Morgan Iron Works - Sale To John Roach, 1867

Sale To John Roach, 1867

After the war, the U.S. government auctioned off at firesale prices the hundreds of ships it had requisitioned during the conflict, depressing the market and leaving U.S. shipyards and marine engine builders with little or no work. As a consequence, almost all the marine engine manufacturing companies of New York went out of business in the years immediately following the war. The exceptions were the Morgan Iron Works, and the Etna Iron Works of John Roach.

Unlike his competitors, John Roach had been able to maintain his profits in the postwar period by diversifying his plant into the manufacture of machine tools and selling them to the U.S. Navy, which was in the process of upgrading its shipyards. By contrast, the Morgan Iron Works, like most other New York engine builders, had struggled in the postwar period, building only two engines in the two years following the war. It remained in business only because Morgan could afford to weather the losses, but in 1866 he suffered an additional financial setback when his newly established shipping lines to Mexico were aborted due to the overthrow of Emperor Maximilian I.

John Roach meanwhile was planning to add shipbuilding to his engine building business, and he saw the Morgan Iron Works with its dockyard on the East River as a stepping stone toward this goal. When in 1867 he offered to purchase the Morgan Works, Morgan was ready to sell, and the two agreed upon a price of $450,000, divided into a cash payment of $100,000 and two mortgages of $100,000 and $250,000. Roach would soon run into cash flow problems of his own and consequently defaulted on both mortgages; Morgan however chose not to foreclose and Roach settled the debts shortly before Morgan's death in 1878.