Part 1 was published on May 13, 2024. This is part 2.
Who Were The Morgans?
We will present, below, the origin of the Morgan bank; the partnership of the Morgans with Anthony Drexel; and their combined assault on Jay Cooke, which opened the way for the rise of Morgan to power in America.
The Morgans and Jay Cooke viewed themselves and the world in fundamentally different ways.
A business historian differentiated between them by their psychology and national feeling:
There are two kinds of investment bankers. One is international and realistic. It is exemplified by J.P. Morgan & Co. It is cold and calculating. Emotion plays but little part; even patriotism is but one factor in life and not the most reliable. This type is careful of its friends and does not neglect its enemies. It is rarely understood in a democracy . . . The second type . . . is exemplified by Jay Cooke. It is lacking in realism and tends to neglect caution. It can be enthused even with patriotic emotion . . . This class is not admitted to the circle of the first class: it is suspected of not being orthodox and reliable.[1]
Their contrast in national orientation was clearly evident during the Civil War. While Cooke and the government struggled to shore up U.S. credit and currency, John Pierpont (“J.P.”) Morgan speculated in gold, dollars, and U.S. bonds as a Wall Street trader.
One 1863 adventure put Morgan in the news: he quietly bought a large quantity of gold, then suddenly shipped much of it to London, causing a shortage and panicked buying at higher prices. This gave Morgan big profits on his remaining horde.[2]
Some New York financiers might be judged as simply unconcerned about their country’s welfare. But as we will make clear, J.P. Morgan must be seen in an entirely different light: his family’s British firm was an integral part of the empire’s apparatus for waging economic war on the world, and on the United States in particular.
The company had been founded in the 1830s by George Peabody, a Massachusetts-born Baltimore cotton exporter and bond broker, who had moved to England.
Peabody established himself in the rarified circle of London investment bankers, alongside the Barings and Rothschilds. He specialized in transatlantic business that coincided with anti-national interests: he imported cotton from the slave South; and he exported English iron rails to the U.S., in ruinous competition with American iron producers.
Peabody brought in the Massachusetts-born Junius Morgan – father of J. P. Morgan – as his partner in London in 1854.
Junius Morgan had worked in London’s orbit for 28 years as a Boston merchant banker and a Connecticut cotton broker, before he moved to the “Mother Country.”[3]
Junius took charge of the Peabody firm in 1859 and made it J.S. Morgan and Co. in 1864 when Peabody retired. Junius’ son J.P. joined the London firm in 1857 at the age of 20.
J.P. Morgan returned to America the following year. But for the rest of his life, J. P. Morgan would be a member of his father’s London firm, and his father’s representative in America.
From the late 19th century until the mid-20th, during the Morgan’s reign as the kings of Wall Street, their allegiance would not be to America, or to England, per se, but to a semi-mystical hierarchy, English and international, whose center was London.[4]
The hierarchy took care of its own. When the 1857 American depression pushed the Peabody-Morgan firm near to bankruptcy, the Bank of England rescued them with a loan of £800,000, guaranteed by nine British banks.[5]
The British urgently needed transatlantic leverage to curb America’s independent strategy. Junius Morgan provided that reach into his native country, and this helped him attain an exalted position among the most powerful City of London private investment bankers. He and his heirs were thus placed into that confluence of finance, government, intelligence services, military, diplomacy, media and academia, that is ruled informally from the precincts of “high society” – from White’s gentlemen’s club in London, from palatial countryside houses, and so forth.[6]
It was as a part of this English oligarchy -- which gave lavish rewards and inflicted terrible punishments -- that Junius Morgan arranged to form a partnership in Philadelphia as a vehicle for derailing American nationalism.
Behind the Drexel-Morgan Partnership: the Continuing Imperial War Against the Union
Junius Morgan and Company of London re-engaged with Anthony Drexel’s bank as their American agents in 1868,[7] amidst the political fight over controlling the incoming national administration.
As the prime U.S.-based antagonist to Jay Cooke’s nation-building objectives, Drexel precisely suited the outlook of Junius and his son J.P. Morgan.
During the Civil War, the Morgans had acted as a financial arm of imperial efforts to divide, encircle and crush the American republic. Their bold anti-Union maneuvers were obscure or secret at the time. They became partially known only in the 20th century -- when the Morgans opened old papers to those who would treat these outrageous transactions delicately, with due respect to the reputations of the grand gentlemen involved.[8]
The reader may bear in mind as we proceed that this Morgan bank is, even today, the largest bank in the USA (J.P. Morgan Chase).
