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 whereby 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.
What Morgan left instead – and what the biography exhaustively records and explains – are actions and achievements: steadily channelling capital from the Old World to the New, to float government bonds and build railroads, steel mills, farm equipment, electrical plants (initially, in the 1850s, through J.S. Morgan and Co, the London bank he would eventually take over from his father); restructuring the railroads (a process known as Morganisation), which stimulated production and the growth of domestic markets; organising the world’s first billion dollar corporation (US Steel); helping to set up General Electric, International Harvester, Northern Securities and many lesser giants – all, according to Strouse, ‘on the principle that the combination of rival interests into huge, stable systems was preferable to the boom-and-bust cycles, price wars, waste, and speculative recklessness of internecine competition’; mobilising other bankers and financiers to act, under his direction, as a lender of last resort to the US Treasury and elsewhere, thus restoring foreign faith in American credit during the currency crises of the 1870s, the gold crisis of the 1890s, the panic of 1907. These efforts were stressful and time-consuming, they involved great risk and the sacrifice of short-term interests, but when Morgan died in 1913 his estate was valued at $80 million, roughly $2 billion today.
Money accounted only in part for Morgan’s influence. In 1909, the banker Teddy Grenfell told a friend that Morgan’s ‘position today in America is not due to his riches. There are 20 richer men there. It is due to the fact that in the dark days of 1907, he knew no fear ... If he had given way, the whole house of financial cards would have fallen.’ Years after the gold crisis of 1895, former president Grover Cleveland asked Morgan how he had persuaded his fellow bankers to raise the $65 million needed to stabilise the currency (and then to ensure it stayed in the Treasury). ‘I simply told them this was necessary for the maintenance of the public credit and the promotion of industrial peace,’ he answered, ‘and they did it.’ An indirect consequence of such influence – the last of Morgan’s achievements, as it were – was the creation of the Federal Reserve. ‘Never again will conditions of government make it possible for any financier to bestride the country like a Colossus,’ Joseph Pulitzer’s hostile newspaper The World declared after Morgan’s death in 1913. ‘In time little will remain except the feeling of bewilderment that a self-ruling people should ever have allowed one man to wield so much power for good or evil over their prosperity and general welfare, however much ability and strength and genius that man possessed.’
Morgan’s good fortune began at birth – in 1837. The family tree stretched back on both sides to the early settlement of New England, an important distinction for a financier, given what Strouse calls the age’s reflexive linking ‘of money and credit with Jews’. He was also born rich, a man of old money, or relatively old money, as well as new. Morgan’s forebears on his mother’s side were intellectual and ecclesiastical; those on his father’s side were commercial and entrepreneurial. His paternal grandfather, Joseph Morgan, left an estate of $1 million on his death in 1847, mostly in real estate and stocks. His father, Junius, ‘the most powerful emotional bond of Pierpont’s life’, was apprenticed in commerce and banking and prospered in trade. In 1852 his Boston firm, J.M. Beebe, Morgan and Co, an import wholesale house, posted $7 million in gross annual sales. Two years later, Junius joined the London-based Anglo-American bank of George Peabody and Co (later to become J.S. Morgan and Co), buying and selling American securities, offering brokerage and general banking services, trading on its own account, and promoting promising new ventures – notably, in 1856, the Atlantic Telegraph Company, which had recently secured a charter to lay a cable from Britain to America.
Junius Morgan groomed his son for business, and the son was a willing apprentice. From the start he was ‘intent on order and control’. Though mostly an indifferent, impatient student, his meticulously dated school diaries betray a passion for record-keeping, listing ‘income, expenses, the initials of girls he liked, and all the letters he sent and received, including postage paid’. When he caught rheumatic fever in 1852 his father sent him for four months to the Portuguese Azores, where he characteristically noted ‘that he should not have brought American quarters, since they were worth only 24c, while American dollars fetched $1.10 in Spanish currency’. At school in Switzerland, he persuaded his fellow students to pool their allowances to finance sleighing, skating, hiking and sailing expeditions, extravagant meals, cigars and American newspapers. He balanced his accounts ‘in pounds sterling, francs, scudi, florins, Austrian gulden, Neapolitan ducats and Tuscan pauls’.
Things absorbed Morgan rather than ideas. The account books of his teenage years ‘reflect his tactile, visual sensibility and mandarin tastes’. Like his father, he somehow combined an uncomplicated faith in Yankee virtues, enumerated by Strouse as ‘industry, prudence, restraint, veracity, thrift – qualities summed up in the term character’, with a love of custom-made clothing, fine furniture, decorative objets, old books and paintings. Language acquisition, deemed crucial to success in international finance, shaped his education. He learned German in six months (with the help of ‘obliging Fraüleins’). He read Robinson Crusoe – the perfect novel for such a boy – in French, and translated Mme de Sévigné into German, writing out in three languages such maxims as ‘In all labour there is profit: but the talk of the lips leads only to penury.’ His facility with numbers impressed everyone, and in Germany one of his university professors asked him to stay on and make a career in mathematics. There is little reference in the early diaries and correspondence to religion, and no agonising over sin or retribution. His Episcopalianism, another paternal inheritance, was Low Church, roomy, uneffortful, though he dutifully attended church and later played a prominent role in national church affairs, setting aside three weeks every three years ‘to sit among rectors and bishops, listening to dry ecclesiastical debates’.
Though sickly as a child, and given to bouts of depression and hypochondria, Morgan worked and played with an intensity that wore out younger colleagues and rivals. The Bishop of Massachusetts said that a visit from Morgan left him feeling ‘as if a gale had blown through the house’. In 1901 Henry Adams reported that ‘London and Berlin are standing in perfectly abject terror, watching Pierpont Morgan’s nose flaming over the ocean waves, and approaching hourly nearer their bank-vaults’ (Morgan suffered from rhinophyma, which grotesquely deformed his nose in later years). The insane work culture of American investment banking, the culture of Goldman Sachs, derives in part from what one burnt-out colleague, a former college athlete, called ‘the gigantic, nerve-wracking business and pressure of the Morgan methods’. Until late in his life he had trouble delegating: ‘I am never satisfied until I either do everything myself or personally supervise everything done even to an entry in the books.’ Strouse recounts numerous punishing rescue operations, in several of which Morgan simply refused to let prospective partners leave until they agreed. At the end of one such meeting, held at an all-night session in his library in New York in 1907, an agreement for a $25 million loan was placed on the table in front of the presidents of five trust companies:
‘There you are gentleman,’ Morgan said.
No one moved.
Morgan went over to Edward King, head of the Union Trust, and drew him to the table.
‘There’s the place, King,’ he said, ‘and here’s the pen.’ King signed. The other presidents followed suit ... The library’s brass doors swung open at 4.45 to let the bankers out.
Warned that sessions like these were gaining him a reputation for wearing people out, Morgan was, according to one witness, ‘as astonished and angry as if it had been untrue’.
His love of control and fanatical attention to detail extended to his personal life. The biography records his innumerable purchases, of houses, yachts, rare fruits and comestibles, furnishings, cigars, books and manuscripts, ceramics, tapestries, sculptures and paintings. The third of his three custom-built yachts, all named Corsair, was fitted out with
maple panels lining her engine room, a library the width of the hull, a player piano, lace curtains in every stateroom, capes, cloaks, parasols, perfume vials and powder puffs for female guests, silver-backed hairbrushes, cut-glass inkstands, leather portfolios filled with ‘Corsair’ stationery, cases of vintage wine and brandy, 50 pounds of ‘Morgan’ tea (a blend of Earl Grey and Lapsang Souchong) and humidors filled with Cuban cigars. In the linen closet were 68 blankets, 116 sheets, 177 pillow cases and 670 towels. The kitchen parlour accommodated several sets of ‘Corsair’ china, silver baskets for almonds, candy and fruit, fish forks and oyster forks, menu holders, champagne glasses, pearl-handled fruit-knives, nut picks, sugar-sifters, flower vases, marrow scoops, cocktail shakers (one marked ‘JPM’), julep strainers, grape shears, gold spoons, asparagus tongs, 84 linen tablecloths, 800 napkins and 47 finger bowls.
Though the Corsair carried enough coal to cross the Atlantic, Morgan often sent her ahead while he travelled to Europe on White Star liners. The Corsair was used for taking friends on cruises in the Mediterranean and along the coast of Italy, and, on the return home, to steam out to pick his party up when the White Star liner reached New York Harbor.
Morgan’s character as a deal-maker is apparent in non-business as well as business transactions. Among the more amusing episodes in the biography is Strouse’s account of his romance with Lady Victoria Sackville in 1911, ‘an elaborate folie à deux’ in which each party ‘played out the flirtation while calmly pursuing more practical ends: ready cash on one side, authentic treasures on the other’. The romance began after Morgan purchased the Gainsborough portrait of Miss Linley and her Brother which the Sackville estate had put up for sale to avoid death duties. Lady Sackville, described by her grandson Nigel Nicolson as having ‘made a corner in millionaires and lonely elderly artists’ (among them Kipling, Lord Kitchener, W.W. Astor, Rodin, Lutyens and Henry Ford), was determined to get the painting back. She also hoped that Morgan would buy tapestries, carpets and other items from the estate at Knole. ‘Fluent in the language of covert glances and studied disregard’, she ‘most carefully’ ignored Morgan when they met at a party shortly after he bought the Gainsborough: ‘I did not want him to think I was running after him.’ He followed her to her car and said: ‘Why did you not tell me direct & not through dealers that you had some heirlooms to sell? I must see you – give your own time and come.’
At their next meeting, at Morgan’s London house, he declared that he didn’t want any tapestries, but bought 29, sight unseen, plus two carpets, for £65,000 (a price Lady Sackville had inflated by £15,000). She asked him to put the agreement in writing: ‘He obligingly wrote out £65,000 payable within a year (she happened to have brought stationery), but warned that he could not pay at once, as he was “quite dry”.’ On parting, Lady Sackville reports in her diary: ‘he folded me in his arms and said I hope you don’t mind, but I feel such respect & affection for you. I hope you are happy now over this transaction and go home happy. I respect you so much; you have always behaved so well.’ Morgan was 74 at the time and the ‘utterly astonished’ Lady Sackville was 49: over the next year their romance progressed to professions of love, further passionate embraces and surreptitious hand-holding – whether they went to bed together is not clear. Lady Sackville asked Morgan whether, if she became rich, she could buy Miss Linley back:
Her seasoned admirer was not about to be hornswoggled by a pair of pretty eyes: ‘I don’t think, dear, I shld like to part with it now.’
Lady S: ‘Then do you like Miss Linley better than you like me?’
JPM: ‘No, dear, I don’t; and I shall think about your proposal; but I hate parting with her.’
Victoria crossed the room to pick up a book. When she returned, Morgan took her hand and promised not to take the painting to America. It would not go to his son, he said, or to the Metropolitan; it would never leave his hands except to come into hers. She silently held out the book – it was a biography of him – opened to a passage that said Mr Morgan never breaks his word.
Over the next months, Lady Sackville pressed Morgan about the painting. He countered by claiming its return would expose them: ‘he wants to protect me against gossip and scandal of which he has a morbid fear.’ While Morgan was away on the Continent, she took several friends to see the silver at his London home. There she discovered that most of his paintings, including Miss Linley, had been packed for shipment to America. She refused to see him when he returned. When they met at a Court ball – ‘he said he had come hoping to find her there’ – Morgan contrived to look ‘extremely gêné’. Later, he sent her a book about his life inscribed ‘To Lady Sackville from J. Pierpont Morgan with his affectionate regards.’ With characteristic prudence, Lady Sackville concluded in her diary: ‘So this judgment is closed and we remain the very best of friends, bless him.’ She might, after all, need him again in the future.
Strouse’s wry account of this episode is characteristically alert to the play of self-interest and calculation; but she never wholly dismisses Morgan’s feelings for Lady Sackville. He did have a passionate, romantic side; he also had an eye for profit. The mixture of motives recalls a comparable mix in Morgan’s business dealings, where self-interest and national interest, or what he saw as national interest, inextricably combine. Strouse patiently credits both sorts of motive and is careful about figures. She records the outrage of those who suffered most under the economic stringency of the 1890s – in part a consequence of Morgan’s rescue operations – but also notes the relative modesty of the profits involved: on the huge currency stabilisation undertaken at the time, J.P. Morgan and Co’s ‘total earnings’, including ‘interest and half of the US management fee, were $295,653’, a pittance ‘in view of the amounts these bankers regularly handled and the spectre of Federal default’. Morgan himself made no such defence. Investigated by the Senate in 1896, he simply refused to discuss fees, regarding ‘a private banker’s earnings and losses as private’.
After 1900, he devoted a great deal of time and energy to buying art: in the last twenty years of his life he spent half of his income this way. Much of his collection is deposited in the Metropolitan Museum and the Morgan Library (built in 1906), and it can be argued that his contributions to the development of American culture were as important as his financial dealings. Strouse assiduously records all his purchases, and carefully weighs his achievements and abilities as collector and connoisseur. A ‘crude historical imagination was the only flaw in his otherwise perfect insensibility to art’ is how Roger Fry characterised Morgan as a collector. But earlier, while still in his employ, Fry had praised Morgan’s ‘intelligent responses, “huge enjoyment”, appreciation of Giotto, and interest in things he could not buy’. Henry James, a frequent visitor to Junius Morgan’s house in London, was also complimentary about Morgan’s taste, in a thinly disguised portrait of him as the rich and voracious American collector, Breckenridge Bender, in his novel The Outcry.
Morgan started late as a collector – ‘he set out to acquire as much as he could in a relatively short time, often buying entire collections en bloc’ – which makes it more difficult to assess his merits as a connoisseur. When sent a bill of £10,000 for a bust of the infant Hercules, attributed to Michelangelo, he passed the bill to his librarian with a note asking where the sculpture was: ‘ “The bronze bust is in your library,” she wrote in green ink across the bill, “and faces you when sitting in your chair. It has been there about a year.” ’ (This librarian, Belle Green, is the book’s most exotic character: of African-American parentage, yet passing as white; openly flirtatious with Morgan, while sleeping with his rival connoisseur, Bernard Berenson; hard-eyed and parsimonious with dealers, while swathed in jewels and couturier gowns at work.) In 1911, on a tour of the Nile, Morgan fell in love with two model funeral boats, each about three feet long, for which a dealer was asking £2500. Morgan was accompanied on the tour by Herbert Winlock, the assistant curator of Egyptian art at the Metropolitan Museum, who thought the boats unique but ridiculously overpriced. Morgan offered £1000 each, which Winlock ‘also thought ridiculous’. Morgan understood Winlock’s objections, but as he told friends at dinner that night, ‘I know Mr Winlock thinks I am a fool but I want the boats and I don’t want the £1000.’
He knew what he wanted and had the means and character to ignore lesser considerations, like price. Strouse recounts such episodes with an amused even-handedness. ‘His concern for his health had taken on the status of a duty,’ she writes of him in 1876: ‘to forestall breakdown and moral collapse, he was obliged to coddle himself.’ Upbraided for not writing to his mother, he complained of writer’s block (‘writing one word when I mean another’), which left him feeling ‘completely used up and unfit for anything else for hours’. This affliction he complained of nowhere else in the correspondence and Strouse describes it as ‘singularly well designed to get him out of something he didn’t want to do’.
Strouse has dug deep in the archives – she’s been working on Morgan for over fifteen years – and has uncovered much previously unexamined material, including ‘vaults of uncatalogued biographical documents’ (in the Morgan Library and elsewhere) and boxes of newly discovered family correspondence, in particular letters between Morgan’s favourite daughter, Louisa, who spent much of each year travelling with him, and her mother, Fanny, Morgan’s second wife. A great strength of the biography is its interweaving of private and public lives; here the milieu of Edith Wharton and Henry James is rendered whole, no longer shorn of its economic base – the working world of Newland Archer or Caspar Goodwood. The public life is described clearly and persuasively, even for a reader largely ignorant of stocks and bonds. But the book is very long and, at times, the details of mergers, restructurings, currency crises and artistic as well as financial acquisitions can be wearying, despite the systematic alternation of business and personal episodes. It has also to be said that the absence of character development or internal conflict inhibits psychological drama and speculation, which was one of the strengths of Strouse’s biography of Alice James (1981). Morgan leaves one impressed and exhausted – rather as if one had encountered the man himself.