House of Morgan

Topics: Bank, Finance, Bond Pages: 2 (766 words) Published: July 29, 2008
The House of Morgan by Ron Chernow is a very interesting history of the Morgan banking dynasty. He follows the triumphs as well as the defeats of the major Morgan operations. Risk, power, and change are three themes in this book that show how impressive the House of Morgan was. This book is all about the history of the Morgan dynasty which coincides with the history of the financial world. The House of Morgan develops and functions at a time when the banking industry was first started. This is fascinating because there is only one time in the development of the country when this takes place and it can never happen again. As a result, the leaders of the Morgan dynasty had to take risks and make decisions based on instinct that paved the way for English and American banking. An example of this took place in 1870 when France needed to raise money abroad to finance a war. Junius Morgan decided to be a gambler and loaned France a Morgan-led syndicate issue of $50 million. According to Chernow, Junius was “betting the future of his firm on one roll of the dice” (27). Even though the French ended up losing the war, they repaid their bond debt which earned Junius over $1.5 million. This not only made him the wealthiest American banker in London, it also launched him into the upper ranks of government financing. Chernow quotes George Smalley describing the loan: “It was considered, and has ever since been considered, an event in the history of English finance” (28). Another theme in this book that shows how impressive the Morgan dynasty was is power. The House of Morgan was, at one time, more powerful than most governments. Chernow states, “So long as governments were financially weak, with primitive monetary methods and small budgets, they had to rely on private bankers” (77). Governments came to the Morgan banks to finance their wars and to stabilize their currencies. The Morgans had enough power to put together loans that would save both the pound and...
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