United States Steel: A Corporation with a Soul

by Arundel Cotter

John Pierpont Morgan

“The greatest banker the world has ever seen.” Thus the head of the Deutsche Bank called the late J. P. Morgan during his lifetime, and as the years pass students of finance are becoming more and more satisfied that the German, himself a banker of no mean repute or ability, spoke truly.

Without J. Pierpont Morgan the organization of the United States Steel Corporation would, in all probability, have been an impossibility. The carrying through of so vast a project required a financier of his prestige and of his financial courage. There was no other banker big enough or bold enough to undertake such a task, and no history of the Corporation would be complete unless it contained a résumé of the work of the former money wizard.

So large did Morgan loom in the public eye during his lifetime and so much has been said and written of him since that it would be difficult to say anything of him with which the reader is not already familiar. But it has perhaps not been generally realized that Morgan was a patriot of the right type. He was, to use a financial term, “a bull on America.” His confidence in his country’s future was unbounded, and he had the courage of his convictions to put his great fortune into the development of American enterprises.

John Pierpont Morgan was the son of Junius Spencer and Juliet Morgan. He was born on April 17, 1837, and educated at the English High School of Boston and the University of Gottingen. He entered the banking business at the age of twenty, with the firm of Duncan, Sherman & Co., and later, from 1864 to 1871, was a member of the banking house of Dabney, Morgan & Co. Still later he helped to form the firm of Morgan, Drexel & Co., which afterward became J. P. Morgan & Co. He died in Rome within a few weeks of the close of his 76th year, on March 31, 1913.

Having a peculiar genius for financial organization and arriving at the heyday of his power at the period when vast consolidations of capital and industry were the order of the day it was natural that he should have figured prominently in the carrying through of many of these. Among the large concerns with the organization of which he was closely identified was the International Harvester Co., and he took a prominent part in the reorganization and refinancing of several large railroad enterprises, notably the Erie, Reading, Santa Fe, and Northern Pacific. He has generally been blamed for the New Haven débâcle and there is no doubt that he occupied an important position in managing its affairs; in fact, according to the former president of that system, he dictated its policies and actions.

But the financing of the United States Steel Corporation was beyond all question his magnum opus.

So great was Morgan’s influence in the management of most of the companies with which he was connected that it was said of him, as of the McGregor, that “where he sat was the head of the table.”

But so far as the Steel Corporation was concerned at least, it seems to be fairly well established that, keen as was his interest and great as was his pride in the big company, he never assumed an attitude in the least dictatorial. He was the Corporation’s banker—nothing more. Questions of operation and policy he left entirely to those having direct charge of them. This was particularly true in the last six or eight years of his life, by which time, other directors of the Corporation have stated, he had come to place such implicit reliance on the judgment of Judge Gary that he always accepted the latter’s ideas upon all matters connected with the welfare of the great enterprise.

Morgan himself regarded the amalgamation of many of the country’s leading steel concerns into United States Steel as the crowning achievement of his career. He took a personal pride in his connection with the Corporation’s organization—and who shall say it was not a worthy pride? He lived to see it firmly established and exerting an influence for good on the steel trade and on industry generally; to see it gain the confidence of the public as evidenced by the growth that was, even before his death, taking place in the number of its stockholders, many of whom held only a share or two and regarded them almost as gold bonds; to see it earn the good will of its competitors and the loyalty of its—at the time—two hundred thousand odd employees.

But unfortunately he also lived to see it attacked by the Government. No doubt this was a sore grief to the great financier. And its vindication did not come until several years after his death.

To those who knew him by sight only Morgan appeared a solitary, stern figure, perhaps a little too much inclined toward impressing his own will on others. Those who enjoyed intimacy with him declare that under his cold exterior beat a heart as tender as a woman’s, that he took the keenest interest in all things human and that, while never figuring publicly as a philanthropist, the list of his private benefactions was enormous.

Newspaper men, who perforce had often to seek an interview with the great banker, found him rather unapproachable. But when he consented to talk his statements could be relied on absolutely. And he was not without a subtle sense of humor. On one occasion a financial writer who had been assigned to get Morgan to talk by hook or by crook invaded his private yacht and was only saved from being ejected by the banker himself who invited his visitor to the saloon and treated him like an honored guest.

He discussed in the fullest detail the subject on which the writer wished to interview him but—at the end, when his self-invited guest was taking his leave, Morgan said with a shadow of a smile:

“Of course, you understand all I have told you is in confidence. You have been my guest and I rely on you not to violate that confidence.”

Needless to say the interview was never printed. The scribe reported to his office that the banker refused to be interviewed.

When Morgan died the leading business men of the country united in testifying to his ability and character. Judge Gary, who had been closely associated with him for years, said:

“As a constructive force in financial matters he had no equal. With keenest perception, with indomitable courage, and with unbounded confidence in the future he was a natural leader and as such was called upon in times of financial stress to lend his influence to avert a threatened storm or to overcome an existing difficulty. And he never failed. His character was such that the greatest men of this country and of other countries trusted him and followed his lead.”

Shortly before he last sailed from his home shores Morgan remarked to a friend that his work was done. The utterance was prophetic. And posterity is beginning to realize how great that work was. In these difficult days of world reconstruction, more than ever before, is his financial genius and particularly his faith and courage missed.