partner in October 1854. Morgan's initial task was to strengthen and develop the firm's principal American accounts, using his first-hand knowledge of and connections to American business which Peabody, who had moved to London in 1836, lacked. Morgan spent his first few months working for Peabody in the United States, establishing contacts with American clients like Duncan, Sherman & Company, reaching out to new potential clients, and gathering information. During this period, Morgan first met Francis M. Drexel, founder of Drexel & Company, one of Philadelphia's leading banks. Drexel allied his bank with Peabody's through Morgan, forming one of the most powerful and important banking alliances in American history. Upon Morgan's arrival in London in 1854, Peabody & Co. was immediately in a position of strength as a leading dealer in American securities in the city; American grain, cotton, and railroad values soared during and after the Crimean War. Morgan was placed in charge of much of the firm's iron portfolio, which included the marketing of railroad bonds in both New York and London. The iron business had drawn the firm into greater involvement in financing American railway construction, including as the initial offeror of bonds for the Ohio and Mississippi Rail Road Company in 1853. Built around a core of booming American railway securities, the firm established itself in several other markets, including the New York money market and government finance. By 1856, Peabody was confident enough in Morgan to leave him in sole care of the business while Peabody took an extended tour of the United States. Panic of 1857 The railway boom ended in 1857 and prices collapsed, leading to rumors in London that Peabody & Co. was on the verge of failure. Some of Peabody's largest clients suspended business or failed entirely, and Duncan Sherman was unable to pay its remittances without assistance. Some of Peabody's own creditors, including rival Barings Bank, demanded immediate payment on their debts. Peabody declined a conditional bailout from the major London houses which would have closed the firm, instead receiving an emergency line of credit of £800,000 from the Bank of England. After the panic and near collapse of Peabody & Co., Morgan became a more cautious investor, demanding statements from all correspondent banks, even at the risk of offending them and even from well-respected former colleagues. Despite their own financial difficulties in this period, Peabody and Morgan were chief