The Morgans: Private International Bankers, 1854–1913 by Vincent P. Carosso (review)

Shorter Book Reviews 143 commended for showing us how Morgan's dogged pursuit of a "new instrument" for the study of human origins led him to produce instead a foundation on which at least two schools of "structuralist" persuasion would still be building a century later. GeorgePark Department of Anthropology Memorial University of Newfoundland Vincent P. Carosso. The Morgans:PrivateInternationalBankers, 1854-1913. Cambridge: Harvard University Press, 1987.xvii + 888 pp. Illus. Vincent Carosso must have been mindful of a saying credited to Callimachus when he produced this book: "Mega biblion, mega kakon11 (or, roughly, "Abig book is a big pain"). He need not have worried. The Morganswillremain the definitive work on the men and the banking firm for this generation and perhaps many more. Junius S. Morgan and his son, John Pierpont, better known to most Americans as J.P. Morgan, have become synonymous with banking and finance in the United States. Although it is often forgotten that they were not commercial bankers but investment bankers, they were precisely the individuals that raised the ire of the Populists in the late 1800s. Junius, a Hartford merchant, formed a partnership in 1853 with George Peabody, A Baltimore dry goods importer who had moved to London to develop his ov.11 merchant banking house. This partnership took Morgan Sr., to London where, in 1858, he assumed management of Peabody & Co. Primarily involved in financing trade, Peabody & Co. also provided credit for iron sales to the United States and promoted the transatlantic cable project. Junius continued Peabody's business when the latter retired in 1864,reforming the company as J.S. Morgan & Co., a firm that became one of the most important international banking houses in the 1800s, competing with Baring Bros., Rothschild and others. Young Pierpont, meanwhile, gradually carved out his own niche in the investment world, founding J. Pierpont Morgan & Co., which experienced much of its early success because of the demands of the American Civil War, and then received a boost when J.S. Morgan & Co., established its first 144 Shorter Book Reviews American branch in New York after the War. Pierpont not only trained himself in gold exchange and securities operations, but soon grew interested in railroad financing. A new alliance with Tony Drexel further enhanced his status, capital and connections. After involving himself in an army pay lapse that resulted from Congress's failure to appropriate funds, Morgan advanced the money to the U.S. government. Soon Morgan's U.S. firm was handling several U.S. government bond issues, even as his father's firm became widely involved in financing foreign governments. Pierpont continued his financing of railroads. He gained a reputation as an astute organizer, and even managed to make peace between W.H. Vanderbilt's New York Central Railroad and the Pennsylvania Railroad. Upon Junius's death in 1890,J.P. Morgan had already developed a reputation for sound investment practices and good banking sense. His inheriting of his father's estate and position as managing partner of the London-based J.S. Morgan & Co., added to his own investments; and Drexel, organ & Co., further cemented this reputation. With the death of Tony Drexel in 1894, Pierpont stood in total command of a network of international banking houses in New York, London, Paris and Philadelphia. Morgan's pre-eminence in the banking community made him the obvious leader in the financial crisis of 1893-1895. Waiting in the White House with Grover Cleveland and his advisors, who had essentially ignored Morgan until the critical immediacy of the crisis was evident (Cleveland's advisors in estimating remaining gold reserves had apparently overlooked a $10 million draft due), Morgan presented his dramatic plan for a private contract between his syndicate and the U.S. government to provide the gold necessary for a restoration of public confidence. Morgan's telegram to the London office told of a new departure from old practice which he had just taken--a remarkable understatement by America's pre-eminent banker concerning his having just bailed out the U.S. government, in much the same way that, less than a century later, the government itself would bail out Chrysler Corporation. To Carosso's credit, he does not shrink from praising...