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When death came to old J. P. in 1913, U. S. finance and the House of Morgan ceased to be a one-man show. Ruddy, Anglophile, grouse-hunting J. P. II "Jack" (to a very few friends) Morgan had been carefully reared by his father in the traditions of personalized private banking. But his own and his father's flair for men surrounded him with partners whose brilliance obscured everything but the Morgan name. Stotesbury, Stettinius, Cochran, Lament, Morrow, Davison—such men made the term "Morgan partner" a semi-mythical synonym not only for (at one time) $1,000,000 a year, but for financial diplomacy on an international scale. When War came, it was Partners Henry P. Davison and Dwight W. Morrow who led the House of Morgan into its second great era. Early embracing the English cause, by 1918 the House had underwritten $1,400,000,000 in Allied loans, had netted some $4 millions as purchasing agent for the Allies, and had more than doubled its capital funds.
After the war those funds almost doubled again, reached $118,604,000 by 1929. But the postwar boom was not a Morgan boom. The partners specialized in bonds (U. S. railroad, utility, Italian government, German Dawes& Young plans) until late in the stock boom, then limited their stock distributions (Standard Brands, Johns-Manville, sprawling United Corp., ill-fated Alleghany) to rich individuals and friends. When the crash came, it was once more the House of Morgan that led the bankers' rescue syndicate: a $240,000,000 attempt to dam the flood of sales. But the effort was futile. When realistic Partner Thomas W. Lamont informed the Stock Ex change's Board of Governors of the pool, his own words skewered the situation: "There is no man nor group of men who can buy all the stocks that the American public can sell." And while Wall Street still leaned on the Morgans, the public now leaned on the Government. An era had ended.
On powerful individualism, on personal banking freedom the twilight began to fall with the New Deal. The Banking Act divorced deposit banking from underwriting; three Morgan partners, including bland Henry S. Morgan (J. P.'s younger son), accordingly split off to form a new partnership, Morgan Stanley & Co. J. P.'s elder son, Junius Spencer, stayed on as a Morgan partner. The foreign loan busi ness was dead; its epitaph the Johnson Act which forbids U. S. sale of securities of governments defaulting to the U. S. Government. Meanwhile Morgan partners were retiring, dying; from the partnership their heirs drew millions for inheritance and inheritance taxes. By last year's end the House of Morgan's capital funds (net worth) had shrunk from $118,604,000 to $39,156,000. Of its $671,519,000 assets, 61.5% consisted of tax-free government bonds, of which only 4.5% was out working for U. S. industry.
The "Morgan-First National" influence in 1935 was estimated (by a National Resources Committee report) as still reaching into $30,210,000,000 worth of U. S. railroads, utilities, industries, banks.
Yet some of the proudest Morgan nurselings (like General Electric) had long since outgrown their Morgan links, were financing themselves from depreciation.