87. JP Morgan - Greatest International Financier and World Famous Banker Ever

Updated: Oct 6, 2020

Who Was JP Morgan ?


J.P. Morgan became one of the wealthiest and most powerful businessmen in the world through his founding of private banks and industrial consolidation in the late 1800s.


Along with amassing immense wealth through the creation of such corporations as U.S. Steel, Morgan led efforts to bail out the U.S. Treasury in 1895 and 1907.


John Pierpont Morgan Sr. (April 17, 1837 – March 31, 1913) was an American financier and banker who dominated corporate finance on Wall Street throughout the Gilded Age. As the head of the banking firm that ultimately became known as J.P. Morgan and Co., he was a driving force behind the wave of industrial consolidation in the United States spanning the late 19th and early 20th centuries.



Over the course of his career on Wall Street, J.P. Morgan spearheaded the formation of several prominent multinational corporations including U.S. Steel, International Harvester and General Electric. He and his partners also held controlling interests in numerous other American businesses including AT&T, Western Union and 24 railroads. Due to his financial dominance, Morgan came to wield enormous influence over the nation's lawmakers and finances. During the Panic of 1907, he organized a coalition of financiers that saved the American economy from collapse.


As the Progressive Era's leading financier, J.P. Morgan's dedication to efficiency and modernization helped transform the shape of the American economy. Adrian Wooldridge characterized Morgan as America's "greatest banker".


Morgan died in Rome, Italy, in his sleep in 1913 at the age of 75, leaving his fortune and business to his son, John Pierpont Morgan Jr. Biographer Ron Chernow estimated his fortune at only $118 million (of which approximately $50 million was attributed to his vast art collection ( Now, Equivalent to USD $ 3 Billion in 2020 Inflation adjusted ) , a net worth which allegedly prompted John D. Rockefeller to say: "and to think, he wasn't even a rich man." But, As per some estimates , he was much richer than what has been declared during his death.


As of 2019, JP Morgan's asset management arm of the bank has US$ 3.4 trillion in client assets , managing Assets value more than GDP of UK and France Individually.


A Brief Review on JP Morgan


https://www.youtube.com/watch?v=77iCwSFW7ZY


Early Years

John Pierpont Morgan was born into a prominent New England family on April 17, 1837, in Hartford, Connecticut. His paternal grandfather, Joseph, was a founder of the Aetna Insurance Company, and his father, Junius, became a partner in a successful dry goods business around the time he married Juliet Pierpont, daughter of noted minister and poet John Pierpont. 

A sickly child who suffered seizures and other mysterious ailments, Pierpont, as he was known, spent long periods sheltered at home. When healthy, he frequented galleries and concerts with his parents, sparking a lifelong fascination with the arts. Initially a smart but indifferent student, he began showing improved grades by the time he attended English High School in Boston. 

In 1854, Junius Morgan moved the family to London to begin his new career as a partner in the banking firm of George Peabody & Co. Pierpont was sent to the Institute Sillig in Switzerland, where he became fluent in French and displayed an aptitude for mathematics, and then to Göttingen University in Germany.

I. Early Career and Marriages

After finishing his education in 1857, Morgan moved to New York to work as a clerk at Duncan, Sherman & Co., the American branch of his father's firm. In one early example of his ingenuity, Morgan was in New Orleans for business when he encountered a ship captain with a boatload of coffee and no buyer. Morgan used his company's funds to purchase the coffee, and then sold it to local merchants for a profit. His success emboldened him to strike out on his own, and he continued to work with his father after founding J. Pierpont Morgan & Co. in the early 1860s.

Through his New York social circle, Morgan grew close to Amelia "Memie" Sturges, the daughter of a successful merchant. Their blossoming romance was jarred by her diagnosis of tuberculosis in 1861, and they quickly married and moved to Algiers with the hope of spurring a recovery. However, despite Morgan's best efforts to nurse his bride back to health, she passed away in February 1862.

Devastated, the young businessman returned to New York and plunged himself into his work. In 1864, at the urging of his father, he paired with senior partner Charles Dabney to form Dabney, Morgan & Co. With Junius Morgan now heading the London banking firm, the Morgans continued to expand their wealth and influence by funneling overseas investments into American businesses.

Meanwhile, Pierpont struck up a new romance with Frances Louisa "Fanny" Tracy, the daughter of a New York lawyer. They married in May 1865 and had four children, with son John Pierpont "Jack" Morgan Jr. going on to take over his father's business many years later. II. Railroad Magnate

With the retirement of Dabney in 1871, Morgan joined forces with Philadelphia banker Anthony Drexel to found Drexel, Morgan & Co., which took up residence in a towering new building in lower Manhattan. Entering his mid-30s, Morgan was developing into the outsized figure that would dominate the financial world with his enormous frame, piercing eyes and brusque nature.

Morgan's already successful career took a leap forward in 1879 when William Vanderbilt approached him about the sale of 250,000 shares of stock in the New York Central Railroad. Morgan pulled off the massive transaction without driving down the share price, and in return he secured a seat on the New York Central board of directors. The following year, he fronted a syndicate that sold $40 million in bonds to finance the Northern Pacific Railroad, then the largest transaction of railroad bonds in U.S. history.



Pic : Bond of the New Jersey Junction Railroad Company, issued 30. June 1886, reverse side with signatures of John Pierpont Morgan and Harris C. Fahnestock as trustees

Underscoring his influence in the industry, Morgan in 1885 arranged a meeting with the feuding directors of the New York Central and Pennsylvania Railroad aboard his yacht, the Corsair. As they sailed up and down the Hudson River, Morgan made it clear that the yacht would not return to port until they reached a compromise that fostered suitable competition. The executives eventually agreed to terms in what became known as the Corsair Compact.



Pic : Corsair III. Financial Empire and Government Savior

Morgan's life and career took another turn after the death of his father in 1890. Following a decade of railroad consolidation, he broke new ground by arranging the merger of Edison General Electric and Thomson-Houston Company to form General Electric in 1892. Additionally, the lifelong art enthusiast began exponentially expanding an already impressive collection of valuable works.

The immense scope of Morgan's power came to light in the wake of the Panic of 1893. With U.S. gold reserves seriously depleted, Morgan formed a syndicate of international investors willing to supply gold in exchange for a favorable rate on 30-year bonds. He then reassured a skeptical President Grover Cleveland by citing an obscure 1862 statute that gave the Secretary of the Treasury the power to pull off such a transaction without congressional approval. The syndicate bought and quickly resold the bonds in early 1895, stabilizing the shaky economy.

Following the death of Drexel that year, Pierpont again reorganized his company into J.P. Morgan & Co. The firm soon became a major player in the steel industry by financing the formation of Federal Steel in 1898. Three years later, after purchasing Andrew Carnegie’s steel company for nearly $500 million, Morgan merged the entities into U.S. Steel, creating the first billion-dollar corporation. IV. Presidential Foe and Ally

Also in 1901, Morgan teamed with James J. Hill to form the Northern Securities Company. Northern Securities held the majority of shares in the Northern Pacific, the Great Northern and the CB&Q railroads, giving Morgan control of approximately one-third of the country's railways.

However, he soon encountered resistance from President Theodore Roosevelt, who sought to leverage the populist tide against the wealthy "robber barons" of Wall Street. In 1902, the Justice Department charged Northern Securities with violating the Sherman Antitrust Act of 1890. A protracted legal battle was settled when the Supreme Court ruled in favor of the government in 1904.


Pic : Morgan's role in the economy was denounced as overpowering in this political cartoon

Regardless, Morgan continued to exert his authority in both industries and in government. In 1903, J.P. Morgan & Co. was appointed fiscal agent for a newly independent Panama, with responsibilities that included overseeing the transfer of $40 million to the New Panama Canal Co.

In 1907, Morgan again was called to aid the U.S. government in the grips of economic panic. Seeking to stabilize a series of collapsing trust banks, he called several bank presidents to his Manhattan library, and, in an echo of his Corsair meeting of 1885, locked the door until a solution could be reached. After all-night negotiations went nowhere, Morgan ended the stalemate by drawing up a bailout contract and ordering the exhausted presidents to sign.

In semi-retirement by the time the crisis was resolved, Morgan devoted much of his energy to his art collection and philanthropy. He returned to the spotlight one final time in 1912, when he testified before the Pujo Committee's congressional investigation into the collaborations of Wall Street bankers. V. Death and Legacy

Morgan set sail on an overseas voyage after the hearings, but his health steadily declined, and he died at a hotel in Rome, Italy, on March 31, 1913. To commemorate his passing, the New York Stock Exchange remained closed until noon on the day of his funeral.

Morgan's astounding success transformed the financial industry and left behind a powerful legacy. Although he twice bailed out the U.S. Treasury, his ability to do so left many unsettled, spurring the creation of the Federal Reserve System in late 1913. His name lives on through the massive international banking firm he created, which entered the 21st century as JPMorgan Chase & Co.

Additionally, the financial giant left behind a personal art collection to rival that of any king. His ornate library was built to house most of his works, which, thanks to the efforts of Jack Morgan, was unveiled to the public in the 1920s with the opening of the Morgan Library & Museum.



Pic : Photograph of the Pierpont Morgan Library in Manhattan, New York, USA at night


VI. JP Morgan & Chase Today, July 2020


JP Morgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City. JP Morgan Chase is ranked by S & P Global as the largest bank in the United States and the seventh largest bank in the world by total assets, with total assets of US$2.988 trillion, more than GDP of UK and France Individually . It is also the world's most valuable bank by market capitalization.. JPMorgan Chase is incorporated in Delaware.


Pic : 383 Madison Avenue - JP Morgan Chase Office Tower


As a "Bulge Bracket" bank, it is a major provider of various investment banking and financial services. It is one of America's Big Four banks, along with Bank of America, Citigroup, and Wells Fargo. JPMorgan Chase is considered to be a universal bank and a custodian bank. The J.P. Morgan brand, is used by the investment banking, asset management, private banking, private wealth management, and treasury services divisions. Fiduciary activity within private banking and private wealth management is done under the aegis of JPMorgan Chase Bank, N.A.—the actual trustee.


The Chase brand is used for credit card services in the United States and Canada, the bank's retail banking activities in the United States, and commercial banking. Both the retail and commercial bank and the bank's corporate headquarters are currently located at 383 Madison Avenue in Midtown Manhattan, New York City, while the prior headquarters building directly across the street, 270 Park Avenue, is demolished and replaced with a new building.The current company was originally known as Chemical Bank, which acquired Chase Manhattan and assumed that company's name. The present company was formed in 2000, when Chase Manhattan Corporation merged with J.P. Morgan & Co.


As of 2019, the asset management arm of the bank has US$ 3.4 trillion in client assets and a 200-year-old legacy as a trusted fiduciary to corporations, governments,in assets under management, while its investment and corporate bank arm holds US$25.45 trillion in assets under custody. At US $45.0 billion in assets under management, the hedge fund unit of JPMorgan Chase is the third largest hedge fund in the world.


JP Morgan 's Response to Covid 19


In March and April, we approved more than $45 billion in new credit for our clients impacted by COVID-19. This included more than $6 billion to hospitals and healthcare companies, educational institutions, nonprofits and state and local governments. For example, we worked with NewYork-Presbyterian Health System – which has seen a significant increase in overnight patients as a result of COVID-19 – to increase their line of credit so they could acquire vital medical supplies and equipment and bring on additional staff. 

$45B+ in approved new credit in March and April for our clients most impacted by COVID-19 $950M in new loans for our small business clients during the first 60 days of the crisis $30B+ to over 250,000 businesses since the beginning of PPP


We’ve also assisted our corporate clients in raising capital, including many in industries that have been hard hit by the pandemic, from healthcare to travel and transportation. Year to date, we’ve helped clients raise $664 billion in investment grade financing, and also provided $104 billion of high yield financing.

__ JP Morgan Chase & Co, Aug 2020.


VII. A Comprehensive Video Documentaries on JP Morgan


https://www.youtube.com/watch?v=SEwenAjPtcc


15 Things You Didn't Know About JP Morgan

https://www.youtube.com/watch?v=B5wzX-GHnrg


Epilogue


Its really Inspiring and Mesmerising Story of Financier and Banker, Who had such huge impact on the Organisations across the various Industries in USA and He also had saved his Country, USA, from the brink Collapse, not once, but twice,


Though, he suffered from his health problems all along in his life , faced the loss of first wife within short time after marriage and faced several challeges throught his life.


Morgan was very good at making failing companies into profitable companies. After the 1893 financial panic, he helped the railroad industry recover. He merged railroad companies and became a stockholder in every one of them. He made a fortune in railroads.


Morgan helped the government a second time in 1907. During a Wall Street crisis, his bank took government deposits. But not everyone in the government was impressed with his financial wizardry. In 1912 a federal committee investigated him for creating unfair monopolies by combining small companies into one big corporation.


He was great Art Collector and his Collections are in line with that of a Royal Family and He is also one of the Renowned Philanthropist.


The Firm he Founded has become JP Morgan Chase & Co and now manages Client Assets of USD $ 3.4 Trillion, which is more than GDP of UK, France and Even India as on August 2020.



MM Rao

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Sources :

https://www.biography.com/business-figure/jp-morgan#:~:text=Born%20into%20a%20prominent%20New,in%20the%20country's%20railroad%20industry.

https://en.wikipedia.org/wiki/J._P._Morgan

https://news.jpmorganchase.com/news-stories/jamie-dimons-covid-19-stakeholder-memo

https://www.thirteen.org/wnet/historyofus/web10/features/bio/B14.html


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