American Financier



Copyright © 1999 Jean Strouse. All rights reserved.
ISBN: 0-375-50166-5

Chapter One


Pierpont Morgan's arrival took the quiet chamber by surprise. It was 2:00P.M. on a mild Wednesday in December 1912, and the congressionalcommittee did not expect its star witness until the following day. Politicians,lawyers, clerks, reporters, and the casual visitors who had come to watchthese proceedings on Capitol Hill stopped what they were doing. All eyesfollowed the seventy-five-year-old banker and his party as they filed slowlytoward seats near the center of the hall.

    Morgan's matronly daughter, Louisa, stayed close to his side. His son, J. P.Morgan, Jr., walked a step behind. Next came two young partners from Morgan'sWall Street bank—Thomas W. Lamont and Henry P. Davison, with theirwives—and a couple of lawyers. From a distance, the two J. P. Morgans lookedvery much alike. Each stood six feet tall, weighed over two hundred pounds,carried a velvet-collared Chesterfield topcoat, and walked with a taperedmahogany cane. People standing nearby could see the same broad planes in bothfaces, but the son's hair was dark and his features trim, while the father worea drooping, grizzled mustache, what hair he still had was white, and hisovergrown eyebrows arched up like wide-angled Gothic vaults. It was hard not tostare at the elder Morgan because of the rhinophyma—excess growth of sebaceoustissue—that deformed his nose. No one stared for long. Edward Steichen,who had taken the old man's photograph a few years earlier, said thatmeeting his gaze was like looking into the lights of an oncoming expresstrain.

    Once the New Yorkers had found seats, the afternoon's witness—a statisticiannamed Philip Scudder—resumed his testimony, and Mr. Morgan heard hisname mentioned several times. Mr. Scudder was describing, with the help oftables, charts, and diagrams, how eighteen financial institutions effectivelycontrolled aggregate capital resources of over $25 billion—comparable to twothirds of the 1912 gross national product.

    There is no precise way to measure the value of a 1912 dollar nearly acentury later, but using a rough equivalent to the consumer price index andadjusting for inflation, $25 billion from 1912 would be worth about $375 billionin the 1990s. A more revealing comparison comes from the percentage ofgross national product: two thirds of the 1998 GNP would be about $5 trillion.

    For months in 1912 this House Banking and Currency subcommittee,headed by Louisiana Representative Arsène Pujo, had been trying to establishthat a "money trust" ruled over America's major corporations, railroads,insurance companies, securities markets, and banks. The investigation served asclimax to more than two decades of intense popular antagonism to "bigmoney" interests—an antagonism that traced back to the founding of theAmerican colonies. And now here under subpoena was the dominant figurebehind all the recent financial consolidations, "the Napoleon of Wall Street."

    Morgan by 1912 could not cross the street, much less the Atlantic, withoutarousing speculation in the stock market and the press, He managed to enterthe Pujo Committee hearing room with minimal fanfare on Wednesday, December18, because of a schedule change. The committee's counsel, SamuelUntermyer, had telephoned the Morgan bank on Tuesday morning to say thathe would not be ready to examine the financier on Wednesday as originallyplanned, but would start on Thursday, December 19, instead. Morgan took aprivate train to Washington on Tuesday anyway, bringing with him an imposingarray of counsel that included Joseph Hodges Choate, one of the country'sleading corporate lawyers, a former U.S. ambassador to Britain's Court of St.James, and past president of the Bar Association of the City of New York; formerSenator John Colt Spooner, once Wisconsin's preeminent railroad attorney:Richard V. Lindabury, who was defending the Morgan-organized U.S.Steel Corporation against a government antitrust suit: De Lancey Nicoll, formerdistrict attorney for the City of New York; William F. Sheehan, formerlieutenant governor of New York; George B. Case of the New York law firmWhite & Case; and Francis Lynde Stetson of Stetson, Jennings & Russell, knownas "Morgan's Attorney General." None of these men would be allowed to advisethe banker as he testified, but they provided weighty political support.

    The party reached Washington early Tuesday evening and went directly tothe Willard Hotel at 14th and Pennsylvania. Morgan was gloomy and irritable.He had a bad cold. After dinner, too tired for any more talk with lawyers, hesat up late smoking his favorite cigar—a large Pedro Murias JPM made especiallyfor him in Havana—and playing solitaire.

    He disliked everything about these hearings. For years he had worked closelywith politicians he trusted, and thought U.S. markets would continue to thriveif the government let financial experts alone to conduct business in thenation's best interests. Neither the government nor the press had left him alonelately, however, and neither seemed willing to take his word about whatconstituted the country's best interests. Pretty soon, he ruefully told afriend, business would have to be conducted with "glass pockets." The PujoCommittee apparently wanted to go through his pockets, and to score politicalpoints with the proceedings.

    Morgan had some grounds for thinking that the country ought to leave itsfinancial affairs to him. Over the past half century, his bank had helpedtransform the United States from an economic neophyte into the strongestindustrial power in the modern world. In the 1850s, when America needed muchmore capital than it could generate on its own, the Morgans and their associateshad funneled money from Europe to build railroads and float government bonds. Bythe turn of the century, Pierpont Morgan was organizing giant industrialcorporations, largely with American money, and the vital center of world financehad shifted from London to New York.

    The risks involved in funding the emerging U.S. economy were as enormousas the potential rewards, but investors regarded the Morgan name on issues ofstocks and bonds as a warranty. It is a maxim on Wall Street that cash chasesperformance, and the house of Morgan established its reputation by backingproperties that yielded steady profits and long-term growth. Moreover, Morganpersonally took on the job of financial disciplinarian, acting as mediatorbetween the owners and the users of capital. His clients, largely foreign atfirst, were putting up money to build railroads, steel mills, farm equipment,and electrical plants, and when things went wrong with one of those operations,Morgan fired the managers, restructured the finances, and set up a board oftrustees to supervise the company until things went right. He was buildinginternationally competitive financial and industrial structures, and his powercame not from his own wealth but from a record that led other bankers andindustrialists to trust him.

    It is another Wall Street maxim that markets hate uncertainty. Wars, panics,crashes, and depressions punctuated Morgan's professional life, disrupting theflow of capital toward the future he had appointed himself to guard, and overtime he had managed to impose a measure of order on America's turbulenteconomic development. He reorganized the nation's railroads (the processcame to be known as Morganization), put together the world's first billion-dollar corporation (U.S. Steel), and had a hand in setting up InternationalHarvester and General Electric—all on the principle that the combination ofrival interests into huge, stable systems was preferable to the boom-and-bustcycles, price wars, waste, and speculative recklessness of internecinecompetition. The "Napoleon of Wall Street" advocated a kind of managedcompetition, in which the managing was done not by government bureaucrats but byexperienced professionals who understood the complexities of high finance—inother words, by him. Given the arcane nature of capital markets, a privatebanker with transatlantic authority, access to accurate information, and a highsense of stewardship was able to exercise extraordinary power.

    Under Morgan's direction, New York's major financial houses in 1912 wereserving in effect as a central bank. Andrew Jackson had terminally crippled theSecond Bank of the United States in 1836, shortly before Morgan was born,and Woodrow Wilson signed the Federal Reserve System into law in 1913, justafter Morgan died. Between 1836 and 1913 there was no central bank to regulatethe supply of money and credit in the United States, no official lender oflast resort, no federal recourse in times of acute turbulence or panic.America's antiquated banking system had been devised before the Civil War, for adecentralized agricultural society. When the federal government ran out of goldin 1895, Morgan raised $65 million and made sure it stayed in the Treasury'scoffers. When a panic started in New York in 1907, he led teams of bankers tostop it.

    For a moment in 1907 he was a national hero. Crowds cheered as he madehis way down Wall Street, and world political leaders saluted his statesmanshipwith awe. The next moment, however, the exercise of that much power by oneprivate citizen horrified a nation of democrats and revived America'slongstanding distrust of concentrated wealth. Morgan's critics charged that hehad made huge profits on the rescue operation—even that he had engineered thecrisis in order to scoop up assets at fire-sale prices. The 1907 panic convincedthe country that its financial welfare could no longer be left in private hands.It led to the setting up of a National Monetary Commission, to the "money trust"investigation, and eventually to the founding of the Federal Reserve.

* * *

As Morgan played out rounds of solitaire late Tuesday night at the WillardHotel, he had several things on his mind besides the approaching congressionalordeal. He was due to leave in January on his annual trip to Egypt, wherehe was underwriting archaeological excavations as president of New York'sMetropolitan Museum of Art. He planned early in 1913 to visit the expeditionhouse he had commissioned for museum field-workers at Deir el-Bahri, themagnificent temple complex within the ancient city of Thebes. After Egypt, hewould stop to see the new buildings he had funded at the American Academyin Rome, then go on to take the waters at Aix-les-Bains in southeastern France.

    He could, he said, do a year's work in nine months but not in twelve, andaccordingly visited Aix every spring. Though he had exceptional physicalstamina, Morgan periodically collapsed in depression and "nervous" exhaustion,and tried to ward off these breakdowns with foreign travel and spa cures.

    His wife, who also suffered from depression, did not figure in his travelplans. The marriage had been over in all but form for thirty years. He sent herto Europe for months each summer and fall with a chauffeured car, one of theirdaughters, and a paid companion; when she returned, he took troops offriends, often including his mistress, abroad. Mrs. Morgan was heading homeon the Atlantic in December 1912 as he prepared to leave.

    He had spent increasing amounts of time in Europe as he turned the focus ofhis attention from business to collecting art. The scope of his 1901acquisitions had prompted one of his British partners, Clinton Dawkins, to wirethe New York firm (referring to Morgan in code)—"I hope, though we cannot hintit, that Flitch will not buy the National Gallery at the end of the year." Thefollowing summer, as "Flitch" dined with Edward VII in London and entertainedKaiser Wilhelm on board his yacht, Corsair, at Kiel, Dawkins complained:"We never see him and it is difficult to get hold of him. He spends his timelunching with Kings or Kaisers or buying Raphaels."

    The Raphael, an altarpiece known as the Colonna Madonna, was about togo on exhibition at the Metropolitan Museum in 1912, along with other highlightsof the painting collection Morgan had been shipping over from Londonall year. Among the canvases that would be shown together in the UnitedStates for the first time were Rembrandt's Nicolaes Ruts, Vermeer'sA Lady Writing, Gainsborough's Duchess of Devonshire, Lawrence'sMiss Farren, and works by Turner, Rubens, Van Dyck, Reynolds, andGreuze. A set of Fragonard panels called The Progress of Love, which hadoccupied a special room in Morgan's London house, would not be shown until asimilar room could be constructed for them at the Met. In December 1912 Morganwas in the process of buying for $200,000 an altarpiece attributed to FilippoLippi from the chapel of the Villa Alessandri, Fiesole—St. LawrenceEnthroned with Saints and Donors.

    As a private collector and as president of the Metropolitan Museum, Morganwas stocking America with the world's great art. His purchases included notonly Old Master paintings and drawings but sculpture, majolica, tapestries,Regency furniture, bronzes, jewelry, watches, ivories, coins, armor, portraitminiatures, seventeenth-century German metalwork, Carolingian gold, rarebooks and illuminated manuscripts, Gutenberg Bibles, medieval reliquaries,Limoges enamels, Gothic boiserie, Chinese porcelains, ancient Babyloniancylinder seals, Assyrian reliefs, and Roman frescoes from Boscoreale.

    By 1912 he had spent about $60 million on art (roughly $900 million in the1990s), and had given many important objects away. What would happen tothe collections after his death was not clear. The Metropolitan Museum hopedto receive them as a gift, but Morgan wanted the museum to build a new wing,and New York City officials had not come up with the requisite funds. Toaccommodate his rare books, manuscripts, and drawings, he had built anItalianate marble library, designed by Charles McKim, next to his house inMurray Hill. The London Times, reporting on the library's treasures in1908, said of millionaire collectors: "One out of ten has taste; one out of ahundred has genius. Mr. Frick, Mr. Altman, Mr. Widener in America, and the lateRodolphe Kann in Paris, come under the former category; but the man of genius isMr. Pierpont Morgan."

    Few Americans had been as magnanimous as the London Times, eithertoward Morgan's collecting or the career that made it possible. The federalgovernment had begun at the turn of the century to enforce the Sherman AntitrustAct, a law passed in 1890 to curb private economic power, prohibitmonopolization, and proscribe agreements that had the effect of restrainingtrade. When Theodore Roosevelt's Justice Department won a celebrated antitrustsuit against a railroad holding company organized by Morgan, James J.Hill, and E. H. Harriman, Morgan's British partner Mr. Dawkins observed thatto use "the blessed word `combination' ... in America causes as much disturbancenow as the singing of the Marseillaise under the Third Empire."

    Combination, monopoly, merger, consolidation, trust: to Morgan andhis colleagues, these forms of industrial organization made practical andfinancial sense. They had grown out of new mass-production and distributioncapacities that were radically reducing operating costs, increasing efficiency,and creating immense national wealth. Elsewhere in America, however, the newindustrial leviathans' subjugation of labor, stifling of free-marketcompetition, and concentration of financial and political power were widely seenas a threat to the country's fundamental ideals.

    Popular hatred of the trusts, along with a split in the Republican Partybetween Roosevelt's Progressives and William Howard Taft's Old Guard, hadhelped elect Woodrow Wilson in November 1912. The new chief executivewould take office with Democratic majorities in both houses and a clear mandatefor reform. He immediately declared war on monopoly concentration,promising to protect American farmers and workers from big business.

    As if all that weren't enough to keep Morgan awake on the eve of hisappearance before the Pujo Committee, a number of his consolidations were introuble. U.S. Steel, the largest jewel in his crown, had been charged withviolating the Sherman Act. The New York, New Haven, & Hartford Railroad, onwhich he had hoped to base a New England transportation empire, was nearlybankrupt and under political attack. And the securities of his 1902 shippingcombine, the International Mercantile Marine, had never sold at all. Thedisaster that hit the IMM's White Star Line in April 1912 was not an antitrustsuit but an iceberg. After the loss of the Titanic, people joked thatthe IMM stock held more water than the sunken ocean liner.

    As the Pujo Committee began looking into Morgan's "trustification" ofbanking and credit in March of 1912, J. P. Morgan, Jr., called "Jack," hopedthat Congress might "behave quite decently" about the inquiry, but his optimismcollapsed when the committee appointed Samuel Untermyer—an experiencedcorporate lawyer and a strident critic of the "money trust"—as its chiefcounsel. "Investigation will probably proceed now on as unpleasant lines ascan be arranged," Jack had warned his father in April.

* * *

It was late by the time Morgan finished his last cigar at the Willard on Tuesdaynight, put away his cards, and went to bed. When his party arrived at thehearing room in the House Office Building on Wednesday afternoon, he lookedworn-out, and was having difficulty breathing through his cold. Louisa andcounselor Lindabury sat next to him on one side, the Davisons on the other,with Jack, the Lamonts, and former DA Nicoll directly behind them. They foundMr. Untermyer surprisingly accommodating. He quickly completed his examinationof the statistician, and called Morgan to the witness stand at 3:00.

    Untermyer's opening questions were routine, establishing for the record thegeneral organization of J. P. Morgan & Co., its connections to affiliated banksin Philadelphia, London, and Paris, the names of its partners, and the kind ofbusiness it conducted. He brought out that the firm accepted deposits and issuedsecurities for its corporate clients. (The functions of commercial andinvestment banking were not separated until 1933, by the Glass-Steagall Act.)Morgan confirmed information prepared ahead by his partners that as of November1, 1912, seventy-eight corporations had nearly $82 million on depositat his bank, and that the total assets of those companies amounted to nearly$10 billion.

    After half an hour, Chairman Pujo interrupted to say that the members ofthe committee had been called to the House: the proceedings would resume inthe morning. Before the politicians left, Morgan told them he hoped histestimony could be taken as quickly as possible, since he was planning to goabroad.

    At 9:00 A.M. on Thursday, he returned to find several hundred spectatorspacked into the committee hall, with reporters and photographers competingfor space up front. He was accompanied, this time, by Joseph Choate, JohnSpooner, William Sheehan, and George Case, as well as Louisa, Jack, Davison,and Lamont. And this time he looked rested and alert.

    As the questioning resumed he asked to move up to the committee table on araised dais, within arm's reach of Mr. Untermyer, "So I can hear better. I am alittle hard of hearing: you know, I'm getting old." When his voice grew hoarse,he turned to Louisa for throat tablets, and at one point Untermyer asked if hewanted a glass of water. "No, thanks," said Morgan.

    "If you get tired, don't hesitate to say so," the lawyer offered.

    "I'm not tired," Morgan replied.

    The first light moment of the day came when Untermyer asked if his witnesswas not a large stockholder in another powerful bank, the National City. "Ohno," answered Morgan, "only about a million dollars' worth." He seemed surprisedwhen general laughter greeted this response, but after a minute hejoined in.

    Untermyer wanted to show that New York's five leading banks—J. P. Morgan& Co., National City, the First National, Bankers Trust, and Guaranty Trust—hada stranglehold on the country's capital and credit. The hearings broughtout that officers of these five banks held 341 directorships in 112 U.S.companies—in banks, public utilities, insurance, transportation, manufacturing,and trade; the Morgan partners alone sat on 72 boards. Nonetheless, Morganwanted to show that there was no such thing as personal control in thecomplicated business of money.

    To dozens of questions he replied that he did not know or could not remember.Though he had once mastered every number on every piece of paper thatcame through his office, he was getting old, as he reminded Mr.Untermyer, and had been delegating the detail work to younger men for years. Toother questions his answers were incomprehensible. As his partners and closefriends knew, his intelligence was not verbal or analytic but perceptual andconcrete: it dealt in numbers, objects, action. At times the exchanges betweenUntermyer and Morgan had the edgy/comic quality of absurdist drama, as if thetwo men were speaking different languages and earnestly pretending to understandeach other.

    On the question of free market competition versus monopoly concentration,Untermyer suggested: "You are opposed to competition, are you not?"

    Morgan declined the suggestion: "No. I do not mind competition...."

    Untermyer pressed: "You are an advocate of combination and cooperation,as against competition, are you not?"

    Morgan chose the less incendiary word: "Yes: cooperation I should favor."

    "Combination as against competition?"

    "I do not object to competition, either," Morgan said. "I like a littlecompetition."

    Then he asked if he might continue for a moment on a "sensitive" subjectwhich he really did not "want to talk of.... This is probably the only chance Iwill have to speak of it."

    "Certainly," Untermyer nodded. "You mean the subject of combination andconcentration?"

    "Yes." Perhaps thinking of the consolidations that had failed, and thecompetitive pressures that had given rise to the trusts, Morgan went on: "thequestion of control. Without you have control, you cannot do anything."

    Untermyer did not understand. "Unless you have got control, you cannot dowhat?"

    "Unless you have got actual control, you cannot control anything," Morganenigmatically repeated.

    Untermyer: "Well, I guess that is right. Is that the reason you want tocontrol everything?"

    Morgan: "I want to control nothing...."

    Untermyer: "What is the point, Mr. Morgan, you want to make, because I donot quite gather it."

    Morgan did not see himself as wanting control. All his life he hadobserved what happens to money as it moves through international markets,changing direction as swiftly as a school of fish. He had worked with it incycles of expansion and contraction, through panics, depressions, competitiveprice wars, speculative gambles, and government defaults. When a Morganizationsucceeded, stock prices rose; when a combination failed, all his financial andpolitical efforts could not keep share prices from falling. Asked to predictwhat the stock market would do, he invariably replied, "It will fluctuate."Necessity, in his view, had drafted him to do what he could to police themarkets and keep the U.S. economy on track, but in the end no one couldcontrol money, and it is in that context that his opaque, clumsytestimony makes some sense.

    Urged to clarify his point, he went on: "What I say is this, that control isa thing, particularly in money, and you are talking about a money control—now,there is nothing in the world that you can make a trust on money."

    Plausibly enough, Untermyer found this statement difficult to follow: "Youridea is that when a man has got a vast power, such as you have—you admit youhave, do you not?"

    Morgan demurred: "I do not know it, sir ..."

    Untermyer: "Well, assuming that you had it, your idea is that when a manabuses it, he loses it?"

    Morgan: "Yes: and he never gets it back again, either."

    Shortly after this exchange, Untermyer asked whether the witness would liketo stop for lunch. Morgan: "I do not want to stop at all. I am ready to go righton. I would like to get through. That is all.... I wanted to have you understandmy views about the thing. I will stop any remarks on my side, however." Thecommittee recessed for lunch.

* * *

The old man seemed at times to be enjoying the chance to say things he hadlong thought about, noted New York's Evening Post, but then "suddenly,he would look about and discover the presence of the crowd, as if he had notseen the people before. A quick change would pass over his face; he would shrinkvisibly, and become again the man he has been so long, a hater of publicity andself-disclosure. Nothing more interesting could be imagined than this constantshift of personality, from the great power in finance, dominating, direct, andcourageous, to the man of artistic tastes and retiring habit, shrinking beforethe faces of strangers."

    After lunch, Untermyer again tried to establish the reach of Morgan's empireand again met with denials. "Your power in any direction is entirely unconsciousto you, is it not?"

    Morgan qualified his assent: "It is, sir, if that is the case."

    Circling around another way, Untermyer tried to get at the reasons behindthe consolidation of railroad systems, steel plants, and banks. And this time hesucceeded in drawing out of his witness a peremptory (and to democratic ears,an outrageous) assumption of political prerogative. Behind Morgan's crypticreplies lay his conviction that the process of industrial concentration was avirtual force of nature—irresistible, certainly not invented by him, and betteroff in his hands than it might have been in others', though he was also denyingthat it was by any stretch of the imagination in his hands at all.

    Asked why he had amalgamated large corporations, Morgan replied, "If it isgood business for the interests of the country to do it, I do it."

    "But Mr. Morgan," objected Untermyer. "Is not a man likely, quitesubconsciously, to imagine that things are for the interests of the country whenthey are good business?"

    "No sir," said Morgan.

    Untermyer: "You think that you are able to justly and impartiallydifferentiate, where your own interests are concerned, just as clearly as thoughyou had no interest at stake, do you?"

    Morgan: "Exactly, sir."

    Untermyer: "And you are acting on that assumption all the time, are younot?"

    Morgan: "I always do, sir."

    Untermyer: "Of course, there is a possibility of your judgment beingmistaken, is there not?"

    Morgan gave a disarming reply: "Oh, I may be wrong in my judgment, but Ido not think it lies in that direction."

    Untermyer: "Does it not go somewhat on the theory that the wish may befather to the thought?"

    Morgan: "What is your question?"

    Untermyer: "That the wish to bring these interests together may lead you tobelieve that the country is not injured by that sort of concentration?"

    Morgan: "I do not think so."

    Finally, in what has become the most famous exchange in the hearings'thousands of pages of testimony, the two men returned to the question ofcontrolling money and credit. Untermyer said, "The basis of banking is credit,is it not?"

    Morgan: "Not always. That is an evidence of banking, but it is not the moneyitself. Money is gold, and nothing else."

    There was in 1912 a significant difference between actual metal coin andloans represented by pieces of paper (banknotes, bonds, bills). When Morganrepeated yet again that money could not be controlled, Untermyer asked himwhether credit was not based on money—that is, did not the big New Yorkbanks issue loans to certain men and institutions "because it is believed thatthey have the money back of them?"

    Morgan: "No sir. It is because people believe in the man."

    Untermyer: "And he might not be worth anything?"

    Morgan, with less than perfect regard for grammar: "He might not haveanything. I have known a man to come into my office, and I have given him acheck for a million dollars when I knew they had not a cent in the world."

    Untermyer: "That is not business?"

    Morgan: "Yes, unfortunately it is. I do not think it is good business,though."

    Untermyer did not, apparently, think much of this answer, for he repeatedhis proposition: "Is not commercial credit based primarily upon money orproperty?"

    Morgan: "No sir; the first thing is character."

    Untermyer: "Before money or property?"

    Morgan: "Before money or property or anything else. Money cannot buyit"—and he elaborated, after a few more questions—"because a man I do nottrust could not get money from me on all the bonds in Christendom."

* * *

After the committee adjourned on Thursday afternoon, Morgan and his partywent directly to Union Station and from there by private train to New York.Stock prices, which had dropped at the beginning of the week in what WallStreet analysts called a Pujo market, rose on Friday in a jubilant "Morganmarket." One trader told The New York Times, "We are wearing the Morgancolors to-day. He has helped us to get our nerve back." Jack Morgan cabled theLondon partners that his father's testimony had been "quite extraordinarilysuccessful, perfectly frank, very helpful to situation. He himself is delightedand very well, and whole country appears to be very pleased and satisfied."

    With somewhat less enthusiasm, the Times reported that though the oldman had not changed many people's views about the questions under investigation,still, "If impressions gleaned the day after from conversation with Senatorsand Representatives count for anything, J. P. Morgan lost no prestigethrough his appearance.... On the contrary, his willingness as a witness andhis evident sincerity and frankness seem to have created a distinctly favorableimpression."

    An editorial in the Evening Post praised his "uncommon ability,"bowed to his expertise, and scolded those who were attacking the methods of highfinance, yet found several of his positions "contrary to all that is settled inregard to the nature of man.... It will never do to say that unchecked power isa good thing because it is in the hands of good men."

    Two weeks later, Morgan left for Egypt with his daughter Louisa and severalfriends. On the Nile in early February he slid into a delusional depression. Hecould not eat, had "horrid" dreams, asked constantly about conspiracies,subpoenas, and citations for contempt of court, and felt, reported Louisa, that"the country was going to ruin, that his race was run, and his whole life workgoing for naught!"

    The party retreated to Cairo, then to the Grand Hotel in Rome. The Pope, theKaiser, and the King of Italy sent messages of concern. Morgan rallied for adrive up the Janiculum to see the new buildings at the American Academy. Heattended Easter services on March 23 at St. Paul's American Church. OnMarch 31, just shy of his seventy-sixth birthday, he died in his sleep.

* * *

Two days later, a headline in the Paris Herald asked, HOW WEALTHY WASHE? Toward the end of April, after the funeral and burial in Hartford, aftermemorial services in London, Paris, and Rome, there was a surprising answer.Morgan's fortune seemed to be less than $100 million. When his estate wasfinally settled in 1916, his American banking interests, securities, and realestate were valued at approximately $58 million, and his art collections at $20million. He left another $2.5 million worth of property in England.

    The total value of the estate came to about $80 million (roughly $1.2 billionin the 1990s). Morgan had made plenty of money, but not nearly as much aspeople had imagined. In buying out Andrew Carnegie to put together U.S. Steelin 1901, the Morgan syndicate had paid $480 million, of which Carnegiepersonally received nearly half. John D. Rockefeller, already worth nearly abillion dollars by 1913, reportedly learned of Morgan's net worth from thenewspapers, shook his head, and said, "And to think he wasn't even a rich man."

    Tributes to Morgan that spring centered on his "rugged honesty and rock-ribbed integrity." Theodore Roosevelt praised his "sincerity and truthfulness,"The Wall Street Journal his "first-class mind," the London Timeshis "distinctly wholesome" influence on the stability of international finance.Others called him an uncrowned monarch and the "embodiment of the heroic age inAmerican industrial history."

    Even some of Morgan's critics said he was a builder and conservator, not awrecker, liar, or cheat. Joseph Pulitzer's World called him the"commanding figure" of a moribund financial feudalism: "Never again willconditions of government make it possible for any financier to bestride thecountry like a Colossus.... Having greater force, greater character, greaterintellect and greater vitality than any other man in Wall Street, he naturallybecame the leader, and he remained the leader.... The system he built up with somuch skill and effort is doomed to crumble.... In time little will remain exceptthe feeling of bewilderment that a self-ruling people should ever have allowedone man to wield so much power for good or evil over their prosperity andgeneral welfare, however much ability and strength and genius that manpossessed."

    Samuel Untermyer told the press: "Whatever may be one's view of the perilsto our financial and economic system of the concentration of the control ofcredit, the fact remains, and is generally recognized, that Mr. Morgan wasanimated by high purpose and that he never knowingly abused his almostincredible power."

    Morgan's famous remark before the Pujo Committee—that credit in the conductof the world's business was based primarily on character and trust—camedirectly out of his own experience and applied above all to himself. By 1912,however, it was too late for a private banker to wield so much public power, andit was too late for Morgan to change.