Rich Uncle Pennybags: Financial Tycoon J.P. Morgan

“Very few of the heroes of the Golden Age of American finance had much interest in the solid realities of what underlay their structure of stocks and bonds and credits. Later on, a Henry Ford might introduce an era of intensely production-minded captains of industry, but the Harrimans, Morgans, Fricks, and Rockefellers were far more interested in the exciting manipulation of huge masses of intangible wealth than in the humdrum business of turning out goods.” – Robert Heilbroner

A portrait of JP Morgan Sr / JP Morgan Jr /

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“The Captains of Industry have always counseled the rest of us ‘to be realistic.’ Let us, therefore, be realistic. Is it realistic to assume that the present economy would be just fine if only it would stop poisoning the air and water, or if only it would stop soil erosion, or if only it would stop degrading watersheds and forest ecosystems, or if only it would stop seducing children, or if only it would stop buying politicians, or if only it would give women and favored minorities an equitable share of the loot?” – Wendell Berry

The Robber Barons

The captains of the industry are perhaps better known as the Robber Barons. Or maybe, they are simply known for the huge brand names that they have created. It’s been about a century since some very prominent people helped build the United States: J.P. Morgan, Rockefeller, Center, and Carnegie Hall, just to name a few.

JP Morgan Sr walking in the street in Washington, DC

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Everyone has definitely heard these names, whether or not they know about the men themselves: the Astors, the Fords, the Rockefellers, the Carnegies, the Vanderbilts. But what exactly did they do to make their money? Today we’re going to look at J.P. Morgan.

J.P. Morgan

Everyone recognizes the name J.P. Morgan, and people tend to associate it with wealth. That’s because he was an American financier and banker who founded J.P. Morgan & Co., one of the country’s leading financial firms. He trained as an accountant at the New York banking firm, Duncan, Sherman Company.

The JP Morgan and Co bank on a street corner

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He then got involved in his dad’s banking company, which led him to become a Drexel, Morgan, and Company partner. In 1895, the firm was updated and became J.P. Morgan & Company. This company eventually evolved into one of the most important banking houses in the world.

The Master of Finance

Meanwhile, Morgan merged Edison General Electric and the Thompson-Houston Electric Company in order to form General Electric, which materialized as the number one electrical-equipment manufacturing company in the United States. After financing the Federal Steel Company, he combined it with Carnegie Steel Company in order to form the United States Steel Corporation.

JP Morgan Sr wearing a top hat speaking with a bellboy in the early 1900s

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Toward the end of his life, Morgan focused on gaining control of all the nation’s leading corporations and financial institutions. In addition to being a business mogul and finance tycoon, he was also a passionate art collector and the leading philanthropist of his time.

Hailed as a master of finance when he passed away in 1913, J.P. Morgan is credited for shaping the nation and still considered one of America’s leading businessmen.

A Businessman Is Born

On April 17, 1837, John Pierpont Morgan Sr. was welcomed into the world in Hartford, Connecticut. He lived up until the last day of March in 1913 and died in Rome, Italy. Throughout his lifetime, he was America’s greatest and most influential banking tycoon of the so-called Gilded Age: a time of speedy, advanced industrialization and economic boom that lasted from 1870 to 1900.

A portrait of JP Morgan Sr

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The first company he founded, J.P. Morgan and Co., was so successful and quickly became America’s biggest corporate taxpayer and the driving force behind the rapid expansion of the country’s industrial sector. For most Americans, the name General Electric rings a bell; however, you may not know that J.P. Morgan was one of the men who created the company so many years ago.

Embarking on a Financial Career

John Pierpont Morgan was born into the business world with a wealthy, financier father, Junius Spencer Morgan, and his wife, Juliet Pierpont. Young Morgan got his elementary education from various public schools, including Hartford Public School and Episcopal Academy in Cheshire.

JP Morgan Sr walking up the steps of a home

JP Morgan Sr. Photo by Bettmann / Getty Images

He then attended Boston’s English High School before enrolling in Germany’s prestigious University of Gottingen. There, he improved his German and earned a degree in art history. He then returned to the U.S. to embark on a career in finance. He started working at the London branch of Peabody in 1857, a merchant banking firm called Morgan & Co.

A Business Mind

J.P. Morgan moved to New York in 1858 and became an accountant for Duncan, Sherman & Co., the American representatives of George Peabody and Company. However, when the American Civil War broke out, Morgan joined his dad’s firm, J. Pierpont Morgan & Company.

JP Morgan Sr standing at the bottom of a long staircase

JP Morgan Sr. Photo by FPG / Getty Images

Morgan worked at his father’s company up until 1864. He then served as an influential member of the film Dabney, Morgan, and Co., from 1864 to 1872. In 1871, the businessman entered a partnership in order to form the New York firm of Drexel, Morgan & Co.

Investments and Acquisitions

Thanks to the help of the newly founded banking firm, Morgan continued making investments and acquisitions. He funded many developments, including Thomas Edison projects, and was the one who laid out the financial foundation for Edison Electric Company.

JP Morgan Sr walking in the Harvard Commencement Parade with the Dean to his left

JP Morgan Sr at the Harvard Commencement Parade. Photo by Bettmann / Getty Images

Meanwhile, small companies and railroads were dealing with some difficult times after the Civil War. Morgan purchased and restructured a lot of them and brought his own ideas and standards into the rail industry. Many of the rail holdings were in the New York Central, New Haven, Hartford Pennsylvania, Southern, and the Northern Pacific systems.

Growing Success

In 1882, Morgan ensured Edison General Electric and Thomson-Houston Electric Company’s merger to create General Electric. But after the panic of 1839, Morgan provided financial support to the U.S. government in order to prevent a Treasury crisis.

JP Morgan Sr posing for a portrait

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In 1895, Drexel Morgan & Co. was reorganized and renamed J.P. Morgan & Co. The company gradually evolved and became the most successful and powerful banking institution in the entire world. Getting there took a lot of work and required a business genius.

The U.S. Steel Company

Morgan recognized the requirement of huge quantities of steel in rails and trains, and that’s when he decided to fund and acquire a significant number of steel-making operations. He formed the U.S. Steel Company by combining Carnegie Steel Works with various other iron and steel industries.

Men hard at work with steel beams

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The business tycoon subsequently expanded his business to many other sectors in the financial and industrial trades. He went on to provide financial backing to coal mines, insurance, and even communications industries. He had a knack for knowing exactly where to invest his money.

An Avid Art-Lover

In 1907, Morgan directed the banking coalition during the stock market panic and was running various business communities. In the process, he acquired control of several insurance companies. One of the ways the rich stay rich is knowing exactly what the public’s demands are and making investments accordingly.

People surrounding the JP Morgan Company office

People surrounding the JP Morgan Company office following the stock market crash. Photo by Bettmann / Getty Images

Like many other wealthy individuals, Morgan was also an art enthusiast and accumulated a massive collection of pictures, paintings, and other art-related objects. Much of the art he owned was donated to the Metropolitan Museum of Art after he passed away.

Significance and Influence

Morgan started his own private banking company in 1871 and later restructured it as J.P. Morgan & Co. The firm purchased, financed, and expanded various businesses and subsequently emerged as one the most powerful and influential banking houses on the planet.

A portrait of JP Morgan Sr

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It also financially supported the United States government during the economic depression after the panic of 1893. Morgan also helped merge the railroad industry in the East and helped achieve railroad rate stability when it gained control of so many railroads (spanning tens of thousands of miles).

Success and Philanthropy

In 1901, he operated the merger of several steel and iron companies and created the United States Steel Corporation. Its success was gradual, but it ultimately became the largest steel manufacturer in the world.

Mrs. JP Morgan Sr sitting in a carriage drawn by a horse

Mrs. JP Morgan Sr. Photo by Bettmann / Getty Images

In addition to being a prosperous financier, Morgan was a well-known philanthropist who used his wealth to help countless humanitarian endeavors. He donated a massive portion of his personal money to different charities, churches, schools, and hospitals.

Personal Life and Legacy

Morgan tied the knot with a woman named Amelia Sturges in 1861, but, unfortunately, their fairy tale ending was cut short when she died the following year. Then, in February 1965, the business tycoon walked down the aisle with Frances Tracy, also known as Fanny.

JP Morgan Sr walking down a set of steps outside of a bank

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The couple had four kids together: Louisa, John Pierpont Jr., Juliet, and Anne. On March 31st, 1913, J.P. Morgan died peacefully in his sleep in the Grand Hotel in Rome, Italy. He was put to rest in Cedar Hill Cemetery, Hartford, Connecticut, U.S. His son, John Pierpont Morgan, inherited his father’s fortune and business.

Powerful Characteristics

When it comes to his looks, John Pierpont Morgan Sr. was a bear of a man who had piercing black eyes that would flash through his interlocutors. He had a deep voice that almost sounded like thunder in the distance.

JP Morgan Sr sitting behind a desk

JP Morgan Sr. Photo by Bettmann / Getty Images

He projected intelligence, confidence, and strength. Although his character depicted a powerful person who is good with words, there was one surprisingly distinctive physical feature about J.P. Morgan: his nose.

His Remarkable Nose

I know it might come as a surprise, but J.P. Morgan had a large and incredibly purple nose. Morgan’s nasal organ’s purple color was actually due to a condition he had that was called Rhinophyma. It usually happens as a result of rosacea that is left untreated for an extended amount of time.

JP Morgan Sr shaking his cane at someone as he walks down the street

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His doctors once told him that the lobulations, nodules, and fissures on his nose could be removed with surgery; however, Morgan ignored them and didn’t seem to mind his nose. But as it turned out, his massive sniffer gave him character, and it was a big part of his personality.

The Crisis Quencher

Like many other successful people, money wasn’t much of a problem for an entrepreneur like J.P. Morgan. The businessman found himself helping curb a ranging financial crisis referred to as The Panic of 1907, which threatened to ruin the United States’ economy.

JP Morgan with a little girl sitting on his lap

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Because he was so successful, Morgan earned a well-deserved reputation as an adept crisis manager. He managed to convince the then-Treasury Secretary, George B. Cortelyou, to put a whopping $35 million of federal money into some of the most distressed New York Banks.

The Panic of 1907

This clever move helped relax thousands of depositors who were starting to hectically withdraw their small means from the ailing lenders. But Morgan didn’t stop there. His innovative mind always thought ahead.

James Stillman posing in a portrait, President of National City Bank

James Stillman, President of the National City Bank. Photo by Bettmann / Getty Images

For his next step, Morgan and National City Bank President James Stillman set up a meeting that included the country’s most influential financiers. He advised them to plan a safeguard mechanism against any future financial calamities. This was actually how the foundations for the Federal Reserve were established.

Morgan and Tesla’s Partnership

Even J.P. Morgan didn’t succeed with every single investment. Like every other rich and successful person, Morgan failed a few times. The trick is getting back up. One specific example of Morgan’s less than impressive investment decision was a partnership he started with Nikola Tesla, a controversial American inventor.

Nikola Tesla holding his coils surrounded by photographs and equipment

Nikola Tesla. Photo by Bettmann / Getty Images

Morgan lent Tesla $150,000 (approximately $5 million today, when adjusted for inflation) to build the planet’s very first wireless communication system across the Atlantic Ocean. Unfortunately, teaming up with Tesla wasn’t the best idea.

Stopping the Money Tap

Tesla and Morgan had a very specific plan. Instead of sticking to it, Tesla used Morgan’s money in order to conduct various experiments on what was called “terrestrial wireless power transmission.” Tesla-based these ideas on his theories of using Earth and its atmosphere as electrical conductors.

Nikola Tesla sitting in front of coils with electricity sparking from it while he reads a book

Nikola Tesla in his Colorado Springs laboratory 1988. Photo by Mondadori Portfolio / Getty Images

After Tesla tried to change the design in order to better compete with Guglielmo Marconi’s new radio-based telegraph system, Morgan decided to stop the funding. He didn’t like his partner’s idea, and with no money tap, the project was abandoned in 1906.

America’s Railroad Magnate

By the time to 20th century rolled around, J.P. Morgan was involved in half of the railroad transport in the United States. His companies amazingly owned and operated more than 100,000 miles of railroad, which is an extremely impressive distance of tracks.

JP Morgan sitting in a horse-drawn carriage

JP Morgan (seated back right) in Rocky River near Lake Erie. Photo by Louis Van Oeyen / Western Reserve Historical Society / Getty Images

But this meant that Morgan, his business partners, and associates indirectly controlled all movement of goods, merchandise, and commodities in America. It wouldn’t be an overstatement to say that J.P. Morgan was the man who was literally moving the American economy in the 1900s.

His Hobby Was Saving Businesses in Trouble

During J.P. Morgan’s lifetime, very few men knew more about business and moneymaking than he did. He was an entrepreneurial genius at a time when America needed it the most. He was so fascinated by the mechanics of fortune accumulation that he decided to revive and revolutionize his hobby of ailing small businesses.

JP Morgan walking on the pier with other important-looking men

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Instead of one big, central mother company, Morgan’s business model was basically based on a viable network of small and highly competitive businesses that could deal with the financial shocks and repercussions.

His Son Founded a Public Library

There is no doubt that J.P. Morgan was an educated man. However, he wasn’t necessarily the world’s biggest reader. Instead of being a man of contemplation, he was a man of action. He wasn’t an observer and preferred to “walk the walk” than to “talk the talk.”

JP Morgan Jr posing with a cane

JP Morgan Jr. Photo by Corbis / Getty Images

Yet, after he died, it came out that the famous investor had a collection of rare and precious books. His son, Jack Morgan, actually used the collection to found the Pierpont Morgan Library. It is now called The Morgan Library and Museum.

Change of Plans

J.P. Morgan was an extremely lucky man. He had purchased a first-class ticket for the Titanic’s maiden voyage but changed his plans at the last minute. After hearing about the Titanic’s devastating sinking, he stated the famous quote, “Monetary losses amount to nothing in life… It is the loss of life that counts.”

A photograph of the Titanic

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Although many people know that J.P. Morgan was supposed to board the Titanic, what you may not know is that he was a huge investor in the “unsinkable” ship. Morgan actually financed a line of ships for White Star Line called The Olympic Class Ships. The line created three luxury ships: The Olympic, The Titanic, and The Britannic.

Titanic Conspiracy

Since J.P. Morgan basically owned White Star Line, a few theories were spawned. If you’re familiar with the conspiracy theory that the Titanic sinking was an insurance scam, there were a few suspicions about Morgan’s involvement.

The Olympic and Titanic being built circa 1909

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Morgan’s reasoning for canceling his Titanic trip was because he was too “sick” to board. However, he was seen playing golf during that time. Theorists believe that he was aware of the Titanic’s plot to hit the iceberg and collect insurance money, which is why he decided not to board the ship.

J.P. Morgan’s Involvement

Some people take this theory even further. If Morgan was too sick to relax on a luxury boat but could go play golf… it seems obvious that he was feeling fine. Sure, maybe he knew about the plot and decided it wasn’t worth the risk.

JP Morgan Sr with his daughter and son, JP Morgan Jr

JP Morgan Sr, his daughter Mrs. Herbert Satterlee, and JP Morgan Jr. Photo by Bettmann / Getty Images

But some people believe it was more sinister than that. While nobody was meant to die in the theory suggesting that the Titanic sinking was an insurance scam, other theories suggest that Morgan financed the ships and planned the sinking in order to kill his enemies. But that one seems a little far-fetched to me.

He Lent the Federal Treasury Some Gold

Back in 1895, the Federal Treasury was in some serious trouble. By serious, I mean it was almost completely empty. J.P. Morgan and his friends (the Rothschild family) lent 3.5 million ounces of gold to the U.S. government against a 20-year bond issue.

JP Morgan walking with a crowd surrounding him

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This really depicts the power he had and shows that large businesses have always been the backbone of the United States economy. While J.P. Morgan owned 100,000 miles of railroads, the Rothschild family established the banking business back in the 1760s, their wealth and savvy business minds continued for generations to come.

Morganization

After President Theodore Roosevelt convinced Colombia to hand over control of its province of Panama in 1903, J.P. Morgan & Company were appointed the “fiscal agent” for the newly independent Republic of Panama, handling $10 million of donated government aid.

JP Morgan Sr, his daughter, and son walking together

JP Morgan Sr, with his daughter and son in the early 1900s. Photo by FPG / Getty Images

J.P. Morgan was known for taking over failed businesses and recreating them into more profitable enterprises. He was able to identify these small businesses in sectors such as steelmaking and railroads and merged them to create powerful monopolies. He did this so often that the strategy is now called “Morganization.”

He Founded the Private Member’s Metropolitan Club

Morgan founded the private member’s Metropolitan Club after his buddy, John King, was rejected by the prestigious Union Club in 1891. Morgan donated $125,000 worth of land on 5th Avenue. He certainly had extra money to spend.

JP Morgan sitting in a carriage with his wife

JP Morgan Sr and his wife circa 1910. Photo by Philipp Kester / ullstein bild / Getty Images

In fact, the famous quote “if you have to ask how much it costs, you can’t afford it” is attributed to J.P. Morgan. By 1900, he controlled half of the country’s railroads with interests in 24 different companies and owned more than 100,000 miles of railroad track.

He Hated Being Photographed

Because of the chronic skin condition that left his nose disfigured, J.P. Morgan hated being photographed. However, he was a huge fan and supporter of photographer Edward S. Curtis, and in 1906, he gave him $75,000. Curtis definitely picked the right friends.

A profile view of JP Morgan greeting someone

JP Morgan Sr. Photo by Topical Press Agency / Getty Images

Morgan’s power was so incredible that he bailed the U.S. economy out in two separate financial crises. He eventually provided 3.5 million ounces of gold when the U.S. Treasury ran out after the panic of 1903 and when he saved the New York baking industry during The Panic of 1907.

The Reason for the Federal Reserve System

It’s really crazy if you think about the extent of the reliance the U.S. government had on Morgan to resolve the 1907 crisis. It literally led bankers and politicians to create the Federal Reserve System. He was so rich that his home at 219 Madison Avenue was the first electrically lit private residence in New York.

JP Morgan Sr speaking to a friend

JP Morgan Sr photographed speaking to a friend in the early 1900s. Photo by Bettmann / Getty Images

When Morgan bought up the U.S. steel industry in the early 1900s, he founded U.S. Steel, the world’s first billion-dollar company. The biggest part of the corporation was Carnegie Steel, whose $480 million takeover did not include lawyers. The deal was done between Morgan and Andrew Carnegie, personally without a written contract.

A Mineral Collector

He applied for parliamentary authority in 1902 in order to build an underground railway in London. But he was outmaneuvered by Charles Tyson Yerkes, owner of the existing tube lines. He was also a mineral collector and had a collection of more than 1,000 pieces. The pink variety of beryl was named “morganite” in 1911, in the great businessman’s honor.

JP Morgan speaking with two businessmen in the street

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When he passed away in 1913, the NYSE shut down for two hours. This mark of respect was normally only given to a U.S. President. Considering he pretty much saved the economy in America, he deserves it.

He’s Uncle Pennybags!

There is a Mandela Effect going around the Internet about the iconic Monopoly man. Rich Uncle Pennybags is a memorable character and extremely recognizable. We all remember him with a top hat, mustache, a cane, and of course, a monocle.

A portrait of JP Morgan Sr / The monopoly man

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Well, believe it or not, the monopoly man never had a monocle! I know, I was surprised too. While I let you wrap your head around that, did you know that the iconic Uncle Pennybags is actually modeled after the Progressive Era businessman, the rich and powerful J.P. Morgan?

He Died Peacefully in Rome

J.P. Morgan was a remarkable man and a courageous business giant. He wasn’t afraid of the ocean, and in addition to financing While Star Line’s Olympic Class Ships, he also owned several yachts of his own. A few months before his 76th birthday, Morgan took a trip to Rome, his favorite city, before peacefully dying in his sleep in March of that year.

JP Morgan and Thomas Lipton posing together in captains hats

JP Morgan and Sir Thomas Lipton circa 1903. Photo by Bettmann / Getty Images

Not only was he a Wall Street Mogul and prodigious financier, but John Pierpont Morgan Sr. was also an enthusiastic art-lover and a philanthropist. Even though it’s been over a century since he died, Morgan is still one of the greatest investors and remains essential in the world of international finance.

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