-December, two weeks before the official target date of January 1, greenbacks were quoted at the same price as gold for the first time since their issue in 1862. When resumption day finally came, banks along Wall Street draped their facades in bunting, and the Drexel Building hoisted an American flag. The banks, prepared for a run on gold, were delighted when it did not occur: since holders of greenbacks knew that they could exchange their paper dollars for gold, they didn’t have to.
Levi Morton congratulated Secretary Sherman, who replied: “Thanks for your congratulations, which I heartily reciprocate; for the syndicate are entitled to a large portion of the merit now given to me. As I got more than my share of the abuse, it is probably thought that I should get more than my share of the credit.”
At the beginning of 1879, there was a change in the English house of Morgan. Jacob Rogers returned to the United States as Boston agent for the bank, and Pierpont’s brother-in-law Walter Burns took Rogers’s place in London. After a few years as Levi Morton’s London partner, Burns had been appointed European director of the U.S. Mortgage Company in Paris—he was fluent in French—and served as Junius’s translator during the negotiations for the 1870 French loan. Pierpont had been urging Mary’s husband to enter the family firm for years, and as soon as the new plans were definite, told him, “I never was a party to or interested in an arrangement to which I gave my approval more willingly or with stronger convictions that it was ‘the thing to do.’ ” As always when powerfully moved, he was at a loss for words: “So far as regards my feelings toward you personally, you ought by this time to know them thoroughly. If not I cannot put them on paper.” Burns became a partner in J. S. Morgan & Co. the same day the United States returned to the gold standard, January 1, 1879.