800 Napkins, 47 Finger Bowls

Zachary Leader

  • Morgan: American Financier by Jean Strouse
    Harvill, 816 pp, £25.00, June 1999, ISBN 1 86046 355 X

Size matters – especially in business. In the quarter-century following the American Civil War, consolidation – in the form of trusts, mergers, monopolies, syndicates and cartels – transformed the US economy, revolutionising transport, communications and industrial production. The industrialists and financiers who shaped the new economy regarded its international ascendancy as natural and inevitable. To those who objected that consolidation inhibited free-market competition and local enterprise, depressed wages, produced inhumane living conditions for workers, and was anti-democratic, big money countered with claims of increased efficiency, radically reduced operating and distribution costs, falling consumer prices, greater social mobility and immense national wealth. These benefits it often extolled in moral or religious terms. Economic progress meant ‘discipline’, ‘sound’ money, ‘inviolate’ faith, as opposed to ‘waste’, ‘wild’ inflation, a ‘corrupt’ currency, ‘blind and dishonest frenzy’, ‘reckless booming anarchy’.

For all that, the concentration of wealth and power was alarming. In 1912, officials from five New York banks – J.P. Morgan and Co, National City, the First National, Bankers Trust and Guaranty Trust – held 341 directorships in 112 US companies, including other banks, public utilities, and companies involved in insurance, transportation, manufacturing and trade. The Morgan partners alone sat on 72 boards. The high moral tone adopted by bankers and industrialists infuriated struggling farmers in the West and South, state legislators in the Midwest, unemployed manufacturing workers and the proprietors of small businesses. ‘When J. Pierpont Morgan, the patron of bishops and exalted pillar of the church, is at his devotions does he think of the starving miners who are suffering through his efforts and those of his colleagues at the coal trust?’ the Machinists’ Monthly Journal asked in 1897. ‘When he reads the lessons of charity and good will toward men, does he think of the tyrannous system that reduces wages to the subsistence point, or is he figuring some new combination where by he can augment his plethoric fortune? When the organ peals forth does not his conscience supply a discord with the wails and cries of those whose lives are sacrificed to the voracious demands of his class?’

The answer was mostly no. Yet as Jean Strouse shows, Morgan was not a monster. What he was, in a way peculiar to his type, was unreflective, serenely confident in the saving virtues of market stability and steady productive growth. So sure was Morgan of the rightness – for the nation – of his actions that he rarely bothered to explain them. Asked by a Congressional committee why he had purchased stocks below the current rate of return (to gain control of the scandal-ridden Equitable Life Assurance Society in 1910), he replied: ‘I thought it was a desirable thing for the situation to do that.’ Told that this answer was too vague, he repeated it: ‘That is the only reason I can give. That is the only reason I have, in other words. I am not trying to keep anything back, you understand.’ But this ‘reason’, his interrogator objected, was ‘no reason at all’. Morgan remained unperturbed: ‘That is the way you look at it. I think it is a very good reason.’

Such a man poses problems for a biographer, as well as for novelists. Strouse quotes the passage in Howards End where Helen Schlegel explains the character of Mr Wilcox to Leonard Bast, the bank clerk he has inadvertently ruined: ‘There are two kinds of people – our kind, who live straight from the middle of their heads, and the other kind who can’t, because their heads have no middle. They can’t say “I”. They aren’t in fact, and so they’re supermen. Pierpont Morgan has never said “I” in his life.’ Strouse would agree. ‘He was, as Henry Adams said of Theodore Roosevelt, “pure act”.’ But Schlegel goes on to say, ‘if you could pierce through him, you’d find panic and emptiness in the middle,’ which Strouse wouldn’t say of Morgan. He may lack any very complicated internal life, or the means of expressing it, but his story is neither empty nor dispiriting. His was a life of things and acts; feelings are recounted in the biography – depressions, infatuations, rages – but with a matter-of-factness appropriate to their subject. When depressed, Morgan summoned doctors, went on rest cures, travelled and got better. Unfulfilled in his second marriage (his first wife died of consumption shortly after their wedding), he took on mistresses, while remaining on affectionate terms with the second wife, from whom he mostly lived apart. When confronted with problems outside his control, he concentrated on soluble problems. When tricked or cheated, he neither brooded nor held grudges, focusing steadily on his interests. Edward Steichen, whose photographs of Morgan late in life are the best portraits we have of him, said that ‘meeting his gaze was like looking into the lights of an oncoming express train.’ Though given to sudden rages, he countered opposition coolly, with little of the venom or relish of such fellow plutocrats as Henry Clay Frick, Andrew Carnegie or John D. Rockefeller. Most criticism he ignored, cultivating a forbidding taciturnity. ‘He left no record of his response’ is a familiar motif in the biography.

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