J.P. Morgan: Biography & Facts

Instructor: Matthew Helmer

Matt is an upcoming Ph.D. graduate and archaeologist. He has taught Anthropology, Geography, and Art History at the university level.

J.P. Morgan is one of America's first entrepreneurs, and he modeled American prosperity. In this lesson, you will learn about how Morgan created one of the leading business enterprises in the world today.

Who was J.P. Morgan?

J.P. Morgan
J.P. Morgan
American Industrial Revolutiontycoons

J.P. Morgan took advantage of his economic prowess in banking to purchase large industries, back when the world was still figuring out where the Industrial Revolution would take us. Now, J.P. Morgan has evolved over the past two centuries into one of the largest corporations in the world. You might liken him to the technology giants of today's business world.

Early History of J.P. Morgan's Industries

John Pierpont Morgan, or J.P. Morgan was born in 1837 in Hartford Connecticut. Morgan was born into a very wealthy family, so his story isn't exactly the rags-to-riches romantic stories we associate with the American Dream. Rather, Morgan's father used his fortune from banking to send young J.P. Morgan to the best schools in the country. Morgan was even able to travel to Europe to gain an international education -- something which was well out of reach for most Americans at the time.

When Morgan returned to start his business career, the United States was on the cusp of the Civil War. Morgan was able to use his wealth to purchase a 'substitute soldier', or someone to go fight the war in his place. This allowed him to evade the draft. After the war, Morgan took advantage of an economy recovering from war to build his business empire. Morgan started out in his father's footsteps, working in the banking and investment industries. His real genius, however, was thinking beyond the boundaries of banking to create a company that was invested in many different industries. His first major venture was purchasing and consolidating many of the United States railroad companies.

The practice of corporate consolidation came to define J.P. Morgan's effective but controversial business strategy. Corporate consolidation refers to the merger of many smaller companies into a large company. While Morgan argued that consolidation led to increased efficiency and better service, many were concerned that consolidation would lead to monopolies, unfair trading practices, and an unfair balance of power toward corporate elites. Many referred to tycoons like Morgan as robber barons, or elites who built their wealth by robbing the common people.

In 1901, Morgan made his largest business consolidation purchase yet. He acquired famous tycoon Andrew Carnegie's steel empire and consolidated it into a massive corporation known as United States Steel. United States Steel controlled over 70 percent of the market. Morgan built up other famous conglomerates, including General Electric and AT&T. Morgan managed to dodge monopoly regulation probably due to his influence in government. At certain points in history, Morgan even lent money to the US government to help economic recovery. After Morgan's acquisition, United States Steel became the world's first billion dollar corporation, starting the era of corporate super economies of the 20th century and beyond.

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