#139 J.P. Morgan

**David Senra** (0:00)
I want to tell you about a one-time only limited event that I don't think you're going to want to miss. I am doing a live show with Patrick O'Shaughnessy from the Invest Like the Best podcast in New York City on October 19th. Patrick has interviewed over 300 of the world's best investors and founders for his podcast. I've read over 300 biographies of history's greatest entrepreneurs for my podcast. We'll be talking about what we learned from seven years of podcasting, sharing our favorite ideas and stories, and doing a live Q&A. There will also be special event-only swag. If you live in New York City, I think it's a no-brainer. But if not, I think it's a great excuse to fly in. I've already heard from a bunch of people that bought tickets. They're flying in from other cities. Some people are flying in from other countries. That's setting the bar really high, so I will have at least four shots of espresso or four energy drinks before or during the show so we can make it a night that you'll never forget. If you're interested in attending this unique live event, I will leave a link down below. I highly recommend you get your tickets today, and I hope I get to see you in New York on October 19th. This book is about the rise, fall, and resurrection of an American banking empire, the House of Morgan. Until 1989, JP. Morgan and company solemnly presided over American finance from the short building at 23 Wall Street. Much of our story revolves around this chiseled, marbled building and the presidents and prime ministers, moguls, and millionaires who marched up its steps.
With the records now available, we can follow them inside the world's most secretive bank.
In the popular mind, the two most familiar Morgans, JP. Morgan Sr. and JP. Morgan Jr. are rolled into a composite beast, JP. Morgan, that somehow endured for more than a century. For admirers, these two JP. Morgans typified the sound, old-fashioned banker whose word was his bond and who sealed his deals with a handshake. Detractors saw them as hypocritical tyrants who bullied companies, conspired with foreign powers, and coaxed Americans into war for profit.
Nobody was ever neutral about the Morgans.
The old House of Morgan spawned a thousand conspiracy theories. It catered to many prominent families, including the Astors, Guggenheims, Duponts, and Vanderbilts. It shunned dealing with lesser mortals, thus breeding popular suspicion. Since it financed many industrial giants, including US Steel, General Electric, General Motors, Dupont, and AT&T, it entered into their councils and aroused fear of undue banker power. The early House of Morgan was something of a cross between a central bank and a private bank. It stopped panics, saved the gold standard, rescued New York City three times, and arbitrated financial disputes.
What gave the House of Morgan its tantalizing mystery was its government links. Much like the old Rothschilds and bearings, it seemed insulated into the power structure of many countries, especially the United States, England, and France, and to a lesser degree, Italy, Belgium, and Japan. As an instrument of US power abroad, its actions were often endowed with broad significance in terms of foreign policy. At a time when a parochial America looked inward, the bank's ties abroad, especially those with the British Crown, gave it an ambiguous character and raised questions about its national loyalties. The old Morgan partners were financial ambassadors whose daily business was often closely intertwined with the affairs of state.
While people know the Morgan House by name, they are often mystified by their business. They practice a brand of banking that has little resemblance to standard retail banking. These banks have no tellers, issue no consumer loans and grant no mortgages. Rather, they perpetuate an ancient European tradition of wholesale banking, serving governments, large corporations and rich individuals.
As practitioners of high finance, they cultivate a discrete style. They avoid branches. Seldom hang out signposts and until recently, wouldn't advertise.
Their strategy was to make clients feel accepted into a private club, as if a Morgan account were a membership card to aristocracy. The story of the Morgan banks is nothing less than the history of Anglo-American finance itself. For 150 years, they have stood at the center of every panic, boom and crash on Wall Street. They have weathered wars and depressions, scandals and hearings, bomb blasts and attempted assassinations.
No other financial dynasty in modern times has so steadily maintained its preeminence.
This book's thesis is that there will never be another bank as powerful, mysterious or opulent as the old House of Morgan.
What the Rothschilds represented in the 19th century and the Morgans in the 20th won't be replicated by any firm in the next century. The banker no longer enjoys a monopoly on large pools of money. As world finance has matured, power has become dispersed among many institutions and financial centers. So our story looks back at a banking world fast vanishing from sight. One of vast estates, art collections and ocean going yachts of bankers who hobnobbed with the heads of state and fancied themselves royalty.