, former headquarters of J.P. Morgan & Co. The origins of the firm date back to 1854 when
Junius S. Morgan joined
George Peabody & Co. (which became
Peabody, Morgan & Co.), a London-based banking business headed by
George Peabody. Junius took control of the firm, changing its name to
J.S. Morgan & Co. in 1864 on Peabody's retirement. Junius's son,
J. Pierpont Morgan, first apprenticed at Duncan, Sherman, and Company in New York City, then founded his own firm with a cousin, J. Pierpont Morgan & Company, in 1864. J. Pierpont Morgan & Company traded in government bonds and foreign exchange. It also acted as an agent for Peabody's. Junius, however, considered some of Pierpont's ventures to be highly speculative. Therefore, Pierpont took on Charles H. Dabney (a connection established when Pierpont was sent to
the Azores as a child) as a senior partner, and the firm was known first as Dabney, Morgan, and Company (beginning in 1864) and then "Drexel, Morgan & Co." (in 1871). In those firms, Pierpont used his Peabody connection to bring British financial capital together with the rapidly-growing U.S. industrial firms, such as railroads, which needed capital. The Drexel of Drexel, Morgan & Co. was Philadelphia banker
Anthony J. Drexel, founder of what is now
Drexel University.
House of Morgan On Junius's death in 1890, Pierpont Morgan took his place at J.S. Morgan and Company. After Drexel's death, Drexel, Morgan reorganized in 1895 and became J.P. Morgan and Company. The company also invested in the suppliers of war equipment to Britain and France, thus profiting from the financing and purchasing activities of the two European governments. During the early 1920s, J.P. Morgan & Co. was active in promoting banks in the
Southern Hemisphere, including the
Bank of Central and South America.
Glass–Steagall Act and Morgan Stanley In 1933, the provisions of the
Glass–Steagall Act forced J.P. Morgan & Co. to separate its
investment banking from its
commercial banking operations. J.P. Morgan & Co. chose to operate as a
commercial bank because after the stock market crash of 1929, investment banking was in some disrepute and commercial lending was perceived to be the more profitable and prestigious business. Also, many within J.P. Morgan believed that a change in the political climate would allow the company to resume its securities businesses but that it would be nearly impossible to reconstitute the bank if it were disassembled. In 1935, after being barred from the securities business for over a year, the heads of J.P. Morgan made the decision to spin off its investment banking operations. Two J.P. Morgan partners,
Henry S. Morgan (son of Jack Morgan and grandson of
J. Pierpont Morgan) and
Harold Stanley, founded
Morgan Stanley on September 16, 1935, with $6.6 million of nonvoting preferred stock from J.P. Morgan partners. At the beginning,
Morgan Stanley's headquarters were at 2 Wall Street, just down the street from J.P. Morgan, and Morgan Stanley bankers routinely used
23 Wall Street in closing transactions.
Morgan Guaranty Trust In the years following the
spin-off of
Morgan Stanley, the securities business proved robust, while the parent firm, which was incorporated in 1940, was less profitable. By the 1950s, J.P. Morgan was only a mid-sized bank. To bolster its position, in 1959, J.P. Morgan merged with the Guaranty Trust Company of New York to form the Morgan Guaranty Trust Company. The two banks already had numerous relationships between them and had complementary characteristics as J.P. Morgan brought a prestigious name and high-quality clients and bankers while Guaranty Trust brought a significant amount of capital. Although Guaranty Trust was nearly four times the size of J.P. Morgan at the time of the merger in 1959, J.P. Morgan was considered the buyer and nominal survivor and former J.P. Morgan employees were the primary managers of the merged company.
Return of J.P. Morgan & Co. Ten years after the merger, Morgan Guaranty established a
bank holding company called J.P. Morgan & Co. Incorporated, but continued to operate as Morgan Guaranty through the 1980s before beginning to migrate back to use of the J.P. Morgan brand. In 1988, the company once again began operating exclusively as J.P. Morgan & Co. Also in the 1980s, J.P. Morgan along with other commercial banks pushed the envelope of product offerings toward investment banking, beginning with the issuance of
commercial paper. In 1989, the
Federal Reserve permitted J.P. Morgan to be the first commercial bank to underwrite a corporate debt offering. In the 1990s, J.P. Morgan moved quickly to rebuild its investment banking operations and by the late 1990s would emerge as a top-five player in securities underwriting.
JPMorgan Chase By the late 1990s, J.P. Morgan had emerged as a large but not dominant commercial and investment banking franchise with an attractive brand name and a strong presence in debt and equity securities underwriting. Beginning in 1998, J.P. Morgan openly discussed the possibility of a merger, and speculation arose of a pairing with
Goldman Sachs,
Chase Manhattan Bank,
Credit Suisse or
Deutsche Bank AG. In the previous decade, Chase Manhattan had emerged as one of the largest and fastest-growing commercial banks in the United States through a series of mergers. In 2000, it merged with J.P. Morgan to form
JPMorgan Chase & Co. The combined JPMorgan Chase offered
investment banking,
commercial banking,
retail banking,
asset management,
private banking and
private equity businesses. In 2004, JPMorgan began a joint venture with
Cazenove, which combined Cazenove's investment banking operations with JPMorgan's UK investment banking business. By 2010 JPMorgan bought the company out. J.P. Morgan Cazenove is a marketing name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries. In 2005, JPMorgan Chase acknowledged that its two predecessor banks had received ownership of thousands of slaves as collateral prior to the
Civil War. The company apologized for contributing to the "brutal and unjust institution" of slavery. The bank paid $5 million in reparations in the form of a scholarship program for Black students. J.P. Morgan, the company itself, is still active as the business and investment banking subsidiary of JPMorgan Chase; Chase Manhattan Bank is still active as the personal banking subsidiary of the company. ==List of Chairman and CEOs of J.P. Morgan & Co.==