J.P. Morgan: The Real-Life Monopoly Man

Hailed as “the one man who changed finance,” J.P. Morgan’s broad reach and legacy shaped the world as we know it.

Throughout his career, Morgan organized some of the world's most influential firms, including General Motors, General Electric, Western Union, and, of course, Morgan Stanley and J.P. Morgan Chase.

Morgan was born into money. His father was a prominent banker, and his influential relatives sat on Aetna Insurance and Yale University boards.

While Morgan wanted for few material items, his childhood wasn’t without its challenges. He was a sickly child, often spending long periods of time cooped up at home. Even more formative, his father, Junius Morgan, was a complicated figure. Morgan disagreed with his father’s conservative practices: He became his opposite, forming a risky practice and a mind toward compassion.

The family moved from Connecticut to London in 1854, where Morgan learned French and German. He could use language and expertise to influence people, and that’s just what he did.

Morgan was a good, but not great, student. But despite academic difficulty, Morgan secured a position at Duncan Sherman, a New York City banking firm. Knowing that “Money equals business, which equals power, all of which come from character and trust,” Morgan established a reputation as a likable, hard-working, and strategic businessman.

Duncan Sherman offered Morgan another opportunity: to learn about the financing and reorganization of the railroad industry. This knowledge would prove emblematic later in his life when he purchased the same firms he’d personally negotiated at Duncan Sherman.

Despite personal success (and a body of water between them), Morgan still felt enmeshed with his father. Eager to escape from under his thumb, he searched for new opportunities.

One day, while in New Orleans on business, he met a ship captain selling a massive quantity of coffee but with no buyer. Morgan used his family’s funds to buy the coffee and sold it to local merchants at a decent profit.

That moment defined his career. With the revenue, Morgan went out independently and founded J. Pierpont Morgan & Co. in 1861 from a one-room office in New York City.

Then came another major turning point: The Civil War. Prior, Morgan invested in cotton and iron imports, but both became unprofitable. He shifted his approach, buying gold.

During that time, he began experimenting with wealth transfers, which proved his major strength. He moved $1.15 million in gold to England, causing a massive price spike.

Morgan “always had two reasons for doing anything: a good reason and the real reason.” While the move was deemed accidental, critics believed his goal was to corner the U.S. gold market.

Success, a strong reputation, and good timing solidified Morgan’s future ventures. With Anthony Drexel, his mentor, his firm purchased space in a large NYC building, a testament to his emerging influence. Still, he wanted more.

In 1879, Vanderbilt’s son William approached Morgan about selling 250,000 New York Central Railroad shares. This was Morgan’s chance: Without share manipulation efforts, which were common at the time, he secured a seat on the firm’s board.

Over the years, railroad consolidation became Morgan’s specialty. The year after, he purchased the Northern Pacific Railroad for $40 million and played a leading role in stabilizing the industry. He also created a national capital market for industrial firms, the first of its kind.

Morgan’s father’s death in 1890 opened a new era for the financier. Finally free to pursue his own opportunities, Morgan organized the merger of Edison General Electric and the Thomson-Houston company, forming General Electric.

However, his involvement in the U.S. government truly set him apart: Over the years, the public had grown distrustful of trust companies, which played a significant role in crediting major banks. In 1907, the situation came to a head. Without collateral or deposits, trust companies fell one by one, causing the entire U.S. banking system to collapse.

Morgan said, “When I have business on hand, I think it is better to have it done quickly.” Quickly was right—Morgan devised a plan to consolidate all of the central U.S. banks in months, offering President Roosevelt a buyout plan. The panic was over.

Unfortunately, Morgan died shortly after the ordeal in 1913. Morgan’s control spanned four-fifths of the New York Stock Exchange at his death. Today, he’d be worth nearly $50 billion.

Here’s what we can learn from J.P. Morgan about long-term vision, trust, and building valuable relationships.

Lessons

A long-term orientation yields superior results to a short-term orientation. Morgan believed, “you make money when you buy, not when you sell.” He believed in a traditional approach to investing, likening it more to private equity than what many consider an investment. Morgan felt “bound in honor when I reorganize a property and [felt] morally responsible for its management, to protect it.” As a result, many of his investments were long-haul pursuits. More so than his competitors, Morgan knew that short-term gains yielded less success than long-term ones. The same goes for life: Morgan pursued everything, from relationships, businesses, and hobbies, as a long-term investment rather than a quick, cheap money (or value) grab. Succumbing to immediate gratification wasn’t the goal: The plan was a lifelong success.

Trust is the most valuable thing money can’t buy. Morgan said, “The first thing is character before money or anything else. Money cannot buy it.… A man I do not trust could not get money from me on all the bonds in Christendom.” Trust, Morgan’s “fundamental basis of business,” yields loyalty, strengthening relationships. J.P. Morgan didn’t care about being liked; he sought respect. He knew a strong history of results and an honest reputation were worth more than money alone. On the back of trust, Morgan built one of the strongest financial empires in history. This quality also led him to bail out the U.S. government: By converging all of the age’s major economic players, with whom Morgan knew personally, he saved the United States from a complete financial breakdown. Even more impressively, he did this twice. Morgan’s trust and character added value beyond what his account could: A person is only as good as their word, and Morgan’s were powerful.

Leverage your hobbies as networking opportunities. J.P. Morgan didn’t spend his fortune on lavish parties or gambling. He was an artistically minded person who valued art and culture. He said, “No price is too great for a work of unquestioned beauty and known authenticity.” No price was too great: Over the course of his life, Morgan collected over 20,000 pieces of art, more than most modern museums. He said, “A man always has two reasons for doing anything: a good reason and the real reason.” Art was Morgan’s favorite hobby; beyond investment, it served another purpose. More so than his competitors, Morgan curated an insane network of cultural figureheads from artists, painters, sculptors, media titans, and musicians. His network’s diversity was virtually unmatched, allowing him access to critical thinkers and innovators across multiple industries. Art allowed him to form connections beyond the business card, securing an established place in high society.

Focus on risk management, not mitigation. Morgan learned the value of this lesson from his father, Junius, a man who took on as little risk as possible. But there is no reward without risk, and Morgan knew this all too well because of his father. Morgan took the necessary steps to mitigate risk, forming trusts, investing with others’ money, and arguing for tariff protections. Despite general risk aversion, Morgan uniquely understood that a strong leader needed to manage risk effectively. Risk is mitigated through strategic thinking and informed decision-making, not through fear. During his lifetime, Morgan took on many risky investments—the U.S. economy was the most dangerous. But he did so after thinking through the problem carefully and strategically, knowing that often, the riskiest investments yield the most significant returns. Take the lightbulb, for example: Morgan’s investment in Edison made him among the most influential people of all time. Without a mind toward strategy, risk is silly. But with J.P. Morgan’s approach and ability to take on reasonable risk, the practice is simple.

Demonstrations are the most potent form of PR. Demonstrating his product’s efficacy furthered Morgan’s critical philosophy: Trust above all else. In the 1880s, Morgan was the first investor in Edison’s now integral lightbulb. However, he knew launching the product wouldn’t come quickly, as many were skeptical of electricity’s safety and longevity. He became his own first customer, commissioning Edison to light up his home on Fifth Avenue in New York. He invited plenty of his influential friends over to bear witness, and, in short order, the lightbulb became famous. He said of the demonstration’s results, “When you expect things to happen—strangely enough—they do happen.” Today, the lightbulb is among the most powerful and essential components of our culture; it’s safe to say that Morgan’s risk paid off.

Money is made during buying, not just when you sell. Morgan said, “It was not really a question of price. It was a question of success.” This statement defined his career: No investment was too significant if well-executed and strategic. Likely because of his father’s (highly conservative regarding risk) career in finance, Morgan knew that some risk was necessary to yield strong results. He offset risk through ruthless research, diligence, and tact to cope. Morgan’s investments, namely large firms like railroads and steel, were strategically rendered. He knew that the best investments are often the most expensive—otherwise, why wouldn’t everyone try to buy it? Morgan said, “If you have to ask how much it costs, you can't afford it,” he lived by that idea. This is one of the most important takeaways from his career: More so than his competitors, Morgan understood that an investment’s success lies before the deal is ever made. What happens after is often out of your control.

J.P. Morgan Quotes

On solving problems: “No problem can be solved until it is reduced to some simple form. The changing of a vague difficulty into a specific, concrete form is a very essential element in thinking.”

On success: “Go as far as you can see; when you get there, you'll be able to see farther.”

On wisdom: “The wise man bridges the gap by laying out the path by means of which he can get from where he is to where he wants to go.”

On competition: “Nothing so undermines your financial judgement as the sight of your neighbor getting rich.”

On quick decisions: “When I have business on hand I think it is better to have it done quickly.”

On the abuse of power: “When a man abuses his power, he loses it.”

Speeches

• 94-year-old John Rockefeller plays golf. J. P. Morgan at a hearing of the Senate...HD Stock Footage—Rare footage of Morgan.
• Testimony of J.P. Morgan before the Bank and Currency Committee of the House of Representatives, at Washington, D. C., appointed for the purpose of investigating an alleged money trust in "Wall street."---Transcript of Morgan’s congressional testimony.

Videos

• The Stock Exchange—Modern Marvels details Morgan’s impact on finance.
• J.P. Morgan Documentary: How One Man Financed America—A video biography.
• The Men Who Built America—Documentary looks at Morgan’s business decisions.
• How JP Morgan Chase Became The Largest Bank In The US—The history of Morgan’s bank and his influence.
• J.P. Morgan: The Man Who Owned America—A comprehensive biography.
• J.P. Morgan: Emperor of Wall Street | Full Documentary | Biography—Morgan’s legacy.
• How JP Morgan Started - Finance Documentary—Morgan’s early career.
• How JP Morgan Became The Richest Banker In History—An animated documentary.
• JP Morgan Chase & Co. The history of largest bank in the US—A detailed history of Morgan’s legacy.
• John Pierpont Morgan: The World’s Bank—Morgan’s influence.
• J.P. Morgan Documentary: How One Man Financed America—Podcast covering Morgan’s influence.

Book Recommendations

• J. P. Morgan: Banker to a Growing Nation (American Business Tycoons)--Morgan’s professional biography.
• Morgan: American Financier—Morgan’s bestselling biography.
• The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance—Morgan’s impact on the financial industry.
• The Great Pierpont Morgan—Morgan’s earliest biography.
• The Panic of 1907: Lessons Learned from the Market's Perfect Storm —Details Morgan’s influence on the Panic of 1907.
• J. Pierpont Morgan: Industrialist and Financier (Signature Lives)---Examines Morgan’s career.
• Pierpont Morgan and friends: The anatomy of a myth—An opinion piece on Morgan’s history.

Further Readings

• John Pierpont Morgan and the American Corporation—Morgan’s impact on modern business.
• The J.P. Morgan Effect: How One Man Changed The Face Of Finance—LinkedIn user examines Morgan’s impact on finance.
• J.P. MORGAN, THE CLAYTON ANTITRUST ACT, AND INDUSTRIAL FINANCE-CONSTRAINTS IN THE EARLY TWENTIETH CENTURY’---Morgan’s anti-trust practices.
• Who Was J.P. Morgan? The Man Behind the Powerhouse Bank—An in-depth professional profile.
• Morganization: The Art of Efficient Organization—Details Morgan’s key philosophy.
• J.P. Morgan—A comprehensive personal and professional profile.
• Morganization: How Bankrupt Railroads were Reorganized—A quick look at Morgan’s philosophy and application in railroads.
• The Golden Touch—Details Morgan’s bailout of the U.S. Government.
• Seven Famous People Who Missed the Titanic—How Morgan narrowly avoided personal disaster.
• J. P. Morgan—Morgan’s charitable endeavors.
• J.P. Morgan—History Channel looks at Morgan’s life.
• Did J. P. Morgan's Men Add Value? An Economist's Perspective
• on Financial Capitalism—A detailed look at Morgan’s practices and impact.
• Banker J. P. Morgan Born—The Library of Congress’ quick biography.
• Empire of Wealth: J.P. Morgan and the Birth of Modern Finance—LinkedIn user examines Morgan’s legacy.
• Morgan: J P: Morgan: The Finance Mastermind of the Robber Baron Era–Morgan’s influence on modern finance.
• The Panic Of 1907: How J.P. Morgan Took Over Wall Street—Morgan’s impact on Wall Street.
• Morganization: Understanding J.P. Morgan’s Strategy and Its Impact on Industries—Morgan’s enduring theory.