Making investment or value decisions is inherent in daily life. Housewives make value judgments on the cost of food, clothing, shelter, and other family needs. Managers and workers develop opinions of the value of labor. Investors make value decisions based on present and future values of investment opportunities.

Given the daily reality of value decisions, what is the most important criterion for making these decisions?

In a previous Gleanings, I noted studies conducted independently by both business and social researchers that drew the same conclusion. People make buying decisions emotionally and then justify their decisions rationally.¹

There must be a better way to make decisions that would reflect a rational understanding of the value of a product or service. For example, consider how the redoubtable and arguably the most influential investment banker in US history, J. Pierpont Morgan, made investment decisions.

In the early part of the twentieth century, Pierpont was in the twilight of his long career as a financier in New York City. As with many other financially wealthy people of his day, he built a monopoly (or at least a near monopoly known as a trust). His trust was in the financial industry and was commonly called the House of Morgan (aka the Money Trust).

In the latter part of the 19th Century, monopolies and trusts that caused artificial price increases came under increasing scrutiny. In 1890, the US Congress passed the Sherman Antitrust Act targeted at breaking-up monopolies and trusts that impaired competition. When Theodore Roosevelt become president in 1901, one of his major agendas was to enforce the Sherman Antitrust Act.

During 1912 and 1913, hearings were held to investigate the "Money Trust" and Pierpont Morgan was called to testify. He was questioned by an attorney named Samuel Untermyer. One of the questions Untermyer posed to Morgan involved the criterion for investment decisions. Here is an excerpt from Morgan’s testimony:

Untermyer: Is not commercial credit based primarily upon money or property?

Morgan: No, sir, the first thing is character.

Untermyer: Before money or property?

Morgan: Before money or anything else. Money cannot buy it . . . because a man I do not trust could not get money from me on all the bonds in Christendom.

Spectators applauded, and businessmen across America stood rapt by this eloquence. The usually taciturn Pierpont had ennobled banking in an unexpected way. On Wall Street, banker Henry Seligman said, stock prices leapt 5 to 10 points on the strength of this testimony. Pierpont phrased the point more colorfully: “I have known a man to come into my office, and I have given him a check for a million dollars when I knew that they had not a cent in the world.”²

Pierpont used the term character to mean trustworthy. To make a decision to invest in a business venture was more about the character traits of the entrepreneur than the idea, potential of the idea, financial resources, or collateral. Pierpont learned that the predicate for financial success was the trustworthiness of the people involved.

Perhaps he was guided to this insight through biblical teaching at his church. He was, after all, a deeply committed Episcopalian. It was said that “religion logically accompanied the moralism that drove him at work.”³ Though he was categorized as a robber baron of the gilded age and therefore thought to have been on some level driven by greed, he was pragmatic and somehow knew that character facilitated financial success. Hence, his focus on character as the most important criterion for making investment decisions.

When compared to the aforementioned research that emotion drives investment decisions, the criterion of character may seem similar in that, like emotional decisions, character assessments may appear to be subjective. Wise character assessments, however, are based on objective experience with a person. By examining a person’s history and reputation, one can gain insight into a person’s level of excellence, customer service, honesty, integrity, persistence, commitment, and work ethic. These are some of the key character qualities that make a person trustworthy and therefore worthy of capital. This process of discerning character would be an example of the biblical principle “by their fruits you will know them.”⁴

From my study of the businessmen of Pierpont’s era, many, if not most, were connected with the Christian community through local churches. One biographer called Pierpont “New York’s most influential Episcopal layman.”⁵ His commitment to the church arguably helped form his value system and, most likely, informed his perspective on the most important criterion for investing.

Notwithstanding his devotion to the Episcopal church and his commendable focus on character as the seminal value for investing, he was, like most business leaders of his day, largely untrained in how to conduct business biblically, which is why he was considered one of the robber barons. Ironically, his recognition of the importance of character as a predicate for financial success was not well applied to himself.

It is wonderful that he understood the importance of character and trustworthiness as the foundation for making investment decisions, but there is so much more involved. Learning to think and act biblically in the workplace is not innate in human beings. We have to be trained. For example, we have to learn to walk in the following truths:

• The purpose of business is to find and fulfill our role in the Creation Mandate.
• Success is defined in terms of obedience to the will and ways of God.
• Strategic planning is the process of discerning the will of God.
• Building equally yoked leadership teams is a predicate for discerning the will of God.
• God funds his will.
• Money is simply a temporal tool to be used to obey God and should be used to trade up to gain wealth that transcends this existence.
• Management is about discipling people into alignment with the will and ways of God.
• Executional excellence is a stewardship responsibility.
• Hiring C4 people is critical to organizational success.
• When an organization is built with the right people (C4 people), then helping the workers find and fulfill their purpose will enable the organization to find and fulfill its purpose.

Sadly, during Pierpont's days, few church leaders understood the value that God places on work in the physical world and therefore did little to help business leaders and workers learn a biblical view of work. Nevertheless, Pierpont’s most important investment criterion does provide a valuable illustration of the importance of biblical values in conducting business. When we consider texts, such as Psalm 1, godly character is the predicate for success in the tangible universe and deficient character will lead to judgment. It is, therefore, really no surprise that character is the most important criterion for making wise value decisions.

Pierpont’s focus on character is an example of biblical values applied to the workplace and should inspire us to apply this principle in every buying decision. Whether as a housewife, worker, manager, or investor, always consider the character of the person you are doing business with, because excellent work follows excellent character.

Let’s learn this lesson well because obedience to God's values and principles always leads to blessings.

1 Gleanings, 2008-11, http://strategieswork.net/publications/gleanings/2008/2008-11.pdf.
2 Ron Chernow, (2010-03-16) The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance, Kindle Edition (Grove/Atlantic, Inc.), Kindle Locations 3162–3173.
3 Ibid. (Kindle Location 1153).
4 Matthew 7:20 NKJV.
5 Chernow (Kindle Location 1152).

Walking in Financial Freedom