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The Many Faces of John Pierpont Morgan

  • Jean Strouse, Morgan: American Financier, Random House, 1999, 796 pages (Hardcover, $34.95)
  • Robber baron, master industrialist, moody hypochondriac and premier American art collector. John Pierpont Morgan was all of these, and ultimately one of the nation's most controversial businessmen.

    Though cast as the high priest of modern capitalism, Morgan did not really believe in free markets, and that is just one of the many surprising facts unearthed by Jean Strouse in her exhaustive new portrait of Morgan.

    Paternalistic and terrifying in person, Morgan viewed America's wealth as a justifiable end for his sometimes-brutal empire-building means. Morgan's strength of character, fired under an exacting father, hid what was often an emotional wreck of a private life.

    Over the decades, Morgan came to take personal responsibility for everything in America, ranging from advising Presidents Cleveland and Roosevelt, maintaining the dollar's value -- largely on the gold standard, to which he was an ardent adherent -- "and coaxing economic adversaries to the bargaining table, workers and managers as well as warring railroad and steel barons," like Andrew Carnegie, Jay Gould and John D. Rockefeller, Strouse writes.

    All the while, he was "urging Washington to modernize the country's antebellum banking system." Months after he died in 1913, the Federal Reserve replaced the private banking system he had devised.

    This carefully rendered biography leads the reader through decades of American development, via Morgan's personal history. No small challenge to finish reading simply because of its length, the book is still the perfect way to learn about why America wasn't always a world financial power -- and how it became one.

    A natural-born financier, Morgan loved balancing his teenaged bank account in dozens of different foreign currencies, and even devised a mock trading and investment banking "game" with his cousin. Years later, they and Morgan's father, Junius Spencer Morgan, set up what would ultimately emerge as Wall Street's widely respected J.P. Morgan & Co.

    Despite Yankee bloodlines, Morgan had a surprising streak of meritocracy. Educated in Europe and at Harvard, he enjoyed patrician standing among the well-traveled Old World glitterati, but had the peculiar professional drive of American new money, which prompted him to curb railroad rate wars and market his firm into the premier issuer of U.S. government bonds.

    Morgan refused to hire incompetent friends, defied nepotism, and generally surrounded himself with talent despite his arrogant complaint about the "absence of brains" on Wall Street.

    Privately, Morgan possessed what one friend called "a very feminine streak in his nature," and surrounded himself with sumptuous clothes, art, yachts and homes. At 24, he married first for love to a woman who died of tuberculosis soon after their nuptials. Pierpont later married a "difficult" woman with whom he shared distinct incompatibilities but many children, including a son whom he largely ignored. "He loved presiding over a house full of people -- the corollary of which was that he hated to be alone," Strouse noted.

    Estranged from his second wife -- they were rarely even on the same continent -- Morgan took as lovers a series of fascinating women.

    During Morgan's lifetime, "gold politics" would come to divide the U.S. for decades, Eastern bankers vs. Western farmers, populists vs. fiscal conservatives, and eventually Republicans vs. Democrats.

    Though he was the prime organizing force behind mammoth companies such as U.S. Steel, Morgan also had a nose for new ventures, and helped finance Thomas Edison and start-ups that came to be known as AT&T (T) and General Electric (GE).

    He orchestrated the rescue of the stock exchange in 1907, reversed the near-failure of the Treasury, and all the while viewed these as his self-styled "providential" duty.

    But like most successful entrepreneurs of the Gilded Age, Morgan rarely concerned himself with political and social consequence, and "few had moral qualms about their work. They saw themselves building a great industrial empire and making America rich."

    Fittingly, the stock market slumped in response to news about Morgan's health, but went up the day after he died. The markets had discounted the news in advance.

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