Weekly Quill — Missing the Boat – Politics Test the Fed’s Limits

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Sometimes missing the boat is for the best. In the case of one John Pierpont Morgan, missing his originally scheduled departure for the United States from Southampton, England on April 10, 1912, five days before his 75th birthday, bought him 350 more days in the land of the living. The American icon would sail for his home country, but not for another three months. It was that trip that killed him in the end.

Born April 17, 1837 in Hartford, Connecticut, there was never to be a rags to riches story behind the rise of the man who would one day become the world’s most renown financier. Morgan’s paternal grandfather founded the Aetna Insurance Company and his father was a successful businessman whose career landed him as partner in George Peabody & Co. in London in 1854. After finishing his education in Europe, a 20-year old Morgan’s first job was as an apprentice at a New York branch of his father’s bank.

Heritage alone, however, did not define those who referred to him as Pierpont. While in New Orleans for business, he encountered a ship captain with a boatload of coffee and no buyers. Using the company’s funds, he purchased it all and sold it to local merchants for a profit. Though he would continue working with his father, in 1864, he was emboldened to strike out on his own, founding J. Pierpont Morgan & Co. The years that followed read like a banker’s bibliography, littered with such names as Philadelphia’s Anthony J. Drexel and John Thompson, a New York city banker who honored his friend, Salmon P. Chase, Secretary of the Treasury under Abraham Lincoln and architect of the National Banking System by starting a new bank in his name.

Like a real-life game of Monopoly, Morgan’s shrewdness as an investment banker remains the stuff of legend. No fewer than five railroads came under his charge including the Northern Pacific, New York Central, Pennsylvania, Southern and Erie. By 1902, Morgan controlled via stock holdings more than 5,000 miles of American railroads. The two corporate marriages he brokered remain among the most eminent in U.S. history. The 1892 merger of Edison General Electric and Thomson-Houston Electric Company formed General Electric while Morgan’s financing of Federal Steel in 1898 was followed three years later with the purchase of Carnegie Steel from which U.S. Steel was spawned.

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