The Myth of Capitalism

Chapter NineMorganizing America

If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessities of life.

—John Sherman

John Pierpont “JP” Morgan was America's banker. He famously financed superstar scientists of his day like Nikola Tesla and Thomas Edison, and arranged the merger that formed General Electric. Morgan's house was the first in New York City to be wired for electricity, and he spent vast amounts of money amassing a huge private art collection. He inspired confidence and fear; he would stare with his piercing eyes, and one man said that a meeting with Morgan made him feel “as if a gale had blown through the house.” When Morgan died, the New York Stock Exchange closed until noon in his honor; it had previously only been closed to honor the passing of kings and presidents.¹

He was the “boss of bosses” during the Gilded Age, and he singlehandedly saved the nation from economic collapse during the Panic of 1907. The Panic arose when the New York Stock Exchange fell 50% and bank runs ensued across the country. Morgan devised a plan to shore up the banking system with his personal money, and cash from wealthy friends and institutions. He provided liquidity to the country when America's own treasury failed. This outraged the nation – how could one man have gained such immense power and control?

Morgan was famous for financing failing companies, gaining majority shareholdings, and then ...