How George Peabody’s firm became ensnared in the panic, jeopardizing Junius’s new partnership with Peabody and Morgan’s training there. The first test of Morgan’s mettle: Could he meet the challenge of a financial crisis? He showed deep empathy and compassion for his father’s anxiety and discomfort as Junius and George Peabody managed their way through the crisis. Father told him in 1857, “You are commencing upon your business career at an eventful time. Let what you now witness make an impression not to be eradicated. In making haste to be rich how many fall; slow and sure should be the motto of every young man.”

The purpose of our book is to chronicle and analyze Morgan’s interventions in financial crises, telling the story of how he learned the art of last resort lending by trial and error, and finding its relevance to issues that last resort lenders still face in the early twenty-first century. We classify Morgan’s last resort loans into three types.

This chapter analyzes voluntary compliance in tax contexts, focusing on the importance of procedural justice and tax morale. It also explores conditions under which governments can achieve optimal revenue levels.

This chapter discusses the perils of voluntary compliance, including variation between individuals in the likelihood of voluntary compliance, costs and risks of changing intrinsic motivation by states, and potential risks to the cooperating public. The chapter examines a crucial paradox: When governments shift from monitoring to seeking public collaboration, they may inadvertently create more problematic regulatory approaches. While appearing gentler on the surface, these strategies could prove more manipulative from a democratic standpoint and more intrusive from a liberal perspective.

Most stories of the Panic of 1907 end with activities in December 1907. To truly understand, however, what being a private lender of last resort must have meant to Morgan, we extend the story well into 1908. To close out the story, we track what he did to clean up his own firm and other firms after the crisis, revealing substantial losses well beyond any he had incurred in previous dealings.

This chapter explores the role of culture (e.g., trust, solidarity, rule of law) in predicting the success of voluntary compliance and its malleability toward trust-based rather than coercion-based regulation.

This chapter compares the impact of different regulatory tools (command and control, mandates, and incentives relative to reasoning, honesty oath, and nudge) on the crowding out of different types of intrinsic compliance motivations.

This chapter concludes the book with normative messages on contexts where states can trust public cooperation without coercion, addressing jurisprudential and normative aspects of governments gaining public cooperation.