Junius Spencer Morgan: The 1870 French Loan That Built the House of Morgan

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Junius Spencer Morgan, father of J.P. Morgan, was born in 1813 in Holyoke, Massachusetts, to Joseph Morgan, who ran a tavern and stagecoach line in Connecticut. Junius skipped college and became a clerk for a Boston merchant banker at 16. His defining lesson came after the Great Fire of New York in 1835, when his father bought out panicked partners in the Aetna Fire Insurance Company and paid every claim in full, after which Aetna tripled its premiums. After an early failed partnership, Junius joined Howe, Mather and Company in Hartford and survived the Panic of 1837 by collecting Southern debts in cotton. In 1853 the London banker George Peabody offered him a partnership, and Junius allied with the Drexel family of Philadelphia before moving to London in 1854.

The Panic of 1857 nearly sank Peabody and Company, which survived on an £800,000 emergency line from the Bank of England, and Junius became a demanding, audit-driven banker. During the Civil War his son telegraphed Union victories such as Vicksburg to London ahead of the steamships. When Peabody retired in 1864 he refused Junius his name, so the firm became J.S. Morgan and Company. In 1870 Junius led a £10 million bond syndicate for France's provisional government, bought his own falling bonds to hold the price, and cleared £1.5 million when France repaid early in 1873.

• He and Peabody backed Cyrus Field's transatlantic telegraph cable through years of failures.
• He limited Civil War profiteering to avoid alienating a British textile industry dependent on Confederate cotton.
• Father and son wrote twice a week for over 30 years, and J.P. Morgan later burned the letters.
• At an 1877 Delmonico's dinner he told New York's elite never to cause evil to be spoken of the American name.
• He died in 1890 after a passing train spooked his carriage horses, leaving over $12 million.