All language subtitles for Titans.The.Rise.of.Wall.Street.S01E01.THE.HOUSE.OF.MORGAN.1080p.AMZN.WEB-DL.DDP2.0.H.264-TEPES

Ladies and gentlemen,

I come here today with an important message;

greed is healthy.

The financial hub of the world today

is Wall Street.

Its foundation was built by a bold group of innovators,

titans of finance.

See, we're a new brokerage, welcome to Merrill Lynch.

It's Kennedy, I'm here to see Mr. Morgan.

If we really push, we can overtake four.

(dramatic music)

Before their names were institutions,

they fueled the rise of new industries.

(upbeat music)

I believe the union Pacific can provide the spine

of an unmatched network of commerce.

In a quest for power and influence.

For God's sake Samuel, take a risk for once in your life.

Proving order to buy 150,000 shares

at any price.

They amass huge fortunes,

but they find themselves in the government's crosshairs.

Gonna give you one more chance Mr. Morgan.

Did you pay income taxes?

Anyone who wishes to challenge

the Securities and Exchange Commission

will feel the full weight of the United States government

at their doorstep.

Why invade Belgium

if they knew it would cause England to declare war?

Because they believe they can defeat us.

(dramatic music and gunshots)

As war breaks out,

the world turns to Wall Street.

An amount of this magnitude would be difficult to raise.

But it can be done.

This is why I came to you first.

But the biggest threat

is of their own creation.

JC Penny is up two and a quarter, Kresge is up four.

The market is unsustainable.
Enough.

(dramatic music)

American trust has stopped handing out dividends,

it's not bouncing back up.

Creating a crash that could destroy everything.

The market is in free fall,

and your first thought

is to absolve yourself of all responsibility.

But the foundation built by Wall Street titans

(dramatic music)

emerges stronger than ever.

That gives me almost three billion to play with.

There's not a corporation on earth

that won't piss themselves when they hear me coming.

(dramatic music)

Giving rise to a new breed of banker,

one that could bring everything crashing down.

Greed is what keeps me hungry.

If you don't want it the most, I guarantee you

there's some other greedy bastard out there that will.

♪ I want the money and the power and the fame for real ♪

♪ Try to take it from me then I'm down and kill ♪

♪ I desire everything then I feel I won't stop ♪

♪ Till the house in the hills ♪

♪ I'm in my zone yeah ♪

♪ A lot of money, power, respect ♪

♪ Been to it all ♪

♪ When we don't ever forget ♪

♪ I'm in my zone yeah ♪

♪ I'm in my zone yeah. ♪

(birds chirping)

(dramatic music)

At the start of the 20th century,

JP Morgan is the undisputed king of Wall Street.

The most powerful banker in the world.

He has changed the course of American history,

financing the industries that have transformed the nation

into a global economic power.

(gavel bangs)

Now Morgan's influence is being questioned.

Mr. Morgan, in how many industries

do you wield significant financial interest?

(upbeat music)

The US government is coming after him,

but JP Morgan refuses to cooperate.

How many? None.

(dramatic music)

Are you honestly telling this committee

that you don't have the power to influence an industry?

I do not.

What about a single company?

I do not.

Your firm is run by you, is it not?

It is not.

I wanna be clear about your answer,

you're telling the committee that you do not run

investment bank, JP Morgan and Company?

No, sir, I do not.

(dramatic music)

Before JP Morgan

became the king of Wall Street,

he was just a young banker looking to make his name.

(dramatic music)

JP trained under his father, Junius Morgan,

one of the most prominent American bankers in London.

Now Junius is sending JP to New York

to oversee his bank's American investments.

Restraint Pierpont,

if my experience has taught me anything, it is this;

a banker who confuses boldness with insight

is merely being reckless.

Not many men are being an offered an opportunity like this

don't waste it.

I won't.

(dramatic music)

Stay slow and sure Pierpont, always slow and sure.

Yes, sir.

Good, make sure everything's in proper order,

the ship leaves at half past 10.

Junius controlled everything

that J Pierpont Morgan was doing.

He made sure that he was prepared

for a future life in banking in the United States

to inherit his legacy.

But JP Morgan was headstrong and aggressive.

He was very, very capable,

but he was not always easy to deal with.

From a young age,

JP has been groomed by Junius

to live by the gentlemen banker's code.

I will return tonight,

see that these accounts balance by then.

A code of ethics

demanding the highest level of respect,

honesty and professionalism amongst bankers.

The gentleman's banking code was really the code

that the entire banking industry followed at the time.

This was an era in which a man's word was his bond.

And if you turned out not to be trustworthy,

then you would lose business

and you would be essentially drummed out of the industry.

While Junius has trained JP to follow his lead,

JP sees a different path for himself.

JP Morgan saw that there were a lot of opportunities

and he felt he could calculate the odds of success.

And if he thought he could succeed,

he would take the chance.

The journey from London to New York takes JP from the

financial capital of the world

to a nation coming into own.

America has entered the industrial revolution,

triggering an unprecedented economic boom,

giving rise to new industries

like railroads, oil and mining.

(dramatic music)

The country was modernizing rapidly.

The economy had grown during the course of the 19th century

and there was great potential here,

there were resources, there were potential markets,

there was every reason to think

that it might continue to grow that way.

(dramatic music)

Though the American economy is growing,

JP arrives to a Wall Street that's still taking shape.

The early days of investing in finance on Wall Street

were very much like the wild west

because there was so little regulation,

there was so little transparency.

Wall Street had a few patchwork of state laws,

but there was no federal oversight,

they did what they did,

and they did it in a way that they felt was right.

(upbeat music)

The unregulated world of Wall Street

captivates JP but Junius expects him

to only make conservative, responsible investments.

And JP quickly grows tired of his father's rules.

JP was trying to make his mark,

he wanted to prove himself,

but also felt the immense pressure

from his father to conform.

(upbeat music)

Morgan's ambition was always there,

he could focus intensely

on the things that he was interested in

and wanted to just kind of disregard everything else.

Determined to do things his own way,

JP Morgan is desperate for an opportunity.

And it comes when this civil war begins.

The battle between north and south,

pits brother against brother.

(men make war cries)

Devastating the nation.

But in the chaos,

JP is approached with an opportunity

to turn a quick profit through a backroom deal.

He's a man of his word,

if he says the deal will go through,

the deal will go through.

At 100% profit?

Well, he doesn't know that,

but he doesn't need to know that, does he?

I'll go four.

The union is on their heels Mr. Morgan,

providing them with the means to defend our constitution

against this traitorous assault,

I'll call and raise four.

It's an act of patriotism, sir.

(dramatic music)

Well,

I'm nothing if not a Patriot.

As the war intensifies,

the union is in desperate need of guns,

so JP Morgan makes a deal

loaning money to businessman Simon Stephens,

to buy thousands of obsolete rifles

from the US government for next to nothing.

After making one small modification to the barrel

to improve power and accuracy,

the guns will be turned around

and sold right back to the government at a huge mark up.

JP knows this goes against everything his father taught him,

but he can't pass up a chance to do things his way.

(dramatic music)

War is always an opportunity for someone to make a buck.

That was true in the civil war,

it was true in the war of 1812,

it was true in World War I,

it was true in World War II.

Now it may be morally questionable,

it may from most eyes be morally reprehensible,

but it was not particularly unusual.

(dramatic music)

What do you think?

Beautiful craftsmanship, solid.

A hell of a gun, just not built for modern warfare.

How long to alter all of them?

Shouldn't be long, a week at most,

Fremont, we'll have them all by the end of the month

And I'll receive my payment the week after that?

I see no reason to believe otherwise.

(dramatic music)

Good, no surprises.

JP provides the money to buy the guns

and make the modifications.

(upbeat music)

With the deal complete, he doubles his money.

JP Morgan is still building his reputation

and he wants to make a killing.

He saw an opportunity with the Hall Carbine deal

and he took it.

When the government discovers

how much they overpaid for the guns,

JP's name is dragged into the press.

Just a word.

Get out of my damned way.

Accusing him of war profiteering

in what becomes known as the hall carbine affair.

With a public outraged, congress holds hearings

questioning the patriotism of everyone involved,

including JP Morgan.

The hall carbine affair did nothing to enhance

the Morgan name in New York

and left JP with some very bad publicity.

(dramatic music)

The government eventually drops the charges

due to a lack of evidence.

But when news of the scandal reaches London,

his father rushes to New York to confront JP.

Worse than traitors in arms are the men who

while pretending loyalty to the flag,

feast and fatten on the misfortunes of our nation

while Patriot blood is crimsoning the Plains of the south

and the bodies of their country men

lay moldering in the dust.

That's what our government thinks of you.

What you did was reckless,

it was greedy,

and a violation of the code every banker must live by.

As I stand here today,

I am inclined to sever all professional ties with you,

but I will not.

I will give you a second chance.

Do not waste it.

The black eye of being involved in this scandal,

deeply angered and upset Junius

because of the reputational damage

that being involved in this affair might have.

He was supposed to be

the shepherd of other people's money.

They wouldn't be able to trust him

if he was trying to make a quick buck for himself.

The scandal has damaged JP Morgan's reputation

and could jeopardize his future at his father's bank.

While JP's attempt

to make money off the civil war has failed,

another banker in Philadelphia

has found a way to make a fortune off the war

by working with the government.

(dramatic music)

40 year-old Jay Cooke

has built his small Philadelphia investment house

into a rising force.

(dramatic music)

Jay Cooke had his eye on the future

and he was willing to take a risk,

but never had a real opportunity to make his mark

until the civil war came along.

(dramatic music)

With the treasury depleted

and the union army desperate for reinforcements,

President Lincoln proposes a massive sale of bonds

to fund the war effort.

Wars are expensive, governments have to borrow money.

And when governments borrow money,

typically what they do is to sell bonds.

The war bond is essentially a loan

that a government will issue

in which somebody who purchased it

gave you cash right upfront with the promise that 10 years,

maybe 20 years from then,

you're gonna get your money back with interest.

But America's bankers aren't buying the bonds

because the only way they'll make their profit

is if the union wins.

Bankers don't like risking money unless they have to.

And the outcome of the civil war was pretty uncertain

in the early years of the war.

If you were making a bet on the union or the Confederacy,

you might as well flip your coin

and bankers don't like flipping coins

when they're making investments.

With bankers refusing to take the risk,

Jay Cooke sees an opportunity

to do something that's never been done before.

Instead of trying to sell the bonds to banks,

Cooke will sell them directly to the American people,

making a commission on every bond sold,

he could make millions in profits.

What Cooke brought to the union war effort

was a new attitude toward the sale of government bonds.

Jay Cooke said, I can sell these to American Patriots.

We will sell these bonds,

we will fund our brave soldiers

and they will deliver us to victory.

Using Telegraph technology

to coordinate the effort,

Cooke floods local newspapers nationwide.

(dramatic music)

With ads and pro bond editorials.

He prints handbills and circulars

for sales agents to distribute

and posters to plaster across each town.

(dramatic music)

It's a grassroots sales assault unlike anything seen before.

(dramatic music)

Conducted by a master salesman.

This would become a standard practice

in American war financing

but Jay Cooke was the one who originated it.

By war's end,

Cooke sells a billion dollars in bonds

or almost 20 billion today.

The United States, the union won the civil war

primarily because they had more resources

to pour into the conflict than the Confederacy did.

(dramatic music)

And Jay Cooke sold the bonds that brought the cash

to allow the United States

to make these investments in the war.

(dramatic music)

Cooke is hailed as a hero

and becomes one of the nation's richest men

ready to set his sights on a new frontier.

While Cooke has found success during the civil war,

JP Morgan is working to rebuild his reputation

and earn back his father's trust.

But with Junius monitoring every move he makes,

requiring prior approval of any deals,

JP finds himself in a rut.

JP Morgan had to operate under his father's shadow

for many years.

He was always thinking about his father's reaction

and it was a burden to him.

But as JP struggles to find a path forward,

in London, Junius is betrayed at Peabody and Company,

the prestigious bank he was set to take over.

George Peabody made an amazing offer to Junius Morgan

to convince him to come into his company.

He said that in 10 years he would retire

and he would leave the company name to Junius,

and he would leave capital in the company.

After 10 years, Peabody, as he promised, retired.

But that was the only promise he kept.

He did not leave the Peabody name,

he did not leave the capital with Junius.

Sir, if I may.

Mr. Morgan, this is our offer.

George Peabody has gone back on his word.

And after a decade of dedication,

Junius Morgan must figure out his next move.

Junius was devastated by Peabody's actions.

He had never anticipated

that something like this could take place,

it left him very vulnerable.

Now he would have to recover completely on his own.

Junius establishes a new bank, JS Morgan and company.

But without the Peabody name and capital,

he will face an uphill climb

to reach the prominence he once knew.

With nowhere else to turn,

he will need to rely on his son, JP like never before.

(bell ringing)

I've already drafted up a

plan streamlining operational costs, salaries, staffing,

what have you,

but you and I will have to go through the specifics.

Some of these costs are not insignificant.

Father,

you can be assured I'll do whatever I need to do.

I'll cut my own salary

if it will keep the office properly staffed.

All I ask of you is one thing,

spare me any more talk about the banker's code,

look where it got you.

(dramatic music)

JP Morgan saw what happened to his father

as a very defining moment.

He saw this in its true light

and felt that things like this that could happen

could be devastating

and never wanted to be in that situation himself.

With the house of Morgan in trouble,

JP is able to take a bigger role

and looks to take matters into his own hands.

(dramatic music)

By making his mark

in the nation's biggest industry, railroads.

(train horn goes off)

By the late 1860s, America's post-war economy

has begun to recover.

Leading the charge is the industry

that has defined the nation's growth for decades.

Pierpont recognized that the United States

was entering a period of rapid growth.

That would involve connecting the Eastern seaboard

and the Midwest to the far west.

(dramatic music)

On May 10th, 1869, the golden spike

completing the transcontinental railroad is driven.

The first transcontinental railroad

knitted the country together, east to west, north to south.

It allowed the creation of a single economic market.

Before the civil war, railroads were a risky investment,

a free for all of unregulated expansion.

Now, the industry is entering a new chapter

with fewer lines and greater profits

for those who control them.

And JP Morgan wants a piece of it.

JP Morgan was hugely ambitious,

and this was a wide open opportunity

and he was going to do what he thought he did best,

which was bring order to it, to organize it,

to make it run efficiently and to allow it to be profitable.

Morgan starts small,

acquiring a piece of the Albany and Susquehanna line.

Then, soon gains a stake in the well-established

Baltimore and Ohio and Pennsylvania railroads.

But just as Morgan is starting to make his mark

in America's biggest industry,

Jay Cooke is looking to take it over.

(upbeat music)

Now one of the country's richest men,

Cooke is unveiling an ambitious plan

that can transform the nation.

Building a massive new line

that will rival the transcontinental railroad,

the Northern Pacific.

Jay Cooke was probably the most visible financier

in the country in the early 1870s

on the strength of what he had done during civil war

and Cooke brought to the railroad industry,

that mindset that revolutionized the sale of war bonds.

Because he was going to sell railroad shares

and railroad bonds by the same sort of salesmanship

that allowed him to sell war bonds.

(dramatic music)

The line will bring rail service

to an underserved area of the country,

and with almost 7,000 miles of track plan,

Cooke believes he can trigger a population explosion

across the great Plains and Northwest

and get even richer doing it.

But building a line this massive will cost millions.

So to raise capital,

Cooke pulls out every trick in his book.

(upbeat music)

He put out flyers, he put out advertisements,

he brought speakers in to explain

what a wonderful part of the country this was

and how Duluth was gonna be the next Chicago

and how the north was this garden spot of the world.

And people used to joke and they would call it,

Jay Cooke's banana belt.

And if you've been to Montana in the winter,

you know it's no banana belt.

But American investors

see Cooke's pitch for what it is; lies.

He used the same techniques that he had perfected

during the war to sell these securities,

but he couldn't appeal any longer to patriotism.

Unable to raise enough money in America,

Cooke realizes he needs to tap the world's deepest pockets.

To lure European investors, Cooke has to come to them.

Jay Cooke needs to get British money

behind his enterprise

and London is the financial capital of the world.

So if you were floating bonds,

if you were promoting investment in the United States,

the natural thing was go to London.

Come, take a look at the map.

That'll give you a much better idea

of the amazing things that we have planned.

(upbeat music)

Bismarck, Billings, Butte, Spokane.

Now these cities are not yet household names,

but they will soon form the backbone

of a new era of American excellence.

Lands as rich in natural resources

as they are a beauty to behold,

calling out to the next generation of pioneers.

All we need to build it are men of vision, men like you.

Jay Cooke would instill investors

with the idea that they were getting in on the ground floor

of something that was going to be great.

With European investors

less likely to know the truth behind his sales pitch,

Cooke is confident he can raise all the capital he needs.

But by coming to London,

Jay Cooke is encroaching on Morgan turf.

(horses plodding)

I have worked too hard

to build up my good name in this city

to let him ride in here like some carnival barker,

looking to swallow up all the capital that he can.

He won't.

He won't what?

Swallow up any capital.

(dramatic music)

I can handle Cooke.

And what exactly are you going to do?

My job,

I'll take care of it.

When Jay Cooke shows up in London,

Junius Morgan, JP Morgan, that was where their power was.

It was Morgan territory

and they didn't take too kindly to his presence.

Morgan sees this

as a chance to prove himself to his father.

He goes on the offensive

using his contacts in the British press

to conduct a secret smear campaign to expose Cooke's lies.

Soon, a series of negative articles run in the London Times,

turning European investors against Cooke

and spurring the British government

to take an unprecedented action,

instituting a ban on all Northern Pacific bond sales

declaring Cooke's offer a scam.

With investment at a standstill,

Cooke is forced to cover

most of the Northern Pacific's

rising construction costs himself.

Money was flowing out of his pocket rapidly

at a million, $2 million a month.

At some point, he ran out of money

and nobody was there to bail him out.

Facing almost certain bankruptcy,

Cooke is desperate for an infusion of cash.

His last hope is to turn where he made his fortune,

the US government.

(upbeat music)

President Grant has signed legislation to issue new bonds

to pay for $300 million in remaining civil war debt.

If Cooke can secure the government contract,

he'll be able to use the profits he makes on commissions

to save his railroad empire.

Jay Cooke thinks thank God,

Now I have an opportunity to sell those bonds

on the war bond king, and I can take that money

and then plug the hole in my railroad business.

Cooke sets up a meeting

with the treasury secretary to make his pitch.

But what he doesn't know is that someone else

is one step ahead of him.

(dramatic music)

Jay Cooke was absolutely certain

that he could take the civil war bonds

and handle the entire matter himself.

Morgan saw an opportunity to cash in on the same cow.

Suddenly, Jay Cooke's lifeline is in danger.

With Cooke assuming the deal was his for the taking,

Morgan saw an opening.

After setting up a war room in Washington,

he spent a month lobbying for a meeting,

looking to lock up the massive contract for himself

and finish off Jay Cooke in the process.

When the government finally reveals its decision,

Jay Cooke receives only half of the debt issue.

The other half is awarded to JP Morgan.

When JP Morgan gets the rights to issue half the bonds,

this is a huge windfall for his bank,

but it also means a disaster for Jay Cooke

because his debts are going to start to come in due,

and he's not going to have the windfall

from the bond issuance to prop up his railroad empire.

JP Morgan went into battle

against America's most powerful banker and won.

For the house of Morgan, it's a massive cash windfall

and sends a clear message to every bank on Wall Street,

this is only the beginning.

JP Morgan was exceptionally self-confident,

there was no nonsense, there was no diplomacy,

he just came at you like a freight train.

The battle over the refinancing

really did signify Morgan's ambition,

his verve, his determination.

Jay Cooke did need the money,

so Morgan saw this as a path to supplanting Cooke.

He would end up at the peak

of the American financial industry.

(dramatic music)

After winning half the contract for the war debt,

JP receives a letter from his father.

Dear Pierpont,

I hope this letter finds you well,

I wish to pass on my congratulations

for securing half of the government debt offering.

However, I am disappointed to see that the Morgan name

is listed after Cooke's.

It is true our firms share equally in the issue,

but you know as well as I,

that the perception amongst our colleagues will be

that Cooke is lead underwriter.

There is nothing to be done about this now,

but it is important that I make clear to you

that these things matter.

Like most sons, JP Morgan wanted the affirmation

that he was doing the right thing for himself,

for the house of Morgan, for the family name

and ultimately for the country.

Even after his greatest triumph,

JP Morgan is reminded of how far

he still has to go in his father's eyes.

But while Junius's long shadow

has made JP's victory bittersweet,

for Jay Cooke, the humiliating defeat is devastating.

(dramatic music)

As his cashflow crisis is exposed.

Cooke's depositors begin a run on the bank,

depleting his already dwindling reserves

and quickly throwing the house of Jay Cooke into bankruptcy.

(dramatic music)

Cooke's collapse sends shock waves across Wall Street

that are soon felt nationwide.

(people shouting)

The bankruptcy of Jay Cooke and company

hit the financial markets like a thunder bolt.

It was just a huge shock,

and it was a shock to Jay Cooke himself.

He was in tears on the floor in Philadelphia

when he had to announce

that the doors were going to be closed.

That was a signal, uh-oh,

if Jay Cooke can go under the rest of us are in trouble too.

In 1873, there was no central authority in the government

that had the ability to manipulate money supply

or to provide support.

Not like today, there was no central bank.

(dramatic music)

With no guarantee on bank deposits,

JP Morgan knows a run on one bank

can quickly spread to others.

(horses plodding)

(soft music)

Cooke failure is showing signs of spread,

market poised to sustain damage.

Calling in all loans as a precaution,

some disagreement among partners,

but as senior, this is my decision.

I am calling in all outstanding loans, send it, hurry up.

(dramatic music)

Calling in a loan is when a bank will,

in essence say we want our money back.

It's all about risk management

from the lender's perspective,

it's all about protecting their investments.

Against the wishes of his partners,

JP Morgan calls in all the bank's loans

hoping to protect it before panic is unleashed.

The panic of 1873 is the worst the country has ever seen

causing the New York stock exchange to close for 10 days

and leaving an apocalyptic economic landscape in its wake.

The financial panic of 1873 was the first panic

in what could be called America's modern industrial era.

Over 5,000 commercial banks and 57 stock exchange firms

are dragged down.

While over a quarter of the nation's railroads go belly up.

But after the panic subsides, things get worse

as the nation's economy plunges into depression.

(soft music)

It was a seven year slump.

It was a vicious slump, it ruined hundreds of thousands

if not millions of Americans,

it was an extremely painful period.

Really until the 1930s,

this was what Americans were talking about

when they used the term The Great Depression.

(dramatic music)

But while much of the nation suffers,

one bank emerges from the panic stronger than ever,

the house of Morgan.

By calling in the firm's loans,

JP not only keeps the bank from being dragged down,

but turns a profit of $1 million for the year

or 22 million today,

setting the stage for his next big move.

Morgan was always on the lookout for opportunities.

Properties were distressed after the panic of 1873

and what might've cost a hundred dollars in 1872

now could be had for $40.

And Morgan had enough confidence in the ultimate growth,

the long-term growth of the United States

that he was willing to swoop in

and scoop up these assets at the discounted price.

(dramatic music)

Morgan targets bargains

throughout the decimated industrial landscape.

(train horn toots)

(dramatic music)

Including several bankrupted railroads.

The people who make money building the railroads

are not the people who built the railroads.

(dramatic music)

They're the people who bought the bonds

after the people who built the railroads went bankrupt.

And JP realizes that one way through that financial morass

was to consolidate all these little lines

into a few major and potent lines.

(dramatic music)

Morgan then expands

the firm's international presence

and exploits his new influence in Washington

by filling Jay Cooke's old role

as the master of government debt.

(dramatic music)

All from his office

in the company's stunning new headquarters

at 23 Wall Street directly across from the stock exchange.

And as Morgan's fortunes rise from the ashes of the panic,

so too has the place he calls home, Wall Street.

During the middle part of the 19th century,

there was a competition between the old financial capital

of the United States, Philadelphia and New York,

New York was the up and coming center of finance.

When Cooke and company went under in 1873,

you could really see the passing of the torch to New York.

That's where the new day of American finance was developing.

By 1879, with the post panic depression

finally over, the nation and Wall Street

seem poised for a big move,

but some believe one man could ruin everything.

His name is William Vanderbilt.

William Vanderbilt was the oldest son

of Commodore Cornelius Vanderbilt,

the richest self-made man in the world.

He had done it first with steamboats

and then with railroads.

When Cornelius passes away in 1877,

William Vanderbilt finds himself

worth about a hundred million dollars

and in control of the New York central railroad,

which was the main railroad

that covered New York and adjacent states.

William Vanderbilt now finds himself

in charge of the New York central,

one of the largest railroads in the country

controlling the only route into New York city.

It's a huge responsibility,

one that many don't trust William Vanderbilt to handle,

including the state of New York.

Government officials open an investigation

revealing corruption on the New York central

with the state threatening heavy fines.

Vanderbilt believes that if he sells enough stock

to become a minority owner,

the government will call off the investigation.

(dramatic music)

So he turns to JP Morgan.

(dramatic music)

A quarter of a million shares,

that'll be enough to make me a minority owner of the line.

Which should get the state to call off the investigation.

The question is,

what will your shares be worth if the price collapses?

What do you mean?

Well, if the shareholders see movement like that,

they could panic, it could trigger a sell off.

You're not giving me many options.

There must be a way.

There's always a way.

The key is knowing how to find it,

which is why you came to me.

Vanderbilt needs JP Morgan to help him unload

a massive share

of some of the most valuable railroad stock on earth

without anyone knowing.

If he succeeds, Morgan stands to make millions in fees,

but he's also looking to gain

something much more valuable, power.

(ship horn toots)

Morgan travels over 3000 miles to London.

(dramatic music)

To sell the shares discretely

and to secretly take control of the New York central.

(dramatic music)

I understand your concerns,

the panic decimated the railroads.

And we are just now

finally putting the pieces back together,

but the New York central, it's different.

This is the crown jewel of the American railway system,

Mr. Vanderbilt's sale ensures that will remain that way

because I will have a seat on the board.

Now, with your permission,

I will be certified to vote as your proxy

in all board matters.

This means that you and all our British investors

will have their interest well-represented and protected

as the majority block that you are.

(dramatic music)

Junius watches on in approval

and knows his son has finally come into his own.

JP's offer to act as proxy voter for all the investors

gives them confidence.

Their investment will be safe.

Morgan sells the shares and the stock price remains steady.

(dramatic music)

When JP returns to the US,

he's made the modern day equivalent

of $80 million in commissions.

And while William Vanderbilt wasn't looking,

Morgan has taken control,

becoming the most powerful board member

of the New York Central.

The deal is hailed as genius by the press

and gives rise to a term

that will soon come to dominate Wall Street; Morganization.

Morganization involved, basically Morgan,

not only arranging financing for enterprises,

but also taking a role

in the management of the enterprises that he was financing.

(upbeat music)

So that he could maintain control and authority

over these businesses.

JP Morgan was unusual among bankers

in that he had a kind of analytic vision.

He also had a keen eye for economic intelligence.

Morgan understood that that was more important

than money itself

because knowing what was gonna happen

allowed you to make money.

This is the rise of the modern corporation

and Morgan is at ground zero

in creating corporate business practice.

The New York central deal

marks the minting of a new railroad baron

and leaves no question as to who is the face

of the House of Morgan.

And in many ways, this was the beginning

of the JP Morgan legend that we now know.

As JP Morgan finally has secured Junius's approval

and steps into the role his father envisioned,

tragedy strikes.

Junius is severely injured in a carriage accident.

And on April 8th, 1890, he passes away.

From the old ways of London banking

to the new era of rapid growth on Wall Street,

Junius Morgan's death marks the official transfer of power

from father to son.

(soft music)

But for JP Morgan,

the role carries with it a new responsibility;

preparing his own son to one day succeed him.

Junius was a much more involved father

in helping to get young JP Morgan the tools of the trade,

JP Morgan was much more distant

and he was kind of this larger than life dad

who did not really take the time to cultivate his son

the way his father did.

But at a certain point, JP Morgan realizes, wait a minute,

I need to start paying more attention

cause he's gonna carry on the family bank.

You ready?

Yes, sir.

With the 23 year old Jack

now graduated from Harvard,

JP prepares to send him to London

to learn the business where his late grandfather did.

(dramatic music)

As JP takes steps to ensure the house of Morgan's future,

a new rival on Wall Street threatens his power.

Meyer, check the mail room

for delivery from the union Pacific,

I'm expecting an updated inventory

of the rolling stock today.

Looking to take JP Morgan down on his home turf,

the railroads.

And I backed it only with the utmost respect.

This is a hostile act and it will be dealt with accordingly.

But their personal battle

threatens to destroy the nation.

Have I not been lied to to my face?

The market is in free fall.

And your first thought is to barge in here

and absolve yourself of all responsibility.

(upbeat music)