Editing J. P. Morgan (section)

==J.P. Morgan & Company: 1895–1913==
{{Main|J.P. Morgan & Co.}}
After the death of [[Anthony Joseph Drexel I|Anthony Drexel]], the firm was renamed J. P. Morgan & Company in 1895, retaining close ties with [[Drexel & Company]] of Philadelphia; [[Morgan, Harjes & Company]] of Paris; and [[J.S. Morgan & Company]] (after 1910 [[Morgan, Grenfell & Company]]) of London. By 1900, it was one of the world's most powerful banking houses, focused primarily on reorganizations and consolidations.{{citation needed|date=October 2014}}

Morgan had many partners over the years, such as [[George Walbridge Perkins]], but always remained firmly in charge.{{sfn|Garraty|1960|p={{page needed|date=January 2023}}}} His international reputation as a financier began to draw investors to the businesses that he took over.<ref>{{cite web|url=http://voteview.com/rtopic6_ucsd_4.htm|archive-url=https://web.archive.org/web/20060314192432/http://voteview.com/rtopic6_ucsd_4.htm|url-status=dead|archive-date=March 14, 2006|title=Morganization: How Bankrupt Railroads were Reorganized|access-date=January 5, 2007}}</ref>

===Panic of 1893 and election of 1896===
At the depths of the [[Panic of 1893]], around 1895, the [[United States Department of the Treasury|U.S. Treasury]] nearly depleted its gold reserves. Morgan put forward a plan for the federal government to buy gold from his and European banks, but it was declined in favor of a plan to sell government bonds directly to the general public. Morgan demanded a meeting with President [[Grover Cleveland]], where he claimed the United States government could default that day if action was not taken.{{citation needed|date=March 2024}}

Morgan came up with a plan to use an old [[American Civil War|Civil War]] statute{{which|date=January 2023}} that allowed Morgan and the [[Rothschild & Co|Rothschilds]] to sell 3.5&nbsp;million ounces<ref>The value of the gold would have been approximately $72&nbsp;million at the official price of $20.67 per ounce (equal to ${{Inflation|US|20.67|1895|fmt=c}} today) at the time. [http://www.nma.org/pdf/gold/his_gold_prices.pdf "Historical Gold Prices – 1833 to Present"]; [[National Mining Association]]; retrieved December 22, 2011.</ref> of gold directly to the U.S. Treasury in exchange for a 30-year bond issue.<ref>{{cite web|url=http://www.biography.com/people/jp-morgan-9414735|website=Biography.com|title=J.P. Morgan: Biography|publisher=A&E Television Networks, LLC|access-date=December 8, 2015}}</ref> The episode saved the Treasury but hurt Cleveland's standing with the populist agrarian wing of the [[History of the United States Democratic Party|Democratic Party]], ensuring his political career was over. In the [[1896 United States presidential election]], bankers came under a withering attack from [[William Jennings Bryan]], and Morgan was among many who donated heavily to Republican [[William McKinley]].<ref name="test">[[John Steele Gordon|Gordon, John Steele]] (Winter 2010). {{webarchive |url=https://web.archive.org/web/20100702060356/http://www.americanheritage.com/articles/magazine/ah/2010/4/2010_4_66.shtml |date=July 2, 2010 |title="The Golden Touch" }}, American Heritage.com; retrieved December 22, 2011; archived from [http://www.americanheritage.com/articles/magazine/ah/2010/4/2010_4_66.shtml the original] on July 10, 2010.</ref>

===Nikola Tesla's Wardenclyffe station: 1900===
In 1900, the inventor [[Nikola Tesla]] convinced Morgan he could build a trans-Atlantic wireless communication system based on his theories of Earth and atmospheric electrical conduction (eventually sited at [[Wardenclyffe Tower|Wardenclyffe]]) that would outperform the short-range radio wave-based wireless telegraph system then being demonstrated by [[Guglielmo Marconi]]. In what may have been a philanthropic investment,<ref>Carlson, W. Bernard (2013).  ''Tesla, Inventor of the Electrical Age''.  Princeton University Press, page 317</ref> Morgan gave Tesla $150,000 (equivalent to ${{Format price|{{Inflation|US-GDP|150000|1900|r=-5}}}} in {{Inflation/year|US-GDP}}) to build the system and Tesla offered him a 51% control of the patents. Almost as soon as the letter of agreement was signed, Tesla decided to scale up the facility to include his ideas of terrestrial [[Wireless energy transfer|wireless power transmission]] to make what he thought was a more competitive system.<ref name="teslatech.info">{{cite journal |first=Marc J. |last=Seifer |title=Nikola Tesla: The Lost Wizard |journal=ExtraOrdinary Technology |volume=4 |issue=1 |year=2006 |url=http://teslatech.info/ttmagazine/v4n1/seifer.htm }}</ref> Morgan refused to give Tesla any further money towards the project and, with Tesla unable to secure further investment capital, Wardenclyffe's development stalled and the site was abandoned by 1906.<ref name="teslatech.info"/><ref>{{cite book |first=Margaret |last=Cheney |title=Tesla: Man Out of Time |location=New York |publisher=Simon & Schuster |year=2001 |isbn=0-7432-1536-2 |pages=203–208 |url=https://books.google.com/books?id=HIuK7iLO9zgC&pg=PA203 }}</ref>

===Northern Securities: 1901–1904===
{{Main|Northern Securities Company}}
[[File:Fedor Encke - Portrait of John Pierpont Morgan 1903.jpg|alt= |thumb|upright|Portrait of J. P. Morgan; ''Cutthroat Capitalist'' –[[Oil on canvas]] by [[Fedor Encke]], 1903 ]]
The [[Northern Pacific Railway]] went bankrupt in the [[Panic of 1893]]. The bankruptcy wiped out the railroad's bondholders, leaving it free of debt, and a complex financial battle for its control ensued. In 1901, a compromise was reached between Morgan, New York financier [[E. H. Harriman]] and Minnesota railroad builder [[James J. Hill]]. To reduce competition in the Midwest, they created the [[Northern Securities Company]] to merge three of the region's most important railways: the [[Northern Pacific Railway]], the [[Great Northern Railway (U.S.)|Great Northern Railway]], and the [[Chicago, Burlington and Quincy Railroad]]. The parties ran into unexpected opposition from President [[Theodore Roosevelt]], who considered the merger bad for consumers and a violation of the seldom enforced [[Sherman Antitrust Act of 1890]]. In 1902, Roosevelt ordered Attorney General [[Philander Knox]] to sue to break it up. In 1904, the Supreme Court dissolved the Northern Security company; though Morgan did not lose money, his all-powerful political reputation suffered.{{sfn|Carosso|1987|pp=478–79}}{{sfn|Carosso|1987|pp=529–30}}{{sfn|Strouse|1999|pp=418–33}}{{sfn|Strouse|1999|p=515}}

===U.S. Steel: 1901–1913===
In 1900, Morgan began talks to purchase [[Andrew Carnegie]]'s steel business and merge it with several other steel, coal, mining and shipping firms. After financing the creation of the Federal Steel Company, Morgan merged it with the [[Carnegie Steel Company]] and several other steel and iron businesses (including William Edenbirn's Consolidated Steel and Wire Company) in 1901, forming the [[U.S. Steel|United States Steel Corporation]]. U.S. Steel was the world's first billion-dollar company, with an authorized capitalization of $1.4 billion, much larger than any other industrial firm and comparable in size to the largest railroads.{{citation needed|date=March 2024}}

U.S. Steel's goals were to achieve greater [[economies of scale]], reduce transportation and resource costs, expand product lines, and improve distribution to allow the United States to compete globally with the [[United Kingdom of Great Britain and Ireland|United Kingdom]] and [[Germany]].<ref name="steel">{{cite news | first=Peter |last= Krass |title=He Did It! (creation of U.S. Steel by J.P. Morgan) |publisher=Across the Board (Professional Collection) |date=May 2001}}</ref> U.S. Steel president [[Charles M. Schwab]] and others claimed the company's size would enable it to be more aggressive and effective in pursuing distant international markets.<ref name="steel"/> Critics regarded U.S. Steel as a monopoly, as it sought to dominate not only steel, but also the construction of bridges, ships, railroad cars, rails, wire, nails, and many other products. With U.S. Steel, Morgan captured two-thirds of the steel market, and Schwab was confident that the company would soon hold a 75% market share.<ref name="steel"/>

U.S. Steel also faced criticism for its labor policies. U.S. Steel was non-union and used aggressive tactics to identify and root out pro-union "troublemakers." The lawyers and bankers who had organized the merger, including Morgan, were more concerned with long-range profits, stability, good public relations, and avoiding trouble. His views generally prevailed, and the result was a "paternalistic" labor policy.{{sfn|Garraty|1960|p={{page needed|date=January 2023}}}}

===Failed London Underground line: 1902===
Morgan suffered a rare business defeat in 1902 when he attempted to build and operate a line on the [[London Underground]]. Transit magnate [[Charles Tyson Yerkes]] thwarted Morgan's effort to obtain parliamentary authority to build the [[Piccadilly, City and North East London Railway]], a subway line that would have competed with "tube" lines controlled by Yerkes.<ref>{{cite book |last=Badsey-Ellis |first=Antony |title=London's Lost Tube Schemes |publisher=Capital Transport |isbn=1-85414-293-3 |year=2005|pages=157–158}}</ref> Morgan called Yerkes' coup "the greatest rascality and conspiracy I ever heard of".<ref>{{cite book |first=John |last=Franch |title=Robber Baron: The Life of Charles Tyson Yerkes |location=Urbana |publisher=University of Illinois Press |year=2006 |isbn=0-252-03099-0 |page=298 |url=https://books.google.com/books?id=FIYRJWiXiJkC&pg=PA298 }}</ref>

===International Mercantile Marine and RMS ''Titanic'': 1902–1913===
In 1902, J.P. Morgan & Co. financed the formation of [[International Mercantile Marine Co.]] (IMMC), an Atlantic shipping company which absorbed several major American and British lines, in an attempt to monopolize the shipping trade. Morgan hoped to dominate transatlantic shipping through interlocking directorates and contractual arrangements with the railroads, but that proved impossible because of the unscheduled nature of sea transport, American antitrust legislation, and an agreement with the British government.{{citation needed|date=March 2024}}

Morgan had booked a luxury suite with a private promenade deck on the {{RMS|Titanic}} and scheduled to sail on the ill-fated maiden voyage of the ship, which was owned by an IMMC subsidiary, [[White Star Line]], but those plans were later changed.{{sfn|Chernow|2001|loc=p. 146}}<ref>Steven H. Gittelman, J.P. Morgan and the Transportation Kings: The Titanic and Other Disasters, University Press of America, 2012, pages 286-287</ref> The ship's famous sinking was a financial disaster for IMMC. Analysis of financial records shows that IMMC was over-leveraged and suffered from inadequate cash flow causing it to default on bond interest payments.{{efn|After Morgan's death, the IMMC was forced to apply for bankruptcy protection in 1915. Its fortunes were saved by [[World War I]], and it eventually re-emerged as the [[United States Lines]], which went bankrupt in 1986.}}{{sfn|Clark|Clark|1997}}<ref>Steven H. Gittelman, ''J. P. Morgan and the Transportation Kings: The Titanic and Other Disasters'' (Lanham: University Press of America, 2012).<!-- ISSN/ISBN, pages needed --></ref>

In response to the sinking, Morgan purportedly said:

{{blockquote|Monetary losses amount to nothing in life. It is the loss of life that counts. It is that frightful death.<ref>{{cite news|last=Daugherty|first=Greg|title=Seven Famous People who missed the Titanic| url=https://www.smithsonianmag.com/history/seven-famous-people-who-missed-the-titanic-101902418/|access-date=February 26, 2023|newspaper=Smithsonian Magazine|date=March 2012}}</ref>}}

===Panic of 1907===
[[File:Morgan, Sam.jpg|thumb|left|upright=.8|Morgan's overpowering role in the American economy was demonstrated in this political cartoon]]
The [[Panic of 1907]] was a financial crisis that almost crippled the American economy. Major New York banks were on the verge of bankruptcy and there was no mechanism to rescue them, until Morgan stepped in to help resolve the crisis.{{sfn|Carosso|1987|pp=528–48}}{{sfn|Bruner|Carr|2007|p={{page needed|date=January 2023}}}} To ease the crisis, Secretary of the Treasury [[George B. Cortelyou]] earmarked $35 million of federal money to deposit in New York banks.<ref>{{cite book|last1=Fridson|first1=Martin S.|title=It Was a Very Good Year: Extraordinary Moments in Stock Market History|date=1998|publisher=John Wiley & Sons|page=6|isbn=9780471174004|url=https://books.google.com/books?id=wQxxN7W1vowC&q=george+cortelyou+%2435+million&pg=PA6|access-date=September 21, 2015}}</ref> Morgan then met with the nation's leading financiers in his New York mansion, where he forced them to devise a plan to meet the crisis. [[James Stillman]], president of the National City Bank, also played a central role. Morgan organized a team of bank and trust executives which redirected money between banks, secured further international lines of credit, and bought up the plummeting stocks of healthy corporations.{{sfn|Carosso|1987|pp=528–48}}

A delicate issue arose regarding the brokerage firm of Moore and Schley, which was deeply invested in the [[Tennessee Coal, Iron and Railroad Company]] (TCI). Moore and Schley had used over $6 million of TCI stock as collateral for loans to Wall Street banks, which the firm now could not pay. If Moore and Schley failed, it could precipitate a larger crisis. Thus, Morgan proposed merging the TCI with U.S. Steel, one of its chief competitors.{{citation needed|date=March 2024}}

U.S. Steel president [[Elbert Gary]] agreed, but was concerned that [[antitrust]] implications could obstruct the merger. Morgan sent Gary to see President [[Theodore Roosevelt]], who promised legal immunity for the deal. U.S. Steel thereupon paid $30 million for the TCI stock and Moore and Schley was saved. The announcement had an immediate effect; by November 7, 1907, the panic was over.{{sfn|Carosso|1987|pp=528–48}}

===Criticisms and investigations===
[[File:I Like a Little Competition.jpg|alt=|thumb|upright|''"I Like a Little Competition"—J. P. Morgan'', [[pen and ink]] by [[Art Young]], relating to the answer Morgan gave to the [[Pujo Committee]] in 1912, when asked whether he disliked competition.{{sfn|Burgan|2007|p=93}}]]
While conservatives hailed Morgan for civic responsibility, strengthening the national economy, and devotion to the arts and religion, critics of banking and consolidation viewed him as one of the leading figures in the system they rejected.{{sfn|Strouse|1999|p={{page needed|date=January 2023}}}}{{sfn|Morris|2006|p={{page needed|date=January 2023}}}} They attacked Morgan for the terms of his 1895 loan of gold to the U.S. Treasury. Many,{{who|date=January 2023}} including writer [[Upton Sinclair]], attacked him for his handling of the [[Panic of 1907]].{{how|date=January 2023}}

In December 1912, Morgan testified before the [[Pujo Committee]], a subcommittee of the [[United States House Committee on Banking and Currency|House Banking and Currency committee]]. The committee ultimately concluded that a small number of financial leaders was exercising considerable control over many industries. The partners of J.P. Morgan & Co. and directors of First National and [[Citibank|National City Bank]] controlled aggregate resources of $22.245&nbsp;billion, which [[Louis Brandeis]] compared to the value of all the property in the twenty-two states west of the [[Mississippi River]].{{sfn|Brandeis|1914|loc=ch. 2}}

In the early 2000s, an investigation by historian James Lide discovered that through parts of its business, [[JPMorgan Chase]] accepted thousands of slaves as collateral on loans made to plantation owners in the early 19th century, and that it ended up owning several hundred slaves.<ref>{{Cite news |last=JOURNAL |first=Robin SidelStaff Reporter of THE WALL STREET |title=A Historian's Quest Links J.P. Morgan To Slave Ownership |url=https://www.wsj.com/articles/SB111568595843228824 |access-date=May 1, 2023 |newspaper=Wall Street Journal |date=May 10, 2005 |language=en-US}}</ref> The banks in question, Citizens' Bank and Canal Bank, both now part of JPMorgan, served plantations from the 1830s until the [[American Civil War]], and sometimes took ownership of slaves when the plantation owners defaulted on loans. JPMorgan estimated that between 1831 and 1865, the two banks accepted approximately 13,000 slaves as collateral and ended up owning about 1,250 slaves. An apology was made in compliance with a rule requiring companies to detail past dealings with the slave trade when doing business with the city of Chicago.<ref>{{Cite web |last=Moore |first=Jamillah |date=June 30, 2022 |title=JP Morgan Bank Slavery Disclosure |url=https://www.phila.gov/media/20230206134453/JP-Morgan-Bank-Slavery-Disclosure.pdf |access-date=May 2, 2023 |website=City of Philadelphia}}</ref><ref>{{Cite journal |last=Janssen |first=Claudia I. |date=January 2012 |title=Addressing Corporate Ties to Slavery: Corporate Apologia in a Discourse of Reconciliation |url=http://www.tandfonline.com/doi/abs/10.1080/10510974.2011.627974 |journal=Communication Studies |language=en |volume=63 |issue=1 |pages=18–35 |doi=10.1080/10510974.2011.627974 |s2cid=30404803 |issn=1051-0974}}</ref>