Morgan Grenfell
 |
|
| Industry | Investment bank |
|---|---|
| Fate | Acquired |
| Successor | Deutsche Bank |
| Founded | 1838 |
| Headquarters | London, England, United Kingdom |
Morgan, Grenfell & Co. was a leading London-based investment bank regarded as one of the oldest and once most influential British merchant banks.
The bank emerged from the merchant banking business commenced by George Peabody on his own account when he took up residence in London in 1838 pursuant to his commodities merchanting business (Peabody, Riggs & Co.) in which had already made his fortune. The banking business was formally incorporated in 1851 as George Peabody & Co. and by the time of Peabody's retirement in 1864 had become the largest American merchant bank in London. In 1854 Peabody had taken on Junius Spencer Morgan as a partner with just under a 9% interest in the capital of the firm and a 28% interest in its profits. The firm expanded rapidly especially in the business of extending credits for the transatlantic trade. However, it came under severe strain during the global financial crisis of 1857 principally as a result of the difficulties experienced by and in some cases the bankruptcy of Peabody & Co.'s American agents. In late 1857 Peabody & Co. were obliged to seek help in the form of a loan from the Bank of England. Paradoxically, the fact that the Bank felt it necessary to support Peabody & Co. rather than risk its failure, underlined the important position the firm had by this time achieved and Peabody & Co. emerged from the crisis with reputation intact, if not enhanced, and were able to repay the loan in March 1858.
Peabody himself emerged from the crisis tired and ill. While remaining senior partner for the time being, he increasingly withdrew from the business leaving Morgan as its effective head. Peabody's focus became the philanthropic use of his considerable fortune. Peabody, who died in 1869, finally retired in 1864 when his 10-year partnership agreement with Morgan came to an end. Morgan formally assumed control of the business but had to accept Peabody's unwillingness to see the firm (over which he would no longer have any control or influence) continue to trade under the Peabody name benefitting from the reputational goodwill the Peabody & Co. name had in the marketplace. As a consequence the firm was re-styled J. S. Morgan & Co. The firm's New York agency was in due course to become J. P. Morgan & Co., named after Junius' son, John Pierpont ("J.P.") Morgan.
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