[Drex.Logo.small.gif] Home Contents Index Contact Us Search Admissions [logo98-bar.gif] [drexel-seal-web.jpg] [drexel-bio-coverweb.jpg] [goback.gif] The Man Who Made Wall Street: Anthony J. Drexel by Dan Rottenberg - November 7, 2001 [rottenberg-small.jpg] "I'm very honored to be here today. So let me return the compliment by taking you away from here to another time and place. Specifically, let's go back to Wednesday afternoon, the 8th of March in 1871, and let's remove ourselves 90 miles north to New York City. This is not at all the world-beating city of New York that you and I take for granted. It's not even the "Little Old New York" chronicled by Edith Wharton- at this point Edith Wharton is only nine years old. It's a provincial town confined to the limits of Manhattan Island. There's no World Trade Center, no Empire State Building, no Grand Central or Pennsylvania Station, no Woolworth Building, no Flatiron Building, not even a Brooklyn Bridge. On the surface, nothing seems to be going on in this town. But beneath the surface, something very important is happening. There is a financial community on Wall Street, but it consists mostly of petty and grasping traders and speculators who operate in squalid, narrow little walkups that can best be described as "Dickensian." In fact, some of these buildings were erected even before Charles Dickens was born. Let's peek inside one of these structures. In a cramped two-room office at 53 Exchange Place, a confused and depressed young banker is going through the motions of conducting business. His name is J. Pierpont Morgan, and he is 33 years old. But he is nothing like the powerful, intimidating titan that most of us have read about. This Pierpont Morgan is a profoundly unhappy and unfulfilled young man. From his perspective, all the foundations of his life seem to be falling apart. His banking partnership is about to expire. He despises the noisy foreigners and grasping speculators who work on Wall Street. Although he's obviously bright and well-connected, he's not well-liked: Wall Street people say he's brusque and difficult to work with, and he knows it. He's plagued by severe headaches, constant fatigue, insomnia and fainting spells, as well as skin eruptions that inflame his face and enlarge his nose. By mail from London, his domineering father is constantly lecturing him about his lapses of character. He has no further need for money-he's earning about $50,000 a year at a time when most American families earn less than $500- and he has no desire to continue in business. He's already written his father that he plans to leave Wall Street and settle down to live like an English squire, perhaps raising prize dogs or a herd of pedigreed cattle. Around 4:30 on this particular Wednesday afternoon Morgan leaves his office, carrying a suitcase, and hails a horse-drawn carriage that takes him to the steam ferry at the foot of Liberty Street. He boards the five o'clock ferry, which takes him across the Hudson River to the Pennsylvania Railroad's immense depot in Jersey City, bustling with ticket offices, waiting rooms, restaurants and twelve tracks headed for points north, south and west. Here he boards a train that will deposit him, at 8:45 that night, at the Pennsylvania Railroad's depot at 32nd and Market Street in West Philadelphia. Why is he making this trip? Morgan really doesn't know. All he knows is that two months earlier he received a letter from his father in London telling him that Anthony J. Drexel of Philadelphia may want to see him about a certain matter. And six days ago Morgan received a letter from Anthony Drexel himself, inviting him to come down for dinner at his mansion in West Philadelphia. One of Morgan's characteristics throughout his life is his unquestioning devotion to his father. So here he is on the train to Philadelphia, going to have dinner and stay overnight with a man he's never met before. Now let's shift down to Philadelphia and look in on Morgan's mysterious host, Anthony Drexel. He's 44 years old, a bald, stout man of medium height, with a ruddy complexion and a heavy brown moustache. He's the driving force among three brothers who built a small family currency brokerage into an influential private bank of great reputed wealth, with branches in New York and Paris. Their father, Francis Martin Drexel, was an Austrian artist who fled from Napoleon's armies as a teenager, wound up painting portraits in Philadelphia, and ultimately gave up painting and opened his currency brokerage house on Third Street- Philadelphia's financial district- in 1838. Anthony Drexel went to work there a year later, when he was 13, and he's been working on Third Street ever since. He's a creature of habit, so it's easy to imagine how this day began for him. In the morning he walks three miles from his mansion at 39th and Walnut Streets to his office on Third Street. Along the way he stops to pick up his best friend, George W. Childs, publisher of Philadelphia's leading newspaper, the Public Ledger, at his mansion at 22nd and Walnut Streets. Together these two old friends and business partners proceed down Chestnut Street with such punctuality that shopkeepers were said to set their clocks by the hour when they passed. As he passes, he nods and waves politely to everyone. In one sense, everybody in Philadelphia knows this man. In another sense, nobody knows him other than his best friend Childs. As John already mentioned, Anthony Drexel is a very private, self-effacing man who goes out of his way to avoid the limelight. Now, for all his apparent influence and power, Anthony Drexel has a problem. The problem is that a banker needs to be where the money is. Philadelphia may be a great source of individual financial wealth in 1871, but New York is far greater, and London is far greater still. Drexel needs an aggressive young man to run his bank's New York office. And he needs to establish banking connections in London. So his plan is to put Morgan in charge of his New York office and, in the process, create an alliance with Morgan's father in London. So now it's 8:30 p.m. on the evening of March 8th, 1871, and Anthony Drexel is in his carriage waiting patiently at the West Philadelphia depot for Morgan's train to arrive. What's about to happen? Remember, we're back in 1871 now, so we don't have the benefit of hindsight- we haven't seen the script in advance. But we do know that good things seem to happen to people who cross Anthony Drexel's path. With Drexel's support, an obscure banker named Jay Cooke became the America's financial savior during the Civil War. With Drexel's backing, his closest friend, George W. Childs, had evolved from a penniless clerk into the celebrated proprietor of one of America's most respected newspapers, the Philadelphia Public Ledger. And of course you and I now know that Tony Drexel is about to engineer an even more dramatic transformation within Pierpont Morgan himself. Morgan is about to meet the first businessman, other than his father, whom he could admire and respect. Drexel didn't merely offer Morgan a job; he gave him a 50% partnership in the New York office, he gave him ample capital support, and then in 1873 he erected for Morgan a huge, magnificent seven-story building at the corner of Broad and Wall Streets. It was the World Trade Center of its day, and overnight it reshaped not only Wall Street's physical landscape but its psychological landscape as well. Incidentally, the price paid by the Drexel brothers for that corner lot at Broad and Wall Streets worked out to $21 million per acre- the highest price ever paid for land in the world up to that point. So you could say that Anthony Drexel demonstrated more confidence in Morgan's future than Morgan himself. And he demonstrated more confidence in the future of New York than New Yorkers did. Thanks to the remarkable chemistry generated by this relationship, J.P. Morgan will not retire to a life of books, art collecting and grand tours of Europe, as he had planned. Instead, over the next forty years, Morgan will build and expand America's great railroads. He'll create the world's first modern corporations, like U.S. Steel, General Electric and International Harvester. And he'll impose some sense of order on the destructive forces of the stock market. For better or worse, from this moment Morgan's name will become synonymous with America's transformation from a rural agricultural society into a modern industrial state. Anthony Drexel is about to change Morgan, and Morgan is about to change the world. Now, in my book I called this date in March 1871 "the day the world changed." Of course, in the past two months many people now say the same thing about September 11th of this year. Very often when we look back at the major turning points in world history, we focus on some disaster- the first atomic bomb, or Pearl Harbor, or the great stock market crash of 1929. But of course, as the scene I've just painted for you demonstrates, the world is changing every day. Even as we go about our daily business, some great things are happening behind the scenes that we don't know anything about. In times like these, when everything seems to be going wrong, that strikes me as a very reassuring thought. Anthony Drexel exemplified the old adage that there is no limit to what a man can do if he doesn't mind who gets the credit. His great success stemmed from his willingness- even his eagerness- to let the Morgans and others take full credit for his contributions. Later he was a mentor in much the same way to his niece, Saint Katharine Drexel, who set up a network of missions and schools modeled after her Uncle Anthony's banking network. His greatest lasting achievement- and the only one he put his name on- was Drexel University, which sprang from his unique vision: to give the children of the working class the same kind of first-rate education that Harvard and Yale gave to the children of the rich. Somewhere on this planet at this very moment there are potential Anthony Drexels, potential J.P. Morgans, who will change the world for the better. They might be right here in this room. And right now they're laboring in obscurity, waiting for some mentor or patron to call them to greatness. Anthony Drexel is no longer around to perform that task. So now it's up to you and me." Thank you. Dan Rottenberg - Drexel U. convocation November 7, 2001 [goback.gif] Modified: Thursday October 17 2002 [spacer.gif] Home [spacer.gif] [spacer.gif] [spacer.gif] Contents [spacer.gif] [spacer.gif] [spacer.gif] Index [spacer.gif] [spacer.gif] [spacer.gif] Contact Us [spacer.gif] [spacer.gif] [spacer.gif] Search [spacer.gif] [spacer.gif] Feedback/Corrections [spacer.gif]