Taking His Full Measure

By GEORGE J. CHURCH

John Pierpont Morgan is usually "depicted...as a ruthless predator who robbed America's farmers and workers to line his own pockets," writes Jean Strouse. But halfway through her first draft of Morgan: American Financier (Random House; 796 pages; $34.95), she realized that the picture she was getting from plowing through a mass of Morgan documents, many of which no previous biographer had seen, was far more complex. Starting over, she has produced a more balanced and crisply written--though at times unnecessarily detailed--portrait than her subject could ever have drawn. History, Strouse observes, is written by "the articulate," and Morgan was anything but. The best explanation he could come up with for some of his deals was, "I thought it was the thing to do."

He had other weaknesses. An often sickly child, the financier suffered all his life from colds, headaches and depression--known to him as "the blues"--not to mention rhinophyma, the skin disease that in his 50s turned his nose into a purple bulb. He hated to be alone but had no talent for making friends--as distinguished from mistresses. He started a new romance at age 74 with a titled Englishwoman of 49. Women saw past not only the hideous nose but also the peremptory manner that they thought disguised an inner shyness. With some reason: Morgan was ruthless in getting rid of inept partners, but could hardly ever bear to fire them in person.

In dealing with money rather than people, however, Morgan was self-confidence personified. Strouse argues convincingly that he saw his own interests as synonymous with those of the nation, and at times he was right. He raised enough capital to put the U.S. economy well on the road to financial independence from Britain, and even bailed out the U.S. government in 1895, collecting and lending the gold Washington needed to keep paying its bills. He stopped the panic of 1907 by raising the funds to keep tottering banks afloat, in effect acting as a one-man Federal Reserve System six years before the real Fed was created. He made plenty of money for himself in the process, of course, but not quite as much as popular myth would suggest. The estate he left in 1913, including his gargantuan art collection, was valued at $80 million, around a tenth of Andrew Carnegie's wealth.

Morgan's philosophical legacy is more troublesome. He regarded competition as wasteful and chaotic, which in his day it often was. To bring stability and order to the economy--and to fulfill what he regarded as his moral responsibility to safeguard clients' investments--he organized monster trusts. Notably, he midwifed the 1901 merger that created U.S. Steel, the world's first billion-dollar corporation. Such behemoths have spurred economic growth and technological advance. But can they get so big and powerful that the government is justified in breaking them up? If so, when? And how can that be done without losing the economic benefits of size? Are these still hot questions in 1999? Well, did somebody say...Microsoft?

--By George J. Church