By John K . Brown

On July 4 , 1874 , the St . Louis Bridge over the Mississippi River opened to great fanfare . The first structure anywhere in the world to rely on steel , it broke world records for the length of its arched spans and the depth of its stone piers reaching down to bedrock beneath the churning river . The bridge gave St . Louis , long the leading city of the West , its first direct connection to the national railway network .

This restored landmark still serves the city . Now known as the Eads Bridge — named for its promoter — it cost the equivalent of $ 422 million in today ’ s dollars . A steamboat man before the Civil War , James Eads designed the bridge and drove it to completion through innumerable obstacles , although he had no training in civil engineering . This was his first bridge .

The St . Louis Bridge shortly after its completion in 1874 , with St . Louis , Missouri in the distance . Photograph by Robert Benecke from Calvin Woodward , A History of the St . Louis Bridge , frontispiece ( 1881 )

His work in promoting the project was equally audacious . Bankers Junius and Pierpont Morgan leapt into the venture with an enthusiasm that contradicted their conservative image . After investing for their own accounts , the Morgans underwrote the bonds of this risky enterprise : an untried design , developed by a novice and built with pioneering methods and novel materials over a wild river . This was not banking for the timid .

The Progenitor of the House of Morgan We know a lot about the House of Morgan , still the reigning world power in banking . Junius ’ s son , Pierpont , dominated Wall Street in 1900 , but the son built on his father ’ s foundation . In 1870 , J . S . Morgan & Company stood at the center of Anglo-American finance . By that time , the London-based bank did a worldwide business , with a focus on the United States . Junius cultivated his reputation for caution , for making American capitalism — especially its railroads — safe for British investors .

Investment banking emerged in the mid-19th century out of merchant banking and international trade . Barings , Rothschilds and Brown Brothers moved with some care into financing the new railroads of Europe and America . A relative newcomer , J . S . Morgan grabbed market share by offering riskier issuers .

Investor capital largely came from British gentry and industrialists . American companies topped their shopping lists , thanks to generous returns , cultural affinities and a faddish appreciation for the exotic . Britain ’ s investing elite understood railroads , but American lines were taming a vast continent , literally the Wild West .

Railroad equities had a dubious reputation , especially those of new western lines . According to one historian , the equities of the transcontinental lines were “ normally distributed as bonuses to bondholders or as compensation for services rendered by railroad promoters .” Potentially valuable someday , such stock was little more than a speculative bet .

While shares carried a speculative aroma , bonds of new railroads could be portrayed as attractive investments in a bright future . They stipulated collaterals , trustees and investor protections in the

32 FINANCIAL HISTORY | Summer 2024 | www . MoAF . org