J.P. Morgan on Leadership Transition

Although Pujo left Congress in 1913, the committee's findings inspired public support for ratification of the Sixteenth Amendment authorizing a federal income tax, for passage of the Federal Reserve Act that same year, and for the Clayton Antitrust Act of 1914, the article records. The findings were also widely publicized in Louis Brandeis's book Other People's Money and How the Bankers Use It, which gave the money trust diagnosis its permanent literary form. Morgan himself, though suffering ill health, testified before the committee in December 1912 and faced several days of questioning from Untermyer; the exchange between the two men on the fundamentally psychological nature of banking, an industry built on trust rather than on money or property, is often quoted in business articles to this day. Morgan's associates laid his continuing physical decline at the hearings' door: he fell ill in February 1913 and died on March 31, with the Federal Reserve still nine months from officially displacing the money trust as lender of last resort.

The early 1910s marked the turning point for the shipping trust. On April 15, 1912, the Titanic, flagship of its fleet and property of the White Star subsidiary, sank during her maiden voyage. Beyond the toll of lives and money, the sinking unsettled the trust's organization: Senator William Alden Smith, through the American commission of inquiry into the disaster, attacked the combine's very principle and Morgan's combination itself, the history records. Ismay's retirement as IMM president, arranged before the Titanic went down, took effect in 1913 with Harold Sanderson succeeding him; Morgan died that March 31. Analysis of the company's financial records shows that IMM was overleveraged and suffered from inadequate cash flow, defaulting on bond interest payments in late 1914 and entering a friendly receivership in 1915, from which it emerged in 1916. The combine never managed to dominate the bulk of the North Atlantic trade, and its corporate remnants eventually re-emerged as the United States Lines.

Morgan's estate was valued at 128 million dollars, over half of it the worth of his collection, and he bequeathed all except one piece to the library, asking that his son make it permanently available for the instruction and pleasure of the American people, the institution's history records. Jack Morgan sold off much of the overseas collection rather than importing it, but kept what was already in his father's library, and in 1924 he incorporated the Pierpont Morgan Library as a public institution with a 1.5-million-dollar endowment, retaining Belle da Costa Greene as director. The library was not a public lending library and initially admitted only researchers, ten at a time; Jack's warning that one soiled thumb could undo the work of nine hundred years expressed its standard of custody. The collection, more than 350,000 objects by the early twenty-first century, includes three Gutenberg Bibles, the manuscript of A Christmas Carol, and the only significant music manuscript Morgan bought in his lifetime, Beethoven's Violin Sonata in G major, Opus 96, acquired in 1907.

In 1913, newspapers reported that Morgan had fallen into a long sinking spell marked by extreme weakness and nervousness, with a paralysis of the throat muscles preventing him from taking food, his biography records. He had been traveling abroad, and he died in his sleep on March 31, 1913, at the Grand Hotel Plaza in Rome, at seventy-five. His body came home aboard the French Line passenger ship SS France; Wall Street's flags hung at half-staff, and the stock market suspended trading for two hours as the coffin passed through New York City, an honor ordinarily reserved for heads of state, with the body lying the first night in his home and adjacent library. He was interred in Cedar Hill Cemetery in his birthplace of Hartford. His estate was worth 68.3 million dollars, of which about thirty million represented his share of the New York and Philadelphia banks, with the value of the art collection estimated at fifty million.

Morgan's son, John Pierpont Morgan Jr., known as Jack, took over the business at his father's death, but he was never as influential as the founder, the biography records. The Glass-Steagall Act of 1933 broke the House of Morgan into three parts: J.P. Morgan and Co., which became Morgan Guaranty Trust and ended up merging with Chase Bank; Morgan Stanley, the investment house formed in 1935 by his grandson Henry Sturgis Morgan with Harold Stanley; and Morgan Grenfell in London, the overseas securities house. The gemstone morganite was named in his honor, and the Cragston Dependencies of his Highland Falls estate were listed on the National Register of Historic Places in 1982. From 1890 to 1913, forty-two major corporations were organized, or had their securities underwritten in whole or part, by J.P. Morgan and Company, the institutional residue of a single banker's judgment acting as the American economy's allocator of capital.