How a Dangerous, Exploitative Railroad Industry Created J.P

Morgan’s Fortune

Before the Jupiter of Roman myth could become king of the sky and thunder, he had to overthrow his father in a mighty battle. Not so for the Jupiter of Wall Street. J.P. Morgan had trusted his father to set him on the right path and steer his career, and even when his father was overbearing, Morgan never mounted a challenge. The creator of the biggest companies the world had ever known was, himself, very much the creation of paternal influence. The young Morgan, once established, proved instinctively suited to the times in which he lived. It was an era of raucous, unfettered competition: chaotic capitalism that he would try to order.

John Pierpont Morgan was born in April 1837 into a wealthy family and inherited his father’s European connections and tastes, along with part of his fortune. He grew up in the river town of Hartford, Connecticut, a thriving center of trade and, by necessity, insurance. John preferred to be called Pierpont, though schoolmates nicknamed him Pip. As the eldest of five and the only son to live past childhood, he was also entitled to a lifetime of moral education and cautionary advice from his father, Junius, and continual redirection when he strayed. His mother, Juliet, was troubled by depression and lived at a sullen remove from the family. She once scolded Pierpont for writing home too often.

Pierpont suffered physically as a child. For months before and after his first birthday he was so frequently overcome by convulsions that his parents feared he might not survive. In adolescence, he missed school because of sore throats, headaches, earaches, boils on his face, and ulcerated sores on his lips. When Pierpont was fifteen, his father sent him to the Portuguese Azores, hoping the warm climate would cure his rheumatic fever. He stayed there, with only a family friend and a doctor to check on him, for four months.

Junius moved Pierpont into and out of boarding and public schools—transferring him nine times in thirteen years—without explanation. Pierpont didn’t complain. He was an indifferent student in most subjects other than math: “full of animal life and spirits . . . and not renowned as a scholar,” one classmate later described him. Pierpont sought order in the only ways he could. He collected and organized, first stamps and autographs of Episcopal bishops and then his own accounts. When he traveled, he noted the latitude of his destination and the time of his arrival, and wherever he was he kept a leather-bound journal of daily expenses: paper and postage, ice cream and strawberries, beaver hats, silk gloves, buggy rides, opera tickets.

In 1854, the family moved to London after Junius accepted a partnership in the British office of the premier American private bank, run by George Peabody, to help direct European capital to the United States. Junius would one day take over, and he hoped Pierpont would do so after him: a Morgan dynasty.

Pierpont was seventeen. He had graduated from the English High School of Boston, which specialized in math, and was eager to begin his career. But Junius wanted him to learn French and German and enrolled him at a school near Lake Geneva. Pierpont considered the accommodations too sparse and the studies uninteresting. “Adapts himself very slowly . . . Answers back . . . sulky,” the headmaster wrote of the new student. Outside the classroom, he was happier. He enjoyed the camaraderie of the other American students and soon made himself their unofficial leader. If they went on an expedition, he planned it; if they hosted a party, he arranged it. Taking charge would become a lifetime impulse—one, though, that Pierpont would have to curb around his father for years.

At the University of Göttingen, where Junius sent him next, Pierpont was such an exceptional math student that his professor thought he could one day join the academy. Neither Morgan considered that a suitable career path.
The possibilities for making a name and a fortune were so extravagant and, initially, the oversight so minimal that railroads naturally attracted uninformed investors and unscrupulous brokers.
In 1857, Junius arranged a first job for Pierpont, as an unpaid clerk at a New York investment firm linked to his. It specialized in financing the railroads eager builders were haphazardly laying across America. The industry was all raw hustle. Lines overlapped each other or ran parallel, creating a tangle of tracks of different widths and trains running on different time clocks. Operators constructed as much as they could afford and then stopped, requiring passengers to regularly switch cars to complete their trips. When Abraham Lincoln traveled from Springfield, Illinois, to New York in 1860, he had to change trains four times (and take two ferries) over the course of four days.

Pierpont moved into the city’s most fashionable neighborhood, around Union Square, and lived comfortably on the two hundred dollars his father sent every month. In exchange, Junius expected Pierpont to ignore the chance to make a quick profit in the stock market. But there were many chances. When Pierpont bought shares in a steamship company benefiting from a large government subsidy to carry mail, Junius disapproved. “Bring your mind quietly down to the regular details of business,” he advised. Pierpont was to become a banker beyond reproach, trusted to handle other people’s money and not speculate with his own. “Never under any circumstances do an act which could be called in question if known to the whole world,” Junius wrote. Integrity would give the Morgans a competitive edge in America.

After Pierpont served as an apprentice for two years, Junius decided his son should resign. The firm’s partners praised their clerk’s “untiring industry,” and suggested he would be even more successful if he approached colleagues with “suavity and gentle bearing” instead of impatience. Pierpont, recipient of regular job evaluations from his father, graciously accepted this one.

He may also have been distracted. He had fallen for Amelia Sturges, known as Memie, a bright, well-read, high-spirited member of his social circle. They planned a rendezvous in Europe that autumn. On their way home, Pierpont moped when the ship’s captain seemed to take an interest in Memie. “One of my friends very blue all day. Disappeared from dinner very suddenly,” she wrote in her diary. “No cry of Man Overboard so concluded he was all right.” They were engaged in August 1860.

That November, Abraham Lincoln was elected president, and within half a year, the North and the South were at war. But Pierpont was happily preoccupied by Memie and the autumn wedding they were planning. He didn’t even mind that Junius hadn’t found the right firm for him yet. He tried some freelance work instead, helping to finance a controversial deal to supply the ill-prepared Union Army with five thousand Hall carbines, refurbished rifles left over at the end of the Mexican-American War in 1848. Pierpont didn’t see the sale through but earned a generous commission for his efforts. A congressional committee called the entire transaction profiteering. The Supreme Court didn’t. It ruled the government had to pay as promised, twenty-two dollars for each altered rifle originally priced at $3.50. More troubling for Pierpont, Memie had taken ill with a severe, lingering cough. A week before the wedding, she was still unwell, vomiting and sleeping badly. She looked so thin that she decided to keep a veil over her face during the entire marriage ceremony. It took place in her parents’ Manhattan home at ten in the morning on October 7, 1861, in front of a small group of friends and family. Two days later, the newlyweds left New York for a European honeymoon.

The couple consulted specialists in Paris, who determined Memie had tuberculosis: cause unknown, cure undiscovered. Pierpont didn’t share the diagnosis with Memie, only the doctors’ recommendations, which included rest and warm air as well as turpentine pellets, cod liver oil, and donkey’s milk. Nothing helped. Not the roses and geraniums he brought or the apples he roasted, not the nightingales and canaries that sang in their hotel room. By December, Memie was too weak to stand. Pierpont asked his mother-in-law to cross the Atlantic as soon as she could and meet them in Nice. Memie’s father had come to regard Pierpont as a hypochondriac and thought he might be exaggerating the danger of her condition, but he sent Memie’s mother and brother over in January.

After they arrived, Pierpont relented to pressure from Junius and traveled to London to discuss business. By the time he could wrest himself away ten days later, Memie was much worse. She threw her arms around him when he arrived at her bedside, and just that took all her energy.
Morgan’s days came to be consumed by the railroads: a sprawling, overextended, indebted industry that was growing with careless speed and changing everything it touched.
Pierpont stayed close to her throughout the day. At eight thirty the next morning, he was called from his bedroom to hers. She died moments later. They had been married four months.

Back in New York, Pierpont formed a business partnership with his cousin and hoped “constant occupation” would keep him from dwelling on his grief. His loss hung on him, and so did his regret. No one blamed Pierpont for failing to save Memie—except for Pierpont himself. His gaze intensified, his hazel eyes seemed to darken, and his constitution weakened again. In the days following her funeral that spring, sores appeared all over his body, a mild form of smallpox, and once he recovered, headaches would sometimes overcome him. Throughout those months, and for many afterward, Pierpont stayed in touch with Memie’s parents and held on to her Bible. He acquired his first oil painting, of a fragile young woman, and hung it over the mantel in his library. He read poetry about lost love. The Civil War provided opportunities to trade foreign exchange and new government bonds, and, eventually, offer railroad financing.

But Pierpont exhausted himself and suffered new breakdowns of his nerves and body. “I am never satisfied until I either do everything myself or personally supervise every thing done even to an entry in the books,” he wrote to his father in September 1862. Those periods of helplessness were also the only times when the pressure from Junius let up, and Pierpont was forced to relax his own exacting standards. His vigor returned by the next summer, and on behalf of his father’s firm and his own, he was issuing short-term loans, brokering securities, and financing commodity trades. That year, he, like many men of means, paid a substitute three hundred dollars to take his place in the army. He went on to earn fifty-eight thousand dollars from his firm. Lincoln’s salary that year was twenty-five thousand dollars.

Pierpont supplemented his salary by manipulating the market for gold. He and a friend created an artificial shortage by shipping gold they had bought on credit to London. When prices in America went up, they sold, and each took a profit of sixty-six thousand dollars. Other Wall Street brokers admired the scheme. Junius was furious, believing Pierpont had been reckless and greedy and had violated the Morgan code of conduct. Junius at first threatened to cut professional ties, then decided instead to arrange for a senior partner to join his son in New York. For much of the next two decades, Pierpont would have to be the junior.

In March 1865, as the world watched the war draw down, Pierpont proposed to Frances Louisa Tracy. She was twenty-two; he was close to twenty-eight. They lived in the same neighborhood, worshipped at the same Episcopal church, occupied equally comfortable positions in Manhattan’s social hierarchy. Fanny, as she was called, enjoyed attending the opera and concerts with him, and he enjoyed the idea of being married again. The nation was still in mourning for the slain President Lincoln when, on May 31, Pierpont and Fanny wed at St. George’s Church. She gave birth to their first child, Louisa, nine months and ten days later.

They had three more children over the next seven years: John Pierpont Jr. (who always went by Jack), Juliet, and Anne. Fanny, too, could be overwhelmed by melancholy, but while Pierpont craved work and social distractions, she needed quiet. She wanted to move to the suburbs of New Jersey. He told her he couldn’t survive there. Eventually, they began to create separate lives for themselves in different homes, cities, sometimes continents.

By 1871, a new national optimism had taken hold, a confidence in an expanding economy of steel and oil and electric power, of perseverance and luck. It was a time that Mark Twain would soon call the Gilded Age. Americans paid to hear a lecture titled “The Aristocracy of the Dollar,” and Walt Whitman was paid one hundred dollars to compose “Song of the Exposition” in celebration of the country’s industrial strength. John Sherman, a Republican senator from Ohio, wrote to his brother, General William Tecumseh Sherman, of how the wealthy “talk of millions as confidently as formerly of thousands.” With the massively popular serialized novel Ragged Dick, Horatio Alger’s fictions of social mobility made it seem as if anyone who worked hard enough could elevate themselves. Personal thrift for some; stock market speculation for others.

Pierpont grew weary amid this thronging hopefulness. He was so strained by his dealmaking and worn out by his perfectionism that he wanted to retire at age thirty-three. His father refused to let him. Instead, Junius allowed Pierpont to take his family to Europe for a year.

When he returned, Pierpont started a new partnership with Anthony Drexel, head of a prominent Philadelphia banking family. Drexel, who was twelve years older than Pierpont, had a reputation sound enough to satisfy Junius. Drexel’s name came first at the firm, and Junius still held sway, but Pierpont was permitted to manage the New York office. He had more authority than he was used to, which allowed him to reveal his vaulting ambition. But Drexel, Morgan & Company it was for the next two decades, until Drexel died and Morgan renamed the firm.

Drexel set Morgan up nicely. He paid more than $900,000, in gold, for several lots on Wall Street. Number 23 sat at the intersection with Broad Street across from the New York Stock Exchange, and when Drexel purchased the land in 1872, no comparable property in any city in the world had been sold for more. The six-story building was known simply as “the Corner.” It was constructed with white Vermont marble, a grand mansard roof, and statues representing Europe and America above the main entrance. Its interior was finished in black walnut and mahogany, with marble floors, steam heat, and, after Morgan financed Edison’s electric company, six hundred lightbulbs. It was among the first buildings to be illuminated entirely by electricity. The firm rented out office space on the upper floors, and several railroad companies relocated their headquarters to take up residence there.

Morgan’s days came to be consumed by the railroads: a sprawling, overextended, indebted industry that was growing with careless speed and changing everything it touched. It absorbed more money, mostly from European investors, than any enterprise before and more natural resources than any other in America. Some 170 million acres of the country’s public land would become the private property of the railroads, given, not sold, to them. Lincoln hoped transcontinental railroads would be a nation-building project after the Civil War. For every mile of track laid, the government awarded companies 12,800 acres, along with a bonus: any coal or iron underground.

Railroads relied on the labor of Chinese immigrants in the West and Irish, Italian, and Greek immigrants in the East. They first brought Scandinavian immigrants to the Midwest, then Eastern Europeans. The cars carried citrus, timber, cotton, grain, gas, pigs, cattle, mail, and mail order catalogs across the country. They advocated for public schools to create a ready supply of clerks. Their need for precise train schedules helped standardize time itself.

Railroads altered the geography of opportunity. Their lines determined which towns became impoverished and which prospered. Billings, Cheyenne, Tacoma, Reno: these were not places that would have otherwise attracted populations of any size. The companies’ shipping rates, adjusted as owners saw fit, influenced the economics of small and big businesses. They handed out free passes to the politicians they hoped to sway. The railroads had a greater impact on people’s well-being than the government, and though Americans might not have liked that feeling of dependence, they had to live with it.

The possibilities for making a name and a fortune were so extravagant and, initially, the oversight so minimal that railroads naturally attracted uninformed investors and unscrupulous brokers to take advantage of them. They sold overpriced stocks and bonds to build lines with little prospect of success. Owners bribed politicians, bought off journalists, pushed aside Native American tribes, and dismissed environmental concerns as a matter of business.

Safety precautions were especially lax. Tens of thousands of railroad employees died or ended up mangled every year. “It was taken as a matter of course that the men must of necessity be maimed and killed,” wrote one railroad commissioner hoping to improve that record. Many of the railroads were built cheaply. Repairs weren’t timely. Lines ran in both directions on single tracks with rudimentary signal systems. Men had to climb on top of freight cars traveling 20 miles an hour to activate the hand brakes. Then they had to jump to the next car to do it again. If the train lurched, they could tumble to the ground. A low overhead bridge could knock them out. Men linked or unlinked cars by maneuvering in between, and inevitably some fell underneath.

In Winona, Minnesota, one day in February 1873, E. Campbell, the engineer on a passenger train, didn’t sound the alarm or apply the brakes when he saw a freight train on the tracks. The trains collided and both engines were smashed. Campbell jumped off in time. But J. C. Reilly, the baggage master, was badly burned when he fell onto the stove.

Conductor Arthur Lindsley lost his right arm after he was run over by a freight train at Janesville, Wisconsin, in April of the same year. Fireman R. Brown was killed in an accident at Vincent Station, Ohio, in July. In November, an employee named Amandas Hagerty was bent over the track repairing a switch at the Mauch Chunk station in Pennsylvania on a Wednesday afternoon. Maybe he heard the No. 4 passenger train backing in. Maybe he didn’t. But he didn’t have time to escape. Two wheels severed his body, and he died immediately.

The mere fact of working on the railroads shortened a man’s life expectancy. But if a brakeman or switchman or fireman proved himself and managed to avoid injury, he figured his job was secure.

Then, in 1873, one of the Morgans’ most prominent American rivals, Jay Cooke and Company, went bankrupt. Cooke, who had assembled his own army of agents to sell government bonds across the Union, was known as the financier of the Civil War. Afterward, he turned his considerable talents for promotion to the railroads. He would finance the construction of the Northern Pacific Railroad, meant to traverse the sparse, frigid lands of Minnesota, North Dakota, Montana, Idaho, and Washington. Cooke promised a temperate climate, tropical vegetation, and a broad fertile belt “within the parallels of latitude which in Europe, Asia, and America embrace the most enlightened, creative, conquering, and progressive populations.” Instead, the land through which the Northern Pacific would pass was disparagingly called “Jay Cooke’s banana belt.” When wheat prices fell and farmers failed, trouble followed for Cooke. He couldn’t find enough buyers for one hundred million dollars’ worth of bonds. His firm went under, and the shock set off a series of bank failures that caused a panic on Wall Street and shut down the stock exchange for ten days.

Banks collapsed. Businesses failed. People lost their savings and their homes. By 1876, an uncounted number of adults were unemployed and underemployed, and tens of thousands roamed the country looking for food and work, sleeping in police stations when they could. The railroad men’s expectation of lifetime positions was revealed as empty hope. Some tried to leave the country. Two hundred or so accepted work building a railroad in Brazil. After their ship sank off the coast of North Carolina, hundreds of other desperate men applied for the jobs.

The Long Depression ground on for six years, contributing to an international financial crisis. European investors lost six hundred million dollars in American railroad stocks. It was a scare for the Morgans. Pierpont’s health faltered; he stopped exercising. Friction in the office sank him lower. Amid the dreariness, he tried again to retire in 1876, and, failing to secure permission from his father, left for a summer abroad that lasted until the following spring.

In July 1877, firemen and brakemen in Martinsburg, West Virginia, walked off the job in a spontaneous protest against the second wage cut in a year by the Baltimore & Ohio. Railway workers across the country joined them, stopping train traffic in Baltimore, Philadelphia, Pittsburgh, Chicago. They took control of switches, uncoupled rail cars, blocked trains, and set fire to railway buildings and bridges. Breweries and flour mills idled in St. Louis. Banks closed. Bridges burned.

In Pennsylvania, anthracite coal miners stopped digging. The railroads oversaw the mines and transported the coal. “Bread is what we are after and, sir, we have not had enough to keep our families from suffering say for nearly two years, and it is written that man should not live by bread alone,” one miner told the governor after being granted an interview in his private rail car—an unusual gesture of conciliation. But to no avail. Coal fields flooded and steel mills shut down.

Executives called on state officials for help. “There are two military companies at Martinsburg, armed and supplied with ammunition,” the governor of West Virginia replied to a Baltimore & Ohio vice president. But the local militia sympathized with the strikers. The governor called for federal intervention. “Please send in addition 100 men and two pieces of artillery,” he said in a telegram to the secretary of war.

The military campaign against Native Americans out west had sapped the Army’s coffers. Pierpont—whose firm held almost a million dollars of the Baltimore & Ohio’s short-term debt, while his father’s firm held another four million—offered to lend the federal government money to pay Army officers. The military moved into the cities, subdued the streets, and took control of the railroads and mines.

Pierpont assessed the credit risk. The Baltimore & Ohio’s losses required it to take on longer-term debt, which he knew would be a hard sell. Instead, he and Junius organized a banking syndicate to buy and hold the railroad’s bonds until circumstances changed. “Affairs for a time looked very critical and gave me much anxiety for many days and nights,” Pierpont told one of his father’s partners that August. It took years to sell all the bonds.

More than one hundred thousand workers around the country protested that summer of 1877. One hundred were killed and a thousand jailed. The public called it a rebellion; the government called it a riot. Later, it came to be known as the Great Upheaval.

In November, the country’s business and political elite set aside any lingering worries and came together at Delmonico’s Restaurant on Fifth Avenue to commend Junius for upholding the nation’s credit and “honor in the commercial capital of the world.” That capital was still London. The Morgans had become trusted advisers on both sides of the Atlantic, just as Junius had wanted. “A kind Providence has been very bountiful to us,” Junius said. “And under this guidance, the future is in our own hands.”

By the 1880s, business was humming again. The railroads comprised 80 percent of the listings on the New York Stock Exchange, brought in revenue about two times as great as the federal government’s, and added an average of seven thousand miles of track each year. They couldn’t all survive. But in their construction, promotion, and dissolution, they provided possibilities of all kinds. When William Vanderbilt wanted to secretly sell shares in the railroad his father, Cornelius, had built, Pierpont helped. Vanderbilt’s nearly exclusive ownership of the New York Central was becoming a liability, likely to provoke either new restrictions or taxes. He wanted to avoid both. Pierpont persuaded the British investors he and his father had cultivated to buy the shares and give him the voting power, which meant he could take a seat on the company’s board. He made half a million dollars in the process.

Pierpont’s firm had also made a killing easing the Long Island Railroad into and out of bankruptcy. His most conspicuous deal involved helping sell forty million dollars’ worth of Northern Pacific bonds in November 1880 so the company could lay down the final sixteen hundred miles of track required to reach the Pacific. It was the largest railroad bond offering in the country to date. Before the Panic of 1873, Jay Cooke’s aggressive salesmanship on behalf of the Northern Pacific had helped inflate the railroad bubble in the first place. Now Pierpont was reaping the rewards. The Northern Pacific would become pivotal to his ambitions—and his conflict with Roosevelt.

New York thrived too. Plans were set for the city’s most expansive apartment cooperative, a twelve-story redbrick Victorian Gothic pile on West Twenty-Third Street, with the top floor given over to artists’ studios. It would be the tallest building in the city. (Later, it would become the Chelsea Hotel.) The Brooklyn Bridge was almost complete after more than a decade under construction. Luxury department stores opened on Broadway, and carriages lined the streets of Ladies’ Mile.

Morgan’s share of his firm’s profits was eight hundred thousand dollars in 1880 and nearly one million the year after. He acquired his own notable address at 219 Madison Avenue, in a neighborhood where he already knew everyone. The brownstone was renovated to his uncompromising requirements: walnut doors at a new entrance on Thirty-Sixth Street; a stainedglass dome and stained-glass sliding panels opening onto the front hall; twin white oak staircases; a two-story safe in the butler’s pantry. The mansion was the first private residence to rely completely on Edison’s lights. Morgan installed a private telegraph wire connecting the house to 23 Wall Street. The telegraph was meant for business but proved useful at other times, including when he accidentally locked the family’s French poodle in the wine cellar and carried off the key.

The drawing room took up the entire west side of the house, with a ceiling painted to look like a mosaic. The library was decorated with octagonal panels of allegorical figures representing History and Poetry, painted by Christian Herter, the premier interior designer of the time. On the shelves were Robert Burton’s Anatomy of Melancholy from 1621, a copy of the John Eliot Indian Bible from 1663, sixty-six volumes on Napoleon and His Generals, and hundreds of other leather-bound treasures. Morgan wanted the best of everything—“Nothing but masterpieces,” a friend said. “And he can afford to have them.”
Morgan devised a plan whose legality might have made others hesitate, but he was willing to take the risk.
That year, Morgan also purchased his first yacht, Corsair. It was a 185-foot black-hulled steamer, the largest and most technically sophisticated in the country. His close friends began to call themselves the Corsair Club and Morgan himself the Commodore. During summer weekends, he would steam up the Hudson to Cragston, the country estate near West Point where his family lived in the hot months. There he maintained kennels for his show dogs, collies mostly; he liked to give their puppies as gifts, but only to those he held in the highest regard. On Sunday evenings he and his guests slept aboard the yacht so they could get under way at daybreak. By the time they arrived on the New Jersey side of the Hudson, a hearty breakfast was ready. As they finished, around nine, a launch pulled up alongside Corsair and everyone went ashore. Morgan’s carriage waited to take him to 23 Wall Street.

He worked on the ground floor, in an office with glass walls, at a large desk, plain and businesslike. He kept the door open. Sometimes he could be seen swinging in his pivot chair, if anybody dared look. He usually had a long cigar, banded in gold, often unlit in his mouth or in his left hand. His Chesterfield topcoat and silver-tipped mahogany walking stick were set aside. Mr. Morgan, as everyone called him, attended to matters large and small: the daily flow of cash and accumulation of debt, the stream of potential dealmakers and advice seekers. He would concentrate intensely, maybe for a few moments, maybe for more, then arrive at a decision, dispatch instructions, and move on. That focus was his genius, but it was the genius of a monarch not a democrat. It kept him isolated, made him severe, and sometimes left him exhausted. Morgan said he could do a year’s work in nine months, but not twelve. His impatience could be withering. When a church organist gathered the nerve to ask a favor, Morgan gave him a minute. “I’m struggling to . . .” the man stammered. “So am I,” Morgan supposedly replied. “Keep struggling. Good day.” Then he walked back to his desk.

Morgan became more than a banker in the 1880s. His transformation wasn’t gradual, it was absolute, and it happened in a day. Morgan worried that European railroad investors were wearying of American imprudence, of accounting fictions and expensive rivalries that wasted their money. He made up his mind to remedy some “sore spots” in the industry. One of them ran right past his summer home. The West Shore line had been built to compete with the New York Central, operating parallel to it from New York City to Buffalo on tracks close enough to be visible. There wasn’t enough freight traffic for two lines, though, so each reduced rates until the West Shore was insolvent and the Central was heading that way.

Morgan devised a plan whose legality might have made others hesitate, but he was willing to take the risk. He invited the railroad executives onto Corsair and didn’t let them off until they came to an agreement to end their hostilities. If they didn’t, they wouldn’t get any more money from him. They ate a lovely lunch and smoked cigars as they sailed to Sandy Hook, New Jersey, then up the Hudson to West Point, where they could view the military academy high on the bluffs, and back again. “You must come into this thing now,” Morgan said to the lone holdout, and then said little else. By day’s end they had a deal. The Central would buy the West Shore out of bankruptcy. In exchange, the West Shore owners could buy from the Central’s owners a line in Pennsylvania to combine with the one they already operated there. Because such a monopoly was unlawful in Pennsylvania, Morgan would step in as a proxy buyer.

That didn’t fool everyone. The Pennsylvania Supreme Court eventually ruled against the merger, but by then the rivalries between the railroads and the men had dissipated. Each had been able to raise their rates, and their stock prices and dividends soon followed. Only their customers paid. Morgan continued to apply his remedies, and to be strained by his work.

As he reached age fifty, even his father warned him to slow down and stop responding so intensely to every entreaty, however desperate. (“Let the ‘small fry’ go to some other Doctor,” Junius said.) But the business community had come to believe that Morgan was indispensable. He was seen as the one man who could convince antagonists to cooperate. Even though they didn’t always heed him, he would continue trying throughout the next decade. Morgan sought money and its rewards—the homes, the yacht, the art—but as America’s economy expanded, he sought something bigger and more fundamental, too. He wanted to rationalize the free-for-all of capitalism—to make it orderly and concentrated, directed from above by the powerful men who, he was certain, knew best.


From The Hour of Fate by Susan Berfield. Used with the permission of Bloomsbury. Copyright © 2020 by Susan Berfield.
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