Carp Morgan Failure

During the last parts of his business career, J. Pierpont Morgan became very involved in philanthropy and the United State’s government. He helped end the Panic of 1893 and donated much of his fortune to helping fund his art collection and the Museum of Natural Sciences before his death.

Throughout the 1800s the railroad business grew at an incredible rate, creating railroad tycoons like Cornelius Vanderbilt, the self proclaimed king of the railroad industry. However, there was a downfall to these great successes. The collapse of railroad overbuilding and shaky railroad financing set off a series of bank failures. Many new mines like Comstoke Lode were opened which flooded the market with gold and silver. When farmers in the west

One of the first signs that something was wrong was that the large Philadelphia and Reading Railroad went bankrupt from over expansion. At the time Grover Cleveland was newly elected for his second term. He tried to repair the economy by changing the laws concerning silver coinage that had already been passed, but it was too late. As concern about the America’s economy grew, people began frantically pulling their money out of banks causing a depression. To add to this, the Northern Pacific Railway, the Union Pacific Railroad and the Atchison, Topeka & Santa Fe Railroad went out of business. This was followed by the bankruptcy of many other companies. In total nearly 15,000 companies and 500 banks

P. Morgan’s best efforts, the situation continued to worsen. Finally, Morgan told the president he had located law, passed during the Civil War, that authorized the Secretary of the Treasury to issue bonds to buy gold coins without having to get approval from Congress. The president worried that the gold would pass right out of the country, but Morgan guaranteed that he could use his connections to keep the money from going to foreign countries. It was a huge gambled but after twelve days J.P. Morgan & Co. led a syndicate of bankers to sell U.S. bonds to buy back gold from foreign investors. The firm sold the bonds at $112.25 and sold out the entire issue in New York within 22 minutes, saving the stock