INTRODUCTION

When Pierpont Morgan died in 1913, at seventy-five, he was the most powerful banker in the world. He had organized giant railroad systems and corporate “trusts,” presided over a massive transfer of wealth from Europe to the United States, and, at a time when America had no central bank, acted as monitor of its capital markets and lender of last resort. In the process, he helped transform a largely agrarian society into a modern industrial state—and entered into a struggle over the nature of the country’s identity that dates back to Jefferson and Hamilton.

Anyone who occupied that contested ground would have drawn political fire, and it is not surprising that Morgan was exalted by the right as a hero of economic progress and vilified by the left as an icon of capitalist greed. Yet a hundred years later the terms of the argument have not appreciably changed.

The best of the Morgan biographers, Frederick Lewis Allen, suggested some of the reasons why: sparse information about a deeply reticent man, dry financial reporting, ambiguous facts, and passionately held opinions. “ There were legends and anecdotes galore,” Allen concluded in 1949, “but many of them were of uncertain veracity.… [W]hat evidence had accumulated about Pierpont Morgan was strikingly divided between the one-sidedly laudatory and the one-sidedly derogatory.”

On the laudatory side, a Yale professor conferring an honorary degree on Morgan in 1908 compared him to Alexander the Great, then invoked a higher power: “ ‘ Unto whomsoever much is given, of him shall much be required; and to whom men have committed much, of him they will ask more.’ ” Switching Testaments eight years later, B. C. Forbes, the founder of Forbes magazine, called Morgan “the financial Moses of the New World.” Morgan’s authorized biographer, his son-in-law Herbert Satterlee, gathered useful information but offered no analytic appraisal, left out large pieces of the public and private life, and got important facts wrong. Intent on answering Morgan’s critics by emphasizing his patriotic spirit and jolly Christmas parties, Satterlee drained all vitality from the tale.

The critics drew sharper pictures. Wisconsin’s Republican Senator Robert W. La Follette described Morgan in 1910 as “a beefy, red-faced, thick-necked financial bully, drunk with wealth and power, [who] bawls his orders to stock markets, Directors, courts, Governments, and Nations.” In the thirties, the banker appeared in John Dos Passos’s novel 1919 as the “boss croupier of Wall Street,” a “bullnecked irascible man with small black magpie’s eyes,” famous for “suddenly blowing up in a visitor’s face and for that special gesture of the arm that meant, What do I get out of it? ” Matthew Josephson, in his history The Robber Barons (1934), portrayed Morgan as “ ‘imperiously proud,’ rude and lonely, intensely undemocratic … equal to throwing articles of food or clothing at his servants when they nodded and forgot his wants.” Half a century later, in E. L. Doctorow’s Ragtime , Morgan figured as “a burly six-footer with a large head of sparse white hair, a white moustache and fierce intolerant eyes set just close enough to suggest the psychopathology of his will.”

When I first considered writing about Morgan in the 1980s, at the urging of my editor, Jason Epstein, I thought the story would be worth trying to tell again if new evidence made it possible to see past the legends and anecdotes—and then I learned that the Pierpont Morgan Library in New York had vaults of uncatalogued biographical documents, including Morgan’s childhood diaries and schoolbooks, his adult letters and cables, volumes of business correspondence, hundreds of photographs, and extensive files on his purchases of art. Only Satterlee had seen this material, and used it selectively; Allen saw some of it, but drew a well-crafted three-hundred-page sketch, not a full-scale portrait.

Over the next several years I found additional documents in private hands, at the Morgan Grenfell archives in London, and in other repositories on both sides of the Atlantic. ^* Eventually I began to write, and got about halfway through a draft before I saw that it wasn’t working. Months later I realized why. From the outset I had found Morgan’s detractors more convincing than his champions: they were better writers, they reflected popular American assumptions (including my own) about the “robber baron” chapter of our history, and their bracing hostility gave the story force. The advocates, by comparison, seemed defensive and fawning. As a result, I had been looking for a modified, human-scale version of the “boss croupier” of Wall Street—the cynical tycoon who subjected the entire U.S. economy to the “psychopathology of his will”—and that was not what I had found. The evidence didn’t support the picture I had preemptively drawn, and I hadn’t been noticing what it did suggest.

For example: Matthew Josephson in The Robber Barons reported that after Morgan precipitated the “ peculiarly atrocious and wanton” panic of 1901, which “ruined thousands of people” and “was felt in all the financial capitals of the world,” he “swore at ‘idiots’ and ‘rascals’ who sought to interview him, and … threatened one reporter with ‘murder.’ ” Asked if some statement was not due the public, the banker announced, “I owe the public nothing.” This story turns out to be largely fiction. Briefly: a group of Morgan’s rivals tried to take over one of the railroads he controlled, the Northern Pacific, by secretly buying its stock while he was in France. When his partners in New York caught on, they cabled him for instructions, then began to buy up the remaining shares. They quickly acquired what they needed, which drove up the price of NP and incited speculators to “short” the market—to sell stock they didn’t own, expecting to make a profit by buying shares for delivery as the price came down. But the price did not come down, because no one was selling. Instead the “shorts,” desperate to buy stock they had to deliver, drove NP from $146 to $1,000 a share. To raise cash for these preposterous prices, they dumped their other stocks, the market crashed, and the panic of 1901 was on. Morgan, knowing that the crisis could ruin thousands of people and unhinge the U.S. economy, arranged by cable for his partners and the raiders to postpone receipt of stock they had bought, and to sell enough shares at $150 to allow the shorts to cover. He then went to London and stopped a nascent panic there by offering roughly the same terms—not the actions of a man who thinks he owes the public nothing.

Josephson cites as his source Lewis Corey’s antagonistic biography, The House of Morgan (1930), and Corey cites Joseph Pulitzer’s World for May 11, 1901. In fact on May 11 the World —competing with William Randolph Hearst’s Journal for crowd-pleasing sensationalism, and noted for its antipathy to plutocrats—described Morgan arriving in Paris and working around the clock to stop the panic: one headline reads, MORGAN WINS IN NP FIGHT AND STOCKS REBOUND . The banker had declined at first to give an interview to the World ’s correspondent, saying he did not yet know very much. Several hours later he told the press, “The situation looks a little better.” On May 12, the World reported not that Morgan swore at “ ‘idiots’ and ‘rascals’ who sought to interview him,” but that he denounced the men who had started the panic as idiots and rascals for “tangling themselves up in a situation which he had particularly warned them to avoid.” He had, the paper went on, worked until 3:00 A.M. and risen at 7:00 to take a quiet drive in the Bois de Boulogne. As he sat alone on a bench, “lost in thought,” the World ’s correspondent asked again for an interview, “but the magnate threatened murder and re-entered the carriage.” He said, “I can’t be interviewed now. I am leaving tomorrow morning for London.” End of story. All these dispatches are datelined Paris. Then at the bottom of the column an odd second ending to the article appears, datelined London. In this version, a reporter (the writer who filed from Paris? a new one? an imaginary one?) approaches the banker saying “you told me yesterday to come again,” and asks whether, since Morgan is being blamed for the panic, some statement is not due the public. It is in this dubious context that the World has him say, “I owe the public nothing”—yet historians since the 1930s have relied on Josephson’s account.

Born into a wealthy family, Morgan had a patrician sense of noblesse oblige and unusual motivations: he could have made a lot more money than he did, if that had been his primary aim, and unlike many sons of rich men, he worked hard all his life. He spent half of his fortune on art. About his collecting, as about his financial career, the experts disagreed: the German-educated scholar William Valentiner called Morgan “the most important art collector I ever met,” while the British critic and curator Roger Fry announced that “a crude historical imagination was the only flaw in his otherwise perfect insensibility [to art].”

Even Morgan’s personal appearance gave rise to legend. He had a skin disease called rhinophyma that in his fifties turned his nose into a hideous purple bulb. One day the wife of his partner Dwight Morrow reportedly invited him to tea. She wanted her daughter Anne to meet the great man, and for weeks coached the girl about what would happen. Anne would come into the room and say good afternoon; she would not stare at Mr. Morgan’s nose, she would not say anything about his nose, and she would leave. The appointed day arrived. Mrs. Morrow and Mr. Morgan sat on a sofa by the tea tray. Anne came in, said hello, did not look at Morgan’s nose, did not say anything about his nose, and left the room. Sighing in relief, Mrs. Morrow asked, “Mr. Morgan, do you take one lump or two in your nose?”

The problem here is that Dwight Morrow did not join the firm until after Morgan died. Still, I checked with Anne Morrow Lindbergh. She wrote back: “ This ridiculous story has not a grain of truth in it,” but “is so funny I am sure it will continue.”

As Morgan slowly came into focus in my imagination, I learned more about the staying power of the stories. Associates as well as biographers complained that he was difficult to know. His British partner Edward C. Grenfell reported in 1906 that “ JPM” was “an impossible man to have any talk with. The nearest approach he makes is an occasional grunt.” Brusque, publicity-shy, and neither introspective nor articulate, Morgan had no coherent philosophy and never explained his decisions. The high-stakes business of merchant banking required strict confidentiality, but he carried that ethos further than most. After a dinner in his honor in Chicago one night, the Tribune ran the headline MONEY TALKS BUT MORGAN DOESN’T . On the mantel in his private study, he kept a white enamel plaque that read, in blue Provençal script: Pense moult, Parle peu, Écris rien (Think a lot, Say little, Write nothing).

He is said to have observed, “A man always has two reasons for the things he does: a good reason—and the real reason,” yet when it came to his own behavior he acknowledged not the slightest difference between “good” and “real” reasons. Asked why he had merged a group of railroads or bought a controlling interest in an insurance company, he said, “I thought it was the thing to do”—at once shutting out inquisitors, displaying his Olympian self-assurance, and telling the partial (in both senses of the word) truth. He was, as Henry Adams said of Theodore Roosevelt, “ pure act.”

At times he seemed made of contradictions. Conservative by nature and reverential toward tradition, he had meritocratic instincts and an astute receptivity to new ways of doing things. Though physically robust—he outlived and outworked several younger partners—he worried constantly about his health. He was sociable and shy, deliberate and impulsive, ingenuous and shrewd, domineering and flexible, exuberant and depressive, extravagant and frugal, worldly and religious, inscrutably reserved and deeply sentimental.

He actually left many more records in his own voice than previous biographers have found, and a huge cast of characters supplies testimony as well—including U.S. presidents, European statesmen, art scholars, business associates, his father, rector, physicians, and son, his first and second wives, his favorite daughter and his rebel daughter, and his delightfully indiscreet librarian, Belle da Costa Greene.

A woman in her nineties, whose family knew him well, told me that when Morgan entered a room “ you felt something electric. He wasn’t a terribly large man but he had a simply tremendous effect —he was the king. He was it .” William Lawrence, the Episcopal bishop of Massachusetts, noted that a visit from Morgan left him feeling “as if a gale had blown through the house.” Belle Greene pronounced her “Big Chief” “the most exhausting person I know. He often tells me he ‘likes my personality,’ and yet when I leave him I feel utterly divested of it—as of a glove one draws off and gives to a friend because he likes it.”

E. C. Grenfell, who had complained about Morgan’s conversational skills in 1906 (“the nearest approach he makes is an occasional grunt”), saw something else three years later. He wrote to a friend at the end of 1909: “ [T]he popular idea of this man is very wide of the truth. He is neither hard nor cunning. Outwardly he is rough because he is very strong & yet very shy & has no command of words.… He has made big mistakes & even when his schemes are well conceived, he runs big risks of being tripped up or attacked in flank by meaner or smaller men.… His shortcomings are so patent that they almost add to his attraction.”

Though cast as the high priest of modern capitalism, Morgan did not really believe in free markets. All his adult life he tried to stabilize the emerging U.S. economy, to discipline speculative profiteers and bring the market’s destructive forces under control. With his eye on the lenders of capital (the United States was a net debtor until 1914), he took personal responsibility for maintaining the dollar’s value and coaxing economic adversaries to the bargaining table—workers and managers as well as warring railroad and steel barons—while urging Washington to modernize the country’s antebellum banking system. He privately subsidized social reformers who worked with the urban poor, and prominent labor leaders considered him singularly fair. Still, people suffered under policies he supported, especially farmers squeezed by falling crop prices and the rising cost of debt. And by 1900 much of the United States was horrified at the power of the trusts. Convinced that he was guiding the country toward a spectacularly prosperous future, Morgan made no distinction between his own interests and the national interest, although he was not an objective arbiter in the long-standing struggle over America’s identity but an active partisan representing people who had billions invested in the outcome.

As Grenfell noted, Morgan made “big mistakes” and had “patent shortcomings.” Had he been more concerned with the social costs of industrialization, he might seem more sympathetic now, and had he been able to explain himself, he would have been easier for me to write about—but biographers aren’t supposed to speculate about what might have been.

Although the proponents of big business secured political ascendancy at the end of the nineteenth century, it was the opposition—populists, Progressives, and their intellectual heirs—who won the battle over how the story would be told. They depicted Morgan as a ruthless predator who robbed America’s farmers and workers to line his own pockets. Offered that scenario, most of us would side with the farmers and workers, but it does the democratic tradition an injustice not to see other dimensions of the story now.

Many people have known a more complex version all along. Leading critics of big business during Morgan’s lifetime, including Lincoln Steffens, Ida Tarbell, and Theodore Roosevelt, recognized that the demonization of capitalists had gone too far, but their revision did not trickle down (or up) into popular opinion. Steffens’s disciple Walter Lippmann observed in 1914 that muckraking exposés had tapped into deep and legitimate dissatisfactions—otherwise, a “ land notorious for its worship of success would not have turned so savagely upon those who had achieved it.” Still, Lippmann mocked the “sense of conspiracy and secret scheming” in which “ ‘Big Business,’ and its ruthless tentacles, have become the material for the feverish fantasy” of people whose lives had been radically altered by economic change: “all the frictions of life are readily ascribed to a deliberate evil intelligence, and men like Morgan and Rockefeller take on attributes of omnipotence, that ten minutes of cold sanity would reduce to a barbarous myth.”

Nearly a century later, as fresh evidence and historical distance make it possible to take a more realistic look at Morgan, the questions his life raises are once again at the center of national debate—only now the markets are global, the emerging economies are Asian, and the corporations under scrutiny are Microsoft and Intel rather than railroads and U.S. Steel. Can central bankers effectively “manage” the business cycle? In economic crises, which tottering governments or banks ought to be bailed out, and which allowed to fail? What is the best way to control inflation? Does industrial competition naturally lead to consolidation? Are big corporations inherently bad? How can affluent societies offset economic inequality? How and when should government intervene in commercial markets?

At the end of the twentieth century, responsibility for sorting out answers to those questions rests with the Treasury and Justice departments, the Federal Reserve, the SEC, the FTC, the Group of Seven, the IMF, and the World Bank. At the end of the nineteenth, with predictably mixed and controversial results, Morgan acted largely on his own.

August 1998