Morgan

by Jean Strouse

  One of them was his own son. Pierpont had continued to do business with the junior Ketchum after their lucrative corner, advancing money for stock purchases and investing in some of his friend’s ventures. After Edward’s arrest, Wall Street whispered that Dabney, Morgan, like Ketchum Son & Co., would soon be forced to suspend. The loss to Edward Ketchum on the Dabney, Morgan books at the end of 1865 amounted to about $50,000, which Pierpont transferred to his private ledger.

  At the peak of the crisis, Charles Dabney instructed Jim Goodwin: “Nothing will be done to give publicity to our loss by [Ketchum] – it will be much better for us to lose the whole than to stir the matter now, we shall gradually recover public confidence which is absolutely essential, much more than any money we can hope to recover from altering our course.” The firm’s policy should be public silence, and a discreet word in private: “It will be well to caution E.K. not to speak of his debt to us to any one who may call on him.… We must keep still.” They did keep still. Ketchum went to Sing Sing.

  Pierpont in his twenties had come to resemble his stolid, square-jawed mother more than his finer-featured father. His Pierpont heritage seemed to entail nothing but trouble—skin problems, a “nervous” constitution, susceptibility to extreme mood swings—and he was almost completely estranged from his mother’s family, including the eccentric old man to whom he had once been devoted. When Juliet, returning to New York in 1864, invited her father to visit, the Reverend Pierpont complained that he would have to call on her “where she is—at Pierpont Morgan’s,” but “he has never invited me to his house.”

  Trouble with his descendants aside, John Pierpont was having the time of his life in Washington, D.C. He headed a lecture association that brought famous speakers to the capital (including Horace Greeley and Ralph Waldo Emerson), and ran a weekly French study group with another white-bearded government clerk, Walt Whitman. When Whitman managed to get an early proof of Victor Hugo’s Les Miserables, the two poets took turns reading it aloud to the group, trying to translate on their feet. Mr. Pierpont celebrated his eightieth birthday in April 1865, read elegiac poetry on the White House lawn after Lincoln’s assassination, then went to work on a digest of U.S. Supreme Court decisions touching on revenue questions. In August 1866 he died in his sleep.

  In the aftermath of the war, as industrialists began to organize U.S. commercial operations on a vast new national scale, Junius Morgan was building a banking dynasty capable of financing whatever the future might hold. Two of his daughters helped. In June of 1866 Sarah married a banker—George Hale Morgan, the son of banker George Denison Morgan and nephew of former New York Governor (now U.S. Senator) Edwin Denison Morgan. Though also originally from Wales, this family was not related to her own. Sarah’s husband joined Dabney, Morgan & Co. in the fall of 1866. Neither she nor the firm had to change names.d

  Early in 1867 the Morgans’ middle daughter, Mary, married Walter Hayes Burns, a banking partner of Levi P. Morton’s. (Morton had founded a Wall Street firm in 1863, after unpayable Southern debts caused his wholesale business to fail.) The newly wed Mr. and Mrs. Walter Burns settled in London, where he headed the house of Morton, Burns & Co.

  Pierpont’s youngest sister, Juliet—the most troubled of his siblings, and the most like her mother—fell in love with an Ecuadorian named Flores, to her parents’ acute dismay. She eventually gave him up, and though she failed to secure another banker, she did manage to find a husband with the right name—John Brainerd Morgan, an Episcopal minister and the younger brother of Sarah’s husband, George.

  Pierpont was doing his part to extend the Morgan domain. On March 10, 1866—nine months and ten days after her wedding—Fanny gave birth to a girl. Both parents had wanted a son but instantly fell in love with the baby, whom they named Louisa Pierpont after her grandmothers. Charles Dabney, traveling abroad that spring, said he hoped Pierpont would write “when his parental excitement has somewhat subsided.” Junius told Jonathan Sturges that he longed to see his son “in his new relation of Father of which he seems so proud.”

  Pierpont was proud of being a father, and by January 1867 his wife was pregnant again. He loved presiding over a house full of people—children, relatives, guests—the corollary of which was that he hated to be alone. In February, when Fanny took Louisa to visit the Hartford relatives, he came home from work the night they left to find their chef preparing dinner, but “didn’t want to eat alone,” so went out to a neighbor’s, where he dined, played cards till 11:30, then returned to a “dismal” empty house. He ate out or had friends in every night. After serving saddle of mutton and playing cards with guests till 10:00 one evening, he took the men to play billiards at the Union League Club, then returned home, he told Fanny, “thoroughly disgusted with its loneliness.”

  For all his complaints about desertion, he was hardly ever alone. “Important engagements” prevented him from joining his wife in Hartford for the weekend—in the evenings he attended dinners, a musicale, and a ball. On Sunday he went to St. George’s in the morning, dined midday with the Tracys, returned to church in the afternoon, called on Fred Sturges and his wife, Mary, who had just had a boy (“I condoled with Fred on the sex of the new baby”), and stopped at Virginia Osborn’s for tea before calling on the elder Sturgeses and Dabneys. The next morning he had breakfast at the Levi Mortons’, and expected to dine at his club “unless someone takes pity on me.”

  In their first year of marriage, he and Fanny had discovered some distinct incompatibilities. He thrived on the activity and stimulation of the city, and had an inexhaustible appetite for new experience and legions of acquaintance. Fanny liked the country, quiet evenings at home, reading, and intimate talks with old friends. Her husband’s pace was hard on her “nerves,” and from time to time she needed to get away, which he experienced as abandonment.

  He resumed his protests in July, when she visited a sister in Providence: “You don’t know how awful lonely the house seemed without you and Louisa.… I don’t care to have the dose repeated oftener than reasonably. It rained pitchforks all night.… I feel very well but so lonely. Kisses to Louisa ad libitum [as much as you like]. Tell her to say ‘dear Mama.’ ” Two days later he came down with such a severe headache that he could not write or sit up; it faded in the evening but left him weak all the next day. He remonstrated: “It will be a long time before I let you off again for so long a time it is lonely enough.”

  Though he appeared robust as he turned thirty, Pierpont was more anxious than ever about his health. No longer the slim, romantic figure who had returned in mourning from Nice in 1862, he now weighed two hundred pounds, and his girth had joined the list of symptoms he fretted about—headaches, poor digestion, intermittent inertia and “blues.” Both he and Fanny suffered from depression, but where her remedy was retreat, he sought social distraction and the curative waters at health spas.

  The couple did agree on spending summers out of the hot city, and in 1867 they rented a large house at Irvington, high on the east bank of the Hudson. Pierpont commuted to Wall Street by boat, inviting friends up nearly every weekend. His domineering habits were not to everyone’s taste. Fred Sturges brought his wife and son to stay with Fanny for a week in August while he and Pierpont commuted to town. He liked the house, the views, the servants, and his host’s guided tours of neighboring sites and estates, but not the schedule: the household retired every night exactly at ten, “as the bell was to be rung at six, breakfast at seven and boat at eight—which programme was promptly carried out,” Fred told his brother Henry. “After breakfast Pierpont had prayers and at eight minutes of eight we stepped into the wagon for the boat and at a quarter before ten I was in my office.” Every afternoon at four they returned: “It certainly was very delightful all this week to have a cool sail up and down the river instead of dusty cars,” continued Fred, “but I could not stand being tied to run as I had to every day at exactly twenty minutes of four in order to catch Pierpont’s carriage which he has to carry him to the
boat.”

  As soon as the Sturgeses left, Pierpont went to Saratoga Springs to take the waters. Fanny, now eight and a half months pregnant, and Louisa, who had the measles, stayed with the Tracys, who had rented a cottage on the west bank of the Hudson just below West Point, at Highland Falls. Pierpont found fewer friends at the fashionable resort/retreat than he expected—only Delafields, Stuarts, Alsops, Bartletts, Brookses, Griswolds, Phelpses, Blisses, Goodridges, Cornings, and the Reverend Tyng. He stayed at the Clarendon Hotel (“fearfully lonely”), and described the cure to his wife: “Sleep Water Breakfast Bowling Dinner Bowling Supper & Sleep.” The routine worked “like a charm”—he lost three pounds in five days.

  In daily letters to Fanny he worried about her exertions and their daughter’s health, lamenting: “I need not tell you how lonesome how very lonesome it is without you & Louisa. I feel like a ship without a crew or rudder and were it not that I feel that I am deriving benefit from the waters I should scarcely be able to keep myself from joining you at West Point without delay.” With no crew or rudder he was finding ample entertainment: at the Clarendon was a Miss Marshall of Natchez—“the most lovely looking girl in the house,” he told his wife. “… I expect to be very devoted if I can get time aside from bowling.”

  His concern for his health had taken on the status of a duty: to forestall breakdown and nervous collapse, he was obliged to coddle himself. At Saratoga in 1867 it was not free choice—he would of course rather be with the pregnant wife and sick child he clamorously missed—but the benefit he derived from the waters that required him to endure this lonely exile (surrounded by friends). His anxieties about his health were real, even though doctors found nothing organically wrong. Yet his packaging of what he wanted to do in the language of high moral necessity recalls his lecture to Jim Goodwin in 1856 on the duty of choosing a helpmeet wife.

  Many years later, in another context, Junius offered an ironic reflection on this kind of self-assigned motivation: “I have no doubt that there is a satisfaction in doing one’s duty, even if is spelt with a large D,” the elder Morgan told a friend at the end of 1885, “but don’t you think it is a word whose definition can be made to conform to almost anything which one wants to do?”

  If Pierpont perceived a gap between what he said and what he did—between duty and desire, his own “good” reasons and the “real” ones—he never let on. He stayed at Saratoga for two weeks in 1867.

  On September 7, a few days after he returned to Irvington, his wife gave birth to a son. The baby had no name for three weeks. Fanny described Pierpont as happy but not elated the way he had been at Louisa’s arrival—his first child would always be his favorite—and unwilling to name his son after himself, though she was urging him to. Perhaps he was thinking of Morgan family tradition—neither Joseph nor Junius had given his firstborn son his own name. Or perhaps he did not really want to give up his singularity, to see himself as a point on a line of succession. Intently focused on what lay ahead of him, he paid surprisingly little attention to what, or who, would come after. In the abstract, before Louisa was born, he had longed for a son; now that he had one, he was not rejoicing. Yet Fanny won out. They named the boy John Pierpont Morgan, Jr., and called him “Jack.”

  While Pierpont fathered a family, worried about his health, managed Junius’s transatlantic business, and traded for his own firm and its clients in gold, cotton, iron rails, Peruvian guano, foreign exchange, government securities, and commercial paper, the country was engaged in bitter political struggles. Andrew Johnson had squared off against Radical Republicans who wanted the newly powerful federal government to guarantee suffrage and political equality for blacks. According to the historian Eric Foner, the struggle over slavery had convinced Republican reformers that freedom stood “in greater danger of abridgment from local than national authority”—which was “a startling reversal of the founding fathers’ belief, enshrined in the Bill of Rights, that centralized power posed the major threat to individual liberties.”

  Johnson was ideologically closer to the founders than to Reconstructionist reformers. He turned out to be an obtuse, impolitic states-rightist who tried to conciliate the white South by granting amnesty to former Confederates; he vetoed measures to establish a Freedmen’s Bureau and a Civil Rights Act, and opposed the Fourteenth Amendment, which would extend full citizenship and voting rights to blacks. The Radicals were trying to impeach the President in December 1867 when Morgan went to Washington.

  Far more concerned with economic stability than the politics of Reconstruction, Morgan wanted the government to promote sound currency and industrial productivity, and thought a disruptive impeachment the last thing the country needed as it recovered from war. He listened to the debates in Congress, and cheered the Radicals’ defeat, “happily squelched by a vote of 2 to 1.”e He also attended debates on the nation’s finances.

  Immediately after the war, with inflation rampant and a $2.8 billion national debt, the public had favored a return to the prewar gold standard, which meant that the government had either to eliminate fiat money entirely or to increase the value of all paper currency (greenbacks and banknotes) until it was convertible into gold, dollar for dollar. In April 1866 Congress authorized Treasury Secretary Hugh McCulloch to begin retiring greenbacks—$10 million in the six months following passage of the law, and $4 million a month after that—but popular sentiment soon changed. The economy was contracting sharply after the wartime boom. It reached its low point in December 1867, just as Morgan visited Washington. In that context, tightening the money supply seemed cruel.f

  For farmers, small merchants, and working people, the availability of “easy” paper money is good. It stimulates production and creates jobs. And for borrowers of all kinds, it makes debts easier to repay. A farmer can take out a loan for $1,000 in the spring, and pay it back after his harvest with dollars worth less than those he borrowed. The dollars are worth less because “easy” money leads to inflation: with plenty of cash chasing relatively few goods, prices go up and the value of a dollar goes down.

  Lenders of money hate inflation for exactly the reason borrowers like it: they do not want their loans repaid in depreciated currency. Roughly $486 million in long-term U.S. federal debt was held abroad in 1867. The foreigners who owned the bonds had a potent weapon if the government let the value of its legal tender decline—they could sell the bonds and refuse to buy more, which would seriously debilitate American capital markets. The Treasury and the private bankers who saw themselves as guardians of those markets wanted the country back on the gold standard in order to maintain the flow of foreign money to the United States.

  To international bankers and traders, a gold dollar was far more than a medium of exchange. Gold stood as the ultimate guarantor of value, a universally sanctioned measure that provided people making economic decisions with reliable information about what things were worth. In an era of wild financial instability, it was “the rule of law applied to money”—a disciplinary force that could regulate currency markets, forestall inflation, keep purchasing power relatively constant, and assure America’s trading partners that their financial commitments would hold steady over time: the government would repay its debts in full. The gold standard also promised to keep control over the U.S. economy in the hands of men who had these concerns in mind.

  This new sectional conflict, with eastern bankers and foreign traders taking one view of fundamental monetary questions and western farmer/debtors another, would divide the United States for the next three decades.

  Morgan ardently supported government action to restore the gold standard, and he denounced do-nothing politicians who hoped that time and economic growth would bring the nation back to “sound” money. From Washington in 1867 he told Fanny that Republican Representative Justin Morrill of Vermont, though sympathetic to the hard-currency view, “seemed to be of the opinion that Congress could safely take the position regarding the laws of finance and political economy that the ancient
Emperor did when he thought by standing on the shore he could command the waves to advance or recede at his pleasure. My own impression is that in many of his predictions Mr. Morrill will find himself equally disappointed.” It was Morgan who was disappointed when, early in 1868, Congress rescinded authority for the Treasury’s contraction.

  That election-year summer, the Republicans nominated Union war hero Ulysses S. Grant, whose acceptability to the Radicals made Morgan uneasy. When the Democrats turned to former New York Governor Horatio Seymour, Morgan pronounced himself disgusted. He had hoped for a Democrat who, “though he might not be elected, would still create some anxiety in the minds of the rabid radicals now carrying everything with such a high hand.” The fact that Seymour had addressed the violent mob during New York’s 1863 draft riots as “my friends” should have been enough to “sink him forever,” Morgan told his wife—“for Seymour personally I have the most supreme contempt.” Secretary of State Seward thought the Democrats “could have nominated no candidate who would have taken away fewer Republican votes.”

  The Republicans, now unmistakably the party of the new industrial interests, pledged themselves in 1868 to protectionism and the gold standard, while the Democrats tried to resuscitate the South and attract the small businessmen, farmers, and workers who had been left out of the Republican coalition.

  Though Morgan would play a major role in the long-term fight against “easy” money, his anxieties about his health in 1868 took precedence over economic politics. Having been so eager for a career in finance as a boy, and so impatient to get started as a young man, he now seemed conflicted over what he actually wanted to do.

  Attributing his “nervous” breakdowns to overwork, he took off the entire summer of 1868 and went to Europe—alone. His wife’s parents again rented a cottage on the Hudson at Highland Falls. He installed Fanny and the children in a house on adjoining property called Stonihurst. When he reached London, he consulted Sir Henry Holland, who had seen Memie in 1861, and who recommended the hot springs at Carlsbad for Pierpont’s gastrointestinal trouble. In Paris, worried about his lungs, he called on one of the pulmonary specialists who had diagnosed Memie’s TB—was he experiencing her symptoms in an unconscious attempt to bring her back?—before proceeding with his parents and sister Juliet to Carlsbad.