Jump to content

Drexel, Morgan & Co.

From Alfawiki
J.P. Morgan & Co.
Company typeSubsidiary
IndustryFinancial services
Founded1871; 155 years ago (1871)
FounderJ. P. Morgan
FateMerged with Chase Manhattan Bank in 2000
SuccessorJPMorgan Chase & Co.
Headquarters
New York City
,
United States
Area served
Worldwide
Key people
J. P. Morgan (founder), Jamie Dimon (CEO of successor company)
ProductsInvestment banking, asset management, private banking, commercial banking (until 2000)
ParentJPMorgan Chase & Co.
Websitewww.jpmorgan.com

J.P. Morgan & Co. is a prominent American financial services firm specializing in investment banking, asset management, and private banking. Established in 1871 by the financier J. P. Morgan, it has evolved through numerous mergers and acquisitions to become a subsidiary of JPMorgan Chase, recognized as the largest banking entity worldwide. Historically referred to as the "House of Morgan" or simply Morgan, the company has been influential in shaping international finance.

Up until the year 2000, J.P. Morgan primarily engaged in commercial banking for 146 years before merging with Chase Manhattan Bank. Following this merger, its commercial banking activities were consolidated under the Chase brand.

Early history

The firm’s roots extend back to 1854 when Junius S. Morgan joined the London-based banking firm George Peabody & Co., led by George Peabody. Upon Peabody’s retirement in 1864, Junius assumed control and renamed it J.S. Morgan & Co.. Junius’s son, J. Pierpont Morgan, began his career at Duncan, Sherman, and Company in New York before founding J. Pierpont Morgan & Company with a cousin in 1864. This enterprise dealt in government bonds and foreign exchange while serving as an agent for Peabody’s interests. Due to concerns about speculative risks, Junius brought Charles H. Dabney on board as senior partner, leading to the firm's rebranding as Dabney, Morgan, and Company (1864), and later Drexel, Morgan & Co. (1871). Leveraging connections with Peabody, Pierpont directed British capital into rapidly growing American industrial companies, especially railroads. The Drexel partner was Philadelphia banker Anthony J. Drexel, who later founded what is now known as Drexel University.

House of Morgan

Following Junius’s death in 1890, Pierpont took charge of J.S. Morgan and Company. After the passing of Drexel, the firm restructured in 1895 as J.P. Morgan and Company.[1] It played a key role in financing the establishment of the United States Steel Corporation, recognized as the first billion-dollar corporation formed by merging Andrew Carnegie's businesses with others. In 1895, it supplied $62 million in gold to the U.S. government to support a bond offering and replenish the treasury surplus to $100 million. Beginning in 1892, it also provided financing for the New York, New Haven, and Hartford Railroad, spearheading acquisitions that positioned it as New England’s leading rail carrier. By 1905, it had forged a strategic partnership with the New York banking house of J.P. Morgan & Co., collaborating on global finance matters and facilitating German investors’ absorption of securities through Dresdner Bank.

Constructed in 1914, 23 Wall Street, famously known as "The Corner" and "The House of Morgan," was targeted on September 16, 1920, when an anarchist bomb detonated outside the building, resulting in 38 fatalities and approximately 400 injuries. A warning note was delivered shortly before the explosion demanding the release of political prisoners under threat of additional attacks by "American Anarchists Fighters." Despite extensive investigation efforts, the FBI closed the case in 1940 without identifying those responsible.

Financing of Allied Bonds in World War I

In August 1914, Henry P. Davison, a partner at Morgan, negotiated an arrangement with the Bank of England that designated J.P. Morgan & Co. as the exclusive underwriter for war bonds issued by Great Britain and France. The Bank of England and J.P. Morgan & Co. mutually served as fiscal agents throughout the conflict. Over the course of the war, J.P. Morgan extended loans totaling around $1.5 billion (equivalent to several billion dollars today) to support the Allied powers in their struggle against Germany. Additionally, the firm invested in companies supplying military equipment to Britain and France, generating profits through both financing and procurement ventures.

In the early 1920s, J.P. Morgan & Co. broadened its reach into the Southern Hemisphere by facilitating the establishment of banks such as the Bank of Central and South America.

Glass–Steagall Act and Formation of Morgan Stanley

The 1933 Glass–Steagall Act required a clear division between J.P. Morgan & Co.'s investment banking and commercial banking activities. Opting to remain a commercial bank, J.P. Morgan focused on maintaining stability and profitability following the 1929 market crash, with plans to eventually re-enter securities.

By 1935, since it was prohibited from engaging in securities, J.P. Morgan partners Henry S. Morgan and Harold Stanley established Morgan Stanley, financed with $6.6 million in nonvoting preferred shares contributed by J.P. Morgan partners. Located initially at 2 Wall Street near J.P. Morgan’s offices, Morgan Stanley capitalized on its proximity to secure major deals.

Morgan Guaranty Trust

After spinning off its securities division to form Morgan Stanley, J.P. Morgan's core business prospered; however, the incorporated entity established in 1940 showed modest profitability and was considered mid-sized by the 1950s. To enhance its competitive position, J.P. Morgan merged with Guaranty Trust Company of New York in 1959, creating Morgan Guaranty Trust Company.

This union merged J.P. Morgan’s esteemed reputation and client base with Guaranty Trust’s significant capital resources. Despite Guaranty Trust being nearly quadruple in size, J.P. Morgan was recognized as the acquirer and maintained management control, setting the stage for renewed expansion.

Reestablishment of J.P. Morgan & Co.

Ten years post-merger, Morgan Guaranty established a bank holding company named J.P. Morgan & Co. Incorporated, initially operating under the Morgan Guaranty name through much of the 1980s before reverting to the J.P. Morgan brand by 1988.

Throughout the 1980s, J.P. Morgan diversified its services by moving into investment banking, beginning with offerings in commercial paper. In 1989, it became the first commercial bank authorized by the Federal Reserve to underwrite corporate debt issuances. By the end of the 1990s, J.P. Morgan had successfully rebuilt its investment banking arm to rank among the top five firms in securities underwriting.

JPMorgan Chase

By the late 1990s, J.P. Morgan had developed into a prominent commercial and investment banking institution with a strong brand presence and significant roles in debt and equity underwriting.

Starting in 1998, merger talks involved potential partners including Goldman Sachs, Chase Manhattan Bank, Credit Suisse, and Deutsche Bank AG. In 2000, J.P. Morgan merged with Chase Manhattan—then one of America’s fastest-growing commercial banks—to create JPMorgan Chase & Co..

The newly formed company provided an extensive range of financial services encompassing investment banking, commercial banking, retail banking, asset management, private banking, and private equity.

In 2004, JPMorgan initiated a joint venture with Cazenove, integrating its UK investment banking operations; by 2010, JPMorgan acquired full ownership. The brand J.P. Morgan Cazenove represents JPMorgan Chase’s UK investment banking and EMEA equities divisions.

In 2005, JPMorgan Chase publicly acknowledged that some predecessor banks had accepted slaves as collateral before the American Civil War. The firm issued an apology for this part of its history and pledged $5 million toward scholarships benefiting Black students.

Currently, J.P. Morgan functions as JPMorgan Chase’s business and investment banking division, while Chase Manhattan serves as its personal banking branch.

List of Chairpersons and Chief Executive Officers of J.P. Morgan & Co.

Following its establishment in 1871, John Pierpont "J. P." Morgan was acknowledged as the leading figure of J.P. Morgan & Co., although his official designation was "senior partner." Leadership transitioned to his son, John Pierpont "Jack" Morgan Jr., after his passing in 1913. Upon the company's incorporation in 1942, Jack assumed the inaugural CEO role while maintaining his position as chairman. Over time, the institution was directed by twelve leaders—eight of whom held both chairman and CEO roles—until its eventual consolidation with Chase Manhattan Bank, resulting in the creation of JPMorgan Chase.

Chairpersons of the Board

Chairpersons and Chief Executive Officers

See also

Sources

  • Carosso, Vincent P. The Morgans: Private International Bankers, 1854–1913. Harvard University Press, 1987.
  • Carosso, Vincent P. Investment Banking in America: A History. Harvard University Press, 1970.
  • Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance, 2001.
  • Fraser, Steve. Every Man a Speculator: A History of Wall Street in American Life. HarperCollins, 2005.
  • Geisst, Charles R. Wall Street: A History from Its Beginnings to the Fall of Enron. Oxford University Press, 2004.
  • Moody, John. The Masters of Capital: A Chronicle of Wall Street. Yale University Press, 1921.
  • Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy, 2005.
  • Pak, Susie J. Gentlemen Bankers: The World of J.P. Morgan. Harvard University Press, 2013.
  • Strouse, Jean. Morgan: American Financier. Random House, 1999.

External links

  1. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ReferenceA
Retrieved from "https://www.alfawiki.org/index.php?title=Drexel,_Morgan_%26_Co.&oldid=72545"