Running head: J.P.

Morgan And The Rise of Modern Finance

J.P. Morgan And The Rise of Modern Finance
Sephora Impert
Molloy College
J.P. Morgan And The Rise of Modern Finance
John Pierpont Morgan as !orn on April "#$ "%&# in 'artford Connecticut to parents
Juliet Pierpont and Junius Spencer Morgan. J.P. Morgan came from a long line of ealthy
relati(es ho pa(ed the ay for his later success. 'is father Junius managed a dry)goods
company in 'artford and su!se*uently !ecame a partner in a !an+ing firm in ,ondon. Morgan-s
grandfather founded Aetna 'ealth Insurance Company that is still idely used today and a
maternal relati(e of his !y the name of James Pierpont as an originator of .ale /ni(ersity.
Morgan as indeed 0!orn ith a sil(er spoon in his mouth.- According to Masters of
Enterprise$ 1Morgan as no rags) to) riches story$ !ut one of riches to more riches.2 Morgan
as not the typical child groing up$ he did not fancy playing ith his peers$ toys or the latest
gadgets of his time. 'e instead as fascinated ith his fathers accounting !oo+s$ ledgers and
mathematical figures. Morgan as sic+ly as a child and one such malady that he suffered from
as inflammatory rheumatism. This unfortunate disorder resulted in acne rosacea that caused an
inflamed red nose. This as one of Morgan-s distincti(e features3 his nose !ecame the 0curse- of
his family for many generations 4Strouse$ "5556.
Morgan attended !oarding school in Sit7erland and later mo(ed to 8ermany for College
at the /ni(ersity of 8ottingen that as ell +non for mathematics here he also learned
French and 8erman. In "%9#$ Morgan :oined his father at ;all Street 'ouse and <uncan$
Sherman and Company here he e=pertly employed his s+ills in finance and ac*uired additional
+noledge for his later plans. In "%>? Morgan married the lo(e of his life$ Amelia Sturges also
+non as 0Memie- ho as sic+ ith tu!erculosis. She as daughter to the ell)+non
merchant and patron of the arts$ Jonathan Sturges3 fi(e months after the edding Amelia passed
aay from the disease. Morgan later married the daughter of a @e .or+ layer$ Frances ,ouisa
Tracy in "%>9 and had four children together. <uring the Ci(il ;ar in "%>A$ J.P. Morgan
A
J.P. Morgan And The Rise of Modern Finance
successfully opened his on !usiness$ J. Pierpont Morgan B Company and !y "%>C he made
o(er D9?$???3 he as only tenty) se(en years old 4Erands$ "5556.
J. P. Morgan resided at C9 ;est "#
th
Street in @e .or+ for the ma:ority of his life ith
his family. This as @e .or+-s richest area and most fashiona!le residential destination.
Manhattan-s ealthy elite li(ed up north aay from the hustle and !ustle of the city in grand
Italian Renaissance mansions. Morgan en:oyed !an+ing and he too+ !ig ris+s. 'e e=celled at the
more comple= financial constructions than that of his predecessors. Morris$ A??9 Pg. A%$ 1'is
fundamental dri(e as toard order and control$ and he as appalled !y the storm of 1creati(e
destruction2 at the heart of the long American !oom. 'e detested 1!itter$ destructi(e$
competition2 that alays led to 1demorali7ation and ruin.2 Morgan as one of a +ind and set out
to pro(e his mar+ in the history of @e .or+ City.
J.P. Morgan utili7ed his poer in order to facilitate American financial mar+ets during
numerous economic hardships. 'is competitors argued that he had too much poer and that he
often used his ties for his on personal financial gain. Fn the contrary J.P. Morgan B Company
has from the (ery !eginning and still to this day is committed to fulfilling customer-s needs in a
!eneficial ay that has a great impact in communities orldide. Morgan-s company also
played a ma:or role in pre(enting national !an+ruptcy in the /S treasury gold reser(es !y the
creation of a !ond proposal. In "5?"$ J.P. Morgan oned the first !illion)dollar company after
!uying out entrepreneur Andre Carnegie and later com!ining && companies to esta!lish /nited
States Steel. This conglomerate ruled half of the steel capa!ility and production in America
4Morris$ A??96.
In "5?#$ Morgan sa(ed a num!er of trust companies from collapsing3 rescued @e .or+
City-s stoc+ e=change !y persuading in(estors to pro(ide li*uidity to !lea+ mar+ets. This action
&
J.P. Morgan And The Rise of Modern Finance
resulted in the creation of a consortium to guarantee &? million dollars orth of @e .or+ City
!onds to a(ert the city from defaulting. Morgan also achie(ed another successful act of
philanthropy after sponsoring Thomas Gdison-s research. This act assisted in generating 8eneral
Glectric !y merging Gdison Glectric Company and Thomson 'ouston Glectric. This electric
company ga(e poer to Morgan-s companies ma+ing it the first !usiness to use electricity
generated from this source. Morgan-s home as the first home in @e .or+ City to use
electricity from the company !y use of the incandescent !ul!s 4Strouse$ "5556.
Morgan as a +non philanthropist$ respected orldide and (ery much +non in the
!usiness orld. 'e or+ed his employees e=tremely hard and only the strong and competent
could +eep up ith him and his many ne (entures. Anyone ho or+ed for or ith Morgan
!ecame incredi!ly rich so in many ays the difficult or+ paid off nicely. Morgan had a great
impact on @e .or+ City$ his fine acuity for the !etterment of the city he lo(ed so much and his
philanthropic ays shoed in many ays. @e .or+ City ould not !e as accessi!le as it is
today ithout the railroad and su!ay systems. It ould !e ne=t to impossi!le to get around the
city and e*ually aggra(ating. Morgan-s contri!ution to the railroad as a !eneficial and lucrati(e
decision. Morgan as a part of the reorgani7ation of transcontinental railroad system in hich
mar+ed an enormous e=pansion of trade in the country. Morgan arranged a successful stoc+
offering of "% million dollars toards the ;illiams Hander!ilt @e .or+ City Central Railroad in
hich he !ecame oner of a si=th of America-s rail lines and ac*uired a seat on the @e .or+
Central-s !oard of directors3 as orth more than the commission !ecause it alloed him access
to the railroad system as a hole 4Erands$ "5556. Indeed Morgan as a poerful and
e=ceptionally rich man. ;ith his many contri!utions to @e .or+ City$ the city is fore(er in
remem!rance and ae of this famous influential spirit. J.P. Morgan passed on March &"$ "5"& of
C
J.P. Morgan And The Rise of Modern Finance
natural causes at the age of #9 in Rome Italy. In honor of his death$ The @e .or+ Stoc+
e=change closed on the day of his funeral until noon. This !usiness tycoon is still contri!uting to
the !enefit of the city and orldide e(en after his death. The railroads are still running and (ery
useful to the people of the city each day. Chase !an+ is idely used and is situated orldide in
o(er >? countries. Gntrepreneurs li+e Morgan are one of a +ind and this Connecticut nati(e
influenced the great city of @e .or+ significantly and for that @e .or+ is proud and grateful
for Morgan-s participation in the start of @e .or+ City-s rich history.


9
J.P. Morgan And The Rise of Modern Finance
References
Erands$ '. ;. Masters of enterprise: Giants of American business from John Jacob Astor and
J.P. Morgan to Bill Gates and Oprah infre!. @e .or+: Free Press$ "555.
Morris$ Charles R. "he "!coons: #o$ Andre$ %arnegie& John '. (oc)efeller& Ja! Gould& and J.
P. Morgan *n+ented the American ,upereconom!. @e .or+: 'enry 'olt$ A??9.
Strouse$ Jean. Morgan: American -inancier. @e .or+$ "555.
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