J.P. Morgan: The Man Who Owned all America part two

The Railroad magnet JP Morgan & Co.

 

In 1871 John saw the golden opportunity to team up with one of the leading financiers in the country. A banker named Anthony Drexel together. They founded the Drexel Morgan & Co private Merchant banking house, which was later renamed to Simply JP Morgan &Co. And this would be the firm that John would manage for the rest of his life serving as the precursor to the modern banking Titan. We know today, as JPMorgan Chase now early in John's career, he'd mostly just been a facilitator of deals like connecting wealthy investors and Visionaries together and exchange for a cut of the profits.

 

But as John amassed a bigger personal fortune and reputation, he was able to finance many of these projects on his own and John had already identified, his first, major investment, the American railroad system. Now, at the time, most of the other big industries were dominated by one single magnate like Carnegie dominated steel and Rockefeller dominated oil, but the railroads weren't monopolized. Actually, it was the opposite. There were so many competing companies that offered very similar routes that they often / their prices to try and when customers.

 

But whereas most looked at the railroad business, Essence or Fierce competition. John's or opportunity. He thought the answer was consolidation merging railroads together rather than competing, that's because John knew that the bigger business got, the more I could benefit from economies of scale. So John's goal was always to turn multiple small companies into one unified conglomerate suddenly rather than competing against each other and driving down prices. It could set whatever prices it wanted as it owned all the nearby railroads. So John invested heavily in multiple railroads, which he began.

 

Consolidating, he take over underfinanced railroad companies. Streamline their management and operational efficiency and merged the small companies together into one dominant player that could crush any remaining competitors which of course, he then can take over as well. John use this tactic to such great effect that it was even named after him becoming known as more organized. But the other thing John did differently from other businessmen and investors of the time was that he paid a very proactive role in the corporate management of these companies. John wasn't content with simply buying shares, then sitting back and raking in the profits.

 

He was a man who craved control John needed to be the One calling the shots. So he regularly used his influential position on the boards of directors to direct the company. As he saw a Fete, he often reshuffled the leaderships of all these different Railway companies to his liking and assembled them into monopolies with himself at the head of the table. Of course, when the railroad came to him for help, he'd refuse unless he was given full control. This, not only gave John the power, he wanted but also created a more stable industry which in turn attracted, even more Investments in money from Europe flowing into the US.

 

Railway companies. Now that it looked more Consolidated and stable thanks to John And this of course, made John even wealthier, John kept acquiring more Rail lines and constantly wanted to outdo his previous achievements and be more ambitious. For example, he purchased 250,000 shares of stock from William Vanderbilt and one of the most prominent Railways in the country, the New York Central Railroad. He then took things even further the following year, when he executed the largest transaction in railroad bonds ever made in the United States underwriting, the cell of 40 million dollars in bonds to finance, the completion of the Northern Pacific railroad

 

before long john, under one-third of all roads in America at a time when 60% of America's stock market capitalization, consisted of railroad companies. In other words, John was no longer just a wealthy financier. He was literally shaping Railroad conglomerates and being heavily involved in re-organizations. And mergers, all of which grew his power and wealth further. And his growing reputation as a formidable, Titan of the industry was matched by his intimidating appearance, John had a skin condition called rosacea that inflamed and ruptured. The blood vessels of his nose made it very red and disfigured.

 

Whilst he also had Emma which made his nose much larger and covered in pimples. John was actually very self-conscious about his appearance and got angry at being photographed. According to his grandson, whenever John had a portrait done. He always ordered them to redo his nose, to make it look more normal, which is why it's not as noticeable in pictures of him. But his startling facial features combined with his towering height and his aggression. Way of speaking, all meant that John was an intimidating presence to be around. However, in 1901, it seemed John had finally met someone who would stand up to him President Theodore Roosevelt.

 

You see, John had just Consolidated, his Northern Pacific, railroad together with two other Railways in the region and created. A massive new holding company called the Northern Securities Corporation and he'd been able to get away with this kind of monopolistic practices due to his close relationship with the current President William McKinley, but then McKinley was assassinated. And suddenly, Theodore Roosevelt became president and took a very different view of what John was doing. Roosevelt ordered the justice department to file a suit against the company for violating the Sherman Antitrust.

 

Act of 1890 was John fought this. In court. The company was ultimately sped up and this was just the beginning of a very tense relationship between the two men. When John heard Roosevelt was going to Africa. One year, John said good, I hope the first lion that meets him does his duty for John though. This was merely a small setback. He was already planning something much crazier.

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