Henry S. Morgan
Co-founder 1935Background
J.P. Morgan & Co. partner and grandson of J.P. Morgan who co-founded Morgan Stanley.
Role at Morgan Stanley
Morgan Stanley possesses arguably the most aristocratic, intertwined founding story in the entire history of American finance, representing the elite splintering of the most powerful banking dynasty in the world: the House of Morgan. The foundational origins of the firm are entirely rooted in the traumatic legislative aftermath of the Great Depression. Before 1933, J.P. Morgan & Co. was a financial monopoly; it executed lucrative investment banking (underwriting stocks) and commercial banking (taking deposits) under exactly the same secretive roof. However, Congress passed the revolutionary Glass-Steagall Act in 1933, legally demanding that banks separate their risky investment banking operations from their protected commercial deposits. The partners of J.P. Morgan were forced to make an agonizing choice. Ultimately, they chose to remain a commercial bank (which eventually became JPMorgan Chase). However, two ambitious, elite partners—Henry S. Morgan (the grandson of the legendary J. Pierpont Morgan) and Harold Stanley—refused to abandon the lucrative, prestigious world of investment banking. In 1935, they defected and founded Morgan Stanley & Co. on Wall Street. Because they possessed the prestigious 'Morgan' name and established elite corporate relationships, Morgan Stanley instantly captured a 24% market share of all public offerings in its very first year. By strictly maintaining the aristocratic, powerful ethos of the original House of Morgan, Henry Morgan and Harold Stanley built the dominant, elite investment banking franchise of the 20th century.