90

States. It was Peabody iron which was the foundation for much of 

American railroad tracks from 1860 to 1890. In 1864, content to retire 

and leave his firm in the hands of Morgan, Peabody allowed the name 

to be changed to Junius S. Morgan Company. The Morgan firm then 

and since has always been directed from London. John Pierpont 

Morgan spent much of his time at his magnificent London mansion, 

Prince’s Gate.

One of the high water marks of the successful Rothschild-Peabody 

Morgan business venture was the Panic of 1857. It had been twenty 

years since the Panic of 1837: its lessons had been forgotten by hordes 

of eager investors who were anxious to invest the profits of a 

developing America. It was time to fleece them again. The stock 

market operates like a wave washing up on the beach. It sweeps with 

it many minuscule creatures who derive all of their life support from the 

oxygen and water of the wave. They coast along at the crest of the 

"Tide of Prosperity". Suddenly the wave, having reached the high water 

mark on the beach, recedes, leaving all of the creatures gasping on 

the sand. Another wave may come in time to

51

save them, but in all likelihood it will not come as far, and some of the 

sea creatures are doomed. In the same manner, waves of prosperity, 

fed by newly created money, through an artificial contraction of 

credit, recedes, leaving those it had borne high to gasp and die 

without hope of salvation.

Corsair, the Life of J.P. Morgan,34 tells us that the Panic of 1857 was 

caused by the collapse of the grain market and by the sudden 

collapse of Ohio Life and Trust, for a loss of five million dollars. With this