In 1871, the banking house of Drexel, Morgan & Co. was established by John Pierpont Morgan. "Twenty four years later it was renamed J.P. Morgan & Co., which it was to remain until the firm's purchase by Chase Manhattan in 2000. (Hughes 23) At this point, Chase Manhattan was the largest banking company in the United States. This was a far cry from the 1980's when Morgan "boasted the largest market capitalization of any American bank and was more expensive to buy than Citicorp. (Hughes 11)" While J.P. Morgan could not imagine the path banking would take in the U.S. with his passing in 1913; his banking house would have a strong hold on American banking for much of the 20th century. The introduction of bank holding companies and certain laws placing restrictions on American banking such as the Glass Steagall Act of 1934 brought about many changes in American banking and allowed for the emergence of international banks to supplant the "House of Morgan" in the new era. It is no question though, that "John Pierpont Morgan was one of the most influential figures in the rise of U.S.
banking,"(Hughes 23) and the early survival of the U.S. economy.
J.P. Morgan was born in 1837, and similar to many of his peer contemporaries, he was born into a family rich in legacy. Both the Pierpont and the Morgan family had notable ancestry dating back to early British colonization in North America. Importantly, Pierpont's father, Junius Spencer, commonly referred to as the senior Morgan until his death late in 1890, was well established on both sides of the Atlantic. Spending much of his elder years abroad, Junius was the primary figure throughout Pierpont's life. For every matter, business, political, or private, Junius counseled Pierpont with sound, influential advice. As mentioned, Junius was recognized equally in Europe as in the United States as a banker, and internationally, his reputation was on a similar status to that of the Rothschild and Sons banking corporation (Strouse, 149). Thus, from an early age, Pierpont's life was scripted for a promising future in banking and business. Although Pierpont did follow the path laid before him, this was not the case for the majority of those born into the same circumstances. Pierpont's generation of wealthy heirs often chose the easy life by simply living off the amassed fortunes of earlier generations. Others, such as the "robber barons," accumulated wealth not through inheritance, but by working from the bottom to the top during the "Gilded Age" (Strouse, 129). Two men fitting a category of rags to riches, and of whom were also connected to Pierpont through business, were Andrew Carnegie and Thomas Alva Edison.
In 1869, Junius Morgan became acquainted with Carnegie under the construction and financing of a steel railroad bridge across the Mississippi River. The bridge finally opened in 1874 as the St. Louis Bridge, but due to an ongoing mild depression in the economy, sparse rail traffic used the...