J.P. Morgan: The Man Who Owned America

Summary

J.P. Morgan, born into wealth in 1837, became a dominant figure in American finance, owning the first billion-dollar company and influencing the U.S. economy. Despite health issues in childhood, he entered the workforce at 19, eventually founding JP Morgan & Co. Known for consolidating railroads and forming U.S. Steel, Morgan's business tactics were both admired and criticized. He played a crucial role in stabilizing the economy during crises, but his power raised concerns. Morgan's legacy continues through JPMorgan Chase, the world's largest bank by market capitalization.

Takeaways

• 💼 JP Morgan was a dominant figure in American finance, owning the first billion-dollar company and significantly influencing the U.S. economy.
• 🏦 His banking firm, JP Morgan & Co, became a precursor to the modern banking giant JPMorgan Chase.
• 🚂 Morgan was instrumental in the consolidation of the American railroad system, creating monopolies and using the strategy that became known as 'morganization'.
• 🔝 He played a key role in shaping major industries, including railroads, steel, and later, the formation of General Electric and AT&T.
• 💡 Morgan's business tactics involved taking control of companies, often by reshuffling leadership and merging them into larger entities.
• 📉 During times of economic crisis, such as the panic of 1893 and 1907, Morgan intervened to stabilize the financial system, showcasing his immense power.
• 💵 His financial maneuvers, while stabilizing the economy, also raised concerns about the concentration of economic power in the hands of a few individuals.
• 🏛️ Morgan's influence extended to politics, with him being a central figure in the Pujo Committee hearings investigating Wall Street's 'money trust'.
• 🌐 His legacy continues with JP Morgan Chase being the largest bank in the world by market capitalization, reflecting the lasting impact of his business strategies.
• 🔗 The script also hints at the interconnectedness of historical financial figures, suggesting a comparison with Cornelius Vanderbilt's rise and influence.

Q & A

What was J.P. Morgan's role in the American economy?

J.P. Morgan played a pivotal role in the American economy, owning the first billion-dollar company and dominating the country's most profitable industries. His actions could influence the economy significantly, with the power to save or doom companies with a word or a decision.

What was J.P. Morgan's first major investment?

J.P. Morgan's first major investment was in the American railroad system, where he saw an opportunity for consolidation and the creation of monopolies.

How did J.P. Morgan's childhood health issues affect his early life?

J.P. Morgan was a sickly child, suffering from various diseases and conditions such as brutal coughing fits, migraines, seizures, and scarlet fever. These health issues often kept him indoors, leading him to study and read financial statements, which likely influenced his later career in finance.

What was the significance of the partnership between J.P. Morgan and Anthony Drexel?

The partnership between J.P. Morgan and Anthony Drexel led to the founding of the Drexel, Morgan & Co private merchant banking house, which was later renamed JP Morgan & Co. This firm became the precursor to the modern banking titan, JPMorgan Chase.

How did J.P. Morgan's strategy of 'morganization' impact the railroad industry?

J.P. Morgan's strategy, known as 'morganization,' involved consolidating multiple small railroad companies into one dominant entity. This approach led to the creation of monopolies, allowing the newly formed conglomerates to set their own prices and crush any remaining competition.

What was the outcome of J.P. Morgan's consolidation of the Northern Pacific Railroad and other regional railways?

The consolidation of the Northern Pacific Railroad and other regional railways resulted in the creation of the Northern Securities Corporation. However, this monopolistic practice was challenged by President Theodore Roosevelt, leading to a lawsuit that ultimately forced the company to be split up.

How did J.P. Morgan's personal life influence his business decisions?

J.P. Morgan's personal life, including the tragic loss of his wife Amelia to tuberculosis, deeply affected him. It's believed that he never fully recovered from this loss and threw himself into his work more intensely, which may have influenced his ambitious and aggressive business strategies.

What was the significance of J.P. Morgan's creation of U.S. Steel?

The creation of U.S. Steel was significant because it was the world's first billion-dollar corporation, with a market cap of $1.4 billion. This gave J.P. Morgan control over roughly two-thirds of American steel production, consolidating power in the industry.

How did J.P. Morgan help stabilize the American economy during the crises of 1893 and 1907?

During the crises, J.P. Morgan played a crucial role in stabilizing the American economy by forming private syndicates to shore up gold reserves and investing in smaller banks to prevent their bankruptcy. His actions helped restore public confidence in the banking system and averted potential economic disasters.

What was the Pujo Committee, and why was J.P. Morgan summoned to testify before it?

The Pujo Committee was a congressional investigation aimed at examining the influence of Wall Street's 'money trust' on the American economy. J.P. Morgan was summoned to testify due to his significant role and influence in the financial sector, becoming the face of Wall Street power during the hearings.

Outlines

00:00

💼 The Life and Influence of J.P. Morgan

John Pierpont Morgan, born in 1837, was a financier with immense wealth, power, and influence. He owned the first billion-dollar company and played a crucial role in the US economy. Despite being born into privilege, Morgan's childhood was marked by illness, which led him to spend much of his time studying financial statements. His father, Junius Spencer Morgan, was a wealthy banker who wanted John to follow in his footsteps. Morgan's early career involved writing financial reports and eventually led him to establish his own company at the age of 24. His personal life was marked by tragedy, including the death of his wife shortly after marriage, which deeply affected him. Morgan's business acumen was evident in his ability to consolidate railroads and create monopolies, a strategy that became known as 'morganization.' His influence extended to the formation of modern banking giant JPMorgan Chase.

05:03

🚂 J.P. Morgan's Dominance in Railroads and Business Tactics

Morgan identified the American railroad system as a key investment opportunity and saw the potential in consolidating competing railroad companies. He believed in the power of economies of scale and aimed to create unified conglomerates that could control pricing and eliminate competition. Morgan's approach to business involved taking over underfinanced railroads, streamlining their operations, and merging them into dominant entities. His proactive role in corporate management and desire for control led him to reshape the industry. Morgan's tactics, including the acquisition of a significant portion of the New York Central Railroad and the underwriting of the Northern Pacific Railroad, solidified his position as a titan of industry. His influence and wealth grew exponentially, and he became a central figure in shaping the US economy.

10:03

🏭 The Creation of U.S. Steel and Morgan's Business Empire

In 1901, Morgan orchestrated one of the largest business deals in history by purchasing Carnegie Steel for $480 million and merging it with other companies to form U.S. Steel, the world's first billion-dollar corporation. This move gave him control over two-thirds of American steel production, further expanding his business empire. Morgan's ability to combine companies and create industry giants was unparalleled. He also played a significant role in the formation of General Electric and AT&T, showcasing his influence in multiple sectors. Despite facing legal challenges and public scrutiny, Morgan's business strategies and financial prowess continued to shape the American economy.

15:06

📉 Morgan's Role in Averting Financial Crises and His Legacy

Morgan played a pivotal role in stabilizing the American economy during times of crisis. In 1893, he formed a private syndicate to shore up the US gold reserves, preventing economic collapse. In 1907, he again intervened during a financial crisis, coordinating with other bankers and the government to inject capital into the economy and restore public confidence. Despite his heroic actions, Morgan faced increased scrutiny and criticism for the concentration of power in the hands of a few businessmen. His influence was a subject of investigation by the Pujo Committee, which eventually led to the establishment of the Federal Reserve. Morgan passed away in 1913, but his legacy lives on through the continued expansion of JP Morgan Chase, now the world's largest bank by market capitalization.

Keywords

💡Wealth

Wealth, in the context of the video, refers to the immense financial resources that J.P. Morgan possessed, which allowed him to own the first billion-dollar company and dominate profitable industries. It underscores the video's theme of economic power and influence, as Morgan's wealth was instrumental in shaping the American economy and the businesses he controlled.

💡Influence

Influence, as depicted in the video, is the power that J.P. Morgan wielded over the economy and businesses. His decisions could make or break companies, showcasing the extent to which his personal influence extended beyond his wealth. It is a central concept in the video, illustrating how Morgan's actions had far-reaching implications on the economic landscape.

💡Consolidation

Consolidation is a key strategy that J.P. Morgan used to merge smaller companies into larger, more dominant entities within industries like railroads. The video highlights how Morgan saw the value in reducing competition by consolidating railroad companies, which allowed for greater control over pricing and operations, exemplifying his business acumen and the impact on American industry.

💡Economies of Scale

Economies of scale are mentioned in the video as a benefit that larger businesses, like those created by Morgan's consolidation efforts, could leverage. By increasing the scale of operations, these businesses could reduce costs and increase efficiency, which was a driving factor behind Morgan's approach to business expansion and a significant aspect of his success.

💡Antitrust

Antitrust refers to the laws and policies designed to prevent monopolies and promote fair competition. The video discusses how J.P. Morgan's business practices, particularly the formation of monopolistic entities, led to legal challenges under the Sherman Antitrust Act. This keyword is crucial for understanding the pushback Morgan faced from the government and the public.

💡Financial Crisis

The video recounts the financial crises of 1893 and 1907, during which J.P. Morgan played a pivotal role in stabilizing the American economy. His actions during these crises highlight the dependence of the economy on his decisions and resources, demonstrating the extent of his power and the risks of such concentration of economic control.

💡Morganization

Morganization, a term coined after J.P. Morgan, refers to the process of consolidating companies within an industry to reduce competition and increase market control. The video uses this term to describe Morgan's signature strategy, which was central to his business model and had a lasting impact on American industry structures.

💡Robber Baron

A robber baron, as discussed in the video, is a term used to describe wealthy individuals who amassed their fortunes during the Industrial Revolution, often through ruthless business practices. J.P. Morgan is presented as one such figure, and the video explores the moral complexities of his wealth and influence, as well as the public's mixed views on his actions.

💡Pujo Committee

The Pujo Committee, mentioned in the video, was a congressional committee that investigated the 'money trust' on Wall Street, including the influence of figures like J.P. Morgan. This keyword is significant as it represents a turning point in public and governmental scrutiny of financial power, leading to reforms in the banking system.

💡Federal Reserve

The Federal Reserve, while not directly featured in the video, is mentioned as an outcome of the financial instability that J.P. Morgan's era highlighted. The video suggests that the need for a central banking system, like the Federal Reserve, arose in part due to the risks posed by relying on individual financiers like Morgan for economic stability.

💡JPMorgan Chase

JPMorgan Chase is the modern banking institution that traces its roots back to J.P. Morgan's businesses. The video concludes by mentioning this corporation, emphasizing Morgan's lasting legacy in the financial world. It serves as a bookend to the narrative, showing how Morgan's early 20th-century business strategies have evolved into a contemporary global financial powerhouse.

Highlights

J.P. Morgan's immense wealth, power, and influence, owning the first billion-dollar company and dominating the United States' economy.

His ability to single-handedly impact the economy with his decisions, saving or dooming companies.

Born into privilege in 1837, J.P. Morgan's father, Junius Spencer Morgan, was a wealthy banker who ensured John received the best education.

John's childhood was marked by illness, which led him to spend much of his time studying or reading financial statements.

At 19, John entered the workforce, leveraging his father's connections to get a job at a Wall Street banking firm.

John's early career involved writing reports on financial and political happenings in America, an emerging market at the time.

His father's concern over John's rashness and the need for him to learn restraint and responsibility.

In 1859, John made a risky investment in Brazilian coffee, foreshadowing his future as a daring financier.

The tragic loss of his wife, Amelia Sturges, to tuberculosis, which deeply affected John and drove him to focus more on his work.

John's profiteering during the American Civil War, including the controversial purchase and resale of surplus rifles.

The founding of Drexel, Morgan & Co, which would later become JP Morgan & Co, marking the beginning of his influential banking empire.

John's strategy of consolidating railroads, creating monopolies, and the term 'morganization' being named after him.

His proactive role in corporate management, reshuffling leaderships, and creating stable industries that attracted more investments.

Owning one third of all American railroads and shaping the industry through reorganizations and mergers.

J.P. Morgan's physical appearance, including his skin conditions and towering height, which contributed to his intimidating presence.

The confrontation with President Theodore Roosevelt over monopolistic practices and the subsequent breakup of Northern Securities Corporation.

The landmark purchase of Carnegie Steel and the creation of U.S. Steel, the world's first billion-dollar corporation.

J.P. Morgan's role in financing and shaping other major industries, including electricity and telecommunications.

His instrumental role in stabilizing the American economy during the 1893 depression by forming a private syndicate to shore up gold reserves.

The 1907 financial crisis and J.P. Morgan's strategy to invest in smaller banks to prevent a catastrophic collapse of the banking system.

The increased scrutiny and public concern over the power and influence of J.P. Morgan and other Wall Street magnates.

J.P. Morgan's legacy, including the establishment of JP Morgan Chase, the biggest bank in the world by market capitalization.

Transcripts

Wealth, power, and influence.  J.P Morgan had it all. 

He owned the first billion-dollar company. He dominated the country’s most  

profitable industries. And on multiple occasions,  

the economy of The United States quite literally  depended on the actions of J.P. Morgan. 

With a simple word or the stroke  of a pen, he could save a company  

from collapse or doom it to bankruptcy. Hated by some, admired by others - there will  

never be another man quite like JP Morgan. This is his story.

John Pierpont Morgan was born in Connecticut in  1837 into privileged circumstances. John’s father,  

Junius Spencer Morgan, was already a wealthy  banker, and he ensured that John had the best  

education that money could buy, since he wanted  John to follow in his footsteps as a financier. 

However, despite being born into wealth, John’s  childhood was bleak. He was a sickly child. He  

regularly suffered from brutal coughing fits,  migraines, seizures, and various diseases  

such as scarlet fever. His medical conditions  meant he often couldn’t play outside with the  

other kids. Instead, you’d find him inside  studying or reading financial statements. 

In fact at one point John became incapacitated  by rheumatic fever - and his father’s solution  

was to send John to live by himself in the  Azore islands in the middle of the Atlantic  

Ocean. His dad believed the climate  and salty air would help John recover  

from his condition. So John stayed on that  island for nearly a year without any family,  

and when he was finally well  enough, he continued his education.

By 1857, John had studied in Boston,  Switzerland, and Germany, and was now 19  

years old and ready to enter the workforce. At this point, John’s father was a junior  

partner at a London-based merchant banking  firm called George Peabody & Co - and thanks  

to his father, John was able to get a job  on Wall Street at the banking firm which  

looked after Peabody’s interests in America. Part of John’s job involved writing reports  

to his father’s firm detailing the financial  and political goings-on in America, which of  

course at the time was still an emerging market. However, from an early age, John’s father feared  

that his son was too rash and hot-tempered to  ever become a successful financier, and that  

he needed to learn restraint and responsibility. One example of this was in 1859, while on a trip  

to New Orleans, John made a seemingly reckless  gamble by using company money to purchase an  

entire shipment of Brazilian coffee that arrived  in port without a buyer. Even though John sold  

it and made a tidy profit, the senior members of  the banking house, including John’s own father,  

couldn’t stand this kind of risk-taking. So in 1861, aged 24, John left the safety  

and security of an established firm  in order to strike out on his own,  

founding his own company which continued to act  as an agent for his father’s bank back in England. 

It was also that year that John married  his first love, a frail young woman named  

Amelia Sturges. And for a brief period  John was the happiest he’d ever been. 

However Amelia soon came down with a persistent  cough that was later diagnosed as tuberculosis.  

So right after their wedding, John took her  on an extended honeymoon in the Mediterranean,  

hoping that the new climate might restore her  strength just like John’s father had tried for  

him when he was younger - but it was no use. John’s wife died just four months after  

their wedding, leaving John a widower at 24. Understandably, he was an inconsolable mess,  

and it’s believed he never truly recovered from  this tragic loss of his wife at such a young age. 

Immediately after losing her, John threw  himself deep into his work more than ever. 

However whilst John was  going through his own crisis,  

so was the United States - around this  time the American civil war had broken out,  

and the 1863 conscription act should have meant  John went off to fight - but he didn’t. Instead  

John paid $300 to be removed from enlisting,  and have a substitute stand in his place.

That's not to say John didn’t get involved in  the war though - in fact on the contrary, he  

profited from it hugely. One of the most notable  examples was when he financed the purchase of  

5,000 surplus hall carbine rifles at $3.50  each from the government that were considered  

too old to use. But then the consortium who  bought them made some minor adjustments and  

almost immediately sold the same rifles back  to the government for $22 each. It was an over  

600% increase in price, and thus whilst it was a  very lucrative deal for John to be involved in,  

this war profiteering was certainly not  popular with the public or the government.

But that was the least of his worries - John would  soon be facing some much bigger controversies.

In 1871, John saw the golden opportunity to  team up with one of the leading financiers  

in the country; a banker named Anthony Drexel.  Together, they founded the Drexel, Morgan & Co  

private merchant banking house - which was later  renamed to simply JP Morgan & Co, and this would  

be the firm that John would manage for the rest of  his life, serving as the precursor to the modern  

banking titan we know today as JPMorgan Chase. Now, early in John’s career he’d mostly just  

been a facilitator of deals - like connecting  wealthy investors and visionaries together in  

exchange for a cut of the profits. But as John  amassed a bigger personal fortune and reputation,  

he was able to finance many of these projects on  his own. And John had already identified his first  

major investment: the American railroad system. Now at the time most of the other big industries  

were dominated by one single magnate - like  Carnegie dominating in steel and Rockefeller  

dominating in oil, but the railroads weren’t  monopolized; actually it was the opposite - there  

were so many competing companies that offered  very similar routes that they often slashed  

their prices to try and win customers. But  whereas most looked at the railroad business  

and saw fierce competition, John saw opportunity.  He felt the answer was consolidation - merging  

railroads together rather than competing. That’s because John knew that the bigger  

a business got, the more it could benefit from  economies of scale - so John’s goal was always  

to turn multiple small companies into one  unified conglomerate. Suddenly rather than  

competing against each other and driving down  prices, they could set whatever prices they  

wanted as they owned all the nearby railroads. So John invested heavily in multiple railroads  

which he began consolidating. He’d take  over underfinanced railroad companies,  

streamline their management and operational  efficiency, and merge the small companies  

together into one dominant player that could  crush any remaining competitors - which of  

course he’d then be able to take over as well. John used this tactic to such great effect  

that it was even named after him,  becoming known as “morganization.” 

But the other thing John did differently to  other businessmen and investors of the time,  

was that he played a very proactive role in  the corporate management of these companies.  

John wasn’t content with simply buying  shares, then sitting back and raking in  

the profits. He was a man who craved control.  John needed to be the one calling the shots,  

so he regularly used his influential position on  boards of directors to direct the company’s as  

he saw fit. He often reshuffled the leaderships  of all these different railway companies to his  

liking and assembled them into monopolies  - with himself at the head of the table,  

of course. When railroads came to him for help,  he’d refuse unless he was given full control. 

This not only gave John the power he wanted, but  also created a more stable industry, which in  

turn, attracted even more investments. Money from  Europe flowed into US railway companies now that  

it looked more consolidated and stable thanks to  John, and this of course made John even wealthier. 

John kept acquiring more rail lines, and  constantly wanted to outdo his previous  

achievements and be more ambitious.  For example he purchased 250,000  

shares of stock from William Vanderbilt in one of  the most prominent railways in the country - the  

New York Central Railroad. He then took things  even further the following year when he executed  

“the largest transaction in railroad bonds ever  made in the United States,” underwriting the  

sale of $40 million in bonds to finance the  completion of the Northern Pacific Railroad. 

Before long, John owned one third  of all railroads in America,  

at a time where 60% of America’s stock market  capitalization consisted of railroad companies. 

In other words, John was no longer just  a wealthy financier, he was literally  

shaping railroad conglomerates and being heavily  involved in reorganizations and mergers - all of  

which grew his power and wealth further. And his growing reputation as a formidable  

titan of industry was matched  by his intimidating appearance. 

John had a skin condition called rosacea that  inflamed and ruptured the blood vessels of his  

nose making it very red and disfigured, whilst  he also had rhinophyma which made his nose much  

larger and covered in pimples. John was actually  very self conscious about his appearance and got  

angry at being photographed. According to his  grandson, whenever John had a portrait done he  

always ordered them to redo his nose to make  it look more normal, which is why it’s not as  

noticeable in pictures of him. But his startling  facial features combined with his towering height  

and his aggressive way of speaking, all meant that  John was an intimidating presence to be around. 

However in 1901, it seemed John had finally  met someone who would stand him up to him:  

president Theador Roosevelt. You see, John had  just consolidated his Northern Pacific Railroad  

together with two other railways in the region  and created a massive new holding company called  

the Northern Securities Corporation. And he’d been  able to get away with these kind of monopolistic  

practices due to his close relationship with  the current president, William McKinley. But  

then McKinley was assassinated, and suddenly  Theodore Roosevelt became president who took  

a very different view on what John was doing.  Roosevelt ordered the Justice Department to  

file a suit against the company for violating  the Sherman Antitrust Act of 1890. Whilst John  

fought this in court, the company was ultimately  split up. And this was just the beginning of a  

very tense relationship between the two men. When  John heard Roosevelt was going to Africa one year,  

John said: “good, I hope the first  lion that meets him does his duty”. 

For John though, this was merely a small setback.  He was already planning something much crazier.

In 1901 Carnegie Steel was at its peak. It  dominated the steel industry and was one of  

the most valuable companies in the country.  But despite it netting $40 million a year,  

Carnegie was ready to retire, and wanted  to sell his company. But who could buy it?

That’s where John came in. He basically told  Carnegie to name his price and he did - $480  

million dollars, which would be more than any  other business deal in history. And yet John  

agreed on the spot - and later confessed  that he would have paid $100 million more. 

John made the landmark purchase in 1901,  but that was just the beginning of his  

ambitious plan. He merged Carnegie Steel  with the Federal Steel Company and a few  

other businesses to form U.S. Steel, the  world’s first billion-dollar corporation,  

which had a market cap of $1.4 billion  dollars. Just to put that in perspective,  

all the manufacturing in the country was  capitalized at a combined $9 billion. 

This deal gave John control over roughly  two-thirds of the American steel production. 

So basically 2 of the largest industries  at the time were steel and railroads,  

and John had seemingly conquered both. And he didn’t stop there. 

John helped finance Thomas Edison’s early  experiments with electricity. He then played an  

important role in merging Edison electric with its  competitors in order to create General Electric. 

And John was also influential in  creating what would later become AT&T. 

John’s talents for combining  companies together and turning  

them into unstoppable giants was unmatched. But unfortunately, a crisis was about to begin.

In 1893, the United States was facing a depression  the likes of which it had never seen before. After  

several decades of continued growth and unchecked  investments, the bubble burst, and the American  

economy plunged into chaos. Stocks plummeted,  losing almost half their value, thousands of  

businesses closed their doors forever, hundreds  of banks went bankrupt, and unemployment  

rates skyrocketed throughout the country. The crisis scared off foreign investors,  

who cashed in their American bonds in  exchange for gold, slowly but surely  

depleting the US reserves. Since, at the time,  the dollar was still tied to the gold standard,  

meaning anyone could convert their paper money  into physical gold, and thus had more confidence  

their paper money was actually worth something.  As a result, the American government always kept  

at least $100 million worth of gold bullion on  hand to back the dollar. But by 1895, most of  

that gold was gone and the dollar’s value was in  a sharp decline. At its lowest, the government had  

no more than $9 million worth of gold reserves,  which meant that it was in danger of defaulting on  

its loans at any moment. And of course, this run  on gold just spread more panic, having a domino  

effect where more investors pulled their money out  of the US and depleted the reserves even further. 

The US didn’t have a central bank at the time  to rescue them, and the situation was extremely  

dire. President Cleveland understood that this  was a crossroads moment for America that would  

forever alter its course. The traditional  strategy of simply selling more bonds to  

the American people wouldn’t work fast enough. John knew that this was the time for drastic  

and immediate action, so he traveled to  Washington to meet the president and lay  

out his game plan in order to bring America  back from the brink of an economic disaster. 

John’s audacious scheme was to form a private  syndicate consisting of the most prominent  

bankers in the country who would work together  with foreign investors to shore up America’s  

gold reserves. His syndicate offered to purchase  $65 million worth of 30-year gold bonds using 3.5  

million ounces of gold. Thanks to an old Civil  War statute, President Cleveland could agree  

to the deal right then and there without  having to wait for approval from Congress. 

Once Cleveland signed the agreement, John wired  his men in New York and told them to act and,  

in only 22 minutes, they bought out all the gold  bonds. John’s decisive actions had an immediate  

calming effect on the volatile financial  market and restored faith in the economy. 

John had almost single handedly saved  them from total collapse. And, of course,  

being the shrewd businessman that he  was, he had also made a large profit  

from the enterprise by securing generous  rates on the gold bonds that he purchased. 

And thus whilst John had saved the day and helped  bail out the government, it also raised concerns.  

It illustrated the vast influence and power of  one single banker on the entire US economy. And  

some asked whether his motivations were really  patriotic, or simply opportunistic to line his  

own pockets. At the next election the relationship  between big banks and the government was a hot  

topic for the Democrats - but John and his banker  friends donated heavily to the Republic nominee  

who won the election instead. So for now,  John kept his close ties to the government. 

But this was not the only time that John  was instrumental in stabilizing the American  

economy. In 1907, the country was facing another  deepening financial crisis which led to several  

banks being on the verge of bankruptcy, leading  to hordes of people queuing up around the block  

to withdraw their money from their bank accounts.  The government reportedly had to tell bank tellers  

to deliberately count the money slower to try  and reduce the rate cash was being withdrawn.  

Because if everyone pulled their money out  at the same time, it could be catastrophic. 

By this point, Roosevelt was the president, and  as we already know, he certainly did not see eye  

to eye with John on most things. But the crisis of  1907 was so dire that they both agreed it would be  

in America’s best interest if the government and  big business worked together to save the country  

from falling into a depression. So Roosevelt  called on JP Morgan to salvage the situation. 

Once again, John’s strategy was to spend a lot  of money where it was needed most. He summoned  

dozens of the leading financiers and leaders of  the nation’s biggest banks and trusts to join him  

in his private library on Madison Avenue,  and decide on the best course of action. 

John’s plan was essentially for them to invest in  their smaller competitors. John concluded that,  

although some banks would inevitably fall, others  could still be saved, so he and his associates  

deposited giant sums of money in a number of  banks so that they would be able to pay their  

depositors and avoid declaring bankruptcy. After revealing his plan, John then locked  

the door while the bankers negotiated  amongst themselves, literally locking  

them in until they agreed on a resolution. By the morning, everyone had agreed with  

John’s plan. And with Roosevelt’s approval,  the U.S. Treasury also contributed $25 million,  

showing the level of trust and respect the  president had for John’s business sense. 

What’s remarkable is that John was 70  years old at this point, and negotiated  

all of this whilst having a terrible cold  - meaning he was constantly coughing and  

sneezing whilst saving the US economy. But his plan ultimately worked - lots of  

capital was injected back into the economy, public  confidence was restored in America’s banking  

system, and yet another economic disaster was  averted thanks to John’s wheelings and dealings. 

But whilst he was once again briefly labeled as  a hero, almost immediately people again began  

to realize just how dependent they had become  on one single man. Something needed to change.

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John was facing increased scrutiny. The age  of the robber baron who could conduct his  

business unchecked and unimpeded was slowly  coming to an end, as the American public was  

growing increasingly weary of a handful  of businessmen wielding so much power and  

influence. John was summoned to testify before  the Pujo Committee, that wanted to investigate  

the true reach of Wall Street’s “money  trust” and its role in the American economy. 

John was front and center during the  Pujo committee hearings, and he became  

the face of Wall Street power. Despite his financial success,  

John’s mental state was deteriorating. He had  multiple nervous breakdowns and he struggled to  

deal with the public’s negative portrayal of him  in the media. Ironically he was actually due to  

board the Titanic for its maiden voyage, but due  to health issues pulled out at the last moment. 

Meanwhile the Pujo committee paved the way  for the establishment of the federal reserve,  

since it was clear they couldn’t just rely  on a handful of ultra rich and powerful  

individuals to step in and fix the economy. But John would never see the repercussions  

of this investigation. Because months  later, on March 31st, 1913, the 75-year-old  

financier died while on vacation in Rome. After his death, John’s son took over the  

business and continued its expansion. In  fact even in present day, there are still  

concerns the bank is too powerful - it’s undergone  countless acquisitions and mergers over the years,  

something John himself would’ve been proud  of - like mergers with bank 1, bear sterns,  

and most notably of all in the year 2000 the  merger with Chase bank to create JP Morgan  

chase. With an estimated $3 trillion in assets  after 200 years of consolidation in the banking  

industry, JP Morgan chase is the biggest bank  in the world by market capitalization. And so  

whilst opinion will be divided on John Pierpont  Morgan, there’s no doubt his legacy lives on. 

But personally when it comes to  the era of these industrialists,  

my favorite story is Cornelius Vanderbilt.  Honestly there was nobody quite like him,  

and so if you don’t know his story yet,  you’ve gotta check out this video right  

here to see his brutal rise to the top.  I’ll see you there in a second. Cheers.