When a book is entitled The Man Who Made Wall Street, you just don’t expect the sub-title to read: Anthony J. Drexel and the Rise of Modern Finance. Anthony J. Drexel? Not J. Pierpont Morgan? Morgan, the most famous Wall Streeter in history, is the man normally credited with the “rise of modern finance.” Morgan is the name associated with raising the capital for U.S. Steel, for Edison’s electric company, for the mighty railroads, for the Panama Canal. It’s Morgan who is said to have dominated the U.S. economy in the era before the Federal Reserve Bank was created. All true, concedes author Dan Rottenberg, yet he contends that if it hadn’t been for Anthony J. Drexel, we might never have heard of J. Pierpont Morgan at all. In this persuasive biography, Rottenberg makes the case that, for most of his career, J. Pierpont never made a move before getting an opinion from Anthony J. Rottenberg, the editor of Family Business magazine, says he’s been “obsessed” by Anthony J. Drexel for some 20 years now. The obsession started, he explains, when he came across this sentence in Edwin Hoyt’s 1966 history The House of Morgan: “By the time his father died, Pierpont was not used to yielding to anyone save Anthony Drexel, senior partner in Drexel, Morgan & Co.” Pierpont Morgan, who was 52 at the time of his father’s death, had become a man “respected and feared on two continents.” Rottenberg was astounded to read he had “yielded” to anyone at all, much less to a Philadelphia banker remembered today, when he is remembered at all, as the founder of the Drexel Institute of Technology, now Drexel University. Surely, Rottenberg reasoned, if the famous J. P. Morgan held Drexel in such high esteem, there must be more to know about him. He soon discovered that the reason we don’t know more is because Drexel was content to have it that way. Drexel eschewed the limelight. “He granted no interviews, kept no diaries, held no public offices and destroyed his personal papers,” Rottenberg writes. “His company compounded the problem in the 1950s by destroying nearly all its nineteenth-century records.” This sort of thing discourages biographers, who much prefer voluminous source material to work with. And then there was the fact that what little information could be found easily indicated Anthony J. was a strait-laced family man “unsullied by financial or sexual scandal.” Happily for the cause of financial history, Rottenberg’s curiosity was undampened and he has managed to dig up quite a bit about his “obsession.” One source: letters J. P. Morgan mailed to his father, Junius, which contain frequent references to “Mr. Drexel.” Said one, written in 1873: “Mr. Drexel and family have arrived safely and I cannot tell you how greatly relieved I am that he is back [from a vacation in Europe]. It takes an immense responsibility off my shoulders, I can assure you, to have him here to consult and act with.” Pierpont had first met “Mr. Drexel” just two years before. Anthony (Tony) Drexel, then 44, had built his father’s Philadelphia-based currency brokerage, Drexel & Co., into an influential private bank with branches in New York and Paris. Pierpont Morgan, then 33, was both sickly – suffering from headaches, fatigue, insomnia and fainting spells – and heartily sick of his New York banking partnership, which seemed about to fold anyway. Junius Morgan had written to Tony to suggest he take Pierpont on as a partner in Drexel’s New York office, thus establishing an alliance between the Drexel firm and his own based in London. He then wrote to Pierpont asking him to meet with Drexel. Drexel was as impressed with Pierpont as Junius hoped he would be. Drexel not only offered Pierpont a partnership, he offered to re-organize the New York office as Drexel, Morgan & Co. with the Drexel family putting up almost all the money. Pierpont told Drexel that he’d been considering retiring to the life of a gentleman farmer (money being no obstacle) and, at the very least, felt he needed a year off. Drexel said that if Pierpont accepted his offer, he could have his long vacation and a bright future on Wall Street, too. And so it was. For more than 20 years, Tony Drexel visited Pierpont Morgan in New York weekly, usually on Monday, to make recommendations and suggest guidelines. And when Drexel died in 1893, Morgan, then age 56, wrote to a friend: “I am at a complete loss to know how I am going to get along without him.” By Rottenberg’s account, the quiet, self-effacing Drexel had a way of advancing the careers of many talented others. He personified the old adage: There’s no limit to how much you can accomplish, if you don’t care who gets the credit. Drexel’s alliance with fellow-Philadelphia banker Jay Cooke, 10 years before the meeting with J. P. Morgan, is a case in point. In 1861, the federal government was in dire need of money to fight the Civil War but foreign investors were selling American securities and taking cash out of the country and hard-nosed bankers thought government bonds too risky. Cooke came up with a then-unheard-of idea: borrowing from the patriotic public. Cooke had political connections but was a relative novice in the financial world. He was able to convince Lincoln’s Treasury Secretary Salmon Chase to let him sell government bonds – for a small commission – only because Tony Drexel agreed to be his partner. In his pitch to Chase, Cooke referred to the Drexel firm as “the heaviest house in Philadelphia” and one that “has probably transacted more business” in government loans and treasury notes than any other. The partnership raised $511 million (in a time when a year’s pay was $500). Cooke, who enlisted 2,500 salesmen and brass bands in the sales effort, became a Civil War hero. Tony Drexel had to wait for Dan Rottenberg to get due praise for taking what seemed at the time to be a huge financial risk. Rottenberg doesn’t claim Tony Drexel’s judgment was infallible. He is sure Drexel cursed the day he ever agreed to help finance the Reading Railroad. His efforts to install competent management were frustrated by others and the railroad went through one bankruptcy after the other. The tale of that debacle is another good reason to read The Man Who Made Wall Street.
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