Morgan family

The Morgan family was an American financial and banking dynasty, which became prominent in the U.S. and throughout the world in the late 19th century and early 20th century. Members of the family amassed an immense fortune over the generations, primarily through the noted work of John Pierpont (J. P.) Morgan (1837–1913).

Morgan members were notable for dominating the banking industry during their time. J.P. Morgan was the de facto leader of this dynasty, having been the most prominent businessman in America at the turn of the century. He revolutionized numerous industries, including electricity, railroad, and steel. Through his business methods, he was highly successful in asserting his power as one of the most influential businessmen in America. Historians describe the Morgan family along with its web of partners to be part of the large American banking empire known as the House of Morgan. It is difficult to place an exact beginning and end date on the dynasty. However, many scholars attribute the death of J.P. Morgan to the end of the banking dynasty. American journalist and historian Ron Chernow wrote about the prominence of this dynasty under J.S. Morgan and J.P. Morgan. In The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance, he chronicles the lives of the Morgans, whose lives are “encrusted with legend... ripe with mystery, [and] exposed to such bitter polemics”.[1]

History

The Morgan family originated in Wales during the 17th century. Born in Llandaff, Glamorgan County, Miles Morgan was the son of William Morgan. At the age of 20, Miles sailed for America, along with his brothers, John and James, seeking new opportunities in the New World. Arriving in April 1636, he landed in the Massachusetts Bay Colony. Settling in Roxbury and later Springfield, Massachusetts, Miles met Prudence Gilbert, his future wife.[2] Miles was a soldier during the sack of Springfield. He later worked on a farm and lived a comfortable life. He continued living in the city until the age of eighty-three.[3]

One of his sons, Nathaniel, continued the legacy of the Morgan name by becoming a powerful member of his small town. Nathaniel had many professions in his town, including Fence Viewer, hayward, field driver, Constable, surveyor, and assessor.[4] He married Hannah Bird on January 19, 1691, daughter of James Bird of Farmington, CT.

Nathaniel’s son, Joseph Morgan, was the fifth of seven children. Born on December 3, 1702, Joseph began to learn to weave at a young age. At the age of 21, he became a soldier in the company of Captain Josiah Kellogg of Suffield. Upon his father’s death, he inherited part of Chicopee Field. He married Mary Stebbins in 1735, and raised a family on a farm of two hundred acres. Upon his death, he gave much of his property to sons Joseph, Jr. and Titus.

Joseph, Jr. was elected Lieutenant and later Captain of the 8th Company in the 3rd Regiment of the Hampshire County, Massachusetts militia on April 26, 1776. Upon his death, one of his sons, Joseph III, received 112 acres of land.

Joseph III was the first to enter the financial industry, which is what the family is known for today. He left the family business of working on farms behind. In 1812, he joined the Washington Benevolent Society as a private banker.[5] He moved the family to Hartford, which existed as one of the most prominent trade centers in the Connecticut River Valley.[6] In November 1816, he purchased the Hartford Exchange Coffee House, where he acted as an innkeeper. It stood as the focal point of all business affairs and social activities in the area; the idea of meeting new clients and collaborating with other businessmen in these coffee shops and inns allowed for the growth of industry in America.[7] In July 1825, he bought the Hartford Bank. Joseph III purchased and reorganized the Hartford Fire Insurance Company into the Aetna Fire Insurance Company. (Many of these business deals were conducted at his inn, which acted as a hub for businessmen). After a fire struck a number of New York City buildings, which held insurance plans from Aetna, Joseph Morgan III made prompt payments to the companies. New business suddenly poured in, as the insurance company was seen as highly reliable and trustworthy. The partners of the firm and the stockholders made large sums of money in future years.[8] After moving from the farming business to the coffee house business, Joseph III decided it was time to turn to finance. He purchased the City Hotel on Main Street, which he renovated and cleaned up; business at the hotel boomed like never before.[9] He married Sarah Morgan (née Spencer), who was the Director of the Hartford Orphan Asylum. He acted as a director of the firm until his death.

Junius Spencer (J.S.) Morgan, Joseph III's son, played a prominent role in the banking industry. From a young age, he showed interest in entering the business field like his father. In 1829, at the age of 15, he worked as an apprentice with a merchant, Alfred Welles in Boston. Following that, he worked at a number of firms including:

In 1864, Junius Morgan changed the name of George Peabody and Company to J.S. Morgan and Company. Under his leadership, it became one of the most prominent banking firms in both America and Europe. At the age of 64, J.S. Morgan retired.

Perhaps the most prominent member of the family is J. P. Morgan (1837–1913), son of J.S. Morgan. He became exposed to his father’s business deals at an early age. He worked as an accountant until eventually becoming a partner at Drexel, Morgan & Co. in 1871.[11] By 1885, he began buying out railroads and reorganizing them. Through his business strategies, the term “Morganization” was coined to describe his method of creating monopolies through buying companies, eliminating the competition, and cutting costs.[12][13] By the turn of the century, he became incredibly successful in his business endeavors, controlling most of the major industries in America. During the Panic of 1907, J. Pierpont Morgan bailed out the U.S. government.

The key characteristic of the Morgan banking style, perpetuated by J.P. Morgan, exists where banks “perpetuate an ancient European tradition of wholesale banking, serving governments, large corporations, and rich individuals”.[14] J. Pierpont Morgan was also a member of numerous social clubs including the Union League, New York Yacht Club, and Knickerbocker Club.[15] In 1891, he also founded his own club, the Metropolitan Club. Famous members included Cornelius Vanderbilt, Darius Ogden Mills, and more. The club had 1200 resident and 500 non-resident members at its founding.[16] These social clubs were important in establishing relationships among powerful leaders of American society. Modeled after British social clubs,[17] these organizations had people who held a tremendous influence over everyday life, such as bankers, politicians, lawyers, and railroad tycoons.

J.P. Morgan’s legacy was continued by his son of the same name, although his son never became as prominent as his father. Born in 1867, John Pierpont Morgan, Jr. attended Harvard University, class of 1889. Also known as "Jack", he entered the banking industry, like his father, becoming a partner at Drexel, Morgan and Company, Bankers and Brokers of New York City in 1892. He helped in the establishment of J.P. Morgan and Company, which was founded in 1894. Yet, his life marked the decline and fall of the Morgan dynasty. With the passage of the Glass-Steagall Act in 1933,[18] which restricted the merging of investment and commercial banks, came the end of the period of Robber barons and banking dominance.[19] Thus, J.P. Morgan and Company became a commercial bank, and Morgan Stanley an investment bank. Through new legislation, and a growing public resentment against big business, the opportunities for Jack were rare compared to his predecessors. Additionally, Jack suffered from many ailments, such as neuritis, to the point where he had to resign from numerous positions.[20] Lastly, The bankers of the pre-1913 Baronial Age are have said to have been the “lords of creation”, since they catapulted the American economy into an industrial powerhouse of production and power. This unprecedented development became attributed to the Morgan banking style.

Wealth

By one estimate, J.P. Morgan (1837–1913) is believed to have been the 24th richest American in history,[21] inflation adjusted. His fortune is believed to have grown to about $38 billion (2007 USD). Other estimates place it around $41.5 billion (2014 USD).[22]

According to historians Michael M. Klepper and Robert E. Gunther, Morgan had one of the highest wealth:GNP ratios in American history. In their book, The Wealthy 100: From Benjamin Franklin to Bill Gates,[23] Morgan’s wealth:GNP ratio was 328.[24] At the time, his fortune amassed around $119 billion.

Genealogy

William Morgan Branch

Miles Morgan Branch

Joseph Morgan Branch

Junius Spencer Morgan Branch

John Pierpont Morgan Branch

Select bibliography

See also

References

  1. ↑ Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press. p. xi. ISBN 0871133385.
  2. ↑ Starr, Frank Farnsworth. The Miles Morgan Family of Springfield, Massachusetts. Google Books.
  3. ↑ Hoyt, Jr., Edin P. (1966). The House of Morgan. New York: Dodd, Mead and Company.
  4. ↑ Starr, Frank Farnsworth. The Miles Morgan Family of Springfield, Massachusetts. Google Books.
  5. ↑ Hoyt, Jr., Edwin P. (1966). The House of Morgan. New York: Dodd, Mead and Company. p. 24.
  6. ↑ Corey, Lewis (1930). The House of Morgan: A Social Biography of the Masters of Money. New York: G.H. Watt. p. 23.
  7. ↑ Hoyt, Jr., Edwin P. (1966). The House of Morgan. New York: Dodd, Mead and Company. p. 27.
  8. ↑ Hoyt, Jr., Edwin P. (1966). The House of Morgan. New York: Dodd, Mead and Company. p. 37.
  9. ↑ Hoyt, Jr., Edwin P. (1966). The House of Morgan. New York: Dodd, Mead and Company. p. 32.
  10. ↑ Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press. p. 19. ISBN 0871133385.
  11. ↑ "J.P. Morgan". American Experience: People & Events.
  12. ↑ "Morganization". Investopedia. Retrieved 7 October 2014.
  13. ↑ "JP Morgan". History: Biographies. Retrieved 7 October 2014.
  14. ↑ Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press. p. xiii. ISBN 0871133385.
  15. ↑ Biographical Directory of the State of New York, 1900. Google Books. New York City. p. 323.
  16. ↑ "The Metropolitan Club". Proquest. New York Times. 8 March 1891. Retrieved 6 November 2014.
  17. ↑ Pak, Susie J. (1 June 2013). Gentlemen Bankers. Google Books. Harvard University Press. Retrieved 6 November 2014.
  18. ↑ Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance. New York: Atlantic Monthly Press. p. xii. ISBN 0871133385.
  19. ↑ Maues, Julia. "Banking Act of 1933". Federal Reserve History. Retrieved 2 November 2014.
  20. ↑ Hoyt, Jr., Edward P. (1966). The House of Morgan. New York: Dodd, Mead & Company. pp. 388–389.
  21. ↑ "The Wealthiest Americans Ever". The New York Times: Business. Retrieved 7 October 2014.
  22. ↑ "J.P. Morgan Net Worth". The Richest. Retrieved 7 October 2014.
  23. ↑ The Wealthy 100: From Benjamin Franklin to Bill Gates. Amazon. ISBN 0806518006.
  24. ↑ Roth, J.D. "The Wealthy 100: A Ranking of the Richest Americans, Past and Present". Get Rich Slowly. Retrieved 7 October 2014.
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