Suzanne's Reviews > The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

The House of Morgan by Ron Chernow
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Oct 01, 2011

it was amazing
bookshelves: around-my-bookshelf-year-1, non-fiction, suzanne-s-chunkster-challenge, politics

For those of you who aren’t familiar with my background, I possess college degrees in both Political Science and Finance. I am fascinated with the subjects of history and economics. So, when I started reading House of Morgan, I quickly realized that the book in my hands was the culmination of all my favorite subjects put together. Ron Chernow, already on my radar as a foremost biographer, was apparently in charge of financial policy studies for a public policy foundation during the 1980′s. With this background, he sought to put together a comprehensive look at the changes taken place in modern American finance over the years, through the vehicle of the J.P. Morgan Company.

Beginning with a fascinating look at 19th century economic expansion, it is clear that without bankers like J.P. Morgan, Americans (and Europeans) would not have enjoyed the successes reaped from the industrial age. These banks were so powerful, it fell to them ensure the success or prevent the failure of corporations and governments alike. In those days there was a gentleman banker code, limiting competition between financial houses and discouraging bankers from rounding up new business. They understood their place in the world and their obligations – which included infusing capital at times to save drowning economies.

Later organizations like the Fed and the World Bank arose to step into that role, and the financial houses were split up between banking and securities. Politicians just weren’t comfortable placing that kind of responsibility in the hands of private businessmen. It was clear that a power struggle was developing that was leaving governments beholden to the banks. So government enacted laws like Glass-Steagal in an attempt to limit the power of financial giants like J.P. Morgan’s empire.

It is one of the most interesting and well-written works of history that I have ever read. It should be required reading for finance or business majors. Heck, it wouldn’t hurt if most people read this book. It might better help people to understand the complex world in which they live.

It has been my experience, that modern political discourse (and apparently throughout history, as the book elaborates), tends to dumb down the world of the finance for the average American. Politicians would rather not have voters aware of how their policies have negatively affected the economies, and usually point fingers at those in the world of finance. While sometimes, that finger pointing is justified (as with insider trading or highly risky leveraged buy-outs), more often than not, it’s government policy that is to blame.

This book came out on 1990, and so the recent mortgage crisis of 2008 is not mentioned in this book. It would be interesting to see if Chernow had any comments on it.

Best book I’ve read in a long time!
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Reading Progress

October 1, 2011 – Shelved
November 8, 2012 – Shelved as: around-my-bookshelf-year-1
November 8, 2012 – Shelved as: non-fiction
March 1, 2014 – Shelved as: suzanne-s-chunkster-challenge
June 18, 2014 – Started Reading
June 30, 2014 – Finished Reading
July 1, 2014 – Shelved as: politics

Comments (showing 1-5 of 5) (5 new)

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message 1: by ``Laurie (new)

``Laurie Henderson Now that was an interesting review! Learned so much about the real story behind politics and banking.

Suzanne Thank you, Laurie! As you can tell, I really enjoyed the book!

message 3: by Lilisa (new)

Lilisa Sounds like a great read - now on my TBR list. Thanks.

Suzanne You're welcome, Lilisa. Enjoy!

message 5: by Murat (new)

Murat Tumay Encouraging review

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