J. P. Morgan was a renowned banker and businessman. He took an early interest in business, spending time checking receipts, and the expenditure of his allowance rather than playing games. After studying at the University of Göttingen in Germany, he was asked to become an assistant to one of the professors, but he preferred to start out in business, joining Duncan, Sherman, and Co, a firm with which his father had an association. He made money out of the American Civil War, and founded his own company, Dabrey, Morgan, and Co. By 1871, he had teamed up with the firm Drexel, to form Drexel, Morgan, and Co, and quickly established himself as one of the leading financiers in New York. After the war, he continued to build up his banking and business empire. He came to the rescue of the US financial system on a couple of occasions, and also served as president of the Metropolitan Museum of Art.
J. P. Morgan built a portfolio of business interests in the key industries of the day—railways, shipping, and electricity.
He helped consolidate much of the railroads in the US, create US Steel, and was involved in the creation of General Electric, AT&T, and International Harvester.
As an industry magnate and a powerful industry figure, he came to be seen as a de facto US central banker, being called upon to assist the financial world in times of trouble, and he helped avert a US financial crisis in 1895.
Morgan established a reputation as a leading financier, with a considerable salary, and industrialists and governments regularly asked him for advice.
During the 1870s, he focused on the railway industry, resolving disputes, and organizing private investment from the US and Europe to upgrade the system, and generate operating efficiencies.
However, he failed in an attempt to unite the railways against the government after the passing of the Interstate Commerce Act in 1887, which banned price-fixing in the industry.
The financial crisis of 1895 originated from the withdrawal of funds from the US by British investors–as the banks were failing, and the stock market collapsing. So the US government used gold reserves to strengthen the financial system, and asked Morgan for help.
He suggested an economic and a political answer to the crisis–a syndicate of investors would sell gold coin to the US Treasury, paid for by newly issued bonds; he also guaranteed the scheme to President Cleveland.
This intervention was successful in halting the slide, and also made him a significant profit.
He was then involved in a number of high-profile deals, including the financing of US Steel, the largest steel corporation in the world.
He was also an important figure in the creation of industry trusts, but these were seen as collusive business practices by President Theodore Roosevelt, who started cracking down on this practice, making an example of Morgan in the process.
By the 1890s, these government attacks had turned him into an unpopular figure in the US, and he spent his later years amassing an art collection, and travelling.
“A man always has two reasons for doing anything: a good reason and the real reason.”J. P. Morgan