I have been wanting to write a review on this book since a while. In this fascinating book, Chernow portrays the great influence that the Morgan banks had on the American economy and further since the late 18th century. It is a great book for individuals working in emerging markets and for others as well. It vividly describes how George Peabody started the banking house being a banker for the American states in London. Today, most emerging markets are in the same state (if not better) as America was earlier. Indeed, at that moment, the credit profiles of most of the American states didn't look good. This book describes how the British bankers harassed the states and how over time the financial centre changed from London to New York.
Chernow divides the 700 page book into several sections. The first section called the Baronial era in banking, is the most fascinating of the lot. After George Peabody establishes the bank, he died fairly young and brought in Junius Morgan from the US to be his successor. Junius Morgan scaled new heights, and then his son JP Morgan Sr. (Pierpont) took over. Pierpont is the name associated with the Morgan banks. He had a very powerful character which has been very colourfully described in the book (along with his comical physical traits). This was the infamous age of "Robber barons" where the banks, railroads, big steel and oil industry were very closely associated, if not owned by the same.
The second era is the "Diplomatic era", where Pierpont was succeeded by his son JP Morgan Jr (Jack). Jack was not as influential as his father and he was overshadowed by other bankers such as Dwight Morrow. This era is where the bank plays a very large international role rescuing the Bank of England and also helping finance the Nazis, Mussoline and Japanese nationalists. The other important event was the depression and how the bank was resilient inspite of it. This section was less vibrant compared to the first one and had very few fascinating characters.
The third era covered was called the "Casino era" and this was the birth of modern finance. With the Glass Steagle Act, the bank split into Morgan Guruantee and Morgan Stanley. This section describes a lot of the takeover battles that Morgan Stanley and Guarantee get involved in.
The book intertwines the history of the bank with the political and societal aspects very well. It also describes how the banking world was filled with groupism since the early days - the bank filled only white male protestants and both Jack and Pierpont hated jews. In fact, each bank had their own religious and social affiliations.
An excellent book! Must read.
