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Last week, to reporters summoned to "The Corner," genial J. P. Morgan him self announced his house's submission to the times. He handed out typewritten copies of a statement saying that J. P. Morgan & Co. was applying for incorporation as a bank and trust company, implying that partners would become stockholders on a pro rata basis. Also implicit was the conclusion that as stock-holders die their heirs will liquidate their holdings and that some of them may go into the hands of the public.
Prime aim of the change was to perpetuate the business, protect it from the tax-sharpened threat to partners' funds.
For the top-flight Morgan partners are aging—J. P. is 72, Thomas W. Lamont, 68—and new partners are not to be found behind every stump. The death of Charles Steele last August was a heavy blow. (According to SEC estimates his partici pation in Morgan capital amounted to 36.6% — $9,150,000 exclusive of surplus.) His heirs have already withdrawn $5,000,000. Another aim of the change was to widen the business into the profitable trust field, in which Morgan has sent many a whopping account to "Morgan banks" like Guaranty Trust, Bankers' Trust, First National, New York Trust.
Incorporated, † the House of Morgan will separate itself from its Philadelphia office, Drexel & Co., which will become an underwriting house (and open its own New York branch). Morgan Inc. will hang on to its foreign companies, Morgan Grenfell & Co., Ltd., of London and Morgan & Cie of Paris. On the block for sale will go J. P. Morgan's and Soi Junius' seats on the New York Stock Exchange. And off to the financial wars will go a new House of Morgan, still a giant, in a new suit of clothes.
† Private banks still operating in Manhattan: Brown Brothers, Harriman & Co., Heidelbach, Ickleheimer & Co., Laidlaw & Co. and Macy's Bank.