Morgan

by Jean Strouse

  Wall Street, noting the warmth of feeling between the Secretary and 23 Wall Street, speculated that Bristow would leave the government to join Drexel, Morgan. When Bristow did resign—forced out by Grant that June—it was not to join the Morgan bank but to make a bid for the Republican presidential nomination. He had the support of liberal reformers, but the combined opposition of Grant and the party bosses shut him out.

  Pierpont had been relatively free of depression in his new partnership, but in the spring of 1875 his mood once again turned blue. Fighting off a head cold in early March, he told Junius he felt “as if I could bite 10-penny nails with pleasure … I feel way down & would sell myself for [a] small sum.”

  As before, feeling “way down” coincided with difficulties in his office—this time, over Drexel’s younger brother, Joseph. Pierpont was fed up with this partner, who had resisted calling in their loans before the 1873 panic. “He is very sensitive,” the junior Morgan complained to the senior, “and I have to study his whims constantly to avoid any questions.” He did not hide his dislike, and other people noticed: a colleague described him that spring as a “rough, uncouth fellow, continually quarreling with [Joseph] Drexel in the office.”

  To ease the tension, Drexel partner J. Hood Wright came up from Philadelphia. Pierpont found Wright the exact opposite of Joseph—competent, quick, accurate, and “a capital negotiator”—and would have liked to continue with him alone but did not see how he could jettison Tony Drexel’s brother. He felt as trapped as he had at Dabney, Morgan five years before. And as he had then, he decided “the best thing would be for me to give up myself—I don’t feel good for much anyway.”

  Joseph Drexel himself decided to retire in the fall of 1875: he wasn’t getting along with his brothers or Morgan, and cannot have liked this situation any more than they did. Still, Pierpont felt “strongly disposed to give up.” Since he tended to see things as black or white, discord with one partner undermined everything else, and the plunge in his mood after three internally tranquil years prompted thoughts of drastic change.

  He did not have the single-minded absorption in his work that other barons of the Gilded Age did. Carnegie didn’t even pause to get married until 1887, when he was fifty-two (after his ambitious, possessive mother died). Rockefeller, the son of a con man from western New York State, had started out with none of Morgan’s sense of patrician entitlement; everything about the founder of Standard Oil—his thin straight line of a mouth, ascetic habits, Baptist piety, hard bargains—spelled diligence and thrift. The only time a colleague ever saw him enthusiastic was when Rockefeller learned that one of his buyers had bought a cargo of oil far below market price: “He bounded from his chair with a shout of joy, danced up and down, hugged me, threw up his hat, acted so like a madman that I have never forgotten it.”

  Living well mattered to Morgan as much as doing well. He supervised the plantings at Cragston as carefully as he did the wording of government bonds: one Sunday in the fall of 1875 he proudly cut 278 of his own roses, and later stipulated while ordering new bushes from the head of a British nursery that he wanted no Standards unless they had “extra stout stems and 2–3 year old heads and roots,” the stems not less than “an inch to 1½″ in diameter,” and “half, not full Standards.” In his late thirties he was drawn to many things besides banking—travel, society, the Episcopal Church, history, art—although as always it was his delicate health, not deliberate choice, that dictated respite.

  Disposed to “give up” in September 1875, he deferred to his father: the decision “must depend in a great measure on what your plans may be for next year.” It can hardly have surprised him that those plans did not include the demise of Drexel, Morgan. Junius instructed his son to find a new partner.

  Pierpont canvassed the field and found it wanting: the reputable figures on Wall Street seemed dull, the disreputable a dime a dozen. To Junius he complained about how few businessmen seemed “unexceptionable in character, ability, and experience.… The longer I live [he was all of thirty-eight] the more apparent becomes to me the absence of brains—particularly evenly balanced brains.” Still, he did find a new partner, an Italian-born international shipping merchant named Egisto P. Fabbri, who had done business with Junius for years.

  Fabbri was an unusual choice. When Junius raised questions about working with a foreigner, Pierpont pointed out that their new colleague was a naturalized American, the Drexels Austrian, and Wright a Scot. The house of Morgan would have a blue-blood Yankee reputation for the next hundred years, but Pierpont’s surprisingly meritocratic instincts did not confine him to the Anglo-Saxon Protestant American elite. Fabbri joined Drexel, Morgan on January 1, 1876—he was just then sequestered on the jury that sent “Boss” Tweed to jail—and took to banking, Pierpont reported, “like a duck to water.”§

  Pierpont’s assessment of the “absence of brains” on Wall Street did not endear him to colleagues, and those who did not know him well continued to be put off by his lofty manner. Yet attentive observers might have seen that he was surrounding himself with men of integrity and professional skill. In choosing to work with Tony Drexel, Benjamin Bristow, J. Hood Wright, and Egisto Fabbri—and not with Charles Dabney, George Morgan, Jim Goodwin, or Joseph Drexel—he strengthened his position for the future.

  Junius remained in command. Late in 1875, on the other side of the Atlantic, he decided that his son was spreading himself too thin, and instructed him to resign from several corporate boards. Pierpont complied, but protested that he had refused ten directorships for every one he accepted, and never took one he did not think “advantageous” to their firm. He sat on the boards of the National Bank of Commerce, the Central Trust Company, the Delaware and Hudson Canal Company (to which he had leased the Albany & Susquehanna), the Pullman Palace Car Company, Carnegie’s Illinois and St. Louis Bridge, and several railroads. Some of these commitments took considerable time, others less (“although I attend to the duties—I will never be a dead head”), and he justified the work on grounds to which his father could hardly object, as “of great service to our business beside being associated with gentlemen of recognized position and influence.” He joined more boards over the next decade. What seemed to the elder Morgan a waste of time became in the younger’s hands a crucial instrument of financial oversight and control.

  Persuaded for the second time not to retire, Pierpont took his family to Europe for the summer of 1876 as the United States celebrated its centennial. Six Morgans sailed from New York in June, and on arriving in England went straight to Dover House, an estate Junius was leasing in rural Roehampton (he bought it two years later). Seven miles from London—twenty-five minutes by carriage from Princes Gate—Dover House stood on the ridge of a hill overlooking Wimbledon Common and Putney Heath. The New Yorkers drove up a winding carriage road from Putney Park Lane, through wide stone entrance gates and handsome old trees and lawns, to the columned porticoes of a large Regency villa. Junius showed them through its octagonal entrance hall, glassed-in conservatory, skylighted staircase, sixteen bed and dressing rooms, two kitchens, and separate cellars for coal, beer, and wine. Outside, he had stables, flower gardens, a dairy, and a lawn-tennis court; he put in strawberry and asparagus beds, and greenhouses for orchids, peaches, melons, and figs.

  Junius at sixty-three was aging well. He had a full head of white hair, and his air of wise distinction seemed clarified by time. Still vigorous and trim, he rode daily, and challenged his sons-in-law at tennis. (Pierpont now avoided all exercise more vigorous than walking.) The years had been less kind to Juliet, who had withdrawn further than ever into invalidism and complaint. She no longer traveled, and rarely left her room. Dover House reflected her presence not at all.

  It did reflect Junius’s interest in art—he had begun buying landscape paintings and portraits. Luigi Palma di Cesnola, appointed director of New York’s Metropolitan Museum in 1879, later described Junius as a “liberal patron” who had “no pretensions to making a picture
gallery, but bought many paintings simply to decorate his London house and his beautiful country seat.” In the spring of 1876, shortly before Pierpont’s family arrived, a spectacular theft deprived Junius of a portrait he was about to buy—of Georgiana, Duchess of Devonshire, by Thomas Gainsborough.‖

  Georgiana had posed for Gainsborough in a white dress with a blue silk petticoat and sash, masses of elaborate curls, and a huge plumed hat. Half pouting, half smiling, she regards the viewer with a coy combination of innocence and surmise, one hand holding a delicate pink rosebud, the other a full-blown rose. The dealer William Agnew bought the portrait from Christie, Manson, and Woods in May 1876 for a little over £10,000 ($51,540)—the highest price yet paid for a picture at auction—and put it on display at his Bond Street gallery. Junius contracted to buy it for an undisclosed sum, estimated by outsiders at £14,000 to £15,000.a

  Crowds lining up to see the Duchess attracted the attention of an American thief named Adam Worth. A German Jew who emigrated to Boston as a child, Worth had made a distinguished career of crimes against property, never people. In 1869 he stole $1 million from a Boston bank, then moved to Europe calling himself Henry J. Raymond, the just-deceased founder of The New York Times. At the time of Agnew’s Duchess exhibition, he needed something to ransom his less-talented brother from Newgate Prison, and decided the painting would be perfect. Late one night he climbed through a gallery window, cut Georgiana out of her frame, and escaped—a coup that captured headlines on both sides of the Atlantic. Agnew’s offered a £1,000 reward, but before Worth opened negotiations with Scotland Yard his brother was released on a technicality, which left Adam with a world-famous white elephant, and Junius Morgan bereft.

  Worth eventually smuggled the portrait to the United States in the false bottom of a trunk. For the next twenty-five years he corresponded with Agnew’s, partly through the personal columns of the London Times, claiming that his heist had made the painting even more valuable than it was in May of 1876. He demanded £15,000 for Georgiana, and referred, in an odd version of the Pygmalion story, to their “elopement.” Junius never saw his lost Duchess again.

  The younger Morgans stayed at Dover House for the month of July 1876. Pierpont went to London with Junius for meetings and dinners—saving the menu (all in French) from an American centennial celebration at the Westminster Palace Hotel on July 4—and watched the boat races at Henley. He discussed business with two new partners Junius had imported from Boston, Jacob C. Rogers and S. Endicott Peabody, a distant relative of George. With Fanny he spent a weekend in Kent at the country house of Henry Riversdale Grenfell, an MP and a director of the Bank of England, and another nearby in Seven Oaks with the Peabodys. Touring Kent, the Morgans visited Sir Philip Sidney’s Penshurst, Lord Sackville’s Knole Park, and “another beautiful place belonging to the inventor of some hair-dye,” reported Fanny.

  Alone, Pierpont went to Paris for a few days on business, reporting to his wife in a buoyant mood: “The King of Greece & myself arrived safely at Hotel Bristol this morning. He took the swell apartments au premier – I ‘au troisieme’ – at same time I had rather be myself than the King.” Fanny had opposed this separation. He urged her to “Keep good courage – it won’t last always and you will have the satisfaction of doing your duty & you know I love you dearly & am with you always.” Finally, after eleven years of marriage, he spelled her name with a y.

  She cheered up when they took the children to Scotland in August and she had her husband more to herself. “After dinner P. & I walked off over the bridge … home before dark,” she wrote in her diary, and “Pierpont and I walked off a little way down the river and came back for a quiet evening in our room.” Pierpont (who could take only so much peace and quiet) went back to London on business after a week.

  Tony Drexel was in Washington that August negotiating for a new government loan. The leading contender this time was Joseph Seligman, a close friend of and financial adviser to President Grant. Seligman had emigrated from Bavaria to the United States in 1837, at nineteen. By 1862, when he and his brothers started the New York banking firm of J. & W. Seligman & Co., they had built a merchandising empire worth nearly $1 million. Their German-Jewish bank with offices in London and Frankfurt had sold U.S. bonds in Germany during the Civil War, and in the summer of 1876 former Treasury Secretary Bristow warned Drexel in “strict secrecy” that Seligman would have the “inside track” on the refundings as long as Grant remained in office. At Bristow’s urging, Drexel went with Seligman in July to meet with the President and his new Treasury Secretary, Lot Morrill.

  Election-year politics loomed over these negotiations. Both parties were so mired in corruption that they had to promise reform. The Republicans rejected House Speaker James Blaine, whose hands were deep in the railroad tills, and settled on the pallid but respectable Rutherford Hayes, a hard-money conservative and three-term governor of Ohio—Henry Adams called him “a third-rate nonentity.”b The Democrats countered with New York’s wealthy Governor Tilden, also a sound-money man, who had helped break up the Tammany Hall ring of “Boss” Tweed. With his commitment to gold and years of experience as a railroad attorney, Tilden had the support of prominent Wall Street Democrats, including the Rothschilds’ American agent, August Belmont.

  Belmont, as former chairman of the Democratic National Committee, had attacked the Republicans at his party’s convention in June, and as a result Seligman and Grant wanted to cut the Rothschilds out of the next syndicate. Tony Drexel conferred from Washington by cable with Junius and Pierpont in London, while Fabbri in New York reported “very great discontent” with the administration: Grant had been acting “injudiciously, if not recklessly, removing from mere personal motives men of excellent standing & record” (among them, Bristow), and causing trouble for the Republicans “at a juncture when unity & concentration of forces are of vital importance.” The politically astute Fabbri was not sanguine about the outcome of the election, and warned that if the Democrats won, Belmont would be a useful ally. In any case, given the Rothschilds’ powerful international position, “it would be a mistake to ignore” them.

  Day after day, Pierpont postponed his return to Scotland. Finally in late August the bankers and the Treasury agreed to terms for a $200 million 4½ percent loan, with Rothschilds in the lead.c While Seligman had started out with an “inside track,” the Drexel, Morgan group had pulled even. The loan sold quickly in London and New York.

  When Pierpont rejoined his wife and children on August 29, he brought startling news: they were going to stay abroad all winter. His American partners were managing well enough in his absence that he could take another full year’s leave.

  This radical change of plans cannot have been easy for a large family that had planned and packed for a summer. Louisa, traveling with her father in Europe years later during the worst depression of his life, reflected to Fanny that his nervous anxieties and black despair were “just such as you were meeting during those years that you spent over here, only worse!” The Morgans spent the autumn of 1876 in Paris.

  In the United States, the Democrats were playing up the specter of Grant-era corruption and straddling the fence on finance—they had paired Tilden with an easy-money vice presidential candidate on an inflationist platform—and seemed likely to win. Drexel, Morgan contributed $5,000 to Hayes’s struggling campaign in September, cabling its London partners: “Such contributions most advantageous for the future Syndicate business and facilities,” and urging London to contribute as well, since “Defeat means inflation.” Junius doubted the wisdom of this policy, “looking our position” as foreign bankers interested in U.S. government finance, but agreed to subscribe $5,000 through Drexel, Morgan “for the purpose mentioned. JSMCo’s name must not appear.” In November neither candidate earned enough electoral votes to win, though Tilden got 51 percent of the popular vote. With each side claiming victory in several disputed southern states—and each accusing the other of fraud—Congress appointed a commission t
o determine the outcome. This group awarded the victory to Hayes after a long, bitter fight, two days before the inauguration.

  From Paris in December the Morgan family went on to Egypt. They stayed at Cairo’s palatial New Hotel, then took a Cook’s steamer, the Beni Souef, up the Nile. Pierpont had no interest in roughing it or going native. His party traveled in regal style with a dragoman (interpeter/guide), a French physician, several Egyptian servants, a nurse, a maid, a French waiter, their regular courier, Cesar, and Fanny’s cousin Mary Huntington. On the Nile they had hot baths, western beds, French cuisine, and Sunday religious services conducted by Pierpont. Just below Sohag they peered into a primitive mud hut—“Oh!” exclaimed Fanny in her journal. In the evenings the doctor taught Pierpont to play piquet. One night the travelers entertained the American consul and the governor general of the district on the Beni Souef. “Though the talk had to pass through the dragoman, the dinner was a success,” Fanny wrote. “They were enchanted with the children’s collection of Scotch views, and my family pictures.”

  The next day the entourage took a picnic to Karnak and posed for a photograph against monumental columns of stone—servants in turbans and robes, ladies in gloves, jackets, and heavy skirts, with hats and parasols for shade. Jack and his father wore three-piece knicker suits, starched wing collars, pith helmets, sturdy boots, and bow ties. Leaning on a walking stick, Pierpont looks as though he is about to lead an expedition into the desert for the Royal Geographical Society.

  Instead, he led his family on to Aswan and Philae (where they watched Nubians shoot the Cataract on logs), then back downriver to Cairo: he bought jewelry, scarabs, and rugs, and attended a production of Aïda. His party spent the rest of the winter in Rome, then met up with the entire Morgan clan in Paris at the Hôtel Bristol. They celebrated Junius’s sixty-fourth birthday on April 14 at the Café Anglais on the Boulevard des Italiens, and Pierpont’s fortieth at the Bristol three days later.