J.P. Morgan â€“ Civil War Corruption Leads to Big Business
About John Pierpont Morgan
J.P. Morgan, the name synonmous with big business, developed a name early on as a ruthless, shrewd businessman –traits which all too often are required in order to run a successful business. What many do not know, is that the at an early age, the backbone of the successful business was formed off a degenerate trade made with the United States government that costs U.S. citizens more than just idle cash – but rather the lives of American soldiers.
Morgan, whom one man’s encounter was described as “Meeting his black eyes was like confronting the headlights of an express train bearing down on you”, was only 23 years old when he embarked on one of his first business adventures. After his initial stint as an accountant wound down, J.P. Morgan took over his father’s banking company in New York City in 1861, a year when the young country’s course took a dramatic turn.
The Civil War Changes Everything
The Civil War had begun on April 12, 1861 when General Beauregard fired Confederate artillery on Fort Sumter. Both sides quickly began raising and organizing armies, scrambling quickly to get everything into order. One month later, Morgan, realizing a dire situation was developing, partnered with Arthur Eastman to initiate a scheme that would bilk the United States government out of cash and human lives. Morgan provided the funds to Eastman and 5,000 obsolete carbine rifles were purchased from the U.S. Army arsenal at Governor’s Island, New York. The rifles were barely working, extremely dangerous, and practically worthless. In test firings, the rifles literally blew the thumbs off of testers. The rifles were purchased for $3.50 each – a total of 5,000 carbines were purchased for $17,500 dollars. Eastman then covered the purchase by partnering with Simon Stevens to initiate the next phase of the scheme.
Stevens next contacted General John Fremont, and offered him 5,000 “new” guns at $22.00 each. The U.S. Army, anxious to supply their arsenal, quickly agreed. The guns were shipped and when the barely working carbines were placed into soldiers hands, it quickly became apparent that soldiers’ lives were going to be lost directly as a result of these faulty weapons. Too late to recall the weapons, the government took J.P. Morgan to court where J.P. won one of his first major legal battles – the court determined that a contract was indeed valid, even though the quality of the weapons were vastly lower than expected by the purchasers. J.P. Morgan pocketed over $100,000 dollars (millions in today’s currency) which served to bankroll the many financial undertakings that lead to his dynasty.