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The rise of J.P. Morgan. How Civil War corruption birthed a big business dynasty.

J. P. Morgan

John Pierpont Morgan makes a deal with the devil

J.P. Morgan, the man synonymous with big business, developed a name early on as a ruthless, shrewd businessman –traits which all too often are required to run a successful business. What many do not know, is that the at an early age, the backbone of the successful business was formed off a degenerate trade made with the United States government that costs U.S. citizens more than just idle cash – but the lives of American soldiers.

Morgan, whom one man’s encounter was described as “Meeting his black eyes was like confronting the headlights of an express train bearing down on you”, was only 23 years old when he embarked on one of his first business adventures. After his initial stint as an accountant wound down, J.P. Morgan took over his father’s banking company in New York City in 1861, a year when the young country’s course took a dramatic turn.

The Civil War Changes Everything

The Civil War had begun on April 12, 1861, when General Beauregard fired Confederate artillery on Fort Sumter. Both sides quickly began raising and organizing armies, scrambling quickly to get everything into order. One month later, Morgan, realizing a dire situation was developing (he avoided serving during the war by paying a substitute $300 to take his place), partnered with Arthur Eastman to initiate a scheme that would bilk the United States government out of cash and human lives.

Oh, sure. We’ll take those rifles off your hands

Morgan provided the funds to Eastman and 5,000 obsolete carbine rifles were purchased from the U.S. Army arsenal at Governor’s Island, New York. The rifles were barely working, extremely dangerous, and practically worthless. In test firings, the rifles literally blew the thumbs off testers. J.P. Morgan purchased the rifles for $3.50 each. A total of 5,000 carbines were purchased for $17,500 dollars. Eastman then covered the purchase by partnering with Simon Stevens to initiate the next phase of the scheme.

Never fear, we have rifles to help you win the war

Stevens next contacted General John Fremont and offered him 5,000 “new” guns at $22.00 each. The U.S. Army, anxious to supply their arsenal, quickly agreed. The guns were shipped and when the barely working carbines were placed into soldiers’ hands, it quickly became apparent that soldiers’ lives were going to be lost directly because of these faulty weapons.

You call these “rifles”?

Too late to recall the weapons, the government took J.P. Morgan to court where J.P. won one of his first major legal battles – the court determined that a contract was indeed valid, even though the quality of the weapons were vastly lower than expected by the purchasers. J.P. Morgan pocketed over $100,000 dollars (millions in today’s currency) which served to bankroll the many financial undertakings that led to his dynasty.

Image Credits

In-Article Image Credits

J. P. Morgan via Wikimedia Commons by Images of American Political History with usage type - Public Domain

Featured Image Credit

J. P. Morgan via Wikimedia Commons by Images of American Political History with usage type - Public Domain

 

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