J.P. Morgan: History, Achievements and Facts

Major Accomplishments of J.P. Morgan

J. P. Morgan

J. P. Morgan achievements

Morgan accumulated an immense amount of fortune during the Gilded Age (1870s to 1900), an era that witnessed rapid economic and industrial growth, particularly in northern and western part of the United States

J.P. Morgan helped reorganize a number of struggling firms in the railroad industry

J.P. Morgan was most known for taking financially stressed businesses and then injecting very robust organizational structures and management systems. As a result, the businesses that he reorganized often attracted many investors, which in turn made them even more profitable.

The late 19th century witnessed huge growth in the railroad industry in the U.S. Amidst all that growth there were some firms that struggled financial. Those troubled firms posed a reasonable level of threat to the entire industry.

Kind courtesy of financiers like J.P. Morgan the thriving railroad industry was able to steer clear of those financial problems. Morgan and his associates worked very hard to reorganize those struggling railroads. He then went on to consolidate some of them. This allowed him to become a major player in the industry as he controlled a sizable percentage (around 15%) of the entire rail lines in America.

J.P. Morgan spearheaded many massive consolidations in the US markets

Morgan led many mergers and acquisitions in the markets as he tried to make those industries become more efficient. He made those consolidated businesses more competitive in the international markets, albeit accusations of unethical nationwide trusts and market manipulations.

J.P. Morgan was the undisputed king of the financial industry throughout an era historians like to call the Gilded Age (from 1870s to 1900). The era saw immense economic growth and industrial expansion, particularly in the northern and western part of the United States. Wages (real wages) also skyrocketed, growing about 60% between 1860 and 1890. The industries that experienced massive growth included the railroads, mining, factory and finance. At the heart of all that was none other than John Pierpont Morgan, the top financier and corporate banker who had extensive network and investments across the markets.

By the start of the 20th century, J.P. Morgan had built himself major multinational corporations that included the likes of United States Steel Corporation, International Harvester and General Electric.

He made the U.S. railroad industry more efficient and profitable

J.P. Morgan’s first coup in the railroad industry came in 1869, when he took control of Jay Gould and Jim Fisk’s Albany and Susquehenna Railroad. From then onward, he was driven by an ambition to not only finance the railroad industry but also ramp up industrial consolidation through mergers and acquisitions.

Morgan was able to attract an array of European investors into the U.S. railroad industry. Boasted by the extensive amounts of integration in the industry, Morgan was able to make all parts of the U.S. transportation system very efficient.

Morgan was key in the reorganization railroad firms such as the West Shore & Buffalo Railroad in New York, the Philadelphia & Reading, and the Chesapeake & Ohio Railway, among others. Between the late 1860s and the late 1890s, Morgan’s company played a leading role in majority of the consolidations that took place in the industry.

Conferences for railroad presidents

In his pursuit of a more integrated transportation system, Morgan organized conferences for presidents of firms in the railroad. During those conferences leading stakeholders in the industry strategized to come out with better ways of maintaining a culture of maintenance and stable rates in U.S. railway.

J.P. Morgan and his associates saved the federal government from a default

At the peak of the economic crisis of 1893 (also known as the Panic of 1893), Morgan came to the rescue of the federal government as the nation stared a default in the face. The initial plan of President Grover Cleveland administration was to sell bonds to the public in order to prevent the crisis from deteriorating. Morgan met President Cleveland in the White House and convinced him to buy 3.5 million ounces of gold from European banks as well his banks.

Although Morgan’s intervention was politically damaging for Cleveland in the 1896 presidential elections, the purchase of those gold ounces ultimately saved the U.S. Treasury from an economic disaster.

Purchased Carnegie Steel Company

Following the death of his father in 1890, Morgan assumed control of J.S. Morgan & Co. Towards the end of the 19th century, Morgan started negotiations with renowned steel magnate and businessman Andrew Carnegie for the purchase of the latter’s company and other businesses in the steel industry.

Once the deal was done, Morgan proceeded to merge Carnegie Steel and numerous other steel and iron firms to form the U.S. Steel Corporation. The deal between Carnegie and Morgan was in the region of half a billion dollars.

By consolidating many steel and iron businesses, Morgan etched his name into the history books as his company became the first billion-dollar company in the world. U.S. Steel Corporation had an authorized capitalization at around one and half billion dollars. The sheer scale of the company meant that Morgan could push forward with bringing down costs in the industry as well as improving distribution lines. All of that allowed the company very competitive in the international market.

At its peak, U.S. Steel held over 60% of the market share as it was also involved in not just steel but in the building of ships, rails, railroad cars and bridges.

J.P. Morgan purchased Andrew Carnegie’s steel empire for close to half a billion U.S. Dollars in 1900 | Image: Scottish-American steel magnate and philanthropist Andrew Carnegie

Brought in stability into the financial markets

J.P. Morgan’s immense financial power allowed him to play a key role in stabilizing the U.S. financial market, especially during economic crises, including the panic of 1907. Due to the absence of any central bank at the time, the responsibility of steering the entire economy from financial catastrophe partly fell to Morgan’s and his wealthy associates of bankers.

With the Panic of 1907 biting very hard, and as major U.S. banks seemed like going bankrupt, J.P. Morgan sprung to action. He brought together a number of top bankers and financiers to bail out struggling financial institutions and large corporations. By so doing he was able to avert a possible financial meltdown across the markets.

By the winter of 1907, Morgan and his Wall Street associates, including James Stillman, president of the National City Bank, had successfully attained enough lines of credit to save those banks and corporations that were on the verge of going bankrupt.

J.P. Morgan-inspired loan facility of $60 million helped rescue the U.S. federal government

In the last few years of the 19th century, J.P. Morgan was in charge of a group of top financiers and bankers that gave out loan to the tune of $60 million to the United States federal government. That loan facility is credited with saving America’s gold standard. Morgan and his Wall Street associates were patted on the shoulder for the immense role played.

J.P. Morgan was an avid collector of numerous art works and books

In addition to being a titan in the financial markets of the United States, J.P. Morgan was also known for collecting many famous paintings, rare books and pictures. In the end, many of the items in his collection were either loaned or given to the Metropolitan Museum of Art in New York City. It must be noted that the financier helped establish the museum. He was also the president of the museum.

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