20 Wealthy Lives of 20 Business Titans

Author: Yi Lei, Chen Deyang
Publisher:
Publish Date: 2006-09-01
Features:
Morgan entered the steel industry in 1871 when he partnered with others to establish "Drexel, Morgan & Co.," engaging in banking businesses such as investment and credit. He pioneered the revolutionary and epoch-making venture of investment banking. In 1894, after the death of his partner, he took sole ownership. In 1895, it was renamed J.P. Morgan & Co. (After Morgan's death, it was reorganized into the listed J.P. Morgan Bank (commercial bank) and the listed Morgan Stanley (investment bank) following market trends). Using this company as its headquarters, it expanded its influence into various financial and economic sectors (such as steel, railways, and public utilities) and began to form monopolistic financial groups. In 1912, the Morgan financial group controlled 13 financial institutions, with a total asset value of $3.04 billion. Wall Street's financial bosses referred to Morgan & Co. as the "bank of banks." Before the establishment of the Federal Reserve in 1913, Morgan & Co. played a role similar to that of a central bank in the U.S. economy, exerting a pivotal influence on the American financial system. Using strong financial means, it consolidated the railroads, steel, oil, and other industries in the U.S., reshaping the economy while also becoming the pillar of Wall Street and the "Rolls-Royce of the banking world." During the rapid concentration of industrial production, bank capital also became more concentrated. In the late 19th century, New York saw the emergence of three powerful life insurance companies and two commercial banks (New York National Bank and New York Citibank). Each controlled dozens of commercial and insurance companies, forming powerful financial monopolistic organizations that began to merge with industrial capital. The Rockefeler financial group and the Morgan financial group were thus born. Around the turn of the 20th century, the Rockefeler financial group and the Morgan financial group controlled about one-third of the $120 billion in U.S. national wealth. In 1895, Morgan & Co. began to infiltrate the steel industry. At that time, due to the rapid development of the railroad industry, as well as the influence of the Spanish-American War and the Boer War in a modern sense, the steel industry also developed rapidly. Steel prices rose steadily, profits surged, and mergers became commonplace, but chaotic price wars also emerged. Morgan believed that to establish proper order in the steel industry,