measure available: it halted gold payments.
The havoc that followed showed how radical and useless such an action was. The public concluded that the whole banking system was circling the drain, and started a run on the banks. The trade deficit with Europe widened to $447 millionâa horrifying abyss. The interest rate for short-term money in New York climbed to 74 percent. The stock market fell apart. Four railroads went under, and 500 banks. Thousands of businesses failed. In this tempest of disaster, the United States was facing ruin.
The government had $40 million left in monetary gold, a store that was dwindling by $2 million a day. In the financial community, they thought it certain that the Treasury would fail. On the last day of January 1895, $9 million in gold bullionâalmost half the reserveâsat on ships in New York Harbor bound for Europe. At the last possible moment, at the very brink of the abyss, the country was rescued from insolvency by one of the men that the public was blaming for the state of things, the greatest grandee of them all, the American princeâthe financier J. Pierpont Morgan.
In American terms, the Morgans had been rich forever. They had not scrabbled their way out of poverty but had glided along a path to prosperity that began sixteen years after the arrival of the Mayflower at Plymouth, when Miles Morgan bought a farm at Springfield, Massachusetts, and set about, in the words of the familyâs chronicler, âspawning generations of land-owning Morgans.â
Morganâs father, Junius, moved to Boston in 1851 to expand his business into merchant banking. He enrolled his son at the English High School, admonishing him to make friends with those of the âright stamp.â Morgan was a lively, passionate, and moody youngster.He was beset by sudden rashes on his face and suffered bouts of scarlet fever. In 1852 he was sent to the Azores to recover from a rheumatic disease that left one leg shorter than the other.
Banking then was a dynastic occupation. The great English banking families such as Baring and Rothschild fed a cult of personality that Walter Bagehot, a British journalist and commentator of the day, captured when he wrote: âThe bankerâs calling is hereditary; the credit of the bank descends from father to son; this inherited wealth brings inherited refinement.â
Junius moved his headquarters to London in 1854. Morgan went to a school on Lake Geneva, and then to the University of Göttingen. Later he returned to America to become his fatherâs eyes and ears on Wall Street.
Troubled throughout his life by his skin, and afflicted at times by nervous ailments and migraine headaches, Morgan nevertheless became the greatest banker in America, a tall, burly, laconic, and intrepid financier, prowling Wall Street behind the smokestack of a huge cigar. His yacht, the Corsair II, with its sleek black hull and yellow funnel, was said to be the largest private craft afloat. He collected bronzes, porcelains, watches, ivories, and paintings, rare books, manuscripts, and ancient artifacts. He bought rare furniture, tapestries, and armor. In two decades he spent almost a billion dollars in todayâs money indulging his passion for collecting. In his refinement, cosmopolitan upbringing, and fortune he was probably the only man in America that European bankers would accept as an equal, and for that reason, he was political poison in the United States.
Still a largely agricultural country, the United States was not the creditor it is today. It was a debtor nation. Its rural voters hated the eastern establishment bankers, whom they viewed as having enslaved America to British gold. The operation of the gold standard couldpunish farmers by depressing prices, an effect they attributed to the wicked machinations of Europeans, abetted by American financiers. Such was the political temperature at the end of January 1895, as $9 million sat in New York
The havoc that followed showed how radical and useless such an action was. The public concluded that the whole banking system was circling the drain, and started a run on the banks. The trade deficit with Europe widened to $447 millionâa horrifying abyss. The interest rate for short-term money in New York climbed to 74 percent. The stock market fell apart. Four railroads went under, and 500 banks. Thousands of businesses failed. In this tempest of disaster, the United States was facing ruin.
The government had $40 million left in monetary gold, a store that was dwindling by $2 million a day. In the financial community, they thought it certain that the Treasury would fail. On the last day of January 1895, $9 million in gold bullionâalmost half the reserveâsat on ships in New York Harbor bound for Europe. At the last possible moment, at the very brink of the abyss, the country was rescued from insolvency by one of the men that the public was blaming for the state of things, the greatest grandee of them all, the American princeâthe financier J. Pierpont Morgan.
In American terms, the Morgans had been rich forever. They had not scrabbled their way out of poverty but had glided along a path to prosperity that began sixteen years after the arrival of the Mayflower at Plymouth, when Miles Morgan bought a farm at Springfield, Massachusetts, and set about, in the words of the familyâs chronicler, âspawning generations of land-owning Morgans.â
Morganâs father, Junius, moved to Boston in 1851 to expand his business into merchant banking. He enrolled his son at the English High School, admonishing him to make friends with those of the âright stamp.â Morgan was a lively, passionate, and moody youngster.He was beset by sudden rashes on his face and suffered bouts of scarlet fever. In 1852 he was sent to the Azores to recover from a rheumatic disease that left one leg shorter than the other.
Banking then was a dynastic occupation. The great English banking families such as Baring and Rothschild fed a cult of personality that Walter Bagehot, a British journalist and commentator of the day, captured when he wrote: âThe bankerâs calling is hereditary; the credit of the bank descends from father to son; this inherited wealth brings inherited refinement.â
Junius moved his headquarters to London in 1854. Morgan went to a school on Lake Geneva, and then to the University of Göttingen. Later he returned to America to become his fatherâs eyes and ears on Wall Street.
Troubled throughout his life by his skin, and afflicted at times by nervous ailments and migraine headaches, Morgan nevertheless became the greatest banker in America, a tall, burly, laconic, and intrepid financier, prowling Wall Street behind the smokestack of a huge cigar. His yacht, the Corsair II, with its sleek black hull and yellow funnel, was said to be the largest private craft afloat. He collected bronzes, porcelains, watches, ivories, and paintings, rare books, manuscripts, and ancient artifacts. He bought rare furniture, tapestries, and armor. In two decades he spent almost a billion dollars in todayâs money indulging his passion for collecting. In his refinement, cosmopolitan upbringing, and fortune he was probably the only man in America that European bankers would accept as an equal, and for that reason, he was political poison in the United States.
Still a largely agricultural country, the United States was not the creditor it is today. It was a debtor nation. Its rural voters hated the eastern establishment bankers, whom they viewed as having enslaved America to British gold. The operation of the gold standard couldpunish farmers by depressing prices, an effect they attributed to the wicked machinations of Europeans, abetted by American financiers. Such was the political temperature at the end of January 1895, as $9 million sat in New York
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