Morgan the Magnificent: The Life of J. Pierpont Morgan (1837-1913)

Front matter

MU ON awn

HM t WA

Nai

Contents

I. THE MAN 3 Il. THE HOUSE OF MORGAN TWO GENERATIONS BACK 23 Ill. PIP MORGAN 38 _» IV. TRICKS OF A TRADE 55 V. FIRST MORGAN SYNDICATES 72 £ VI. RAILROAD LUNACY 90 vu. “GENTLEMEN’S AGREEMENTS’ —BUT THESE WERE NO GENTLEMEN 106

VIII. RE-MORGANIZING THE RAILROADS 125 Ix. “SAVING THE COUNTRY’ —FIRST, 1895 142 X. HILL AND HARRIMAN 160

XI. NORTHERN PACIFIC PANIC—THE BATTLE OF THE GIANTS 183

Chapter One

PERHAPS ONCE IN A HUNDRED YEARS IS BORN A MIND capable of entering a sphere of higher mathematics closed to ordinary mortals. A direct and synthetic mind that cuts across lots and flies straight to conclusions, intuitively and by processes unknown to itself.

Súch a mind we call genius.

Such was the mind of John Pierpont Morgan.

By sheer mental magic, Morgan solved the most complicated problems. He was a mathematical marvel. This quality in itself destined the direction of great affairs. But no single faculty placed this astonishing American upon his lofty pedestal as the greatest banker, the greatest organizer, the greatest master of capital of his time. paja

Morgan had vision and surpassing imagination. Add | to these incredible audacity, sublime self-confidence, unqualified courage, amazing virility of mind and body, and a personality that can only be described as overwhelming. Small wonder, then, that this man, part | poet, part pirate, grew (in the estimation of himse and others) almost into a God; and, as a God, ruled for a generation the pitiless, predatory world of cash.

Morgan was a colossal adventurer in the realm of reality. He took what he wanted. His code was his own.

fs J

He did things that today could not be defended in law or morals. But, for his time and generation, he played the game and played it fairly. He preferred the strong rather than the weak as antagonists. Of course, when it suited his purpose, he bowled over both.

Eventually he became a sort of super-government. Often, indeed, he took unto himself or events forced upon him the function of Government itself. In the panic of 1907 he was dictator of the United States in all save formal title; and there were other occasions when his tremendous power had to be called upon to repair the ineptitude of the lawmakers.

In the early years of the century, Morgan unquestionably was tending toward almost exclusive control of the cash and credit of America. His enormous transportation and industrial combinations had swept into his hands a large part of the country’s available capital. He became a symbol. He was Wealth, Power, Gold.

Wall Street paid him homage that was almost comic. Everyone scrambled to get into his stock pools. Staid, conservative men of affairs went into transports of bliss when Morgan placed their names upon his subscription lists. At the lifting of a Morgan finger awe fell upon the financial community. It was odd, almost grotesque, that one man’s personality could play so large a part in a country consecrated to the idea of popular infallibility.

Morgan’s power was not confined to America. The great of the earth fawned before him. Kings and Emperors vied to do him honor. It seemed that nothing could stop him. But something did.

_A Safe Man in the White House was shot by an

assassin, and a bold, intelligent, ambitious young political captain became President. That event spelled the doom of Morgan’s plan, if plan he had, to organize the basic industries of the country into enormous aggregations of capital such as the United States Steel Corporation. The Steel Corporation was Morgan’s masterpiece—an industrial empire that only he could have fashioned. _ Theodore Roosevelt, the new President, was dowered with an energy as abnormal as Morgan’s own. Roosevelt was, in Henry Adams’ expressive phrase, “pure act.” Also, he was fearless and quick to respond to the public will. The public—that portion of it which was not seeking eagerly to enrich itself by following the lead of the wicked Wall Street men—was keenly aroused over the growth of the giant corporations.

Spurred by the bitter pens and tongues of the muck-rakers, the common man looked upon Morgan and his ilk as rough, red rogues who were plundering and stealing right and left. (In many cases the estimate was not far wrong. Roosevelt was in touch with and responsive to the popular point of view. Morgan was not. He knew nothing and cared less about the ordinary run of human kind. Morgan sprang from whatever aristocracy this country may boast, and it was his chief pride that he was a gentleman. He and the young President were fated for conflict. “When I became President,” says Roosevelt in his autobiography, “the question as to the method by which the United States Government was to control the corporations was not yet important. The absolutely vital question was whether

Es]

e Government had power to control them at all.”

Roosevelt found a way. He selected Morgan as his chief antagonist, giving the latter the shock of his life by suing to dissolve the Northern Securities Company, Morgan’s gigantic merger of the Great Northern and the Northern Pacific railroads. Slur this action as so many have done, it seems to me that it was a dauntless act by a dauntless man.

The Northern Securities Company was an outgrowth of a tremendous contest for supremacy in the railroad world between Morgan and his ally, James J. Hill, and a coalition led by Edward H. Harriman and the Standard Oil. The struggle was like a great spectacle one watches in an arena. While the world looked on in breathless wonderment, men of illimitable power flung into the fray unheard-of masses of capital.

The result was a draw. Morgan, determined to place the Hill lines forever beyond Harriman’s reach, hit upon the scheme of forming a huge holding company. Then Roosevelt took a hand.

In the Northern Securities suit Roosevelt forced the United States Supreme Court to reverse itself, in response to public opinion and a changing code of social thought. Roosevelt’s victory was narrow, but the Supreme Court declared the merger an illegal combina- , tion in restraint of trade. The decision was a body blow to Morgan. It marked the end of an era in high finance.

The relations between Roosevelt and Morgan form a fascinating story. It will be given here so far as we have been able to gather it from those who were intimate with both men. These strong, forceful individuals, one feels sure, would have been comrades had not fate decreed that they should occupy opposing positions in great affairs.

Time and again friends of both sought to bring them together. There were many meetings, but no fusion of friendship. To Roosevelt, Morgan was a man whose talents were devoted entirely to entrenching the power of organized capital. To Morgan, Roosevelt was a gentleman gone wrong—a man who sacrificed all the privileges of his class for common applause. A politician. Morgan despised the tribe.

Morgan was no less colorful in his faults than in his virtues. He cared not a whit what the world thought of him. Each morning he held a levee, a rapid-fire affair, in his great red room at the western end of his lovely Italian Renaissance Library in East Thirty-sixth Street. Those who awaited him might include business associates, friends, art dealers, pensioners, what not.

Though his home was next door, he would often drive up to the Library entrance in an open barouche and come striding into the conference chamber. It mattered not the slightest to him that this fed gossip coupling his name with beautiful women. Let the world tell tales ot a luxurious mansion on Forty-sixth Street, just off Fifth Avenue; of parties aboard his yacht; of Lucullan banquets in a private apartment at the Fifth Avenue Hotel where favors to the ladies were bracelets and necklaces of diamond and pearl.

Many women knew Morgan as a generous patron. In a way, his very defiance of convention was a protection. Who but Morgan would have dared to set forth for a

C7 church convention accompanied by a famous beauty? While the financier sat in solemn conclave with the men of the cloth, the lady enjoyed the luxury of the Morgan private car, drawn up upon a siding in a leafy suburb! Who but Morgan would have grandly bestowed “dots” of $100,000 each upon lovely young things, whose favors he had enjoyed, when they decided to anchor in the more placid harborage of matrimony? Who but Morgan would boldly have ventured an affair with the beautiful and intellectual wife of a famous and philandering architect?

Morgan’s adventures in romance were many and varied. But they were never tainted by open scandal. His women were as loyal, as worshipful as the associates he chose in business. There was no touch of the tawdry in the lighter engagements of his life. Living today, on both sides of the water, are great ladies whose memories of Morgan the Magnificent are touched with a tenderness which time will never erase. They were privileged to see a side of this amazing man completely closed to others. Locked forever in the inner crypt of their natures are tales that will never be told. It is a pity.

Morgan was not a sensualist, but he found real stimulation in romantic as in religious emotion—a compound by no means rare. Fitting a certain need of his nature, women were attracted to him, irresistibly. With them he could be in turn Rabelaisian and delicate. He liked parties where the talk was free and joyed in the exuberant company of ballet belles. He was equally at home in the boudoirs of fastidious ladies. Few women could withstand his leonine love-making.

Like some of the fabled kings of the Old Testament he was eclectic in his choice of mistresses. He collected beautiful women as he collected objects of art. More than one young woman of humble station was distinguished by Morgan’s attentions. While the affair lasted —sometimes long afterward—the financier was a lordly protector.

The path of a Morgan favorite was smoothed for life. He was ever solicitous of her welfare. He was genuinely pleased if she made a happy marriage. He deprecated the social cruelties inflicted upon women who defied the conventions.

In the heart of New York’s lower East-side stands a great building—the Lying-In Hospital—devoted to the care of expectant mothers. Morgan founded this institution and lavished great sums upon it. From the tenuous filaments of a tempestuous romance this building grew. The lady of the liaison pointed out to Morgan the urgent need of a modern maternity hospital and led him into the project.

Many and varied were the ribald jests when it became known that Morgan had established a maternity hospital. It was a standing joke among the gay bloods of the bars and the clubs. But not even the boldest of his intimates ventured to twit the financier.

Lying-In soon became renowned, its medical staff including many noted specialists. Incidentally, several doctors married Morgan mistresses, though well aware of the nature of their former relaticnship. Does this not open a fascinating field for speculation? Why should physicians and surgeons be less squeamish than most men in such matters? Does their training tend to lessen respect

MORGAN the MAGNIFICENT T o Cabin tals Uaioe inet ia kee e for chastity and lead them to believe that modern Puritanism absurdly overvalues it?

Morgan’s extra-marital ventures were no secret to his friends. Nor could they be concealed from his family.

But Morgan was Morgan and his life was his own.

He was not so tolerant of the indulgences of others, particularly those men whom he raised to positions of eminence and trust in his great consolidations. Charles M. Schwab will never forget an interview with Morgan shortly after the latter had made Schwab president of the Steel Corporation. Schwab had just returned from a sky-larking trip to Europe. The papers had been filled with tales of his exuberant exploits—gambling at Monte Carlo and the like. Morgan did not think these episodes consonant with the dignity of Schwab’s position and bluntly told him so. Schwab pleaded that everything he had done had been done openly and not behind closed doors. “Humph,” remarked Morgan witheringly, “that’s what doors are for.”

When Morgan was in a mood like that, the strongest quailed before him. His frown could cow the most ferocious of financial desperadoes. Morgan’s eyes were awful in anger. Such eyes had seldom been set in human head. They blazed from beneath shaggy eyebrows. They seemed to change color with every emotion. They were really dark blue, but even those who knew Morgan well described them, varyingly, as of every shade from light gray to black.

At times they could soften and become as liquid as those of a woman, as when the financier indulged in a daily romp with his children and, later, with his numerous grandchildren. He permitted nothing to interfere with this phase of his family life. His children remember swarming over him, tugging at his sweeping moustaches and great double watch-chain, and exploring his pockets for hidden sweets and cookies. They rumpled his hair and pulled his clothing awry. But he didn’t mind. He paid little attention to appearance or attire.

Morgan watched over his children as he did over his companies. In both cases, though, his authority was absolute, if benevolent. To this day the Morgan children look upon their father’s memory with a degree of reverence approaching religious awe. In turn, Morgan’s veneration for his father was almost Oriental in its intensity. Occasionally, generally late at night on some long journey or out alone upon the ocean, he would speak of his early life, the careful training his father had given him at home and in business, and the latter’s pride when he first found his son standing upon his own feet.

Morgan’s religion was a strange, depthful thing. It was the strongest impellent in his nature; and undoubtedly was linked with occasional waves of melancholy which swept over him. However, his religion, like everything else, was a private possession not to be shared with his fellow-man. Deep within Morgan burned the zealous doctrines of the old Puritan divines. From earliest childhood he had been taught that man comes into the world a sinner; and that only a favored few can escape the hell firé to which our sphere is doomed.

The only hope of salvation, Morgan believed, lay in aa

MORGAN the MAGNIFICENT eT ae ee ge A EA E E E E the doctrine of the Atonement. All his life he wavered not an inch from the beliefs of his boyhood. The first article of his will contains this remarkable declaration:

“I commit my soul into the hands of my Saviour, in full confidence that having redeemed it and washed it in His most precious blood, He will present it faultless before the throne of my Heavenly Father; and I entreat my children to maintain and defend, at all hazard, and at any cost of personal sacrifice, the blessed doctrine of the complete atonement for sin through the blood of Jesus Christ, once offered, and through that alone.”

The grip religion had upon Morgan was extraordinary. Though no scholar and never a deeply read man, he was thoroughly conversant with the history of the American Protestant Episcopal Church. It was one of the curious anomalies of his nature that he could revel in gatherings of ecclesiastics where dull and dusty discussions of dogma and church law consumed the sessions. For decades he dominated the American Episcopal Church. He acquired the position, almost, of a lay Pope, and probably had more influence in church affairs than any member of the House of Bishops.

The Rev. Dr. W. S. Rainsford says of Morgan’s religious nature:

“His beliefs were to him precious heirlooms. He bowed before them as the Russian bows to the ‘Ikon’ before he salutes the master of the house. The Evangelical ‘Plan of Salvation’ was to him what the Ark of the Covenant was to ancient Judaism. Of how that ‘plan’ grew, what other earlier plans were merged in it, he knew nothing. So Mr. Morgan had the peace and power of religious assurance, while the very nature of his assurance precluded in him the possibility of spiritual development. His religion was a talent to be wrapped in its own napkin and venerated in the secret place of his soul; laid aside in safe disuse, rather than passed from man to man in life’s great barter.”

For twenty-four years Dr. Rainsford, a picturesque Cambridge University Irishman, was rector of the Morgan church—St. George’s on Stuyvesant Square in lower New York. Though total opposites in social outlook— Rainsford believed in “salvation by human touch”— these powerful individualists were irresistibly drawn to each other.

During the period of his pastorate, Rainsford breakfasted each Monday with his senior warden, Morgan; and perhaps drew closer to him than any other. The autocrat of the breakfast table confided in Rainsford as he did in few.

When Rainsford took over St. George’s in 1883 the church was dying of dry rot. Rainsford made St. George’s a free church and welcomed the teeming masses of the East Side. Preaching a religion of broad humanitarianism, almost of socialization, Rainsford restored St. George’s ancient glory. Morgan grumbled at the revolutionary creed of the new voice in the pulpit, but recognized in Rainsford a man who got results, and so backed the vigorous young rector to the limit.

That was Morgan’s way. Beneath the crust he showed the world, he was a creature of strong feeling and intense emotionalism. If he liked a man he gave him every-

MORGAN thee MA GING E 1 TCHAN thing. If he didn’t it was war to the hilt. Morgan was a man of fascinating prejudices and a good hater. He never sought to conceal his dislikes. He had a deep-seated anti-Semitic prejudice and on more than one occasion needlessly antagonized great Jewish banking firms. He judged men eye to eye and they went up or down in his estimation accordingly.

Some of his pet personal dislikes were E. H. Harriman, Andrew Carnegie, John W. Gates, and John D. Rockefeller. Colored by prejudice, Morgan always underestimated Harriman. It is interesting to speculate how far these men could have gone if they had joined their genius at the cross-roads in their careers. Morgan always-winced when Carnegie addressed him as “Pierpont.” Gates he considered an “unsafe” man. Rockefeller’s cold money-lust chilled Morgan although he admired the Oil King’s business genius and modeled his management of the Steel Corporation upon Standard Oil.

Morgan liked William Rockefeller and made John D.’s less pious younger brother a member of the Corsair Club, the highest honor that could come to a friend of Morgan. The Club was limited in membership to an even dozen and met at intervals aboard Morgan’s yacht, the Corsair, or elsewhere. At Morgan’s death in 1913 there were ten surviving members: Lewis Cass Ledyard, Joseph H. Choate, George S. Bowdoin, Charles Lanier, Francis R. Appleton, George L. Rives, Frank K. Sturgis, Charles Steele, Chauncey M. Depew, and William Rockefeller. Their names were not mentioned in the will, but to each was left a piece of silver plate.

ene ere MAN Oe

Morgan was a kingly host aboard the Corsair. In successive decades, he built three great yachts called Corsair, each more imposing than its predecessor. The name satisfied his instinct for the dramatic. Did he visualize himself as a modern corsair as his splendid, black-hulled yacht bore him over the sea? Morgan was a great showman. He knew well the value of a setting just as he knew the force of a frown or the effect of a roar. For several years the Corsair was the flagship of the New York Yacht Club. Thereafter intimate friends called Morgan “Commodore.” It was the only title in which the first financier of the world gloried.

At the height of his power Morgan grew to look upon himself as a modern counterpart of a gorgeous _ Renaissance prince. His pride expanded with his prestige. He growled angrily when he heard that a wit had dubbed him Pierpontifex Maximus; but beamed with pleasure when compared to Lorenzo the Magnificent. Morgan, too, could make gestures as magnificent as the greatest of the Medici, such as his coronation gift of a $500,000 tapestry to King Edward. Morgan, though, was no Lorenzo. He was the greatest collector of his time in many fields of art, but he did not support contemporary art.

Morgan’s vast collections—paintings, porcelains, Bibles, miniatures, manuscripts, jewelry, and the like— were assembled with an apparent prodigality that no government could match. But Morgan was largely a checkbook collector; he was not a connoisseur in a finer sense. He loved beautiful things and liked to surround himself with them, but he bought under the guidance

Cis]

p- AN SA

MORGAN the MAGNIFICENT E ed aE witha D Seip SE of expert salaried advisers, and seldom experienced the thrill of those personal discoveries that so delight the true connoisseur. He bought in batches; whatever plan and method there was may be credited to his advisers.

As an art purchaser, Morgan was difficult for dealers. He did not believe in giving the dealer a large profit. In the midst of a dicker he would turn his terrific eyes full upon his visitor and exclaim: “I have heard enough. Pll take this at the price you paid plus fifteen per cent. How much did you pay?”

It was a bold man who dared prevaricate as to price or seek to cozen Morgan into a more generous offer. Most items in the vast collections had appreciated enormously at Morgan’s death, though admittedly underappraised.

Morgan had his disappointments as well as his triumphs as a collector. He was never able, for example, to persuade John Hay’s widow to part with the original manuscript of Lincoln’s Gettysburg Address, presented by Lincoln to his young secretary, Hay. Strange to say, Morgan was always eager to add to his imposing array of Lincoln letters and papers. His interest in Lincoln must have been the attraction of opposites!—another fascinating idiosyncrasy in the nature of Morgan the gentleman, the aristocrat, the Bourbon.

_ Although he believed in America and was an ardent patriot after his fashion, Morgan despised democracy. He was totally unable to deal with those whom he did

T: not consider his equals. No duke of feudal France, no

“chieftain of a Scottish clan, was more contemptuous of the ordinary man than was Morgan. His boyhood was passed in New England, a region of ingrown sectionalism; his later adolescence in a Europe where class lines were rigidly drawn. From the cradle he had imbibed a certain pride of blood and breeding. At twenty (1857) he came into Wall Street, a lank, cocky youth thoroughly imbued with belief in his own destiny and with the backing of a father who was rapidly becoming the most forceful figure in a famous Anglo-American banking firm. Naturally young Morgan’s thought was turned eastward. It was so all his life. Not that he did not understand and take full advantage of the commercial potentialities of the great crude country that was America. But for his rules of conduct, his standards of life, he drew rather upon England than upon the country of his birth.

Long after he had become a focal point, almost the core, of the greatest movement of massed capital since the world began, Morgan looked upon himself as the agent, the trustee of clients largely European. He modeled his banking firm upon the great British and Continental establishments that came into being with the development of power machinery. His career was in no sense fortuitous. But events, of course, shaped him as much as he shaped events.

It was this extraordinary man’s most glaring weakness that he refused to place himself in touch with the social currents that were influencing his time. He sold his securities in every hamlet in the land but he never troubled to meet the customers.

Hence it came to him as a shock when his acts were questioned and the agencies of the law and of publicity

MORGAN the MAGNIFICENT MORGA NTT re

‘turned upon them. He hated most the parade of his per-

sonality and characteristics. In the late nineties it happened that a mystifying skin or blood disease manifested itself in an enormous enlargement of his already prominent nose. Specialists treated the member to no avail. Morgan’s general health did not seem to be affected, but the nose remained bulbous and spotted with red and purple marks. The disfigurement was seized upon by the ribald cartoonists of the muckraking era, and the financier became painfully sensitive about it.

Until the very last year of his life (Morgan died a fortnight before his seventy-sixth anniversary) this was the only outward indication of physical deterioration in a man who had lived to the hilt, who was a heavy eater, a fancier of fine wines, an enormous smoker. From early manhood Morgan scorned physical exercise. In the midfifties he became alarmed over his increasing weight and toyed for a few days with dumb-bells and other gymnastic apparatus.

Feeling no better, he had himself thumped and tested by a famous physician. The latter told him: “You have worked all your life with your brain. Your body is secondary. Changing your habits might be fatal. Take no exercise in any form. Don’t even walk a block when you can ride in a hansom. You have a magnificent constitution. Rely upon it.”

Morgan had cut down to twenty a day the big, black, murderous cigars he smoked and had toned down correspondingly in his other habits. Thereafter, though, he ate and smoked and drank as he pleased—and lived to attend the funerals of most of his contemporaries.

Morgan was a large man, thick of chest, with a big head (he wore a seven and seven-eighths hat) set close down on burly shoulders, features large, a high, fine forehead, a square, bulldog chin. His dark hair gradually thinned and changed to iron-gray and to white, but his moustache until the final years remained a midnight hue.

Long past his seventieth year, he moved with almost nerveless alertness, surprising in a man of his age and bulk. His stride was elemental, jungle-like. To those who came before him, he seemed a citadel of silence and reserve force, cold, impressive, brusque, tramping forward, always making his visitor uncover his batteries first. He seemed as impregnable as a force of Nature. His mental power, as well as his physical resources, was the marvel of those who watched him. His mind seemed ever upon a distant purpose which he alone perceived. It was Bismarck’s way. It was Napoleon’s way.

“Morgan,” remarked a noted lawyer who had many dealings with him, “had one chief mental asset—a tremendous five minutes’ concentration of thought. A sort of clairvoyant instinct seemed to dictate his decisions. He always went to the main question intuitively and let the rest follow. He never puttered about among trifles.”

The “trifles” were left to his partners. “I am not a good judge of men,” he once told a friend. “My first guess is sometimes right. My second never is.” Morgan was over-modest. He would never have been able to accomplish what he did unless he had possessed astounding selective ability in choosing men to work with and under him.

The house of Morgan was always known as a partnerkiller. Morgan would not bother with details. His mind encompassed a greater picture. The detail work he left to the capable group surrounding him. These men adored their chief. “Senior,” as they called him, had a certain love-compelling quality (when he chose to reveal it) which none could resist. Hence they accepted his lightest suggestions as orders from on high, gave themselves day and night to his mighty projects, and more than one died in his service.

Morgan, most likely, was totally unconscious of the terrific strain he placed upon these men. He judged others’ powers of endurance by his own. Fierce in his friendships, he would have struck down in his tracks the critic who dared suggest that he was crowding cruel labor upon the frailer shoulders of his first partners— Egisto P. Fabbri, J. Hood Wright, Charles H. Coster, and Morgan’s brother-in-law, Walter Burns. Yet these and others essayed to hold Morgan’s soul-crushing pace and died under their burdens.

Morgan alone came through the mill. Business was never his bedfellow. If any particularly knotty matter was bothering him, he would retire to his den, riffle the cards at solitaire (as did Napoleon), and work out a solution quickly and decisively. Or he would corral two or three cronies in a private banquet room or in the cabin of the Corsair and sing the night away.

Morgan couldn’t sing but thought he could. He had a deep voice and dearly loved to exercise it. He had at his command ditties by the dozen in French, German and English. What he lacked in voice quality he made lee MATIN.

up in quantity. Into these impromptu musicales the financier entered with as much gusto as he employed in singing hymns. He had a remarkable knowledge of hymns and loved congregational singing. This enthusiasm never deserted him. He would sing hymns alone if he could not find others to carry the verses with him. In the autumn of 1912 St George’s Church completed a centennial chapel. Often Morgan drove from his home Saturday afternoons and entered the chapel alone.

“As soon as I learned of this habit,” says Dr. Karl Reiland, the present rector, “I used to go over regularly to meet him there. Sometimes I found him kneeling in prayer, or reading or singing a hymn without organ, and alone. He seemed as happy as a child if I sent for one of our organists to play the hymns for us. He would stand in the chancel singing and beating the time, with book in hand, thoroughly enjoying every moment. The doors were always closed—none but the aged sexton and myself knew that the great master of men and things was worshipping in the Temple.”