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MORGAN: AMERICAN FINANCIER, by Strouse, J., New York: Random House, 1999, xv-796 pp., $34.95 (cloth)
Jean Strouse's Morgan inevitably invites comparison with Chernow's (1990) National Book Award-winning House of Morgan. Strouse does not fall short of the mark. Morgan is an extraordinarily accomplished contribution to the somewhat revisionist modern literature on the era of the 'robber barons', especially so for someone whose only previous work, a biography of Alice James that won the Bancroft Prize, was light years distant from the arcane world of investment banking. Whereas Chernow told the story of the institution, from its nineteenth century London origins under George Peabody to the middle of the twentieth century's 'decade of greed', Strouse gives us an intimate portrait of J. Pierpont Morgan, the man who in many ways personified the Gilded Age.
Morgan actually has more in common with Chernow's (1998) recent biography of John D. Rockefeller, Sr. (Shughart, 1998) than with his monumental history of J.P. Morgan &Co. No one can read these two engrossing narratives without concluding that much of what passes for conventional wisdom about the men who built the great industrial trusts in the decades following the Civil War is indeed 'myth' (Folsom, 1991). Morgan, Rockefeller, and their fellow capitalists consolidated productive assets, exploited economies of scale, and cut costs relentlessly. Andrew Carnegie, for example,
'built big, efficient, technologically up-to-date [steel] mills and ran them at full capacity, which kept his production volume high and his costs low . . . With the lowest costs in the industry, he could ''scoop'' the market by underselling his rivals anytime he wanted. Although government tariffs protected the new industry, Carnegie told [Pierpont's father] Junius proudly that ''even if the tariff were off entirely, you couldn't send steel rails west of us'' ' (p. 139).
During a time of secular deflation and remarkable productivity gains, the output produced by great trusts expanded more rapidly than that of the economy as a whole and their prices fell faster than did the general price level (DiLorenzo, 1985). Consumers clearly benefitted from these developments. The only ones to be hurt by the emergence of Carnegie Steel, Standard Oil, and other 'huge, low-cost, high-volume enterprises' (p. 154) were the owners of the smaller, less efficient firms who...