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he would have won eminence. Of course, had the opposite policy. It never desired he became a man of great wealth. Yet to be known as a leader of speculative his personal fortune was never as great finance. It always denied strongly that as the fortunes of several other Americans. it made or unmade markets. It drew a He did not care for money merely to sharp line between the constructive creditaccumulate it; and he always exerted a creating facilities of a banking house and power in the financial and industrial world the purely mercenary profit-seeking policies far out of proportion to his own fortune. of a brokerage house. It announced its He persuaded men; he compelled men; willingness at all times to enter into and he led men; he dominated men. There carry through to completion any great were several times in our financial history constructive plan of finance for the benefit when, by his personal influence, he pre- of the Government, city, corporation, or vented a panic. There were times when individual, if that plan and policy dehe threw his great influence to the patriotic manded simply the use of banking facilities. service of the Government. For he was Thus, early in its career, the house both a constructive and a patriotic man. undertook the task of selling in Europe
a very large block of stock for the New II
York Central Railroad, at a time when He was born in Hartford in 1837. His American markets could not have abfather was a merchant at that time, but sorbed the stock. This was probably a few years later he became a partner of one of the most important railroad transMr. George Peabody and established a actions ever carried on by Mr. Morgan banking house in London under the name both because it demonstrated the banking of J. S. Morgan & Co. It was as a result ability of his house and because it estabof this move that J. P. Morgan finished lished him definitely as the fiscal agent his education in Germany. After a few of the Vanderbilt system. years of clerical work in the banking Similarly, in the period between 1880 business, he helped to organize a small and 1890, Mr. Morgan became the prime and unimportant Wall Street house under agent in negotiations between the railroads the name of Dabney, Morgan & Co., which at that time were engaged in defounded in Civil War times. Eight years structive competition. He was the father later, he made his first public appearance
of the idea of the "gentlemen's agreeas a financier and banker of importance. ment,” whereby railroads which had been It is characteristic perhaps that this first in the habit of fighting pitched battles appearance was in the nature of a cam- amongst themselves for traffic agreed to paign against Gould and Fisk, who were maintain rates and to abstain, so far as exploiting for their own purposes a small possible, from attempting to cripple or and unimportant railroad called the Albany destroy their rivals. & Susquehanna. Under the leadership In 1893, the activities of the Morgan of Mr. Morgan, this railroad was rescued house touched Government activities. In from the spoilers and sold to the Delaware that year, the treasury of the United & Hudson, where it still remains. That States was practically exhausted, on acepisode is said to have been the reason count of withdrawals of gold for domestic why the powerful banking house of Drexel purposes and for shipment. A syndicate & Company in Philadelphia sought an in which Mr. Morgan coöperated with alliance with Mr. Morgan and made him the American representatives of the Rothshead of the New York house of Drexel, childs stepped in and offered to supply Morgan & Co.
to the Government about $65,000,000 in The character of the house seems never gold, and to take in exchange about to have varied. It was founded at the $62,000,000 of Government bonds. In two end of an epoch in which the habit of months the export of gold was stopped finance was to plunder and destroy, for by the operations of this syndicate and by the personal aggrandisement of the leaders the end of four months free gold in the of the financial world. The Morgan firm treasury had reached the point of safety A somewhat similar episode took place American Company, and half a dozen less in the next year.
These two syndicate important enterprises of an industrial operations brought Mr. Morgan directly and public utility character. in contact with and made him a part of The power of the Morgan house seemed the Government finances.
to suffer a temporary eclipse in 1903 with IN
the apparent collapse of the United States
Steel Corporation, the International MerIn the seven or eight years following cantile Marine, and many other merger 1893 the constructive genius of Mr. companies. When the Steel Corporation Morgan was seen at its best. When great passed the dividends on its common stock railroads like the Atchison, the Northern and this stock dropped below $10 a share, Pacific, the Erie, the Southern Railway, many people felt that the end of J. P. the Union Pacific, the Reading, and others Morgan & Co. was not far off. The outof their type, fell into bankruptcy or ruin come proved the weakness of this theory. as the result of the great depression of The temporary eclipse of Mr. Morgan, 1893, it came to be the habit of all syn- however, brought to the front, as a leading dicates and protective committees to turn financier, the late E. H. Harriman. Mr. to Mr. Morgan. As the skies began Harriman had confined his efforts largely clear he carried through the reorganiza- to the building up of a railroad empire tions of all these great systems with the
and the creation of a great banking power. exception of the Union Pacific. His In a battle in 1901 between Mr. Morgan power and prestige grew year by year, and and Mr. Hill on one side and Mr. Harrihe seemed to be able to command unlimited man on the other, the Hill-Morgan forces amounts of cash and unlimited supplies had retained control of the Northern credit both at home and abroad. While Pacific, but in order that this end might other bankers wrestled with one or two sys- be accomplished the financial world was tems, the Morgan house went forward with plunged into a brief but spectacular and the reorganizations of half a dozen such dangerous panic. The battle was probsystems at one time. It has often been ably a drawn battle; but out of it Mr. pointed out that in these reorganizations Harriman emerged much bigger than he a plentiful supply of water remained in had been before, and his growth from that the capital of the new companies, but the time to his death in 1909 was one of the fact also remains that almost without marvelous chapters in the annals of exception these reorganizations have
have American business history. weathered the storms that have since The recovery of Mr. Morgan from the intervened, and still remain solvent, if boom period of 1903 to 1907 was as specnot powerful, corporations.
tacular as his eclipse had been. The Success in the reorganization of these great expansion era culminated in a crash fallen railroads urged Mr. Morgan forward in the panic of 1907, when the credit to other accomplishments. In the Mc- facilities of the Nation broke down under Kinley Presidency, he became known the great burden of expansion and under an organizer of great industrial enter- the action of the Government under Mr. prises; and the climax of his career as a Roosevelt. It seemed at that time as promoter and creator of corporations was though, for lack of a central controlling reached when, in 1899, he gathered to force, the banks of the United States were gether a group of competing steel com- trying to tear one another down and were panies and created and floated success- likely to bring the whole financial world fully the United States Steel Corporation, into ruin. At that moment, when all which remains to this day the largest men seemed about to start a scramble corporation in the United States, if not for their own safety without regard to in the world. He followed this success the public welfare, Mr. Morgan came to by the flotation of the securities of the the front, as he had come in 1893 and on International Harvester Company, the In- many other lesser occasions, and assumed ternational Mercantile Marine, the North the financial leadership of the country.
At his office and library, he conferred unequaled in the history of this country, day and night with the heads of all the though paralleled, possibly, in other lands. banks, with the greatest private capital- No other man in our financial history ists in the country, with the officials of has left behind him so many tangible the Government responsible for finance; evidences of his creative power, or so and he personally made the policies, and many methods closely interwoven with put them into execution, which arrested the business life of a great nation. the money crisis of 1907 and gave the His death will probably lead to no sudden business world a chance to get out of its readjustment or disruption of any of the troubles by a slow, if painful, process of institutions or public functions with which liquidation of its resources.
he was connected. Yet the man is dead; I IV
and his power and personality in the
business world cannot be passed down to It has often been said that this episode syndicates, to firms, or to corporations. was the crown of Mr. Morgan's career; Therefore, the business world will suffer and perhaps he will be remembered more a great change. for this than for any other of his accom- The passing away of such leaders as plishments. However that may be, it is Mr. Harriman and Mr. Morgan marks the agreed by all that no other man at that end of an epoch; and the next era in time could have assumed the financial American business life will be an era in leadership of the country as Mr. Morgan which syndicates and organizations will assumed it.
be the most powerful agencies, and they That panic made a policy which has will come under public control to a degree been followed by the house of Morgan that would be simply incomprehensible from that day to this. It seems to have to a man like Mr. Morgan. shown a necessity for concentrated leader
V ship of the banking world. Recognizing the fact that Mr. Morgan personally For quite a time, Mr. Morgan had been could not live forever, and that no other practically a retired leader. He had taken single man seemed likely to be able to little active part in the many activities fill his place, the Morgan house set to and functions of the banking house which work so to concentrate the banking power bears his name. Nevertheless, he reof New York City that it would act as a mained to his death the undoubted leader unit in any great emergency, or on any of American business, so far as it is exgreat measure that might confront it. pressed in and represented by the operaTo that end, half a dozen of the largest tions of banking and finance. The banks and trust companies in the United confidence of the whole business comStates were brought either directly under munity in the firm and in the great banks the control of J. P. Morgan & Co., or and trust companies which he had piled into such close affiliation with that firm up around him since the panic of 1907 that they would undoubtedly act as a was based, to a striking extent, upon the unit in any such emergency or task. confidence of that community in the
Thus was created that concentrated integrity, courage, and ability of Mr. money power which has come to be Morgan himself. popularly known as a money trust. It is The continuance of that confidence dehardly probable that it will be able to pends hereafter not upon the power and maintain itself hereafter in face of the prestige of a man but upon the acts and loss of its leader and its presiding genius continuous policies of a firm and of a and in the face of a public clearly hostile group of banks and bankers who have to it. Be that as it may, the fact remains hitherto been held together and made one, that here, without the usual corporate as it were, by the name and association form and purely by virtue of his power, of Mr. Morgan. There is little doubt his wealth, and his integrity, Mr. Morgan that there will be in the financial comcreated an aggregation of banking power munity a shifting and moving about of various men and various interests, such as catastrophes are but reminders of other followed the removal of Mr. Harriman floods of the past and prophecies of those from the railroad world. There may be, floods that are sure to come. and there probably will be, personal am- Probably the greatest task in the bitions developed within the Morgan physical upbuilding of the Nation is the groups which may find themselves too proper use of the rain and snow that falls much hampered and restricted by the in the Mississippi drainage basin and the community of interest in which they safe guiding of that water to the sea. dwell and which may seek new alliances If the Mississippi River and its tributaor try to carve out individual destinies ries, were once effectively controlled, the for themselves to the eventual disruption saving in flood damage alone would much of their own power.
more than pay the interest on any conIn spite of the constructive work and ceivable sum that could be spent on the the masterful leadership of Mr. Morgan controlling works, for every year the inand of his great deeds in the era that we finitely powerful streams of the Mississippi are now passing out of, a revision of the Valley run wild somewhere, usually in currency and banking laws, if a wise many places. So common is this that it is revision be made, will prevent any other not "news" unless the catastrophe is tresuch career, even if another such strong mendousanddramatic. Merely the negative personality were to arise. The possession advantage of escaping the damage from of such great power - or the possibility
or the possibility flood calls aloud for the control of the river. of its possession - does not fit into the But this is not the greatest of its adAmerican scheme of life or business. Mr. vantages. There are vast undeveloped Morgan's strict integrity, by the financial regions of rich lands, unborn towns, and code of his time, and the confidence that non-existent centres of trade that would this integrity inspired brought finance a be flourishing, helpful units if it were not very, very long way forward and upward for the fear of the river. For men and from the era of Jay Gould. But the money do not settle and build homes and concentration of credit which was in some industries within the probable reach of respects a fortunate result of his integrity, unbridled waters. under our present bad financial laws, would How much the Ohio, the Missouri, and in itself again be improper and immoral. the Mississippi can be economically used
Thus ends a financial dynasty and an for transportation is an unsettled point. economic epoch.
As they flow now, building bars of débris,
cutting their banks, flooding the countryTO END FLOODS
side at highwater and running low in
droughts, they are less and less useful. HE public has already begun to Kept within their banks, relieved of some
pay millions of dollars to repair of their débris, and with a more even flow,
railroad bridges and tracks and they would at least have a better chance telephone lines that were washed away of regaining their old usefulness as comby the recent floods. Counties and town- mon carriers. ships are at work repairing roads; cities Above the fall line of the rivers, where and towns are cleaning up their débris, the possibilities of navigation usually counting their losses, and looking over cease, the sites for water power developthe cost of emergency relief work. Fac- ment are found. For this use, also, an even tories and stores are counting the cost of flow is one of the greatest assets. damaged plants and ruined goods, and The control of the great river means an individuals are trying to rehabilitate incalculable increase in wealth to the wrecked homes and washed-out farms; Nation. The United States Engineer and all this has to be done in the face of Corps and the river commissions have a month's interruption of business. Last brought the lower river under partial year it was in the lower Mississippi Valley. control. By the Eads jetties and related This year it is in the Ohio Valley. Both
works the passes at its mouth have been
opened to navigation. By a superb levee Whenever a new piece of land is drained system flood-waters have been barred and reclaimed (as is being done in Arkanfrom the bottom lands. But these works, sas) some other section is forced to receive as good as they are, are not aimed at the the extra pressure of the river. And these root of the evil.
intimate inter-relations go back up from In the 191 trillion cubic feet of water the Mississippi where it empties into the which the Mississippi yearly carries to Gulf to the veriest little streamlet that the sea, there are 400 million tons of the begins in a plowed field on the western country's richest soil. A river carrying slopes of the Appalachians or in the forests silt in this manner when flowing slowly on the eastern slopes of the Rockies. deposits the silt and forms bars, which There have probably always been floods change its channels and find new places in this country, but the cutting of the to attack when the floods come again. forests and the careless tillage of the soil
A silt-carrying river when flowing fast have increased their size and frequency. acts like a great file, scouring out its bot- Nearly all the rain that falls, as explained tom and cutting its banks. The lower by Professor T. W. Chamberlain, of Mississippi is gradually building its bottom Chicago, should go into the soil and thence up higher and higher during the months into the underdrainage, coming out slowly of sluggish flow, so that the levees have and steadily by seepage and by springs to be built higher and higher to control into the streams clear and pure. Being the water at flood time. If straightened fed thus fairly uniformly, these streams and confined enough to accelerate its flow should be the least destructive and the sufficiently to keep it from building up most adaptable for power and navigation, its bottom during the low stages, it would and these virtues would be felt all the way be too powerful for any kind of control from their small sources to the Gulf. But during its high stages. The vast sections where the rain falls upon denuded forest that used to be overflowed took enough slopes, or upon farm land left in such water to relieve the pressure elsewhere. condition that it will not absorb the rain