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he would have won eminence. Of course, he became a man of great wealth. Yet his personal fortune was never as great as the fortunes of several other Americans. He did not care for money merely to accumulate it; and he always exerted a power in the financial and industrial world far out of proportion to his own fortune. He persuaded men; he compelled men; he led men; he dominated men. There were several times in our financial history when, by his personal influence, he prevented a panic. There were times when he threw his great influence to the patriotic service of the Government. For he was both a constructive and a patriotic man.

II

He was born in Hartford in 1837. His father was a merchant at that time, but a few years later he became a partner of Mr. George Peabody and established a banking house in London under the name of J. S. Morgan & Co. It was as a result of this move that J. P. Morgan finished his education in Germany. After a few years of clerical work in the banking business, he helped to organize a small and unimportant Wall Street house under the name of Dabney, Morgan & Co., founded in Civil War times. Eight years later, he made his first public appearance as a financier and banker of importance. It is characteristic perhaps that this first appearance was in the nature of a campaign against Gould and Fisk, who were exploiting for their own purposes a small and unimportant railroad called the Albany & Susquehanna. Under the leadership of Mr. Morgan, this railroad was rescued from the spoilers and sold to the Delaware & Hudson, where it still remains. That episode is said to have been the reason why the powerful banking house of Drexel & Company in Philadelphia sought an alliance with Mr. Morgan and made him. head of the New York house of Drexel, Morgan & Co.

The character of the house seems never to have varied. It was founded at the end of an epoch in which the habit of finance was to plunder and destroy, for the personal aggrandisement of the leaders of the financial world. The Morgan firm

had the opposite policy. It never desired to be known as a leader of speculative finance. It always denied strongly that it made or unmade markets. It drew a sharp line between the constructive creditcreating facilities of a banking house and the purely mercenary profit-seeking policies of a brokerage house. It announced its willingness at all times to enter into and carry through to completion any great constructive plan of finance for the benefit of the Government, city, corporation, or individual, if that plan and policy demanded simply the use of banking facilities.

Thus, early in its career, the house undertook the task of selling in Europe a very large block of stock for the New York Central Railroad, at a time when American markets could not have absorbed the stock. This was probably one of the most important railroad transactions ever carried on by Mr. Morgan both because it demonstrated the banking ability of his house and because it established him definitely as the fiscal agent of the Vanderbilt system.

Similarly, in the period between 1880 and 1890, Mr. Morgan became the prime agent in negotiations between the railroads. which at that time were engaged in destructive competition. He was the father of the idea of the "gentlemen's agreement," whereby railroads which had been in the habit of fighting pitched battles amongst themselves for traffic agreed to maintain rates and to abstain, so far as possible, from attempting to cripple or destroy their rivals.

In 1893, the activities of the Morgan house touched Government activities. In that year, the treasury of the United States was practically exhausted, on account of withdrawals of gold for domestic purposes and for shipment. A syndicate in which Mr. Morgan coöperated with the American representatives of the Rothschilds stepped in and offered to supply to the Government about $65,000,000 in gold, and to take in exchange about $62,000,000 of Government bonds. In two months the export of gold was stopped by the operations of this syndicate and by the end of four months free gold in the treasury had reached the point of safety.

in the next year. operations brought Mr. Morgan directly in contact with and made him a part of the Government finances.

A somewhat similar episode took place These two syndicate These two syndicate

III

In the seven or eight years following 1893 the constructive genius of Mr. Morgan was seen at its best. When great railroads like the Atchison, the Northern Pacific, the Erie, the Southern Railway, the Union Pacific, the Reading, and others of their type, fell into bankruptcy or ruin as the result of the great depression of 1893, it came to be the habit of all syndicates and protective committees to turn to Mr. Morgan. As the skies began to clear he carried through the reorganizations of all these great systems with the exception of the Union Pacific. His power and prestige grew year by year, and he seemed to be able to command unlimited amounts of cash and unlimited supplies of credit both at home and abroad. While other bankers wrestled with one or two systems, the Morgan house went forward with the reorganizations of half a dozen such systems at one time. It has often been pointed out that in these reorganizations a plentiful supply of water remained in the capital of the new companies, but the fact also remains that almost without exception these reorganizations have weathered the storms that have since intervened, and still remain solvent, if not powerful, corporations.

Success in the reorganization of these fallen railroads urged Mr. Morgan forward to other accomplishments. In the McKinley Presidency, he became known as an organizer of great industrial enterprises; and the climax of his career as a promoter and creator of corporations was reached when, in 1899, he gathered together a group of competing steel companies and created and floated successfully the United States Steel Corporation, which remains to this day the largest corporation in the United States, if not in the world. He followed this success by the flotation of the securities of the International Harvester Company, the International Mercantile Marine, the North

American Company, and half a dozen less important enterprises of an industrial and public utility character.

The power of the Morgan house seemed to suffer a temporary eclipse in 1903 with the apparent collapse of the United States Steel Corporation, the International Mercantile Marine, and many other merger companies. When the Steel Corporation passed the dividends on its common stock and this stock dropped below $10 a share, many people felt that the end of J. P. Morgan & Co. was not far off. The outcome proved the weakness of this theory. The temporary eclipse of Mr. Morgan, however, brought to the front, as a leading financier, the late E. H. Harriman. Mr. Harriman had confined his efforts largely to the building up of a railroad empire and the creation of a great banking power. In a battle in 1901 between Mr. Morgan and Mr. Hill on one side and Mr. Harriman on the other, the Hill-Morgan forces. had retained control of the Northern Pacific, but in order that this end might be accomplished the financial world was. plunged into a brief but spectacular and dangerous panic. The battle was probably a drawn battle; but out of it Mr. Harriman emerged much bigger than he had been before, and his growth from that time to his death in 1909 was one of the marvelous chapters in the annals of American business history.

The recovery of Mr. Morgan from the boom period of 1903 to 1907 was as spectacular as his eclipse had been. The great expansion era culminated in a crash in the panic of 1907, when the credit facilities of the Nation broke down under the great burden of expansion and under the action of the Government under Mr. Roosevelt. It seemed at that time as though, for lack of a central controlling force, the banks of the United States were trying to tear one another down and were likely to bring the whole financial world into ruin. At that moment, when all men seemed about to start a scramble for their own safety without regard to the public welfare, Mr. Morgan came to the front, as he had come in 1893 and on many other lesser occasions, and assumed the financial leadership of the country.

At his office and library, he conferred day and night with the heads of all the banks, with the greatest private capitalists in the country, with the officials of the Government responsible for finance; and he personally made the policies, and put them into execution, which arrested the money crisis of 1907 and gave the business world a chance to get out of its troubles by a slow, if painful, process of liquidation of its resources.

IV

It has often been said that this episode was the crown of Mr. Morgan's career; and perhaps he will be remembered more for this than for any other of his accomplishments. However that may be, it is agreed by all that no other man at that time could have assumed the financial leadership of the country as Mr. Morgan assumed it.

That panic made a policy which has been followed by the house of Morgan from that day to this. It seems to have shown a necessity for concentrated leadership of the banking world. Recognizing the fact that Mr. Morgan personally could not live forever, and that no other single man seemed likely to be able to fill his place, the Morgan house set to work so to concentrate the banking power of New York City that it would act as a unit in any great emergency, or on any great measure that might confront it. To that end, half a dozen of the largest banks and trust companies in the United States were brought either directly under the control of J. P. Morgan & Co., or into such close affiliation with that firm that they would undoubtedly act as a unit in any such emergency or task.

Thus was created that concentrated money power which has come to be popularly known as a money trust. It is hardly probable that it will be able to maintain itself hereafter in face of the loss of its leader and its presiding genius. and in the face of a public clearly hostile to it. Be that as it may, the fact remains that here, without the usual corporate form and purely by virtue of his power, his wealth, and his integrity, Mr. Morgan created an aggregation of banking power

unequaled in the history of this country, though paralleled, possibly, in other lands.

No other man in our financial history has left behind him so many tangible evidences of his creative power, or so many methods closely interwoven with the business life of a great nation. His death will probably lead to no sudden readjustment or disruption of any of the institutions or public functions with which he was connected. Yet the man is dead; and his power and personality in the business world cannot be passed down to syndicates, to firms, or to corporations. Therefore, the business world will suffer a great change.

The passing away of such leaders as Mr. Harriman and Mr. Morgan marks the end of an epoch; and the next era in American business life will be an era in which syndicates and organizations will be the most powerful agencies, and they will come under public control to a degree that would be simply incomprehensible to a man like Mr. Morgan.

V

The

For quite a time, Mr. Morgan had been practically a retired leader. He had taken little active part in the many activities. and functions of the banking house which bears his name. Nevertheless, he remained to his death the undoubted leader of American business, so far as it is expressed in and represented by the operations of banking and finance. confidence of the whole business community in the firm and in the great banks and trust companies which he had piled up around him since the panic of 1907 was based, to a striking extent, upon the confidence of that community in the integrity, courage, and ability of Mr. Morgan himself.

The continuance of that confidence depends hereafter not upon the power and prestige of a man but upon the acts and continuous policies of a firm and of a group of banks and bankers who have hitherto been held together and made one, as it were, by the name and association of Mr. Morgan. There is little doubt. that there will be in the financial community a shifting and moving about of

various men and various interests, such as followed the removal of Mr. Harriman from the railroad world. There may be, and there probably will be, personal ambitions developed within the Morgan groups which may find themselves too much hampered and restricted by the community of interest in which they dwell and which may seek new alliances or try to carve out individual destinies for themselves to the eventual disruption of their own power.

In spite of the constructive work and the masterful leadership of Mr. Morgan and of his great deeds in the era that we are now passing out of, a revision of the currency and banking laws, if a wise revision be made, will prevent any other such career, even if another such strong personality were to arise. The possession of such great power or the possibility of its possession does not fit into the American scheme of life or business. Mr. Morgan's strict integrity, by the financial code of his time, and the confidence that this integrity inspired brought finance a very, very long way forward and upward from the era of Jay Gould. But the concentration of credit which was in some respects a fortunate result of his integrity, under our present bad financial laws, would in itself again be improper and immoral. Thus ends a financial dynasty and an economic epoch.

TO END FLOODS

HE public has already begun to pay millions of dollars to repair railroad bridges and tracks and telephone lines that were washed away by the recent floods. Counties and townships are at work repairing roads; cities and towns are cleaning up their débris, counting their losses, and looking over the cost of emergency relief work. Factories and stores are counting the cost of damaged plants and ruined goods, and individuals are trying to rehabilitate wrecked homes and washed-out farms; and all this has to be done in the face of a month's interruption of business. Last year it was in the lower Mississippi Valley. This year it is in the Ohio Valley. Both

catastrophes are but reminders of other floods of the past and prophecies of those floods that are sure to come.

Probably the greatest task in the physical upbuilding of the Nation is the proper use of the rain and snow that falls in the Mississippi drainage basin and the safe guiding of that water to the sea.

If the Mississippi River and its tributaries, were once effectively controlled, the saving in flood damage alone would much more than pay the interest on any conceivable sum that could be spent on the controlling works, for every year the infinitely powerful streams of the Mississippi Valley run wild somewhere, usually in many places. So common is this that it is not "news" unless the catastrophe is tremendous and dramatic. Merely the negative advantage of escaping the damage from flood calls aloud for the control of the river.

But this is not the greatest of its advantages. There are vast undeveloped regions of rich lands, unborn towns, and non-existent centres of trade that would be flourishing, helpful units if it were not for the fear of the river. For men and money do not settle and build homes and industries within the probable reach of unbridled waters.

How much the Ohio, the Missouri, and the Mississippi can be economically used for transportation is an unsettled point. As they flow now, building bars of débris, cutting their banks, flooding the countryside at highwater and running low in droughts, they are less and less useful. Kept within their banks, relieved of some of their débris, and with a more even flow, they would at least have a better chance of regaining their old usefulness as common carriers.

Above the fall line of the rivers, where the possibilities of navigation usually cease, the sites for water power development are found. For this use, also, an even flow is one of the greatest assets.

The control of the great river means an incalculable increase in wealth to the Nation. The United States Engineer Corps and the river commissions have brought the lower river under partial control. By the Eads jetties and related works the passes at its mouth have been

opened to navigation. By a superb levee system flood-waters have been barred from the bottom lands. But these works, as good as they are, are not aimed at the root of the evil.

In the 19 trillion cubic feet of water which the Mississippi yearly carries to the sea, there are 400 million tons of the country's richest soil. A river carrying silt in this manner when flowing slowly deposits the silt and forms bars, which change its channels and find new places to attack when the floods come again.

Whenever a new piece of land is drained. and reclaimed (as is being done in Arkansas) some other section is forced to receive the extra pressure of the river. And these intimate inter-relations go back up from the Mississippi where it empties into the Gulf to the veriest little streamlet that begins in a plowed field on the 'western slopes of the Appalachians or in the forests on the eastern slopes of the Rockies.

There have probably always been floods in this country, but the cutting of the forests and the careless tillage of the soil

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A silt-carrying river when flowing fast acts like a great file, scouring out its bottom and cutting its banks. The lower Mississippi is gradually building its bottom up higher and higher during the months of sluggish flow, so that the levees have to be built higher and higher to control the water at flood time. If straightened and confined enough to accelerate its flow sufficiently to keep it from building up its bottom during the low stages, it would be too powerful for any kind of control during its high stages. The vast sections that used to be overflowed took enough water to relieve the pressure elsewhere.

have increased their size and frequency. Nearly all the rain that falls, as explained by Professor T. W. Chamberlain, of Chicago, should go into the soil and thence into the underdrainage, coming out slowly and steadily by seepage and by springs into the streams clear and pure. Being fed thus fairly uniformly, these streams should be the least destructive and the most adaptable for power and navigation, and these virtues would be felt all the way from their small sources to the Gulf. But where the rain falls upon denuded forest slopes, or upon farm land left in such condition that it will not absorb the rain

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