Molly Ayala
John Pierpont Morgan, the American financier and investment banker, was a driving force behind the wave of industrial consolidations in the US at the turn of the 20th century. In 1889, Drexel, Morgan & Co.—a company founded by J.P. Morgan and Anthony J. Drexel—helped merge several of Thomas Edison's companies under one corporation, forming Edison General Electric Company. This company later merged with Thomson-Houston Electric Company to become General Electric. J.P. Morgan died in 1913, but his banking firm, now known as JPMorgan Chase & Co., remains the biggest bank in the world by market cap. As of 2018, JPMorgan analysts were still providing financial advice to General Electric, suggesting that the two companies still have a close relationship.
| Characteristics | Values |
|---|---|
| John Pierpont Morgan's Date of Birth and Death | 17 April 1837 – 31 March 1913 |
| John Pierpont Morgan's Occupation | American financier and investment banker |
| Company Founded by John Pierpont Morgan | JPMorgan Chase & Co. |
| John Pierpont Morgan's Role in General Electric | Merged Edison General Electric and Thomson-Houston Company to form General Electric |
| Current Status of John Pierpont Morgan's Company | Biggest bank in the world by market cap |
| General Electric's Current Focus Areas | Wind power, aerospace and healthcare |
| General Electric's Former Divisions | GE Plastics, GE Appliances and Lighting |
| General Electric's Former Employees | 340,000 worldwide, with nearly 200,000 in the U.S. |
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What You'll Learn
JPMorgan Chase is the biggest bank in the world by market cap
JPMorgan Chase was created in 2000 through the merger of New York City banks J.P. Morgan & Co. and Chase Manhattan Company. The former, founded by John Pierpont Morgan, was a driving force behind the wave of industrial consolidations in the United States at the turn of the twentieth century. Over his career, Morgan helped form several prominent multinational corporations, including U.S. Steel, International Harvester, and General Electric.
General Electric (GE) was formed through the 1892 merger of Edison General Electric Company and Thomson-Houston Electric Company, with the support of Drexel, Morgan & Co. The Edison General Electric Company was itself formed in 1889 when Drexel, Morgan & Co. financed Edison's research and helped merge several of his companies under one corporate entity.
Today, JPMorgan Chase has a market capitalisation of over $600 billion, almost double that of its closest competitor. The bank has consistently delivered strong financial performance under the leadership of CEO Jamie Dimon. It has a vast scale that allows it to invest heavily in technology, giving it an advantage in digital banking trends. JPMorgan Chase is the world's fifth-largest bank by total assets, with $3.9 trillion as of 2023. The firm operates the largest investment bank globally by revenue and is ranked 24th on the Fortune 500 list of the largest U.S. corporations by revenue.
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JP Morgan's role in the creation of General Electric
John Pierpont Morgan Sr. was an American financier and investment banker who played a significant role in the creation of General Electric (GE). Known for dominating corporate finance on Wall Street during the Gilded Age and Progressive Era, JP Morgan was a driving force behind the wave of industrial consolidations in the United States at the turn of the twentieth century.
In 1889, JP Morgan's company, Drexel, Morgan & Co., financed Thomas Edison's research and helped merge several of his companies under one corporation, forming the Edison General Electric Company, incorporated in New York on April 24, 1889. This merger included companies such as the Edison Lamp Company, Edison Machine Works, Bergmann & Company, and the Edison Electric Light Company. The Edison General Electric Company later merged with the Thomson-Houston Electric Company in 1892 to form General Electric, with the continued support of Drexel, Morgan & Co.
JP Morgan's interest in electricity began when he hired Thomas Edison to install electricity in his Manhattan mansion, making it the first electrically lit private residence in America in 1882. He then invested heavily in Edison to form the Edison Electricity Company, creating the world's first power station and supplying electricity to half of Manhattan. This investment was driven by Morgan's belief in the revolutionary potential of electric light, which he thought would bring him immense wealth and outcompete his rivals.
Beyond General Electric, JP Morgan was involved in the formation of several prominent multinational corporations, including U.S. Steel and International Harvester. He and his partners also held controlling interests in numerous other American businesses, such as Aetna, Western Union, the Pullman Car Company, and numerous railroads. Through his holdings, Morgan exerted significant influence over capital markets in the United States.
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General Electric's business interests and acquisitions
General Electric (GE) is a major American corporation and one of the largest and most diversified corporations in the world. Its products include electrical and electronic equipment, aircraft engines, and financial services. GE was formed through the 1892 merger of Edison General Electric Company and Thomson-Houston Electric Company with the support of Drexel, Morgan & Co. The original plants of both companies continue to operate under the GE banner to this day.
GE has been a major player in the world of banking, plastics, computers, and even television broadcasting. Its business interests have spanned a wide range of sectors and industries, including renewable energy, aviation, and healthcare. GE has had to sell off portions of its holdings in recent years due to financial setbacks, including its media, financial services, and consumer products arms.
Acquisitions
- In 1893, GE bought the business of Rudolf Eickemeyer, along with all its patents and designs for transformers used in electrical power transmission.
- In 1986, GE purchased the RCA Corporation, including the National Broadcasting Company (NBC), Inc.
- In 1989, GE combined its European business interests in appliances, medical systems, electrical distribution, and power systems.
- In 2001, GE acquired Spanish-language broadcaster Telemundo and incorporated it into its National Broadcasting Company, Inc. subsidiary.
- In 2007, GE acquired Smiths Aerospace for $4.8 billion and Vetco Gray for $1.9 billion.
- In 2008, GE acquired Hydril Pressure & Control for $1.1 billion and sold GE Plastics to Saudi Arabia for $11.6 billion.
- In 2014, GE was in talks to acquire the global power division of French engineering group Alstom for around $13 billion, with the transaction involving the French government taking a 20% stake in Alstom.
- In 2023, GE HealthCare, the health technology company, was spun off from GE.
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JP Morgan's influence on Wall Street
John Pierpont Morgan Sr. dominated corporate finance on Wall Street throughout the Gilded Age and Progressive Era. As the head of the banking firm that ultimately became JPMorgan Chase & Co., he was a driving force behind the wave of industrial consolidations in the United States at the turn of the twentieth century.
Morgan was born in 1837 into a banking family. He began his career in New York City as a junior clerk at Duncan Sherman. Through his father's reputation and connections, Morgan was among the most sought-after young men on Wall Street and enjoyed the company of many of New York's leading citizens. Morgan's father succeeded George Peabody as head of the London office, and the firm's remaining commercial credit and securities accounts were transferred from Duncan Sherman to J. Pierpont Morgan & Co., which by the end of 1862 was considered one of the stronger private banking houses on Wall Street.
Morgan's growing prestige helped him in an age when the offering bank's reputation mattered more than the stock fundamentals. This cemented the public's perception of Morgan as a figurehead for all of Wall Street. His power and influence were much greater than the actual wealth he controlled. Morgan used his personal power and reputation to encourage the formation of trusts and mergers within industries where he saw ruinous competition. He was a founding member of the Church Club of New York, an Episcopal private member's club in Manhattan, and he petitioned for the creation of a special limited collectible printing of the 1892 revision of the Book of Common Prayer, which he financed.
Morgan was among the most powerful industrialists and bankers of all time. From 1890 to 1913, 42 major corporations were organised or their securities underwritten by J.P. Morgan and Company. He also held controlling interests in numerous other American businesses, including Aetna, Western Union, the Pullman Car Company, and 21 railroads. Through his holdings, Morgan exercised enormous influence over capital markets in the United States.
Morgan's bailout-like reaction to and leadership during the Panic of 1907 built on his lofty reputation and also helped lead to the creation of the Federal Reserve System. At the height of the Panic, Morgan stepped in to aid the banking community and quell the massive drop in bank reserves and market collapse. He was touted by many Americans as a true patriot and selfless beacon of financial hope for the country.
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General Electric's iconic status
General Electric (GE) is one of the most iconic American companies, founded in 1892 in New York state. GE was formed through the merger of Edison General Electric Company and Thomson-Houston Electric Company, with the backing of financier J.P. Morgan.
GE's iconic status is rooted in its long history of innovation and industry leadership. For over a century, it maintained its "blue-chip" stock status and survived, and even initiated, revolutions across industries, technologies, and managerial practices. GE's influence extended beyond its business success, with its employees taking pride in their association with the company and its CEO, Jack Welch, regarded as a management guru.
GE's reputation as an iconic company also stems from its strong brand recognition and credit rating. Its brand was so powerful that it conferred a degree of fame and admiration in the consumer society, akin to a religious aura. This elevated GE's status in the public's mind, establishing it as a trusted and admired entity.
However, GE's iconic status has been waning in recent years due to a decline in its business performance. In 2018, its worth fell to about 20% of its peak market value in 2000, and it faced near-bankruptcy in 2008. Despite this, GE remains a significant force, with a wide range of business interests, including healthcare technologies, appliances, lighting, industrial products, and broadcasting.
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Frequently asked questions
No, JP Morgan does not own General Electric. In 1892, JP Morgan, the financier and investment banker, was responsible for the merger of Edison General Electric and Thomson-Houston Company to form General Electric. The original plants of both companies continue to operate under the GE banner to this day.
General Electric was formed in 1892 through the merger of Edison General Electric Company and Thomson-Houston Electric Company. The merger was supported by Drexel, Morgan & Co., a company founded by J.P. Morgan and Anthony J. Drexel. The company was incorporated in New York and was at the forefront of the age of electricity, quickly becoming a powerhouse of invention and innovation.
JP Morgan was responsible for the formation of General Electric. As the head of the banking firm that ultimately became known as JPMorgan Chase & Co., JP Morgan was a driving force behind the wave of industrial consolidations in the United States at the turn of the twentieth century. Over his career, he was involved in the formation of several prominent multinational corporations, including General Electric.
