The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

Ron Chernow

Language: English

Pages: 848

ISBN: 0802144659

Format: PDF / Kindle (mobi) / ePub


Published to critical acclaim twenty years ago, and now considered a classic, The House of Morgan is the most ambitious history ever written about American finance. It is a rich, panoramic story of four generations of Morgans and the powerful, secretive firms they spawned, ones that would transform the modern financial world. Tracing the trajectory of J. P. Morgan’s empire from its obscure beginnings in Victorian London to the financial crisis of 1987, acclaimed author Ron Chernow paints a fascinating portrait of the family’s private saga and the rarefied world of the American and British elite in which they moved—a world that included Charles Lindbergh, Henry Ford, Franklin Roosevelt, Nancy Astor, and Winston Churchill. A masterpiece of financial history—it was awarded the 1990 National Book Award for Nonfiction and selected by the Modern Library as one of the 100 Best Nonfiction Books of the Twentieth Century—The House of Morgan is a compelling account of a remarkable institution and the men who ran it, and an essential book for understanding the money and power behind the major historical events of the last 150 years.

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night he was usually congratulated by the others on being about to take a half-holiday.”17 The purchasing operation reflected the size and the complexity of modern warfare. World War I seemed both primitive and modern, an incongruous mixture of cavalry charges and zeppelin raids, cannon fire and mustard gas. There were endless salvos of deadly projectiles: at the Battle of the Marne alone, two hundred thousand shells were exploded in a day. So the logistical needs were immensely varied and of

exercising its new power. The arrangement took on an unexpected longevity; the procedure became so entrenched that J. P. Morgan and Company would brief the incoming Coolidge and Hoover administrations on how it worked. Later, in remarkable testimony to government-banker ties in the Diplomatic Age, Tom Lamont would state categorically that no sizable loan of the 1920s was made without Washington’s tacit approval. The line between politics and finance blurred, then disappeared. The cognoscenti who

certain banks—“relationship banking”—would be a cardinal feature of private banking for the next century. It came about not because bankers were strong but because companies were still weak. PIERPONT’S life was now prosperous and settled. He was making the gigantic salary of $75,000 a year. He and Fanny lived in a brownstone at 6 East Fortieth Street, just across Fifth Avenue from the Croton Reservoir, which arose like a vast Egyptian tomb on the site of today’s New York Public Library. The

interest rates. Treasury Secretary John Snyder spied in Sproul and Wall Street a cabal intent on returning to the good old days, when the New York Fed and Morgans dictated monetary policy. Truman was eager to stifle inflation jitters during the Korean War and was irritated by what he saw as the bankers’ patent selfishness. He gave Leffingwell a tongue-lashing reminiscent of the earlier New Deal diatribes: I appreciate your interest in this matter but it seems to me that an emergency is a very

answer. When Deutsche Bank then complained about the issue’s being sold outside Germany, Galbraith said Morgans was simply heeding the client’s wishes. He didn’t quite fathom the depth of anger he had aroused or how deeply he had offended tradition. Deutsche Bank would bide its time and get even in extremely dramatic fashion. Though extraterritorial in nature, the early Euromarkets were riled by fierce nationalistic clashes. Except in the Eurodollar market, banks expected to lead issues

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