JP Morgan Robber Baron or Captain of Industry

J.P. Morgan is a post civil war captain of industry. What separates Morgan from other greats, such as, Cornelius Vanderbilt, John D. Rockefeller, and Andrew Carnegie is his motives and his upbringing. I would define a “robber baron” as an individual whose financial ambitions cause him to knowingly take advantage of others for their own personal gain. A “captain of industry” seeks solutions, not advancements; though the outcome may prove to be monetarily beneficial. Regardless of the distinction between the two labels, it is inevitable that there will be a structure that places wealthy as the most beneficial, and the unwealthy as the least.

John Pierpont Morgan was born to a wealthy banking family in Hartford, Connecticut. His father was Junius Spencer Morgan, one of the most respected financiers in London (Britannica). Junius Morgan was chosen by George Peabody to supercede him and take over his merchant house and all of its holdings. Peabody was a huge champion of America and vowed to be its strongest supporter in London, so when the time came to choose a new leader, Peabody stated that only an American could replace him (Chernow 4-7). The contract between Peabody and Morgan was that the merchant house would be turned over to him with in ten years of their partnership and it eventually was. In the meantime Junius Morgan began priming his only surviving son, John Pierpont, to become a great banker. Junius had many concerns regarding his son due to John Pierpont’s frail health and unmanageable temper (Chernow 18-19). Junius combated John Pierpont’s “weaknesses” by impressing his influence upon every aspect of John’s life and constantly challenging his intelligence (Chernow 21). Under his father’s direction, John became the American agent for his father’s firm in New York, then he established his own firm with a cousin which failed, thereafter he became partner in the New York firm Drexel, Morgan, and Company which later became JP Morgan and Company (Britannica). John’s father worried that his son’s rash decisions would not follow the conservative approach to money that he had been taught. During the Civil War Pierpont financed a deal for Arthur Eastman to purchase obsolete rifles from the US government, which Eastman modified and improved, and then sold back to the government at six times the original purchase price (Chernow 21). This type of deal was not what Junius had been training Pierpont to support but time and time again Pierpont seemed to be able to identify future opprtunities to invest and negotiate them with a non traditional approach to business. Junius groomed Pierpont to conduct banking business with the traditional “Gentlemen’s understanding” which stated that bankers would not advertise, compete, or accept new clients without clearing it with the client’s prior banking institution. Pierpont adhered to these rules but his tactics for conducting business were much straighter forward.

Pierpont’s deals were on a take it or leave it basis which earned him a reputation of being brusque and abrupt but also fair. He was not driven by a tremendous desire for money but for setting finances right and doing things the right way. John believed in honesty as shown in his managing of a railroad deal with Andrew Carnegie when Carnegie went to collect on a $60,000 investment, John gave him $70,000 instead because he said he underestimated the account. Carnegie refused the money but Morgan insisted, as a result Carnegie vowed to never harm the Morgans’ (Chernow 39). Morgan’s ambitions were not to dominate the financial arena but to ensure that economics were run efficiently and soundly. His interest in organizing assets and investments coined the term “Morganization.” Morgan’s reputation for doing exactly what needed to done is why he was chosen to stabilize the railroad industry, Carnegie Steel Company, and the merger between Edison General Electric and Thompson-Houston Electric (Britannica). Pierpont’s reputation was one of the key reasons for William Vanderbilt choosing him to organize the assets gained from the death of Vanderbilt’ father (Chernow 43). The panic of 1893 displayed the power of Morgan’s financial resources and international connections, as he was integral in forming a syndicate that replenished the US governments depleted gold reserve in order to relieve the Treasury crisis (Britannica). Morgan again came to the country’s rescue in 1907 when the stock market crashed by helping to reorganize large government deposits and he helped to preserve the solvency of several major banks and corporations. Pierpont’s suggestions lead to a national bank and a system that intertwined major banks and corporations to maintain financial integrity (Britannica).

John Pierpont Morgan was the most innovative and influential captain of industries the US has ever seen. Born to a rich family and a matter of fact personality is what kept Pierpont’s focus not on money or competition, but on process and order. Though he did become one of the wealthiest men in our country it is stated time and time again that his motivation was organizing finances to be most productive and beneficial and that is what sets him apart from the robber barons of his era.