J.P. Morgan Documentary: How One Man Financed America

Examine the success of any titan of industry,  whether it be Carnegie and his mountains of steel or Rockefeller and his sea of oil,  and you will find a coveted green commodity fueling their industry . . .

Money. And in the late 1800s, one man  controlled more of it than any other: John Pierpont Morgan. To understand the vast scope of Pierpont’s  influence, we must first rewind to a time long before America was an economic  powerhouse with a 21 trillion-dollar GDP.

It’s all too easy to forget that  America was once an emerging market; one that, not too long ago, was almost  entirely dependent upon British capital. So, without further ado, let’s explore the  story of how a combination of timing, genius, and connections made J. P.

Morgan the most  powerful man in the history of American finance. 🎶 Music 🎶 This episode of American Titan would not  have been possible if it wasn’t for our friends at Acorns, an investment app that  automatically rounds up your credit and debit card transactions to the nearest whole dollar  and then auto-invests that spare change for you into a diversified portfolio. Stay tuned until the very end to learn more,  or sign up now and claim your sign-up bonus of five dollars by going to: “acorns.

com/bc” The link is on-screen now, and  in the video description below. Typically, we begin someone’s life story  at birth, but the story of JP Morgan cannot be told without mentioning the  influential family that brought him up. Pierpont’s grandfather, John Pierpont,  was a radical and fiery preacher, and would introduce his grandson  to the power of forceful speaking — a skill that would later pay dividends  for the future captain of industry.

But a far more towering and instrumental  figure in Pierpont’s life was his father: Junius Spencer Morgan. Junius was a highly respected  businessman in both the American and European banking industry. And he largely took it upon himself to shape  his son into his own ‘cool’ and ‘collected’ image; grooming the young boy to inevitably  join the family banking business.

No other man comes close to having the  same kind of impact on Pierpont’s life than his beloved father. Although their father-son relationship  is probably best described as “tough love. ” But we’re getting ahead of ourselves.

John Pierpont Morgan was born into this  privileged life on April 17th, 1837, with every advantage that could be given  to prepare him for what was to come. But it wasn’t all sunshine and  rainbows for the young Morgan. He was a sickly child.

As an infant, he suffered  from seizures, and as he grew older, was often plagued with rheumatic  fever, scarlet fever, and painful migraines. But certainly, his most visible medical  complication was his acne rosacea – which severely inflamed and ruptured  the blood vessels of his nose. Lacking treatment in the mid-1800s,  his condition progressively worsened, transforming his nose from “unsightly” to  a disfigured red and purple monstrosity.

Although you certainly wouldn't know  that by looking at most pictures of JP Morgan, which is the way he wanted it to be. According to his great-grandson, any  time Morgan commissioned a portrait or photo of himself, he demanded that  his gargantuan nose be touched up, after the fact. Essentially, the 1800s equivalent of Photoshop.

Pierpont’s various medical problems  required isolation, turning him into somewhat of a loner. Unable to play outside like most of  the other kids, Pierpont stayed inside, where he spent his time studying and  learning to read financial statements. In the rare moment that he wasn’t absorbing  information, Pierpont found comfort in playing the card game Solitaire  — a pastime that became one of his lifelong pleasures.

Back in the classroom,  Pierpont was a natural leader. He would often challenge his  teachers and, using logic, talk them down from punishing him. As he went through school, his leadership skills caught the eye  of his seemingly impossible-to-please father, Junius, who would focus his energies  on helping Pierpont cultivate his promising potential for the business world.

Influenced by his father’s success,  Pierpont became fascinated with successful men and made a habit of  collecting autographs from presidents and other famous figures. His fascination with powerful leaders  led him to write a school essay on Napoleon Bonaparte. And although his parents tried to  introduce him to American heroes, Pierpont was solely impressed with Napoleon  and heavily inspired by the general’s insatiable appetite for global power — an  idea that struck a chord with the future leader.

On October 1st, 1854, Pierpont’s father,  Junius, was made partner at the London-based financial firm, George Peabody & Company. Soon after, the Morgan family relocated to London. But Pierpont, then just 17,  wouldn’t be staying very long.

Concerned about his son’s mood swings and hot  temper, Junius sought to instill principles of discipline and responsibility. Wanting only the best for Pierpont,  Junius sent him to the Institut Sillig, a Swiss boarding school on  Lake Geneva, 600 miles away. It wouldn’t be his first time  far apart from his family.

When he was only 15, Junius sent Pierpont  to the remote islands of the Azores to help him recover from rheumatic fever. Alone, all by himself, he’d spend an  entire year recovering from his illness. Perhaps this was part of his father’s  unique parenting plan to help “toughen” Pierpont, helping the boy to become independent.

After school, Pierpont began his career  on Wall Street, aiming to profit from the lucrative emerging American market. With the help of his father, Pierpont  secured a starting position as an unpaid clerk with a small banking firm in New York. One of his chief responsibilities was providing  overseas intelligence to his father in London; sending the latest American  economic and political updates.

For 33 years, Pierpont reserved Tuesday and  Friday evenings to write to his father, who not only absorbed his son’s  lengthy letters but cherished them. With his new position on Wall Street,  Pierpont gained invaluable firsthand experience in the business world.  100 00:06:26,319 --> 00:06:31,669 But his tireless ambition soon outgrew that  small firm, and in 1861, he started his own company, J Pierpont Morgan & Company.

One of the dividends of working in  the banking industry was Pierpont’s introduction to New York’s elites,  allowing him to mingle with those of high society. It was at one of these gatherings when  one young woman caught his interest and deposited a fierce love  in his heart: Amelia Sturges. Amelia, or Mimi, as she was more  commonly known, came from a banking family as well, and when Pierpont  first met her, he was mesmerized.

Over the next three years,  Pierpont and Mimi were inseparable. And as his business grew, he used  his new wealth to buy her a ring from Tiffany’s, planning to propose. But their lives would soon  take a turn for the worse.

Preparing for a wedding in a few  months, Mimi approached Pierpont that summer with a lingering cough. And although Mimi said she was too  sick for a wedding, Pierpont rushed to marry the woman of his dreams in October of 1861. By this time, she had become so frail  that Morgan had to carry her down the stairs to her own wedding.

Hoping that a warmer climate would cure  her cough, Pierpont took his bride on an extended honeymoon to Algiers. Concerned, Morgan hired the best  doctors that money could buy. But as her condition deteriorated,  physicians confirmed Morgan’s worst fear: tuberculosis, a disease almost always  a death sentence in those days.

Sadly, it became evident that no  amount of money could change her fate. Although J. P.

Morgan was as attentive  as could be, Mimi Morgan died on February 17th, just four  months after their wedding. Pierpont was heartbroken and returned  to New York a shell of who he once was. Coping with the pain of loss, Morgan threw  himself wholeheartedly into his work.

With long days and strict discipline,  the next two years were consumed with growing his reputation as a  trustworthy American banker. It was during this time, however, that  America would go to war … with itself. North fighting South, the Civil War  would soon reach Morgan when Congress passed the Conscription Act in March  of 1863, drafting all able-bodied men between 20 and 45 to enlist in the Union Army.

But John Pierpont Morgan was too  busy and important to dirty his hands with something as trivial as war. Following in the footsteps of other men of means  like Andrew Carnegie and John D. Rockefeller, Morgan paid $300 to be removed from enlistment and instead have a substitute fight in his place.

He would fondly refer to his stand-in  as “the other Pierpont Morgan. ” But Pierpont wouldn’t sit idle on the  sidelines of battles — the business of war was too lucrative for such nonsense. As the battles raged on, Morgan found  a way to profit from the carnage: trading Union bonds.

He recognized that bond prices seesawed in  value following the news of each battle’s outcome between the Union and Confederate  Armies — the ability to foresee the winner of a battle meant big profits. Along with Union bond speculation, Morgan  also found other ways to monetize the war. In what would later become known as the  Hall Carbine Affair, the 24-year-old Pierpont was approached with a unique  business proposal from a New York lawyer named Simon Stevens.

Stevens proposed that Morgan lend  him $20,000 at 7 percent interest to purchase approximately five thousand  antiquated rifles, called Hall Carbines. Widely regarded as outdated,  yet still serviceable, Stevens could purchase the rifles from the Union army at the bargain price of just  three dollars and fifty cents apiece. Using Morgan’s loan, Stevens’ plan was to  modernize the rifles by upgrading their cartridges, which would improve  their range and accuracy.

After upgrading the weapons at the cost of  only seventy-five cents more per rifle, Stevens would then flip the guns — selling them  back to the army and using the proceeds to repay Morgan’s loan with interest. The plan worked to a tee. Following the defeat of the Union army at the  First Battle of Bull Run, the North suddenly found itself desperate for rifles.

Reluctantly, the army agreed to repurchase  the newly modified weapons at the steep price tag of $22 each — despite selling these same  guns for just three dollars and fifty cents only about a month prior. Two years later, a Congressional  committee overseeing government contracts labelled those involved in the  Morgan-backed deal as being: “Worse than a traitor. ” These types of deals didn’t make Pierpont  popular, however, especially with his father — for Junius lived by a  conservative and non-speculative business philosophy, born from his firsthand  experience during the Panic of 1857.

“Slow and sure should be the  motto of every man,” he preached. Despite his hectic deal-making schedule, Pierpont  always made the time for religion and devoutly attended Saint George’s Church in Manhattan. On one of these Sunday mornings,  Pierpont met Frances Louisa Tracy.

Fanny, as was her nickname, wasn’t  immediately interested in Pierpont, but over time, Morgan wore her down. By the end of 1864, the two were an item. Although he had waited three years to marry  Mimi, he waited just a few months to marry Fanny on May 31st, 1865.

Nine months and ten days later, Fanny gave  birth to Pierpont’s first daughter, Louisa. Two years later, his first son  was born, J. P.

Morgan Junior. At this time in America, wealth and  prosperity were on everyone’s mind. The end of the Civil War pushed the  country into a multi-decade boom, later dubbed the Gilded  Age; the Age of Enterprise.

From 1870 to 1910, America’s population  and per capita income more than doubled, as robber barons and business  tycoons took the nation by storm. Names like Carnegie, Rockefeller, and  Vanderbilt were on everyone’s lips, as entire industries were  birthed seemingly overnight. But as the country grew, so  did its need for capital.

Backed by the old-world money that  Pierpont’s father was working with back in London, J. P. Morgan was perfectly  positioned on Wall Street.

It was the epitome of being in  the right place at the right time. The only problem was that  J. P.

Morgan was finished. At age 33, with the world ready to beat  down his door, J. P.

Morgan was tired. It looked like retirement was the only  option for him to cure his weary body. But his father would have none of it.

Junius had worked too hard in London to cultivate  ties with America to let his son stop now. If health was the issue, then he would graciously  allow his son some time off, but Pierpont would not be permitted to leave  the banking business altogether. Junius Morgan arranged a new  partnership for Pierpont.

One of his contacts with substantial ties  in London was a Philadelphia banker by the name of Anthony Drxel, a man who  was 11 years Pierpont’s senior— a conscious decision by Junius to surround  the young Morgan with older and wiser minds. Drxel’s American firms were already raking in  three hundred and fifty thousand a year, and had established trade partnerships overseas. Armed with five million dollars of seed capital  from Junius, Pierpont and Drxel formed a new venture, creating Drxel,  Morgan & Company in 1871.

As per his father’s wishes, the younger  Morgan agreed to join the partnership under one condition: a desperately needed vacation. Pierpont wasn’t thrilled at the prospect of  going back into the office: he was exhausted. In fact, throughout the financier’s life, he  would regularly take vacations for several months each year, desperately needing to recharge.

He often joked that he could accomplish  12 months of work in just 9 months' time. After returning from a 15-month vacation in Europe  and Africa, J. P.

Morgan purchased a 368-acre property in Highland Falls on the  Hudson River, north of New York City. This sprawling estate, known as Cragston,  would be where he escaped the noise of the city and raised his growing family; the Morgans  added another two daughters in the next couple of years. Unsurprisingly, Pierpont cared about  excellence in every area of his life.

He was as precise with his  gardens as his finances. It was well-known that he cultivated his own  roses and took special care to only select the best flowers for his stately home. And just like pruning his plants on the weekend,  he was careful to avoid weeds that threatened to sprout in his business.

Back at his office on 23 Wall Street, he demanded  that women only be allowed in the building once a year, on New Year’s Day,  when the markets were closed. His partner had a female secretary who had  to be stationed across the street, so as not to distract the busy businessman. That level of focus led to unheard  of success in the banking business.

While the country’s median annual income  was just five hundred dollars a year, Morgan was regularly making over  five hundred thousand a year. But it was more than his financial  genius that made him so successful; it was also his intimidating image, which was  only exacerbated by his bulbous and deformed nose. His fierce gaze was described as like  staring into the light of an oncoming train.

He towered over men, standing an impressive  six foot two, a full 8 inches over the average man’s height at the time. Morgan used his daunting appearance to bend  his opponents to his will, especially those in the railroad industry. Unlike most businesses with relatively low  barriers to entry, starting a railroad could cost anywhere from seventeen  to thirty-five million dollars.

Fortunately for Drxel, Morgan & Company,  there were just a handful of banks that could finance projects of such magnitude. But despite the high startup costs,  the railroad industry had overexpanded; with several companies offering lines that  competed with one another, all trying to service America’s never-ending growth. During this time, it was common for one person  to control the interests of an entire industry.

Carnegie was forging more steel  than all of Great Britain. Rockefeller was refining as  much as 90% of America’s oil. But the rails, on the other  hand, were quite the opposite.

Whereas other industries were largely  monopolized, many railroad owners dealt with cutthroat competitors. It wasn’t uncommon to have multiple companies  lay rail lines along the same route to compete with one another, driving down margins. But whereas others saw over-expansion,  Morgan saw opportunity.

Instead of passively owning stock in railroad  companies, Morgan would play an active role in the corporate management  of rails he invested in. By taking a position in a company and joining  its board of directors, Morgan could reshuffle the company’s leadership and then  direct the company the way he saw fit. The practice grew so popular that it later  became known as “Morganization,” although today, we know it as activist investing.

It was said that, despite serving as  a director on many boards, the true chairman was always wherever Pierpont sat. On one rare occasion, when a railroad  president challenged his leadership, J. P.

Morgan responded: “Never forget, your railroads  belong to my clients. ” Over time, Pierpont gained an  unparalleled reputation as an honest and forthright dealmaker. And at a time when government regulatory agencies  didn’t exist, he was known as “the sheriff” in the Wild West of trains.

Having Morgan on your board was  a deterrent; one that would cause corporate raiders and robber barons to  think twice about attempting a hostile takeover. Brokering larger and larger deals, Morgan  perfected the art of consolidation, as his growing reputation helped to attract  even more business for his firm. So when two railroad giants threatened to  take down the rail industry and crash the entire American economy, it’s no surprise  that Morgan’s power was called into action.

But the scale of this deal required Pierpont  to set the stage in a way that had never been tried before … the stakes  could not have been higher. If you’ve ever heard the phrase “work  hard, play hard,” it was lived out with J. P.

Morgan. Although he spent long hours in the office, he  exercised just as much effort in his leisure time. In 1882, J.

P. Morgan joined the New York Yacht  Club and purchased a 185-foot iron yacht, which he called the Corsair. He often used the vessel to commute to and  from work in the city so that he wouldn’t be tied down by the rail schedule.

In luxurious fashion, Pierpont also hosted  extravagant parties as he cruised up and down the Hudson. Although the Corsair was mainly used for pleasure,  its staterooms would serve as the eccentric boardroom for Morgan’s next meeting. Two of the largest railroads in the country,  The Pennsylvania and The New York Central, were battling each other at every turn, with  their margins growing thinner by the day.

But what these companies didn’t realize was  how their territorial wars were affecting the American economy. British investors, who had sunk $1. 5 billion  into the industry, nervously watched as the railroads edged ever closer to bankruptcy.

Before long, the British were quickly pulling  money out of U. S. rail stocks, at the concerning rate of $25 million a year.

This was particularly dangerous, considering  railroad companies consisted of over two-thirds of America’s publicly traded  companies at the time. If the two railroads collapsed, the domino  effect could have a catastrophic impact on the infant American economy. J.

P. Morgan devised a daring plan that required  agreements on both sides of the tracks, but neither rail president looked ready to concede. So Morgan invited both of them to come aboard  the Corsair, where they sailed the Hudson River, debating the details of  Morgan’s ambitious proposal.

In his typical unconventional and controlling  style, Morgan refused to dock until both parties agreed to his terms—effectively holding  the railroad presidents hostage. In the end, they wearily agreed to  stay out of each other’s territories. This landmark victory became  known as the Corsair Pact.

For Morgan’s help in brokering the transaction,  he was generously rewarded with a $100,000 commission, along with a million-dollar  profit on his rail bonds. A few years later, on April 8th, 1890, Morgan’s  father, Junius, tragically passed away in a carriage accident. And while his father’s death was awful  news, it wasn’t entirely negative, as Pierpont inherited the lion’s share of  his fortune, totaling 15 million dollars.

Although painful for Pierpont,  it was also, perhaps, liberating. With his father gone, Morgan was now free  to invest and spend as he wanted, finally enabling him to step out from  his father’s overcasting shadow. Overnight, J.

P. Morgan’s wealth more than doubled. His first order of business was to immediately  purchase an even bigger yacht, which he very creatively named the Corsair II.

When asked about the cost of building such  a mega-yacht, legend has it that the banker answered, “If you have to ask, you can’t afford it. ” Few prices in life were too high for J. P.

Morgan. The opulent new Corsair II spared no  expense; boasting real fireplaces, unique fine china, oak paneling,  full-size tubs, and central heating. The yacht would cost him $100,000  a year in maintenance alone.

Despite the steep price, Morgan considered  it well worth the investment, allowing for a true escape from the office  and the bombardment of telegrams. And although Morgan had plenty of cash to  keep himself afloat, the market would soon poke holes in his business. Enter the Gold Panic of 1893.

At the time, the U. S. dollar was tied to the  gold standard; which allowed for anyone to convert their paper money into physical gold.

Because notes like the twenty or hundred-dollar  bill were essentially thought of as “vouchers” for gold, the government always kept a minimum  reserve of one hundred million dollars' worth of gold coin and bullion. It wasn’t a legal mandate, but keeping it  above that line meant the public still trusted the government. But in February of 1893, the government’s  reserves plunged well below the hundred million mark, as European investors exchanged  their U.

S. currency for the precious metal. The run on gold sparked widespread  panic, as people began to ask themselves: “If the U.

S. government ran out of gold,  would paper money really be worth anything? ” And as the country’s reserves drained out  in a steady flow, banks and businesses began to fold around the country, seemingly in unison.

With millions now unemployed, major corporations  turned to the same institutions that helped them in the first place:  the bankers of Wall Street. But the bankers had their hands  full, especially J. P.

Morgan. His darling industry, the rails, was collapsing  — with 192 lines declaring bankruptcy in one year alone. Eventually, a third of all train tracks in  America would be shuttered, impacting the entire economy from coast to coast.

The people of the time would call  this period “The Great Depression,” a name that wouldn’t be redefined until 1929. Soon, J. P.

Morgan would once again prove  why he was known as “The American Napoleon,” as he turned his mighty  will to the problem at hand. His reputation as a great consolidator would  prove him to be the right man for the job. Intuitively, he knew that merging the railroads  was their only chance at survival, a move which left many wondering if the banker held too  much power over this great American industry.

But when railroads came to him for help,  he would refuse — unless he was given full control. This wasn’t the time for waiting  around — as all great businessmen know, this was a time for decisive action. After taking control of a rail line, Morgan  used his financial wizardry to strengthen the company’s balance sheet; refinancing its  debt and issuing new shares to raise more capital, among other strategies  in his financial playbook.

Over time, Morgan slowly pulled the brakes  on the out-of-control railroad industry. And for his efforts, Drxel, Morgan and Company  was rewarded with a secure hold on all future business with major rail lines, not to  mention some very handsome commissions. Out of this 20-month financial feat, J.

P. Morgan  walked out with more than just money; he also gained new notoriety and fame. His increasingly impressive reputation took  him farther than he had gone before, eventually landing him in front of the  highest office in the land.

Although Pierpont was able to halt the railroad  catastrophe, America’s Treasury was still in crisis mode. Gold was the foundation of  the entire U. S.

economy. And that foundation was quickly crumbling. In response, J.

P. Morgan came up with a plan  to restore America’s gold reserves, which he sent directly to President Grover Cleveland. Confident that his plan would work, Morgan  retreated to his library to play solitaire, waiting for the eventual “Yes” from the President.

Within an hour, the reply came back . . .

“No. ” President Cleveland instead opted to do what  the government had always done in the past: sell bonds to the American public. But Pierpont knew that issuing bonds would take  too long, when the government would default on its debts within three weeks.

Without delay, J. P. Morgan rushed  from New York to Washington, determined to meet with the President,  a man he considered his equal.

If the President was the king of the land,  then Morgan was unquestionably the emperor of finance. At first, the President denied seeing him,  to which Pierpont replied with an intense, intimidating tone: “I have come down to Washington to see  the President — and I’m going to stay here until I see him. ” By this time, the situation was growing worse  by the hour, as the government was running the serious risk of going bankrupt – leaking  $2 million a day from its gold reserves and showing no signs of slowing.

The morning after his arrival, Morgan was  ushered in to see the President and his several cabinet members. But the President and his men were not  inclined to listen to the Wall Street banker. Luckily for Morgan, the treasurer received  a call in that meeting that their reserves had dropped to $9 million.

Pierpont saw his opportunity and jumped. He told the men in the room that he personally  knew of a draft for $12 million that, if presented that day, would wipe out the U. S. 

government by 3 o’clock that afternoon. Realizing their dire situation,  President Cleveland turned and asked: “Have you anything to suggest, Mr Morgan? ” Morgan offered a syndicate of U.

S. and European  investors who could work together to invest gold back into the government’s coffers. Using an outdated loophole from an earlier  Civil War law, Morgan demonstrated how the Treasury could buy gold from Morgan’s private  syndicate, building up their dwindling reserves and plugging the leak.

More importantly, the loophole enabled the  President’s administration to bypass Congress, a convenient way for Cleveland  to make an immediate decision. In spite of the negative publicity of the  White House working with Wall Street, Cleveland signed the contract with Morgan’s syndicate. Within 22 minutes in New York City, and 2 hours  in London, the private sale of the government’s gold bonds was completely sold.

Disaster now averted, Pierpont had successfully  bailed out the United States government – rescuing the country from the brink of collapse and  restoring faith in the American economy. But his motivations were not entirely altruistic,  as he pocketed a hefty commission for his services in facilitating the transaction –  raising questions as to whether Morgan’s behavior resembled more a profiteer than a patriot. With this amount of influence, many were concerned  whether one man like Morgan should hold so much power.

There’s no clearer example of this than when  J. P. Morgan was approached by Andrew Carnegie in 1901.

Carnegie Steel was at its peak, netting $40  million a year, but Andrew Carnegie was ready to retire from the business world. So he wrote on a scrap of paper the amount  he’d be willing to sell his business for, and had it delivered to Morgan’s office. Taking just one glance at the $480 million price  tag, J.

P. Morgan agreed on the spot, marking the largest business transaction in history,  as well as minting Carnegie as the richest man in the world at the time. Later, when celebrating the deal, Carnegie  remarked that he should’ve asked for an extra hundred million dollars.

“If you had, I would’ve paid it,” replied Morgan. Using Carnegie Steel, Morgan formed the United  States Steel Corporation and continued his consolidation spree, effectively controlling  60 to 70 percent of the country’s total production. In doing so, he also created the world’s  first billion-dollar company, U.

S. Steel, then valued at $1. 4 billion; equal to a  staggering 7 percent of America’s GDP.

In addition to his iron grip on the steel  industry, Morgan’s newest venture, Northern Securities, had bought up and controlled two of  the largest railroad companies in the nation. This meant that Morgan owned one-third of all  rail lines, at a time when 60% of America’s stock market capitalization  consisted of railroad corporations. People began to whisper and speculate  that Morgan owned the United States.

One of those who believed the  whispers was the President himself: Theodore Roosevelt. Previous presidents, like Cleveland and McKinley,  were very much in favor of the mega-corporations taking over the country — or, at  least, they didn’t seem to mind. In stark contrast, Roosevelt was anti-monopoly,  and believed that the size of government should grow with the size of American industry.

Needless to say, Morgan and the  President weren’t off to a great start. Using the Sherman Anti-Trust Act of 1890,  Roosevelt worked hard to tear down companies like Northern Securities and U. S.

Steel. At a time when there were no problems with  politicians receiving bribes from big business, like free rail passes, President Roosevelt was  resolutely against those old-world practices. Roosevelt saw J.

P. Morgan as part of the  problem with America’s bumpy economy. The President did not want giant  corporations to go unchecked.

Morgan and his Northern Securities would  be Roosevelt’s example to the whole world. Without consulting his presidential cabinet,  Roosevelt publicly declared that Northern Securities was being investigated for  illegal acts under the antitrust law. And for the second time in his life, Morgan  rushed over to the White House demanding to see the President.

He claimed that he should have been given  time to fix the problem and warned before this hasty move. “That is precisely what we did not  want you to do,” replied Roosevelt. Eventually, Northern Securities would be broken up  in 1904 as the Supreme Court overturned Morgan’s appeal.

J. P. Morgan resented the government’s  intrusion into big business.

Upon hearing that President Roosevelt was  traveling to go hunting in Africa one year, Pierpont remarked: “Good. I hope the first lion that  meets him does his duty. ” Although the two did not see eye to eye, President  Roosevelt, or Teddy, as he was also known, had to admit that Morgan possessed a  talent for repairing entire economies.

This talent would be tested again in 1907, when  the stock market panicked after the failure of the United Copper Company, which pulled  down the entire mining industry with it, along with two brokerage houses and a  bank — all within one weekend. As it happened, the stock market  panicked again and a bank run ensued. One of the strategies used for slowing the  drain of capital from the nation's banks was to have the tellers count money slowly, as  customers rushed to withdraw their money; purposefully dragging out each  encounter with depositors.

Perhaps this played a role in making the lines  so long in the historic bank-run photos we know today. If the public continued pulling money out  at the same time, the ramifications would be felt for years. President Roosevelt would need to set his  differences aside, as he knew there was only one man who could solve this  problem: John Pierpont Morgan.

His administration called for Morgan to step in, extending twenty-five  million dollars of government funds to be used at Pierpont’s disposal. Amidst the crisis, John D. Rockefeller offered  half of his personal fortune to Morgan if it would help save the country from a depression.

Just like the business conducted on  his yacht, Morgan had to set the stage. He arranged for heads of the nation’s largest  banks and trusts to meet in his private library to work together to solve the national crisis. Morgan reportedly laid out his plans for the  bigger banks and trusts to invest in their smaller competitors.

He then locked the door and played Solitaire,  while the bankers negotiated amongst themselves. Reporters anxiously camped  outside, waiting to hear the news. By early morning, the leaders of the nation’s  largest banks and trusts had come to a resolution, just like the Corsair Pact so many years before.

Morgan helped organize the capital  needed to bail out the failing banks. And by the end of the week,  another crisis was averted. J.

P. Morgan was hailed a hero. Walking down Wall Street, bystanders cheered.

But this would be the very last time that  one man, especially a Wall Street banker, held that much influence over an entire country. And even though Morgan was  semi-retired and well into his mid-70s, he continued to face opposition  for his unparalleled influence. By 1912, Morgan was commanded to  appear before the Pujo Committee, a Senate-led group that was investigating  the extensive financial power held by a small handful of all-mighty bankers.

And although the group was investigating numerous  banks, it soon became evident that J. P. Morgan was the main target in the  government’s crosshairs.

But Pierpont remained adamant  that he had done nothing wrong. When asked if he chased power, he claimed  that power was never something that he wanted. Widely covered by the media, Morgan used the  platform to show off his diplomatic superpowers.

“Is not commercial credit  primarily based upon money or property? ” a lawyer on the sub-committee asked. “No, sir, the first thing is character,” Morgan cleverly replied.

“Before money or property? ” the lawyer countered. “Before money or anything else,” Morgan responded.

Spectators roared with applause. Ultimately, the committee’s findings revealed  that Morgan single-handedly controlled more than twenty-two billion dollars of capital through  his 112 corporations and 341 directorships; effectively equating to more than  two-thirds of the country's GDP. And although the senators were unable to find  Morgan guilty of any illegal wrongdoings, the Pujo Committee eventually paved the way  for the establishment of the Federal Reserve and the permanent fixture of income taxes.

Despite being able to help America avoid multiple  economic depressions, Morgan couldn’t seem to escape his own mental depression. Pierpont suffered from nervous breakdowns  throughout his career, and grew increasingly anxious as he grew wealthier, arguably because  he had more to worry about losing: not just for himself, but for his clients. Throughout his life, Morgan would confine  himself to his bed, usually several days each month to recover from his  various health complications.

Despite being the toughest banker who  ever lived, Pierpont was thin-skinned. Worsening his manic-depressive episodes was  the public’s negative personification of the financier, portraying  him as a greedy businessman. He certainly didn’t enjoy seeing newspaper  cartoons portraying him as a devilish and greedy monster.

Now, in his final years, he endured great  personal struggles; dealing with tremendous criticism, all while trying to cement his  legacy as America’s most successful and patriotic financier. By this point, Pierpont lived to excess; draining  massive amounts of sherry and port, while smoking dozens of cigars a day. He was said to eat a breakfast so  large that it would kill a horse.

It was certainly no aid to his health when  he learned about the shipwreck of one of his investments; the Titanic – a vessel which  he owned through his shipping trust. Interestingly, it was only  a last-minute fluke that he and his multi-million dollar art collection weren’t on the fateful ship when  it went down on April 14th, 1912. Perhaps it was all too much  for the 75-year-old titan.

While traveling in Rome, on March  31st, 1913, Morgan passed away, shortly after midnight. His son J. P.

Morgan Junior attributed his  death to the Pujo committee – which caused his father so much distress. Out of respect, Wall Street not only flew  its flags at half-mast but closed the New York Stock Exchange until noon. At the time of his death, his personal net  worth was calculated to be around 80 million dollars, approximately half of  which was in his art holdings alone.

Andrew Carnegie commented on Morgan’s passing.  Upon hearing about his paltry fortune, which paled in comparison to other  titans such as himself, remarking: “And to think that he wasn’t even a rich man. ” Most captains of industry believed he  was far richer than he actually was.

But Morgan’s legacy extends far  beyond the weight of his wallet. After his passing, many of his paintings were  donated to the Metropolitan Museum of Art, where they can still be viewed today. However, art only comprised around  5% of his various collections.

He also boasted a portfolio of other invaluable  items; such as Napoleon’s watch, Leonardo da Vinci’s notebooks, and a 5-page letter from  George Washington, among many more countless treasures. His personal library was opened to the public  in 1924, and it remains a testament to the amount of influence that one man  can aggregate in his lifetime. The principles that we take away  from J.

P. Morgan’s life are, of course, about influence and power. No matter who met him, everyone could appreciate  Pierpont Morgan’s unrestrained and fierce honesty.

Even Morgan’s arch rival, President  Roosevelt, couldn’t help but praise the man: “Mr Morgan was politically opposed to me,  but whenever I was brought into contact with him, I was struck not only by his very great  power, but by his sincerity and truthfulness. ” We hope that you face your own challenges with  the same drive and passion as J. P.

Morgan: honest and sincere, in whatever you pursue. Of course, we also hope that J. P.

Morgan’s  life has given you a lot to think about … but we also know that sometimes it’s nice not to  have to think too hard, like when it comes to investing with the  intuitively simple app, Acorns. With Acorns, it’s easy to make automatic  investments into your future with daily, weekly, or monthly contributions. Acorns also makes it possible to round up  your credit or debit card purchases to the nearest dollar while auto-investing the difference  for you, right into your portfolio — making investing as easy as spending.

And don’t worry about picking the right stocks  and bonds, as Acorns provides out-of-the-box pre-built portfolios. One other amazing feature that we love  about Acorns is the “Found Money” section in their app. Acorns has partnered with hundreds of  companies that want to invest in your future.

For example, when you shop with Nike through  the Acorns app, Nike will invest five percent of your entire purchase into  your investment account. Even better, you can also earn money on other  everyday essentials, like gas or food delivery, which will invest 4% back into  your portfolio with every purchase! Check out the link in the video description  below, or go to acorns.

com/bc to get started today. And as a special gift for all Business Casual  viewers, Acorns will help kickstart your portfolio with a five dollar sign-up bonus. Even J.

P. Morgan would love that! Thank you for watching!

If you enjoyed this video, be sure to click  the like button and subscribe to see more videos just like this. If you want to learn even more about J. P. 

Morgan, be sure to check out Ron Chernow’s book, The House of Morgan, located  in the video description below. And if you want to be notified as soon as  new videos go live, click the bell icon and then tap the “all” option, as seen on-screen. … Until next time, stay smart.