91

collapse nine hundred other American companies failed. Significantly, 

one not only survived, but prospered from  the  crash.  In  Corsair,  we 

learn that the Bank of England lent George Peabody and Company 

five million pounds during the panic of 1857. Winkler, in Morgan the 

Magnificent35 says that the Bank of England advanced Peabody one 

million pounds, an enormous sum at that time, and the equivalent of 

one hundred million dollars today, to save the firm. However, no other 

firm received such beneficence during this Panic. The reason is 

revealed by Matthew Josephson, in The Robber Barons. He says on 

page 60:

"For such qualities of conservatism and purity, George Peabody and 

Company, the old tree out of which the House of Morgan grew, was 

famous. In the panic of 1857, when depreciated securities had been 

thrown on the market by distressed investors in America, Peabody and 

the elder Morgan, being in possession of cash, had purchased such 

bonds as possessed real value freely, and then resold them at a large 

advance when sanity was restored."36

Thus, from a number of biographies of Morgan, the story can be 

pieced together. After the panic had been engineered, one firm 

came into the market with one million pounds in cash, purchased 

securities from distressed investors at panic prices, and later resold 

them at an enormous profit. That firm was the Morgan firm, and behind 

it was the clever maneuvering of Baron Nathan Mayer Rothschild. The 

association remained secret from the most knowledgeable financial 

minds in London and New York, although Morgan occasionally 

appeared as the financial agent in a Rothschild operation. As the 

Morgan firm grew rapidly during the late nineteenth century, until it