You have to recall that the House of Morgan dates back prior to the 1850s, when Pierpont Morgan's father Junius came on the scene as the successor to George Peabody's American merchant bank in England. They were lenders of capital. The money may be needed by France, for example, and the merchant bank would raise the capital and take a cut.
The U.S. did not become a financial power until after the turn of the century and the U.S. Stock market was hardly a place for investment. It was regarded by the Morgans as a shyster game, peopled by stock operators such as the lowly Joe Kennedy. By the time Wall Street became a mecca known for trading stock the Morgan family had been in business over 50 years and was in it's third generation.
I suspect that although the name Wall Street exists in common parlance as the place where the NYSE is, when in fact it is on Broad Street, that the concept of "Wall Street" comes not from the Exchange. Rather it comes from the fact that the Morgan Bank was located at 23 Wall Street across from the Exchange on Broad. That's my guess and I think it is a pretty good one. I worked around the corner on Exchange Place for a few years and it always hit me, I wondered why "Wall Street" and not "Broad Street". I think that is the reason. The Morgans were on Wall and the Morgans pretty much controlled the shots.
Anyway that is how Morgans started. It was a merchant bank run by an American in London who lent money at first to the States and grew from there into a powerful lender world wide. By the 1920s they were lenders to all of Europe as well as Japan and China with contacts in the Vatican, the British Royal Family, the warlords of China, the Emperor of Japan though major similiar families in Japan, and so on and so forth. Political connections served them well.
They had incredibly poor judgement in the 1920s, 30s, as they had loans outstanding not only to Japan but Mussolini, Germany and Austria.
Boy that had to leave a mark.
They were in denial even as the Manchurian Invasion was going on, but that is another story. |
