Will to power

Morgan, American Financier

Jean Strouse <em>Harvill, 796pp, £25</em>

ISBN 0375501665

There is not much Jamesian nuance in Jean Strouse's approach to American super-banker J Pierpont Morgan. She piles detail upon elaborate detail, recalling the ornate interior of a Manhattan town-house as described by Edith Wharton. But, since her subject matter is rooted in the late 19th-century WASP ascendancy, the effect is compelling - the literary equivalent of a swagger portrait by John Sargent, the great man shown in all his glory, but with something of his vulnerability also suggested.

Not that Strouse is overwhelmed by plutocratic frippery. She skilfully uses yachts, mistresses, old masters and dynastic marriages as colour to set off the more important (but potentially duller) story of one man's domination of the American economy at its most formative stage.

Morgan's father partnered George Peabody, the American banker who first steered British capital across the Atlantic (and whose name survives in housing for London's industrious poor). Pierpont took on the US side of the business, showing his money-making mettle during the civil war, when he bought guns from the government, upgraded them and sold them back at huge profit.

He came into his own during the postwar boom. Railroads needed finance but, at a time of frenzied competition, failures were frequent. As their banker, Morgan weighed in, demanded mergers and created powerful, profitable businesses. He then repeated this successful formula. Through interlocking trusts, he established dominant players, often virtual monopolies, in industries such as electricity, agricultural machinery, steel and, later, shipping. He used his financial muscle to bring the US back to the gold standard (arguing that paper money would cause inflation and scare off needed foreign capital). During several banking crises, he acted as lender of last resort. In the Wall Street panic of 1907, he locked 50 bankers in his Madison Avenue mansion, refusing to let them out until they had rescued the Trust Company of America.

In the process of consolidation, he ruthlessly forced businesses to cut jobs and wages. Inevitably he clashed with emerging labour, which made common cause with the rural, decentralising tradition in American politics. Despite trying to become a media baron, Morgan could not deflect demands for anti-trust legislation. But politicians were fickle and, after being elected president on the anti-business ticket, Theodore Roosevelt essayed one swipe at Morgan before settling for a comfortable relationship.

His name once anathema, Morgan's historical record is being reassessed. Within weeks of his death in 1913, the Federal Reserve system was established. Several commentators now argue that, for all his overbearing nature, Morgan contributed to the rationalisation of a chaotic monetary system and, more controversially, that his robust business tactics were good for US corporate efficiency.

Along the way, Strouse has unearthed several biographical nuggets. Always interesting on Morgan's religious underpinnings, she tells of his maternal grandfather, the Reverend John Pierpont, for a short time America's leading poet and later a radical abolitionist, who, at 76, insisted on signing up as a unionist chaplain in the civil war. (Through accident of marriage, this clergyman's youngest son, Morgan's uncle James, served with the southern forces, but not before composing the ditty "One Horse Open Sleigh", later universally known as "Jingle Bells".)

Strouse's coup is the story of Belle da Costa Greene, the chic, exotic woman who ran Morgan's library. She passed herself off as partly Portuguese, but that was fictional: she was the daughter of Richard Greene, the first black Harvard graduate and, after he abandoned his family, she was brought up to deny her racial background. Although she was not one of Morgan's many mistresses, he was extremely possessive of her, and she doted on him, regularly smuggling in manuscripts from Europe for his library.

Morgan's dominant position in American capitalism has attracted several novelists. In satirising the financier's appetite for European art in The Outcry, Henry James skirted around Morgan's unsightly bulbous nose by pointedly referring to his face as without features. In Howard's End E M Forster toyed with the idea that Morgan had no real personality, only rapacious greed, while John Dos Passos in 1919 saw him as the boss croupier of Wall Street. More recently E L Doctorow was kinder in Ragtime, though his idea of Morgan meeting with Henry Ford has no echo in Strouse. Doctorow does, however, have a ringing phrase about Morgan's "fierce, intolerant eyes set just close enough to suggest the psycho-pathology of his will". Strouse is only occasionally subtle enough to show this force working from the inside. But she provides more than enough material to show its ramifications in the wider world.

Andrew Lycett's biography of Rudyard Kipling is published by Weidenfeld & Nicolson in September