Chapter 4

FOREIGN AFFAIRS

George Peabody, the American banker in London who wanted Junius to join his firm, had not given up. He renewed his offer at the end of 1853. Junius went to England to discuss it. His Boston partnership agreement was about to expire, and early in the new year he agreed to join Peabody’s Anglo-American bank as of October 1.

Peabody’s rise to the position he held in 1854 had been steep. It was commonly said around Salem, Massachusetts, that “you were either a Peabody or a nobody,” but young George was both. Born into a poor branch of the family in South Danvers (now Peabody), Massachusetts, in 1795, he left school at eleven to work in a general store, fought in the War of 1812, then went into the wholesale dry goods business in Washington, D.C. By 1827 he was no longer a nobody: his firm had branch offices in Philadelphia and New York, and he was worth $85,000. In 1837, trading $700,000 worth of goods a year with England, Europe, India, and China, he moved to London and opened an office in the City.

There he watched London’s premier investment houses finance international trade without actually buying or selling goods, and made the lucrative transition from merchant to merchant banker. He began to supply commercial credit for a fee to U.S. farmers, cotton planters, and foreign buyers, and to manage international currency exchanges for export-import markets, becoming a specialist in short-term trade. He financed long-term investment as well, channeling European capital to the United States.

America’s booming 1830s went bust just as Peabody set himself up in London. By 1842 British capitalists held roughly $100 million in defaulted U.S. state bonds, and as a result not even the federal government could sell new paper in London. The bonds had been issued for just the kinds of enterprises Joseph Morgan financed—railroads, turnpikes, canals, and local banks. Like Joseph, Peabody believed that careful investment in the emerging American market would ultimately pay. The problem was that the Europeans who held the money the United States needed had no way to gauge the caliber of ventures three thousand miles away.

Capital markets are essentially the organized processes through which money for long-term investment is raised, distributed, traded, and above all valued , and Peabody made it his business to certify value. He minimized the risk to his clients’ capital by vouching, insofar as possible, for the quality of the securities he underwrote—chiefly, bonds for railroads and states. He also waged an effective campaign from London to get state governments out of default, since legislatures that reneged on their debt jeopardized all U.S. access to foreign capital. Working through reporters, politicians, clergymen, and other bankers, Peabody helped persuade the governments of Maryland and Pennsylvania to resume servicing their debt. His personal interest, as a banker taking responsibility for properties he represented, coincided with America’s interest in reopening channels through which money flowed westward across the Atlantic.

Within a few years foreign anxiety about American defaults had subsided, and wealthy Europeans, uneasy about the 1848 upheavals on the Continent, were once again looking for investment opportunities in the United States. Six thousand new miles of railroad track were laid down in the 1840s. Peabody’s reputation for backing “sound” ventures brought him ample business, and as the new construction boom created a large demand for rails, he moved into the iron trade as well. In the spring of 1852, commenting on the English market for American securities and speaking for his firm, he told friends: “ We believe we pretty much regulate prices & are the principal controlers of the Market.”

The world’s haute banque investment houses such as Rothschilds and Baring Brothers did not solicit clients or steal one another’s business. They waited for kings, states, and entrepreneurs to come to them. To compete in this market without violating Old World rules, Peabody discreetly promoted his services through financial acumen and statesmanship.

In 1851, the U.S. government failed to finance American participation in Prince Albert’s international exhibition of industrial products at the Crystal Palace. The U.S. displays consisted of a few wineglasses, a pair of saltcellars, and a square of soap—until George Peabody put up $15,000. As a result, between May and October 1851 six million people saw Cyrus McCormick’s reaper, Samuel Colt’s revolvers, and Richard Hoe’s printing press. Congress eventually paid Peabody back for an act that had earned him diplomatic standing and the permanent affection of Albert’s wife, the Queen.

That Fourth of July he gave a banquet in honor of Anglo-American friendship. Abbott Lawrence, the American minister in London, had advised him against it, since the Fourth celebrated England’s defeat at American hands. Undeterred, Peabody invited the eighty-four-year-old Duke of Wellington, and once Wellington accepted, social London followed. A thousand people attended the party at Almack’s in St. James’s Street, under portraits of George Washington and Queen Victoria decorated with Union Jacks and American flags. When Wellington arrived at 11:00 P.M. , the band played “See, the Conquering Hero Comes.” Peabody presented him to Mr. Lawrence in quiet triumph.

By 1852 the bachelor Peabody had a thriving business, an international reputation, and nearly $3 million. He did not, at age fifty-seven, have an heir, which was why he needed Junius Morgan. The great nineteenth-century international banks were family dynasties with offices all over Europe. In the high-risk business of raising and lending large amounts of money across great distances for long periods of time, they chose to work through affiliates related by blood or marriage. The Rothschilds, beginning with Mayer Amschel in eighteenth-century Frankfurt, had built an empire on hereditary ties: family members headed branches in Paris, London, and Vienna. Jewish, multilingual, politic, private, the Rothschilds occupied a unique place in the upper echelons of European culture, and their allegiance to the bank transcended all other claims. Partly because they had few peers and partly to keep the business and the assets in the family, sixteen of Mayer Amschel’s eighteen grandchildren married relatives.

While the princely Rothschilds lived surrounded by art in sumptuous town houses and on large country estates, the abstemious George Peabody rented rooms at the Regent Street Hotel and had little interest in culture. He worked ten hours a day, did not drink, smoke, or take vacations, and stood for half an hour one day with a head cold in the London rain passing up a twopenny bus to wait for one that cost a penny. Pierpont sketched him for Jim Goodwin as “ a very agreeable gentleman and very full of wit, but a regular old bachelor if you could have seen the quantity of nic-nacs which he carried with him to America … stored away in his trunks with the greatest precision you would most certainly have thought that he was going to Central Africa or to some other unexplored regions.”

The “regular old bachelor” was fastidious about his appearance: he wore custom-tailored clothes, and dyed his hair as it began to turn gray. He also had a mistress and a daughter in “ a secluded but dignified and permanent establishment” in Brighton. According to his biographer, Franklin Parker, Peabody did not marry the woman because of “class and background” and the rigid Victorian code: “a gentleman did not, as a rule, marry his mistress no matter how fond he may have been of her.” The gentleman’s own social stature, if that was the ground of his delicacy, had been recently acquired.

George Peabody could not know that the dynasty he started by bringing in Junius Morgan would surpass Rothschilds and Barings, the reigning lords of world finance. He did know that the economic future lay in America, and through Morgan he staked a claim to it. As word of the new partnership got out, an English friend told Junius that with Peabody nearing retirement, “ we naturally look to you as the future representative of American credit in this country.” Barings’ American agent wrote to his London office: “If Mr. Peabody was safe before, he will be much safer now with Mr. Morgan at his side”—and the competition for Barings in America would be considerably “more formidable than before.”

Conscious of the social limitations imposed by his bachelor habits and tastes, Peabody wanted his new partner to live in style. A mutual friend found “ a splendid palace for you in Grosvenor Square,” he wrote to Junius in May 1854: “I certainly like the location. What think you and Mrs. M. of it at [£]1,000 [$5,000] a year?” Junius thought he had better wait till they arrived.

He spent his last half year in the United States winding up old business and preparing for his family’s move. Pierpont helped out once he finished school in June. He was chafing to start his own career—he had his eye on the East India shipping trade—but his father decided he should go to school in Europe first to learn French and German. Junius spoke no foreign language, and told Jim Goodwin that “ the advantage [of knowing French] … cannot be overstated. I regret so much that I am deficient that I don’t intend my children shall have the same cause for regret.”

In early September, Pierpont made rounds of farewell visits to family and friends. Boston’s leading merchants honored Junius with a dinner on September 12—testimony to their collective esteem and the prodigious Victorian appetite. The elder Morgan later recalled that as he began to realize the enormity of the step he was taking, “ my heart failed me.” The words of encouragement he received from his Boston colleagues “nerved me for the work I had to do.” Perhaps the repast did as well, though not everyone ate every course. It began with raw oysters, two soups, baked bass, and boiled cod, followed by “Removes” (leg of South Shore mutton, caper sauce; Westphalian ham, champagne sauce; filets of beef with mushrooms), “Ornamental Dishes” (boned turkey with truffles, oyster aspic, “Pattie of Liver in Jelly”), entrées (calf’s head with turtle sauce, pigeon cutlets in olive sauce, “Vol au Vent, of Birds, à la Financier,” larded sweetbreads with green peas), game (black ducks, plover, partridges, woodcocks, teal), desserts (omelette soufflé, meringue baskets, charlotte russe, champagne jelly, blanc mange), ornamental sweets (pineapple, bonbons glacés, vanilla and lemon ice creams), coffee, and liqueurs. The next morning, the Morgans sailed for England.

Having decided against the “splendid palace” on Grosvenor Square, Junius settled his family temporarily at a hotel. On October 2, George Peabody & Co. officially announced its partnership with Mr. J. S. Morgan of Boston. Pierpont wrote in his diary, “ Father commenced business in London.” The firm started with £450,000 (roughly $2.25 million) in capital, of which Peabody put up £400,000, Junius £40,000, and their English partner, Charles Cubitt Gooch, £10,000. Each would earn 5 percent interest on his share. Of the net profits and losses, Peabody would take 65 percent, Morgan 28 percent, Gooch 7 percent. Morgan would have an additional £2,500 (about $12,500) a year for entertaining, an integral part of his work. That fall the firm moved into new quarters at 22 Old Broad Street.

Pierpont showed his brother and sisters the town, and looked at houses with his parents: they took a short-term lease on one in Gloucester Square, just north of Hyde Park. The older girls, Sarah and Mary, soon left for a boarding academy in Westbourne Terrace near Lancaster Gate. Eight-year-old Junius (“Doctor”) went to school in Twickenham, twelve miles from London on the Richmond Road. English boys mercilessly teased him at first, calling him Boston and Yankee Doodle, but the youngest Morgan soon learned to hold his own. The Twickenham headmaster described him as “ docile—instantly obedient—exceedingly intelligent frank & affectionate.… He is entirely at his ease with his companions & his Masters.… This is mutually delightful, & must produce the best results.”

For Pierpont, Junius had chosen a Swiss school near Vevey on Lake Geneva. When the seventeen-year-old departed for the Continent on November 1, 1854, only little Juliet (called Sis to distinguish her from her mother) remained at what now, three thousand miles from New England, constituted home.

Pierpont left London with a mixture of impatience at the delay of his career and excitement about impending foreign adventures. At the last minute, the American minister in London, James Buchanan, asked him to deliver a packet of government papers to Paris. The junior diplomat wrote to the Reverend Pierpont: “ Imagine your senior grandchild taking his departure from the London Bridge Terminus for Calais and Paris as Bearer of Government Despatches on a foreign tour.” Dense fog kept the other passengers on board the steamer at Calais, “whilst I in my official capacity was whizzing along towards Paris.” After delivering the papers, he headed south and east, stopping at the top of the Jura Mountains along the French-Swiss border for “the finest view which I ever had in my life”—the snowy peak of Mont Blanc against a cloudless sky, “below me the lake of Geneva with its magnificent scenery and villages in one of which was to be for a little time at least my residence.” From Geneva a four-hour sail took him to Vevey. His school, Bellerive, was about a mile from the village.

Run by M. Edouard Sillig, Bellerive had eighty-five students in the autumn of 1854, many of them English and American. Pierpont took private lessons in German and French to help him catch up. He made friends with twins named Payson from Boston, and quickly found a lot to complain about.

Breakfast consisted of coffee and dry bread. Clothes were meted out like provisions once a week. Too many students and too much spoken English interfered with his learning French. “ In a room about the length of our parlors in Boston but much narrower,” he griped, “15 boys find accommodations for the night.” When the headmaster asked him not to smoke, he told his parents: “This is no place for boys over 15.” The Paysons boarded in town—“generally the way those do who know how to take care of themselves.”

Junius had asked M. Sillig to treat Pierpont as he would his own son, and the headmaster at first reported that “ dear Pierpont” with his “rather advanced intelligence” would quickly adjust to “little privations” and find “real happiness” at the school. Soon, however, Sillig’s running notes confirm the boy’s sense of a mismatch. “Adapts himself very slowly,” he wrote after a week, and as time went on: “Makes fun of things. Smokes … Restless at his lessons … Talks after the lights are out … A joker. A talker … Does not behave well. ‘Answers back.’ … Sulky. In a dreadful temper.”

Pierpont’s health began to trouble him—he came down with sore throats, stiff necks, “lung fevers,” acne outbreaks, and a corn on one of his toes that required minor surgery. Blaming these illnesses on the “perfectly terrible” climate of “this uncivilized country,” he grumbled to his parents, “ I never expect to be well while I am here.”

Yet his diaries and letters to Jim Goodwin and Mr. Pierpont were not nearly as gloomy as reports he sent home. To the London authorities he exaggerated his misery, reproaching them for condemning him once again to deprivation and exile, while admitting to his chums that he was having a pretty good time. As soon as he moved out of the dormitory to a chalet on the road to Chillon, his rooms became headquarters for the American students at Vevey. He pooled their allowances, and under his jurisdiction the Yankees played whist and billiards, smoked, went sleighing, skating, hiking, and sailing, ate sweet sausages with sour champagne, shared American newspapers—and once in a while worked on their studies.

Pierpont at eighteen was no less outraged by the injudicious exercise of authority in Switzerland than he had been at thirteen in Hartford when Miss Stevens threw him out of class for laughing. One Sunday, M. Sillig authorized local celebrants of the Fête de la Sainte Barbe, the patron saint of artillery, to fire cannons into Lake Geneva from school grounds. The first explosions woke Pierpont up at 5:00 A.M. (“ the very morning when we are allowed to sleep a little later than usual”), and a change in the scheduled festivities caused him to miss lunch after church. Crowning these indignities was a grand ball held “in town on Sunday night,” he exploded to Jim. “I think that take it altogether it was the most disgraceful affair which ever occurred in a Christian country.… I gave Mr. Sillig pretty plainly my opinion of his conduct in permitting the sons of Christian parents who had been brought up to look upon the Sabbath as a day which belongs to God attending any such meetings. He took it very well and thanking me said that he thought he had done wrong in having anything to do with it.”

Whether or not Sillig was humbled by this tirade (it seems to have been the interference with his sleep and lunch that brought on Pierpont’s denunciation of the “most disgraceful affair” in Christian history), he cannot have liked facing down six feet and 160 pounds of sanctimonious American boy.

On the subject of religion itself Pierpont said little, but a diary entry at the end of 1854 reflects his sense of personal connection to a discriminating Savior and his faith in divine guidance toward the mercy and reward he will ultimately deserve: “… it has pleased Almighty God to preserve my life to the opening of another [year]. May it please him to forgive all my sins of thought, word and deed and lead me to lead in future a life more devoted to His service … and if it should please the Almighty Father to preserve my life may I so live [that] at the last day I shall receive from thy dear son, ‘Well done good and faithful servant.’ ”

His appreciation of this world’s pleasures was in no way blighted by fear of punishment in the next. The account books he kept as he traveled in the 1850s reflect his tactile, visual sensibility and mandarin tastes. In Paris he bought himself leather boots, white kid gloves, a coat (115 francs—$23), a vest, “ pantaloons,” collars, a beaver hat, and a stash of cigars. He noted the entrance fees at Versailles, Napoleon’s tomb, the Gobelin tapestry factory, the École Nationale des Beaux Arts, and the Louvre. He sent his mother furs. Occasionally he gave money to beggars—2 francs one day “by mistake for one sous.” At Vevey he paid 10 francs ($2) for a Jenny Lind concert, 6 francs for confectionery, 2.50 for cologne, 17.50 for bouquets. He bought Mme. de Staël’s Corinne and a volume on the Guerre de Trente Ans . And he balanced his accounts in pounds sterling, francs, scudi, florins, Austrian gulden, Neapolitan ducats, and Tuscan pauls.

He also listed frequent payments for medicines and doctors’ fees. In July 1855 he told Jim that “ an eruption” had appeared on his face “which injures my looks very considerably.” The Bellerive physician sent him for a cure to Loeche-les-Bains in the Valais, where sulfurous waters boiled out of the ground into vats. Spa guests of both sexes wore long shirts to soak in the baths. Pierpont rose at five and bathed until ten, taking breakfast and playing dominoes and whist on floating trays; then he went back to bed for half an hour (“a necessary penalty for each bath”), had a second breakfast, and exercised (mandatory) from noon until two. The cure exceeded his expectations, he reported, thanks to a Baltimore family named Hoffman, “ plenty of excursions, plenty of dancing &c &c &c &c, flirting into the bargain.”

He quickly indicated what the four etceteras referred to: an eighteen-year-old Italian whom he pronounced “one of the handsomest and most unpretending young ladies I think I ever saw,” with “dark hair & eyes & beautiful skin.” The eruption on his face did not keep him from speaking to the girl (in French), but her “horrid old brother in law” did: this jailer made every effort “to vex her and prevent her talking with any one.”

One afternoon, as Pierpont was reading aloud to Mrs. Hoffman, an earthquake sent chairs skidding across his hotel room and knocked chimneys off the roof. A few nights later a second tremor shook the guests awake at 2:00 A.M. Dressing quickly, Pierpont raced to the Hoffmans’ rooms and had “hardly been in there three minutes,” he told Jim—excitement turning him into a poet—“when who should make her appearance but Miss Rolaris, the young Italian, in her night dress, panting and pale as marble with fear.… I never had seen such a beautiful expression before. She took a chair and sat for about an hour, totally unconcerned as to her dress, or the position in which she was. Although as beautiful as she well could be, there was not the least affectation or coquettry about her. But enough for Loeche and its belles,” he broke off in midstory, and did not mention the Italian beauty again.

He teased Jim constantly about girls. “ In every letter you mention some new feminine angel who is far handsomer than anyone else you ever saw,” he wrote. “To speak plainly old fellow you are going to fast altogether and need some correction.” And, “If … Cupid has shot his dart into your heart let me advise you to have the wound attended to immediately, for fear that Mortification should ensue and the hole remain in its present state.”

When one of the Drapers announced her engagement, he mused: “ don’t it make you feel old, old fellow to see all these girls that we used to carry on with, going the way of all the world and splicing themselves for life in this manner?” He dropped his jocular tone the minute he guessed that Cupid had dealt his cousin a wounding blow: “Why in thunder when you were writing about being in such low spirits didn’t you make a clean breast of the matter and write me the whole cause of your sadness? Has any young female been treating you badly Jim? I admire your coolness.”

Coolness was not one of his own attributes in these matters. When Jim accused him of being fickle, he protested: “it is no such thing. I never was so, you very well know, in any of my affections, and sometimes I think it is a very great disadvantage that I am not a little more so, for once I have taken a liking to a person it is very difficult for me to get over it.” The volume of his correspondence with female friends at home and his responsiveness to young women he met abroad suggest that he was capable of taking a liking to several persons at once.

In August 1855 he met his family for a brief holiday in Paris (as chief linguist, “ I was compelled to do all the talking”), then returned to Bellerive to put the finishing touches on his French. That fall he placed first in his class. In the humanities he studied The Aeneid and Louis XVI, read Robinson Crusoe in French, translated Mme. de Sévigné into German, and wrote out in three languages maxims that echo what he had been taught on the other side of the Atlantic. “In all labor there is profit: but the talk of the lips leads only to penury.” “The crown of the wise is their riches: but the foolishness of fools is folly.” His facility with numbers impressed everyone at Bellerive. A fellow student recalled him as “little short of a prodigy,” able to calculate cube roots in his head. Pierpont advanced quickly through algebra and geometry to trigonometry and physics.

The Baltimore Hoffmans were spending the winter in Vevey, and he often called on Mrs. Hoffman for tea and confidential talk. “ How pleasant it is,” he reflected to Jim after one visit, “to be surrounded with persons who are always glad to see you and with whom you always feel perfectly at home.” His own home was too far away, and his mother too absorbed in her own troubles, to afford him any sort of haven. The Hoffman household gained a further attraction that winter—an American niece who had come to Vevey for her health. Pierpont the expert on illness found in this young lady none of “that uneasiness so common for the generality of persons in the same condition. I tell you what Jim she is a trump and I begin to feel a little queer.” In matters of romance he constantly swore his confidant to secrecy: maybe Hartford was reading over Jim’s shoulder, or maybe Jim had a tendency to gossip; more likely, these warnings reflect Pierpont’s rather grandiose sense that all eyes were trained on him. “I find her (remember this is all strictly between you and me) exceedingly comme il faut. She has the best disposition of any young lady I know, she is lively, agreeable, & although not exceedingly handsome is very pleasing. Dont you breath a word of this to a living soul. I’ll tell you how I get along in that quarter. Being exceedingly intimate with her uncle & aunt I can see as much of her as I wish which makes it very nice.”

Taking his father’s advice about association with the “right” sorts of people, he joined “the tip top young men of Vevey” in organizing a series of private balls for “very choice and select” company. “It costs me about $1.75 a night,” he told Jim, “but that is dog cheap when you can laugh, talk and dance with such a beautiful girl as Miss Hoffman as much as you choose.”

Pierpont’s acne did not spoil his social life, but it did make him self-conscious. Having a series of photographs taken early that winter, he notified Hartford (mangling his grammar): “Grandmother will be rather surprised … to hear that anyone with such an eruption on my face should have had their portrait taken.” To his delight the pictures showed “no defects of the kind.” Instead, they show an attractive young man with light brown hair slicked across his forehead and flashy sartorial taste: in a huge bow tie, dotted waistcoat, and double-breasted jacket with wide lapels, he looks warily amused, as if not sure this self-display will turn out well. He stopped in Paris later that spring “to see if anything can be done for my face.” Apparently, nothing could.

During his time at Vevey, Pierpont watched Britain, France, and Austria defend Turkey against Russia in the Crimean War with a distinctly American eye. A jingoist two decades before the term was coined, he thought European imperialism should confine itself to the eastern side of the Atlantic and leave America’s nascent expansionism alone. When Sebastopol fell to the Western allies in October 1855, he told Jim: “ The whole western part of Europe is in one blaze of triumph & joy occasioned by the victories of the allied armies in the east.” He did not join the cheering. “To tell the truth I am rather sorry.” He feared that England and France, finding they could handle powerful Russia, would “stick their fingers in our affairs at home as respects Cuba or the Sandwich Islands [Hawaii] … I have also the idea that if they attempt it John Bull & Johnnie Crapeau combined will find their match.”

Junius decided early in 1856 that his son had completed half of his scholarly assignment: he was fluent in French. Next, he would go to the university at Göttingen to “starch up” his German.

For all Pierpont’s early dislike of the Swiss school, he was sorry to leave his friends, especially the Hoffmans, who had “for eighteen months through sickness and through health … done all for me that any but a parent could do,” he confessed to Jim. Distancing himself from a painfully familiar subject with conventional wisdom, he went on: “ When one leaves home or relations, as I have so often been obliged to do, it is with the satisfaction of knowing that it is only for a season, that not many months will elapse before we shall again be able to take our accustomed seat at the table and our old places among our friends, and it robs parting of its deepest sting.” He had no such consolation now. “When it comes to taking leave of friends and true friends at that, whom in all probability we shall never meet again, then it is hard too hard to part.” He apologized to his cousin for his melancholy mood: “Jim you will hardly thank me for writing to you thus sadly, but I feel to tell the truth rather sad, and if you dont want to read it just skip it over.”

At the end of April 1856, he and Frank Payson arrived at Göttingen, a small university town south of Hanover “ situated upon a dead plain about an hundred miles from the Rhine,” he told Jim, with “bookstores and libraries in every street.” (Frank’s twin, Charles, disappeared from Pierpont’s letters after the first few weeks at Vevey.) A railroad under construction would soon disrupt the provincial peace, predicted the student of modern transport, but for the moment “silence reigns supreme.” The university—“the greatest and finest in Germany”—had special strengths in chemistry and math, as well as some of the leading professors in Europe, including Friedrich Wöhler, “considered with [Justus Von] Liebig the greatest living Chemist.”

The German students at the university divided into scholars and dilettantes. Pierpont charted a path between the two: he took advanced trigonometry, chemistry with Professor Wöhler, and daily German lessons—and spent his free time at bowling alleys, billiard halls, garden concerts, beer fests, operas, fencing lessons, and dances.

Pronouncing German “awful to learn,” he swore he would master it in six months (“sink or swim, live or die”) or not at all. He worried about flirting in a new tongue, and was agreeably surprised to learn that “nothing delights a German damsel more than to get hold of a partner who is a raw recruit in the language.” When he wanted to make a “remarkably witty remark I usually dive into French,” he told Jim—but quickly concluded that “there is no way as good to learn a language as to converse with and have your faults corrected by a pretty girl.”

He and Frank fitted out their rooms in “royal splendor and eastern magnificence.” They hired a servant for two thalers a month (the price of fifty good cigars), entertained often, and—personal preference conforming to paternal dicta—made friends with the families who formed the “ first society , or in other words, the aristocracy of Göttingen.”

Junius came to visit in the spring of 1856. Father and son talked about U.S. politics and international trade. President Franklin Pierce, a Jacksonian Democrat from New Hampshire with close ties to the South, was failing to keep the pro-slavery forces in check. Pierpont told Jim in disgust that if the country managed to avoid a civil war, no thanks would be due to Pierce, “for he has certainly done his part to create one.”

Democrats had occupied the White House for twenty of the twenty-eight years since Andrew Jackson’s victory over John Quincy Adams, and southern Democrats in Congress had consistently defeated northern proposals for protective tariffs, homestead laws, a transcontinental railroad, and land-grant colleges—effectively relegating the Whig heirs of Hamilton and Clay to the sidelines. In 1854 the fight over the Kansas-Nebraska Act destroyed the ailing Whigs, and redefined national party politics along sectional lines. The act essentially repealed a ban on slavery in the western territories: southern Whigs voted with the Democratic majority to pass it over the violent objection of northern Whigs. Northern Democrats bolted in protest, and opponents of slavery from dissident groups and both major parties in the North gradually drew together into a new party that took the name “Republican.” Its members began to unite around the neo-Hamiltonian ideas that the Union should take precedence over states’ rights, and that local powers posed more threat to individual liberty than the centralized power of the state. ^*

The Morgans voted Republican—in a mock election at Göttingen in November 1856 Pierpont backed the losing John Frémont against Democrat James Buchanan—but were less concerned with slavery than trade. Cotton accounted for more than half of all U.S. exports in the 1850s, and Peabody & Co. was trading on its own account as well as handling cotton sales for clients. Pierpont proudly quoted to Jim an English admiral who said that while the British fleet was “ a capital weapon for a war with most any nation … unfortunately the United States have a ship which we cannot take and which will render our navy useless, i.e., The Ship ‘Cotton.’ ” No one connected with the Peabody firm wanted the United States to sink that ship in a civil war.

Writing to Jim, Pierpont generally had less to say about affairs of state than affairs of the heart. When he suspected his cousin of a serious attachment in the spring of 1856, he delivered a lecture on the subject, sounding very much like his own father. “ Although younger, I have seen much more of the world and society than you have,” he began, “… so pray don’t think that it is entirely unadvisedly that I write this.” Jim’s recent letters showed “too plainly that you are really much more interested” in a certain young lady (“I won’t mention names for fear the letter may fall into other hands”) “than you are willing as yet to own to yourself.” Pierpont warned Jim to “look out … that it does not … lead you to commit yourself to such a degree that your honor will be compromised and force you to an act which will be your deepest regret through life.”

As an example, the nineteen-year-old guardian of feminine virtue and masculine honor cited a situation in which he had recently been “compelled to have a hand.” (He uses the word “compelled” three times in this brief sketch: strong forces were at work.) A fellow student at Vevey, with no thought of marriage, had paid such “very decided” attentions to a “fine young lady, highly educated and very attractive,” that the girl had fallen “desperately” in love. Her parents favored the match. Pierpont, seeing that his friend’s honor was about to become “so compromised that he would have been compelled by public opinion to marry the girl in spite of himself,” had been “compelled to interfere.” Hence his unsolicited advice: “if I felt it my duty in that case how much more is it for me to warn you in time.”

Furthermore, he felt called on to correct his cousin’s “decidedly erroneous ideas” about marriage. The “fair damsel” in question had a gift for music, and Jim was urging her to study abroad. A life on the stage would not do for the wife of James Junius Goodwin, Pierpont explained: “Your career in life, like mine depends on our own individual exertions, our courses … will both be in the mercantile sphere and from this cause it becomes our duty to select for our wives those who, when we go home from our occupations, will ever be ready to make us happy and contented with our homes.”

This pontifical account makes a mercantile career sound like a spiritual calling—which, in Junius’ eyes, it virtually was. The fact that Pierpont’s vision of conjugal bliss did not match the situation in his own home (though not because his mother had a career) did nothing to detract from his conviction: a wife should “be domestic ,” he concluded, “her heart must be at home with her husband and children, not in the world.” Jim would not be “happy with a wife who was ever individually before the public, or who in society held any position not connected with yours.”

Jim did not much like this “dull sermon.” He promised to talk the whole thing over in person next time the cousins met.

Pierpont learned German in six months with the help of the obliging Fräuleins, but had to postpone his start in business yet again when his father directed him to spend one more winter on the Continent. In August 1856 he took the waters at Wiesbaden, then went home to London.

His family had finally settled at No. 14 Princes Gate, a five-story town house in Knightsbridge facing Hyde Park. ^† It was set well back from the road, with Ionic columns framing a portico entrance, Corinthian pilasters under a neoclassical pediment on the first floor, and swags of fruit and flowers decorating the cornice. In the back, French doors opened onto a terrace, and stone stairs led to a large lawn and gardens shared by all the houses in the block. Just a short walk down the Exhibition Road was the South Kensington Museum (later the Victoria and Albert), built after the 1851 Crystal Palace Exhibition to educate the British public about industrial arts and innovative design.

Pierpont found his mother in a state of collapse. Everything about the transatlantic move had agreed with Junius, who was fully engaged with his work and Anglo-American social life, but Juliet’s depressions and physical complaints had grown steadily worse. She had left a close-knit world of relatives and friends for the vast, drafty reaches of a foreign capital that made no effort to welcome Americans. Speaking the language did not help her penetrate the dense thickets of English reserve, and a scant education had not prepared John Pierpont’s daughter for the wider sphere of cultural reference she found abroad. She possessed none of the self-confident charm that enabled scores of American women to “conquer” London a little later in the century. With her husband preoccupied, four of her children away at school, and no interests of her own, Juliet took to her bed with vague, protean symptoms, just as her mother had done.

There was probably a genetic basis to the depression that turned the Pierpont family into a sad roster of instability, alcoholism, suicide, and “nerves.” After Juliet’s mother died in 1855, the Reverend Pierpont described how completely her suffering had vitiated their marriage: she had contributed “little toward making our home the scene of confidential and affectionate intercourse which constitutes one’s beau ideal of a truly happy Christian home.” In the next generation, Juliet contributed little to the affectionate intercourse in her household, and her negative example may have helped shape Pierpont’s ideal of the generously domestic woman “ever … ready to make us happy and contented with our homes.” Juliet’s brother, John, Jr., drew an explicit parallel between her diseases and her mother’s—he thought their “constitution and temperament … the same”—and suspected that Juliet’s ailments were “imaginative, not real”—he no doubt meant “imaginary.” Juliet consulted London’s best physicians, but no one ever found an organic illness or a cure.

She decided to spend the winter of 1856–57 in the United States, hoping to leave her indispositions in London with her husband and children. In mid-September, Pierpont escorted her to Liverpool and saw her off on the Baltic .

From Princes Gate that fall he groaned to Jim in mock complaint that his siblings “ consider me as a kind of ‘valet de place’ whenever I come home.” He squired them around town until the older three went back to school. Mary was his favorite: active and curious, “she does not care about keeping very still for a long time at once.” Neither did he. Once the “children” left, he found the house too quiet. Visits from Frank Payson and the “exceedingly” agreeable Miss Hoffman from Vevey promised to relieve the “monotony.”

That Miss Hoffman was passing through London with her father on her way home to be married did not diminish Pierpont’s regard. He took her, with her father and Frank, to dinners, theater, Madame Tussaud’s, the Royal Mint, the Queen’s Stables and Mews, and, when the autumn rains let up, on carriage drives. “Between you and I Jim,” he whispered, “Miss H. is one of the finest girls I ever met in delicacy of feeling & taste, in sweetness of disposition & in fact in every charm.… I never may meet her again but if I should live many years I am very sure I shld not see her equal.” Though there seemed no chance now of his winning primary place in her affections, he would be “only too happy if I thought I had such an object to look forward to.”

Frank left at the end of September to start work with one of Junius’s former partners from Boston, Levi P. Morton, now head of a wholesale house in New York. Pierpont went riding every morning in Hyde Park, and spent his afternoons at Peabody & Co. organizing twenty years of correspondence.

The London firm was buying and selling American securities for its clients, offering brokerage and general banking services to select friends, trading on its own account, and promoting a few promising new ventures, one of which in 1856 was a transatlantic cable. Cyrus Field, a wealthy New York paper merchant who recognized what Samuel Morse’s telegraph could do for international communications and trade, had secured a charter to lay a cable between the western point of the British Isles and the eastern tip of North America. George Peabody & Co. agreed to help finance the project in July of 1856.

Four months later Junius reported to Mr. Peabody that the Atlantic Telegraph Company was getting along “ famously” and would be a “great property,” sure to “pay largely” once the cable was working. He asked his senior partner, traveling in the United States, to lobby quietly for a federal subsidy: “There can be no doubt that, as a matter of policy, our Government should do something in aid of the enterprise, & … a word from you would have much weight with those in Washington who could bring this forward in a proper way.” He also persuaded Peabody to sit on the company’s board in order to keep its management “honest”: “Our connection with America & its business makes it very desirable that we should have an influence on the organisation of a Co. which is to have so much influence either for good or evil.” The politics of influence and the strict supervision of management would be hallmarks of Morgan banking for over half a century.

Solving the physical and financial problems of transatlantic communication took ten years, even with government subsidies from Britain and the United States. Fires, broken cables, dropped wires, financial panics, storms at sea, and the Civil War intervened. The value of the stock rose and fell like the surface of the Atlantic. Issued at £1,000, the shares fell to £300 in July 1858, then rose to £900 that August when twenty-nine hundred miles of primitive cable first connected the continents. Queen Victoria’s congratulatory message to President Buchanan took sixteen hours to transmit. Peabody imagined that Field must feel like “ Columbus in the discovery of the new world.” Junius told Pierpont: “None of us can properly estimate the effect of this success upon the world, nor do we really grasp in our minds the magnitude of what has been accomplished.” Three weeks later the cable broke, as did the price of the stock.

The operation finally succeeded in July 1866, when the gigantic S.S. Great Eastern finished laying a redesigned, heavily armored ductile cable across the ocean floor from Valentia, Ireland, to St. John’s, Newfoundland. Only then did the property, reorganized as the Anglo-American Telegraph Company and substantially refinanced, begin to pay. Despair often swamped Junius’s hopes in the intervening decade. When Field at one low point accused Peabody & Co. of having caused his ruin, Junius replied, “ You do not seem to recollect that we have been large losers by an enterprise undertaken by yourself and into which we entered at your earnest solicitation.” The Atlantic cable changed the way the world worked, making it possible for the United States to communicate with Europe in a matter of minutes rather than weeks. Moreover, after 1866, financiers such as Peabody and Morgan could move quickly in and out of markets, easily trade in foreign currencies, and anticipate the effects of international news. Peabody & Co. gained access to essential information, as well as prestige and profits, from backing this ambitious venture.

Pierpont went back to Göttingen for three months in October 1856. “Lonesome” without Frank Payson, he joined a student society called the Hannovera, and was soon reporting on “capital” Saturday suppers of roast goose and beer, Wednesday-night card games, and balls. In his farewell speech he delighted his German friends by mixing up the words Dauer (length, duration) and Bedauern (regret, pity): he wished them “ great sorrow” instead of “long life.” One of his university professors had asked him to stay on and make a career in math, but Pierpont had other plans for his facility with numbers.

Early in 1857, finished at last with school and reasonably fluent in German and French, he headed south. He spent a month in Rome wandering through churches, galleries, and ruins, buying mosaics, jewelry, perfumes, bronze vases, reproductions of Canova’s Hebe and The Dying Gladiator . “ It is very pleasant indeed travelling about & seeing the world,” he wrote to Jim, “but the truth is I have been so long unsettled & obliged to make my own arrangements for comfort that I shall not be sorry to settle down once more at home. Besides I am anxious to get to work, it seems to me high time.”

Not quite. He came down that spring with a sore throat, cough, and chest pains. Junius told Jim that his son’s illness had “interfered so much with my plans for him that I don’t know exactly how he is to be situated.” Pierpont asked Jim to find out what plans Junius had in mind; he wanted to go to China.

Jim crossed the Atlantic in June for a foreign education of his own. He started with a Pierpont-guided tour of Europe—the cousins had not seen each other in three years—but Junius cut the trip short in early July, summoning his son home.

Pierpont found Princes Gate full of the “children” and their friends. His mother, still in the United States, had been gone nearly a year, but was not too ill to veto his latest dream: “ Mother objects most strenuously to my going to China,” he told Jim in mid-July. Junius had rented a summer house in Barnet on the northern outskirts of London. The entire household moved there shortly after Pierpont arrived.

By 1857 America had fully recovered from the depression of the 1840s, and business, particularly the railroad business, was booming. Junius proudly told a friend that spring: “ We none of us realise the wonderful increase of capital in the United States. The day is not far distant when they will cease to watch with solicitude the rate of [the Bank of England on] Threadneedle Street.” The British Economist had made the case even more strongly in 1851, predicting that “ the economic superiority of the United States to England is ultimately as certain as the next eclipse.”

The center of this “wonderful increase of capital” was no longer Philadelphia or Boston but Wall Street. The exuberant growth of a market for railroad securities in the 1850s had brought trading and speculation to the New York Stock Exchange on a grand scale: about a thousand shares had traded on the exchange in a high-volume week during the 1830s; twenty years later a million shares a week could change hands. This boom led several investment firms to specialize in railroad finance, and among the best was a New York house called Duncan, Sherman & Co.

One of its senior partners, William Watts Sherman, was living abroad in 1857. He often called on Junius in London and Barnet, and wrote to Mr. Peabody in July: “ It was a lucky fortune or astute sagacity my dear sir that guided you when you fell upon such a man as partner. I know not where you could have found his superior.”

Peabody had watched Duncan, Sherman & Co. with an approving eye ever since its inception in 1851. Sherman’s partner, Scotsman Alexander Duncan, had been introduced to him as having “sound and enlarged views and … one of the most beautiful fortunes” in America—about $4 million. Peabody told Junius in 1854: “I look upon this house as almost the only one in the United States who at present have the necessary capital, enterprize & talent to manage successfully a very large money business.” He gave Duncan, Sherman the right to draw on him for unlimited credit, favored it over other New York banks, and considered appointing it to manage his firm’s affairs in the United States.

In the ebullient markets of 1857, however, the New Yorkers were not willing to act as subsidiary agents for Peabody & Co.; they wanted the opposite arrangement, with the London firm as agent of the American. That July, Junius Morgan and Watts Sherman made a decision that sidestepped the question, created a strong link between their firms, and solved Junius’s problem about what to do with his son. Pierpont would go to work as an unsalaried clerk at Duncan, Sherman, “ for some schooling in American Banking ,” Mr. Sherman told Peabody by mail. “I think him a very promising young man.”

Junius had left Wall Street with regret in the chaos of 1836. He had hoped to return to New York, but his career took him instead from Hartford to Boston to London. Now, twenty years after giving up the prospect of making a fortune on Wall Street, he sent his son to apprentice there. At the end of July the “ very promising young man” sailed for America with the Shermans. Once again, he carried important letters and documents—this time from his father. Junius dispatched an anxious note to his son on board the Persia just before she sailed, asking him to double-check on the safety of the papers, and urging: “ I want you to realise the importance of the step you are now taking & the influence it is to have on your future life. Be true to yourself & all is well. Kind regards to Mr. & Mrs. Sherman. Goodbye. God Bless & keep you is the prayer of Yr aff[ectionate] Father.”