J.P. Morgan, Banker and Financier
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Class: Building Maintenance Teacher: Mr Roseus Assignment 19 Please read and answer the following questions: J.P. Morgan, banker and financier John Pierpont Morgan was known as J.P. He was born April 17, 1837, in Hartford, Connecticut. He died on March 31, 1913, in Rome, Italy. Morgan was an American financier, or businessperson, and industrial organizer. He became one of the world's most famous figures during the two decades before World War I began in 1914. Morgan reorganized several major railroads and helped create many large corporations. The most famous ones include United States Steel, International Harvester and General Electric. Morgan was the son of a successful financier, Junius Spencer Morgan. J.P. Morgan was educated in Boston, Massachusetts, and at the University of Göttingen in Germany. He began his career in 1857 as an accountant with the New York banking company of Duncan, Sherman and Company. This banking company was the American representative of another banking company in London, England, called George Peabody and Company. Powerful Banking Company In 1861, Morgan began working for his father's banking company in New York City. From 1864 to 1871 he was a member of the company Dabney, Morgan and Company, and in 1871 he became a part-owner of Drexel, Morgan and Company, which soon became the primary source of U.S. government financing. This firm was reorganized as J.P. Morgan and Company in 1895, and, largely through Morgan's ability, it became one of the most powerful banking houses in the world. Because of links with the Peabody company, Morgan had highly useful connections with the London business world. During the 1870s, he was able to provide the rapidly growing industrial corporations of the United States with much-needed capital from British bankers. Helped Railroads Become More Profitable Morgan began helping railroads become better organized in 1885. They became more profitable. Morgan first arranged an agreement between two of the largest railroads in the country. The deal between New York Central Railroad and the Pennsylvania Railroad minimized a potentially destructive price war and competition for access to rail lines. In 1886, he reorganized two more major railroads to stabilize their ability to make money. While helping these and other railroads better organize, Morgan became a member of their board of directors. He thereby gained great influence over railroads. Between 1885 and 1888 he extended his influence to railroad lines based in Pennsylvania and Ohio. After the financial panic of 1893, which led to four years of economic depression and hardship, Morgan was called upon to restore a large number of the leading rail lines in the country. This included the Southern Railroad, the Erie Railroad and the Northern Pacific. He helped to achieve fairness in railroad prices and discouraged overly chaotic competition in the East. By gaining control of much of the stock of the railroads he reorganized, he became one of the world's most powerful railroad owners. Morgan controlled about 5,000 miles (8,000 km) of American railroads by 1902. Restored Depleted Gold Reserve During the depression following the panic of 1893, Morgan formed a group that restored the U.S. government's depleted gold reserve. It provided $62 million in gold to relieve the troubles in the U.S. Treasury, which controls the government's money. Three years later, he began financing a series of giant industrial mergers. These moves would reshape the corporate structure of the American manufacturing business. His first venture, in 1891, was to arrange the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric, which became the main electrical-equipment manufacturing company in the United States. Shipping And Steel Industries Morgan helped pay for the creation of the Federal Steel Company in 1898. He helped combine it with Carnegie Steel Company and other steel companies in 1901. It became the United States Steel Corporation. The merger created the world's first company worth a billion dollars. In 1902, Morgan brought together several of the leading agricultural- equipment manufacturers to form the International Harvester Company. In that same year he organized the International Mercantile Marine (IMM), a combination of transatlantic shipping companies. IMM included the company White Star, which created the Titanic. In April 1912, Morgan had a ticket on the maiden voyage. However, he canceled, reportedly because of an illness. The ship sank with great loss of life. Morgan successfully led the American business community's attempt to avoid a general collapse following the stock market panic of 1907. He headed a group of bankers who helped use government money to save many businesses. No longer focusing on large industrial companies, Morgan concentrated on gaining control of various banks and insurance companies. Morgan created a system of interlocking leadership positions on the boards of companies he had reorganized or influenced. The membership system allowed his banking house to control some of the nation's leading companies. This overwhelming power earned Morgan the occasional distrust of the government and the hostility of reformers and muckrakers. Still, he remained a powerful figure in American capitalism until his death in 1913. Morgan was a great art and book collector, and he donated many works of art to the Metropolitan Museum of Art in New York City. His book collection and the building housing them in New York City became a public library in 1924. Today it is the Morgan Library & Museum. QUESTIONS 1)Which piece of evidence explains the cause of the distrust that the government had for Morgan? 2)Which two sentences taken together provide the BEST evidence to support the idea that Morgan's contribution helped businesses in the U.S.? 3)Which of the following MOST influenced the creation of the world's first company worth a billion dollars? 4)Why was Morgan's involvement with railroad companies helpful to the U.S. economy? 5)Write a short paragraph that explains the central idea of the article. Use at least two details from the article to support your response. .