Morgan

by Jean Strouse

  Pierpont marked this passage in Memie’s Bible. At the beginning of its New Testament he wrote, “Amelia S. Morgan. Died at the Villa St. Georges near Nice France at 8:30 a.m. Monday February 17, 1862. ‘Her end was peace.’ ” In the prayer book he had inscribed to her the day before their wedding, he now added: “ ‘I go to prepare a place for you.’ ”

  Junius wrote as soon as he received his son’s wire. “I cannot tell you how much I am grieved by the sad, sad intelligence conveyed in your telegram.… I have, as you know, taken a gloomy view of our dear Memie’s case, but was wholly unprepared for the sudden termination of it. It is a hard blow for you my Dear Son—but I feel sure you will resign the precious one into her Saviour’s arms without a murmur. He gave her to you and has taken her away.”

  Knowing that Pierpont blamed himself for having taken Memie to Algiers—and for having failed to save her—Junius resumed the next day: “It is not my Dear Son well to go back to second causes in such cases.” Nothing could have made the outcome different. He had just seen Sir Henry Holland, who said he knew in October that Memie’s case was “hopeless,” and her early death therefore a blessing. “We know that our lives and all that we have are in the hands of a kind Heavenly Parent who never afflicts but for our good.”

  Junius took consolation in thinking of “the great comfort to Memie that her Mother was with her during the last weeks of her life.” He did not mention that his own demands had kept her husband from being with her during her last days. He offered to come to Nice at once if he could be “of any service”—an offer his son declined. Pierpont was not ready to resign his wife to her Saviour without a murmur, nor to submit to the Heavenly Parent who never afflicts but for our own good—and he may not just then have felt up to his earthly parent’s moral cheerleading.

  It took nearly three weeks for news of Memie’s death to reach New York, and three more for condolences to return. While they remained in Nice, her husband, mother, and brother had the sad task of reading hopeful letters from home, many addressed to her.

  From the rooms Pierpont had prepared for his bride on 21st Street, his mother joined the chorus of those who urged him to take comfort in Memie’s release from suffering—“We would not call her back for she is with the blessed loved ones who have gone before.” Then in mid-condolence she placed a shopping order: “I wish you could get Sarah & myself some of Bondier’s Gloves Black double buttons—I cannot find a pair my number here—63/4 long fingers—Sarah’s 61/2 short fingers—and what there are, are 1.50 per pair.”

  At the Villa St. Georges, Pierpont, Edward, Mary, and Anna McAfferty packed up their own and Memie’s belongings. Memie’s body lay in a vault at the Church of the Vaudois until Edward took the coffin and all their trunks down to Marseilles and sent them on, with a courier, to New York. The mourners left Nice early on February 26 in the pouring rain. For weeks they traveled slowly through Italy and France, united in grief. Pierpont was twenty-four years old.

  * He carried a letter of introduction from one of President Buchanan’s advisers, the Yankee lawyer Samuel Barlow, to Judah P. Benjamin, the conservative Louisiana senator who was trying to prevent secession, but his diaries do not record that he used it. Junius, thanking Mr. Barlow for the letter, offered a cynical reflection on the struggle over slavery: he hoped his son would not “get taken up for ‘a white man’ in a country where Blacks seem to be thought of so much more importance.”

  † Inaugurations took place in March of the year following a presidential election until 1933. Franklin Delano Roosevelt was the first president to be inaugurated in January.

  ‡ Stevens probably knew Morgan through family connections. His brother, Henry, was an American book dealer in London who worked for George Peabody and Junius Morgan, and their sister was the Sophia Stevens who had thrown Pierpont out of class in Hartford for laughing. In 1854 George Peabody hired Henry Stevens to set up a library for his hometown of South Danvers, Massachusetts. The dealer offered to supply books at either a shilling or a pound per volume. Peabody chose the shilling-a-volume selection. Stevens reported that Peabody often asked him, “How are books today?”—as if their value fluctuated like the price of cotton or shares in the Illinois Central.

  § Scientists did not discover the rod-shaped tubercle bacillus until 1882, and did not find an effective cure until the 1950s.

  PART II

  HEIR APPARENT

  On the whole … [Henry Adams] thought he had done as well as his neighbors. No one could yet guess which of his contemporaries was most likely to play a part in the great world. A shrewd prophet in Wall Street might perhaps have set a mark on Pierpont Morgan, but hardly on the Rockefellers or William C. Whitney or Whitelaw Reid. No one would have picked out William McKinley or John Hay or Mark Hanna for great statesmen. Boston was ignorant of the careers in store for Alex. Agassiz and Henry Higginson. Phillips Brooks was unknown; Henry James was unheard; Howells was new; Richardson and LaFarge were struggling for a start. Out of any score of names and reputations that should reach beyond the century, the thirty-year-olds who were starting in the year 1867 could show none that was so far in advance as to warrant odds in its favor.

  The Education of Henry Adams

  Chapter 7

  QUESTIONS OF CONTROL

  Pierpont planned to stay abroad until April with Mary and Edward Sturges when Junius sent word in March that his presence in New York was “absolutely necessary.” Jim Goodwin seemed about to break down under the strain of business he was trying to handle alone. Pierpont took reluctant leave of his mother-in-law—she would wait until the winter Atlantic calmed down—and promised Jim by mail: “together I think we shall make matters work nicely.” He hoped “constant occupation” would keep his mind from “dwelling on the sad, sad scenes of the past few months.”

  When he reached New York, he moved in with Jim and Frank Goodwin on Irving Place. His mother and sister were still in the house he had rented for himself and Memie on 21st Street, which was just as well: living there that spring would have been too painful a daily reminder of his loss. Photographed in widower’s black shortly after his return, he looks solemn, Byronic, and slightly stunned.

  Memie’s burial service took place in Fairfield on May 3, a bright spring day with magnolias and pear trees in bloom. Pierpont had ordered a pink-marble gravestone in Italy, inscribed “Not Lost But Gone Before.” Juliet and Sarah left for England shortly after the service. “Pierpont took tea here, very sad & desponding,” reported Mary Sturges in mid-May. The next day, “Heard Pierpont sick, went to see him, bad cold and sore throat.” A week later his body was covered with sores. His physician, suspecting smallpox, ordered him quarantined. As the sores began to clear up, the doctor changed the diagnosis to varioloid, a mild form of smallpox. By mid-June Pierpont was back at his office and spending weekends in the country with his in-laws. Probably at Jonathan Sturges’s urging, he joined the Century Association, the group of artists, writers, and patrons that had begun as the Sketch Club.

  At the beginning of September 1862 he formed a partnership at 53 Exchange Place with Jim. Ten years earlier the cousins had conducted mock deals as the fictional Goodwin, Morgan & Co. Now, in an accurate reflection of their relative professional stature, they called the new firm J. Pierpont Morgan & Co. (Jim said later, “I was the Co.”) Their work consisted chiefly of trading government bonds and foreign exchange, and reporting to London on American prices and politics. The war had suspended cotton exports, curtailed iron imports, and led foreign investors to dump American securities. Railroad construction declined from 1,500 miles in 1860 to 574 in 1864. Client defaults and the perils of wartime finance made Junius more cautious than ever; he would handle only reputable accounts and heavily collateralized loans. Peabody & Co.’s stock and bond business, having earned £36,493 profit in 1860, showed £13,910 in losses the following year, and £5,771 more in 1862.

  With the patronage of the federal government and the boost of wartime demand, however, certain kinds
of business were booming in the fall of 1862. Feeding the Union army stimulated Chicago’s meatpacking industry, slaughterhouses, and banks. Textile mills stepped up production to meet military demand, as did makers of boots and shoes. The price of wheat went up. Pierpont reported to London on the “tremendous traffic” and abundant earnings of the Illinois Central, the Erie, and the New York Central railroads, as they ferried troops and supplies, and he characterized stocks after the Union victory at Antietam that September as “rampant.” European investors began returning to the market.

  Pierpont accompanied New York Republican boss Thurlow Weed to Washington in mid-September to see Treasury Secretary Salmon P. Chase about securing the right to issue government bonds. Chase had been raising money by auctioning bonds to small groups of brokers and bankers, but as the cost of the war escalated he needed a larger, more efficient system. Pierpont reported to Junius that his visit proved useless—“Chase was as firm as it was possible to be.” In October the government chose the Philadelphia house of Jay Cooke & Co. to sell its securities on commission. Cooke organized the first mass-market, national bond-sale campaign, pricing some of the issues low enough for ordinary people to buy. By 1864 he had floated over $360 million of government bonds. Peabody & Co. traded heavily in the secondary market for these bonds between 1862 and 1866, chiefly through Pierpont in New York. They did £229,200 (just over $1 million) worth of business in U.S. loans, earning a profit of £16,600 ($83,000).

  The hard work that Pierpont hoped would keep his mind off Memie’s death wore him out. Late in the summer of 1862 he came down with such severe headaches that his friends and doctors urged him to take a vacation. Trying the water cure at Saratoga Springs in September, he found his anxiety at being away “worse than when on the spot.” The problem, he explained to his father in a rare moment of self-examination, lay not in external circumstances: “The wear & tear upon me does not arise from deficiency in help the fault is with myself & myself only—it is my nature & I cannot help it. When I have responsibility laid upon me I cannot throw it upon anyone else however competent the party may be. I am never satisfied until I either do everything myself or personally supervise every thing done even to an entry in the books. This I cannot help—my habit since I have been in business has been so & I cannot learn to do otherwise.” This “habit,” though Pierpont complained about its toll, served him well as he learned about the business of finance. His minute attention to detail and inability to delegate had to do with both his own desire for control and Junius’s exacting surveillance. They also reflected his perfectionism and instinctive assumption of command. Later commentators would disagree as to whether he was a “detail” or a “big picture” man. He was both. In these early years he made himself master of every penny on the ledger and every aspect of every deal he made. As the range of his affairs grew too wide for one man to manage, he would be forced to delegate technicalities to lieutenants—although he complained of finding mistakes in the books, and once said he could sit down at any desk in the office and take up wherever the clerk had left off.

  Pierpont’s own health problems had markedly subsided during his years with Memie. After she died, his troubles returned, and he began to have mysterious “nervous” breakdowns, periodically collapsing with headaches, depressions, and exhaustion. For all his prodigious energy, he felt unable during these episodes to carry the weight of responsibility he had assumed. That the limits to what he could do were set by these troubles paradoxically took a certain kind of control out of his hands. It was no failure of will but his refractory health (always an effective card to play with Junius) that kept him from doing more. “My place I know & feel is at my post,” he told his father in September 1862. “I have no desire to leave it so long as I hold out in strength or ability to attend to its duties.”

  Pierpont went to Fairfield for his wedding anniversary in October to put flowers on Memie’s grave. In private, he copied out poems about love and loss. One, called “Fading,” begins:

  Once a lovely flower grew near me

  And entwined around my heart

  But it withered, and in sadness

  I was doomed from it to part …

  Late that fall he moved into 42 West 21st Street with Jim Goodwin. He had bought furnishings from the young German cabinetmaker and decorator Gustave Herter, who was beginning to adapt European styles of interior design for affluent New York. The Sturgeses came for dinner just before Christmas, to “the sweet little home prepared for our darling child,” mourned Mary. Pierpont had mementos everywhere. “Poor fellow!” his mother-in-law continued: “he cherishes everything belonging to her.”

  Between 1862 and 1865 Abraham Lincoln presided over a consolidation of federal power that would have delighted the ghost of Alexander Hamilton. Free of opposition from the Democratic South, the Republican administration and Congress enacted measures that encouraged economic expansion and transferred political power from the states to the federal government. They gave away huge tracts of public land to facilitate railroad construction, encouraged immigration, passed a homestead act, established a system of land-grant colleges, imposed tariffs to protect Northern industry from foreign competition, levied taxes, issued millions of dollars in paper currency, borrowed millions more by selling government bonds, and created a national system of federally chartered banks answerable to the Treasury.*

  The Morgans would be among the primary beneficiaries of this profound transformation, but like most of their contemporaries, they did not see it coming in the early years of the war.

  Union armies suffered terrible losses in the summer of 1862. Pierpont reported to Junius that fall as the government floundered: “Dissatisfaction with the Administration at Washington continues to increase – distrust as to the capability of the cabinet is very generally felt & a change is loudly clamored for.” Junius attributed the “disasters” of the Northern cause to “the most flagrant incapacity on the part of those in power both in the Army and at Washington.”

  Henry Adams, serving as private secretary to his father, the American minister in London, found English society “demented” and “altogether beside itself” on the subject of the American President. After the Republicans lost quite badly in the 1862 elections, Mary Sturges reported: “All are against the Administration.” An agonized Lincoln told a friend in December: “If there is a worse place than Hell, I am in it.” Not until the spring of 1863 did Americans begin to feel, according to Adams, that “somewhere behind the chaos in Washington, power was taking shape.”

  On January 1, 1863, Lincoln issued the Emancipation Proclamation. In March, Congress passed a Conscription Act requiring able-bodied men aged twenty to forty-five to serve in the Union army. Only a couple of Pierpont Morgan’s letters from 1863 have survived, and in them he says nothing about these events. There was no question of his going to war. Junius considered his son’s presence on Wall Street essential to the conduct of their joint business. Like many of his contemporaries, Pierpont paid a substitute $300 to go in his place. Other draft-age Northerners who did not see military service included Theodore Roosevelt, Sr., John D. Rockefeller, Andrew Carnegie, Elihu Root, Philip Armour, Jay Gould, Jim Fisk, Collis P. Huntington, and Jay Cooke. Dozens of young men in the Morgans’ social vicinity did fight, among them Memie’s brothers Edward and Fred, Oliver Wendell Holmes, Jr., Charles Russell Lowell, Robert Gould Shaw, Thomas Wentworth Higginson, Charles Francis Adams, Jr., and Robertson and Garth Wilkinson James. Yet not all the potential soldiers even in Boston abolitionist families went to war: William and Henry James stayed home; Henry Adams did not fight, but served as secretary to his father, the American minister in London.

  When Republican conscription officers began drawing names for the New York draft in July 1863, the men most likely to be called—predominantly the Democratic Irish poor—went on a rampage. They attacked draft offices, federal buildings, Republican newspaper offices, and abolitionists’ houses. Spotting prosperous-looking men on the street, they
shouted “Down with the rich” and “There goes a $300 man.” Henry Sturges wrote in his diary on July 15: “Fearful and disgraceful riot in New York. Colored people burnt alive [in the Colored] Orphan Asylum.” There is no record of Pierpont’s thoughts on the draft riots or his status as a $300 man.

  Eighteen months after Memie’s death, Pierpont was returning to fuller engagement with life. At the end of July 1863, he organized an expedition with several friends, including Arthur and Henry Sturges and Edward Ketchum, Morris’s son. The party started at West Point, proceeded by train and stagecoach to Lake George in the Adirondacks, and continued mostly by sailboat to Lake Champlain. From Burlington, Vermont, they drove across the state to New Hampshire’s White Mountains. Pierpont swam, sailed, rode, and one day climbed both Cannon Mountain and Mount Lafayette. Another day, he won a race up Mount Washington, beating Henry Sturges by a neck.

  In business he was flourishing—conducting joint-account operations with his father’s firm and, on his own, issuing short-term loans, trading foreign exchange, brokering securities, and financing commodity trades. His share of the net profits at J. P. Morgan & Co. rose from $30,000 in 1862 to $58,000 in 1863. A special account on the firm’s books lists $300 he spent on cigars for himself and his father in 1863—exactly the cost of a substitute soldier.

  His earnings nearly doubled at the height of the war. Others around him fared even better. There were said to be twenty millionaires in America in 1843, and two decades later over a hundred in New York alone.† Junius continued to preach and practice caution, but Pierpont was not listening. In the fall of 1863 he took part in a market manipulation that brought down the paternal wrath.