As Banks Join, the Morgans, Rockefellers Aren't on Board
By Rachel Emma SilvermanStaff Reporter of The Wall Street Journal
Sept. 15, 2000 12:46 am ET
In 1907, financier John Pierpont Morgan halted a nationwide financial panic. "And to think he wasn't even a rich man," oil magnate John D. Rockefeller reportedly remarked afterward.
Easy for him to say. When the illustrious banker, known in his day as Pierpont Morgan, died six years later, he was worth about $80 million -- a pittance compared with Mr. Rockefeller's net worth at the time of $900 million (about $15.6 billion in today's dollars).
This week, the Rockefellers and Morgans crossed paths again when Chase Manhattan Corp. agreed to acquire J.P. Morgan & Co., forming what company officials hope will be a banking powerhouse. But there no longer are any Rockefellers or Morgans among either institution's executive ranks.
Indeed, neither family has significant ownership in the banks, and the news was of little more than passing interest to many of the heirs. "I don't think that anybody in the family can have any emotional reaction. Nobody in the family had been really involved in the bank for a number of years," says John A. Morgan, a great-grandson of Pierpont Morgan and an investment banker himself at a small firm, New York's Morgan, Lewis Githens & Ahn Inc.
Which raises a question: What has happened to the heirs of two of the most famous titans of American business? Despite the proposed corporate marriage, the personal and financial fortunes of the families have followed drastically different paths.
Everyone knows, of course, about the Rockefellers. A tight-knit family with a well-recognized surname, the Rockefellers have remained prominent figures in the decades since the great industrialist's death in 1937. The family's 132 living descendants are worth billions -- with the estimated net worth of several exceeding $1 billion -- thanks to seven trusts established in 1934 by John D. Rockefeller Jr., the oil baron's son, to protect and invest the family assets.
Chase was founded in 1877, and became the world's biggest bank after a 1930 merger with Equitable Trust -- one of whose major shareholders was John D. Rockefeller Jr. Though Mr. Rockefeller never served on the board, the press and public "lazily" considered Chase to be Mr. Rockefeller's bank, says Peter Johnson, the Rockefellers's family historian. Mr. Rockefeller's son David, now 85 years old, trained as an economist, started at the bank soon after World War II, and rose through the ranks to become chairman in 1969 until retiring in 1981. Today, little of the family wealth is invested in Chase stock. But by 1960, David was one of the largest Chase shareholders, but his holdings were a mere 0.86%.
Another of John Jr.'s sons, Nelson, was governor of New York from 1959 to 1973 and was vice president of the U.S. from 1974 to 1977. And John D. Rockefeller IV is a Democratic senator from West Virginia.
By contrast, the Morgans have slipped into relative, albeit comfortable -- and probably wealthy, in some cases -- obscurity.
"The Morgans have scattered to different places. The Rockefellers are an unusually cohesive and well organized family. ... They have managed to maintain an unusual degree of unity and prominence on the American scene. I'm not aware of anything comparable that exists with the Morgans," says Ron Chernow, author of histories about both magnates, "The House of Morgan" and "Titan: The Life of John D. Rockefeller Senior."
"The Morgan family is a widely dispersed group," says Robert Pennoyer, a 75-year-old New York attorney and a great-grandson of Pierpont Morgan. "Like most families, they ... made their own careers and occupations."
What came to be known as J.P. Morgan & Co. was founded in 1838 by George Peabody, one of whose eventual partners was Junius Morgan, father of Pierpont Morgan. Pierpont's son John Pierpont Morgan Jr., known as Jack, eventually took over and was chairman when he died in 1943. Another grandson, Harry Morgan, in 1935 helped found investment bank Morgan Stanley & Co., today known as Morgan Stanley Dean Witter & Co. But no family members have been active in J.P. Morgan since the mid-1970s or in Morgan Stanley since the 1980s.
The Morgans aren't nearly as wealthy as the Rockefellers today in part because they never had as much money to begin with. Pierpont Morgan bequeathed about $3 million to each of his three daughters, with his only son Jack getting far more, though exactly how much is unclear because much of the estate consisted of art and property.
The Morgan family fortune was diminished during the Great Depression, and philanthropy further reduced its breadth. As a result, the family's wealth has thinned out among the approximately 200 descendants, Mr. Pennoyer says.
Jack Morgan in 1924 donated to the public the fabulous Pierpont Morgan Library, a stately edifice in midtown Manhattan that once housed his extensive manuscript collection. (Mr. Pennoyer serves on the board of the library). Pierpont Morgan and his descendants have donated about 17,000 works of art, including paintings by Rembrandt and Raphael, to various institutions. Jack Morgan died leaving an estate of $16 million -- though just $4.2 million survived after taxes and expenses -- having given away some $35 million during his lifetime, including $15 million to the library and $9 million to the Metropolitan Museum of Art in New York.
In addition to the library, most of Pierpont Morgan's other real-estate properties were sold or given away. Among them was Camp Uncas, the family's Adirondack lodge, which was sold in 1947. The current occupant is Howard Kirschenbaum, a University of Rochester education professor, who bought the 25-building lakefront compound in the mid-1970s for $135,000 -- from the Boy Scouts. Morgan descendants occasionally have stopped to visit and share memories with Mr. Kirschenbaum.
Many of Pierpont Morgan's other prized possessions, including his Corsair yachts, are no longer in family hands. Until recently, one precious memento had remained in the family: Pierpont Morgan's 18-carat gold cigarette lighter, which came from Asprey, an exclusive London shop. A Morgan great-grandson sent it to Jean Strouse about two months ago because he liked her book, "Morgan: American Financier." Ms. Strouse says the 100-year-old lighter doesn't work, but that she hopes to get it repaired soon.
Unlike the Morgans, who never have big family reunions -- "We see each other once in a while," John A. Morgan says -- Rockefeller clan members gather regularly. "The unusual quality of the name has a great deal to do with their cohesiveness and distinctiveness," says Mr. Johnson, the family's historian. "The other thing is that the Rockefellers have worked very hard to maintain their cohesiveness. ... It's almost unique among wealthy American families."
Dozens of descendants convene every year at the family estate at Pocantico Hills in Tarrytown, N.Y., including some of the 21-member fourth generation, dubbed "the cousins," and the 60-member fifth generation, dubbed the "childrens' children." Professional staffers orchestrate these get-togethers from the "family office" at New York's 30 Rockefeller Plaza.
John D. Rockefeller amassed his fortune through his Standard Oil Co., which during the latter half of the 19th century had a near monopoly on the U.S. oil business. Like Pierpont Morgan, Mr. Rockefeller was a philanthropist, and his personal net worth was only about $25 million when he died in 1937. But by that time his son, John Jr., had transferred approximately $102 million into the family trust (Chase -- who else? -- is the custodian).
No outsider knows exactly how much money now is in more than 100 trusts that manage the family money. But their value has "appreciated significantly" through the decades, Mr. Johnson says.
"For 64 years, the Rockefellers have been very careful about not touching the principal."
-- Jeff Opdyke and Monica Langley contributed to this article.
Write to Rachel Emma Silverman at email@example.com
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