Morgan: American Financier

Money and Trust Pierpont Morgan's arrival took the quiet chamber by surprise. It was 2:00 p.m. on a mild Wednesday in December 1912, and the congressional committee did not expect its star witness until the following day. Politicians, lawyers, clerks, reporters, and the casual visitors who had come to watch these proceedings on Capitol Hill stopped what they were doing. All eyes followed the seventy-five-year-old banker and his party as they filed slowly toward seats near the center of the hall. Morgan's matronly daughter, Louisa, stayed close to his side. His son, J. P. Morgan, Jr., walked a step behind. Next came two young partners from Morgan's Wall Street bank--Thomas W. Lamont and Henry P. Davison, with their wives--and a couple of lawyers. From a distance, the two J. P. Morgans looked very much alike. Each stood six feet tall, weighed over two hundred pounds, carried a velvet-collared Chesterfield topcoat, and walked with a tapered mahogany cane. People standing nearby could see the same broad planes in both faces, but the son's hair was dark and his features trim, while the father wore a drooping, grizzled mustache, what hair he still had was white, and his overgrown eyebrows arched up like wide-angled Gothic vaults. It was hard not to stare at the elder Morgan because of the rhinophyma--excess growth of sebaceous tissue--that deformed his nose. No one stared for long. Edward Steichen, who had taken the old man's photograph a few years earlier, said that meeting his gaze was like looking into the lights of an oncoming express train. Once the New Yorkers had found seats, the afternoon's witness--a statistician named Philip Scudder--resumed his testimony, and Mr. Morgan heard his name mentioned several times. Mr. Scudder was describing, with the help of tables, charts, and diagrams, how eighteen financial institutions effectively controlled aggregate capital resources of over $25 billion--comparable to two thirds of the 1912 gross national product. There is no precise way to measure the value of a 1912 dollar nearly a century later, but using a rough equivalent to the consumer price index and adjusting for inflation, $25 billion from 1912 would be worth about $375 billion in the 1990s. A more revealing comparison comes from the percentage of gross national product: two thirds of the 1998 GNP would be about $5 trillion. For months in 1912 this House Banking and Currency subcommittee, headed by Louisiana Representative Arsene Pujo, had been trying to establish that a "money trust" ruled over America's major corporations, railroads, insurance companies, securities markets, and banks. The investigation served as climax to more than two decades of intense popular antagonism to "big money" interests--an antagonism that traced back to the founding of the American colonies. And now here under subpoena was the dominant figure behind all the recent financial consolidations, "the Napoleon of Wall Street." Morgan by 1912 could not cross the street, much less the Atlantic, without arousing speculation in the stock market and the press. He managed to enter the Pujo Committee hearing room with minimal fanfare on Wednesday, December 18, because of a schedule change. The committee's counsel, Samuel Untermyer, had telephoned the Morgan bank on Tuesday morning to say that he would not be ready to examine the financier on Wednesday as originally planned, but would start on Thursday, December 19, instead. Morgan took a private train to Washington on Tuesday anyway, bringing with him an imposing array of counsel that included Joseph Hodges Choate, one of the country's leading corporate lawyers, a former U.S. ambassador to Britain's Court of St. James, and past president of the Bar Association of the City of New York; former Senator John Coit Spooner, once Wisconsin's preeminent railroad attorney; Richard V. Lindabury, who was defending the Morgan-organized U.S. SteelStrouse, Jean is the author of 'Morgan: American Financier', published 1999 under ISBN 9780679462750 and ISBN 0679462759.