One advantage of a republican form of government is that it allows the United States to have more than one royal family. Apart from the Kennedys, Roosevelts, and assorted dukes and duchesses of Hollywood, there were the great regal dynasties of commerce. Most regal of all was the House of Morgan during the reigns of J. Pierpont Morgan, who inherited it when his father, Junius, died in 1890, and his son, J. P. ”Jack” Jr., as Ron Chernow makes abundantly clear in this rich, monumental, suitably banklike book. The Morgans, sitting on top of the international banking world, not only had princely manners and manors, they wielded the power of princes. In its prime the House of Morgan behaved like a sovereign state, commanding more wealth than most countries hoarded in their treasuries, engaging in shadowy diplomatic missions, writing the script for war or peace, propping up governments or toppling them.
Brusquely running his empire from his rolltop desk in the small, elegant Morgan headquarters at 23 Wall Street, J. Pierpont Morgan inspired awe. Swelling crowds parted for him as he made his way down the street to save the stock exchange in the Panic of 1907. Tycoons turned to jelly when caught in his fierce glare. Kings envied his collection of Old Masters and young mistresses. Top-hatted and Savile Row-tailored, sleek and plump, brandishing a vast cigar and warding off photographers with a walking stick, Pierpont and Jack (an uncanny imitation of his father) became for populists symbols of a fiendish conspiracy of bankers and Brits.
For members and would-be members of the exclusive Morgan banking club (only rock-solid corporations and old money need apply), they became symbols of an aristocratic dignity and integrity that prevented American business from slipping into cutthroat anarchy. For politicians, they eventually became an easy target, resulting in the Glass-Steagall Act of 1933, which forced the House of Morgan to split into a commercial bank (J. P. Morgan & Co.) and an investment bank (Morgan Stanley), putting an end to its imperial glories.
The first half of Chernow’s book, The House of Morgan, is as enchanting as an old-fashioned novel — the rise of George Peabody’s merchant bank in Dickensian London, its reincarnation as the Morgan bank under Junius Morgan; the transformation of his son, Pierpont, from romantic, impetuous boy to king of Wall Street, afflicted with a monstrous red nose and a longing to escape.
The rest of the story is another story. It is the rather discouraging institutional history of the Morgan banks as they go their separate ways, and although Chernow does his best to coax some drama out of several recent Morgan executives, he all but admits that compared with the gentlemen and scholars of yesteryear, they are bumptious little boors.
Still, a kind of barbarians-among-the-ruins drama comes into it as he brings the story into the brazen ’80s. While J. P. Morgan & Co. retained some of the old Morgan discretion, Morgan Stanley and Morgan Grenfell in London plunged headlong into the morass of takeovers and junk bonds. As raucous savages from Harvard Business School clamber over the walls, blood is on the floor, heads roll, insider-trading arrests are made, the proud Morgan name is sullied — we enter the world of The Bonfire of the Vanities.
Chernow is properly scathing about this descent into tawdry greed, and by the end of the story we all miss old Pierpont. We also have a sense of déjà vu. The book begins with the United States as a debtor nation, resenting having to grovel before the British; it ends with the United States as a debtor nation, resenting having to grovel before the Japanese. B+