Today, John Pierpont Morgan is remembered as one of the greatest bankers in American history. In his time, he was called the “Jupiter of Wall Street.”
He was born into the Morgan banking dynasty in 1837. Throughout the Progressive Era, he dominated the corporate world. Morgan founded the banking institution J.P. Morgan & Co. in 1871, which was acquired by Chase Manhattan Bank to become JPMorgan Chase in 2000. Today, JP Morgan Chase is the largest bank in the US.
Over the course of his career, Morgan helped form or support many companies that still exist today, including General Electric, the U.S. Steel, and AT&T. When he died in 1913 at the age of 75, it was revealed that he was worth around $80 million – according to legend, John D. Rockefeller remarked, “And to think he wasn’t even a rich man!” upon reading the figure, according to Jean Strouse’s article for the New York Times.
He dominated the financial and industrial world through the 19th century. Morgan consolidated numerous companies and even regulated entire industries, like steel and railroads, as Morgen Witzel writes in “Fifty Key Figures in Management.”
A study of his life also reveals a number of interesting lessons to be learned from his example.
Here are six lessons in leadership we can learn from J.P. Morgan:
1. Trust matters
Morgan realized the value of an honest reputation.
As Chris Farrell reported for Bloomberg, one of Morgan’s most famous quotes came about toward the end of his life. He was testifying before a Congressional committee in 1912 when he was asked if commercial credit was based on money or property.
“The first thing is character,” he responded. “Before money or anything else. Money cannot buy it.… A man I do not trust could not get money from me on all the bonds in Christendom. I think that is the fundamental basis of business.”
2. Setbacks happen
J.P. Morgan and Company organized numerous different companies, from General Electric to the Erie Railroad.
However, not all of his ventures worked out.
In fact, Morgan was roundly defeated on certain occasions. One notable incident came about while the banker was trying to break into the London Underground market by Charles Tyson Yerkes, according to “Robber Baron” by John Franch. Yerkes apparently sabotaged Morgan’s attempt to secure permission to build lines to compete with his own operation.
3. Things change – and that’s not a bad thing
In one famous incident, when asked by a passerby what the stock market was going to do next, Morgan responded simply: “It will fluctuate.”
Unfortunately, Morgan probably never quite said that – according to Barry Popik’s research, the earliest appearance of the quote dates back to 1934, decades after the man’s death.
However, Morgan’s ability to both adapt to and facilitate change was clear throughout his career. He was frequently able to seize failing entities and “Morganize” them, as Heather Timmons reported for Bloomberg: “He would take over problem companies, flush out incompetent managers, and appoint people he trusted. Over time, many of the companies would recover and become profitable, keeping capital flowing into other Morgan deals.”
4. Having a side passion is a good idea
Don’t let anyone talk you out of majoring in a “useless” subject.
J.P. Morgan himself studied the humanities, receiving a degree in art history from the University of Göttingen, according to “J.P. Morgan’s Way” by the editors of New World City.
Later on, he was a major player in the establishment of the Metropolitan Museum of Art.
5. Keep things in perspective
Morgan dodged a potential deadly situation in 1912, when he canceled his reservation on the disastrous maiden voyage of the RMS Titanic at the very last second.
According to the Smithsonian, in the wake of the tragedy, he told a reporter from the New York Times that, “Monetary losses amount to nothing in life. It is the loss of life that counts. It is that frightful death.”
6. Develop strong connections within your industry
Today, Morgan is remembered for bailing out the US government during the Panic of 1907. Failed speculation and the 1906 San Francisco Earthquake triggered a series of runs on banks across America.
In an interview with UVA professor Robert F. Bruner for the Smithsonian, Abigail Tucker finds that Morgan soothed the panic by calling upon his “deep and extensive relations throughout the financial and business communities.” He gathered top financiers in his home on 34th street, created working groups, and determined which institutions to save and which ones to allow to die off.