The Book Club

Where Have You Gone, J.P. Morgan?


Reading Jean Strouse’s new biography of J.P. Morgan, with it’s richly detailed portraits of the legendary banker’s relic-strewn library and offices, his gruff manner, his Cuban cigars and Homburgs and walking sticks, I couldn’t help thinking of a story told about Bob Rubin, the treasury secretary, the man who today holds the public-sector position of power most akin to the quasi-central-banker role Morgan enjoyed at the turn of the century. (I suppose you have to mention Alan Greenspan in the same breath as Rubin; I often think we should give the pair a nickname à la Woodward and Bernstein’s “Woodstein.” Maybe “Rubespan.”) I don’t know whether he still does this, but when he entertained the press during his days on Wall Street, Rubin would welcome a reporter into his office by taking off his shoes, stretching and wiggling his toes through his socks all during the interview. This was Rubin’s way of striking a casual tone, I suppose, but there was something else there: an effort to be “one of the guys,” to suggest he was a younger man accustomed to letting his hair down, or at least his hosiery.

Say what you will about J.P. Morgan, he was a grownup. I struggled throughout Jean Strouse’s book to think of a modern counterpart, but of course there isn’t one. Not in terms of power or, alas, in style. In terms of raw business muscle, the ability to make and shape markets, you would have to say Bill Gates comes closest in the United States, George Soros elsewhere. In his heyday Mike Milken might have been mentioned. All I can picture in their stocking feet. Not Morgan.

I too approached Strouse’s book with a skepticism born of having read one too many glittering reviews. And I, too, came to the conclusion, fairly late in the book, that the praise is justified. Having said that, I found much of the book’s first half, covering Morgan’s early years up to 1890 or so, tough going; if you ever end up overcaffeinated late one night, I suggest you try reading Strouse’s sections on the intricacies of railroad financing circa 1885. I nearly gave up, but was rewarded by the book’s strong later sections, especially those detailing Morgan’s role in the formation of U.S. Steel, the gold crises of the 1890s, and the panic of 1907. (And you’re right about Strouse’s preoccupation with the minutiae of Morgan’s intercontinental buying sprees. I would stipulate that it was all mighty important stuff; I just don’t want to have to plow through his shopping lists.)

It’s funny that, for all the new details on Morgan’s life that Strouse unearths and expertly pieces together, the one thing that other writers want to talk about is the fact that she spent 15 years writing this book, a pace that makes Tom Wolfe look like Michael Isikoff. Yes, this is an Important Book; yes, it is masterfully researched; yes, it is well written. But I can’t help but feel that part of the acclaim heaped upon Strouse comes from (New York-based) writers who deeply believe there are vast rewards due someone who spends four presidencies holed up in an Upper West Side one-bedroom working on the book of her dreams. It is not only a justification of their own aspirations; it’s an argument to publishers that such projects should be aggressively subsidized. I can hear the pleas at Michael’s now: Please, Alice, just another half-million and another five years and I know I can deliver Jean Strouse-size numbers!

Forgive my cynicism. Morgan: American Financier is an excellent book any way you look at it. I not only didn’t get tired of the stories of women and others in Morgan’s orbit; I found them fascinating, especially Belle De Costa Greene, the African-American librarian and Morgan confidante who “passed” as white; the Morgan daughter who crossed her father by taking up with a noted lesbian; and Jack Morgan, the slow-witted son. You’re right, Jim, that these and other personal stories in the book, including that of Morgan himself, may not in themselves shed any new light on the march of financial history. But if I want straight economic analysis, I’ll read a textbook. In a biography, I want to read about people and what made them tick. On that note, Strouse has succeeded beyond anything I though possible. And where it’s called for, she’s surprisingly strong on economic analysis.

I, too, was impressed by Strouse’s ability to navigate between the dueling portraits of Morgan as demon and God. In fact, I think she comes down strongly in favor of the argument that the various bailouts of industries and governments he engineered were done not in his own financial interest but in the larger interest of stabilizing markets. Explaining how a financier like Morgan didn’t succumb to self-interest in such situations is an effort few writers would attempt, much less pull off. Yet I found Strouse’s arguments entirely convincing. That the “Morganization” of American industry flew in the face of the country’s fledgling antitrust laws she puts in the proper historical context, I think, though the primary justification she cites for these combinations–that they usually thrived–left me cold. Monopolies usually do.

I’m wondering if something else struck you. I was reminded at several points, especially during the 1907 discussions, of the sheer fragility of the American financial system during Morgan’s day. Every few years from the 1880s on, Morgan was swept up in some new crisis that threatened to bring everything–the stock exchanges, the railroads, even cities and, once or twice, the entire government–crashing down. It would start with the failure of one brokerage or steel company, and suddenly dominos were toppling all over. (Morgan and his peers were once called on to shore up the system because at the time there was no central bank; Andrew Jackson managed to put the last one out of business in the 1830s.) Each time, they managed to save the day. In the last three or four years we’ve seen the same kind of scenario proliferate, only this time it’s not the American but the global economy that seems to be brittle. Russia craters and American markets teeter. Asia topples, takes down Brazil, and half the stocks on the Big Board are down 30 percent by lunchtime. As I was reading, I kept thinking: Where is J.P. Morgan–where are the grown-ups?–today?