To understand deeply the economic development of a country, it’s fundamental to review the history, to know who were those visionaries that many years ago dared to do business, to generate employment opportunities, to invest and transform the financial course of a nation.
There is a point that Patrick Dwyer Merrill Lynch considers as a benchmark for inspiration and managing large entrepreneurs nineteenth century as it was J. P. Morgan.
A look to his past
John Pierpont Morgan, better known as J. P. Morgan; was a businessman, banker and art collector who dominated American corporate finance and industrial consolidation of its time. He was born on April 17th in 1837, in 1901 he was one of the richest men in the world. And died on March 31st in 1913, in Rome, Italy, leaving his fortune and business to his son, Jack Pierpont Morgan. And he also left most of his art collection to the Metropolitan Museum of Art in New York City.
He devoted his life to the realization of big business that transformed the economy of the United States of America and to the collection of magnificent works of art.
Some of its most prominent businesses were:
- The merger of Edison General Electric and Thompson-Houston Electric Company to form the General Electric Company in 1891: Company currently dedicated to infrastructure, financial services, and highly diversified media communication. This company now also offers services from provision of energy, water, transportation and health to financial services and information.
- The investment for the creation of the Federal Steel Company.
- The merger of the Carnegie Steel Company and several other companies in the iron and steel sector in 1901 to form Steel Corporation US: The United States Steel Corporation is a steel producer that currently performs most of its operations in the US and Central Europe.
The founding of the International Mercantile Marine Company: Achievement obtained by the trade association with the irish entrepreneur William Pirrie of the Harland and Wolff Company.
JP. Morgan began to work in 1857 in the company of his father, Junius S. Morgan, in the London branch office and emigrated to New York City a year later. In New York he worked in the office Duncan, Sherman & Company, they were the agents in America of George Peabody & Company. From 1860 to 1864 he worked as an agent in New York for his father’s firm as J. Pierpont Morgan & Company. Between 1864 and 1871 he was a member of the Dabney, Morgan & Company, which in 1871 joined with the Drexels of Philadelphia to form the New York firm of Drexel, Morgan & Company.
The way of doing business
The rise of J.P. Morgan to the financial power was accompanied by dramatic financial battles; he took control of the Albany and Susquehanna Railroad Jay Gould and Jim Fisk in 1869. He directed the strategy that broke the privileges for government finances of Jay Cooke, and soon he was involved in developing and financing a railway empire through mercantile operations throughout the United States.
He raised large sums of money in Europe, but instead of simply reinvest the funds, helped the railroads to reorganize and achieve higher performance. He fought against speculators, interested in short-term gains, and created a new vision of an integrated transport system. In 1885, he reorganized the railroad of New York, the West Coast and Buffalo, to rent it later to the New York Central. In 1886, he reorganized the Philadelphia and Reading company, and in 1888, he reorganized too the Chesapeake and Ohio.
J.P. Morgan was specialized in buying companies with problems and reorganize their business structures and management to make them profitable again. His reputation as a banker and financier was already too high that helped him to attract the interest of investors in buying business back then.
On the other hand, after the Congress passed the “Interstate Commerce Act” of 1887, J. P. Morgan organized conferences in 1889 and 1890 that brought together all rail presidents to help the industry to follow the new laws and agreements for the maintenance of “public fees reasonable, uniform and stable”. The conferences were the first of their kind, and they created a community with a common interest among companies in the sector, paving the way for large mergers in the early twentieth century.
The legacy of J. P. Morgan is still alive, it is now recognized by history as one of The Men Who Built America.
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