Skip to main content

Full text of "Twenty-eight years in Wall street"

See other formats 


This  is  a  digital  copy  of  a  book  that  was  preserved  for  generations  on  library  shelves  before  it  was  carefully  scanned  by  Google  as  part  of  a  project 
to  make  the  world's  books  discoverable  online. 

It  has  survived  long  enough  for  the  copyright  to  expire  and  the  book  to  enter  the  public  domain.  A  public  domain  book  is  one  that  was  never  subject 
to  copyright  or  whose  legal  copyright  term  has  expired.  Whether  a  book  is  in  the  public  domain  may  vary  country  to  country.  Public  domain  books 
are  our  gateways  to  the  past,  representing  a  wealth  of  history,  culture  and  knowledge  that's  often  difficult  to  discover. 

Marks,  notations  and  other  marginalia  present  in  the  original  volume  will  appear  in  this  file  -  a  reminder  of  this  book's  long  journey  from  the 
publisher  to  a  library  and  finally  to  you. 

Usage  guidelines 

Google  is  proud  to  partner  with  libraries  to  digitize  public  domain  materials  and  make  them  widely  accessible.  Public  domain  books  belong  to  the 
public  and  we  are  merely  their  custodians.  Nevertheless,  this  work  is  expensive,  so  in  order  to  keep  providing  this  resource,  we  have  taken  steps  to 
prevent  abuse  by  commercial  parties,  including  placing  technical  restrictions  on  automated  querying. 

We  also  ask  that  you: 

+  Make  non-commercial  use  of  the  files  We  designed  Google  Book  Search  for  use  by  individuals,  and  we  request  that  you  use  these  files  for 
personal,  non-commercial  purposes. 

+  Refrain  from  automated  querying  Do  not  send  automated  queries  of  any  sort  to  Google's  system:  If  you  are  conducting  research  on  machine 
translation,  optical  character  recognition  or  other  areas  where  access  to  a  large  amount  of  text  is  helpful,  please  contact  us.  We  encourage  the 
use  of  public  domain  materials  for  these  purposes  and  may  be  able  to  help. 

+  Maintain  attribution  The  Google  "watermark"  you  see  on  each  file  is  essential  for  informing  people  about  this  project  and  helping  them  find 
additional  materials  through  Google  Book  Search.  Please  do  not  remove  it. 

+  Keep  it  legal  Whatever  your  use,  remember  that  you  are  responsible  for  ensuring  that  what  you  are  doing  is  legal.  Do  not  assume  that  just 
because  we  believe  a  book  is  in  the  public  domain  for  users  in  the  United  States,  that  the  work  is  also  in  the  public  domain  for  users  in  other 
countries.  Whether  a  book  is  still  in  copyright  varies  from  country  to  country,  and  we  can't  offer  guidance  on  whether  any  specific  use  of 
any  specific  book  is  allowed.  Please  do  not  assume  that  a  book's  appearance  in  Google  Book  Search  means  it  can  be  used  in  any  manner 
anywhere  in  the  world.  Copyright  infringement  liability  can  be  quite  severe. 

About  Google  Book  Search 

Google's  mission  is  to  organize  the  world's  information  and  to  make  it  universally  accessible  and  useful.  Google  Book  Search  helps  readers 
discover  the  world's  books  while  helping  authors  and  publishers  reach  new  audiences.  You  can  search  through  the  full  text  of  this  book  on  the  web 


at|http  :  //books  .  google  .  com/ 


(■ 


,...rf^-r^..Y 


■i^:.X,^ 


--'^ 


:M^^ 


n.\. 


:*?^i^ 


-*;•  V^'' 


2^<n^;'" 


r-lVA--,./.^^^  1"  ■>•'  --.i  -L-  .'U 


l^iUta'vkfm} 


V^';t)  ^1/  -^  ^  ■  -^ 


n> 


I  -1  T^i 


^  ;0/  '^  ^7:^  % 


NEWYCRK     :    ..  :. 

\AlBerieiiJ  Institute  of  f'ankin^: 


•lii 


\    . :  :  ^KYu 


,  ^\f- 


Kl 


\ 

X    t 

•    1 

"N 

lil 

».- 

.:r. 

'    '/."^ 

•> » 

'^^<^\ 

t» 

ih  -I 


Mi 


^>M 


f* 


NEWYCKK     ....   - 

\AiMricu  Instituty  of  :'anking 


TWENTY-EIGHT  YEARS 

IN  WALL  STREET. 


BY 


HENRY  CLEWS;  lld. 

NEW  YORK  CHAPTER. 

ABtriean  Inttltutt  of  Banking 

BETISBD    AND    EKLABGED    BT    A    BESUMlf  OF   THB  PA8T 

FIFTEEN  TEAB8,  MAKING   A   BEOOBD  OF  FOBTT-THBEB 

TEAB8  IN  WALL  8TBEET,   WHILE    BETAININa  THE 

FOBMEB  TITLE — SUBJECTS,  THAT  ABE  OF  NE- 

OESsrrr  bbieflt  touched  upon  in  obdeb 

TO  KEEP   WITHIN    THE  SCOPE  OF    THE 
PBESENT  WOBK,  FIND  FULLEB  EXPO- 
SITION IN  THE  AUTHOB'S  "  WALL 
STBEET  POINT  OF.  VIEW/*  FOB 
FUBTHEB  BEFl^BENCE  TO 
WHICH    SEE    PUBUSH- 
EB8*      NOTICE     AT 
THE      END      OF 
THIS  BOOK. 


I 


NEW  YORK: 

J-  &  OGILVIE  PUBLISHING  COMPANY, 

57  Ross  Street. 


601194 


goftbight  1887, 
Bt  Hbnby  Olxwb. 


PREFACE  BY  THE  AUTHOU 


^^  0%/U<u 


f 


J' 


>CLt<CM 


601194 


goftbioht  1887» 
Bt  Hbnbt  Olkws. 


PREFACE  BY  THE  AUTHOR. 


€a>Op^^i^  lUx^uCih^}    Oj^Uji^Uyxy^^ 


MILLS  BUILDING 
NEW  YORK. 


3b  My  Beaders: 

The  following  pages  are  intended  to  throw  some  light 
on  imperfectly  known  events  connected  with  Wall  Street 
speculations  and  investments,  and  also  with  the  condition 
and  progress  of  the  country  from  a  financial  standpoint, 
during  the  twenty-eight  years  which  I  have  experienced  in 
the  great  money  centre. 

The  theme  is  worthy  of  an  abler  pen,  but  in  the  absence 
of  other  contributors  to  this  branch  of  our  National  his- 
tory, I  venture  the  plain  narrative  of  an  active  participator 
in  the  financial  events  of  the  times  in  which  I  have  lived. 

I  have  also  made  a  brief  retrospect  of  the  history  of  Wall 
Street,  and  financial  affairs  connected  therewith  since  the 
origin  of  the  Stock  Exchange  in  New  York  city. 

In  sketching  the  men  and  events  of  Wall  Street,  I  have 
freely  employed  the  vernacular  of  the  speculative  fraternity 
as  being  best  adapted  to  a  true  picture  of  their  character- 
istics, aJthough  probably  not  most  consonant  with  literary 
propriety. 

I  have  simply  attempted  to  unfold  a  plain,  unvarnished 
tale,  drawing  my  material  from  experience  and  the  records 
of  reliable  narrators. 

HENBT  CLEWa 

NEW  TOU,  Deo. »,  18«l. 


'■^ —  PROPERTY  OP 

irEW  YORK  CiiAF-TE/V 
^marican  Institute  of  Bankin«r. 


Ar. 


CONTENTS. 


If  AOL 

CHAPTER  L 

mr  UKBUT  IN  WAIX  SnUEBT. 

BeBDlts  of  tba  Panio  of  1867.— Groatliig  »  Berolntlon  In  tbe 
Methodi  of  Doing  BnsinaM  in  Wall  Street.— The  Old  "  Fo- 
glee  *'  of  ttae  Street,  and  How  They  were  SurprlBed.— Their 
Prejudices  and  How  th^  Originated.— The  Struggle  of  the 
Young  Bloods  for  Ifiembership.— The  Youthful  Element  in 
Finance  Peouliar  to  this  Country.— The  Palmy  Dayi  of 
Little,  Drew  and  Horae.— The  Origin  of  "  Comen,"  and  the 
'*  Option"  Limit  of  Sixty  Dayg 6 

CHAFTEB  II. 
WALL  STBBBT  AB  ▲  CIYILIZEB, 

Olsrioal  Obliquity  of  Judgment  About  Wall  Street  Aff aira.— The 
Slanderous  Bloquenoe  of  Talmage.— Wall  Street  a  Great 
Distributor,  as  Bxhibited  in  the  Clearing  House  Transac- 
tions.—Popular  Delusions  in  Begard  to  Speoulation. — ^What 
Our  Reyolutionaiy  Sires  Adrlsed  About  Improying  the 
Industrial  Arts,  Showing  the  Striking  Contrast  Between 
Their  Views  and  the  Way  Lord  Salisbury  Wanted  to  Fix 
Things  for  This  Country 18 

CHAPTER  IIL 

HOW  TO  ICAXB  ICONBT  IS  WALL  BTBXBT. 

How  to  Take  Adyantage  of  Periodioal  Panics  in  Order  to  Make 
Money.  -Wholesome  Advice  toYoung  Speculators.— Alleged 
''  Points  **  from  Big  Speculators  End  in  Loss  or  Disaster.— 
Professional  Adylce  the  Surest  and  Cheapest,  and  How  and 
Where  to  Obtain  It. 19 

CHAPTER  ly. 

XUPOBTAHCB  OF  BTTBimBSS  TBAINIVO. 

Sons  of  Independent  Gentlemen  make  yery  bad  Clerks.— They 
become  Unpopular  with  the  Other  Boys,  and  must  Byent- 
ually  Go.— Night  Dancing  and  Late  Suppers  don't  Contrib- 
ute to  Business  Success.— Giye  Merit  its  True  Reward. — 
Keeping  Worthless  Pretense  in  its  True  Position.- Running 


vm.  CONTKNU. 

Public  Offloes  on  Bushiefls  Prinoiples.— A  Ple«e  of  Gratni- 
totiB  AdTloe  for  the  Administration— ▲  College  Course  not 
In  General  Calculated  to  make  a  Good  Business  Man.— The 
Question  of  Adaptability  Important.-</liildren  should  be 
Bnoouraged  in  the  Occupation  for  which  they  show  a 
Preference.— Thoughts  on  the  Army  and  Nary ta 

CHAPTER  V. 

PBaiSONAL  HOirOB  OF  WALL  BTSmET  MXN. 

Breach  of  Trust  Bare  Among  Wall  Street  Men.— The  BngUsh 
Clergjrman's  Kotion  of  Talmage's  Thrades  gainst  Wall 
Street.  —  Adyenturous  Thieres  Haye  No  Sympathiizers 
Among  Wan  Street  Operators.— Early  Training  Necessary 
for  Success  in  Speculation.— Ferdinand  Ward's  Eyii  Genius. 
— ^A  Great  Business  can  only  be  Built  up  on  Honest  Prin« 
oiples.— Great  Generals  Make  Poor  Financiers,  Through 
Want  of  Early  Training.— Practical  Business  is  the  Best 
College 88 

CHAPTER  VI. 

WALL  BTBBET  DTTBIKa  THB  WAB. 

The  Fmanciers  of  Wall  Street  Assist  the  Goyemment  in  the 
Hour  of  the  Country's  PeriL — ^The  Issue  of  the  Treasury 
Notes.— Jay  Cooke's  Northern  Pacific  Scheme  Precipitates 
the  Panic  of  1878.— Wall  Street  Has  Played  a  Prominent 
Part  In  the  Great  Eyolution  and  Progress  of  the  Present 
Age 89 

CHAPTER  VIL 
HOBB  WAB  BBMnnSCENCIBS— BBITI8H  Ain>  NAPOLBONIC  DBSIOXra. 

How  Napoleon  Defied  the  Monroe  Doctrine.— The  Banquet  to 
Romero. — Speeches  by  Eminent  Financiers,  Jurists  and 
Business  Men.— The  Eloquent  Address  of  Romero  Against 
French  Interyention.— Napoleon  shows  his  Animus  by 
Destroying  the  Newspapers  Containing  the  Report  of  the 
Banquet— The  Emperor  Plotting  with  Representatiyes  of 
the  English  Parliameut  to  Aid  the  Confederates  and  Maka 
War  on  the  United  States 45 

CHAPTER  Vin. 
FOBBIGH  IKTBIGUES  AGAINST  AUBBIGAB  LXBEBTT. 

How  the  Imperial  Pirates  of  France  and  En^^and  Were  Fright- 
ened Off  Through  the  Diplomacy  of  Seward.— Ominous 


CONTlWrs.  ix. 

Appearance  of  Uie  Buttian  Fleet  in  Amerioan  W»ter8«— 
Kapoleon  Aims  at  the  Creation  of  an  Empire  West  ef  the 
Mississippi,  and  the  Restoration  of  the  Oid  French  Colonies. 
—Plotting  with  Slidell,  Benjamin,  Lindsay,  Boebuolc  and 
Others. — Urging  England  to  Recognize  the  Confederacy. — 
Disraeli  Explains  England's  Iresigns  and  Diplomacy.— After 
the  Kayal  Victory  of  Farragut  and  the  Capture  of  New 
Orleans  England  Hesitates  Through  Fear,  and  Napoleon 
Changes  His  Tactics. — Renewal  of  Intrigues  Between  Eng- 
land and  Franoe.—Their  Dastardly  Purposes  Defeated  by 
the  Victories  of  Gettysburg,  Viclcsburg  and  the  Qeneral 
Triumph  of  the  Union  Arms 09 

CHAPTER  IX. 
BBCBBTABY  CHA8B  AlfO)  THB  TBEA.BT7BT. 

The  Depleted  Condition  of  the  Treasury  when  Mr.  Chase  took 
Office.— Preparations  for  War  and  Great  Excitement  in 
Washington.'— Chlyalrous  Southerners  in  a  Ferment. — 
Officials  Up  in  Arms  in  Defence  of  their  Menaced  Positions. . 
—Miscalculation  with  Refi:ard  to  the  Probable  Duration  of 
the  War.— A  Visit  to  Washington  and  an  Interview  with 
Secretary  Chase.— Disappointment  about  the  Sale  of  Gk>y- 
emment  Bonds.— A  Panic  Precipitated  in  Wall  Street.— 
Millionaires  Reduced  to  Indigence  in  a  Few  Hoars.— Mirac- 
ulously Saved  from  the  Wreck.— How  it  Happened 78 

CHAPTER  X, 

THS  NATIONAL  BANKS. 

Secretary  Chase  Considers  the  Problem  of  Providing  a  National 
Currency.— How  E.  G.  Spaulding  takes  a  Prominent  Part 
in  the  Discussion  of  the  Bank  Act.— The  Act  Founded  on 
the  Bank  Act  of  the  State  of  New  York. — Effect  of  the  Act 
u^n  the  Credit  of  the  Country. — A  New  System  of  Bank- 
ing Required 81 

CHAPTER  XI. 

THB  NSW  TOBK  STOCK  BXGHANGB. 

History  of  the  Organization  for  Ninety-four  Years.— From  a 
Button- Wood  Tree  to  a  Palace  Costing  Millions  of  Dollars.— 
Enormous  Growth  and  Development  of  the  Business.— How 
the  Present  Stock  Exchange  was  Formed  by  the  Consolida- 
tion of  other  Financial  Bodies. — Patriotic  Action  During 
the  War  Period.- Reminiscences  of  Men  and  Events. 87 


CONTENTS. 


pioa. 


CHAPTER  Xn. 
"OOBHBBB**  ASD  THSIB  BFFBGT  OH  YALinUI. 

The  Senate  Ck>miiiittee  on  "Gomen**  and  **  Fatores.**— Speou- 
lation  Beneficial  to  the  Country  at  Large.^A  Begnlator 
of  Yaluee,  and  an  Important  A^nt  in  the  Pferention  of 
Panioe.— *'  Comen"  in  aU  kindi  of  Business.— How  A.  T. 
Stewart  made  '*  Comers.'*— AU  Impordng  Firms  deal  in 
" Futures."— Iiegislation  Against  "Comers"  would  stop 
Enterprise  and  oanse  Stagnation  in  Business.— Only  the 
Conspirators  themselres  get  hurt  in  "  Comers."— The  Blaolr 
Friday  "  Comer."— Speculation  in  Grain  Beneficial  to  Con- 
sumers     95 

chapteb;xiil 

THB  OOHMOnOBB^S  "OOBKIBBS." 

The  Great  Hudson  "  Comer."— Commodore  Vanderbilt  the 
"Boss"  of  the  Situation.— The  *' Comer"  Forced  upon 
Him.— How  he  Managed  the  Trick  of  getting  the  Bears  to 
''Turn*'  the  Stock,  and  then  oaught  them.— HUi  able 
Device  of  Unloading  while  Forcing  the  Bears  to  Corer  at 
High  Figures.— The  Harlem  *' Comer."  —  The  Common 
Council  Betrayed  the  Commodore,  but  were  Caught  in  their 
own  Trap,  and  Iiost  Millions.— The  Iiegislature  Attempt  the 
same  Game,  and  meet  with  a  Similar  Fate 107 

CHAPTEB  xnr. 

DANIEL  DBSW. 

Drew,  like  Vanderbilt,  an  Example  of  Great  Suooess  without 
Education.— Controlled  more  Beady  Cash  than  any  man  in 
America.- Drew  goes  Down  as  Gould  Bises.- '*  His  Touch 
is  Death."— Prediction  of  Drew's  F&ll.— His  Thirteen  Mil- 
lions Vanish.— How  he  caught  the  Operators  in  "  Oshkosh" 
by  the  Handkerchief  Trick.— The  Beginning  of  "Uncle 
Daniel's"  Troubles.— The  Conyertible  Bond  Trick.— The 
"Comer"  of  1866.— Millions  Lost  and  Won  in  a  Day.— 
Interestmg  Anecdote  of  the  Youth  who  Speculated  outside 
the  Pool,  and  was  Fed  by  Drew's  Brokers 117 

CHAPTER  XV. 

DBBW  Ain>  YAHDBBBIIA*. 

Vanderbilt  Essays  to  Swallow  Erie,  and  Has  a  Narrow  Bsoape 
from  Choking.— He  Tries  to  make  Drew  Commit  Financial 
Suicide. — Manipulating  the  Stock  Market  and  the  Law 
Courts  at  the  Same  Time.— Attempts  to  "Tie  Up"  the 


CONTENTS.  xi. 

FAOB. 
Hands  of  Drew.— Manufaotiiriiig  Bonds  with  the  Erie  Paper 
Mill  and  Printing  Pre88.^I1sk  Steals  the  Books  and  Brades 
the  Injonotion.  — Drevf  Throws  Fifty  Thousand  Shares  on 
the  Market  and  Defeats  the  Commodore. — ^The  *'  Comer  " 
is  Broken  and  Becomes  a  Boomerang.— Vanderbilt's  Fury 
Knows  no  Bounds. — In  his  Bage  he  Applies  to  the  Courts. — 
The  Clique's  Inglorious  Flight  to  Jersey  City.— Drew  Crosses 
the  Ferry  with  Seyen  Millions  of  Vanderbilt's  Money.— The 
Commodore's  Attempt  to  Beaoh  the  Refugees.— A  Detectiye 
Bribes  a  Waiter  at  Taylor's  Hotel,  who  Delirers  the  Com- 
modore's Letter,  whioh  Brings  Drew  to  Terms.— Senator 
Mattoon  gets  on  the  right  side  of  Both'Pitttie&,.'i 127 

J*l        «ll«i»l       til  .  4/>«^ 

CHAPTER  XVt 

DREW  AlTD  THB  BBIB  "OOltHBBS." 

\  Harmomous  Understanding  with  the  Commodore.— How  the 
Compromise  was  Effected. — An  Interesting  Interview  with 
Fisk  and  Gk>uld  in  the  Commodore's  Bed-Room. — How 
Riohard  Sohell  Raised  the  Wind  for  the^  Commodore.— 
DreWs  Share  of  the  Spoils.— He  Tries  to  Retire  from  WaU 
Street,  but  Can't.— The  Settlement  that  Cost  Erie  Nine  Mil- 
lions.—Gould  and  Fisk  "Water  "  Erie  again,  to  the  Extent  of 
Twenty-three  Millions,  but  leaye  Drew  out  —  "  Uncle 
Daniel"  Returns  to  the  Street. — He  is  Inveigled  into  a 
Blind  Pool  by  Gould  and  Fisk,  Loses  a  Million  and  Retreats 
from  the  PooL— He  then  Operates  Alone  on  the  '*  Short " 
Side  and  Throws  Away  Millions.— He  Tries  Prayer  but  it 
"  Availeth  Not."—"  It's  no  Use,  Brother,  the  ICarket  Still 
Goes  Up."— Praying  and  Watching  the  Ticker.— Hope 
leasly  **  Cornered  "  and  Ruined  by  his  Former  Pupils  and 
Partners 187 

CHAPTER  XVIL 

IRTBBIIISnNa  BFI80DBB  IN  1XEUBW*8  LIFE. 

Incidents  in  the  Early  Life  of  Drew,  and  How  he  Began  to 
Hake  Money.— He  Borrows  Money  from  Henry  Astor,  Buys 
Cattle  in  Ohio  and  Drives  them  over  the  Alleghany  Moun- 
tains under  Great  EUirdship  and  Suffering.— His  Great 
Career  as  a  Steamboat  Blan,  and  his  Opposition  to  Yander- 
bnt.— His  Marriage  and  Family.— He  Builds  and  Endows 
Religious  and  Educational  Institutions.— Returns  to  his 
Old  Home  after  his  Speculatiye  Fall,  but  can  find  Ko  Rest 
80  Far  away  from  Wall  Streetw— His  Hopes  through  Wm.  H. 
Vanderbilt  of  another  Start  in   Life.— His   Bankruptcy, 


Xii.  CONTENTS. 

FAGS, 
liabilitieB  and  Wardrobe.— HiB  Sudden  out  Peaoeful  End.— 
Cbaraoterittlo  Stories  of  his  Booentricities 147 

CHAPTER  XVIIL 

PA2nC8.— THEIB  CAUaBS.— HOW  FAB  FBSTSKTABLB. 

Not  Aooidental  Freaks  of  the  Market.— We  are  Still  a  Nation  of 
Pioneers.— The  Question  of  Panics  Peouliarlj  American.— 
Violent  Oscillations  in  Trade  Owing  to  the  Great  Mass  of 
New  and  Immature  Undertakings. — Unoertainty  about  the  - 
Intrinsic  Value  of  Properties.— Sudden  Slirinkage  of  Bail- 
road  Properties  a  Fruitful  Cause  of  Panics.- Bisks  and 
Panics  Inseparable  from  Pioneering  Enterprise. — ^We  are 
Becoming  Less  Dependent  on  the  Money  Markets  of 
Europe.— In  Panics  much  Depends  upon  the  Prudence  and 
Self-control  of  the  Money-Lenders.— The  Law  which  Com- 
pels a  Beserre  Fund  in  the  National  Banks  is  at  Certain 
Crises  a  Provocatiye  of  Panics.— George  J.  Seney.— Jolm  C. 
Eno.— Ferdinand  Ward.— The  Clearing  House  as  a  Preyen- 
tiye  of  Panics 157 

CHAPTER  XIX. 

ouy-fnMR  FAzncs. 

The  Panic  of  1887.— How  it  was  Brought  About.— The  State 
^anks. — ^How  they  Expanded  their  Loans  under  Goyem- 
ment  Patronage. — Speculation  was  Stimulated  and  Values 
Became  Inflated.— President  Jackson's  *'  Specie  Circular" 
Precipitates  the  Panic— Bank  Contractions  and  Consequent 
Failures.— Mixing  up  Business  and  Politics.— A  General 
Collapse,  with  Intense  SufTering 175 

CHAPTER  XX, 

THB  TBUB  BTOBY  OF  BLACK  FBIDAT  TOLD  FOB  THB  FIBST  TIMB. 

The  Great  Black  Friday  Scheme  originates  in  patriotic  motiyes. 
Adj^ising  Boutwell  and  Grant  to  sell  Gk>ld.— The  part  Jim 
:  played  in  the  Speculatiye  Drama.— *' Gone  where  the 
Ibine  Twineth.'*— A  general  state  of  Chaos  in  Wall 
Street.— How  the  Israelite  Fainted.—''  What  ish  the  prish 
now 7*'— Gould  the  Head  Centre  of  the  Plot  to  "Comer" 
Gold.— How  he  Managed  to  Draw  Ample  Means  from  Erie. 
—Gould  and  Fisk  Attempt  to  Manipulate  President  Grant 
and  Compromise  him  and  his  Family  in  the  Plot. — Scenes 
and  Incidents  of  the  Great  Speculatiye  Drama 181 


coNTBirrs.  zlii 

FAQS. 
CHAPTER  XXL 

GAU8B8  OF  LOSS  IH  8FB0UULTIOH.I 

Inadaqaate  Information.— Falae  InformatioiL—Defeotiof  Newi 
Agenoies.— InBofflciency  of  MargixuL— Dangen  of  Fenonal 
Idiogynonuies.— Operating  in  Season  and  oni  of  Season.— 
Neoeisity  of  InteUigenoe,  Judgment  and  Nerre.— An  Ideal 
Standard.— Wliat  Makes  a  King  Among  Speoolators  7.........    901 

CHAPTER  XXIL 

TXLLABD  AND  BIB  SFBOUULTIOSrai 

Betnm  of  the  Renowned  Speculator  to  Wall  Street  ^BeoaQing 
the  Famous  *«  Blind  '*  Pool  in  Northern  Paoiflo.— How  VR- 
lard  Captnred  Northern  Paoifia— Pursuing  the  Tactics  of 
Old  Vanderbflt.— Raising  Twelye  Million  Dollani  on  Paper 
Credit.— Yillard  Emerges  from  the  "  Blind  "  Pool  a  Greal 
Railroad  Magnate.— He  Inflates  his  Oreat  Scheme  iiom 
Nothing  to  One  Hundred  Million  Dollarsi— His  Unique 
Methods  of  Watering  Stock  as  Compared  with  those  of 
Geoige  I.  Seney 900 

CHAPTER  XXm. 

FEBDINAKD  WABD. 

Peculiar  Power  and  Methods  of  the  Prince  of  Swindlers.— How 
he  I>uped  Astute  Ilnanciers  and  Business  Men  of  all  Sorts, 
and  Secured  the  Support  of  Eminent  Statesmen  and  Lead- 
hig  Bank  Officers,  whom  he  Robbed  of  Mmi^^ng  of  Money  — 
The  most  ArtfulDodger  of  Modem  Times.— The  IVuth  al>out 
the  Swindle  Practiced  upon  General  Grant  and  his  Family.    915 

CHAPTER  XXIV. 

HSNBY  K.  SMITH. 

How  Mr.  Smith  Started  in  Uf e  and  became  a  Successful  Oper- 
ator.—His  connection  with  the  Tweed  '*  Ring,"  and  how  he 
and  the  Famous ' '  Boss  "  made  Lucky  Speculations,  through 
the  use  of  the  City  Funds,  tai  Making  a  Tight  Mon^  Mar^ 
ket.— On  the  Verge  of  Ruin  in  a  Pool  with  W.  K.  Vander- 
bilt^— He  is  Converted  to  the  Bear  Side  by  Woerisholfer, 
and  Again  Makes  Money,  but  by  Persistence  in  his  Bearish 
Policy  Bolns  himseU  and  Dn^  Wm.  Heath  ft  Co.  down 
atoo- 988 


FAOS 
GHAPTBB  XXY. 

KBKinB*8  CABSEB. 

He  starts  In  Speoulation  as  a  '*  Curbstone  "  Broker.— A  lAoky 
Hit  In  a  Mining  Stock  Pats  Him  on  the  Road  to  be  a  Mil- 
lionaire.—His  SpeoolatiTe  Bncoanter  with  the  Bonanza 
Kings.— He  Makes  Four  Millions,  and  Major  Selorer  brings 
him  to  Wan  Street,  where  they  Form  an  Alliance  with 
Gonld,  Who  ''Bnohres'*  Both  of  Them.— Selover  Drops 
Gonld  in  an  Area  Way.— Keene  Goes  Alone  and  Adds  Nine 
MQlions  More  to  Bin  Fortone.— He  Then  Speonlates  Reck- 
lessly In  Byerythlng.— Suffers  a  Sadden  Berersal  and  Gets 
Swamped.— Orerwhelming  Disaster  in  a  Bear  Campaign, 
Led  by  Gould  and  Cammaok,  In  which  Keene  Loses  Seyen 
MiUiona.— ms  Desperate  Attempts  to  Becoyer  a  Part  £ntail 
Farther  Losses,  and  He  Approaches  the  End  of  His  Thir- 
teen Minions.— His  Princely  Liberality  and  Social  Relations 
with  Sam  Ward  aod  Others , 829 

'  CHAPTER  XXVL 

CUB  BAZLBOAD  MXIHODS. 

DeceptlTe  Ftaianclerlng.—Orer-CapltalizBtion.— Stock  **  Water- 
ing.**—Ftaianolal  Reconstructions.— Losses  to  the  Public— 
of  Oonstruotors.-— Bad  Reputation  of  our  Railroad 
Securities.- Unjust  and  Dangerous  Distribution  of  the 
Public  Wealth Ml 

CHAPTER  XXVII. 
TBM  eaOBOZA  BBFDDIATIOir  BOin>  BWIVDUL 

How  a  Sorerelgn  Southern  State  Cheated  the  Korthem  Mea 
who  Helped  Her  In  Distress..— A  New  Way  to  Pay  Old 
Debts.— Cancellation  by  Repudiation  of  Just  datana  for 
Cash  Loaned  to  Sustain  the  State  Goyemment,  Build  Public 
Schools  and  BCake  Needed  Improyements.- Bottom  Facts 
of  the  Outrage.— The  Recent  Attempt  to  Place  a  New 
Issue  of  Georgia  Bonds  on  the  Market  while  the  Old  ones 
-  Remain  Unpaid.- The  Case  before  the  Attomey-General  of 
the  State  of  New  York.— He  Examines  the  Legal  Status  of 
the  Bonds  In  Connection  with  the  Savings  Banks.— His 
Dedslon  Prohibits  these  Institutions  from  Inyestiog  the 
Hard  Earnings  of  the  Working  People  in  these  Doubtful 
and  Dangerous  Securities.— A  Bold  Effort  to  haye  the  Frssh 
Hwue  of  Georgia  Paper  put  upon  the  list  of  Legitimate 
Securities  of  the  New  York  Stock  Exchange  Firmly  Opposed 
and  Eyentually  Frustrated , 356 


CONTENTS.  XV. 

PAGB. 
CHAPTER  XXVIIL 

ANDBXW  JOHNSON'S  YAQABIVB. 

"Swinging  Around  the  Circle. *'— How  Mr.  Johnson  Came  to 
Yisit  Kew  York  on  His  Remarkable  Tour. — ^The  Grand  Re- 
oeption  at  Delmonioo's. — ^Tho  President  Loses  His  Temi>er 
at  Albany  and  Becomes  an  Object  of  Public  Ridicule. —His 
Proclamation  of  "My  Policy**  Ironically  Receiyed. — Re- 
turns to  Washington  Disgraced.— The  Massacre  of  Kew 
Orleans.— The  Impeachment  of  the  President 289 

CHAPTER  XXIX. 

THB  DIX  CONYSNTION. 

How  the  War  Democrat,  General  Diz,  was  Eileoted  Governor 
by  the  Republican  Party. — The  Candidates  of  Senator 
Coniding  Rejected. — ^How  Dix  was  Sprung  on  the  Conven- 
tion, to  the  Consternation  of  the  Caucus.— Judge  Robert- 
son's Disappointment.— Exciting  Scenes  in  the  Convention. 
—General  Dtx  declines  tlie  Nomination,  but  Reconsiders 
and  Accepts  on  the  Advice  of  His  Wife  and  General  Grant. 
—How  Dix's  Eleotion  Ensures  Grant's  Second  Term  as 
President 287 

CHAPTER  XXX. 

C0HB1SQTJENCB8  OF  THB  UTICA  (DIZ*8)  CONTENTION. 

A  Chapter  of  Secret  History.— Conkling  gets  the  Credit  for 
Dix*s  Nomination  and  His  *'  Silence  Gives  Consent  '*  to  the 
Honor.— Robertson  Regards  Him  as  a  Marplot.— The  Sena- 
tor Innocently  Condemned.— The  Misunderstanding  which 
Defeated  Grant  for  the  Third  Term,  and  Elected  Garfield. 
—How  the  Noble  "  806  »*  were  Discomfited.—"  Anything  to 
Beat  Grant."— The  Stalwarts  and  the  Half  Breeds.—'*  Me 
Too.  *' — ^The  Excitement  which  Aroused  Guiteau*s  Murderous 
Spirit  to  KlU  Garfield 807 

CHAPTER  XXXI. 

OBANT'S  BSCOND  TEBM. 

The  Best  Man  for  the  Position  and  Most  Deserving  of  the 
Honor.— How  the  '*  Boom  "  was  Worked  up  in  Favor  of 
Grant— The  Great  Financiers  and  Speculators  all  Come  to 
tbe  Front  in  the  Interest  of  the  Nation's  Prosperity  and  of 
tbe  Man  who  had  Saved  the  Country.— The  Great  Masi 
Meeting  at  Cooper  Union— Why  A.  T.  Stewart  Refused  to 
Preside.— The  Results  of  the  Mass  Meeting  and  how  they 


XVi  CONTKNTS. 

TAffJL 
wen  Appreciated  by  the  Friends  of  the  Gandidsto,  Leading 
BepreeentatiYes  of  the  BiiBines8Ck>miiiiiiiity  and  the  Public 
Frees  Gonerally,  Irrespeotiye  of  Party 818 

CHAPTER  v^fyii. 

XHB  TWXBD  BZZrO,  AND  XHB  OOKMlTTMa  OF  BMVMBSTT, 

The  BiBg  Makes  Itself  Useful  in  Speonlatiye  Deals.— How 
Tweed  and  His  *^  Heelers  *'  Manipulated  the  Money  Market. 
—The  Ring  Conspiring  to  Organize  a  Panio  for  Politioal 
Parposes.^The  Plot  to  Gkdn  a  Demooratio  Yiotory  Defeated 
and  a  Panio  Averted  Through  President  Grant  and  Secre- 
tary Boutwell,  who  were  Apprised  of  the  Danger  by  Wall 
Street  Men.— How  the  Committee  of  "Seyenty"  Origin- 
ated.—The  Taxpayers  Terrorized  by  Boss  Tweed  and  his 
Minions.— How  *'  Slippery  Dick  "  got  EOmself  Whitewashed. 
—Offering  the  Office  of  City  Chamberlain  as  a  Bribe  to 
Compromise  Matters.— How  the  Hon.  SamuelJones  TUden^ 
as  Counsel  to  the  Committee,  Obtained  His  Great  Start  in 
I4fe 887 

CHAPTER  XXXm. 

HON.  SAJCUXL  J.  TTLDVSm 

How  TUden  began  to  make  His  Fortune  in  Connection  with 
William  H.  Hayemeyer.— Tilden's  great  Fort  in  Politics.— 
He  Improves  His  Opportunity  with  the  Discernment  of 
Genius.— How  Tilden  became  one  of  the  Counsel  of  the 
«<  Committee  of  Seventy. "—His  Political  Mevation  and 
Fame  dating  from  this  Lucky  Event.— The  Sage  of  Grey- 
stone  a  Truly  Great  Man.— Attains  Marrellous  Success  by 
His  own  Industiy  and  Brain  Power.— He  not  only  Deserved 
Success  and  Respect,  but  Commanded  them.— How  his 
Large  Generosity  was  Manifested  in  Wm  Last  Wni  and 
Testament.— The  Attempt  to  Break  that  Precious  Public 
Document. 887 

[CHAPTER  TTTTV, 

OOIOCODOBB  VAZmmiBILT.— HOW  HIS  XAXXOTH  FOBTXJHS  WAS 
▲OCUMUIATED. 

Ferryman.— Steamboat  Owner.— Runs  a  Great  Commercial 
Fleet.— The  First  and  Greatest  of  Railroad  Kings.— The 
Harlem  <*  Comer.'*— Reorganization  of  N.  Y.  Central.— ^ow 
He  Milked  the  Street,  and  Euchred  His  Co-Speculators.— 
His  Fortune.— Its  Vast  Increase  by  Wm.  H 848 


CONTENTS.  XviL 

CHAPTER  XXXV. 

A  Builder  instead  of  a  Destroyer  of  Public  Values.— His  Re- 
spect for  Pablio  Opinion  on  the  Subject  of  Monopolies. — 
His  ftrst  Bxperienoe  in  Railroad  Hanagement. — ^How  he  Im« 
proved  tbe  Harlem  Railroad  Property.— His  great  Exeouttva 
Power  manifested  in  every  stage  of  advanoe  until  he  be* 
oame  President  of  the  Vanderbilt  Consolidated  System.— 
An  Indefatigable  Worker.— His  habit  of  Sorutinizing  Every 
Detail.— His  Prudent  Action  in  the  Great  Strike  of  Id??* 
and  its  Good  Results.— Settled  all  misunderstandings  by 
Peace  and  Arbitration.- Makes  Princely  Presents  to  hia 
Sisters.— The  Singular  Gratitude  of  a  Brother-in-Law.— 
How  he  Compromises  by  a  Gift  of  a  Million  with  Yoi 
Oomeel.— Gladstone's  Idea  of  the  Vanderbilt  Fortunes- 
Interview  of  Chaunoey  M.  Depew  with  the  G.  O.  M.  on 
the  subject.— The  great  Vanderbilt  Mansion  and  the  Cele- 
brated BalL— The  Immense  Picture  GaUery.— Mr.  Vander* 
bilt  Visits  some  of  the  Famous  Artists.- EQs  Love  of  Fast 
Horses.— A  Patron  of  Public  Institutions.— His  Gift  to  the 
Waiter  Students.- While  SensitiFC  to  Public  Opinion,  has  no 
fear  of  Threats  or  Blackmailers.— The  Public  be  Damned. 
—Explanation  of  the  rash  Expression.— The  Purchase  of 
'« Nickel  Plate.*'— His  Declining  Health  and  Last  Days.— 
His  WiU,  and  Wise  Method  of  Distributing  300  Millions.— 
EfTects  of  this  Colossal  Fortune  on  Public  Sentiment 855 

CHAPTER  XXXVI. 

*•  TOUKG  COBNEEL." 

The  Eccentricities  of  Cornelius  Jeremiah  Vanderbilt,  and  his 
Marvellous  Power  for  Borrowing  Money. — He  Exercises 
Wonderful  Influence  over  Greeley  and  Colfax. — A  Dinner  at 
the  dub  with  Young  "  Obmeel "  and  the  Famous ''  SmUer." 
— "  Comeel  **  tries  to  make  himself  Solid  with  Jay  Cooke.— 
The  Commodore  Refuses  to  Pay  Greeley.—'*  Who  the 
Devil  Asked  You?"  retorted  Greeley.— '*  Comeers"  mar- 
riage te  a  Charming  and  Devoted  Woman.— How  She 
Softened  the  Obdurate  Heart  of  her  Father-in-Law 875 

CHAPTER  XXXVIL 

THB  TOUNG  VAliTDEBBILTS  Ain>  THEIR  FOBTTJNBa. 

Remarkable  for  Physical  and  Intelleot  ual  Ability.— The  Mixture 
of  Races  and  the  Law  of  Selection.— The  Wonderful  Will  and 


XVflf,  CONTBKW. 


PAOS. 


the  Wife  I>l0Crtt>ix«fEm  of  Two  Hundred  MUUoni.— Tastei, 
Habits  and  Soolal  ProoliTities  of  the  Young  Y anderbilte.— 
The  Married  Relations  of  Some  of  Them.— Being  Happily 
Assorted  they  Make  Good  Husbands.— -Their  Property  Re- 
garded as  a  Great  Trust.— Their  Railrojid  System  and  its 
Great  Army  of  Employes.— The  Young  Men  Cautious  About 
Speculating,  and  Conseryative  ia  their  Expenses  Generally    867 

CHAPTER  XXXVIII, 

THB  KOTHBCHILDB. 

The  Beginning  of  the  Finanoial  Career  of  the  Great  House  of 
Rothschild.— The  Hessian  Blood  Money  was  the  Great 
Foundation  of  their  Fortune.  —How  the  Firm  of  the  Flye 
Original  Brothers  was  Constituted.— Nathan  the  Greatest 
Speculator  of  the  Family.— His  Career  in  Great  Britain,  and 
how  he  Misrepresented  the  Result  of  the  ''  Battle  of  Water 
loo**  for  Speculative  Purposes. — Creating  a  Panic  on  the 
London  Steele  Exchange. — Bxa  Terror  of  being  Assassinated. 
— ^His  Death  Causes  a  Panic  on  the  London  Exchange  and 

the  Bourses 897 

CHAPTER  XXXIX. 

TRAYEBS. 

The  [Jniqae  Character  of  Travers.— His  Versatile  Attainments. 
— Although  of  a  Genial  and  Humorous  Disposition,  He  was 
Always  a  Bear.— How  He  was  the  Means  of  Preserv- 
ing the  Commercial  Supremacy  of  Now  York. — He  Squashes 
the  English  Bravado,  and  Saves  the  Oratorical  Honor  of 
Our  Country.— Has  the  Oyster  Brains?— It  Must  have 
Brains,  for  it  Knows  Enough  to  Sh-sh-shut  Up.— The  Dog 
and  the  Rat— I  d-d-don't  want  to  Buy  the  D-d-dog ;  I  will 
Buy  the  R-r-rat.— Travers  on  the  Royal  Stand  at  the  Derby. 
— ^How  He  was  Euchred  by  the  Pool-Seller  —My  Proxy  in  a 
Speech  at  the  Union  Club.— If  You  are  a  S-s-self-made 
Man,  Wh-wh-y  the  D-devil  didn't  You  put  more  H-hair  on 
the  Top  of  Your  Head?— Other  Witticisms,  &c.— Death  of 
the  Great  Wit  and  Humorist,  and  some  of  His  Last  Witty 
Sayings 40? 

CHAPTER  XL. 

0HABLB8  F.   WOEBIBHOFFSB. 

The  Career  of  Charles  F.  WoerUhofTcr  and  the  Resultant  Effect 
upon  Succeeding  Generations.- The  Peculiar  Power  of  the 
Great  Leader  of  the  Bear  Element  in  Wall  Street  —His 
Methods  as  Compared  with  Those  of  Other   Wreclcers  of 


CONTENTS.  XIX. 

FAQB. 
Yalnea.— A  Bismarok  Idea  of  AggressiyeneM  the  Baling 
Blement  of  His  BusineM  Life.— His  Grand  Attack  on  the 
Vniard  PropertieB,  and  the   Consequence   Thereof.— His 
Benefactions  to  Faithful  Friends 425 

CHAPTER  XLL 

-WOMEN  AB  BFECULATORS. 

Wall  Street  no  Place  for  Women.— They  Lack  the  Mental 
Equipment.— False  Defenses  of  Feminine  Financiers. — The 
Claflin  Sisters  and  Commodore  Yanderbilt.— Fortune  and 
Reputation  Alike  Endangered • '  4S7 

CHAPTER  XLIL 

WBSTXBN  MHJJONAIBBS  IN  NEW  70BK. 

Eastward  the  Star  of  Wealth  and  the  Tide  of  Beauty  Take 
their  Course.— Inflaence  of  the  Fair  Sex  on  this  Tendency, 
and  Why. — ^New  York  the  Great  Magnet  of  the  Country. — 
Swinging  into  the  Tide  of  Fashion.— Oollis  P.  Huntington.— 
Hifl  Career  from  Penury  to  the  Possessor  of  Thirty  Mil* 
lions. — Leland  Stanford — ^flrst  a  Ijawyer  in  Albany,  and 
afterward  a  Speculator  on  the  PaoiflLo  Coast.— Hafl  Boiled 
Up  nearly  Forty  Millions*— D.  O.  Mills— an  Astute  and 
Bold  Financier. — Courage  and  Caution  Combined. — His 
Rapid  Rise  in  California- He  Makes  a  Fortune  by  Invest- 
ing in  Lake  Shore  Stock.— Princes  of  the  Pacific  Slope. — 
Maclmy,  Flood  and  Fair.— Their  Rise  and  Progress.- Wil* 
llam  Sharon  —A  Brief  Account  of  His  Great  Success.- Wm«. 
C.  Ralston  and  His  Daring  Speculations. — Begins  a  Poor 
Kew  York  Boy,  and  Makes  a  Fortune  in  Calif omia.— John 
P.  Jones.— His  Eyentful  Career  and  Political  ProgreiHi. 
— "  Lucky  **  Baldwin.— His  Business  Ability  and  Advance- 
ment. — ^Lucky  Speculations. — Amasses  Ten  or  fifteen  Mil- 
lions.—William  A.  Stewart.— DiscoTcrs  the  Eureka  Placer 
Diggings. — His  Success  as  a  Lawyer  and  in  Mining  Enter- 
prises.— James  Liclc. — One  of  the  Most  Eccentric  of  the 
(^ahfomia  Magnates.— Real  Estate  Speculations.— His  Be- 
quest to  the  Author  of  the  "  Star  Spangled  Banner.** — 
John  W,  Shaw,  Speculator  and  Lawyer  447 

CHAPTER  XLIIL 
RAIIiBOAD  TOYBSTMmrra. 
Vastness  of  our  Railroad  System.- Its  Cost.-^Ftfl  in  the  Rate 
of  Interest. — ^Tendency  to  a  Four  Per  Cent.  Rate  on  Ball- 


xxii.  CONTENTS. 

TAQM 
Coiifleqaeii06B.^How  Juries  are  Swayed  by  their  Sympa- 
thies.— A  Curiotu  MlBoarriage  of  Justioe  before  a  Referee. — 
The  Little  Game  of  the  Diamond  Broker 561 

CHAPTER  LII. 

NSW  TOBK  Afl  A  FmANCIAL  CSNTRB. 

TtB  Past,  Its  Present,  Its  Future.  —  Banking  Decadence.  — 
Growth  of  Interior  Centres. — Obstruction  from  the  Kational 
Bank  Laws.  —  Belief  Demanded.  —  Requirements  of  the 
Future 577 

CHAPTER  LIII. 

BABTH<)T7AEB  THBOBIES  XSH  WALL  6TREBT  APFAIBS. 

The  Shock  of  Erery  Calamity  Felt  in  Wall  Street. — ^Earthquakes 
the  only  Disasters  which  seem  to  Defy  the  Power  of  Pre- 
caution.—Becoming  a  Subject  of  Serious  Thought  for  Wall 
Street  Men  and  Business  Men.— The  Yolcanio  Theory  of 
Earthquakes.— Other  Causes  at  Work  Producing  these 
Terrific  Upheavals.— Why  Charleston  was  more  Severely 
Shaken  Up  than  New  York. — Why  the  Southern  Earth- 
quake did  not  Strike  Wall  Street  with  Great  Force. — Earth- 
quakes Likely  to  Become  the  Great  Disasters  of  the  Future*    589 

CHAPTBRLIV. 

AUaUST  BELMOXT. 

Th6  American  Representative  of  the  Rothschilds— Begins  Life 
in  the  Rothschilds'  House  in  Fr&nkf  ort. — Consul  Greneral  to 
Austria  and  Minister  to  the  Hague.— A  Great  Financier 
and  a  Connoisseur  in  Art ..••    ttS 

CHAPTER  LV. 

THB    BOCIAL.I8T    OBJIiCTIOKS  TO   THB    FBXSEKT    OBDEB    OF    BOCIXTT   » 

AMIEn&D. 

Increase  of  Population  and  the  Growing  Pressure  upon  the 
Means  of  Subsistence.— Education  and  Moral  Improvement 
tlie  True  Remedy  for  Existing  or  Threatened  Evils.— Errors 
of  Communism  and  Socialism.— How  Socialistic  Leaders 
and  Philosophers  Recognize  the  Truth.— Growth  of  Popu* 
lation  Does  Kot  Mean  Poverty 689 

CHAPTER  LVI. 

STOCK  EZCHAiraS  CSLEBBITIBS. 

How  Wall  Street  Bankers*  Nerves  are  Tried. — Fine  Humor, 
Jocular  DispositionSi  and  Scholarly  Taste  of  Operators. --^ 


cdNTEMT&  zziiL 

Gtoorge  Ooiild  as  a.  Futuie  Financial  Power.— American 
Nobility  Compared  with  European  Aristocracy.— -How  the 
Iritth  Oan  Assist  to  Purge  Qreat  Britain  of  her  Bilious 
Incubus  of  Nobility.— The  Natural  Nobility  of  Our  Own 
Country  and  Their  Destiny e03 

CHAPTER  LVII. 

A  LOOK  INTO  THE  FUTUBB. 

What  We  Are.— What  We  are  Preparing  For.— What  We  are 
Destined  to  Do  and  to  Become.— We  are  Entering  on  an 
Era  of  Seeming  Impossibilities.— Tet  the  Inconceivable 
WiU  be  Realized Wl 

CHAPTER  LVin. 

JAT  GOULD. 

His  Birth  and  Early  Education.-  Clerk  in  a  Country  Store- 
He  Invents  a  Mouse  Trap.— Becomes  a  Civil  Engineer  and 
Surveys  Delaware  County.— Writes  a  Book  and  Sells  it- 
Gets  a  Partnership  in  a  Pennsylvania  Tannery  and  soon 
Buys  his  Partner  Out.- He  comes  to  New  York  to  Sell  his 
Leather,  falls  in  Love  with  a  Leather  Merchant's  Daugh- 
ter and  Marries  her.— Settles  in  the  Metropolis  and  begins 
to  Deal  in  Railroads.— Buys  a  Bankrupt  Road  from  his 
Father-in-law,  Reorganizes  it  and  Sells  it  at  a  Consider- 
able Profit.- Henceforth  he  makes  his  Money  Dealing  in 
Railroads.— His  Method  of  Buying,  Reoganizlng  and  Sell- 
ing Out  at  a  Large  Profit.- How  he  Managed  Erie  in  con- 
nection with  Fisk  and  Drew.— His  Operations  on  Black 
Friday.— Checkmated  by  Commodore  Vanderbilt  and 
obliged  to  Settle.— He  makes  Millions  out  of  Wabash  and 
Kansas  &  Texas.- His  Venture  in  Union  Pacific— His 
Construction  Companies.— Organization  of  American 
Union  Telegraph,  and  his  Method  of  Absorbing  and  Oet- 
ting  Control  of  Western  Union.— The  Strike  of  the  Tel- 
egraphers and  his  Oreat  Encounter  with  the  Knights  of 
Labor  and  Trades  Unionist.— Gould's  First  Yachting 
Expedition.— An  exceedingly  Humorous  Story  of  his  early 
Experience  on  the  Water.— His  Status  as  a  Factor  in  Rail- 
road Management 619 

CHAPTER  LIX. 

MSN  OF  MABK. 

Gyms  W.  Field.— Russell  Sage.— Addison  Cammack.^The 
Jerome  Brothers.— Moses  Taylor.— Chauncey  M.  Depew.— 


ZZIV  CONTENTS^ 

Austin  Clorbin.— Anthony  J.  Drexel.— John  A.  Stewart.— 
Hon.  Levi  P.  Morton.— Philip  D.  Armour.-43tedman,  the 
Poet— Stephen  V.  White.— H.  Victor  Newoomb.— James 
M.  Brown.— Former  Giants  of  the  Street— Henry  Keep. 
—Anthony  W.Morse 669 

OHAPTEB  LX. 
James  B«  and  John  H.  Olews 683 

OHAPTEB  liXI. 
ABemarkable  Oliapter  of  History 685 

OHAPTEB  LXII. 
Booms  in  Wall  Street 700 

OHAPTEB  LXin« 
A  Qlimpse  into  the  Fature 716 

Oonclusion 7ai 


ILLUSTRATIONS. 


Henry  Clews 

MlUs^uUding . 

Jacob  Little 

Salmon  P.  Ohase 

John  Shennan 

E.  G.  Spauldlng 
•  New  York  Stock  Exchange  (exterior) 

Daniel  Drew 

Qeorge  I.  Seney         • 

Henry  ViUard 
'  Georgia  State  Bond    • 

Samuel  J.  Tilden  . 

Oommodore  Yanderbilt 

W.  H.  Vanderbilt . 

Cornelius  Yanderbilt  • 

W.  K.  Vanderbilt . 

P.  W.  Vanderbilt 

Three  Bothschilds 

Nathan  Bothsohild    • 

W.  R.  Travers 

C.  P.  Huntington 
Leland  Stanford   • 

D.  O.  Mills 
Charles  Crocker    • 
John  W.  Mackay 
James  C.  Flood     • 
James  G.  Fair  • 
Bobert  Garrett      . 
August  Belmont        • 
George  J.  Gould   • 
Jay  Gould 
Cyprus  W.  Field     . 
P.  D.  Armour  •  . 
Levi  P.  Morton     • 
J.  A.  Stewart    • 
A.  J.  Drexel 
Leonard  W.  Jerome  • 
Addison  Cammack 
Buseell  Sage    •         • 
Chaunoey  M.  Depew 
James  M.  Brown 
£.  C.  Stedman 
H.  Victor  Newcomb  . 
Moses  Taylor 
Hiomas  L.  James      • 
John  H.  Clews 
James  B.  Clews    -     • 
Boewell  P.  Flower 
J.  Plerpont  Morgan  • 
John  D.  Bockefeller 
William  Bockefeller  . 
HenryH.  Bogers 
John  D.  Arcbbold     • 


PAGK. 

Frontispiece 

.  18 

39 

.  73 

81 

.  87 

.  117 

175 

•  ao9 

266 

.  337 

346 

•  366 
387 

.  389 
398 

.  397 
401 

•  407 
461 

.  465 
467 

•  469 
461 

.  463 
465 

•  663 
•  .  696 

.  607 

619 
.  669 

661 
.  663 

665 
.  667 

669 
.  671 

673 
.  676 

677 
.  679 

681 
.  688 

686 
«  687 

689 
.  691 

693 

•  696 
695 


DEDICATION 

TO  THE 

VETERANS  OF  WALL  STREET, 

MOST  OF  WHOM   I   HAVE  KNOWN   PERSONALLY. 


*My  Pear  Friends  : 

I  have  attempted,  in  the  following  pages,  to  relate  in  a  simple 
and  comprehensive  manner,  without  any  aim  at  elaboration, 
the  leading  features  of  the  most  prominent  events  that  have 
come  within  the  sphere  of  my  personal  knowledge  and  experi- 
ence during  the  twenty-eight  years  of  my  busy  life  in  Wall 
street.  I  have  never  kept  a  diary  regularly,  but  have  been  oc- 
casionally in  the  habit  of  preserving  certain  memoranda  in  the 
form  of  letters,  and  a  few  scraps  from  the  newspapers  at  vari- 
ous times.  With  these  imperfect  mementoes,  I  have  revived 
my  recollection  to  dictate  to  my  stenographer  the  matter  which 
these  pages  contain,  in  a  somewhat  crude  form  and  unfinished 
style.  In  fact,  I  have  not  aimed  at  either  finish  or  effect,  not 
having  the  time,  but  have  simply  made  a  collection  of  important 
facts  in  my  own  experience  that  may  help  the  future  historian 
of  Wall  street  to  preserve  for  the  use,  knowledge  and  edifica- 
tion of  posterity  some  of  the  most  conspicuous  features  and 
events  in  the  history  of  the  place  that  is  yet  destined  to  be  the 
great  financial  centre  of  the  world. 

If  I  can  only  succeed,  out  of  all  the  poorly-arranged  material 
I  have  gathered,  in  furnishing  the  historian  of  the  future  with 
a  few  facts  for  a  portion  of  one  of  his  chapters,  I  shall  have 
some  claim  upon  the  gratitude  of  posterity. 

In  my  description  of  Drew,  Vanderbilt,  Gould,  Travers, 


PREFACE. 

Keene,  Conkling  and  others,  I  have  followed  the  advice  which 
Oliver  Cromwell  gave  his  portrait  painter :  '  *  Paint  me  as  I  am, '  * 
he  said.  *  *  If  you  leave  out  a  scar  or  a  wrinkle,  I  shall  not  pay 
you  a  farthing."  I  have  given  my  opinion  of  men  and  things 
also  without  any  superstitious  regard  for  the  proverb  &  mortuis 
nil  nisi  banum, 

I  have  also  endeavored  to  refrain  from  setting  down  aught  in 
malice. 

When  any  of  those  gentlemen  of  whom  I  have  had  occasion 
to  speak,  who  still  survive,  shall  write  a  book,  they  can  indulge 
in  the  same  privilege  with  my  name  that  I  have  done  with 
theirs,  whether  I  am  living  or  dead  at  the  time. 

I  shall  ask  no  indulgence  for  myself  that  I  don't  accord  to 
others. 

I  have  expressed  my  opinions  freely  from  a  Wall  street  point 
of  view,  from  the  standpoint  of  the  much-abused  operator  and 
•-  broker,  and  "bloated  bondholder." 

I  have  endeavored  to  enlighten  the  public  on  the  true  status 
of  Wall  street,  as  the  very  back-bone  of  the  country's  progress 
and  prosperity,  instead  of  misrepresenting  it  as  a  den  of  gam- 
*  biers,  according  to  the  ignorant  and  somewhat  popular  prqudice 
of  the  majority  who  have  attempted  to  write  or  speak  on  the 
subject.  This  feeling  has  been  largely  fostered  by  clergjrmen, 
'  on  hearsay  evidence,  as  well  as  by  the  practices  of  professional 
swindlers,  who  have  been  smuggled  into  Wall  street  from  time 
to  time,  but  who  have  no  legitimate  connection  therewith  any 
more  than  they  have  with  the  church,  which  repudiates  them 
AS  soon  as  it  discovers  them. 

In  fact,  the  great  aim  of  the  book  is  to  place  Wall  street  in 
its  true  light  before  the  eyes  of  the  world,  and  help  to  efface 
the  many  wrong  impressions  the  community  have  received 
regarding  the  method  of  doing  business  in  the  great  financial 
mart  to  which  the  settlement  of  accounts  in  all  our  industry, 
trade  and  commerce  naturally  converges. 


PR^FACB.  3 

I  liave  endeavored  to  correct  the  utterly  erroneous  impression 
that  prevails  outside  Wall  street,  in  regard  to  the  nature  of 
speculation,  showing  that  it  is  virtually  a  great  productive  force 
in  our  political  and  social  economy,  and  that  without  it  railroad 
enterprise  and  other  branches  of  industrial  development  which 
have  so  largely  increased  the  wealth  of  the  nation,  wotdd  have 
made  but  slow  progress. 

To  preserve  and  inculcate  these  ideas  by  putting  them  in 
what  I  hope  may  be  a  permanent  form,  is  another  object  of 
publishing  this  volume.  I  know  you  can  S3anpathize  with  me 
in  tiiis  effort  to  set  public  opinion  right,  as  many  of  you  have 
long  been  making  strenuous  endeavors  after  success  in  the 
same  direction. 

To  put  the  whole  matter,  then,  into  one  short  and  comprehen- 
sive clause,  my  cardinal  object  in  this  book  is  to  give  the 
general  public  a  clearer  insight  of  the  reputed  mystery  and 
true  inwardness  of  Wall  street  affairs. 

In  my  relation  of  certain  reminiscences  of  Wall  street,  and 
in  discussing  the  checkered  career  of  certain  brokers,  operators 
and  politicians,  I  have  endeavored  to  be  guided  by  a  historic 
aphorism  of  Lord  Macaulay : 

"No past  event  has  any  intrinsic  importance,"  says  the 
£^reat  essa3dst,   litterateur,  historian  and  statesman.      "The' 
knowledge  of  it  is  valuable,''  he  adds,  '^  only  as  it  leads  us  to 
form  just  calculations  with  respect  to  the  future." 

In  the  samples  of  my  experience  which  I  have  given  in  this 
book  I  have  aimed,  to  some  extent,  at  this  rendition  of  the 
noble  purposes  of  history  and  biography  in  their  philosophic 
and  scientific  application  of  teaching  by  example.  If  I  have 
£illen  &r  short  of  this  high  ideal  of  the  British  Essayist,  as  I 
humbly  feel  that  I  have,  I  must  throw  myself  on  the  kind  in- 
dulgence of  the  readers,  and  ask  them  to  take  the  will  for  the 
deed.  For  the  presentation  of  the  facts  themselves  I  crave  no 
indulgence.    They  are  gems  worthy  of  preservation  in  the  light 


4  PRBPACE. 

of  fhe  above  definition.    I  only  submit  that  the  setting  might 
be  much  better. 

My  chapters  on  politics  may  be  considered  foreign  to  the 
main  issue,  but  as  many  of  the  events  therein  described  were 
intimately  connected  with  my  business  career,  I  think  they  are 
not  much  of  a  digression* 

Hknry  Ci,«ws. 


MILLS     BUILDING.    (Opposite  N,  y,  stock  ExCMANatJ    - 
No8.  13  AND  15  Broad  Street, 

OCOUPIED  BY  THE 

BANKING  HOUSE  OF  HENRY  CLEWS  8c  CO. 


TWENTY-EIGHT  YEARS 

WALL  STREET. 


BY  HENRY  CLEWS. 


CHAPTER    I. 

MT  DEBUT  IK  WAIiL  8TBEET. 

MT  advent  in  Wall  Street  was  on  the  heels  of  the  panic  of 
1857.  That  panic  was  known  as  the  "  Western  bliz- 
sard."  It  was  entitled  to  the  name,  as  its  destractive  power 
and  chilling  effects  had  surpassed  all  other  financial  gales 
that  had  swept  over  Wall  Street.  The  first  serious  result 
of  its  fatal  force  was  the  failure  of  the  Ohio  Life  and  Trust 
Company,  a  concern  of  gigantic  dimensions  in  those  days. 

The  Company  had  an  office  in  Wall  Street,  and  on  the 
announcement  of  the  collapse,  business  became  completely 
paralyzed.  This  failure  was  immediately  followed  by  the 
suspension  of  many  large  firms  that  had  withstood  the  shock 
of  all  ordinary  collisions  and  had  successfully  weathered 
many  financial  storms. 

The  panic  was  due  in  part  to  excessive  importations  of 
foreign  goods,  and  also  to  the  rapi^l  construction  of  rail- 
roads, to  a  large  extent  on  borrowed  capital.  There  were 
other  contributing  causes.  The  crops  were  bad  that  year, 
and  the  country  was  unable  to  pay  for  its  imports  in  pro- 
duce, and  coin  was  brought  to  ihe  exporting  point  In 
October,  the  New  York  City  banks  suspended  payments, 
and  their  example  was  followed  throughout  the  countij. 


6  MY  DKBinr  IN  WAIX  STRKET. 

Bank  crests  had  been  unduly  expanded  everywhere,  and 
the  time  had  naturally  arrived  for  contraction.  It  came 
with  a  bound,  and  financial  disaster  spread  like  a  whirl- 
wind, becoming  general. 

The  Stock  Exchange  had  been  a  moderately  growing  con* 
cern  for  the  ten  years  previous  to  this  calamity,  and  the 
securities  there  dealt  in  had  been  rapidly  accumulating  in 
numbet  and  appreciating  in  value.  Its  members  were 
wealthy  and  conservative,  with  a  strong  infusion  of  Knicker- 
bocker blood,  an  admixture  of  the  Southern  element  and  a 
sprinkling  of  Englishmen  and  other  foreigners. 

The  effect  of  the  crisis  on  the  majority  of  Stock  Exchange 
properties  was  ruinous.  Prices  fell  fifty  per  cent,  in  a  few 
days,  and  a  large  proportion  of  the  Board  of  Brokers  were 
obliged  to  go  into  involuntary  liquidation.  There  was  a 
great  shaking  up  all  around. 

Then  came  the  work  of  rehabilitation  and  reorganization. 
Confidence  gradually  returned.  The  Young  Eepublic  had 
great  recuperative  powers,  and  they  were  thoroughly  ex< 
erted  in  the  work  of  resuming  business.  Much  of  the  old 
conservative  element  had  fallen  in  the  general  upheaval,  to 
rise  no  more.  This  element  was  eliminated,  and  its  place 
supplied  by  better  materia],  and  with  young  blood,  and  in 
December  the  banks  resumed  business. 

This  panic  and  its  immediate  results  created  an  entire 
revolution  in  the  methods  of  doing  business  in  Wall  Street. 
Prior  to  this  time,  the  antique  element  had  ruled  in  things 
financial,  speculative  and  commercial.  This  crisis  sounded 
the  death  knell  of  old  fogyism  in  the  ^'  street."  A  younger 
race  of  financiers  arose  and  filled  the  places  of  the  old  con- 
servative leaders. 

The  change  was  a  fine  exemplification  of  the  survival  of 
the  fittest,  and  proved  that  there  was  a  law  of  natural  selec- 
tion in  financial  affairs  that  superseded  old  conservatism 
and  sealed  its  doom. 

Until  that  time,  the  general  idea  prevailed  that  those  eu* 
gaged  in  financial  matters  must  be  people  well  advanced  in 


IJNWORT^Y  PRBJUDICKS  OP  ANCIENT  WAI.I,  STRICBT.       / 

years,  even  to  the  verge  of  iDfirmity.  It  is  the  same  idea 
that  has  been  handed  down,  as  if  by  divine  right,  from  old 
world  prejudices,  especially  in  the  learned  professions. 
Kg  doctor  was  considered  a  safe  prescriber  unless  his  hoary 
locks,  bald  head  and  wrinkled  brow  proclaimed  that  he 
had  almost  passed  the  period  of  exercising  human  sym- 
pathy. The  same  rule  of  judgment  was  applied  to  the 
lawyer  and  the  clergyman. 

These  unworthy  prejudices  were  fostered  by  the  character 
of  the  Government  of  the  old  country,  and  nurtured  by  the 
surroundings  of  the  venerable  monarchies  of  Europe,  where 
they  exist  largely  even  to  the  present  day.  So  tenacious  of 
life  are  these  old-fashioned  ideas,  that  many  of  them  were 
found  in  full  vigor,  dominating  Wall  Street  affairs  up  to 
the  crash  of  1857,  fostering  the  antique  element  and  choking 
off  salutary  enterprise. 

Hence  the  process  of  decay  of  these  archaic  notions  and 
our  gradual  development. 

This  struggle  for  new  life  in  Wall  Street  was  not  success- 
fully developed  without  a  serious  effort  to  attain  it.  The 
old  potentates  of  the  street  iought  hard  to  prolong  their 
obstructive  power,  and  their  tenacious  vitality  was  hard  to 
smother,  reminding  one  of  the  nine  lives  attributed  to  the 
feline  species.  The  efforts  of  the  young  and  enterprising 
men  io  gain  an  entrance  to  the  Stock  Exchange  were  re 
garded  by  the  older  members  as  an  impertinent  intrusion  on 
the  natural  rights  of  the  senior  members.  It  was  next  to 
impossible  for  a  young  man,  without  powerful  and  wealthy 
patrons,  to  obtain  membership  in  the  New  York  Stock  Ex- 
change at  the  time  of  which  I  speak.. 

The  old  fellows  were  united  together  in  a  mutual  admira- 
tion league,  and  fought  the  young  men  tooth  and  nail, 
oontesting  every  inch  of  groimd  when  a  young  man  sought 
entrance  to  their  sacred  circle. 

The  idea  then  struck  me  that  there  was  a  chance  for  young 
men  to  come  to  the  front  in  Wall  Street.    I  was  then  en 
gaged  in  the  dry  goods  importing  trade,  in  which  I  received 


8  MY  DEBUT  IN  WAI.I<  STRKET. 

mj  early  training.  I  had  been  kept  out  of  the  Exchange  for 
several  years  by  the  methods  to  which  I  have  alluded.  My 
(ate  was  similar  to  that  of  many  others.  It  was  only  by  an 
enterprising  effort,  and  by  changing  the  base  of  my  opera- 
tionS;*  that  I  finally  succeeded. 

The  commissions  charged  at  that  time  were  an  eighth  of 
one  per  cent,  for  baying  and  selling,  respectively. 

After  numerous  efforts  to  gain  admission  to  the  Exchan^^e, 
without  success,  I  finally  made  up  my  mind  to  force  it.  I  at 
once  inserted  an  advertisement  in  the  newspapers,  and  pro- 
posed to  buy  and  sell  stocks  at  a  sixteenth  of  one  per  cent, 
each  way.  This  was  such  a  bombshell  in  the  camp  of  these 
old  fogies  that  they  were  almost  paralyzed.  What  rendered 
it  more  distasteful  to  them  still  was  the  fact  that,  while  they 
lost  customers,  I  steadily  gained  them.  The  result  was  that 
they  felt  compelled  to  admit  me  to  their  ranks,  so  that  I 
could  be  kept  amenable  to  their  rules  and  do  business  only 
in  their  own  conventional  fashion.  My  membership  cost  me* 
in  all,  initiation  fee  and  other  trifling  expenses  in  connec' 
tion  therewith,  $500.  This  presents  a  striking  contrast  to 
the  recent  price  of  a  seat,  $35,000,  but  though  this  differ- 
ence seems  very  large,  yet  the  changes  in  every  other  re* 
spect  connected  with  Wall  Street  affairs  have  been  in  sim- 
ilar proportion.  Among  some  of  the  old  members  of  that 
day  were  Jacob  Little,  John  Ward,  David  Glarkson  and 
others  whose  names  may  be  found  in  the  archives  of  the 
Stock  Exchange. 

As  an  instance  of  the  way  in  which  membership  was  then 
appreciated,  it  may  be  mentioned  that  speculators  fre* 
quently  offered  $100  a  week,  or  ten  times  the  cost  of  mem- 
bership, for  the  privilege  of  listening  at  the  keyhole  during 
the  calls. 

Although  the  prostration  growing  out  of  this  panic  was 
very  great  and  of  long  continuance  throughout  the  country, 
general  confidence  being  shaken  to  its  very  f  oundation,  yet, 
on  the  whole,  it  was  a  great  gain,  and  marked  an  era  of 
financial  and  speculative  progress.    It  was  the  chief  oauM 


YOUNG  AlCBRICA'S  SP«CUI,ATIVK  ADVKNT. 

in  drawing  ont  the  young  element  in  the  business  of  Wall 
Street,  which  might  have  lain  dormant  for  a  much  longer 
period  without  this  sudden  and  somewhat  rude  awakening. 
It  not  only  brought  Young  America  to  the  front  in  specula- 
tion, commerce  and  general  business,  but  it  imparted  an 
impetus  of  genuine  enterprise  to  every  department  of  trade 
and  industry,  from  the  good  effects  of  which  the  country 
has  never  since  receded. 

This  new  element,  emanating  from  the  throes  of  one  of  the 
greatest  business  revolutions  that  any  country  has  ever  ex- 
perienced, has  continued  to  grow  and  thrive  with  marvellous 
rapidity.  It  is  now  getting  so  large  that  the  Exchange  will 
soon  require  a  whole  block  instead  of  a  basement  as  at  its 
origin  for  its  head-quarters.  The  Governing  Committee  of  the 
Stock  Exchange  are  now  looking  forward  to  arrangements 
for  this  consummation.  How  the  ancient  fathers  of  my  early 
days  in  Wall  Street  would  have  been  shocked  at  the  bare 
idea  of  such  amazing  progress ! 

It  is  not  the  least  singular  phase  of  this  evolution  in  Wall 
Street,  that  .the  youthful  element  to  which  I  have  referred 
stands  alone  as  compared  with  the  progress  achieved  by  the 
same  class  of  men  in  any  other  nation.  In  America  only 
does  the  youthful  element  predominate  in  financial  affairs ; 
and  results  have  justified  the  selection,  which  perhaps  in  no 
other  nation  is  possible.  Thanks  to  the  freedom  of  our  Re- 
publican institutions,  which,  in  spite  of  some  individual 
deductions  and  the  occasional  obstructions  of  ^'  crankdom,'' 
make  way  for  that  progress,  in  the  wake  of  which  the  other 
nations  of  the  world  are  emulous  to  follow. 

The  Exchange  was  at  this  time  situated  on  William  street 
bdtween  Beaver  street  and  Exchange  Place.  That  place  is 
rich  in  speculative  reminiscences.  It  was  there  that  Jacob 
Little  made  and  lost  his  nine  fortunes.  It  was  there  that 
Anthony  Morse,  the  lightning  calculator,  operated.  Hei 
could  foot  up  four  columns  of  figures  as  easily  as  the  or- 
dinary accountant  could  run  up  OTje.  He  had  been  a  clerk* 
and  having  saved  seven  hundred  dollars  by  close  economy* 


10  MY  DKBUT  IN  WAil,  STREET. 

began  to  deal  in  stocks.  His  career  at  that  time  was  more 
marvellous  even  than  that  of  Eeene  of  a  recent  date.  Morse 
made  a  fortune  of  several  millions  in  a  year,  and  became 
bankrupt  during  the  same  period,  without  any  available 
assets  to  speak  of.  It  was  all  honorably  lost,  however. 
There  was  no  Ferdinand  Ward  game  connected  with  it. 

Youthful  speculators  had  not  then  learned  the  "crooked" 
methods  of  the  young  idea  of  modern  times.  It  was  there 
also  that  Daniel  Drew  began  to  accumulate  those  millions 
that  afterward  were  subject  to  such  a  rude  scattering.  It 
was  there  that  the  celebrated  ''  corners "  in  Kock  Island, 
Prarie  du  Chien  and  Harlem  were  concocted.  It  was  there 
that  the  wealth  was  accumulated  which  built  twenty  thous- 
and miles  of  Western  railroads,  causing  many  millions  of 
acres,  that  would  otherwise  have  been  a  wilderness,  to  blos- 
som like  the  rose,  in  spite  of  Mr.  Powderly's  opinion  that 
no  material  good  can  come  out  of  speculation,  and  thus  add- 
ing immense  wealth  in  real  estate  to  the  country,  besides 
conferring  incalculable  benefits  on  trade  and  commerce,  and 
preparing  comfortable  homes  not  only  for  the  pioneers  and 
surplus  population  of  the  Eastern  States,  but  a  teeming  soil 
that  has  attracted  the  down-trodden  of  every  nation  to  come 
imd  partake  of  the  blessings  of  freedom  and  prosperity. 

One  of  Jacob  Little's  speculative  ventures  has  been  ren- 
dered historically  famous  through  the  rule  of  limitation  of 
sixty  days  for  option  contracts.  The  necessity  for  this  limit 
was  brought  about  by  one  of  his  celebrated  attempts  to 
manipulate  the  market.  He  was  one  of  the  most  prominent 
speculators  in  Erie  in  the  early  days  of  Drew's  transactions 
with  that  property  and  its  stocks.  Mr.  Little  had  been 
selling  large  blocks  of  Erie  on  seller's  option,  to  run  from 
six  to  twelve  months.  This  was  in  the  early  history  of 
*^  comers,"  before  the  method  of  managing  them  scientif- 
ically had  been  fully  developed  and  while  "blind  pools" 
were  yet  in  embryo. 

The  leading  members  of  the  Erie  Board  formed  a  pool 
to  ^^  corner"  Mr.  Little,  and  ran  Erie  shares  up  to  a  consid- 


'THB  FIRST  OF  GREAT  ''CORNERS.**  H 

erable  height.  They  imagined'  that  he  was  in  blissful 
ignorance  of  their  purpose,  and  had  everything  ananged 
for  a  coup  d*etat  wliich  was  to  reach  its  crisis  at  two  o'clock 
on  a  certain  day,  when  Little  was  to  be  completely  over- 
whelmed and  hopelessly  ruined.  An  hour  prior  to  the  time 
appointed  by  the  clique  for  his  disaster  he  ;walked  into  the 
Erie  office,  opened  a  bag- filled  with  convertible  bonds,  and 
requested  an  exchange  of  stock  for  the  same.  He  had  pur- 
chased  the  bonds  in  London  and  had  them  safely  locked  up 
for  the  emergency,  which  he  promptly  met  on  its  arrival. 
He  got  the  stock,  settled  his  contracts,  broke  the  "  comer/* 
and  came  out  triumphantly. 

The  option  limit  of  sixty  days  was  afterwards  adopted  in 
order  to  prevent  similar  triumphs  in  manipulation  on  the 
"short"  side. 

As  will  be  illustrated  more  fully  in  subsequent  chapters, 
Mr.  Little's  convertible  bond  trick  was  used  with  signal 
advantage  by  his  speculative'  successors  in  Erie,  who  prac- 
tically demonstrated  on  several  occasions  that  there  were 
millions  in  it. 

Mr.  Little  was  generous  and  liberal  to  a  fault  with  his 
brother  speculators  who  had  experienced  misfortune.  He 
used  to  say  that  he  could  paper  his  private  office  with  notes 
he  had  forgiven  to  the  members  of  the  Board.  He  was  also 
remarkable  for  his  great  memory.  He  could  easily-  re- 
member all  the  operations  he  made  in  the  course  of  a  day 
without  making  a  note  or  a  mistake. 

Like  Drew,  he  was  careless  in  his  attire,  wearing  a  hat 
like  that  of  a  farmer,  and  not  a  very  prosperous  one,  but  he 
had  no  compeer  in  his  day  at  calculating  ahead  in  a  specu- 
lative venture. 


''■■iii'  fflt     ■'■■^■/ J; 


JACOB   LITTLE. 


CHAPTER     II. 

WALL  STREET  AS  A  CIVILIZER. 

Clebioal  Obliquity  of  Judgment  About  Wall  Stbeei 
Affairs.— The  Slanderous  Eloquence  of  Talmaqb. — 
Wall  Street  a  Great  Distributor,  as  Exhibited  in 
THE  Clearino  House  Transaohons. — Popular  Delu- 
sions in  Regard  to  Speculation.— What  Our  Revolu- 
tionary Sires  Advised  About  Improving  the  Indus- 
trial Arts,  Showing  the  Striking  Contrast  Between 
Their  Views  and  the  Way  Lord  Salisbury  Wanted 
to  Fix  Things  for  This  Country. 

THE  dense  ignorance  displayed  by  men  outside  of  Wall 
Street,  in  regard  to  the  business  of  that  great  mart,  is- 
almost  incredible.  Even  the  most  intelligent  men  I  meet 
in  other  professions  and  walks  of  life  have  the  most  utterly 
crude  and  un<1efined  notions  about  the  methods  of  doing 
business  at  the  Stock  Exchange.  Many  good  and  pious 
clergymen  are  under  the  impression  that  Wall  Street  is  a 
name  for  the  sum  total  of  all  kinds  of  infamy,  and  solemnly 
exhort  their  devoted  flocks  not  to  touch  the  unclean 
thing. 

Clerical  obliquity  of  judgment  is  not  quite  so  bad,  nor 
popular  ignorance  so  dense  in  this  respect,  as  it  has 
been,  but  there  is  a  large  field  for  improvement  yet.  The 
business  activity  of  the  country,  and  the  spirit  of  inter- 
course being  so  rapidly  infused  throughout  all  ranks  of  the 
community,  have  demonstrated  that  this  antipathy  to  Wall 
Street  has  been  simply  an  unworthy  prejudice,  in  spite  of 
the  high  moral  authority  from  which  it  has  emanated. 

I  don't  wish  to  throw  any  aspersion  on  the  noble  purposes 
of  the  clergy.  The  end  they  have  been  seeking  has  been  good, 
but  it  has  not  always  jull^tified  the  means  employed.  These 
good  men  have  unwittingly  misrepresented  Wall  Street,  to 
the  great  detriment  of  the  business  interests  of  the  country. 


14  WAI.I,  STRKKT   AS  A  CIVH^IZKR. 

There  is  no  excuse,  however,  for  a  man  in  this  enlightened 
age,  who  professes  to  be  a  Shepherd  in  Israel  and  a  spiritual 
leader  of  the  people,  to  remain  ignorant  of  an  important 
fact,  or  \o  continue  to  see  that  fact  through  a  false  medium, 
when  he  has  the  opportunity  of  coming  into  Wall  Street  and 
seeing  for  himself.  He  has  no  right  to  set  himself  up  as  a 
censor,  a  public  detractor,  and  a  public  libeller  upon  a  set 
of  men  and  merchants  who  are  the  bone  and  sinew  of  the 
commercial  and  industrial  interests  and  prosperity  of  the 
country.  It  is  not  only  a  personal  wrong  but  a  publio 
injury. 

The  Bey.  T.  De  Witt  Talmage  has  perhaps  done  more 
than  any  other  clergyman  to  make  our  speculators,  invest- 
ors and  business  men  ridiculous  in  the  eyes  of  the  rest  of 
the  community  and  in  the  estimation  of  John  Bull,  in  whose 
dominion  his  so-called  sermons  are  extensively  read.  Tal« 
mage  has  employed  his  flashing  wit  and  mountebank 
eloquence  to  bring  financial  disgrace  on  the  business 
methods  of  the  whole  country  by  the  manner  in  which  ho 
has  ignorantly  vilified  Wall  Street. 

He  can  go  to  the  Cremorne  Garden,  Billy  McQlory's, 
Harry  Hill's  and  other  places  of  dubious  reputation,  and 
make  himself  acquainted  with  the  real  condition  of  things 
there. 

How  far  he  has  penetrated  into  the  green  rooms  and  be- 
hind the  scenes  in  these  places  it  is  not  my  business  to  know, 
but  why  should  he  not  treat  Wall  Street  as  fairly,  where 
everything  is  open  to  inspection,  as  he  does  these  dens  of 
vice,  where  midnight  scenes  of  villainous  revelry  and  reckless 
dissipation  reign  supreme?  Why  does  he  misrepresent 
Wall  Street  without  knowing  anything  about  it )  He  can 
come  here  and  go  wherever  he  wishes  without  a  bodyguard 
of  detectives  or  fear  of  molestation.  Why  is  he  so  par- 
ticular about  doing  justice  to  the  brothel  and  the  gaming 
den,  while  he  airs  Lis  ludicrous  eloquence  to  the  highest  pitch 
to  falsify  the  respectable  business  methods  of  Wall  Street? 


BASB  CAI^UMNIKS  OF  TAI<MAGK  AND  OTHKM.  16, 

I  recoUect  the  time  that  men  in  the  higher  walks  of  life, 
and  among  the  higher  classes  (if  I  may  use  the  expression, 
in  opposition  to  the  opinion  of  the  New  York  Sun^  whose 
editor  maintains  that  we  have  no  classes  in  this  country) 
would  have  been  ashamed  to  be  seen  in  "Wall  Street.  Now, 
men  in  the  same  sphere  are  proud  of  the  distLnction,  both 
socially  and  financially.  In  fact  Wall  Street  has  become 
a  necessity  as  a  healthy  stimulant  to  the  rest  of  the  busineBr> 
of  the  country.  Everything  looks  to  this^  centre  as  an  index 
of  its  prosperity.  It  moves  the  money  that  controls  the 
affairs  of  the  world. 

Take  the  Clearing  House,  for  example,  with  its  50  billions 
of  transactions  annually.  All  but  a  fraction  of  this  wonder- 
ful wealth,  compared  with  which  the  stupendous  pile*  of 
Croesus  was  a  mere  pittance,  passes  through  Wall  Street, 
continually  adding  to  its  mighty  power.  This  great  power, 
in  comparison  with  which  the  influence  of  monarchies  is 
weak,  is  not,  like  the  riches  of  these,  concentrated  chiefly  on 
itself.  It  is  imparted  to  all  the  industries  and  productive 
forces  of  the  country.  Wall  Street  is  a  great  distributor. 
It  is  also  universal  in  its  benevolent  effects,  practically  un- 
limited by  either  creed  or  geography. 

It  has  taken  greater  advantage,  for  the  general  good,  of 
scientific  discovery  than  all  the  scientific  societies  combined. 
Wherever  the  electric  wires  have  penetrated  the  Wall  Street 
broker  has  followed.  The  members  of  the  Stock  Exchange 
are,  through  the  power  of  electricity,  in  closer  sympathy 
with  the  great  heart  of  civilized  humanity  than  all  the  mis- 
sionaries and  philanthropic  societies  in  the  world.  Tliey  are 
the  great  cosmopolitans  of  the  age.  In  practical  sympathy 
they  outshine  the  most  devoted  efforts  of  tlie  benevolent 
associations  of  half  the  continent.  They  havo^  tbe  means  to 
do  it^  and  this  comes  chiefly  from  being  practical,  and  from 
their  strong  antipathy  as  a  body  to  cant  and  hypocrisy. 

There  are  many  popular  delusions  outside  the  ranks  of 
the  clergy  connected  with  the  effort  to  form  a  correct  esti- 


16  WAhh  STRBST  AS  A  CIVII^IZKR. 

mate  of  Wall  Street  affairs  by  the  general  public.  It  is  a 
popular  delusion  that  it  is  a  place  where  people  who  are 
in  the  "ring"  take  something  for  nothing.  No  idea  could 
be  further  wide  of  the  mark  in  regard  to  Wall  Street  men 
as  a  class,  however  tiue  it  may  be  of  some  individual 
instances,  as  in  other  departments  of  business.  Wall  Street 
gives  full  value  for  everything  it  receives,  and  the  country 
at  large  is  deeply  its  debtor.  Some  people  may  think  this 
a  paradox,  but  there  is  nothing  more  easily  demonstrated  to 
those  who  have  observed  the  commercial  and  industrial 
progress  of  the  country  and  the  age. 

Wall  Street  has  furnished  the  money  that  has  set  the 
wheels  of  industry  in  motion  over  the  vast  continent,  and 
in  one  century  has  brought  us  abreast,  in  the  industrial  arts, 
of  countries  that  had  from  one  to  two  thousand  years  the 
start  of  us.  In  this  respect  it  has  assisted  nobly  to  carry 
out  the  ideas  of  the  fathers  of  the  Constitution.  Washing* 
ton,  Jefferson,  Madison,  Franklin  and  Hamilton  laid  down 
the  doctrine  that  it  would  be  a  betrayal  of  the  interests  of 
posterity  to  limit  the  productive  energies  of  this  country  to 
raw  material.  With  our  present  experience  we  may  think 
it  strange  that  this  question  should  ever  have  been  debated, 
but  it  was,  even  after  the  old  tyranny  had  been  obliged  to 
loosen  its  grasp  on  the  struggling  enterprise  of  the  yoxmg 
Bepublic.  Our  old  revolutionary  sires  deserve  credit  for 
their  foresight,  but  what  would  have  been  the  fate  of  their 
commercial  philosophy  if  Wall  Street  had  not  supplied  the 
sinews  of  war  to  cope  with  the  forces  of  nature,  to  work  our 
mines  and  build  our  railroads,  and  through  these  and  other 
means,  to  attract  the  teeming  population  from  every  clime 
to  cultivate  our  virgin  soil  and  develop  our  wonderful  in* 
dustries  and  resources  ? 

Apropos  of  the  above  observations,  I  may  add  that  dur- 
ing the  debate  in  the  British  Parliament,  on  the  recognition 
of  the  Confederacy,  the  great  manufacturing  power  in  our 
industrial,  financial  and  commercial  progress  was  clearly 


JKAIX>US  "jingoes"   AS  CIVII«IZBltS.  17 

■shibited  and  thoroughly  appreciated  by  British  statesmen* 
It  was  made  one  of  the  strongest  argnments,  too,  by  some  of 
the  representatives  of  our  jealous  and  envious  cousins  on 
the  other  side  of  the  ^'  pond/'  wlijr  (rrcat  Britain  should  re^ 
cognize  and  aid  the  South  in  the  war.  Lord  Salisbury,  then 
Lord  Robert  Cecil,  at  present  the  leader  of  the  Tory  party 
in  England,  and  the  advocate  of  twenty  years'  coercion  for 
Ireland,  was  one  of  the  bitterest  foes  of  the  Union,  chiefly 
on  this  account.  He  was  one  of  the  Yice-Presidents  of  the 
^  Southern  Independent  Association,"  for  the  promotion  of 
the  cause  of  the  Bebellion,  and  for  supplying  the  Gonfed* 
erates  with  money  and  arms,  and  for  the  ultimate  object  of 
founding  an  empire  of  slavery  on  this  continent 

In  his  speech  then,  on  the  Southern  blockade,  the  future 
Lord  Salisbury  made  the  f  ollowiDg  touching  allusion  to  our 
dangerous  prosperity  on  this  side :  "  The  plain  matter  of 
fact  is,  as  every  one  who  watches  the  current  of  history 
must  know,  that  the  Northern  States  of  America  never  can 
be  our  sure  friends,  for  this  simple  reason— not  merely 
because  the  newspapers  write  at  each  other,  or  that  there 
are  prejudices  on  both  sides,  but  because  we  are  rivals^, 
rivals  politically,  rivals  commercially.  We  aspire  to  the 
same  position.  We  both  aspire  to  the  government  of  the 
seas.  We  are  both  manufacturing  people,  and  in  every  port 
as  well  as  at  every  court  we  are  rivals  to  each  other.  With 
respect  to  the  Southern  States  the  case  is  entirely  reversed. 
The  population  are  an  agricultural  people.  They  furnish 
the  raw  material  of  our  industry,  and  they  consume  the 
products  which  we  manufacture  from  it.  With  them,  there- 
fore, every  interest  must  lead  us  to  cultivate  friendly  rela- 
tions, and  we  have  seen  that  when  the  war  began  they  at 

,once  recurred  to  England  as  their  natural  ally." 

Thus  we  see  how  anxious  Great  Britain  was  to  take  the 

.  place  which  the  North  has  reserved  for  itself ,  and  so  proudly 

*' maintained  in  commerce  and  industry. 

The  great  coming  man,  Salisbury,  wanted  to  reduce  us  all 


18  VfXLU  STRi:iST  AS  A  CIVII.IZBR. 

to  the  position  of  hewers  of  wood,  drawers  of  water  and 
planters  and  pickers  of  cotton,  for  the  special  accommodation 
of  Great  Britain,  as  the  mighty  centre  of  the  world's  manu- 
factoring  industries.  This  would  have  given  a  set-back  to 
our  civilization,  causing  us  to  make  a  retrogressive  move  to 
the  dark  ages.  Since  then  we  have  afforded  this  noble  lord 
and  his  nation  ample  proof  that  we  are  verj  far  advanced 
in  the  manufacturing  arts  ourselves,  and  that  in  many  things 
we  are  far  ahead  of  England,  and  they  are  no  doubt  greatly 
surprised  that  the  arrangement  by  which  England  was  to 
have  all  the  profit  and  America  all  the  hard  work,  has  not 
been  carried  out. 

In  this  wonderful  development  of  the  industrial  arts, 
"Wall  Street  money,  enterprise  and  speculation  have  played 
by  far  the  most  conspicuous  and  progressive  part,  thus  en- 
abling us,  in  little  more  than  two  decades,  to  outstrip  the  old 
nations  that  were  so  anxious  to  enslave  us,  in  spite  of  the 
fact  that  they  had  centuries  upon  centuries  the  start  of  us. 
It  must  be  galling  to  some  of  these  people  that  we  are  now 
the  most  available  candidates  for  the  commercial  and  in- 
dustrial supremacy  of  the  world,  and  we  have  attained  this 
position,  in  a  great  measure,  through  the  instrumentality  of 
WaU  Street  as  a  civilizer. 


CHAPTER    III. 

HOW  TO  MAKE  MONEY  IN  WALL  STREET. 

How  TO  TAKE  Advantage  of  Periodical  Panics  in  Obdeh 
TO  Make  Money. — Wholesome  Advice  to  Young  Speo- 
TJLATOBS. — Alleged  "Points'*  from  Big  Speculators 
End  in  Loss  or  Disaster. — Professional  Advice  thk 
Surest  and  Cheapest,  and  How  and  Where  to  Ob- 
tain it. 

But  few  gain  sufficient  experience  in  Wall  Street  to  com* 
mand  success  until  they  reacli  that  period  of  life  in  which 
they  have  one  foot  in  the  grave.  When  this  time  comes 
these  old  veterans  of  the  Street  usually  spend  long  intervals 
of  repose  at  their  comfortable  homes,  and  in  times  of  panic, 
which  recur  sometimes  oftener  than  once  a  year,  these  old 
fellows  will  be  seen  in  Wall  Street,  hobbling  down  on  their 
canes  to  their  brokers'  offices. 

Then  they  always  buy  good  stocks  to  the  extent  of  their 
bank  balances,  which  have  been  permitted  to  accumulate  for 
just  such  an  emergency.  The  panic  usually  rages  until 
enough  of  these  cash  purchases  of  stock  is  made  to  afford 
a  big  ^rake  in."  When  the  panic  has  spent  its  force,  these 
old  fellows,  who  have  been  resting  judiciously  on  their  oars 
in  expectation  of  the  inevitable  event,  which  usually  returns 
with  the  regularity  of  the  seasons,  quickly  realize,  deposit 
their  profits  with  their  bankers,  or  the  overplus  thereof, 
after  purchasing  more  real  estate  that  is  on  the  up  grade, 
for  permanent  investment,  and  retire  for  another  season  to 
the  quietude  of  their  splendid  homes  and  the  bosoms  of  their 
happy  families. 

If  young  men  had  only  the  patience  to  watch  the  specu- 
lative  signs  of  the  times,  as  manifested  in  the  periodical 
egress  of  these  old  prophetic  speculators  from  their  shells 
of  security,  they  would  make  more  money  at  these  intervals 


20  HOW  TO  MAKE  MONEY  IN  WAI^L  STREET. 

than  by  following  up  the  slippery  "tips^*  of  the  professional 
^^ pointers"  of  the  Stock  Exchange  all  the  year  round,  and 
they  would  feel  no  necessily  for  hanging  at  the  coat  tailsi 
around  the  hotels,  of  those  specious  frauds,  who  pretend  to 
be  deep  in  the  councils  of  the  big  operators  and  of  all  the 
new  "pools''  in  process  of  formation.  I  say  to  the  young 
speculators,  therefore,  watch  the  ominous  visits  to  the  Street 
of  these  old  men.  They  are  as  certain  to  be  seen  on  the  eve 
of  a  panic  as  spiders  creeping  stealthily  and  noiselessly 
from  their  cobwebs  just  before  rain.  If  you  only  wait  to 
see  them  purchase,  then  put  up  a  fair  margin  for  yourselyes, 
keep  out  of  the  "bucket  shops"  as  well  [as  the  "sample 
rooms,''  and  only  visit  Delmonico's  for  light  lunch  in  busi- 
ness hours,  you  can  hardly  fail  to  realize  handsome  profits 
on  your  ventures. 

The  habit  of  following  points  which  are  supposed  to 
emanate  from  the  big  operators,  nearly  always  ends  in  loss 
and  son;Letimes  in  disaster  to  young  speculators.  The  lattek* 
become  slavish  in  their  methods  of  thought,  having  their 
minds  entirely  subjected  to  others,  who  are  presumed  to  do 
the  thinking  for  them,  and  they  consequently  fail  to  cultivate 
the  self-reliance  that  is  indispensable  to  the  success  of  any 
kind  of  business. 

To  the  question  often  put,  especially  by  men  outside  of 

.Wall  Street,  ''How  can  I  make  money  in  Wall  Street?" 

there  is  probably  no  better  answer  than  the  one  given  by 

old  Meyer  Bothschild  to  a  person  who  asked  him  a  similar 

question.    He  said,  "  I  buys  '  sheep '  and  sells  '  dear.' " 

Those  who  follow  this  method  always  succeed.  There 
has  hardly  been  a  year  within  my  recollection,  going  back 
nearly  thirty  years,  when  there  have  not  been  two  or  three 
squalls  in  "  the  Street,"  during  the  year,  when  it  was  possi- 
ble to  purchase  stocks  below  their  intrinsic  value.  The 
squall  usually  passes  over  in  a  few  days,  and  then  the  lucky 
buyers  of  stocks  at  panic  prices  come  in  for  their  profito 
ranging  from  fiv€  to  ten  per  cent,  on  the  entire  venture. 


HOW  TO  IBLnAlJZn  FIFTY  PBH  CBNT.  21 

The  qnestion  of  making  money,  then,  becomes  a  mere  mat- 
ter of  calculation,  depending  on  the  number  of  the  squalls 
that  may  occur  during  any  particular  year. 

If  the  venture  is  made  at  the  right  time^-at  the  lucky 
moment,  so  to  speak — and  each  successive  venture  is  for- 
tunate, as  happens  often  to  those  who  use  their  judgment  in 
the  best  way,  it  is  possible  to  realize  a  net  gain  of  fifty  per 
cent,  per  annum  on  the  aggregate  of  the  year's  investments. 

In  this  way  it  is  easy  to  see  how  the  rich  will  get  richer, 
and  the  poor  poorer. 

Sometimes  men  make  money  in  Wall  Street  by  strange 
turns  in  their  fortunes  that  appear  like  having  been  gov- 
erned by  a  special  Providence,  and'this  sometimes  occurs 
when  men  appear  to  be  utter  wrecks. 

One  of  the  strangest  examples  of  this  kind,  in  my  per- 
sonal experience,  occurred  in  the  summer  of  1886. 

A  man  called  at  my  office  utterly  broken  down  in  spirit, 
but  with  a  few  hundred  dollars  left  out  of  many  thousands 
that  he  had  possessed  a  few  months  previously. 

*'  I  read  your  letter  of  the  third  of  July,"  he  said,  "  and 
had  some  mind  to  act  on  the  advice  which  it  contained,  but 
was  unfortunately  dissuaded  therefrom  by  reading  an  article 
in  a  city  paper  by  a  very  able  writer,  who  had  got  the  bear- 
ish mania,  then  prevalent,  on  the  brain,  and  who,  I  am  in- 
formed, is  now,  like  myself,  almost  ruined." 

^^I  hardly  .know  what  to  do,"  he  continued.  ^'I  have  a 
few  hundred  dollars  left,  which  I  will  leave  with  you,  and 
you  can  use  your  pleasure  with  it.  I  am  going  out  to  the 
country  for  the  remainder  of  the  summer.  I  will  leave  my 
address  with  you,  and,  if  there  is  any  good  result,  you  can 
let  me  know  of  it.  I  really  don't  hope  for  much,  and  of 
course,  I  need  hardly  tell  you  that,  in  the  event  of  being 
^  wiped  out,'  you  need  not  apply  to  me  for  more  margin. 
Let  this  go  with  the  rest,"  he  added,  in  a  despairing  tone. 

The  man  walked  sadly  out,  and  I  did  not  see  him  again 
for  months.    I  invested  his  pittance  on  the  carte  hlanohe 


22  HOW  TO  MAKE  MONBY  IN  WALI,  STREET. 

order  which  he  had  given  me,  to  the  best  of  mj  judgment. 
The  resnlt  was  favorable,  and  his  account  began  to  accumu- 
late. He  was  duly  advised,  according  to  our  business 
methods,  of  his  good  luck,  but  I  did  not  hear  anything  from 
him  personally  for  several  months. 

One  day,  a  portly  gentleman,  with  rosy  health  beaming 
in  his  face,  stepped  into  my  private  office,  and  was  quite 
profuse  in  his  thanks  to  me. 

*^  Well,"  I  said ;  '^  I  have  but  a  hazy  recolledtion  of  your 
acquaintance,  if  I  know  you  at  all." 

"Don't  you  recollect,"  he  said,  "  the  time  I  went  to  the 
country  in  summer,  when  I  told  you  my  case,  and  how  I  had 
been  unfortunate  in  speculation?" 

'^  And  are  you  the  man  who  went  to  the  ooimtry  in  despair 
to  die !"  I  asked,  in  surprise  at  his  changed  appearance. 

"  I  am,"  he  replied,  "  and  I  owe  the  wonderful  change 
which  you  now  see  to  your  timely  advice.  I  staked  almost 
my  last  dollar  on  that  counsel,  and  now  I  am  comfortably 
fixed  through  your  management  of  the  small  fund  placed  at 
your  disposal." 

Now,  this  was  an  example  of  a  man  who  did  make  money 
simply  by  taking  the  advice  that  was  freely  tendered  him. 

There  are  others  who  lose,  in  spite  of  all  that  the  most 
honest  judgment  can  do  to  prevent  them. 

Some  men,  when  they  have  money,  are  so  fearfully  perverse 
that  all  attempts  to  get  them  to  do  the  right  thing  only  have 
the  opposite  effect,  and  they  prefer  to  follow  every  wild 
rumor. 

One  day,  for  instance,  a  man  gave  me  an  order  to  buy  a 
thousand  shares  of  Erie  without  limit.  The  order  was  exe« 
cuted  at  94  I  had  no  sooner  bought  it  than  the  stock  went 
down. 

My  customer  returned  in  a  short  time  and  ordered  the 
stock  to  be  sold.    It  was  then  92 i. 

In  half  an  hour  afterwards  he  returned  again  and  ordered 
it  bought  back  ac^ain,  without  any  limit  as  before.  It  waa 
bought  back  at  95. 


SHUN  D^I^USIVl^  RUMOR  MONGERS.  23 

After  consulting  with  other  friends  for  some  time  he 
ordered  it  sold  again.     The  market  by  that  time  was  90. 

He  then  came  back  the  fifth  time,  and  said :  *'I  first  saw 
one  man  who  told  me  to  buy,  and  then  another  who  told  me 
to  sell.  I  understand  one  is  called  a  'bull '  and  the  other  a 
^  bear.'  About  these  names  I  don't  know  much,  but  I  do 
know  now  that  I  am  a jackass." 

This  affords  a  good  illustration  of  the  way  the  average 
speculator  is  managed  and  perplexed  in  Wall  Street.  There 
is  a  means  of  avoiding  such  a  peck  of  trouble,  however,  if 
he  would  only  take  a  little  wholesome  advice,  wait  patiently 
for  a  proper  opportunity,  and  not  rush  headlong  to  purchase 
on  the  "tips"  of  the  delusive  rumor  mongers.  He  would 
then  begin  to  learn  how  to  make  money  in  Wall  Street. 

As  I  have  pointed  out  in  another  chapter,  speculation  is 
a  business  that  must  be  studied  as  a  specialty,  and  though 
it  is  popularly  believed  that  any  man  who  has  money  can 
speculate,  yet  the  ordinary  man,  without  special  training  in 
the'business,  is  liable  to  make  as  great  a  mistake  in  this 
attempt,  as  the  man  who  thinks  he  can  act  as  his  own  law- 
yer,  and  who  is  said  ^to  have  a  fool  for  a  client." 

The  common  delusion,  that  eicpert  knowledge  is  not  re- 
quired in  speculation,  has  wrecked  many  fortunes  and  repu- 
tations in  Wall  Street,  and  is  still  very  influential  in  its 
pernicious  and  illusory  achievements. 

When  a  man  wants  correct  advice  in  law  he  goes  to  a 
professional  lawyer  in  good  standing,  one  who  has  made  a 
reputation  in  the  courts,  and  who  has  afforded  other  evi- 
dence to  the  public  that  he  is  thoroughly  reliable.  No  man 
of  average  common  sense  would  trust  a  case  in  law  to  a  bar 
room  ^^ bummer"  who  would  assert  that  he  was  well  ac- 
quainted with  Aaron  J.  Yanderpoel,  Boscoe  Gonkling,  and 
Wm.  M.  Evarts,  and  had  got  all  the  inside  ^*tips"  from 
these  legal  lights  on  the  law  relating  to  the  case  in  question. 
The  fellow  would  be  laughed  at,  and,  in  all  probability,  if 
he  persisted  in  this  kind  of  talk,  would  be  handed  over  to 


2i  HOW  ro  MAKn  MON:eY  IN  WAIX  STREET. 

the  city  physician  to  be  examined  in  relation  to  his  sanity*, 
but  in  Wall  Street  affairs  men  can  every  day  make  similar 
pretensions  and  pass  for  embodiments  of  speculative  wis- 
dom. 

If  speculators  are  caught  and  fleeced  by  following  such 
counsel,  the  professional  brokers  who  are  members  of  the 
Stock  Exchange,  are  no  more  to  blame  than  the  eminent 
lawyers  to  whom  I  have  referred  would  be  for  the  upsliot 
of  a  case  that  had  been  taken  into  court  on  the  advice  which 
some  irresponsible  person  had  pretended  to  receive  from 
these  celebrities  of  the  New  Yor. .  Bar. 

Professional  advice  in  Wall  Street,  as  in  legal  affairs,  is 
worth  paying  for,  and  costs  far  less  in  the  end  than  the 
cheap  ^^ points"  that  are  distributed  profusely  around  the 
Street,  thick  as  autumn  leaves  in  Yallombrosa,  and  which 
only  allure  the  innocent  speculator  to  put  his  money  where 
he  is  almost  certain  to  lose  it. 

My  advice  to  speculators  who  wish  to  make  money  in 
Wall  Street,  therefore,  is  to  ignore  the  counsel  of  the  bar- 
room "tippers"  and  "tipplers,"  turn  their  backs  on  "bucket 
shops,''  and  when  they  want  "  points  *^  to  purchase,  let  them  ' 
go  to  those  who  have  established  a  reputation  for  giving 
sound  advice  in  such  matters,  and  who  have  ample  resources 
for  furnishing  correct  information  on  financial  topics,  as 
well  as  a  personal  interest  in  making  all  the  money  they 
can  for  their  clients. 

There  is  no  difficulty  in  finding  out  such  reliable  men 
and  firms  in  the  vicinity  of  Wall  Street,  if  speculators  will 
only  read  the  newspapers,  or  make  inquiry  of  the  first 
messenger  boy  they  may  happen  to  meet. 


OHAPTEB    IV. 

IMPORTANCE  OF  BUSINESS  TRAINING. 

BoKB  ov  Independent  Gentlemen  make  tebt  bad  Clebks.-- 
They  become  Unpopular  with  the  Otheb  Boys,  and 
MUST  Eventually  Go. — ^Night  Dancing  and  Late  Sup- 
pebs  don't  contbilutb  to  Business  Success. — Give 
Mebit  its  Tbue  Eewabd.  -  Keeping  Wobthless  Pee- 

TENSE  IN  ITS  TbUB  POSITION. —BUNNING  PUBLIO  OFFICES 

ON  Business  Pbinciple& — A  Piece  of   Gratuitous 

AdYIOE  FOB  THE  AdMINISTBATION.— A   OOLLEGE  OOUBSE 

not  in  general  calculated  to  make  a  orood  business 
Man. -The  Question  op  Adaptability  Impobtant.— 
Childben  should  be  Encoubaged  in  the  Occupation 

FOB   WHIOH    they  SHOW  A  PBEFEBENCE. — THOUGHTS    ON 

THE  Abmy  and  Navy. 

IHAYE  usually  found  that  tho  sons  of  independent  gen- 
tlemen, who  have  great  expectations,  make  very  poor 
clerks  and  don't  develope  into  Good  "Wall  Street  men. 

Their  expectations  seem  to  dwarf  the  ability  that  might 
develope  under  the  more  favorable  auspices  of  being 
obliged  to  paddle  their  own  canoe.  Like  tho  light  under  a 
bushel,  referred  to  in  the  Good  Book,  their  brilliant  qualities 
are  obscured  and  circumscribed  by  the  paternal  protection 
in  prospect.  They  have  not  a  sufficient  incentive  to  work, 
because  they  know  that  all  they  require  for  their  natural 
wants  will  fall  easily  into  their  laps.  The  motives,  there- 
fore, which  usually  develope  the  greatest  mental  qualities 
are  absent  and  the  qualities  themselves  lie  dormant, 
and  frequently  decay  like  poppy  seeds  in  their  seed 
vessels,  without  being  productive  of  the  fruits  which  are  the 
result  of  industrial  habits  and  the  desire  for  acquisition. 
Such  young  men,  instead  of  being  a  help  to  an  office  into 
which  they  happen  to  be  thrust,  often  through  friendship  and 
favoritism,  are  a  great  hindrance  and  a  stumbling  block  in 
the  path  to  promotion  of  other  young  men. 


2G  IMPORTANCB  OF  BUSINESS  TRAINING. 

After  manj  ineffeotual  attempts  to  reform  and  remodel 
them,  they  have  generally  to  be  discarded,  as  the  drone  bees 
are  ejected  from  the  rest  of  the  industrious  hive.  And  they 
usually  become  as  unpopular  with  the  other  boys  as  the 
drone  does  with  his  comrades  who  make  the  honey  and  will 
not  suffer  the  idle  fellow  to  feast  on  the  fruits  of  their  labor. 

Young  men  who  have  nothing  but  their  own  resources  to 
depend  upon  will  be  found  far  more  meritorious  than  this 
higher  class.  There  are  some  eminent  exceptions,  but  it 
takes  a  large  amount  of  good  sense  to  counteract  the  conceit 
instilled  by  the  idea  of  financial  independence  by  birth. 

The  latter  are  more  liable  to  youthful  and  enervat- 
ing excesses,  as  they  have  the  means  to  indulge  in  nocturnal 
amusements  that  are  not  conducive  either  to  clear  brains  or 
active  habits  during  the  day. 

Night  dancing  and  late  suppers,  with  some  of  their  social 
concomitants,  when  habitually  indulged,  don't  contribute  to 
business  success.  I  know  how  this  is  myself,  and  therefore 
speak  feelingly;  but  I  don't  lay  myself  open  tathe  charge  of 
egotism  when  I  say  that  I  have  never  permitted  the  habit  to 
get  the  better  of  me. 

I  am  not  setting  myself  up  as  a  censor  of  other  men's 
habits,  nor  attempting  to  utter  mere  moral  or  religious 
oant.  I  am  simply  discussing  the  question  from  a  scientifio 
and  physical  standpoint,  and  I  say  that  these  habits  don't 
contribute  to  business  success,  but,  on  the  contrary,  form  one 
of  the  greatest  hindrances  to  it.  They  make. any  man,  no 
matter  how  strong  he  may  be,  physically  unfit  for  ordinary 
business.  These  **  recreations  "  up  town,  however  attractive 
and  delightful  they  may  b6,  don't  fit  a  young  man  for  business 
down  town.  The  line  must  be  drawn  somewhere.  Let  us 
draw  it,  say,  at  Fourteenth  street. 

There  has  been  much  said  and  written  about  Civil  Service 
Beform  by  various  authorities  from  President  Cleveland 
down  to  Dorman  B.  Eaton  and  the  Custom  House  officials. 
The  great  rule  to  follow  is  to  give  merit  its  true  reward 


A  HINT  TO  GOVKR^MENT  OFFICIAI^.  27 

This  draws  out  the  best  efforts  of  the  recipient,  where  real 
merit  is  found,  and  keeps  the  drones  beyond  the  pale  of 
competition.  It  develops  the  qualities  that  are  worthy  of 
being  encouraged,  and  keeps  worthless  pretense  in  its 
true  position.  This  is  the  rule  I  have  adhered  to  in  my 
office,  and  it  works  like  a  charm.  My  office,  though  not 
quite  so  large  as  the  Custom  House  or  Post  Office  of  New 
York  city,  I  think  affords  a  fair  test  of  what  could  be  done 
on  the  largest  possible  scale. 

If  public  office  is  a  public  trust,  and  we  have  the  high 
authority  of  President  Cleveland  and  of  the  New  York 
Tribune  for  saying  so,  I  think  it  can  be  administered  on  the 
same  business  principles  that  have  contributed  to  the  success 
of  some  of  the  largest  and  most  successful  firms  in  the  world; 
and  among  these,  I  think  I  can  say  without  egotism,  as  the 
matter  is  capable  of  demonstration,  that  the  house  of  which 
I  have  the  honor  to  be  the  head,  stands  second  to  none  in 
the  attributes  to  which  I  have  referred. 

The  reader  may  say,  "  This  is  a  puff  for  his  own  house." 
Well,  even  so.  If  it  is,  it  is  true,  and  will  bear  the  strictest 
investigation.  So  I  don't  see  why  I  should  feign  any  false 
modes^  about  the  assertion.  It  would  be  sheer  affectation 
to  do  so. 

Collegiate  education  is  a  great  question  for  debate  among 
literary  men,  journalists  and  business  men,  as  to  its  utility 
in  forming  the  character  of  youth  for  business  life.  As  the 
college  curriculum  and  training  stand  at  present,  the  ordi- 
nary course  is  not  in  general  calculated  to  make  a  good 
business  man.  It  is  erroneously  regarded  by  some  people 
as  a  kind  of  substitute  for  business  training  in  the  earlier 
years  of  a  young  man's  life.  There  could  be  no  greater 
mistake  in  the  beginning  of  a  business  career.  It  is  in 
many  instances  not  only  a  hindrance,  but  absolutely  fatal  to 
success.  To  put  a  young  man  in  an  office  fresh  fromcollegej 
on  a  level  with  one  of  the  same  age  who  has  been  training 
in  business  methods  since  he  left  the  common  school,  ia 
damoraliziiig  to  both. 


28  IMPORTANCE  OF  BUSIKKSS  TRAINING. 

I  wish  to  have  it  difitmctlj  understood  that  in  the  fore* 
going  remarks  I  have  not  made  any  attempt  to  cast  the 
slightest  reflection  on  the  personal  attributes  and  abilities 
of  any  young  man  in  any  line  of  life  or  status  of  society, 
and  I  make  this  statement  perfectly  independent  of  the 
mere  social  incident  as  to  whether  the  young  man  in  ques- 
tion may  part  his  hair  in  the  middle  or  assume  other  dudish 
airs.  That  is  his  business,  and  I  have  no  right  to  trench  on 
the  sacred  precincts  of  his  individuality,  nor  do  I  mean  to 
do  so.  As  a  rule  I  stick  to  my  own  business.  I  simply  in- 
tend to  imply  that  when  a  dude  happens  to  come  into  my 
office,  where  I  think  he  mil  find  the  most  88sthetic  appoint- 
ments in  the  way  of  furniture  and  the  business  arrange- 
ments, if  he  should,  upon  thus  entering  into  my  employment^ 
come  to  the  sudden  conclusion  that  this  sBstheticism  of 
office  furnishing  implied  any  plea  for  idleness  or  assumption 
of  airs  on  his  part,  he  would  very  soon  experience  a  rude 
awakening  from  his  charmed  lethargy  of  conceit,  and  if  he 
were  not  prepared  to  undertake  in  a  calm  and  appreciative 
tone  of  mind  the  first  lessons  of  business  industry,  I  would 
politely  bid  him  an  affectionate  adieu,  and  on  parting  tell 
him  very  kindly  that  though  his  great  natural  gifts  might  be 
thoroughly  adapted  to  shine  in  another  sphere  of  life,  he 
was  both  by  nature  and  education  totally  unfitted  to  play 
the  most  humble  part  in  a  business  career,  such  as  that  of 
which  my  firm  affords  a  fair  and  most  successful  example. 

The  same  remarks  will  apply  to  any  other  young  man 
who  does  not  appreciate  his  vocation,  and  try  to  know  him- 
self as  old  Seneca  taught. 

I  don't  insidiously  single  out  the  dude  for  an  odious  com- 
parison. The  remark  will  apply  just  as  appropriately  to 
the  young  man  who  is  better  fitted  for  a  blacksmith  or  a 
farmer,  or  perhaps  a  preacher,  than  a  business  man  or  a 
financier. 

*•  All  blacksmiths,"  says  the  Bev.  Bobert  Oollyer,  **  can't 
become  preachers,  and  it  would  be  bad  for  the  world  if  they 


FOI,U)W  REPERKNCES.  29 

did/'  There  is  a  good  deal  of  philosophy  in  the  remark  of 
this  popular  preacher,  and  quite  to  the  point  on  the  subject 
which  I  am  now  attempting  to  handle. 

In  fact,  there  is  nothing  in  this  world  would  grieve  me 
more  than  the  prospect  of  being  obliged  to  refloet  in  future 
years  on  the  fact  that  I  had  been  instrumental  in  keeping  a 
young  man's  ^^  nose  to  the  grind-stone,"  so  to  speak,  in 
my  office,  where  he  would  make  a  very  poor  employee  with- 
out the  chance  of  attaining  average  success,  w4ile  in  a  ca- 
reer for  which  nature  and  education  had  fitted  him,  he 
might  not  only  be  happy  and  successful,  but  make  his  mark 
&s  a  star  of  the  first  magnitude. 

When  vie^'ed  in  this  light,  the  question  of  adaptability 
becomes  a  serious  affair,  for  young  men  starting  in  life,  and 
for  their  parents,  who  often  sacrifice  a  great  deal  of  their 
worldly  comforts  and  peace  of  mind  to  launch  their  fond 
offspring. 

The  best  thing  for  parents  to  do,  then,  as  a  general  rule, 
is  to  encourage  their  children  in  that  occupation  or  avoca- 
tion for  which  they  show  a  decided  preference.  Whatever 
young  men  do  voluntarily,  as  a  rule,  they  do  well.  This  is 
especially  illustrated  in  the  lives  of  youths  who  exhibit  an 
inclination  for  a  military  pursuit,  which  offers  the  least  in- 
ducement to  human  avarice,  and  attracts  the  mind  through 
the  more  sentimental  motives  of  patriotism  and  the  love  of 
glory  Bub  in  our  present  civilization  there  are  national 
feelings  that  must  be  inculcated  and  encouraged. 

I  entertained  at  my  Newport  residence,  during  the  past 
Summer,  the  officers  of  the  23d  Brooklyn  regiment  of  the 
National  Guard  of  the  State  of  New  York,  because  I  felt  it 
a  matter  of  duty  to  do  so,  as  well  as  a  privilege  to  do  my 
part  in  contributing  to  the  encouragement  of  the  young  men 
who  have  taken  it  upon  themselves  voluntarily  to  be  mem- 
bers of  that  militia  company. 

These  you:ig  men  visit  Newport  at  very  great  cost  to 
each  one,  as  they  themselves  have  to  contribute  to  the  ex- 


80  IMPORTANCE  OF  BUSINESS  TRAINING. 

penscs  attending  the  trip,  and  their  presence  in  Newport  in 
gjiug  through,  regularly  each  daj,  their  drills  and  parades 
with  as  much  precision  and  correctness  as  though  they  all 
had  been  graduates  of  West  Point,  all  well  equipped  and 
well  attired  in  plain  but  most  becoming  military  apparel, 
made  a  most  interesting  scene  to  witness,  contributing  not 
a  little  to  the  amusement  and  gratification  of  the  residents 
of  that  famous  watering  place.  They  are  becoming  dis- 
ciplined to  be  soldiers.  They  are  mostly  young  men  of 
good  families,  of  profitable  occupation,  many  in  business 
for  themselves  and  others  trustworthy  clerks  in  the  employ 
of  others,  with  good  salaries ;  consequently  they  make  a 
great  sacrifice  to  themselves  in  the  time  that  they  thus  be- 
stow  upon  such  excursions  as  well  as  ordinarily  in  the  drills 
which  they  have  to  go  through,  when  at  home,  once  or  twice 
each  week,  frequently  oftener.  What  is  the  incentive  in 
this  personal  sacrifice  on  their  part  ? 

The  answer  is,  the  spirit  of  patriotism,  and  that  really  is 
what  it  means,  for  in  the  event  of  a  foreign  invasion  or  in- 
ternal disturbances,  their  services  are  pledged  to  the  State 
and  to  the  Oovernment.  They  are  therefore  liable  to 
receive  at  a  moment's  notice  a  call  from  any  quarter  to  go 
to  the  front  with  their  lives  in  their  hands,  leaving  their  fam- 
ilies, their  wives,  their  children,  their  old  parents,  their 
business,  leaving  all  and  requiring  a  farewell  at  their  de- 
parture, as  the  dangers  they  may  have  to  encounter  are 
threatening  in  character  and,  not  unlikely,  may  prevent 
their  ever  returning  alive. 

Taking  this  view  of  the  subject,  therefore,  these  young 
men  should  ba  encouraged  by  all  who  have  the  means  and 
power  at  their  hand,  and  to  the  full  extent  of  their  ability. 
Whenever  they  go  on  missions  of  State  defense,  it  is 
only  just  and  fair  that  they  should  be  received  as  soldiers, 
and  accorded  the  honors  which  soldiers  merit.  They  are 
entitled  to  it  to  a  greater  extent  than  the  regular  soldiers  of 
the  United  States  standing  army.    These  men  do  not  make 


NATIONAI^  DBFBNDERS.  81 

one-half  the  sacrifice  that  the  young  militia  do,  nor  do  they 
make  any  better  Holdiers  on  the  battle-field. 

These  militia  soldiers,  when  they  go  to  the  front,  leave 
behind  them  enough,  in  the  way  of  property,  good  homes 
and  families,  to  make  them  more  enthusiastic  to  fight  for 
victory,  than  the  regular  army,  so  that  they  may  return  to 
their  own  domestic  circles  with  the  laurels  that  victory 
gives. 

In  this  country  we  do  not  desire  standing  armies,  for 
we  do  not  wish  the  expense  entailed  upon  the  Govern- 
ment to  sustain  them,  but  we  do  want  the  young  men 
encouraged  to  do  military  duty  and  be  prepared  for  action 
when  it  comes.  The  only  money,  therefore,  that  the  Gov- 
ernment need  expend  to  protect  our  continent  is  a  good 
militia  force  in  each  of  the  various  States,  to  be  well  dis- 
ciplined. In  that  case  our  country  will  be  prepared  to 
meet  foreign  foes. 

I  am  also  opposed  to  a  large  standing  naval  force,  not 
only  on  account  of  the  expense,  but  also  because  our  coun- 
try is  less  likely  to  get  into  trouble  with  other  nations, 
providing  we  have  no  ships  to  send  into  their  waters. 
Kaval  officers  are  often  very  impetuous  and  chivalrous  and 
sometimes  fancy  they  have  grievances  to  repel,  which  are 
largely  imaginary,  and  with  them  it  is^a  word  and  a  blow. 

With  a  thoroughly  equipped  and  largely  efficient  naval 
force,  we  might  thus  not  unlikely  be  driven  into  a  conflict 
without  cause  or  reason  with  some  friendly  power.  Our 
country  is  happily  located  far  in  the  distance  from  the 
quarrelling  nations  of  Europe,  and  our  being  so  removed  is 
our  protection.  It  is  not  desirable  to  be  brought  in  closer 
contact  by  sending  our  naval  vessels  into  their  waters,  to  be 
under  their  fire.  The  policy  of  this  nation  is  peace  and 
good  will  to  all  mankind.  What  gain  would  it  be  to 
America  to  have  a  conflict  with  England,  even  though  we 
should  conquer  in  the  end,  or  France,  or  Germany,  or 
Bussia  t    We  couldn't  tow  any  of  these  countries  to  ours, 


82  IMPORTANCE  OP  BUSINESS  TRAINING. 

nor  could  we  hold  on  to  our -conquest  as  a  permanent  pos- 
session ;  neither  should  we  desire  to  do  so,  as  we  have  terri- 
tory enough  in  the  38  States  which  comprise  the  United 
States  of  America,  already,  without  desiring  to  annex  that 
of  any  of  our  far  off  neighbors. 

And  if  an  emergency  should  arise  in  what  has  been  called 
the  last  resort  of  kings,  namely,  the  necessity  of  going  to 
war,  it  would  be  found  that  the  importance  of  this  training 
in  the  special  business  of  war  could  then  be  appreciated  at 
its  true  value. 

The  importance  of  business  training,  that  is,  training  for 
the  special  occupation  in  which  a  man's  energies  are  to  be 
developed,  is  always  made  apparent  when  those  energies  are 
put  to  the  test  of  competition,  or  are  called  upon  to  put 
forth  an  extraordinary  effort.  If  a  man  has  not  got  the 
special  training,  whether  in  the  army  or  in  civil  life,  he  is 
never  reliable  in  an  emergency,  but  is  like  that  weak  and 
vacillating  friend  which  old  Solomon  compared  to  a  broken 
ankle. 

I  say,  therefore,  to  the  young  man  of  the  rising  genera- 
tion, while  you  don't  relax  any  effort  to  procure  all  the 
education  that  yoar  time  and  means  will  afford,  above  all 
things,  don't  neglect  che  paramount  importance  of  business 
training. 


OHAPTEB    V. 

PERSONAL  HONOR  OF  WALL  STREET  MEN 

Bbxaoh  of  Tbubt  Babs  Amonq  Wall  Street  Mbn. — ^The 
English  Clergyman's  Notion  of  Talmaoe's  Tirades 
Against  Wall  Street. — Adventurous  Thievej  Have 
No  Sympathizers  Among  Wall  Street  Operators. — 
Early  Training  Necessary  for  Success  in  Specula- 
tion.— Ferdinand  Ward's  Evil  Genius. — A  Great 
Business  can  only  be  Built  up  on  Honest  Principles. — 
Great  Generals  Make  Poor  Financiers,  Through 
Want  of  Early  Training.— Practical  Business  is 
THE  Best  College. 

THEBE  is  no  place  in  the  world  where  people  are  trusted 
so  mach  on  faith  as  they  are  in  Wall  Sheet ;  not  even 
in  the  Church. 

The  bosiness  is  one  of  mutual  confidence^  and  each  day 
there  are  nmneroos  opportunities  for  men  to  secure  many 
millions  of  dollars  of  other  people's  money  and  take  them* 
selyes  safely  off  to  that  Paradise  of  defaulters  and  abscond- 
ers over  the  Border.  Yet  instances  of  this  nature  are  com- 
paratiyely  rare  when  we  consider  the  large  number  of  trans- 
actions and  the  immense  amount  of  money  handled  in  Wall 
Street. 

The  men  of  Wall  Street  haye,  therefore,  become  world- 
renowned  for  straightforward  dealing,  and  have  thus  ob- 
tained the  first  position  as  leading  spirits  in  the  speculative 
affairs  not  hvlj  of  their  own  country,  but  of  the  entire  world. 
Wherever  the  speculative  spirit  of  the  age  has  obtained  a 
foothold,  there  Wall  Street  is  a  household  word,  and  Wall 
Street  men  are  held  in  the  highest  esteem.  It  has  become 
a  tenn  familiar  to  the  ears  of  those  even  who  know  nothing 
about  the  business  which  has  made  its  name  almost  universal. 

'*  What  is  that  Wall  Street?"  said  an  English  curate  to  a 
fiiend  of  mine  who  recently  visited  Liverpool.  *'What  a 
queer  place,"  he  continuec^  ^'  for  Mr.  Talmage  to  have  his 
Tabernacle." 


84  PRRSONAI,  HONOR  OP  WAIX  STRBBT  MKN. 

The  English  divine,  evidently  only  having  "  caught  on* 
to  isolated  sketches  of  the  Brooklyn  preacher's  calumnious 
invectives,  thought  they  were  actually  delivered  among  the 
bulls  and  bears,  and  that  Talmage  had  the  boldness  to 
beard  these  ferocious  animals  in  their  den. 

It  is  true  the  honor  of  Wall  Street  is  sometimes  slightly 
tarnished,  especially  in  the  eyes  of  those  who  reside  at  a 
great  distance,  owing  to  the  occasional  delinquencies  of  dis- 
honorable men,  who  consider  Wall  Street  men  and  Wall 
Street  money  fair  game  for  swindling  operations.  These 
are  for  the  most  part  outsiders,  who  pounce  upon  the  Street 
as  their  illegitimate  prey,  after  probably  making  a  show  of 
doing  business  there. 

There  is  no  place,  of  course,  where  confidence  men  have 
the  opportunity  of  reaping  such  a  rich  harvest  when  they 
can  succeed  in  establishing  the  confidential  relations  that 
help  them  to  secure  their  swag.  But  Wall  Street  proper 
is  not  any  more  responsible  for  such  men  than  the  Church, 
whose  sacred  precincts  are  used  and  abused  by  the  same 
social  pariahs  in  a  similar  manner.  The  Street  is  the  victim 
of  these  adventurers,  and  has  no  more  to  do  with  nurturing 
and  aiding  them  than  the  Church  has. 

What  should  be  said  of  a  financier  who  would  have  the 
temerity  to  assert  that  the  Church  was  an  asylum  for  swin- 
dlers, and  that  thence  they  issued  forth  to  commit  their  law- 
less depredations  on  society }  He  would  be  tabooed  by  all 
intelligent  people.  Yet  there  would  be  about  as  much  truth 
in  such  a  statement  as  in  most  of  the  eloquent  anathemas 
and  objurations  launched  &om  the  pulpit  every  Sunday 
against  Wall  Street. 

There  is  noplace  on  this  earth  where  adventurous  thieves 
have  fewer  sympathizers  than  in  Wall  Street,  except  per- 
haps in  Pinkerton's  and  Byrnes'  detective  bureaux. 

There  is  another  popular  delusion  with  regard  to  those 
who  don't  succeed  in  Wall  Street.  Their  failure  is  fre- 
quently attributed  to  sharp  practice  on  the  part  of  the  old 


A  DANGEROUS  GENIlJs  IN  FINANCE.  *S 

liabitaes  of  the  Street  People  forget  that  the  business  of 
speculation  requires  special  training,  and  every  fool  who 
has  got  a  few  hundred  dollars  oannot  begil)  to  deal  in  stocks 
and  make  a  fortune.  The  men  who  don't  succeed  are  usually 
those  who  have  spent  their  early  life  elsewhere,  and  whose 
habits  have}>een  formed  in  other  grooves  of  thought. 

The  oOtiiness  of  Wall  Street  requires  long  and  close  train- 
ing in  financial  affairs,  so  that  the  mind  may  attain  a  flexi* 
ble  facility  with  the  various  ins  and  outs  of  speculative 
methods.  If  this  training  is  from  youth  upward,  all  the 
better.  It  is  among  this  class  that  many  of  our  most  suc- 
cessful men  are  to  be  found,  though  the^e  are  some  eminent 
examples  of  success  among  those  who  began  late  in  life.  It 
will  be  found,  however,  that  the  latter  must  have  a  special 
genius  for  the  business,  and  genius,  of  course,  discounts  all 
the  usual  conditions  and  auxiliaries  ;•  but  among  ordinary 
intellects  early  training  is  generally  indispensable  to  finan- 
cial success. 

It  seldom  happens,  moreover,  that  the  early  trained  man 
from  youth  up  does  any  great  wrong. 

Ferdinand  Ward  may  seem  an  exception  to  this  rule,  but 
he  had  a  born  genius  for  evil,  and  though  he  had  all  the 
early  advantages  of  Timothy  and  Samuel  the  Prophet,  with 
a  higher  civilization  thrown  in,  so  utterly,  incorrigible  was 
his  nature  that  nothing  but  prison  walk  and  iron  bars  could 
prescribe  bounds  to  his  rascality.  He*  is  an  extraordinary 
exception,  a  genips  of  the  other  extreme^  against  whose 
subtle  operations  society  must  always  be  on  its  guard  ;  but 
he  is  only  one  of  the  dangerous  exceptions  that  prove  the 
rule  for  which  I  am  contending,  the  rule  that  early  training 
in  finance  more,  perhaps,  than  in  any  other  field  of  human 
energy,  is  the  great  desideratum. 

If  such  a  man  is  unsuccessful,  dishonor  seldom  accom- 
panies his  misfortunes.  He  may  pass  through  the  whole 
catalogue  of  financial  disasters  and  their  natural  results 
He  may  fall  to  the  gutter  through  over-indulgence  in  liquor 


86  PSRSONAI,  HONOR  O^  WAU<  &T&B&T  USOf. 

and  the  despair  attendant  on  a  run  of  bad  lack  or  nnfor* 
tonate  connection  with  wicked  partners,  bathe  is  still  capa- 
ble of  rising  from  the  very  ashes  of  his  former  self.  He 
will  never  stoop  to  swindle,  no  matter  how  low  the  rest  of 
his  moral  condition  may  be  broaght. 

No  great  basiness  can  be  bailt  ap  except  apon  honest  and 
moral  principles.  It  may  floarish  for  aiime,  bat  it  will  top- 
ple down  eventaall J.  The  very  magnitade  to  which  the 
basiness  of  Wall  Street  has  grown  is  a  living  proof  of  its 
moral  stamina.  It  is  impossible,  in  the  social  and  moral 
natare  of  things,  to  anite  a  large  namber  of  men,  represent- 
ing important  material  interests,  except  on  principles  of 
equity  and  fair  dealing.  A  conspiracy  to  cheat  mast  always 
be  confined  to  a  small  namber. 

The  most  saccessfal  men  of  Wall  Street,  to  my  own  per- 
sonal knowledge,  are  those  who  came  to  the  Street  youngs 
and  have  ^'gone  through  the  mill,"  so  to  speak ;  those  who 
have  received  severe  training,  who  have  had  some  sledge* 
hammer  blows  applied  to  their  heads  to  temper  them,  like 
the  conversion  of  iron  into  steel. 

These  are  some  of  the  prerequisites  of  a  saccessfal  finan- 
cial career. 

One  of  the  most  common  delusions  incident  to  homaa 
nature  in  eveiy  walk  of  life  is  that  of  a  man  who  has  been 
successful  in  one  thing  imagining  he  can  succeed  in  any- 
thing and  everything  he  attempts.  In  general,  overweening 
conceit  of  this  kind  can  be  cured  by  simple  experiments  that 
bring  men  to  a  humiliating  sense  of  their  mortal  condition 
and  limited  capacity.  When  the  experiment  is  tried  in 
Wall  Street,  however,  to  these  healthy  admonitions  are 
frequently  added  irreparable  disaster  and  overwhelming 
disgrace.  . 

I  shall  note  a  few  examples  within  the  memory  of  news- 
paper readers  still  living.  T^e  brief  panic  of  1884  broaght 
several  instances  of  this  character  to  the  surface.  Some  of 
them  had  fought  our  battles  for  national  existence  and 
preserved  the  Union  when  this  achievement  seemed  almoat 


WHY  GBNKRAI^  GRANT  WAS  VICTIMIZED.  87* 

hopeless.  Their  fame  as  generals  was  as  extensiye  as 
history  itself.  They  had  planned  and  executed  projects 
with  success  on  which  the  destiny  of  a  great  nation,  and 
perhaps  the  destiny  of  other  nations,  had  impended,  yet 
when  they  attempted  to  manage  banks,  railroads  and  finan- 
cial operations  they  became  hopelessly  entangled. 

The  great  captain  of  the  Union's  salvation  was  as  help- 
less as  a  babe  when  Ferdinand  Ward  and  James  D.  Fish 
moved  upon  his  works.  The  eye  that  took  in  the  whole 
situation  at  a  glance  at  Yicksburg,  Richmond  and  Appo- 
matox  was  totally  unable  to  penetrate  the  insidious  and 
speculative  designs  of  the  "  Young  Napoleon  of  finance." 

General  Orant  was  a  victim,  not  so  much  to  the  sincere, 
Teracious  and  unsuspecting  attributes  which  were  so  largely 
predominant  in  that  great  man,  as  to  his  want  of  early 
training  in  financial  business  affairs,  and  to  the  fact  that  he 
was  unable  to  appreciate  its  necessity  in  dealing  with  sharp 
business  men  of  loose  morals.  Generals  Winslow  and  Porter 
fell  into  a  similar  error  of  judgment  in  the  West  Shore 
Sailroad  matter.  Their  mistake  came  near  being  a  serious 
blow  to  the  railroad  interests  of  this  country.  General 
Wilson,  of  the  New  Tork  and  New  England,  and  General 
Gordon  were  similarly  unfortunate.  The  common  mistake 
conunitted  by  these  worthy  men,  to  whom  the  country  owes 
an  inestimable  debt  of  gratitude,  was  the  chief  cause  of  the 
**  general  demoralization,''  to  which  Treasurer  Jordan 
facetiously  but  indignantly  alluded  when  denouncing  rail- 
road methods,  and  wliich  from  time  to  time  has  played  sad 
havoo  with  some  of  the  best  securities  in  the  country. 

Therefore,  I  say  to  all  who  have  sons  destined  for  a  busi- 
ness career,  let  your  cherished  offspring  have  the  advantage 
of  early  practical  training  in  the  particular  line  of  business 
for  which  you  may  consider  them  best  adapted,  and  do  so, 
even  to  the  partial  neglect  of  their  school  and  college  educa- 
tion. Practical  business  is  the  best  school  and  college  in 
which  they  can  possibly  graduate.  I  shall  attempt  to  make 
this  point  clearer  in  another  chapter. 


SALMON    P.    CHASE, 

Secretary  of  the  U.  8.  Treasury  during  the  war  period. 


OHAPTEB    VI. 

WALL  STREET   DURING  THE  WAR. 

Thr  Fw anciers  of  Wall  Street  Assist  the  Government: 
IN  the  Hour  of  the  Countries  Peril. — The  Issue  of 
THE  Treasury  Notes.— Jay  Cooke's  Northern  Paoifio 
Bcheme  Precipitates  the  Panic  of  1873.— Wall 
Street  Has  Played  a  Prominent  Part  in  the  Qreat 
Evolution  and  PRoaREss  of  the  Present  Aqe. 

WALL  Street  came  to  the  rescue  of  the  country  when  the 
war  broke  out.  The  Government  then  did  not  have 
'  money  enough  to  pay  the  interest  on  the  debt,  and  was  sore- 
ly embarrassed  for  a  time.  The  Hon.  S.  P.  Chase,  Secretary 
of  the  Treasury,  sent  word  to  Mr.  Cisco,  the  Sub-Treasurer 
in  New  York,  to  do  everything  in  his  power  to  raise  the 
money  required  to  sustain  the  nation's  credit. 

Mr.  Cisco  apprised  the  ^^ Street"  of  the  instructions  he 
had  received  from  Washington  concerning  the  empty  con. 
dition  of  the  Treasury.  He  showed  a  number  of  the  leading 
operators  and  financiers  that  within  a  few  days  the  interest 
on  the  accruing  obligations  would  have  to  be  paid,  or  the 
Government  paper  should  go  to  protest.  It  was  clearly 
demonstrated  that  if  funds  could  not  be  raised  the  Govern- 
ment should  be  placed  in  a  perplexing  position,  that  wouldj 
in  all  probability,  greatly  complicate  and  prolong  the  struggle 
for  national  existence.  It  was  one  of  the  most  critical  moments 
in  the  whole  history  of  the  Bepublic,  and  the  emergency 
required  clear,  decisive  judgment,  and  promptitude  of 
action. 

Wall  Street  men  perceived  the  gravity  of  the  situation  at 
a  glance.  If  the  Government's  credit  should  collapse^  it 
was  feared  that  the  whole  framework  of  our  political  system 
would  be  endangered. 

The  foundation  of  all  securities  was  threatened  with  a 
doetractiye  upheaval,  and  most  serious  consequences  were 


40  WAU  STRBST  DURING  TH«  WAR. 

likely  to  ensae,  menacing  a  contraction  of  all  valaecu  Th# 
prospect  was  very  dark.  Not  a  ray  of  hope  shone  thicngb 
the  sombre  clouds  that  hong  dismally  over  the  Union.  The 
internal  dissensions  of  oar  people,  and  the  apparent  destmo* 
tion  of  oar  national  life,  were  watched  with  the  deepest 
interest  by  European  friends  and  foes — the  latter  being  then 
largely  in  the  majority,  and  only  waiting  a  f  ayorable  oppor- 
tunity to  pounce  upon  what  they  considered  their  destined 
prey. 

Manifest  destiny  seemed  to  have  leagued  all  her  forces  in 
opposition  to  us.  The  stoutest  hearts  quailed  at  the  pros- 
pect of  our  dissolution  as  a  nation. 

At  this  momentous  juncture,  when  there  was  no  eye  to 
pity,  and  when  no  other  arm  seemed  mighty  enough  to  save, 
the  Wall  Street  men  were  equal  to  the  occasion.  They  put 
tiieir  heads  together,  came  to  the  front,  and  resolved  to  ex*> 
tricate  the  Government  from  its  perilous  position.  It  is  true 
that  they  were  well  paid  for  it.  They  charged  twelve  pei 
cent,  for  the  loan,  but  that  was  nothing  when  the  risk  ia 
taken  into  account.  It  was  then  almost  impossible  to  get  a 
loan  at  any  rate  of  interest.  By  some  of  the  great  nations 
of  Europe  the  risk  then  involved  in  such  a  loan  was  re< 
garded  in  about  the  si^me  light  as  the  people  of  this  country 
now  estimate  the  present  chances  for  realizing  on  Oonfeder* 
ate  paper  money,  or  Georgia  bonds  of  the  old  issue. 

In  this  state  of  public  feeling,  Lombard  Street  was  not  in 
a  favorable  mood  to  negotiate  loans  with  this  country,  and, 
the  whole  fraternity  of  the  Bothschilds  shut  their  fists  on 
their  shining  shekels  and  shook  their  heads  negatively  and 
ominously  at  the  bare  mention  of  advancing  money  to  the 
once  great  but  now  doomed  Bepublic. 

Money  was  dear  at  the  time,  and  the  Gbvemment  was 
only  obliged  to  pay  what  could  have  been  obtained  in  other 
quarters.  Curiously  enough,  private  property  then  was  con- 
sidered better  security  tLan  the  Government  endorsement| 
on  the  principle — ^which  was  not  a  very  patriotic  one,  though 


nNANCISRS  RAISING  THB  SINKWS  OF  WAR.  41 

in  xeaHiy  true — ^that  the  cotmtrj  could  Borviye  its  form  of 
govenmieiLt.  That  f orm,  however,  the  best  the  world  has 
yet  seen,  surviTed  the  shock  and  maintained  its  antonomj. 
That  it  did  so  was  in  a  large  measure  due  to  the  prompt 
action  of  Wall  Street  men  in  raising  the  sinews  of  war  at 
the  incipient  stage  of  the  rebellion.  Had  they  failed  to  do 
so,  it  is  not  improbable  that  the  repulse  at  Bull  Bun  might 
have  proved  a  decisive  blolv  to  the  Uniony  and  plunged  the 
country  into  a  state  of  anarchy  from  which  nothing  but  a 
despotism  almost  as  bad  could  have  retrieved  it' 

The  negotiation  of  this  loan  brought  out  the  twelve  per 
cent.  Treasury  notes.  After  this  issue  the  rates  fell.  Then 
came  the  11  and  the  10|  per  cent,  issues,  and  subsequentiy 
the  well-known  and  long  to  be  remembered  7  8*10  Treasury 
notes. 

After  this  issue  had  been  popularized,  successfully  dis- 
posed of,  and  finally  taken  up  at  maturity  by  the  6-20 
loan,  Jay  Cooke  was  quick  to  issue,  after  their  pattern,  his 
famous  7  8-10  Northern  Pacific  Bailroad  bonds.  Evidentiy 
he  had  a  patent  for  negotiating  that  famous  7  8-10  per  cent 
railroad  loan,  as  almost  every  clergyman,  Sunday-school 
teacher  and  public  benefactor  were  found  to  have  invested 
in  them,  when  the  crash  came,  and  although  the  road  was 
the  means  of  his  financial  downfall,  with  the  ruin  of  an 
innumerable  number  of  others  besides,  who  were  dragged 
into  the  same  speculative  whirlpool,  this  unfortunate  event 
was  not  entirely  an  unmixed  evil. 

It  is  true  that  this  wad  the  main  and  visible  cause  of 
precipitating  the  panic  of  1873,  of  which  I  shall  speak  more 
fully  in  another  chapter,  but  the  Pacific  road  was  the  great 
pioneer  in  opening  up  the  Far  West,  and  developing  its 
material  resources,  the  great  artery  of  the  Western  railroad 
system,  conveying  vigorous  and  durable  vitality  to  the  in- 
dustrial life  of  the  expansive  regions  beyond  the  Bockies. 

Thus,  in  taking  a  retrospect  of  my  twenty- eight  years  in 
Wall  Street,  I  find  that  what  sometimes  appeared  to  be 


42  WAI«I,  STREET  DURING  tun  WAS. 

great  evils  have  been  succeeded  bj  compensating  good,  fate 
counter-balancing  fa^e,  as  the  Latin  poet  has  it.  It  was  so, 
as  I  have  preyiouslj  observed,  after  the  panic  of  1857.  It 
was  so  after  the  convulsion  of  1873,  and  though  I  have  only 
historic  evidence  to  guide  me  in  regard  to  the  earlier  history 
of  the  Street,  I  find  it  was  so  after  1837.  So;  the  maxim  that 
history  repeats  itself  has  been  fully  verified  in  Wall  Street 

So,  now  that  I  have  relapsed  into  a  reflective  mood  on 
this  subject,  a  host  of  important  associations  connected  with 
the  main  issue  rush  upon  me.  The  prominent  idea  that 
stands  out  in  bold  relief  is  the  rapid  and  wonderful  progress 
made  in  Wall  Street  during  the  period  that  I  have  under- 
taken to  chronicle.  And  not  only  So,  but  the  rapid  strides 
that  have  been  made  in  everything,  almost  universallj,  dur- 
ing that  time,  present  a  vast  theme  for  coDsideration.  The 
part  that  Wall  Street  men  have  taken  in  this  mighty  evolu- 
tion is  the  topic  that  concerns  me  most  at  present.  As  I 
attempt  to  progress  with  my  subject,  I  observe  this  division 
of  it  becoming  more  expansive,  so  that  I  find  myself  in  the 
position  of  the  Irishman  when  he  ascended  to  the  top  of  a 
mountain.  After  recovering  from  the  first  effects  of  his  sur- 
prise, he  exclaimed :  *^  I  never  thought  the  world  was  so 
larger 

So  it  is  with  me.  I  neyer  thought  that  Wall  Street  was 
80  big,  nor  that  Wall  Street  affairs  were  so  extensive,  until 
I  began  to  write  about  them.  They  expand,  as  well  as  im- 
prove, surprisingly  on  closer  acquaintance.  I  only  hope  1 
shall  be  able  to  impress  this  idea  more  vividly  on  the  mind& 
of  my  clerical  friends,  and  others  who  have  been  misguided 
in  this  respect,  chiefly  on  hearsay  and  irresponsible  evidence^ 
and  who,  I  am  sorry  to  say,  have  been  the  well- meanings 
but  over-zealous  instruments  of  misleading  others. 

To  come  to  an  approximate  deduction  of  facts,  then,  it  is, 
I  think,  a  fair  estimate  of  the  general  progress  of  humanity^ 
to  say  that  there  has  been  greater  material  advance  in  every- 
thing that  relates  to  a  higher  civilization,  and  the  greatest 


SPBCUIJLTtON  A  PIOimKR  OP  PROGRKSS.  48 

good  to  the  greatest  number,  dnring  the  last  thirty  years, 
than  in  all  thepreyioos  time  that  has  elapsed  since  the  period 
that  the  father  of  history^  old  Herodotus,  began  to  chronicle^ 
in  his  racy  style,  the  real  and  imaginary  events  of  thehmnan 
faniilj. 

The  part  that  Wall  Street  has  played  in  this  amazing 
progress  has  been  comparatiyely  large,  and  woidd,  if  thor- 
oughly investigated  and  fully  discussed,  make  a  larger  book 
than  I  have  time  to  write  at  present. 

I  can  only  glance  at  the  prominent  topics  and  leading 
events  in  the  extensive  and  somewhat  sensational  history  of 
Wall  Street,  and  sketch  briefly  the  conspicuous  features  in 
the  lives  of  certain  celebrities  who  have  been  conspicuous 
in  the  history  of  speculation,  and  of  those  who  have  been 
prominent  in  the  financial  afiEedrs  of  the  country. 


CHAPTEB    VII. 

MORE  WAR  REMINISCENCES.-^BRITISH  AND  NAPOLEONIC 

DESIGNS. 

How  Napoleon  Defied  the  Monroe  Doctrine.— The  Ban- 
quet TO  Eomero.— Speeches  by  Eminent  Financiers, 

JXTBISTS  AND  BUSINESS  MeN. — ThB  ELOQUENT  ADDRESS 

OF  Eomero  against  French  Intervention. — Napoleon 
8HOWB  his  Animus  bt  Destroying  the  Newspapers 
Containing  the  Eeport  op  the  Banquet. — The  Em- 
peror Plotting  with  Representatives  of  the  Eng- 
lish Parliament  to  Aid  the  Confederates  and  Make 
War  on  the  United  States. 

^T^HEBE  were  other  critical  periods  during  the  war  when 
X  Wall  Street  came  to  the  front,  besides  the  one  in  which 
it  rendered  such  timely  aid  to  the  Government  in  its  finan- 
cial embarrassment.  One  of  these  was  when  the  Emperor 
of  the  French,  Napoleon  III.,  showed  his  cloven  foot  and 
exhibited  anew  the  rancorous  disposition  which  ten  years 
previously  had  crushed  the  Bepublican  hopes  of  La  Belle 
France  by  the  murderous  Coup  SEtat.  He  made  a  bold  at- 
tempt to  plant  that  blood-stained  foot  on  this  fair  soil,  in 
open  defiance  of  the  Monroe  doctrine,  and  to  crush  the  lib- 
erties that  his  immortal  uncle',  even  in  the  full  flush  of  his 
great  conquests,  dared  not  attack  and  was  forced  to  respect. 

I  shall  here  relate  an  incident  of  this  period,  which,  I 
think,  has  not  obtained  the  prominence  in  our  national 
history  to  which,  I  believe,  it  is  justly  entitled* 

Senor  Bomero,  then  Mexican  Minister  at  Washington, 
was  invited  to  a  public  dinner  in  New  York,  in  order  that 
proper  occasion  might  be  found  to  discuss  the  situation  with 
regard  to  the  intentions  of  Napoleon  the  Little  concerning 
Mexico,  and  with  a  view  of  preventing  foreign  intrusion, 
which  was  only  the  entering  wedge  for  future  invasion,  at  a 
time  when  our  nation  was  engaged  in  a  family  struggle  to 


46 


MORU  WAR  imMINISC&NCBS. 


maintain  its  own  existenoOi  and  demonstrate  the  dnrabilify 
of  Bepublicanism. 

The  dinner,  at  which  there  was  a  grand  manifestation  of 
sympathy  in  favor  of  the  Mexican  cause  against  French 
invasion,  took  place  on  the  evening  of  March  'J9,  1864,  at 
Delmonico's,  Fifth  Avenue  and  Fourteenth  street.  The 
banquet  was  held  in  four  of  the  largest  rooms.  The  large 
dining  hall  was  illuminated  as  a  promenade  for  the  families 
of  the  hosts  and  guests,  and  a  large  concourse  of  ladies  and 
gentlemen  who  were  invited  to  see  the  table  and  be  pre- 
sented to  the  distinguished  envoy.  The  rooms  were 
elegantly  decorated  with  flowers,  grouped  and  festooned 
with  artistic  skill,  and  the  doorways  arrayed  with  fragrant 
wreaths  and  garlands.  One  room  was  set  apart  for  the 
orchestra,  and  Helmsmuller  furnished  the  music. 

Senor  Don  Juan  N.  Navarro,  Consul-Generalof  the  Mexi- 
can Bepublic,  IgnacioMarescal,  an  eminent  jurist  of  Mexico, 
and  Don  Fernando  De  La  Cuesta,  Assistant-Secretary  of 
the  Legation,  were  invited  guests.  Following  are  the  names 
of  the  Committee  of  Invitation : 


WILLIAM  G.  BRYANT, 
WILLIAH  H.  ASPIKWALL, 
HAMILTON  PISH, 
JOHN  W.  HAMEBfiUET, 
JONATHAN  STUBQES, 
JAMES  W.  BEEKMAN, 
J.  J.  ASTOB,  Jb., 
SMITH  GLUT, 
W.  E.  nODOE,  Jb., 
DAVID  HOADLET, 
FREDERICK  DE  PEYSTEB, 
W.  BUTLER  DUNCAN. 
WILLIAM  CURTIS  NOTES, 
HENRY  CLEWS, 
FREDERICK  G.  OEBHARD, 
JAMES  T.  BRADY, 


GBORGE  T.  BTBONa, 

HENRY  DELAFIBLD, 

HENRY  B.  PIBRBEPONT, 

GEOBOE  OPDYKE, 

DAVID  DUDLEY  FIELD, 

OEOROB  BANCROFT, 

0.  A.  BRISTED, 

ALEXANDER  VAN  BENSSBLABB| 

GEORGE  F0L80M, 

WASmNOTON  HUNT, 

CHARLES  KING, 

WILLARDFABKER, 

ADRIAN  ISELIN, 

ROBERT  J.  LIVINGSTON, 

SAMUEL  B.  RUOGLES. 


Hon.  James  W.  Beekman  presided.  The  stewards  were 
John  Jacob  Astor,  John  W.  Hamersley  and  Henry  Clews. 

When  full  justice  had  been  done  to  the  large  variety  of 
sumptuous  dishes,  the  chairman  called  the  company  to 
order^  and  explained  that  the  object  of  the  meeting  was  to 


RESISTING  FOREIGN  INVASIONS  47 

Ao  honor  to  the  great  cause  of  religious  and  political  free- 
dom contended  for  bj  the  Bepublio  of  Mexico.  The  chair 
gave  the  first  regular  toast,  "  The  President  of  the  United 
States,"  and  called  upon  David  Dudley  Field  to  respond, 
who  did  so  in  his  usual  eloquent  style,  stating  that  the  sen- 
tinient  of  the  whole  country  was  united  in  sympathy  with 
the  cause  of  the  Mexicans,  and  that  the  Executive  Depart- 
ment of  the  Government  was  simply  the  agent  and  exponent 
of  the  popxdar  will.  He  dwelt  at  some  length  on  the  French 
invasion  of  Mexico  as  one  of  the  greatest  crimes  of  the  age, 
and  predicted  the  brief  reign  of  Maximilian.  Mr.  Field 
wound  up  his  discourse  with  the  following  grand  perora- 
tion: 

Maximilian  mav  come  with  the  Austrian  ea^le  and  the 
French  tricolor  ;  he  may  come  with  a  hundred  ships ;  he  may. 
march  on  the  high  road  from  Vera  Cruz  to  the  capital,  under^< 
the  escort  of  French  squadrons ;  he  may  be  proclaimed  by. 
French  trumpets  in  all  the  squares  of  the  chief  cities ;  but 
he  will  return,  at  some  earlier  or  later  day,  a  fugitive  from 
the  New  World  back  to  the  Old,  from  which  he  came ;  his 
followers  will  be  scattered  and  chased  from  the  land ;  the 
titles  and  dignities  which  he  is  about  to  lavish  on  parasites 
and  apostates  will  be  marks  of  derision ;  the  flag  of  the 
republic  will  wave  from  all  the  peaks  of  the  Cordilleras, 
and  be  answered  from  every  mountain  top,  east  and  west,  to 
either  ocean ;  and  the  renewed  country,  purified  by  blood 
and  fire,  will  resume  its  institutions,  and  be  free. 

The  second  toast  was,  '^Don  Benito  Juarez,  Constitutional 
President  of  the  Mexican  Republic,"  to  which  Mr.  Charles 
King,  Pjresident  of  Columbia  College,  responded.  He 
spoke  of  Mexico  as  the  friend  and  ally  of  the  Union  as 
opposed  to  European  hostility.* 

His  Excellency,  Senor  Matias  Bomero,  the  honored  guest 
of  the  evening,  then  made  abrilUant  speech  on  the  situation, 
from  which  I  take  the  following  extracts : 

^^  I  am  very  happy  to  say  that  the  kind  of  feeling  you  ex- 
press for  Mexico  is  fully  reciprocated.    In  Mexico  there 


48  MORE  WAR  RHMINISCBNC^. 

are  now  but  the  sentiments  of  regard  and  admiration  for 
the  United  States,  and  the  desire  to  pursue  such  a  course  as 
will  draw  more  closely  all  those  powerful  ties  by  which  both 
nations  should  be  united. 

**The  Emperor  of  the  French  pretends  that  the  object  of 
his  interference  in  Mexican  affairs  is  to  prevent  the  annex* 
ation  of  Mexico  to  the  United  States ;  and  yet  that  very 
thing  would,  most  likelv,  be  ultimately  accomplished  if  a 
monarchy  were  established  in  Mexico.  Fortunately  for  us, 
that  scheme  is  by  no  means  a  feasible  one. 

•*We  were  willing  to  grant  to  the  United  States  every 
commercial  facility  Qiat  will  not  be  derogatory  of  oui^  inde- 

gendence  and  sovereignty.  This  will  give  to  the  United 
tates  all  possible  advantages  that  could  be  derived  from 
annexation,  without  any  of  its  inconveniencea  That  once 
done,  our  common  interests,  political  as  well  as  commercial, 
will  give  us  a  common  whole  American  continental  policy 
which  no  European  nation  would  dare  disregard. 

^'  The  bright  future  which  I  plainly  see  for  both  nations 
had  made  me  forget  for  a  moment  the  present  troubles  in 
which  they  are  now  involved.  I  consider  these  troubles  of 
so  transitory  a  nature  as  not  to  interfere  materially  with  the 
common  destiny  I  have  forshadowed ;  but,  as  they  have  the 
interest  of  actuality,  I  beg  to  be  allowed  to  make  a  few 
remarks  in  regard  to  them. 

^^  Every  careful  observer  of  events  could  not  help  noticing^ 
when  the  expedition  against  Mexico  was  organized  in  Europe, 
that  it  would,  sooner  or  later,  draw  the  United  States  into 
the  most  serious  complications,  and  involve  them  in  the 
difficulty.  The  object  of  that  expedition  being  no  less  than 
a  direct  and  armed  interference  in  the  political  affairs  of  an 
American  nation,  with  a  view  to  overthrow  its  republican 
institutions  and  establish  on  their  ruins  a  monarchy,  with  a 
European  prince  on  the  throne — ^the  only  question  to  be 
determined!^  by  the  United  States  and  the  other  nations 
concerned,  was  as  to  the  time  when  they  would  be  willing  or 
ready  to  meet  the  issue  thus  boldly  and  openly  held  out  by 
the  antagonistic  nations  of  Europe. 

^^his,  in  my  opinion,  is  the  situationin  which  the  United, 
States  are  placed  ^ith  regard  to  Mexico.  Taking  into  cou« 
sideration  tne  well-known  sagacitv  of  American  statesmen 
the  often-proved  devotion  of  the  American  people  to 
republican  institutions,  and  the  patriotism  and  zeal  of  the 


MEXICO'S    STRUGGI*^    FOR  PKKBDOM.  49 

iLdministratioQ  tliat  presides  oyer  the  destiiiies  of  the 
eountry,  1  cannot  entertain  the  slightest  doubt  that  the 
United  States  vnll  act  in  this  emergency  as  will  conduce  to 
tiie  best  interests  the^  and  mankind  at  large  have  at  stake 
in  the  Mexican  question. 

*^The  United  States  may  find  that  they  are  brought 
squarely  to  the  issue  in  the  Mexican  question  sooner  than 
they  expected,  should  the  report,  lately  reached  here,  of 
any  understanding  between  Maximilian,  as  so-called  Emperor 
of  Mexico,  and  the  insurgents  in  this  country,  prove  coirect 
The  archduke,  it  is  stated,  will  inaugurate  his  administra- 
tion by  acknowledging  the  independence  of  the  South,  and, 
perhaps,  he  will  go  lurther;  and  this,  of  course,  by  the 
advice,  consent  and  support  of  the  French  Government, 
whose  satellite,  and  nothing  else,  will  the  archduke  be  in 
Mexico. 

*^  Among  the  many  events  calculated  to  terminate  imme- 
diately French  intervention  in  Mexico,  the  European  com* 
plications  which  threaten  to  cause  a  general  war  on  that 
continent  should  be  particularly  mentioned.  It  is  certainly 
wonderful  that  while  Europe  is  in  so  insecure  and  agitated  a 
condition,  menanced  by  revolutions  everywhere,  and  wrest- 
ling to  recover  its  own  existence  and  independence,  the 
French  Emperor  should  be  thinking  about  arran^g  other 
people's  affairs,  as  if  his  own  did  not  require  his  immediate 
and  most  particular  attention. 

Mr.  George  Bancroft,  the  eminent  historian,  was  next 
called  upon  to  reply  to  the  toast,  ^^  The  Eminent  Statesmen 
of  Mexico,"  among  whom  the  chair  named  Guatimotzin, 
Hidalgo^  Morelos,  Ocampo,  Lerdo  and  DegoUado.  Mr. 
Bancroft  said : 

XB.  BANGBOFT. 

Oehtlemen — ^Although  I  am  not  prepared  to  deliver  an 
address  worthy  of  this  auditory,  I  can  not  refrain  from  re- 
plying and  expressing  my  sentiments,  as  I  have  been  called 
to  reply  to  the  toast  which  our  president  has  just  proposed 
to  the  statesmen  of  our  neighboring  sister  republic.  The 
struggle  which  for  many  lon^  years  the  Me^iican  people 
.have sustained  against  their  interior  tyrants  has  been  an 
-heroic  struggle,  worthy  of  a  civilized  and  cultivated  peo- 
pie,  and  in  which  the  sympathies  of  the  whole  civilized 


^^  MORE  WAR-  REMINISC:eNCBS. 

world — of  all  the  friends  of  political  and  religions  liberty — 
ought  to  have  been  manifested  in  a  frank  and  decided  man- 
ner in  behalf  of  the  Mexican  people,  directed  by  the  liberal 
party.  I  believe,  gentlemen,  that  the  cause  of  civil  wars, 
not  only  in  Mexico,  bnt  throughout  all  Spanish  America,  has 
been  the  clergy  alone,  who,  when  they  come  to  acquire  power 
in  the  State,  always  strive  to  overturn  the  government  and 
to  subordinate  the  temporal  interests  of  society  to  their  own. 
This  attribute  seems  to  belong  principally  to  the  CathoUo 
clergy. 

'^The  struggle,  then,  in  which  up  to  this  time  the  patriotic 
Mexicans  have  been  engaged,  was  a  holy  struggle,  and  the 
Bvmpathy  of  the  whole  people  of  the  United  States  was  with 
them — a  people  who,  whatever  may  be  their  religious  creeds, 
adopts  as  a  fundamental  principle  the  most  complete  religious 
liberty,  and  the  absolute  independence  of  the  Church  from 
the  State. 

^^  But  now  the  sympathy  of  the  United  States  is  increased 
for  the  Mexican  people,  when,  in  addition  to  the  facts  al- 
ready mentioned,  we  find  this  people  struggling  for  their 
independence  and  nationality  aj^ainst  a  European  nation, 
which,  taking  advantage  of  the  civil  strife  in  which  we  were 
engaged,  has  sought  to  establish  before  our  eyes  a  form  of 
ffovernment'in  open  antagonism  to  our  own.  We  can  not 
do  less  than  receive  this  project  in  the  same  way  as  Europe 
would  receive  it,  were  we  to  foment  revolutions  and  estskb- 
lish  republics  on  that  continent. 

^^  Then  it  is  that  those  statesmen  in  the  United  States 
who  aid  us  to  emerge  from  our  present  difiSculties,  and  to 
restore  our  power  and  legitimate  influence,  and  those  who 
in  Mexico  not  only  consummate  the  great  work  of  establish- 
ing religious  liberty  on  a  solid  basis,  but  who  succeed  in 
driving  from  their  country  the  foreimi  invader,  or  at  least 
keep  tne  sacred  fire  of  patriotism  and  of  resistance  to  the 
invader  burning,  while  we  disembarrass  ourselves  of  our 
complications,  deserve,  in  the  highest  degree,  our  success 
and  ardent  homage. 

^'Gentlemen,  the  Egyptians  used  to  place  a  burning  lamp 
at  the  feet  of  their  royal  corpses.  On  descending  the  steep 
vaults  in  which  the  corpses  were  deposited,  the  lamp  was 
naturally  extinguished. 

^^  Let  Europe  place  at  Maximillian's  feet  the  weak  lamp 
of  monarchial  power.  It  will  not  burn  in  the  atmosohere 
of  our  continent" 


A  POST'S  IDBA  OF  OI.D  WORI^D  BURGI,ARS.  51 

Mr.  ^William  CuUen  Bryant  was  then  called  upon,  and 
aaid,  in  part : 

•*  We  of  the  United  States  have  constituted  ourselves  a 
sort  of  police  of  the  New  World.  Again  and  again  have 
we  warned  off  the  highwaymen  and  burglars  of  the  Old 
World  who  stand  at  the  head  of  its  governments,  styling 
themselves  conquerors.  We  have  said  to  them,  that  if  they 
attempted  to  pursue  their  infamous  profession  here  they 
did  it  at  their  peril.  But  now,  when  the  police  is  en- 
gaged in  a  deadly  conflict  wiib  a  band  of  ruffians,  comea 
Qiis  Frenchman,  knocks  down  an  unoffending  bystander, 
takes  his  watch  and  purse,  strips  him  of  his  clothing,  and 
makes  off  with  the  booty.  This  act  of  the  French  moncsrch 
is  as  base,  cowardly  and  unmanly  as  it  is  criminal  and  orueL 
There  is  no  person,  acquainted,  even  in  the  slightest  degree, 
with  the  political  history  of  the  times,  who  does  not  know 
that  it  would  never  have  been  perpetrated  had  not  the 
United  States  been  engaged  in  an  expensive  and  bloody 
war  within  their  own  borders. 

^  We  thought  that  we  saw  the  dawn  of  an  era  of  enlight« 
ened  government  in  the  administration  of  Juarez.  That 
dawn  has  been  overcast  by  the  clouds  of  a  tempest  wafted 
hither  from  Europe.  May  the  darkness  which  has  gathered 
over  it  be  of  short  continuance ;  may  these  clouds  soon  be 
dispelled  by  the  sunshine  of  liberty  and  peace,  and  Mexico, 
assured  of  her  independence,  take  the  high  place  which 
belongs  to  her  in  the  family  of  nations."  (Continued 
applause.) 

Senor  Don  Ignacio  Mariscal  responded  to  *'Our  Guest 
and  the  Bar  of  Mexico." 

Mr.  George  Folsom,  formerly  envoy  from  the  United 
States  to  the  Netherlands,  responded  on  behalf  of  the 
diplomacy,  making  special  reference  to  Don  Jose  Lopea 
Uiaga,  Mexican  Minister  to  Berlin. 

Dr.  Willard  Parker  responded  to  the  health  of  Dr.  Na- 
varro, formerly  C!hief  of  the  Medical  Staff  of  the  Mexican 
Army. 

Mr.  George  Opdyke  responded  on  behalf  of  the  met^ 
fhanta. 


Sa  MORA  WAR  RKMINISCKNCfiS. 

Senor  De  La  Cuoata  replied  to  the  Commerce  of  Mezioo. 

Mr.  Jonathan  Storges  spokejov  the  fine  arts  of  Mexico. 

Mr.  Washington  Hunt  spoke,  protesting  strongly  against 
the  French  invasion  of  Mexico. 

Mr.  Frederick  De  Peyster,  President  of  the  New  York 
Historical  Society,  responded  on  behalf  of  the  historians 
of  Mexico.  He  also  made  some  eloquent  remarks  on  the 
tyranny  of  French  intervention. 

Mr.  Henry  E.  Pieirepont  spoke,  as  the  representative  of 
Brooklyn,  against  the  French  policy  in  Mexico. 

Mr.  Smith  Clift  responded  on  behalf  of  the  Bar. 

Mr.  Charles  Astor  Bristed  replied  on  behalf  of  the  liter- 
ary Men. 

Mr.  William  E-  Dodge,  Jr.,  spoke  on  behalf  of  the  Young 
Men  of  America.  ^^The  tread  of  a  French  invasion,''  he 
said,  ^'is  to  them  a  direct  insult,  and  were  our  own  sad  war 
over,  I  believe  there  is  not  a  town,  or  village,  or  hamlet, 
where  a  full  company  would  not  spring  to  arms  to  aid  our 
sister  republic  in  her  glorious  struggle.  I  give,  as  a  senti- 
ment in  which  I  know  all  will  heartily  join,  the  ^^  Monroe 
Doctrine" — '^Americans  can  never  allow  the  heel  of  European 
despotism  to  place  its  imprint  upon  the  soil  of  our  Western 
continent." 

The  Chair  then  said,  ^'  Let  us  now  recognize  the  services 
of  our  commissariat,  who  have  so  nobly  di&charged  their 
stewardship.  I  propose  the  health  of  the  stewards.  I  beg 
Mr.  John  W.  Hamersley  to  speak  in  their  behalf."  Three 
cheers  were  then  given  for  the  stewards. 

Mr.  Hamersley  delivered  an  eloquent  address,  from  which 
I  take  the  following  excerpts : 

*^It  is  hardly  fair,  sir,  to  call  on  us  while  our  hearts  are 
beating  with  fervid  thoughts,  and  your  ears  ringing  with 
burniog  words.  Had  this  toast  been  on  the  programme, 
one  of  my  coadjutors  wou!d  have  prepared  an  address 
worthy  of  the  complime.it  and  the  occasion.  Tiiis  Com- 
mittee was  not  chosen  for  their  gifts  of  utteranoei  but  for 


Tan  FAIR  DAUGHTERS  OF  MEXICO.  53 

\ 

{hoB6  humbler  tastes,  which  only  lend  a  graoe  to  eloquence. 
Oar  duties  are  sdsthetic,  industrial  and  artistic.  We  have 
compassed  the  ends  of  the  earth,  the  depths  of  the  sea ;  we 
have  levied  contributions  on  the  four  winds  of  heaven,  to 
duster  here  all  that  can  tempt  the  appetite,  or  fascinate  the 
ear  and  eje,  and  we  fancied  our  mission  accomplished. 

^^  However,  there  is  the  post-prandial  law  ;  the  despotism 
of  the  wine  cup,  to  which  we  all  owe  allegiance — ^the  only 
despotism  which  the  descendants  of  the  Hu^enots,  or 
Pilmm  Fathers,  will  ever  tolerate  on  this  continent  We 
are  nere,  sir,  in  menace  to  none,  but  firmly  and  respectfully, 
in  the  majesiy  of  manhood,  and  in  consciousness  of  power, 
toreassert  a  principle,  imbibed  with  our  mother's  milk,  a 
household  word,  a  do^a  of  American  faith ;  but  while  we 
cordially  grasp  our  neighbor's  hand^  in  the  darkest  hour  of 
her  trial,  tne  grasp  has  due  emphasis  and  significance. 

^  With  her,  we  have  kindred  traditions ;  each  of  us  has 
hewn  an  empire  from  the  wilderness ;  each  of  us  has  ex- 
pelled the  oppressor ;  and  both  of  us,  with  tattered  banners 
drenched  in  the  gore  of  hero  martyrs,  are  now  appealing 
from  treachery  to  the  God  of  Battles. 

^  We  have  a  common  future ;  for  who  can  doubt  that  our 
Boocesses  and  the  death-knell  of  treason  is  already  rung  1  — 
who  can  doubt  that  the  triumph  of  our  arms  will  be  the 
signal  for  the  eagles  of  Austerlitz '^  to  change  their  base,'* 
from  the  pyramids  of  Puebla  for  their  perch  on  the  towers 
of  Notre  Dame?  And  permit  me  here,  sir,  to  express  a 
hope,  suggested  by  the  season  (God  grant  it  may  be  a 
prophecy),  that  the  Easter  chimes  of  Mexico,  of  the  coming 
year,  with  the  glad  tidings  of  a  Saviour  risen,  shall  peal  from 
sierra  to  sierra,  from  ocean  to  ocean,  with  the  glad  tidings  of 
a  nation  risen,  a  nation  bom  again.     (Cheers.) 

^Sir  [to  the  Chair  J,  it  is  fitting,  while  the  accents  of  sweet 
mosio  recall  tender  and  happy  memories  (man,  imaged  by 
that  armed  cactus ;  woman,  by  that  graceful  palm),  it  is  holy 
to  consecrate  the  hour  to  her  who  was  ^^  last  at  the  cross 
and  first  at  the  sepulchre."  1  propose,  sir,  a  toast,  to  which 
your  heart's  pulse  will  echo  : 

'The  daughters  of  Mexico — ^Fair  as  her  sons  are  brave.'* 

ffinthusiastio  and  prolonged  applause.  Music —  Viva  .fif- 
fwUea.) 


64  MORS  WAR  RBHINISCSNCHS. 


THE  OHAIB. 

**  We  must  not  permit  the  modesty  of  our  banker  and 
steward,  Mr.  Clews,  to  outweigh  our  desire  to  hear  from  the 
Bonrse. 

BCB.   HENBY  CLEWS. 

Mb.  President  and  Gentlemen— Enou(^h  has  ahready 
been  said,  in  the  speeches  made  this  evening^  to  indicate 
most  conclasiyely  the  depth  of  sympathy  which  pervades 
this  community  in  behalf  of  the  cause  of  Mexico,  and  I  rise 
to  express  my  cordial  concurrence  with  the  sentiments  which 
have  Dcen  avowed. 

The  unanimous  and  determined  voices  of  this  company 
clearly  show  that  public  opinion  in  this  country  will  not 
submit  to  the  encroachments  of  foreign  powers  upon  any 
portion  of  the  territory  of  the  continent 

The  principles  of  free  republican  government  are  so 
strongly  implanted  in  the  hearts  of  ike  people  both  of 
Mexico  and  the  United  States,  that  they  wilt  never  consent 
to  surrender  them. 

^  Human  freedom  and  the  rights  of  man  make  common 
cause  between  Mexico  and  all  other  American  States. 

'*I  do  not  utter  these  words  in  prejudice  against  any 
government  In  my  judgment,  European  nations  will  best 
promote  the  welfare  of  their  own  people  by  carefully  ab- 
staining from  all  interference  with  the  declared  will  of  those 
who  dwell  on  this  continent. 

*^The  doctrine  has  been  solemnly  asserted,  and  will  be 
maintained  inviolate  against  all  alliances  which  seek  to  im- 
pede the  progress  of  Bberal  institutions,  or  to  impair  the 
strength  of  governments  founded  on  the  rights  and  intelli- 
gence of  the  people. 

^Thia  is  the  doctrine  of  the  United  States,  and,  under  the 
shield  of  its  power  and  influence,  the  safety,  prosperity  and 
independence  of  Mexico  will  be  maintained  and  made  per- 
petual"    (Cheers.) 

The  meeting  then  separated,  marching  out  to  the  inspir- 
ing strains  of  the  Marsellaise. 

A  few  days  after  this  meeting  the  House  of  Bepresenta- 
tives  unanimously  resolved  that  the  United  States  would 
never  consent  to  the  establishment  of  a  monarchy  which 
would  arise  under  the  auspices  of  Europe,  upon  the  ruins  of 
a  republic  on  the  American  continent. 


RINGING  MAXTMITJAN'S  l^^ATH  KNBIX.  56 

The  speeches  at  the  Bomero  banquet,  followed  by  this 
resolation,  were  the  premonitorj  sounds  of  the  death  knell 
of  Maximilian's  empire,  even  before  he  took  formal  posses- 
sion of  his  eyanescent  throne. 

To  show  the  animus  of  the  Emperor  regardiiig  this  meet- 
ing, and  how  closely  he  was  watching  the  struggle,  I  may 
state  that  when  the  New  York  Herald^  which  had  a  full 
accoxmt  of  the  meeting,  arrived  in  Paris  it  was  promptly 
seized  by  Napoleon's  censors  and  shared  the  fate  of  La 
Lantern  and  some  of  Victor  Hugo's  most  vigorous  produc- 
tions. It  was  committed  to  the  flames  on  account  of  the 
speeches  made  by  some  of  our  representative  men.  It  will 
be  seen  by  reference  to  this  incident  that  our  representatives 
in  Wall  Street  were  among  the  first  to  perceive  this  threat- 
ened danger  to  the  nation,  and  that  they  manifested  their 
business  tact  and  capacity  in  promptly  meeting  it.  They 
acted  literally  on  the  maxim  of  Sir  Boyle  Boche,  that  ^^  the 
best  way  to  shun  danger  is  to  meet  it  half  way." 

Wall  Street  men  were  the  first  to  make  the  move  thai 
checkmated  the  tyrant  who  was  ambitious  to  prove  before 
the  eyes  of  the  world  that  Bepublicanism  was  a  failure. 

A  Tolume  might  be  written  by  the  student  of  universal 
history,  and  probably  will  be  by  some  future  Herodotus, 
Macaulay,  or  Prescott,  on  the  far-reaching  influences  of  this 
original  move  on  tha^part  of  the  Wall  Street  men.  There 
is  a  large  field  for  speculative  theorizing,  containing  much 
important  truth  in  the  way  the  Bepublican  spirit  was  re- 
flected in  the  political  thought  of  Mexico,  as  the  result  of 
the  feeling  manifested  at  this  public  dinner  in  New  York. 
It  was  xmdoubtedly  the  active  precursor  of  the  events  that 
sealed  the  fate  of  that  unfortunate  cat's  paw,  Maximillian.  It 
gave  birth  to  the  idea  that  reverberated  across  the  Atlantic, 
created  distrust  in  Napoleon's  schemes  of  conquest  as  vision- 
ary with  his  own  people,  and  alarmed  their  Teutonic  foes,  who 
urged  forward  those  mighty  preparations  that  culminated  in 
the  terrible  overthrow  at  Sedan* 


CHAPTER    VIII. 

FOREIGN  INTRIGUES  AGAINST  AMERICAN  LIBERTY. 

How  THS  Impebial  PntATEs  OF  Frakob  and  England  Webb 
Fbiqhtened  Ofv  Through  the  Diplomacy  op  Sewabd. 
—Ominous  Ajppeabanob  op  the  Kussun  Fleet  in 
Amebigan  Waters. — ^Napoleon  Aims  at  the  Cbeation 
op  an  Empibe  West  op  the  Mississippi,  and  the  Bes- 
tobation  op  the  Old  Fbenoh  Colonies. — ^Plotting 
With  Slidell,  Benjamin,  Lindsay,  Boebuok  and 
Othebs. — Ubging  England  to  Hecognize  the  Con- 

PEDEBACT. — ^DiSBAELI  EXPLAINS  EnGLAND's  DESIGNS  AND 

Diplomacy.— Apteb  the  Naval  Victoby  op  Fabbagut, 
AND  the  Captube  OP  New  Obleans  England  Hesi- 
tates Thbough  Feab,  and  Napoleon  Changes  His 
Tactics — Renewal  op  Intbigues  Between  England 
AND  Fbance.— Theib  Dastabdly  E^bposes  Depeated 
BY  the  Victories  op  Gettysburg,  Vioksbubg.,  and  the 
Oenebal  Tbiumph  op  the  Union  Abms. 

WHTTiE  the  events  related  in  the  previous  chapter  were 
progressing  apparently  towards  a  resnit  that  might 
have  proved  disastrous  to  the  dearly  purchased  liberties  of 
this  country,  the  nation  was  saved  by  taking  advantage  of  a* 
circumstance  that  was  peculiarly  providential  to  the  Union. 
TheBussian  fleet  happened  to  be  in  South  American  waters 
at  the  time.  Secretary  Seward  was  apprised  of  the  fact  by  a 
Wall  Street  man.  He  was  quick  to  act  on  the  suggestion. 
Alexis,  the  brother  of  the  Emperor,  was  in  command  of  the 
fleet.  Seward  sent  him  a  friendly  invitation,  which  he  in- 
stantly accepted.  The  spies  of  Napoleon  and  of  Scotland 
Yard,  who  were  always  on  the  alert,  and  who  always  discerned 
the  evil  side  of  everything,  promptly  informed  their  em* 
ploy  era  of  the  fact.  The  conclusion  was  manifest  to 
European  statesmen,  who,  unlike  Wall  Street  men,  never 
''copper"  the  points  given  by  spies.  It  seemed  to  them 
clearly  an  alliance  between  the  Great  Empire  and  the  Great 
Bepublic.    Extremes  had  met  for  mutual  defence  andsafety^ 


60      FOREIGN  INTRIGUES  AGAINST  AMERICAN  WBERTT, 

probably  for  aggressiye  purposes.  The  conspirators  wero 
frightened  with  their  own  shadows  and  foiled  by  their  own 
oowardiee,  and  an  apparently  imminent  calamity  was  thus 
simply  averted. 

Ais  the  designs  of  the  two  great  European  powers  were 
craftily  concealed  through  their  cyasive  system  of  diplom- 
acy, it  has  frequently  been  a  subject  of  debate  as  to 
whether  they  meant  to  take  the  part  of  the  Confederacy  for 
the  purpose  of  dissolving  the  Union.  It  is  necessary,  there- 
fore, to  produce  some  tangible  evidence  of  the  intentions  of 
these  foreign  potentates  in  the  hour  of  our  country's 
greatest  peril. 

The  Confederate  records  purchased  by  th^  Qovemment 
some  years  ago  throw  a  ghastly  light  on  this  subject^  and 
gravely  warn  us  of  the  Scriptural  injunction,  to  put  no  trust 
in  kings  and  rulers. 

The  correspondence  between  the  ofiScials  of  the  .Con- 
federacy aod  the  Confederate  Commissioners,  Slidell  and 
Mason,  at  Paris  and  London,  prove  to  a  demonstration  that 
the  ruler  of  France  and  the  rulers  of  Great  Britain  were 
making  preparations  on  a  large  scale  to  take  charge  of  this 
country  as  soon  as  the  Union,  through  their  diplomatic  aid, 
should  be  dissolved.  Letters  from  other  representatives  of 
the  Confederates  of  Europe  go  to  corroborate  this  view  of 
the  matter.  The  correspondence  between  Dudley,  Post, 
Mann  and  Lamar,  who  were  commissioners  in  various  parts 
of  Europe,  and  Judah  P.  Benjamin,  the  Confederate  Secre- 
tary of  State,  is  conclusive  on  the  subject  of  European 
armed  intervention,  which  has  hitherto  formed  a  topic  of  dis- 
pute in  the  historic  circles  of  the  Civil  War, 

The  correspondence  of  Slidell,  who  was  ou'  familiar 
relations  with  the  Emperor  of  the  French,  gives  the  inside 
history  of  the  intrigues  of  that  potentate  in  such  clear  terms, 
that  there  can  be  no  doubt  of  his  intentions  towards  this 
country. 

Had  it  not  been  for  the  superior  vigilance  of  Mr.  Dayton, 


KING  COTTON  A  POW^R  IN  DIPI.OMACY.  6l 

the  United  States  Minister  at  Paris,  several  privateers  would 
have  been  launched  from  French  ports  to  prey  upon  the 
commerce  of  the  United  States,  and  to  do  similar  work  to 
that  for  which  the  Alabama  was  fitted  out. 

It  would  seem  from  the  correspondence  that  the  managers 
of  the  affairs  of  Great  Britain  were  not  so  anxious  to  en- 
courage  the  South  as  Napoleon  was ;  at  least  they  succeeded 
in  concealing  their  purpose  better.  The  practical  diplo- 
macy of  England  in  this  affair  was  superior  to  that  of 
France,  though  the  latter  has  still  held  the  palm  for  pos- 
sessing better  diplomatic  plotters,  who  are  supposed  to  have 
no  superiors  outside  the  royal  associations  of  the  reigning 
power  of  Russia. 

There  is  no  doubt,  however,  that  Napoleon  was  anxious 
to  take  positive  steps  to  recognize  the  South,  while  profess- 
ing the  most  friendly  feelings  in  favor  of  the  North,  but  he 
was  afraid  to  act  except  in  unison  with  Qreat  Britain,  and 
he  failed  to  bring  her  to  time  until  the  favorable  moment 
for  the  execution  of  his  plans  had  passed. 

Slidell  and  Mason  went  to  Europe  in  January,  1862. 
This  was  perhaps  the  darkest  and  most  critical  period  for 
the  cause  of  the  Union  during  the  great  struggle.  The 
(Commissioners  carried  letters  with  them  showing  the  ineffi- 
ciency of  the  blockade  of  the  Southern  ports,  the  great  dis- 
advantages and  losses  suffered  by  England  and  France 
through  cutting  off  the  cotton  supplies,  and  setting  forth 
the  enormous  advantages  that  would  result  if  free  trade  with 
the  Confederacy  were  established.  These  were  strong 
arguments  to  arouse  the  spirit  of  commercial  selfishness  in 
favor  of  the  South. 

The  ambitious  designs  of  Napoleon  were  of  a  very  tower- 
ing and  extensive  character.  He  not  only  expected  to  re- 
cover Louisiana,  which  his  uncle  in  an  hour  of  necessity 
had  sold  to  the  United  States,  but  he  aimed  at  the  restora- 
tion of  the  entire  old  colonial  empire  of  France  on  this 
continent. 


62       FORKIGN  INTRIGUES  AGAINST  AMERICAN  I^IBERTY, 

The  Emperor  was  thoroughly  posted  in  the  affairs  of  this 
conntrj.  It  seems  that  while  he  had  resided  in  a  small  room 
in  Hoboken,  and  took  his  meals  at  a  twenty-five  cent  restau- 
rant, paying  for  them  with  money  borrowed  from  French 
patriots,  on  the  very  slim  prospect  of  reaching  the  throne  of 
France,  he  made  the  best  use  of  his  time,  and  he  had  studied 
the  history  and  geography  of  the  United  States  and  Canada 
with  great  care  and  accuracy. 

In  justice  to  his  character  for  gratitude,  however,  it  must 
be  said,  in  passing,  that,  like  young  ^^  Corneel "  Yanderbilt^ 
he  paid  all  the  money  he  borrowed,  and  placed  some  of  his 
New  York  and  Hoboken  creditors  in  good  positions  at  the 
Tuilleries,  under  the  Second  Empire.  He  never  forgot  a 
favor  nor  forgave  an  injury. 

The  Emperor's  knowledge  of  American  affairs,  as  well  as 
his  ambitious  designs,  were  briefly,  but  at  the  same  time 
very  fully  disclosed,  in  conversation  with  Mr.  Benjamin,  at 
the  Yilla  Eugenie,  at  Biarritz.  ^^He  turned  with  peculiar 
and  undisguised  eagerness,"  said  Mr.  Benjamin,  ^^  to  the 
Mexican  question.  He  knew  the  very  number  of  guns  on  the 
Morro,  the  sums  the  United  States  had  spent  on  the  fortifi- 
cations in  Florida,  the  exports  and  imports  of  Qalveston 
and  Matamoras,  in  fact  everything  which  well  informed 
local  agents  could  have  reported  to  an  experienced  states- 
man eager  for  information.  He  examined  me  again  on 
Texas  and  its  population,  the  disposition  of  the  French 
residents,  the  tendencies  of  the  German  colonists,  the  feeling 
on  the  Mexican  frontier.  He  observed  that  Louisiana  was 
nothing  but  French  at  the  bottom.  I  was  fully  persuaded 
that  he  proposed  to  seek  in  Mexico  a  compensation  for  the 
lost  colonies  in  the  West  Indies,  which,  he  said,  could  not  be 
recovered,  '  sans  nous  brouiller  avcc  tm  allies j^  (without  em- 
broiling us  with  our  allies).  He  insisted  upon  it  that  France 
must,  sooner  or  later,  have  a  foot-hold  (pied  d  terre)  on  the 
Florida  coast,  for  the  purpose  of  protecting  her  commerce 
in  the  Gulf,  for,  he  added,  ^  Nous  ne  vatUona  pas  cCun  avtre 


WANTED — ^AN  AIJ.Y  IN  CRIME.  68 

CHhraUar  de  ce  cote  Idy  (we  don't  want  another  Gibraltar  on 
that  side.")  • 

Mr.  Slidel's  predecessor  at  Paris,  Mr.  Eost,  had  received 
assurance  from  the  Due  de  Momy,  who  was  then  next  to  the 
Emperor  in  his  knowledge  of  State  affairs,  that  the  South 
would  be  recognized.  It  was  only  a  question  of  time.  After 
consulting  with  M.  Thouvenel,  Minister  of  Foreign  Affairs ; 
Persigny,  Minister  of  the  Interior;  Fould,  Minister  of 
Finance ;  Eouher,  Minister  of  Commerce  ;  Baroche,  Presi- 
dent of  the  Council  of  State  ;  Mocquard,  Private  Secretary 
of  the  Emperor;  Count  Walewski,  De  Morny  and  others, 
Slidell  was  satisfied  that  the  Emperor  was  all  right,  and 
he  wrote  to  Jeff.  Davis  &  Co.  as  follows : 

*^  The  Emperor  has  invited  the  English  Government  to 
join  with  him  in  recognizing  the  South,  but  the  English 
Government,  owing  to  Earl  Busselh  has  refused  to  act 
simultaneously  with  him." 

This  statement  of  Slidell  was  true  in  one  sense,  but  it 
was  not  strictly  and  diplomatically  correct.  There  is  no 
doubt  that  the  English  Government  would  have  been  anx- 
ious enough  to  join  the  Emperor  in  any  scheme  of  conquest 
and  spoliation  that  had  a  fair  promise  of  success,  and  an 
average  chance  of  avenging  the  Boston  Tea  Party  and  the 
Battle  of  Bunker  Hill,  but  both  powers  were  playing  at  the 
game  of  diplomacy,  each  for  the  purpose  of  making  the 
other  responsible  for  taking  the  initiative  in  the  recognition 
of  the  South.  They  were  both  very  circumspect  about  com- 
mitting themselves,  and  the  Palmer s ton -Bussell  Cabinet, 
with  that  caution  which  always  characterized  old  "  Pam" 
in  foreign  affairs,  would  not  recognize  any  suggestion  from 
the  Emperor  that  did  not  bear  his  signature.  The  Emperor 
thought  to  make  use  of  a  Mr.  Lindsay,  a  wealthy  shipowner 
and  member  of  Parliament,  to  draw  out  the  English  Gov- 
ernment, but  the  latter  was  not  to  be  committed  to  any. 
course  of  policy  that  might  involve  important  responsibili- 
ties in  the  future  through  any  second-hand  authority. 


64       PORBIGN  INTRiaUBS  AGAINSl"  AMERICAN  I^IBERTY. 

The  Emperor  seemed  to  have  opened  his  mind  very 
freely  to  Mr.  Lindsay.  He  told  him  that  he  would  have 
taken  steps  to  put  an  end  to  the  blockade  of  the  Southern 
ports  if  the  English  Ministry  had  intimated  a  willingness 
to  act  with  him.  He  said  he  had  forwarded  intimation  to 
this  effect  through  Mr.  Thouvenel,  but  had  not  received  a 
satisfactory  answer.  He  intimated  that  if  England  was 
ready,  he  was,  and  was  prepared  at  once  to  despatch  a  form- 
idable fleet  to  the  Mississippi,  on  condition  that  England 
should  send  an  equal  force  to  demand  free  ingress  and  egress 
for  their  merchantmen,  and  for  the  cargoes  of  goods  and  sup- 
plies of  cotton  which  were  necessary  to  carry  on  the  com- 
merce of  the  world. 

Napoleon  was  resolved  to  act,  as  he  had  always  done,  on 
the  high  ground  of  conferring  universal  favors  on  humanity. 

This  was  an  old  trick  in  his  family,  but  it  did  not  work 
effectually  this  time.  He  said  he  had  regarded  the  restora- 
tion of  the  Union  impossible  from  the  first,  and  for  that  rea- 
son had  deprecated  the  continuance  of  the  bloody  contest, 
which  could  not  lead  to  any  other  result  than  separation. 
He  authorized  Mr.  Lindsay  to  make  this  statement  to  Lord 
Gowiey,  and  to  ascertain  whether  he  would  reconmiend  the 
course  indicated  to  his  Government. 

It  is  very  refreshing  to  reflect  on  the  sensitive  exhibition 
of  feeling  displayed,  in  his  ostensible  attempt  to  stop  the 
carnage  and  fratricidal  strife,  by  the  man  who  planned  and 
directed  the  wholesale  assassinations  in  connection  with  the 
sanguinary  Coup  cCUtat. 

Mr.  Lindsay  reported  back  to  the  Emperor  the  substance 
of  his  interview  with  Lord  Cowley,  who  said  that  the  Eng- 
lish Government  was  not  prepared  to  act  until  further  de- 
velopments. It  was  about  this  time  that  Mr.  Seward  was 
getting  in  his  fine  diplomatic  work  with  Earl  Bussell  and 
Palmerston,  which  helped  materially  to  upset  the  calcula- 
tions of  the  Emperor. 

Napoleon  then  requested  Mr.  Lindsay  to  see  Palmerston, 


T>JSRAm,l  DBSCANTS  ON  KNGI^ISH  DUPLICITY.  66 

Bussell,  Derby  and  Mr.  Disraeli,  and  to  gather  their  inten- 
tions. He  desired  Mr.  Lindsay  to  do  all  this  of  his  own 
motion,  and  not  as  coming  from  him,  and  said  he  did  not 
wish  to  be  embarrassed  by  the  forms  and  delays  of  ordinary 
diplomacy,  because  he  felt  the  necessity  of  immediate  action. 

Lindsay  again  saw  Earl  Bassell,  as  the  accredited  and 
special  ambassador  of  the  Emperor,  viva  voce.  The  Earl 
informed  him  that  he  could  not  receive  any  communications 
from  a  foreign  power,  except  through  the  regular  diplomatic 
channel.  He  then  sought  an  hxterriew  with  Mr.  Disraeli, 
who  was  much  more  affable  and  communicative  than  the 
little  Lord  who  stood  so  punctiliously  on  ministerial  cere- 
mony. 

Disraeli  threw  considerable  light  on  the  subject.  After 
expressing  a  deep  interest  in  the  affairs  of  the  Confederacy, 
and  saying  that  he  fully  concurred  in  the  views  of  the 
Emperor,  he  told  Mr.  Lindsay  that  he  had  good  reasons  for 
believing  that  a  secret  understanding  existed  between  Earl 
Bussell  and  Mr.  Seward ;  that  England,  in  the  meantime, 
would  respect  the  Federal  blockade  and  withhold  recogni- 
tion of  the  South.  ^^  But  if  France  should  take  the  initia- 
tive," said  Mr.  Disraeli  in  conclusion,  ^^any  course  she 
may  adopt  to  put  an  end  to  the  present  state  of  affairs  will 
undoubtedly  be  supported  by  a  large  majority  in  Parliament, ' 
and  knowing  this.  Lord  Bussell  will  give  a  reluctant  assent 
to  this,  to  avoid  a  change  of  ministry,  which  would  otherwise 
certainly  follow." 

This  shows  that  Disraeli  saw  very  elearly  through  the 
duplicity  of  English  diplomacy,  and  that  while  En^nd  was 
profuse  in  her  promises  to  Mrl  Seward,  she  was  only  waiting 
for  the  Emperor  to  act  as  pioneer  in  order  that  she  might 
have  a  safe  opportunity  as  well  as  a  plausible  pretext  for 
armed  intervention. 

The  Emperor  complained  that  Earl  Bussell  had  divulged 
his  views  on  American  affairs,  as  expressed  through  his 
ambassador,  to  Mr.  Seward.    Lord  Bussell  placed  himself 


66       FOREIGN  INTRIGUES  AGAINST  AMERICAN  LIBERTY. 

squarely  on  the  "  fence,"  to  be  prepared  for  any  emergency. 
Finally,  about  the  middle  of  April,  the  Emperor  thought  it 
would  be  best  that  he  himself  should  make  a  friendly  appeal 
to  the  Federal  GoTernment  alone  to  open  the  ports,  if  Eng- 
land did  not  join  him,  without  further  hesitation.  He  thought 
it  v.'ould  be  necessary,  however,  to  accompany  the  appeal  with 
a  demonstration  of  force  on  the  Southern  coasts ;  and  if  the 
appeal  should  be  effectiye,  to  back  it  up  by  a  declaration  of 
his  purpose  not  to  respect  the  blockade.  He  determined, 
howeyei;,  to  wait  a  few  days  longer  to  see  how  England 
would  act. 

This  resolution  of  the  Emperor  to  make  a  friendly,  appeal 
to  raise  the  blockade  was  only  a  thin  excuse  to  find  a  cause 
for  quarrel  with  the  North,  and  it  is  verj"  probable  he  would 
have  acted  on  this  determination  alone,  but  for  an  unexpec- 
ted event  which  changed  his  projects,  and  the  apparent 
course  of  history. 

About  a  week  after  this  diplomatic  conference.  Commo- 
dores D.  G,  Farragut,  and  D.  D.  Porter,  with  their  able 
commanders  Bailey  and  Bell,  had  made  the  famous  passage 
of  forts  Jackson  and  St.  Philip,  at  the  mouth  of  the  Missis- 
sippi, with  the  United  States  squadron,  silenced  the  Chal- 
mette  batteries  and  anchored  in  the  harbor  of  New  Orleans. 
After  two  days'  parleying  the  city  surrendered  at  discretion, 
or  rather,  the  city  authorities  passively  and  sullenly  per- 
mitted Farragut,  and  afterwards  General  Butler,  to  take 
possession  of  the  city  without  shedding  any  blood. 

This  great  naval  victory  of  Farragut's  squadron  and  its 
consequences  dampened  the  ardor  of  the  Emperor.  He  saw^ 
the  chances  of  backing  up  his  "  friendly  appeal ''  by  a  dem- 
onstration of  force,  were  cut  off,  so  far  as  New  Orleans  and 
the  forts  of  the  Mississippi  were  concerned. 

Yet,  Napoleon  did  not  totally  relinquish  the  enterprise, 
on  account  of  this  crushing  defeat  of  the  Confederacy.  M. 
Billault,  a  prominent  member  of  Napoleon's  cabinet,  after 
this  event  said  to  Slidell,  ^'  The  cabinet,  with  the  probable 


t —  PROPERTY  Off' 

J«EW  YORK  CHAP-^'T:?:? 
^     American  Institute  nf  Jnrkir.^^ 

A  DELUSIVE  BREAM  OF  POWER  AND  PRESTIGE.  67 

exception  of  M.  Thouvenel,  are  in  favor  of  the  South.  If 
New  Orleans  had  not  fallen,  our  recognition  conld  not  have 
been  long  delayed,  but  if  the  Confederates  should  obtain 
successes  in  Virginia  and  Tennessee,  and  hold  the  enemy  at 
bay  a  month  or  two  longer,  we  may  see  an  opportunity  for 
intervention." 

The  Emperor's  intentions,  however,  were  fully  revealed 
in  an  autograph  letter  to  General  Forey,  which  was  written 
in  July  and  in  which  his  grasping  ambition  stood  out  in  the 
boldest  relief.  He  wrote  :  "  In  the  present  state  of  civili- 
zation of  the  world,  the  prosperity  of  America  is  not  a 
subject  of  indifference  to  Europe,  for  she  nourishes  our 
manufactures  and  gives  life  to  our  conmierce.  We  are 
interested  in  having  the  Bepublic  of  the  United  States  a 
powerful  and  prosperous  power,  but  we  are  not  willing  to 
have  that  Bepublic  take  possession  of  the  entire  Gulf  of 
Mexico,  command  from  there  the  Antilles  as  well  as  South 
America,  and  monopolize  the  distribution  of  the  products  of 
the  New  World.  To  prevent  this,  a  stable  Government  must 
be  established  in  Mexico,  and  we  will  in  that  event  have 
restored  to  the  Latin  race  on  the  other  side  of  the  Atlantic 
its  power  and  prestige." 

Napoleon  completely  overdid  the  thing  in  this  letter  to 
General  Forey.  The  vaulting  ambition  which  overleaps 
itself  and  falls  on  the  other  side  stuck  out  too  plainly.  He 
showed  that  he  wanted  the  whole  earth,  and  this  aroused 
the  resentment  of  the  South.  In  the  following  August,  M. 
Theron,  a  French  consul  in  Texas,  inspired  by  Napoleonic 
ideas  of  annexation,  coolly  contemplated  the  transformation 
of  Texas  to  a  French  republic,  and  confided  his  project  to 
Goyemor  Lubbock  of  that  State,  who  apprised  Jefferson 
Pavis  of  the  consul's  aspirations.  This  was  too  much  even  for 
the  Confederate  Government,  and  M.  Theron  and  the  French 
consul  at  Bichmond  were  both  politely  requested  to  leave 
the  Confederate  States. 

Napoleon  persisted  in  his  intrigues  for  the  purpose  of 


68       FO&AIGK  INT&IGUQS  AGAINSt  AHKRICAN  JJBnRTY. 

getting  a  foothold  in  this  country,  in  spite  of  the  rebuff 
which  his  officious  consuls  had  received  from  the  Confeder- 
acy. Ho  expressed  himself  desirous  of  interesting  some  of 
the  rest  of  the  European  powers  in  the  cause  of  the  South, 
and  again  entered  into  confidence  with  Slidell  on  the  possi- 
bility of  joint  mediation  on  the  part  of  England,  France 
and  Bussia.  "My  own  preference,"  said  the  Emperor,  "is 
for  a  proposition  for  an  armistice  for  six  months,  with  the 
Southern  ports  open  to  the  commerce  of  the  world.  This 
would  put  a  stop  to  the  efiusion  of  blood ''  (How  tender* 
hearted  ho  was  1)  "  and  hostilities  would  probably  never  be 
resumed.  We  can  urge  it,"  he  added,  "  on  the  high  grounds 
of  humanity,  and  the  interests  of  the  whole  civilized  world. 
If  it  be  refused  by  the  North,  it  will  afford  good  reason  for 
recognition,  and  perhaps  for  more  active  intervention." 

Mr.  Slidell  then  suggested  that  if  the  Emperor  would  give 
some  kind  of  assurance  that  the  police  would  not  interfere, 
ships  and  munitions  of  war  might  be  sent  from  France  to 
the  Confederacy. 

"Why  could  you  not  have  the  ships  built  as  if  for  the 
Italian  Government  ?"  suggested  the  Emperor.  "  I  do  not 
think  it  would  be  difficult,  but  I  will  consult  my  ministers 
about  it." 

Napoleon  then  suggested  the  joint  appeal  for  the  six 
months'  armistice  to  England  and  Bussia,  which  was  de- 
clined by  both.  He  then  made  a  direct  offer  of  mediation 
to  the  United  States  Government,  in  the  most  friendly  terms, 
and  on  the  "high  grounds  of  humanity." 

The  United  States  Government  did  not  see  it  in  this 
light,  and  rejected  Napoleon's  humane  offer. 

The  Confederate  agents  then  obtained  power  to  build 
ships  of  war  in  French  ports,  and  to  arm  and  equip  them, 
and  proceed  to  sea  -without  molestation  from  the  French 
authorities,  the  Treaty  of  Paris  forbidding  such  a  hostile 
act  against  a  friendly  power  like  the  North  to  the  contrary 
notwithstanding.  The  despot  of  France  imagined  himself 
above  all  treaties  at  that  time. 


BKGI^AND   "CRAWW"   OUT  Olf  TH«  SCRAPIE  69 

The  English  Alabama  was  then  croising  in  a  most  sno- 
oessfol  manner.  The  Emperor  had  a  conference  with  Mr. 
Annan,  a  large  shipbuilder,  and  assured  him  that  there  would 
be  no  difficulty  about  building  the  ships  for  the  Confederates 
under  the  disguise  of  their  Italian  destination.  Accord- 
ingly, a  contract  was  made  for  building  five  ships  of  war  at 
Bordeaux  and  Kantes,  and  afterwards  another  contract  for 
three  iron-dad  rams. 

In  1863  the  Emperor  had  a  great  deal  of  business  on 
hand,  but  was  still  convinced,  amid  all  his  diplomatic  duties 
that  the  South  should  be  recognized  by  the  European 
powers.  He  was  afraid,  however,  of  putting  his  Mexican 
expedition  in  jeopardy  by  risking  a  rupture  with  the  North. 
Finally,  he  said :  ^'  I  wUl  make  a  direct  proposition  to 
England  for  joint  recognition.  This  will  effectually  prevent 
Lord  Palmerston  from  misrepresenting  my  position  and 
wishes  on  the  American  question.''  Accordingly*  he  had  an 
interview  with  those  two  worthy  members  of  Parliament, 
Messrs.  Boebuck  and  Lindsay,  at  Fontainbleau,  which  was 
said  to  be  highly  satisfactory.  He  authorized  them  to  state 
in  the  House  of  Commons  that  he  was  both  willing  and 
anxious  to  recognize  the  Confederate  States,  with  the  co- 
operation of  England. 

There  was  a  great  debate  in  Parliament  on  the  subject^ 
in  the  midst  of  which  Earl  Bussell  arose  and  said  that 
Baron  Gros,  the  French  Minister,  had  received  no  commu- 
nication from  his  Oovernment  on  American  affairs.  Mr. 
Boebuck,  who  made  the  motion  on  the  authority  of  the 
Emperor,  was  astonished  that  he  had  been  so  badly  fooled. 
It  still  remains  a  mystery,  however,  why  Baron  Gros  did 
not  receive  the  advice  in  question  from  the  Emperor,  be- 
cause M.  Mocquard,  the  Emperor's  Secretary,  wrote  to 
SlideU  as  follows :  ^^  On  the  next  day  after  the  interview 
of  Messrs.  Boebuck  and  Lindsay  with  the  Emperor,  the 
Minister  of  Foreign  Affairs  telegraphed  Baron  Gros  to 
^officiously'  inform  Lord  Palmerston  that,  should  Ghreat 


70       FOREIGN  INTRIGUBS  AGAINST  AMERICAN  LIBERTY. 

Britain  be  willing  to  recognize  the  South,  the  Emperor 
would  be  willing  to  follow  her  in  that  way.'* 

The  only  explanation  that  seems  plausible  under  these 
circumstances  is,  that  the  Palmerston-Eussell  Cabinet  in- 
terrupted this  telegram  to  Baron  Gros  for  diplomatic' pur- 
poses, or  that  the  Baron,  seeing  that  the  debate  in  Parliament 
had  taken  ^n  unfayorable  turn,  had  prudently  resolyed  to 
suppress  the  advice  from  Napoleon,  in  order  that  his  master 
might  not  commit  himself  while  England  was  not  heart  and 
soul  with  him  in  the  enterprise.  In  fact,  England  had 
begun  to  see  that  she  had  taken  a  false  position,  and  Mr. 
Gladstone's  eloquent  spurt,  to  the  effect  that  '^  Jefferson 
Davis  had  created  a  nation,"  was  no  longer  the  diplomatic 
faith  of  England.  She  was  more  influenced  by  fear  than 
love,  as  she  always  is,  and  had  begun  to  think,  after  the 
capture  of  New  Orleans  and  the  destruction  of  the  Con- 
federate fleet,  that  the  Federal  Government  was  capable  of 
organizing  a  formidable  navy.  The  (iondon  Timely  which 
voiced  diplomatic  sentiment  then,  said  so.  During  this  very 
debate  on  Boebuck's  motion,  Lee's  army  had  been  beaten  at 
Gettysburg,  Yicksburg  had  surrendered  and  victory  was 
beginning  to  perch  on  the  Northern  banners  everywhere* 
Napoleon  also  drew  in  his  horns,  complaining  bitterly  that 
"perfidious  Albion"  had  gone  back  on  him,  and  he  was 
afraid  to  permit  the  war  ships,  when  finished,  to  leave  the 
French  ports  for  any  destination,  and  when  he  permitted 
the  English  privateer,  the  Bappahannock,  to  depart,  it  was 
under  the  injunction  that  the  American  minister  should 
know  nothing  about  it. 

What  Lord  Palmerston  called  a  "concatenation  of  cir- 
cumstances ''  contributed  largely  to  force  the  Emperor  to 
change  his  policy  towards  the  United  States.  Maximilian's 
Mexican  expedition  was  exceedingly  unpopular,  trouble  was 
brewing  in  several  parts  of  the  continent,  and  Bismarck 
and  Yon  Moltke  were  cunningly  and  deliberately  weaving 
that  net  in  which  the  Man  of  Destiny,  seven  years  later,  was 


HOW  A  DAY  DRBAM  OF  «MPIR«  BNDED.        71 

Hopelessly  entangled  at  Sedan.  His  dream  of  a  French 
American  Empire  beyond  the  Mississippi  had  vanished  long 
before  bis  last  abject  act  of  hnmiliation  in  surrendering  the 
srword  of  France  to  Bismarck.  And  ere  he  died,  a  miserable 
wreck  of  disappointed  ambition,  again  a  political  exile,  he 
had  the  opportunity  of  seeing  our  own  Bepublic,  which  he 
sought  to  destroy,  rehabilitated,  and  on  its  way  to  become 
the  greatest  nation  in  hij^^tvy. 


i  u,' 


THE  HON.  JOHN  SHERMAN, 

Who  has  taken  a  promineot  part  in  financial  matters  since  the  beginninf?  of  the  war, 
first  in  makinie  treasury  notes  a  legal  tender  in  186.' ;  in  proposing  the  Redemption 
Act  in  1S67,  which  was  passed  in  1870,  aod  in  the  resumption  of  specie  payments  in 
1879,  which  was  the  crowning  succt- as  of  the  flnaccial  policy  which  established  the 
Government  credit  on  a  solid  basis 


OHAPTEB     IX. 

SECRETARY  CHASE  AND  THE  TREASURY. 

The  Depleted  Condition  op  the  Tbeasubt  when  Mr 
Ohase  took  Office.  -  Prbpabations  fob  Wab  and 
Obeat  Excitement  in  Washington  — Ohiyalrou.-j 
Southerners  in  a  Ferment. — Officials  Up  in  Arms  in 
Defence  op  their  Menaced  Positions. — Miscalccla- 
tion  with  Begard  to  the  Probable  Duration  op  the 
Wab. — ^A  Visit  to  Washington  and  an  Interview  with 

SSCBETABY  ChASE.— DISAPPOINTMENT  ABOUT  THE  SaLE 

OF  Gk)yEBNMENT  BoNDs. — ^A  Panic  Pbecipitated  in 
Wall  Stbeet. — Millionaibes  Reduced  to  Indigence 
in  a  Pew  Houbs.  — Mibaculously  Saybd  fbom  the 
Wbeck. — How  IT  Happened. 

SOON  after  Mr.  Chase  came  into  tiie  Treasury  he  foiind 
that  monej  was  serionsly  needed.  In  fact  the  Treasury 
was  empty.  The  expenditure  for  the  fiscal  year  ending 
June,  1861,  was  62  millions,  and  there  were  only  41  millions 
of  revenue  to  meet  them,  and  even  this  amount  was  threat- 
ened with  a  serious  reduction  on  account  of  the  traitorous 
and  rebellious  attitude  of  the  South. 

After  President  Lincoln  had  called  upon  Congress  to  pro- 
Tide  for  the  enlistment  of  400,000  men,  the  expenses  of  the 
Goremment  were  soon  advanced  to  the  enormous  amount  of 
a  million  dollars  a  day.  The  Secretary  of  the  Treasury  made 
a  calculation,  which  he  submitted  to  the  President,  sliowing 
that  the  probable  expenditures  would  amount  to  318  mil- 
lions for  the  ensuing  year.  He  advised  that  80  millions  be 
provided  for  by  taxation,  240  millions  by  loan,  and  that  60 
millions  of  Treasury  notes,  redeemable  in  coin  on  demand, 
should  be  issued. 

The  Secretary  was  authorized  by  Congress  to  borrow  a 
sum  not  exceeding  260  millions,  on  the  credit  of  the  United 
States,  and  as  a  part  of  this  loan  he  was,  in  the  words  of  the 


7^  SKCRKTARY  CHAS«  AND  THS  TREASURY. 

Act,  '*  to  issue  in  exchange  for  coin,  or  pay  for  salaries  or 
other  dues  from  the  United  States,  not  over  50  millions  of 
Treasury  notes,  bearing  no  interest,  but  payable  on  demand 
at  New  York,  Philadelphia  or  Boston." 

When  Mr.  Chase  advertised  for  bids  on  the  bonds  known 
as  the  81  issue  all  bids  at  94  and  above  were  accepted,  and 
those  under  94  were  rejected. 

I  got  up  a  syndicate  immediately  to  take  the  entire  bal- 
ance of  the  loan  at  94,  and  went  on  to  Washington  to  see 
the  Secretary.  This  syndicate  comprised  a  number  of  New 
York  banks  and  many  large  capitalists.  I  called  upon  Sec- 
retary Chase  when  I  arrived,  informed  him  of  the  object  of 
my  visit  and  made  him  an  offer  of  94  for  the  entire  balance 
of  the  loan. 

He  was  in  favor  of  the  proposition,  but  requested  me  to 
leave  the  matter  open  until  the  following  morning  for  him 
to  consider*  It  was  a  question  with  him  whether  he  ought 
not  to  give  those  whose  bids  had  been  rejected  an  equal 
opportunity  with  the  parties  I  represented. 

I  never  can  forget  the  impression  I  received  on  my  ap- 
proach to  Washington  that  morning.  As  I  looked  through 
the  window  of  the  sleeping  car  my  eye  was  met  by  an  entire 
train  load  of  brass  cannon.  There  were  at  least  a  dozen 
platform  cars,  each  having  one  of  those  huge  guns,  all 
apparently  in  order  to  wheel  at  once  against  the  enemy.  I 
shall  always  remember  the  feelings  that  came  over  me  at 
that  moment.  The  question  of  war  or  no  war  was  vividly 
presented  to  my  mind,  and  this  was  the  uppermost  thought 
during  my  visit  at  Washington. 

I  descended  from  my  traveling  quarters  as  soon  as  the 
train  was  announced  as  having  arrived  at  the  capital,  and 
repaired  to  Willard's,  then  the  principal,  if  not,  in  fact,  the 
only  hotel  for  a  traveler  to  go  to,  and  it  was  an  old-fash- 
ioned, historic  hostelry.  I  hastened  to  my  room,  rapidly 
performed  my  ablutions,  and  then  found  my  way  into  the 
dingy  breakfast  room.    On  inquiry,  I  found  that  ten  o'clock 


DiSTlNGX/lSHED  JBBARING  OF  CHASE.  75 

▼as  the  usual  hour  for  heads  of  departments,  including  Mr. 
Chase,  to  be  at  the  Treasury.  At  that  hour  I  went  to  see 
him.  I  sent  in  m  j  card  and  was  ushered  into  his  presence 
without  delay.  "He  was  a  man  of  portly  frame  and  distin- 
g^ished  bearing,  and  impressed  me  with  the  feeling  of  be- 
ing in  the  presence  of  an  individual  far  above  the  average 
standard  of  humanity  in  every  respect. 

I  informed  the  Secretary  of  my  mission,  with  the  result 
above  stated. 

About  seven-eighths  of  the  people  of  Washington,  at  that 
time,  were  Southerners.  The  office-holders  were  largely  com- 
posed of  the  latter,  and  they  were  expecting  to  be  suddenly 
turned  out  of  office.  This  rendered  the  place  a  boiling 
caldron  of  conspiracy  and  treason. 

As  I  went  around  collecting  information,  the  sight  of 
those  cannon  that  at  first  had  made  such  an  indescribable 
impression  upon  me,  continued  to  haunt  my  vision  wherever 
I  went.  The  air  was  filled  with  rumors  of  war,  and  every- 
body was  wound  up  to  the  highest  pitch  of  hostile  excite- 
ment. 

As  I  mingled  among  the  people^  the  impression  was  forced 
uiK>n  me  that  war  was  inevitable,  and  that  up  to  the  very 
hilt  of  the  sword.  I  felt  that  the  contest  would  be  long  and 
bloody. 

I  sent  a  dispatch  to  my  firm  in  New  York,  conveying  my 
impressions  to  that  effect,  and  advised  them  to  clear  the 
decks  in  preparation  therefor.  I  urged  them  to  lose  no  time 
in  selling  off  all  the  mercantile  paper  on  hand,  and  requested 
them  to  communicate  to  the  members  of  the  syndicate, 
which  I  had  formed  for  the  purchase  of  bonds,  recommend- 
ing them  to  withdraw  therefrom,  as  I  was  convinced  that 
war  to  the  knife  was  imminent,  and  that  Government  bonds 
must  have  a  serious  fall  in  price  in  consequence. 

I  saw  Mr.  Chase  the  next  morning,  and  told  him  that,  as  I 
believed,  there  was  going  to  be  a  long  and  bloody  war, 
I  could  not  conscientiously,  in  the  interest  of  my  clients^ 
renew  my  bid  of  the  previous  day. 


76  SSCimTART  CHASB  AND  THK  TKBASURt. 

With  regard  to  mj  opinion  about  the  probable  length  of 
the  war,  the  Secretary  took  issue  with  me  very  firmly. 

Mr.  Chase,  however,  afterwards  proved  to  be  a  warm  and 
most  valued  friend  of  mine,  and  it  was  largely  due  to  his 
aid  and  recognition  that  I  achieved  brilliant  success  in  my 
early  Wall  Street  career  during  the  war  period. 

The  Secretary  was  of  opinion  that  the  bonds  should  com- 
mand par,  at  least,  and  they  would  be  worth  thaL«nd  above 
it  very  soon,  he  thought.  He  made  this  assortioa  on  the 
expectation  that  the  impending  difficulties  would  soon  b« 
adjusted,  and  that  in  less  than  sixty  days  all  the  trouble 
would  be  at  an  end. 

It  was  not  so  extraordinary  as  it  may  seem  to  some  people 
now,  with  the  light  of  later  events  fully  before  them,  that  the 
Secretary  was  so  sanguine  of  short  work  being  made  of  the 
South,  because  he  only  shared  the  opinion  of  a  large  number 
of  people,  who  greatly  underestimated  Southern  durability. 

After  leaving  the  Secretary,  who  treated  me  with  great 
consideration,  as  he  did  every  one  in  his  inimitable  and  dig- 
nified manner,  which  made  such  a  durable  and  favorable 
impression  on  all  who  came  in  contact  with  him,  I  felt  great- 
ly pleased  and  highly  gratified  at  meeting  him.  In  fact,  his 
fine,  magnetic  presence  was  c^f  a  character  to  command  the 
admiration  of  almost  every  person  who  had  the  honor  of  an 
interview.  He  was  a  great  man  for  producing  good  first  im- 
pressions, and,  unlike  many  impressions  of  this  character 
they  were  generally  lasting. 

Had  1  not  visited  Washington  at  the  time  I  did,  and  had 
I  not  obtained  the  correct  impression  concerning  the  future 
of  the  then  impending  difficulties,  my  firm,  like  many  others 
that  invested  in  Government  bonds,  mercantile  paper,  stocks 
and  other  fluctuating  properties,  would  have  been  irretriev- 
ably ruined.  I  have  reason  to  congratulate  myself,  there- 
fore, on  my  good  fortune  in  narrowly  escaping  such  a  dis- 
aster, almost  at  the  beginning  of  my  Wall  Street  career,  as 
I  was  thus  enabled,  at  a  later  stage  of  the  national  trouble^ 


PIRST  EXPERIENCE  IN  GOVERNMENT  BONDS.  77 

to  be  of  considerable  service  to  the  Ooyernment,  through 
the  Treasory,  in  its  efforts  to  sustain  such  an  army  in  the 
field  as  was  calculated  to  ensure  sucxsess  to  the  Federal 
arms. 

My  first  experience  in  dealing  in  Government  bonds  was 
just  prior  to  the  Lincoln  administration^  when  Mr.  Cobb 
was  Secretary  of  the  Treasury.  He  advertised  for  sale  to 
the  highest  bidders  an  issue  of  U.  S.  bonds  bearing  five 
per  cent,  interest,  having  twenty  years  to  run,  and  my  firm 
bid  for  $200,000  of  them,  hoping  to  make  a  quick  turn,  and 
a  small  profit  thereon.  A  five  per  cent,  deposit  was  made, 
as  required  by  custom. 

The  loan  was  all  awarded  to  most  of  the  bids,  mine  in- 
cludedy  and  a  very  large  part  of  it  was  awarded  to  Lock- 
>vood  &  Co.,  who  wdre  then  regarded  the  largest  and  most 
prosperous  Stock  Exchange  firm  in  the  street. 

George  S.  Bobbins  &  Co.,  John  Thompson,  Marie  &  Kans, 
and  a  few  others,  whose  names  I  now  forget,  made  also 
large  bids. 

Of  those  mentioned,  however,  my  firm  stood  alone  in  tak- 
ing up  the  bonds,  as  the  threatening  aspect  of  political  affairs 
came  on  so  soon  afterwards  as  to  depreciate  Government  se- 
curities. The  original  deposit  of  five  per  cent,  was  lost  by 
these  subscribers,  and  the^  bonds  were  permitted  to  remain 
in  Btatu  quoj  as  the  Gbvernment  never  forced  the  claim 
against  the  delinquents. 

This,  in  a  large  measure,  accounted  for  the  impoverished 
condition  of  the  Treasury  when  Mr.  Chase  took  charge  of 
it,  and  for  which  Mr.  Cobb  has  been  made  an  object,  not 
wholly  xmdeserving,  of  public  reproach. 

The  $200,000  bonds  my  firm  subscribed  for  at  par 
were  sold  mostly  at  95  and  below,  but  the  fact  of  taking 
Ihem,  and  meeting  the  subscriptiou,  without  fail,  gave  my 
firm  an  excellent  standing  with  the  Government  at  the  be- 
ginning of  the  war,  and  enured  greatly  to  my  firm's  advan- 
tage thereafter. 


78  SECRETARY  CHASE  AND  THE  TREASURY. 

At  the  time  I  yisited  Washington  my  firm  was  more  large- 
ly engaged  in  dealing  in  mercantile  paper  than  any  other 
branch  of  Wall  Street  business. 

I  had  inaugurated  the  system  at  the  time  of  my  advent  to 
the  **  Street "  of  buying  merchants'  acceptances  and  receiv- 
ables out  and  out,  the  rate  being  governed  by  the  prevailing 
ruling  rate  for  money,  with  the  usual  commission  added. 

It  was  by  this  method  that  my  firm  soon  became  the  lar- 
gest dealers  in  mercantile  paper,  which  business  had  former- 
ly been  controlled  by  two  other  firms  for  at  least  a  quarter 
of  a  century,  and  whose  old  fogy  methods  were  by  my  in- 
novations easily  eclipsed. 

The  merchants  at  that  time  would  go  to  these  discount 
firms  and  leave  their  receivables,  bearing  their  endorse- 
ments, on  sale  there,  and  only  when  sold  by  piecemeal  could 
they  obtain  the  avails  thereof. 

The  more  expeditious  plan  that  I  adopted,  which  was  to 
give  these  negotiators  a  check  at  sight,  seemed  generally  to 
merit  their  approbation,  and  enabled  me  to  command  the 
situation  in  that  line  of  business,  very  much  to  the  chagrin 
otmy  competitors. 

In  this  way  my  firm  had  accumulated  about  five  hundred 
thousand  dollars  in  notes,  which  were  hypothecated  with 
various  city  and  country  banks. 

After  coming  to  the  conclusion  above  referred  to  on  my 
visit  to  Washington,  in  regard  to  the  certainty  of  a  pro- 
longed and  desperate  war,  I  made  quick  steps  back  to  New 
York  to  dispose  of  my  paper.  I  went  vigorously  to  work, 
and  succeeded  in  unloading  all  but  ten  thousand  dollars  of 
short  time  notes  made  by  Lane,  Boyce  &  Co.,  and  a  note  of 
J500  of  Edward  Lambert  &Qo. 

I  had  no  sooner  accomplished  this  very  desirable  work  of 
shifting  my  burden,  and  distributing  it  in  a  more  equable  man- 
ner on  the  shoulders  of  others,  but  at  higher  rates  than  I 
paid,  than  in  less  than  a  week  after  my  return  from  Wash- 
ington the  exciting  news  arrived  of  the  firing  of  the  first 
hostile  gun  at  Fort  Sumter. 


FINANCIAI,I,Y  SAVED  BY  INSPIRATION.  70 

The  annonncement  of  this  overt  act  of  war  spread  like 
wildfire,  and  the  wildest  scenes  of  ^Lcitement  and  conster- 
nation were  witnessed  in  Wall  Street  and  throughout  the 
entire  business  community.  The  whole  country  was  panic 
stricken  in  an  instant. 

Stocks  went  down  with  a  bound  to  panic  prices.  Fortunes 
were  lost^  and  millionaires  were  reduced  to  indigence  in  a 
few  hours.  Money  was  unobtainable,  and  distrust  every- 
where was  prevalent 

The  two  firms  whose  paper  I  was  unable  to  dispose  of 
were  about  the  first  to  fail,  and  before  the  maturity  of  any 
of  the  balance  of  the  paper  which  I  had  successfully  nego- 
tiated both  the  drawers  and  endorsers  thereon,  without  ^ 
single  exception,  all  collapsed. 

The  height  which  Gilroy's  kite  attained  would  have  been 
nowhere  in  point  of  altitude  to  that  which  I  should  have 
reached  had  I  not  had  the  good  luck  to  have  cleared  my 
decks  as  I  did,  and  in  the  nick  of  time. 

My  safety  in  this  instance  was  due  to  my  inspiration,  to 
which  I  believe  myself  more  indebted  than  anything  else  for 
the  privilege  of  remaining  in  Wall  Street  up  to  the  present 
date. 

I  am  no  spiritualist  ucir  theosophist,  but  this  gift  or  occa- 
sional visitation  of  Providence,  or  whatever  people  may 
choose  to  call  it,  to  which  I  am  subject  at  intervals,  has 
enabled  me  to  take  ^^ points"  on  the  market  in  at  one  ear 
and  dispose  of  them  through  the  other  without  suffering  any 
evil  consequences  therefrom,  and  to  look  upon  tliese  kind 
friends  who  usually  strew  these  valuable  "  tips  "  so  lavishly 
around  with  the  deepest  commisseration.  Mj  ability  to  do 
this,  whatever  may  be  ii43  source,  whether  human  or  divine, 
has  saved  me  from  being  financially  shattered  at  least  two 
or  three  times  annually. 

I  do  not  indulge  in  any  table  tapping  or  dark  seances  like 
the  elder  Yanderbilt,  but  this  strange,  peculiar  and  admoni- 
toiy  influence  clings  to  me  in  times  of  approaching  squalls 
more  tenaoionsly  than  at  any  ordinary  junctures. 


80  SECRKTARY  CHASE  AND  THE  TREASXXRY. 

I  have  known  others  who  have  had  these  mysterious 
forebodings,  bat  who  recklessly  disregarded  them,  and  this 
has  been  the  rock  on  which  they  have  split  in  specnlatiye 
emergencies. 

Therefore  I  say  again,  beware  of  "points."  They  consti- 
tute the  ignis  fatuu9  which  lure  more  unfortunate  speculators 
to  their  financial  doom  than  all  other  influences  put  together. 


HON.    ELBRIDGE   GERRY   SPAULDING, 

Author  of  the  Legal  Tender  Act,  which  authorized  the  issue  of  greenbacks  In  18CSL  He 
was  a  member  of  Congress  from  New  York.  He  resides  at  Buffalo,  and  is  now  in 
his  eightieth  year  of  his  age,  but  still  in  good  physical  health,  with  his  miod  dear 
and  vigorous. 


CHAPTEB    X. 

THE    NATIONAL   BANKS. 

BXCBETABT    GhASE  CONSIDERS  THE  PbOBLEM  OF  PROVIDING 

A  National  Currency. — How  E.  G.  Spaulding  takes 
A  Prominent  'Part  in  the  Discussion  on  the  Bank 
Act.— The  Act  Fou^nded  on  the  Bank  Act  of  the 
State  of  New  Tore.— Effect  of  the  Act  upon  the 
Credit  op  the  Country.— A  New  System  of  Banking 
Bequired. 

THE  history  of  the  Bank  Act  of  1863,  impTOved  by  the 
Act  of  1864,  would  require  much  larger  space  than  I 
can  devote  to  it  in  this  book.  I  can  only  glance  at  its 
salient  points,  and  show  its  great  influence,  not  only  on  the 
finances  of  the  country,  but  upon  the  destiny  of  the  nation 
itself. 

The  Hon.  E.  G.  Spaulding,  who  was  one  of  the  most  prom- 
inent men  in  dealing  with  the  financial  questions  of  that 
period,  has  written  and  preserved  a  very  full  history  of 
the  legislation  on  the  subject,  and  of  the  interesting  de- 
bates which  preceded  it. 

After  the  temporary  loans  had  been  negotiated  to  release 
the  pressure  upon  the  Government,  Secretary  Chase  set  his 
mind  to  consider  the  problem  of  providing  a  currency  with- 
out disturbing  the  business  organization  of  the  coimtry. 

At  this  period  he  was  met  by  a  fresh  difficulty,  in  the  sus- 
pension of  specie  payments,  which  had  been  hastened  by  the 
arrest  of  Mason  and  Slidell,  which,  but  for  the  wise  policy  of 
Mr.  Seward,  would  have  precipitated  a  conflict  with  Great 
Britain. 

Early  in  1862  Congress  authorized  ten  million  more  of  de- 
mand notes.  This  was  followed  by  further  issues,  making  in 
/all  300  million  United  States  notes.  Secretary  Chase  was  at 
first  opposed  to  making  these  notes  a  legal  tender  for  private 


82 


THE  NATIONAI,  BANES. 


debts,  but  in  order  to  gel:  tho  bill  tlirongh,  he  agreed  to  the 
legal  tender  clause,  as  Iho  Goyernmont  was  greatly  in  need 
of  money. 

The  Secretary  was  also  empowered  by  Congress  to  bor- 
row 600  million  dollars  on  5-20  year  6  per  cent,  bonds,  aod 
also  to  obtain  a  temporary  loan  of  100  millions  on  condition 
that  the  interest  on  the  bonds  should  be  paid  in  coin, 
and  that  the  customs  should  be  collected  in  coin  for  that 
purpose. 

The  first  bill  to  provide  a  national  currency  secured  by 
a  pledge  of  United  States  bonds  was  introduced  by  Mr. 
Hooper,  in  July,  1862,  bufc  it  was  not  reported  from  the  Com- 
mittee to  which  it  had  been  sent.  At  the  meeting  of  Con- 
gress in  December  the  same  year  the  financial  problem  had 
become  still  more  complicated,  and  owing  to  the  magnitude 
which  the  war  had  then  assumed,  the  expenses  amounted  to 
two  millions  a  day. 

The  total  receipts  for  the  fiscal  year  ending  June  30, 
1863,  were  511  millions,  and  the  expenditures  were  788 
millions,  thus  leaving  a  deficit  of  277  millions. 

All  the  financial  wisdom  of  the  Secretary  was  necessary  in 
this  dilemma.  The  question  was  whether  to  provide  for 
these  277  millions  by  a  fresh  issue  of  (Jnited  States  notes, 
or  by  interest-bearing  loans. 

The  Secretary  was  opposed  to  increase  the  volume  of  the 
currency,  saying  that  the  result  would  be  the  inflation  of 
prices,  increase  of  expenditures,  augmentation  of  debt,  and 
ultimately  disastrous  defeat  of  the  very  purposes  sought  to 
be  attained  by  it. 

He  was  in  favor  of  an  increase  in  the  amount  authorized  to 
be  borrowed  on  the  5-20  bonds.  He  advised  the  creation 
of  banking  associations  which  should  secure  their  circula- 
tion by  a  deposit  of  Government  bonds.  One  object  of  this 
was  to  create  a  market  for  the  bonds. 

Congress  was  not  in  favor  of  this  proposition,  and  the 
bill  of  Mr.  Hooper  was  again  offered  in  the  following  Jan- 


SSCITRING  THE  NATIONAL  BANKING  CURRENCY.  88 

nary,  but  was  adversely  reported  from  the  Committee  on 
Ways  and  Means. 

Another  new  issue  of  100  millions  United  States  notes 
was  ordered  on  motion  of  Mr.  Stevens,  of  Pennsylvania,  to 
meet  the  constantly  increasing  needs  of  the  aimy  and  navy. 

Mr.  Lincoln  signed  the  joint  resolution  ordering  the  new 
issue  with  some  reluctance,  and  sent  a  special  message  to 
the  House,  in  which  he  expressed  his  regret  that  it  was 
necessary  to  add  this  last  amount  to  the  currency  while  the 
suspended  banks  were  free  to  increase  their  circulation. 

Soon  after  this  Senator  Sherman  offered  a  bill  to  provide  a 
national  currency,  somewhat  after  the  model  of  Mr.  Hooper's 
bill.  The  Sherman  bill  was  passed  before  the  end  of  Febru- 
ary. This  virtually  secured  the  present  national  banking 
system. 

In  order  to  show  more  clearly  the  nature  of  the  national 
bank  legislation,  and  the  prominent  part  taken  by  Mr. 
Spaulding  and  a  few  others  therein,  Mr.  Chase  having  been 
the  directing  mind,  it  is  necessary  to  make  a  brief  resume  of 
the  action  of  Congress  with  the  State  banks  in  this  con- 
nection. 

In  January,  1862,  the  banks  applied  to  Secretary  Chase 
to  receive  their  notes  in  payment  for  the  bonds  which  he 
had  for  sale,  but  the  Secretary,  thinking  that  this  would 
inflate  the  bank  currency,  refused  the  offer.  Yet  the  process 
of  inflation  went  on  until  it  increased  from  130  to  167  mil- 
lions. 

When  Mr.  Spaulding  advocated  the  National  Bank  Act 
on  the  ground  that  it  would  provide  a  permanently  improved 
bank  currency,  the  Hon.  Boscoe  Conkling,  at  that  time  in 
the  lower  House,  opposed  the  policy  of  making  war  upon 
the  twelve  hundred  banks  in  the  free  States,  and  made  a  very 
affecting  appeal  for  the  orphans  and  widows  who  had  stock 
therein.  He  proposed  to  issue  250  millions  of  seven  per 
cent,  bonds,  payable  in  thirty-one  years,  to  be  exchanged 
for  the  bills  of  the  suspended  banks  of  New  York,  Philadel- 


84  TH9  NATIONAL  BANKS. 

phis  and  Boston,  and  also  to  issue  200  millions  of  Unitacl 
States  notes,  payable  in  coin  in  a  year.  Mr.  Conkling's 
scheme  was  assailed  bj  Mr.  Bingham,  of  Ohio,  on  the 
ground  that  it  would  subject  the  national  currency  to  the 
mercj  of  city  bankers  and  brokers.  Other  eminent  repre- 
sentatives stood  up  for  the  maintenance  and  integrity  of 
the  State  banks,  and  notably  Mr.  Gonkling  opposed  the 
measure  vigorously,  which  was  intended  to  tax  the  State 
banks  out  of  existence. 

Mr.  Spaulding,  who  advocated  the  bill,  was  followed  by 
Mr.  Fenton  in  an  able  argument,  showing  the  superiority  of 
a  currency  secured  by  United  States  bonds,  and  Senator 
Sherman  explained  the  great  evil  occasioned  by  the  success 
attending  the  counterfeiting  of  the  State  bank  notes. 

These  arguments  seemed  to  be  conclusive  and  overwhelm* 
ing  in  the  passage  of  the  bill. 

It  must  not  be  forgotten,  to  the  honor  of  the  State  of  New 
York,  that  the  National  Bank  Act  was  founded  on  the  Bank- 
ing act  of  this  State,  whose  chief  features  were  a  currency 
secured  on  public  funds,  and  that  directors  and  stockholders 
should  be  personally  liable. 

The  authorship  of  this  idea  is  attributed  to  Mr.  StUlman, 
who  is  also  the  well-known  author  of  the  "  Stillman  Act"  to 
abolish  imprisonment  for  debt. 

This  bank  act,  which  was  especially  engineered  by  the 
far-seeing  Secretary  of  the  Treasury,  Salmon  P.  Chase,  had 
almost  a  miraculous  effect  upon  the  credit  of  the  country. 
It  created  a  new  and  extensive  market  for  United  States 
bonds,  which  immediately  advanced  from  93  to  par. 

All  the  running  expenses  of  the  Government,  accumulated 
with  such  rapidity,  were  paid  from  the  sale  of  the  5-20'8 
within  the  short  period  of  two  months  or  thereabouts. 

It  was  stated  in  the  Treasury  report  at  the  end  of  the  year 
that  '^  The  Bank  Act  at  once  inspired  faith  in  the  securities 
of  the  Qovernment,  and,  more  than  any  other  cause,  enabled 
the  Secretary  to  provide  for  the  prompt  payment  of  the 
soldiers  and  the  public  creditors." 


HOW  THB  bans:  act  was  passbi>  ®** 

Mr.  Hagli  McOulloch,  the  Comptroller  of  the  Currency, 
saw  room  for  certain  changes  in  the  law,  some  of  which  were 
ejected  by  Congress  in  the  first  session  of  1^64.  These 
changes  were  embodied  in  the  Act  of  Jane,  1864. 

There  was  a  long  debate  and  strenuous  opposition,  in 
which  Secretary  Chase  deeply  sympathized,  against  State 
taxation  of  the  national  banks,  but  despite  the  opposition 
the  taxation  clause  was  carried. 

At  length  the  modified  act  was  passed,  limiting  the  total 
amount  of  United  States  notes  to  be  issued  to  400  millions, 
with  such  additional  amount,  not  exceeding  50  millions,  as 
might  be  transiently  required  for  the  redemption  of  the 
temporary  loan,  and  thus  the  main  features  of  the  Bank  Act, 
which  has  served  its  purpose  very  well,  became  a  law. 

I  hope,  however,  ere  long,  as  I  have  more  fully  intimated 
in  another  chapter,  to  see  a  superior  system  of  banking, 
which  I  believe  must  succeed  the  present  system,  which  is 
now  doomed  to  ^'innocuous  desuetude"  through  the  im- 
minent payment  of  the  public  debt 


NEW  YORK  STOCK  EXCHANGE. 


I 


I  GHAFTEB  XI« 

I  THE  NEW  YORK  STOCK  EXCHANGE. 

BiErroBT  or  the  Obganization  fob  Ninety-foub  Teab&*- 
Fbom  a  Button- Wood  Tbeb  to  a  Palace  CosTiNa 

MlLIilONS  OF  DOLLABS.— EnOBMOUS  ObOWTH  AND  De- 
TELOPMENT     OF    THE    BUSINESS.  —  HoW    THE    PbESBNT 

Stock  Exchange  was  Formed  by  the  GoNsoLmATicm 
OF  Otheb  Financial  Bodies.  —  Patbiotio  Action 
DuBiNO  THE  Wab  Pebiod.— Beminiscences  of  Men 
AND  Events. 

k  n^HE  New  York  Stock  Exchange  is  not  a  boilding,  as 

IX  people  generallj  suppose.  It  is  an  Association  of 
brokers  united,  but  not  incorporated  bj  law,  for  the  pur- 
pose of  buying  and  selling  representatives  of  value  called 
*^ stocks"  and  ^^ bonds."  Stocks,  in  the  American  sense  of 
the  term,  are  properties  consisting  of  shares  in  joint  stock 
companies  or  corporations,  or  in  the  obligations  of  a  gov- 
ernment for  its  funded  debt.  In  England,  government  ob- 
ligations only,  are  called  ^  stocks,"  and  the  obligations  of 
companies  or  corporations  are  called  '^  shares." 

The  edifice  in  which  the  Stock  Exchange  meets,  and 
which,  in  common  parlance,  is  designated  bj  the  name  of 
the  association  of  members,  occupies  a  large  portion  of 
the  block  bounded  bj  Broad,  Wall,  and  New  streets,  and 
Exchange  Place.  Its  main  entrance  is  on  Broad  street,  and 
it  has  entrances  also  on  Wall  and  New  streets.  It  has 
a  frontage  of  65  feet  on  Broad  and  168  on  New,  on  which 
the  back  entrance  is  situated.  The  members  of  the  Stock 
Exchange  have  no  need  of  a  charter  from  the  Legislature. 
In  fact^  thej  have  steadily  resisted  all  attempts  of  the  Solons 
of  this  State  to  legislate  in  their  interest.  Their  action  in 
this  respect  is  more  fully  commented  upon  in  my  chapter  on 


THIS  NEW  YORK  STOCK  EXCHANGE. 

**  Comers."  The  Tweed  Bing,  in  the  height  of  its  power 
made  a  bold  attempt  to  force  a  charter  npon  the  Stock 
Exchange,  bat  it  was  indignantly  rejected.  The  irrepress- 
ible ^^Boss"  and  his  henchmen,  by  the  presentation  of  false 
names,  had  a  charter  for  the  incorporation  of  the  Stock  Ex- 
change passed  in  1871,  the  year  prior  to  Tweed's  downfall,  and 
it  was  signed  by  the  Governor.  For  these  gratuitous  services 
the  som  of  $100,000  was  impudently  demanded ;  but  the  char- 
ter was  refused,  and  the  demand  repudiated  by  the  associa- 
tion. Since  1879  until  recently  the  membership,  which  has 
been  full,  was  limited  to  1,100,  but  by  a  resolution  lately 
passed  the  limit  is  now  placed  at  1,200.  The  seats  for  the 
past  year  have  sold  at  from  $26,000  to  $30,000. 

The  Stock  Exchange  building  is  a  fine,  solid  structure, 
devoid  of  anything  showy,  pretentious  or  decorative.  It 
was  designed  by  James  Benwick,  the  architect  of  Qrace 
Ohurch  and  of  St  Patrick's  Boman  Catholic  Cathedral,  on 
Fifth  avenue  at  Fiftieth  street.  The  cost  of  the  building 
was  nearly  $2,000,000.  It  costs  nearly  $200,000  a  year 
to  pay  the  salaries  of  the  various  officials  and  keep 
the  building  in  proper  repair.  The  apparatus  for  ventilat- 
ing the  building  is  one  of  the  best.  It  cost  $80,000,  and 
supplies  an  abundance  of  pure  air  and  perfumes  at  the  same 
time.  The  heating  and  cooling  arrangements  are  the  best 
of  their  kind,  and  the  lighting  is  admirable.  There  are 
three  chandeliers  containing  200  electric  lamps,  which  throw 
a  flood  of  beautiful  soft  light  around  the  whole  interior.  The 
building  is  well  supplied  with  rooms  for  members,  lavatories, 
and  closets.  One  great  feature  of  the  interior  consists  of 
the  large  vaults,  which  contain  more  than  a  thousand  safes 
for  the  safe  keeping  of  securities.  About  400  of  those  saf  e^  are 
let  to  persons  who  are  not  members.  The  vaults  and  safes 
are  considered  the  strongest  in  the  country. 

The  growth  of  this  institution  appears  marvelous  when  we 
go  back  to  its  humble  beginning  in  1792,  when  the  originators 
formed  the  association  under  a  button-wood  tree  in  front  of 


¥h«  0RI<>1NAX  ORGANIZATlOlir.  89 

what  is  now  No.  60  Wall  street.  Following  is  the  text  of  the 
simple  agreement  into  which  the  original  members  entered : 
"We,  the  subscribers,  brokers  for  the  purchase  and  sale 
of  public  stocks,  do  hereby  solemnly  promise  and  pledge 
ourselves  to  each  other  that  we  will  not  buy  or  sell  from 
this  date,  for  any  person  whatsoever  any  kind  of  public 
stocks  at  a  less  rate  than  one  quarter  of  one  per  cent,  com- 
mission on  the  specie  value,  and  that  we  will  give  a  prefer- 
ence to  each  other  in  our  negotiations-  In  testimony  whereof, 
we  have  set  our  hands  this  17th  day  of  May,  at  New  Tork, 
1792.  Lem  Bleekez,  Hugh  Smith.  Armstrong  &  Bamewell, 
Samuel  Marsh,  Bernard  Hart,  Sutton  &  Hardy,  Benjamin 
Seixas,  John  Heary,  John  A.  Hardenbrook,  Amurt  Beebee, 
Alexander  Gunty,  Andrew  D.  Barclay,  Empn.  Hart,  Julian 
Mclvers,  G.  N.  Bleecker,  Peter  Inspach,  Benjamin  Win- 
throp,  James  Ferrers,  Isaac  M.  Gomez,  Augustine  H.  Law- 
rence, JohnBesley,  Charles  Mclvers,  Jr.,  Robinson  <&  Harts- 
horn, David  Eeedy." 

This  arrangement  existed,  and  was  the  only  one  by  which 
the  members  were  bound,  until  1820,  when  daily  meetings 
and  the  regular  call  of  stocks  began.  The  Board  met  in 
various  places,  including  the  old  Merchants'  Exchange  on 
the  corner  of  Wall  and  William  streets,  but  did  not  take 
root  in  permanent  shape  until  the  year  1842,  when  it  became 
established  in  the  new  Merchants'  Exchange,  now  the  Cus- 
tom House.  An  illustration  of  the  old  Merchants'  Exchange 
is  given  on  another  page.  The  sight  of  it  will  doubtless 
awake  a  host  of  endearing  reminiscences  in  the  minds  of 
some  of  the  oldest  merchants  and  speculators.  It  will  be 
remembered  by  the  few  survivors  of  that  period  that  about 
the  year  1820  the  meetings  of  the  Board  were  held  in  the 
office  of  Samuel  J.  Beebee,  at  47  Wall  street.  The  Board 
also  met  in  a  room  in  the  rear  of  Leonard  Bleecker's ;  also 
in  the  office  of  the  old  Courier  and  Journal,  Subsequently 
the  meetings  of  the  Board  were  held  in  an  upper  room  of 
the  old  Merchants'  Exchange.    This  building  was  destroyed 


•0  TH«  NBW  YORK  STOCK  EXCHANGE. 

by  the  great  %re  of  ISSS^  and  afterwards  the  new  MerohantE^ 
£bcohange  was  built.  The  Board  moved  into  this  building 
in  1842,  and  remained  there  until  1853.  Up  to  this  time 
the  Board  was  the  very  closest  of  corporations,  its  member- 
ship being  governed  by  the  most  iron-clad  roles.  There 
was  no  field  for  financial  news  agencies  in  those  days,  for 
the  Board  kept  its  proceedings  a  profound  mystery,  and  its 
members  were  bound  to  the  strictest  secresy  on  pain  of  ex- 
pulsion. That  wonderful  development  of  our  later  civiliza* 
tion,  the  ubiquitous  interviewer,  was  then  unknown.  The 
business  of  the  Board  excited  the  most  intense  curiosity, 
and  so  impatient  did  outsiders  becopie  to  learn  the  myster- 
ies of  the  interior,  that  the  members  of  an  open  Board 
which  was  organized  about  the  year  1837,  after  failing  to 
force  themselves  into  the  regular  association,  engaged  a 
building  next  to  the  Board-room,  and  dug  the  bricks  out  ol 
the  wall  in  order  that  they  might  see  and  hear  what  was 
going  on. 

The  Board  removed  from  the  Merchants'  Exchange  build- 
ing in  1853  to  a  room  in  the  Commercial  Exchange  Bank 
building,  at  the  comer  of  Beaver  and  William.  About  the 
year  1857,  memorable  as  the  period  of  the  great  panic,  and  my 
advent  in  Wall  Street,  the  Board  removed  to  ^^Dan  Lord's 
building,"  which  had  entrances  on  William  and  Beaver 
streets.  It  was  here,  about  the  time  of  my  advent,  in  Wall 
street,  more  fully  described  in  another  chapter,  that  some 
of  the  great  speculators  of  that  era  figured.  Among  these 
were  Daniel  Drew,  Jacob  Little,  and  the  lightning  calcula- 
tor, Morse,  who  made  and  lost  a  fortune  of  millions  in  little 
more  than  a  year.  In  this  building  the  rule  of  secresy  was 
not  relaxed,  and  the  fact  is  on  record  that  a  hundred  dol- 
lars a  day  were  freely  offered  for  the  privilege  of  listening 
at  the  key-hole  during  the  time  of  the  calls.  The  Board 
continued  to  hold  its  meetings  in  this  building  during  tiie 
war,  and  up  to  1866,  when  it  removed  to  the  present  edifice^ 


UJ 


O 

X 

UJ 

:^ 
O 
O 

(/) 

:^ 

tr 
o 

> 


o 
o 
tr 

Q 

tr 

< 
o 

CO 


PATRIOTISM  OP  THB  STOCK  BXCHANGH.  91 

It  is  worthy  of  note  here  that  the  Stock  Exchange,  dar- 
ing the  war,  for  the  purpose  of  assisting  the  Government, 
passed  a  resolution  prohibiting  members  from  selling  Qov- 
emment  bonds  '^  short ;"  and  also  a  resolution  forbidding 
all  dealings  in  gold.  The  latter  resolution  was  the  princi- 
pal cause  of  the  formation  of  the  Qold  Exchange.  This 
action  on  the  part  of  the  Stock  Exchange  was  taken  at  a 
pecuniary  loss  of  many  millions  of  dollars,  the  sacrifice 
having  been  made  for  the  highest  and  noblest  of  patriotic 
purposes ;  yet^  in  the  face  of  such  an  historic  record  as  this 
some  people  still  imagine  that  the  members  of  the  Stock 
Exchange  never  have  been  anything  but  a  selfish  set  of 
money  grabbers.  Is  there  any  other  institution  in  the 
connfay' whose  members  would  have  made  such  a  personal 
sacrifice  in  the  interest  of  the  Government  1  I  doubt  if  there 
is.     Certainly,  none  did. 

There  was  a  second  Open  Board  of  Brokers  formed  in  the 
year  1863.  It  took  up  its  quarters  first  in  a  basement  in  Wil- 
liam street,  called  the  ^^Coal  Hole."  The  membership  began  to 
increase  rapidly,  and  the  business  accumulated  so  fast  that 
the  Board  was  soon  enabled  to  take  more  capacious  accom- 
modations on  Broad  street,  contiguous  to  the  Stock  Exchange. 
In  this  menacing  attitude  the  new  Board  began  to  make 
serious  inroads  on  the  business  of  the  old  one,  almost  one- 
half  of  which  it  had  acquired  by  the  year  1869,  when  the 
old  Board  called  a  truce.  It  was  seen  by  the  judicious 
members  of  the  Board  that  the  competition  was  likely  to 
work  the  ruin  of  both,  and  amicable  negotiations  were  begun 
which  culminated  in  consolidation.  So  thaOpen  Board,  the 
Stock  Exchange  and  the  United  States  Government  Board 
were  consolidated  in  May,  1869,  making  the  strongest  public 
financial  association  in  the  country,  and  o^^e  of  the  most 
important  in  the  world,  and  placing  it  upon  an  almost  im- 
pregnable footing.  Mr.  WilliamNeilsonwas  the  first  Presi- 
dent in  the  new  building. 


92 


THB  NBW  YOr.K  5T.-)C::  BXCHANGS. 


Tlia  following  are  the  names  of  the  Presidents  of  the 
New  York  Stock  Exchange  from  1824  until  tLo  present  time  2 


1824 
1825. 

1828*. 

1829. 

1830. 

1831. 

1832. 

1883 

1834. 

1835 

1836. 

1837 

1838. 

1839. 

1840 

1841. 

1842. 

1843. 

1844. 

1845. 

1846. 

1847. 

1848. 

1849. 

1850. 

1851. 

1862. 

1853. 

1854. 

1855. 


.  Edw.  Ltde. 
.John  Wickeb, 


Russell  H.  Kevins. 
.John  Wabd. 


,E.  D.  Weeks. 

E.  Fbime. 

R.D.  Weeks. 

Datid  Clabkson. 
« 

« 

M 
(( 
U 
{( 
.  « 
« 
(( 
U 

.H.  G.  Stebbins. 
,  G.  B.  Mabvin. 


1856 

1857. 

1858. 

1859 

1860. 

1861 

1862 

1S63 

1864 

1865 

1866 

1867 

1868. 

1869 

1870. 

1871 

1872. 

1873 

187i. 

1875. 

1876 

1877. 

1878. 

1879. 

1880. 

1881 . 

1882. 

1883 

1884. 

1885 

1886 


0.  B.  Mabvin. 

J.  H.  GOUBLIE. 

H  G.  Stebbins. 
W.  H.  Neilson. 


A.  B.  Batlis. 
H.  G.  Stebbins. 
Wu.  Setmoub,  Jb. 

B.  L.  Cutting. 
Wm.  Alex.  buiTH. 
John  Wab&en. 
Wm.  Skablbs. 

W.  H.  Nkilson. 
Wk.  Setxodb. 
W.  B.  Clabke. 
.Edw.  King. 
Hx.  G.  Chapman. 
Geo.  H.  Bbodhead. 
Geo.  W.  McLean. 
Salem  T.  Bussbll. 
ELbnbt  Meigs. 
Bbayton  Ives. 

Donald  Maokat. 

F.  N.  Lawbenok. 

A.  S.  Hatch. 

J.  Edwabd  Simmons. 

u 

James  D.  Smith. 


Jacob  Isaacs  - 
Bebnabd  Hab^    - 
Geo.  H.  Bbodhead 
B.  Ogden  White 
Geoboe  W.  Elt 


was  Secretary  from  1824  to  1831. 
«  "  «     1831  "  1855. 

"  «'  "     1855  "  1870. 

«  «'  «     1870  «  1883. 

«  «  «     1883  "  -— — 


OI.DEST  I.IVING  UBHBSRS  OP  TH^  BXCBANG^  93 

TEN  OLDEST  LIVINa  MEMBERS  TO  NOV.  1,  1886. 


G.  A.  BoLLiNS,  -  -^    joined  Exchange,  Jan.  22, 1885. 

Chas.  Clabk,          _             <«  «♦  Deo,  18, 1836. 

Chas.  Gbahaic,  -  -       "  "  Mar.  24, 1837. 

W.H.LbRot,        -             "  "  Sept  9,1837. 

DERNiNa  DuEB,   -  -        "  "  Apr.  28, 1843. 

Wk.  Auex.  Smth,  -            «<  "  Dec.  17, 1844. 

W.  H.  Hats,      -  -       «  «  «    30. 1845. 

Jto.  O'BBiEir,          -            «  «  Sept.    4, 1849. 

D.  0.  Hats,        -  -       «  «  Jan.  16, 1850. 

Jho.  B.  Tbbvob,     -            «  "  «     15, 1850. 


CHAPTER    XII. 

"CORNERS"  AND  THEIR  EFFECT  ON  VALUES. 

The  Senate  Committee  on  *'Corneb8"  and  "Putubes.'' — 
Speculation  Beneficial  to  the  Country  at  Laege. — 
A  Regulator  of  Values,  and  an  Important  Agent  in 
THE  Prevention  op  Panics. — **  Corners  "  in  all  kinds 
op  Business. — How  A*  T.  Stewart  made  "Corners."— 
All  Importing  Firms  deal  in  "  Futures."— Legisla 
TiON  Against  "Corners"  would  stop  Enterprise  and 

CAUSE  stagnation  IN  BUSINESS. — OnLT    THE    CONSPIRA- 
TORS THEMSELVES  GET  HURT  IN  '*  CORNERS," — ThB  BlAOK 

Friday  "Corner."— Speculation  in  Grain  Beneficial 
TO  Consumers. 

THE  New  York  Stock  Exchange  is  organized  after  the  same 
manner  as  a  social  club,  such  as  the  Union  League,  the 
Union  or  the  Manhattan,  and  not  under  a  special  charter 
from  the  Legislature.  Hence  it  is  protected  from  the  inter- 
ference of  that  honorable  body. 

Although  various  attempts  have  been  made,  from  time  to 
time,  at  Albany,  to  levy  taxes  upon  the  transactions  of 
the  Exchange,  and  to  interfere  with  the  business  of  specula- 
tion and  investment  in  many  other  ways,  these  legislative 
designs  have  hitherto  been  happily  frustrated. 

Shortly  after  the  memorable  '^corner"  in  Hannibal  Sc  St 
Jo.,  in  1881,  another  attempt  was  made  by  the  Legislature  to 
force  Wall  Street  matters  under  the  jurisdiction  of  Albany 
lobbyists  and  "  scalpers." 

The  newspaper  articles  on  the  subject  of  the  ^^  comer  ^  had 
attracted  the  attention  of  the  Legislature  then  in  session, 
and  naturally  suggested  to  some  of  the  wiseacres  of  that 
dignified  and  incorruptible  body  that  the  '^corner"  afforded 
an  excellent  opportunity,  when  the  public  mind  was  excited 
on  the  subject,  to  raise  an  outcry  against  the  shocking  im* , 
morality  of  such  huge  speculations. 


J 


A  Senate  Oommittee  on  ^'corners"  and  ^^fatoieB"  was 
therefore  appointed,  and  yarious  Wall  Street  men  were 
summoned  to  appear  before  it,  and  give  their  testimony  on 
this  interesting  subject.  I  had  the  honor  of  being  one  <^ 
the  witnesses  cited.  I  promptly  obeyed  the  subpoena  in 
preference  to  taking  the  risk  of  being  hauled  up  for  con- 
tempt and  sent  to  durance  vile  I  appeared  before  the  Com- 
mittee at  the  Metropolitan  tiotel,and  not  only  answered  all 
questions  put  to  me,  without  any  fashionable  lapses  of 
memory,  after  the  manner  of  certain  other  financiers,  but  I 
regaled  the  Oommittee  with  a  little  dissertation  on  the  sub- 
ject of  investigation  I  had  letters  from  members  of  tLe 
Legislature  afterwards  complimenting  me  for  having  made 
the  points  very  clear.  So  I  can  say,  "  Praise  from  Sir  Hubert 
is  praise  indeed,"  and  therefore  I  am  encouraged  to  repro- 
duce that  effort  in  this  volume,  not  so  much  from  an  intense 
desire  to  go  down  to  posterity  as  a  successful  orator,  as  from 
a  disposition  to  record  my  approval,  in  more  permanent  from, 
of  the  soundness  of  the  legislative  judgment  on  my  explana- 
tion of  •*  corners.* 

When  the  applause  had  subsided,  I  spoke  as  follows : 

^  Gentlemen  of  the  Oommittee  on  Corners  and  Futures  : 
Speculation  is  a  method  now  adopted  for  adjusting  differ- 
ences^  of  opinion  as  to  future  values,  whether  of  products  or 
securities  This  is  more  common  now  than  in  former  years 
because  the  facilities  for  procuring  information  have  in- 
creased with  the  greater  intelligence  and  celerity  with  which 
all  business  is  now  conducted,  and  also  from  the  greater 
rapidity  with  which  such  information  can  be  transmitted  by 
telegraph  and  cable. 

"  In  former  years  the  results  of  a  crop  were  known  only 
when  it  came  to  the  market.  Now  almost  everything  affecting 
its  future  value  is  known  with  a  fair  degree  of  accuracy  before 
the  crop  is  harvested.  This  advanced  information  naturally 
becomes  the  subject  of  speculative  transactions  which  could 
not  have  existed  in  former  times. 


A.  T.   STEWART  A  CHAMPION  "  COSM^RAR.'*  W 

*  Speculation  brings  into  play  the  best  intelligence  as  to 
file  fatore  of  yalnes.  It  has  always  two  sides.  The  one  that 
is  based  principally  on  the  facts  and  conditions  of  the  situa- 
tion wins  in  the  end,  and  the  result  of  the  conflict  is  the 
nearest  possible  approach  to  correct  values.  The  conse- 
quences of  speculation  are  thus  financially  beneficial  to  the 
country  at  large. 

^'  Speculation  for  a  fall  in  prices  is  based  upon  the  pre- 
sumption of  an  over-supply.  If  it  succeeds,  the  production 
of  the  particular  product  is  checked  until  prices  recover,  and 
in  the  meantime  production  is  diverted  to  articles  loss  abun- 
dant. Thus  speculation  proves  a  regulator  both  of  values 
and  production.  Speculation  for  a  rise  in  prices  is  based 
upon  a  presumption  of  scarcity  or  short  supply,  and  its 
direct  effect  is  to  quicken  production  and  restore  the  equili* 
brium  of  prices. 

**  ^Com-^rs'  usually  come  from  running  speculation  to  an 
excessive  length,  by  which  the  seller  becomes  responsible  for 
deliveries  beyond  what  he  can  possibly  make.  He  thereby 
places  himself  at  the  mercy  of  those  with  whom  he  has  made 
the  contracts.  These  exigencies  chiefly  aflect  tne  speculators 
themselves,  and  the  community  at  large  but  little. 

^Extreme  prices  usually  grow  out  of  them,  but  they  are 
only  momentary,  and  have  small  eflect  upon  regular  or  cash 
transactions,  which  sympathize  very  remotely  with  these' 
temporary  and  artificial  quotations. 

^Speculation  is  not  to  bo  judged  by  its  occasional  excesses, 
but  by  the  general  efiects  which  the  foregoing  considerations 
show  to  be  beneficial.  It  regulates  production  by  instanta- 
neously advanciug  prices  when  there  is  a  scarcity,  thereby 
stimulating  production,  and  by  depressing  prices  when 
there  is  over-production.  It  thus  becomes  one  of  the  most 
beneficial  agents  in  the  business  world  for  the  prevention 
of  panics. 

^Speculation,  moreover,  makes  a  market  for  securities  that 
otherwise  would  not  exist     It  enables  railroads  to  be  built 


through  the  ready  sale  of  their  bonds,  thas  adding  mater- 
ially to  the  weallli  of  the  whole  country,  and  opening  a  more 
profitable  market  to  labor.  In  this  it  becomes  the  forerun- 
ner  of  enterprise  and  material  prosperity  in  business. 

^^  There  are  ^  comers '  in  all  kinds  of  business  as  well  as  in 
Wall  Street  speculation.  Mr.  A.  T.  Stewart,  the  great  dry 
goods  merchant)  made  more  '  corners'  during  the  latter  part 
of  his  life  than  half  the  rest  of  the  business  community  put 
together.  He  did  this  mainly  by  contracting  for  the  entire 
and  exclusiye  production  of  certain  classes  of  goods,  and  as 
such  goods  could  only  be  bought  at  his  establishment  he 
had  a  close  ^  corner '  in  them,  and  accordingly  put  on  his  own 
prices. 

'^  The  greater  portion  of  all  the  large  mercantile  firms  do 
business  in  the  same  way.  And  all  the  importing  firms  deal 
in  futures.  They  sell  goods  by  sample,  agreeing  to  deliyer 
them  at  a  future  stated  period,  varying  from  thirty  xiays  to 
twelve  months.  In  the  meantime  the  goods  have  to  be 
manufactured,  and  in  many  instances  purchasers  have  to 
wait  until  they  are  grown,  and  imported  thousands  of  miles. 

"  If  it  were  not  for  the  support  which  comes  from  the  *  short ' 
interest  in  grain  and  the  general  activity  created  thereby  in 
times  of  depression,  which  come  periodically  in  this  coun- 
try, it  would  be  in  the  power  of  the  large  speculative  grain 
dealers  in  Europe  to  manipulate  prices  downward,  and  pur- 
chase our  products  every  year,  on  raids,  at  prices  much  un- 
der the  cost  of  production. 

'^  When  we  sell  to  Europe  we  must  do  so  at  a  profit,  or  our 
transactions  don't  help  to  enrich  the  coimtry. 

"Another curious  thing  about  *  corners '  is  that  the  people 
who  organize  and  manipulate  them  generally  get  most  hurt 
in  the  enterprise.  This  was  the  case  with  the  ^  corner '  re- 
ferred to  in  Hannibal  and  St.  Joseph.  Mr.  John  Duff,  of 
Boston,  was  the  man  in  whose  prolific  brain  that  ^corner' 
originated,  and  the  result  to  him  was  financial  ruin.  The 
stock  ran  up  to  350,  though  the  short  account  amounted  to 


CAN'T  l.KGISLAT«  AGAINST  "CORNERS."  99 

onljr  mbofat  1,200  shares,  and  the  ^shorts*  had  to  settle  at 
280. 

^Theresnltwas  similar  in  the  ^corner'  in  Northwest  in 
1872,  manipnlated  by  Jay  Gould.  The  stock  was  started  at 
80  and  it  ran  up  to  280.  It  then  reacted  to  the  former  fig- 
ure. I  believe  Jay  Gould  was  alone  in  that  deal,  and  it 
came  pretty  near  crushiag  him,  in  spite  of  his  incomparable 
capacity  f  oi  wriggling  out  of  a  tight  place. 

•*  Patents  are  *  comers  *  protected  by  law.  The  inventor  has 
a  monopoly  for  seventeen  years  in  his  invention  against  all 
the  world,  and  this  gives  him  a  right  to  make  and  sell  the 
article  covered  by  his  patent,  often  at  a  profit  of  several 
hundred  per  ceni  on  the  original  cost,  and  on  the  price  it 
would  bring  if  placed  in  competition  in  the  open  market, 
like  railroad  stocks  and  grain. 

^If  it  is  the  intention  of  the  Legislature  of  this  State  to 
stop  enterprise  in  business,  then  your  (Committee  is  under- 
taking to  accomplish  that  work  in  the  right  way,  but  I  think 
your  success  would  be  a  public  calamity." 

I  doubt  the  expediency  of  either  undertaking  to  regulate 
enterprise  by  law  or  to  choke  off  competition  by  the  law- 
making power.  The  result  would  be  woeful  stagnation  in 
business.  It  would  crush  the  motives  for  commercial 
activity  and  depress  the  creative  energies  of  prosperity. 

The  law  of  supply  and  demand  is  the  best  regulator. 

Congress  attempted  to  suppress  speculation  in  gold  dur- 
bg  the  war,  and  as  soon  as  the  act  was  passed  prohibiting 
such  dealings,  the  premium  on  gold  advanced  100  per  cent. 
This  so  much  terrified  the  wise  statesmen  who  concocted 
this  sweeping  measure  of  financial  reform,  that  they  im. 
mediately  displayed  much  more  wisdom  in  hastening  to  have 
the  bill  repealed. 

The  simple  reason  that  such  laws  will  not  work  in  prac- 
tice is  that  where  there  is  a  will  there  is  generally  a  way  to 
evade  them.  This  is  the  case  with  the  very  best  of  such 
laws  that  can  possibly  be  framed.    Take  the  usury  laws  for 


100 

example.  The  methods  of  getting  aroond  these  are  numer- 
ous, and  there  is  practically  no  limit  to  the  rate  of  interest 
that  can  be  exacted  except  the  conscience  of  the  lender, 
which  is  freqaentlj  very  elastic.  Daniel  O'CTonnell  said  he 
could  drive  a  coach  and  six  through  any  act  of  Parliament. 
Jake  Sharp  was  also  of  opinion  that  he  could  run  a  double- 
track  horse-car  railroad  through  the  best  act  that  could  be 
framed  by  any  Albany  Legislature.  Jake  was  checked  in 
his  career  at  considerable  trouble  and  expense,  but  his  case 
illustrated  that  the  rule  referred  to  holds  good  generally  in 
legislation. 

The  fact,  however,  that  it  seldom  happens  that  anybody 
gets  badly  hurt  in  **  comers,"  except  the  conspirators  them- 
selves, is  sufficient  protection  for  the  general  public^  and 
should  set  the  minds  of  legislators  at  rest,  if  they  mean  to 
do  legitimate  business  in  their  law-making  capacity. 

The  conspirators  in  "corners ''are  usually  left  high  and 
dry  without  any  market  for  their  fictitious  values,  and  the 
•'corner"  very  frequently  has  the  effect  of  putting  the 
property  out  of  the  speculative  market  for  a  long  time.  The 
fate  of  Han.  &  St.  Jo.  is  a  warning  to  those  who  manipulate 
^  corners."  The  stock  was  seldom  quoted  for  months  after- 
wards. 

Take  the  case  of  Black  Friday  for  example.  It  was  most 
disastrous  to  the  parties  intimately  connected  with  it.  It 
came  near  proving  Gould's  ruin,  and  he  has  not  got  over  the 
moral  effect  of  it  yet.  The  probability  is  it  will  be  an  heirloom 
in  his  family,  a  skeleton  in  the  Goidd  closet  for  generations 
to  come.  Gould  and  Black  Friday  have  become  synonymous 
in  the  minds  of  many  people,  and  the  further  from  Wall 
Street  the  more  the  distinction  becomes  confounded. 

In  making  these  remarks  I  have  no  intention  of  throwing 
any  reflection  upon  Mr.  George  Gould,  who  seems  to  be  a 
very  promising  young  man  f  oi:  a  rich  man's  son.  His  careful 
education  has,  no  doubt,  done  much  to  counteract  the  draw* 
backs  incident  to  the  sons  of  wealthy  men  to  which  I  have 


A1.I,  I^AI^GI^  ^R1*U1^.-MAI>B  BY  "CORNERS.*^ 

referred  more  fully  in  another  part  6{}ihiB  book.  His  mater* 
nal  training,  I  understand,  has  been*o]^'th^  most  exemplary 
kind.  This  will  go  far  to  offset  the  disadyantaiges  to  a 
business  career,  which  the  accident  of  his  birlh  iVVr^^^^ 
surroundings,  according  to  my  theory,  otherwise  enta9s,.\^£, 
his  brain  is  composed  of  the  genuine  plastic  material  oixfc' 
of  which  the  craniums  of  successful  financiers  are  made,  he 
may  learn  to  forget  that  he  has  been  nursed  in  the  lap  of 
luxury,  and  look  back  with  due  respect  to  the  hole  whence 
his  father  was  digged  and  the  rock  whence  he  was  hewn. 
He  may  have  brains  enough,  possibly,  to  reflect  with  more 
pride  on 'that  ingenious  mousetrap  that  first  brought  his 
father  into  prominence,  than  the  gewgaws  of  the  gilded 
palace  in  Fifth  avenue,  the  luxuries  of  the  handsome 
parlors  and  rich  conservatories  at  Irvington,  and  the 
goi^ous  trappings  of  his  father^s  yacht  and  palace  cars. 
I  have,  therefore,  great  hopes  that  George  will  be  a  con- 
spicuous exception  to  the  rule  I  have  propounded  elsewhere 
regarding  rich  men's  sons. 

When  a  large  mercantile  firm  buys  up  goods  in  any  line 
so  that  nobody  else  has  the  same  goods,  it  then  has  a 
"comer''  in  these  goods. 

**  Comers"  in  goods  differ  from  "comers"  in  Wall  street  in 
regard  to  their  influence  on  the  organizers.  They  don't  act 
like  a  boomerang  as  the  Wall  Street  "  corners  *'  mostly  do. 
The  ''  comer"  is  sometimes  sustained  during  the  life  of  the 
manipulator,  as  in  the  case  of  Mr.  Stewart. 

The  successors  of  the  great  operators  sometimes  maintain 
it,  but  in  this  instance  Judge  Hilton  made  a  signal  failure, 
though  in  some  respects  he  is  a  far  abler  man.  than  Stewart 
was.  Yet,  he  had  not  the  genius,  for  working"  corners,"  of 
his  eminent  predecessor.  He  is,  probably,  so  well  learned  in 
tiie  law  that  he  has  too  much  inclination  to  go  around  the 
"comers." 

One  thing  is  certain,  very  few  of  these  merchants  can  be- 
come wealthy  except  through  the  medium  of  "corners/'    It 


is  by  these  pecnliar/m^t^odb  'that  neaily  all  large  fortunes 
are  amassed  in  tl|e1^'}hie,  and  in  a  perfectly  legitimate  man* 
ner,  too,  .wtiat^yer  casuists  and  hair-splitting  moralists  may 
say  Of  'A^^  alGont  the  matter.  The  tendency  to  make  ^  cor- 
^ei^!'  seems  to  be  interwoven  in  our  business  methods,  and 
ti  play  an  important  part  in  the  struggle  for  existence.  So 
I  don't  see  what  we  are  going  to  do  about  it  without  a  radi- 
cal change  in  that  compendium  of  the  best  political  wisdom 
that  the  world  has  ever  seen.  I  refer  to  the  Constitution  of 
the  United  States.  All  the  acumen  and  sophistry  which  the 
most  astute  Philadelphia  lawyer  could  bring  to  bear  upon  it 
has  hitherto  failed  to  show  that  there  is  anything  in  this 
wonderful  document  opposed  to  the  liberty  of  making 
"corners." 

As  Mr.  Gladstone  has  truly  said:  ^'This  docmnent  is  the 
most  wonderful  work  ever  struck  off  at  a  given  time  by  the 
brain  and  purpose  of  man.^ 

I  hold  there  is  nothing  in  the  Constitution  opposed  to 
the  freedom  of  making  ^'corners/'  and  that  all  the  evils  re- 
sulting from  these  speculative  inventions  can  be  met  and 
counteracted  by  business  methods,  and  the  laws  regulating 
the  ordinary  concerns  of  life  without  resorting  to  any  rigid 
or  special  methods. 

To  dispose  of  "comers"  or  abolish  them  on  the  laqp 
scale  to  which  I  have  alluded  would  presume  an  entire 
revolution  in  our  social  system,  and  to  attack  them  piece- 
meal, as  the  Legislature  frequently  does,  involves  a  very 
suspicious  kind  of  discrimination,  and  is  at  variance  with 
tlie  spirit  of  the  Constitution.  In  fact  it  often  amounts  to  a 
kind  of  thinly -disguised  blackmail. 

The  truth  is,  that  it  is  almost  impossible  to  legislate 
against  "comers"  without  aiming  a  fatal  blow  at  specula- 
tion itself,  which,  as  I  have  shown,  is  a  vital  principle  in  the 
regulation  of  values,  the  stability  of  business,  and  the  pre- 
vention of  panics. 

I  believe  the  men  of  most  experience,  not  only  in  Wall 


BY  THK  STATK  OF  GEORGIA.  103 

Street^  bnt  in  other  departments  of  finance  and  commercei 
will  bear  me  out  in  the  statement  that  a  market  where  even 
values  are  considerably  inflated  by  speculation,  is  more  de- 
sirable  than  a  period  of  depression.  The  result,  in  the  long 
ran,  is  the  greatest  good  to  the  greatest  number.  I  don't  be- 
lieye  that  the  ghost  of  Jeremy  Bentham  himself  could  rise 
up  and  consistently  condemn  this  statement. 

I  believe  that  speculation  in  grain  and  provisions  is  ma- 
terially beneficial  to  consumers,  and  that  the  latter  are  better 
oft^  one  year  with  another,  and  less  liable  to  be  menaced  with 
periodical  famines,  than  if  there  were  no  speculation  in  these 
necessities  of  life. 

Before  leaving  this  prolific  theme  of  '^  comers  "  I  wish  to 
say  a  few  words  about  my  own  experience  in  that  line.  The 
only  "comer  "  in  which  I  have  ever  been  materially  hurt  dur- 
ing my  long  business  experience  was  one  manipulated  by 
the  State  of  Georgia. 

This  Soyereign  State  issued  and  granted  altogether  about 
eight  millions  of  bonds,  all  bearing  the  great  seal,  properly 
signed  and  legally  issued  for  full  value.  I  advanced  over 
two  million  dollars  in  good  money  on  a  part  of  these  bonds. 
Shortly  after  this  transaction,  the  State  of  Georgia  ascer* 
tained  through  a  garbled  report  of  a  committee  sent  to  this 
city  by  the  Georgia  Legislature,  that  all  these  bonds  were 
held  outside  of  her  own  borders.  The  Legislature  then  passed 
an  act  of  xepudiation,  thereby  reducing  the  value  of  the 
bonds-from  par  to  that  of  waste  paper.  When  I  discovered 
that  my  little  pile  of  two  million  dollars  in  what  I  consid- 
ered good  securities  would  no  longer  exchange  for  green- 
backs, I  had  a  very  disagreeable  sensation  of  having  been 
*^  cornered  "  by  the  high  toned  and  chivalrous  representatives 
of  the  State  of  Georgia,  which,  through  its  lawmakers,  claimed 
the  sovereign  right  to  do  wrong  to  the  citizens  of  a  sister 
State. 

In  the  Harlem  ^  comer,"  which  is  referred  to  in  another 
place,  contracts  to  deliver  at  110  were  settled  at  179. 


104  "  CORNERS.'* 

About  three  million  dollars  were  taken  out  of  the  pockets 
of  the  bears.  Several  prominent  houses  went  down  in  the 
struggle.  The  result  of  the  ^^comer"  was  that  the  bulls  were 
saddled  with  the  entire  capital  stock  of  the  property. 

One  broker,  who  had  sold  calls  at  160  and  was  requested  to 
fulfil  his  contracts  when  the  stock  had  advanced  to  250,  was 
very  much  in  the  same  position  as  Glendower's  spirits,  which 
were  called  from  the  vasty  deep  but  would  not  come.  "I 
don't  see  anything  here,"  he  said,  ^^  about  delivering*  You 
can  call,  but  I  don't  mind  it" 

There  were  two  '^corners"  in  Harlem.  The  Oommoc 
CTonncil  was  cornered  in  one  and  the  Legislature  in  the 
other. 

In  the  Bock  Island  ''comer ''the  bulls  bought  20,000 
shares  more  than  existed,  and  the  price  rose  from  110  to 
150. 

London  financiers  have  a  fearful  horror  of  ''comers." 
Hence  the  London  Stock  Exchange  is  very  chary  about 
listing  our  railroads,  especially  those  with  a  moderate 
number  of  shares. 

"  Comers"  are  seldom  profitable,  and  the  parties  connected 
with  them  can  hardly  escape  getting  badly  hurt  unless  they 
are  prepared  to  own  and  carry  the  entire  property.  Even 
in  that  event,  it  is  usually  put  out  of  the  speculative  market 
for  a  considerable  time. 

The  Hudson  "  corner  "  was  one  of  the  mosi  successtuL  It 
paid  a  profit  of  12  per  cent.  There  was  a  profit  of  4|  on 
the  Bock  Island  "  corner." 

The  first  "corner"  of  which  there  is  any  record  in  Wall 
Street  was  in  Morris  Canal,  an  old  "fancy"  now  almost  for- 
gotten except  for  its  "  comer."  It  had  been  forced  upward 
as  fancies  frequently  are,  until  it  was  far  above  its  intrinsic 
value,  and  several  operators  began  to  sell  "short." 

After  this  operation  had  gone  on  for  some  time  a  pool 
was  formed  to  protect  it,  and  the  pool  bought  it  all  up  and 
locked  it  up  in  a  trunk.    The  operation  was  new  to  the 


tHH  MORRIS  CANAI,   " CORNER."  105 

Street  and  the  bears  were  astoanded,  bnt  when  called  upon 
to  settle  the  J  became  f  orioas,  and  accused  the  manipulators 
of  tlie  "  corner"  of  entering  into  a  conspiracy.  The  "bulls" 
asked  the  **  bears  "  why  they  had  sold  what  they  did  not  pos- 
sess and  oonld  not  procure. 

The  dispute  was  referred  to  the  arbitration  of  the  Board 
of  Brokers,  and  that  eminent  body,  then  unsophisticated  in 
the  arts  of  speculation,  took  what  seemed  to  them  an  equit- 
able view  of  the  case,  and  decided  it  in  favor  of  the 
•shorts,*'  who,  on  the  ground  of  conspiracy  on  the  part  of 
the  eliqae^  were  relieved  from  fulfilling  their  obligations. 


OHAPTEB    XIII. 

THE  COMMODORE'S  "CORNERS." 
Thb  Obeat  Hudson  '^  Cobneb."— Commodobe  Yandebbilt 

THE    "Boss"     OF    THB    SITUATION.  —  ThB    "OoBNEB** 

FoBOED  UPON  Him."— How  he  Managed  the  Tbiok  of 

GBTrXNG  THE  BeABS  TO  "TuBN"  THE  8TO0E»  AND  THEN 
caught  THEM. — HiS  ABLE  DevIOE  OF  UNLOADING  WHILE 

FoBOiNG  theBeabsto  Coteb  AT  High  Figubes. — ^The 
Eablem  "  CoBNEB.'" — The  Common  Counoil  Betbaied 
ths  Gommodobe,  but  webe  Caught  in  theib  own 
Tbap,  and  Lost  Millions. — The  Legislatube  Attempt 
thb  same  Oame,  and  meet  with  a  Bimilab  Fate. 

IN  the  Hudson  ^^comer,"  the  stock  jnmped  from  112  to  180. 
Oommodore  Vanderbilt  was  the  "  Boss  "  of  the  sitaa> 
tion  in  this  "corner."  He  got  the  "bulge  "  completely  on  all 
the  other  parties  connected  with  it,  and  what  is  more,  he 
had  the  balance  of  the  sympathy  of  the  Street  with  him,  for 
he  was  not  the  aggressor  in  getting  up  the  "corner."  The 
fighting  at  first  was  forced  upon  him,  but  he  acted  on  the 
defensive  in  a  way  that  made  his  opponents  sorry  for  their 
rashness.  Though  he  did  not  know  much  about  Shake- 
speare, he  acted  in  accordance  with  old  Polonius'  advice  to 
his  son  by  pushing  the  opposition  to  the  wall. 

As  soon  as  he  gained  the  mastery,  he  became  severely  ag- 
gressive, as  he  was  in  everything. 

The  beginning  of  this  story  of  the  Hudson  "  comer"  is 
somewhat  romantic.  The  Commodore  was  sunning  himself 
on  a  pile  of  logs  on  the  Jersey  side  of  the  Hudson  while  his 
yacht  lay  in  the  stream,  and  he  was  in  the  mood  for  enjoy- 
ing a  long  and  well-earned  vacation,  attempting  to  lay  aside 
for  a  time  the  toil  and  trouble  of  eking  out  a  prooarious 
existence  in  speculation.  While  basking  in  the  noon-day 
sun  and  gazing  with  delight  on  the  luxurious  foliage  that 
arose  from  the  Kew  Jersey  bank  of  the  river,  he  was  aroused 


108  **coMmHS.*' 

from  his  diarming  reverie  by  a  messenger  from  Wall  Street, 
who  conveyed  to  him  the  important  intelligence  that  a 
wicked  and  nnregenerate  cliqne  of  *^  bears  "  had  conspired  to 
sell  Hudson  stock  ^^  short,"  and  that  it  was  declining  with 
great  rapidity  under  the  repeated  and  unmerciful  blows  of 
tiieir  hammers. 

The  Commodore  arose  and  shook  off  his  lethargy,  as  a 
lion  may  be  supposed  to  shake  the  dew  from  his  mane  prior 
to  his  preparation  for  a  spring  upon  an  unfortunate  foe . 

The  Commodore  hastened  down  to  Wall  Street  and  in- 
structed his  brokers  to  take  all  the  sellers'  options  offered 
in  Hudson.  Cash  stock  was  then  taken  as  quickly  as  pos- 
sible until  the  market  was  bare.  A  brief  calculation  showed 
that  the  buyers  had  secured  either  as  cash  or  contract  stock 
all  the  Hudson  stock  in  existence  with  the  exception  of  a 
small  number  of  shares  which  were  not  expected  to  come 
upon  the  market. 

The  prolific  brain  of  the  Commodore  then  invented  & 
new  move  in  the  game.  A  number  of  leading  '^  bear  "  houses 
were  requested  to  "  turu  ^'  Hudson,  which  means  to  buy  it 
for  cash  from  the  cornering  party  and  sell  it  back  to  them 
on  buyers'  options  for  periods  varying  from  ten  to  thirty 
days.  This  able  ruse  was  intended  to  impress  the  bears 
with  the  idea  that  the  cornering  party  was  weak.  It  seemed 
as  if  they  were  short  of  cash.  So  the  leading  bears  grasped 
at  the  good  chance,  as  they  imagined,  of  turning  several 
thousand  shares,  and  instantly  threw  the  cash  stock  on  the 
market.  It  was  privately  picked  up  by  the  brokers  of  the 
great  *^comerer." 

Everything  having  thus  far  progressed  in  favor  of  the 
ruse  the  trap  was  sprung  upon  the  unsuspecting  party. 
The  sellers'  options  began  to  mature,  and  there  was  no  Hud- 
son to  be  obtained. 

The  "comer"  was  complete,  and  the  stock  rose  to  180.  It 
had  been  112  a  few  mornings  before,  when  the  Commodore 
was  basking  in  the  sun,  and  found  that  the  bears  were  tak- 


'THB  GRKAT^  HUDSON  '*  CORNER/'  109 

ing  adyantage  of  his  absenca  The  loss  on  a  hundred 
shares  was  $6,800. 

There  were  about  50,000  shares  contracted  for  to  be 
delivered  at  this  rate  of  profit  by  the  "  comerers.''  It  will 
thus  be  seen  that  thej  were  well  fixed. 

The  bears  were  in  terrible  angoish. 

Bnt  the  worst  part  of  the  deal  for  these  poor  animals  had 
yet  to  come.  The  bears  who  had  turned  the  stock  were 
notified  that  they  must  stand  and  deliver.  They  complained 
bitterly  of  the  ingratitude  of  the  bulls,  whom  they  had  only 
sought  to  oblige,  by  turning  the  stock.  The  bulls  were 
implacable,  however,  and  demanded  their  property.  They 
proposed  a  compromise  which  was  most  exacting.  They 
were  willing  to  lend  stock  at  five  per  cent,  per  day.  Some 
of  the  bears  paid  this,  thinking  the  "corner"  would  be  of 
short  duration,  but  it  continued  for  over  two  weeks,  and^ 
after  paying  five  per  cent,  a  day  for  several  days,  these  poor 
victims  bought  the  stock  at  the  high  rate  and  settled. 

This  double  move  in  turning  the  stock  was  the  ablest 
trick  that  had  ever  been  accomplished  in  cornering.  It 
made  Yanderbilt  king  of  strategists  in  that  line. 

But  the  best  part  of  the  stratagem  was  that  wherein  the 
balls  saved  themselves  from  being  saddled  with  the  whole 
stock,  and  made  iiomense  profits  out  of  the  deal. 

While  some  of  the  bears  were  purchasing  to  cover  at  170, 
Yanderbilf  s  private  brokers  were  selling  at  140,  the  clique 
thus  craftily  unloading  at  good  paying  figures.  This  was 
one  of  the  best  inside  moves  in  the  whole  history  of 
**  comers." 

The  bulls  thus  saved  themselves  from  the  risk  of  being 
loaded  with  probably  the  whole,  or  at  any  rate  the  greater 
part  of  the  capital  stock,  and  through  the  Commodore's  able 
management  the  load  was  comparatively  light  at  the  end  of 
the  deal,  the  property  remaining  as  good  a  speculative  as 
before,  which  is  a  rare  exception  in  "  corners." 

The  ^^ comer"  In  Harlem  was  not  less  skilfully  managed 


110 

than  the  one  in  Hudson,  bat  it  had  fewer  complications.  It 
was  all  plain  sailing,  bo  to  speak,  compared  with  the  for- 
mer, yet  it  clearly  illustrated  that  the  Commodore  had  a 
genius  for  "corners,"  When  he  managed  the  Harlem  "cor- 
ner "  he  had  had  no  experience  in  railroad  matters,  and  he 
had  reached  the  ripe  age  of  sixty-nine. 

I  place  the  Hudson '^corner  "first  in  order  because  it  was, 
in  several  respects,  the  greatest^  though  it  happened  at  a 
later  date  than  the  Harlem. 

It  is  a  curious  fact  that  in  nearly  all  "corners"  with  which 
the  Commodore  was  connected,  he  was  on  the  defensive,  and 
seldom  the  aggressor  at  the  beginning  of  the  fight  He  was 
always  placed  in  such  a  position  that  he  had  to  fight  hard 
to  defend  his  property,  or  let  it  go  to  the  dogs. 

Buying  stock  in  Harlem  Was  his  first  venture  in  railroad 
transactions.  He  bought  it  as  an  investment.  This  was  in 
1863.  Thirty  years  prior  to  this  he  had  been  requested  to 
go  into  Harlem,  but  he  declined,  ironically  remarking: 
"Fm  a  steamboat  man,  a  competitor  of  these  steam  contri* 
vances  that  you  tell  us  will  run  on  dry  land.  Go  ahead.  I  wish 
you  well,  but  I  never  shall  have  anything  to  do  with  'em.** 

When  the  Commodore  went  into  Harlem  it  was  selling  at 
,  eight  or  nine  dollars  a  share.  It  had  been  down  as  low  as 
three  dollars  about  the  time  I  arrived  in  Wall  Street.  He 
put  some  money  in  the  road,  began  improvements  and  the 
stock  soon  rose  to  30.  Many  people  predicted  that  the 
Commodore  would  lose  all  the  money  in  railroads  that  he 
had  made  in  steamboats. 

The  stock,  however,  gradually  rose  to  50,  and  speculators 
began  to  perceive  that  there  was  some  inside  movement  go- 
ijag  on.  This  was  made  apparent  when  one  day  in  April, 
1863,  the  Common  Council  of  this  city  passed  an  ordinance 
authorizing  the  Commodore  to  build  astreetrailroad  down 
Broadway  to  the  Battery.  So  Jake  Sharp's  enterprise  was 
not  original,  as  the  Commodore  was  over  twenty  years  ahead 
of  him. 


THK  COMMODORE  ENTRAPS  TH«  AI.DBRMBN.  HI 

The  Oommon  Council  were  not  immaculate  in  those  days 
either,  though  the  Jaehnes  and  Waites  escaped  punishment. 
Thej  basely  deceived  the  Commodore  after  taking  his 
money;  but  he  punished  them  severely.  As  soon  as  the 
franchise  was  granted,  Harlem  advanced  to  75,  and  the  Alder- 
men began  to  sell  it  '^  short."  They  thought  they  had  the 
Commodore  fast  in  their  clutches,  and  took  their  friends 
into  the  secret.  They  expected  to  sell  enough  of  stock  to 
make  several  millions.  Their  plan  was  to  sell -*'  short "  all 
that  the  market  would  take,  and  then  repeal  the  ordinance, 
which  would  cause  the  stock  to  drop  probably  below  50. 
Drew  was  one  of  the  great  bears  in  this  deal  with  the  Alder- 
men. 

The  Commodore  got  wind  of  the  scheme,  went  on  buying, 
and  got  others  to  help  him,  taking  all  the  "  shorts  "  that  were 
offered.  The  operators  had  soon  sold  a  great  deal  mora 
Harlem  stock  than  there  was  actually  in  existence.  There 
were  110,000  shares  of  Harlem.  When  the  Aldermen  and 
their  friends  thought  they  had  made  millions,  they  repealed 
the  ordinance,  and  Judge  Brady,  in  the  Court  of  Common 
Pleas,  at  the  same  time  issued  an  injunction  prohibiting  the 
laying  of  rails  on  the  Broadway  road. 

Everybody  thought  that  the  Commodore  was  hopelessly 
ruined.  Harlem  stock,  however,  dropped  three  points  only, 
to  72.  This  created  surprise  among  the  Aldermen  and  the 
bears.  They  thought  it  should  have  dropped  to  50.  The 
**  shorts"  went  into  the  msgrket  for  the  purpose  of  covering. 
Harlem  ascended  with  amazing  rapidity  to  100,  to  150,  to 
170  and  finally  to  179.  The  Common  Cuuncil  were  obliged 
to  make  their  final  settlements  at  the  last  figure.  The  Com- 
modore had  all  the  stock.  The  Common  Council  lost  a  mil- 
lion, and  their  friends,  whom  they  had  advised  to  sell 
'*  short,"  lost  several  millions.  The  Com mo« lore  "  raked  in  " 
five  or  six  millions,  and  went  on  his  way  rejoicing  and  im- 
proving Harlem,  having  i^qw  taken  '^Bill."  in  with^  ]^  as 
?ioe  pr09id9Qit« 


112 

One  would  natorallj  imagine  that  the  severe  lesson  whidi 
the  Common  Council  had  received  in  "corners"  would 
have  taught  others  to  beware  of  the  Commodore  in  this  line 
of  speculation,  although  it  was  new  to  him,  but  it  did  not 
People  as  a  rule  will  not  learn  either  by  precept  or  example. 
Thej  must  go  through  the  rough  experience  themselves. 

The  Legislature  soon  fell  into  the  same  trap  in  which  the 
Common  Council  had  been  caught  and  which  they  had 
actually  set*  for  themselves.  The  following  year  the  Com- 
modore secured  control  of  the  Hudson  Biver  Railroad 
through  the  purchase  of  its  stock,  and  afterwards  secured 
a  sufficient  number  of  the  members  of  the  Legislature  to 
pass  a  bill  consolidating  the  road  with  Harlem.  He  also 
won  the  promise  of  the  Governor  to  sign  the  bill. 

Harlem  again  began  to  rise,  and  went  from  7&  to  150. 
This  was  early  in  1864. 

The  members  of  the  Legislature  employed  to  pass  the 
bill  pocketed  the  money  of  the  Commodore  and  then 
hatched  a  conspiracy,  after  the  manner  of  the  Comnion 
Council,  to  ruin  him  and  make  millions  by  his  fall.  He 
had  a  shrewd  lobbyist  in  the  Legislature,  however,  who 
attentively  watched  his  interests  while  he  came  down  to 
New  York  to  purchase  stock  for  the  rise  that  must  have 
necessarily  followed  the  passage  of  the  bill.  He  had  not 
been  long  in  Wall  Street  when  he  was  informed  that  the 
Legislature  were  imitating  the  game  in  which  the  Common 
Council  had  been  so  signally  defeated  the  previous  year. 
The  Commodore  sent  him  word  to  keep  close  watch  at 
Albany,  and  he  went  on  buying  stock  in  Wall  Street 

The  bill  was  defeated.  Harlem  stock  had  a  slump  from 
160  to  90.  The  Commodore  was  in  a  dilemma,  and  would 
have  been  dreadfully  embarrassed  only  for  the  intense 
avarice  of  the  Legislature.  If  they  had  bought  and 
delivered  at  90,  they  would  have  made  millions,  which  the 
Commodore  would  have  lost ;  but,  like  the  horse  leech's 
daughter,  they  cried  "out  for  more.    Nothing  would  satia^ 


"SfiXJE^ZING"  THE  I.«GISI*ATUKE,  113 

Chein  iintn  the  stock.shonid  be  depressed  to  50.  Then  they 
oonld  '^ scoop"  in  seTeral  millions  and  the  Commodore 
ivonld  be  wound  up.  This  was  probably  the  darkest  hour 
in  the  Commodore's  life.  Ho  hardly  knew  which  way  to 
torn.  He  was  od  the  ragged  edge.  He  has  often  patheti- 
cally described  his  feelings  at  this  crisis  to  his  intimate 
friends.  He  was  almost  on  the  brink  of  despair.'  He  sent 
for  old  John  Tobin,  who  had  been  a  gate  keeper  at  the  f erry- 
hoose  at  Staten  Island.  Tobin  had  made  quite  a  haul  in 
the  former  deal  in  Harlem,  and  was  worth  over  a  million. 
He  told  Tobin  what  the  perfidious  members  of  the  Legisla- 
ture had  dona.  John  had  been  buying  Harlem  also  in  pros- 
pect of  a  rise. 

'*They  stuck  you  too,  John,"  said  the  Commodore. 
**How  do  you  feel  about  it?"  John  sighed,  and  replied 
that  his  feelings  were  not  the  most  enviable.  ^^  Shall  we 
let  'em  bleed  us  ?"  queried  the  Commodore. 

John  sighed  again,  but  did  not  know  what  reply  to  make. 

**  John,  don't  them  fellows  need  dressing  down?"  emphati- 
caUy  queried  the  Commodore.  John  answered  in  the  affir* 
mative,  but  did  not  see  how  it  was  to  be  accomplished,  as 
'^them  fellows"  at  that  moment  seemed  to  hold  the  fort. 

After  a  pause  of  deep  reflection,  the  Commodore,  again 
addressing  John  with  intensified  emphasis  in  his  tone,  said: 
''John,  let  us  teach  'em  never  to  go  back  on  their  word  again 
as  long  as  they  draw  breath.  Let  us  try  the  Harlem  'cor- 
ner'once  more." 

It  was  agreed  to  try  and  repeat  the  Harlem  ^^  corner." 

John  put  up  a  million.  Leonard  Jerome  also  went  into 
the  deal.  It  took  five  millions  to  face  the  Legislature  in 
this  game,  in  which  they  had  every  opportunity  of  packing 
all  the  cards.  It  was  virtually,  at  first,  a  silent  game  of 
whisti,  at  which  the  Commodore  was  a  noted  player.  He 
never  played  with  greater  skill  than  this  time,  except  iu  the 
Hudson  ^*  comer,"  and  in  both  instances  he  almost  mani- 
fested the  skill  of  Inspiration. 


114  "CORNEBS." 

The  members  of  the  Legislatare  completely  lost  their 
heads.  The  old  classic  maxim,  ^^whom  the  gods  devote  to 
destraction,  they  first  make  mad,'^  appeared  to  apply  peculi- 
arly to  them,  in  the  manipulation  of  the  Harlem  ^^  comer." 
Some  of  them  mortgaged  their  houses  and  lands  to  get 
money  to  sell  Harlem  ''short."  They  advised  all  their 
friends  that  it  was  such  a  sure  thing  that  failure  was  im- 
possible, and  brought  all  of  their  acquaintances  whom  they 
could  influence  into  the  speculative  maelstrom  of  Harlem. 

In  the  course  of  a  few  weeks,  the  members  of  the  Legis- 
lature and  their  friends  had  sold  millions  of  Harlem  to  be 
delivered  at  various  periods  during  the  summer,  when  they 
expected  it  would  go  'way  down,  probably  to  8  or  9,  where 
the  Commodore  had  originally  bought  it. 

They  expected,  moreover,  that  the  Commodore  would  have 
i^peared  at  Albany  either  in  person  or  by  his  lobby  repre- 
sentatives to  sue  for  terms  of  settlement.  They  were  great- 
ly disappointed.  He  never  left  the  company  of  his  brokers 
in  Wall  Street,  and  persisted  in  purchasing.  The  members 
thought  he  must  be  mad,  or  at  least  in  his  dotage.  He  was 
then  threescore  and  ten,  the  Scriptural  limit  of  human  days. 

The  Commodore  continued  to  purchase  Harlem  until  he 
had  bought — ^paradoxical  as  it  may  seem  to  the  general 
reader — 27,000  shares  more  than  were  in  existence  of  Harlem 
stock. 

When  the  members  of  the  Legislature  who  set  the  trap  to 
catch  Yanderbilt,  but  in  which  they  themselves  were  now 
hopelessly  ensnared,  went  into  the  market  to  buy  for  the 
purpose  of  covering,  there  was  no  Harlem  to  be  had.  Yan- 
derbilt and  his  brokers  had  every  share  of  it  safely  secured 
in  their  strong  boxes. 

The  members  of  the  Legislature  were  paralyzed.  They 
could  expect  no  mercy  from  the  Commodore.  He  owed  them 
none,  and  tliough  a  good  Christian  prior  to  his  death,  he 
was  then  practically  a  stranger  to  the  doctrine  of  the  great 
Kwareiie.  '^JUolmn  good  iox  evil,"  or,  ^'  whosoever  shall 


••can't  pay  tuniR  BOARD  BlUUS.**  Il5 

\  thee  ou  thj  right  cheek,  turn  to  him  the  other  also." 
fie  was  rather  inclined  to  follow  the  maxim  of  that  practical 
Quaker,  who,  when  smitten  on  the  cheek  and  askod  to  turn 
the  other,  replied,  ^^Friend,  thou  didst  not  read  far  enough. 
It  ia  written,  ^pay  what  thou  owest,'"  and  he  knocked  the 
fellow  down. 

This  was  the  rule  of  action  to  which  the  Commodore  rigidly 
adhered  in  dealing  with  the  Legislature  in  the  Harlem 
•comer.'* 

When  a  compromise  was  mooted  to  him,  the  C!ommodore 
leplied,  ^^Put  it  up  to  a  thousand.  This  panel  game  is 
being  tried  too  often." 

No  doubt  he  would  have  put  it  up  to  a  thousand  and 
totally  ruined  the  members  of  the  Legislature,  with  the 
Governor  and  their  friends  included,  only  for  the  over* 
powering  appeals  of  his  two  trustworthy  friends,  Leonard 
Jerome  and  John  Tobin. 

Mr.  Jerome  had  no  sympathy  for  the  Legislature,  any 
more  than  Yanderbilt  had,  but  he  had  a  patriotic  desire  to 
take  care  of  the  "Street,"  thus  showing  the  large  and  compre- 
bensiveyiew  of  which  this  able  financier  is  capable  where  a 
broad  speculative  question  and  a  variety  of  diverse  interests 
are  involved. 

^  If  you  should  carry  out  your  threat,''  said  Mr.  Jerome 
to  the  Commodore,  ^*  it  would  break  every  house  on  the 
Street'* 

The  Commodore  yielded  to  that  touch  of  nature  that 
makes  all  the  world  akin,  and  under  the  magnetism  of 
Jerome's  prudent  entreaty,  like  Pharaoh  with  the  Israelites. 
agreed  to  let  the  Legislature  go — at  286  for  Harlem. 

In  one  day  15,000  shares  matured  at  this  figure.  Specu- 
lators who  read  these  lines,  just  pause  and  think  of  it  for  a 
moment  I  The  stock  that  sold  at  $3  when  I  made  my  debut 
in  Wall  Street  in  1857,  reached  285  in  1864,  and  could  have 
been  put  to  1,003.  DonH  you  Uel  ^^towded  at  the  po8s4'' 
Ulities  of  speculation  I 


118 

Then,  again,  think  of  the  one-man  power  that  oonld  ao- 
oomplish  this  wonderful  feat  and  prevail  against  a  whole 
Legislature  and  its  Governor,  with  the  choicest  assortment 
of  "crooked'*  lawyers  in  the  State,  versed  in  all  the  arts  of 
duplicity  and  cunning  to  aid  and  abet  said  Legislature  and 
its  Governor. 

Think  of  this,  and  then  jou  will  have  some  conception  of 
the  astute  mind  that  the  Commodore  possessed,  without 
education  to  assist  it,  in  the  contest  against  this  remarkable 
combination  of  well- trained  mental  forces.  There  can  hardly 
be  a  donbt  that  the  Commodore  was  a  genius,  probably  with- 
out equal  in  the  financial  world.  There  was  hardly  any 
achievement  of  his  life  which  he  gloated  over  with  such  in* 
effable  delight  as  the  cornering  of  the  Legislature.  He 
would  say,  when  referring  to  the  matter  afterwards :  "  We 
busted  the  whole  Legislature,  and  scores  of  the  honorable 
members  had  to  go  home  without  paying  their  board  bills.* 
Thus  ended  the  second  "corner"  in  Harlem. 

Many  large  houses  were  ruined  by  the  "comer,"  and  a 
host  of  private  speculators  lost  all  they  had.  Daniel  Drew 
came  very  near  being  swamped  in  i<^  but  finally  escaped 
with  paying  ,a  million,  chiefly  through  his  influence  at  court» 

It  is  unnecessary  to  speak  of  the  celebrated  Erie  **  cor- 
ners"  here,  as  I  have  treated  them  pretty  fuUy  in  the  liie 
and  speculations  of  Drew. 


DANIEL    DREW. 


CHAPTEB    XIV. 

DANIEL  DREW. 

Dbsw,  zjeb  Yandebbilt,  an  Example  of  Obeat  Svooess 
WITHOUT  Education. — Contbolled  mobb  Ready  Oash 

THAN    ANT    MAN    IN    AmEBIOA. — DbEW   GOES    DoWN   AS 

Gouij>  EiSEs.  -  "His Touch  is  Death." — Pbedictionof 
Dbew's  Fall.— His   Thibteen   Millions   Vanish. — 

How  HE  CAUGHT  THE  OpEBATOBS  IN  "  OsHKOSH"  BY  THE 

Handkkbchief  Tbick. — The  Beginning  of  "Uncle 
Daniel's  "Tboubles. — The  Convebtiblb  Bond  Tbick. 
— ^Thb  Cobneb"  of  1866.— Millions  Lost  and  Won  in 
A  Day.— Intebesting  Anecdote  of  the  Youth  who 
Bpeculated  outside  the  Pool,  and  wis  Fed  by  DbeVb 
Bbokebs. 

ONE  of  the  BQost  singnlar  and  eventf ol  careers  in  Wall 
Street  was  that  of  Daniel  Drew,  f  amiliarl  j  called  '^  Uncle 
Daniel."  This  man  affords  another  remarkable  instance  of 
the  possibility  of  attaining  great  success  b  j  stubbornly  f  ol- 
louring  vp  one  idea^  and  one  line  of  thought  and  purpose. 
His  life  also  shows  that  education  is  not  necessary  to  suc- 
cess in  the  acquisition  of  money,  but,  as  I  have  attempted  to 
show  in  another  chapter,  may  be  a  great  hindrance. 

This  fact  is  abundantly  illustrated  in  the  lives  of  both 
Drew  and  Vanderbilt.  In  fact,  everybody  who  knew  these 
two  men  were  of  the  opinion  that  with  a  fair  or  liberal  edu- 
cation  they  would  never  have  cut  a  prominent  figure  as 
financiers.  It  is  also  questionable  whether  either  of  them, 
with  all  their  ability  in  other  respects,  would  have  been 
capable,  with  their  peculiar  predilections  for  other  pursuits, 
of  receiving  a  common  school  or  college  education.  They, 
probably,  had  not  the  capacity  for  that  kind  of  acquisition* 
Perhaps  it  might  have  been  impossible  for  any  teacher  to 
make  Drew  pronounce  the  word  shares  otherwise  than 
"sheen,''  or  eonTinoe  Yanderbilt  that  the  part  of  a  looo* 


118  DANlEi;  DR]$W. 

motiTe  in  'which  the  steam  is  generated  should  not  be  spelt 
phonetioallj,  "boylar." 

It  is  more  than  probable  that  professors  in  grammar 
would  have  found  it  a  hopeless  task  to  convince  the  Com- 
modore that  there  was  anything  wrong  in  the  expression, 
••Never  tell  nobody  what  yer  goin'  to  do,  till  you  do  it,"  or 
Drew  that  it  was  improper  to  say  to  his  broker*  '^  Gimme 
ihem  sheers,"  when  he  desired  his  stocks  reduced  to  posses- 
sion. Both  men  seemed  to  think  with  the  character  in 
Shakespeare,  that  reading  and  writings  like  their  other 
attributes,  came  by  nature.  They  evidently  thought  that 
their  abilities  for  financiering  emanated  solely  from  that 
source,  and  results  largely  bore  them  out  in  that  interpreta- 
tion. Both  had  supreme  contempt  for  persons  of  less  abil- 
ity than  themselves  in  the  speculative  arena,  yet  they  were 
terribly  jealous  of  rivals  who  essayed  to  compete  with  them 
in  their  own  peculiar  methods  of  making  money.  Cunning 
and  shrewdness  were  the  leading  characteristics  of  Drew. 
.  Though  illiterate  himself,  he,  however,  showed  that  he  ap- 
preciated education  in  others,  by  erecting  and  endowing  a 
seminary  in  his  native  place. 

Some  people  who  were  not  inclined  to  give  Drew  any 
credit  for  the  finer  and  more  generous  and  genial  feelings 
of  man's  nature,  said  that  his  motive  for  this  endowment 
was  merely  popularity,  and  a  morbid  desire,  like  that  of 
Yanderbilt,  to  perpetuate  his  name. 

Another  motive,  however,  less  ennobling  to  man's  nature, 
seemed  to  be  the  true  one.  He  saw  that  the  religious  element 
in  society  was  then  influential,  and  that  many  religious 
people  of  his  acquaintance  were  in  good  circumstances,  and 
he  sought  to  ingratiate  himself  with  them  in  order  to  make 
use  of  them  in  his  speculations. 

This  appears  clearly  to  have  been  at  the  bottom  of  his 
precious  gift  of  a  seminary  to  his  native  county.  It  was  a 
curious  illustration  of  retributive  justice,  if  I  am  right  about 
his  motive,  that  he  was  obliged  to  default  in  the  payment  o( 
that  gift|  with  thv  &i^ceptio4  Q^  U^c  intcx^stt 


DimW  IN  THB  ZENITH  OF  PROSPKBtTY.  119 

Daniel  Drew,  at  one  time,  could  command  more  readj 
eash  at  short  notice  than  any  man  in  Wall  Street,  or  prob* 
ably  than  any  man  in  America.  His  wealth  was  estimated 
at  thirteen  million  dollars.  He  made  a  very  large  part  of 
this  out  of  his  speculations  in  Erie  stock,  of  which  corpora- 
tion he  was  then  managing  director  and  treasurer.  Being  thus 
on  the  inside,  he  was  enabled  to  leave  everybody  else  on  the 
outside  in  the  ups  and  downs  of  the  market,  which  he  him- 
self generally  engineered. 

The  Street  was  frequently  amazed  by  fluctuations  of  20 
or  30  per  cent,  in  Erie  stock,  sometimes  in  the  oourse  of  a 
day  or  two,  throu^  the  able  manipulation  of  Mr.  Drew.  ^ 

It  was  a  sorry  day  for  Drew  when  Jay  Gould  took  his 
place  in  the  control  of  Erie,  and  it  was  equally  disastrous 
for  the  Erie  property. 

Erom  this  period  Gould  began  to  grow  rapidly  to  the  full 
stature  of  speculative  manhood,  while  Drew  moved  as 
quickly  in  a  downward  direction,  until  he  found  himself 
again  at  the  lowest  rung  of  the  financial  ladder.  It  was  no 
wonder  that  he  said  of  Gould,  ^^his  touch  is  death.'' 

Drew's  losses  followed  one  another  in  quick  succession^ 
until  his  thirteen  millions  had  melted  away  like  sndw  off  a 
ditch,  and  eventually  he  died  in  debt  and  broken  hearted. 
His  last  days  stand  out  as  a  sad,  but  eloquent  warning  to 
the  avaricious.  And  this  reminds  me  of  a  festive  events  the 
chief  incidents  of  which,  I  think,  are  worthy  of  reproduction. 

I  remember  being  at  ^  dinner  party  ostensibly  given  to 
the  old  gentleman  when  in  the  very  zenith  of  his  financial 
fame  and  prosperity.  It  was  a  kind  of  mutual  admiration 
society,  Drew  being  the  king-pin  of  the  social  coterie.  On 
account  of  his  thirteen  millions  he  was  the  centre  of  cring- 
ing a  miration,  and  was  by  a  number  of  the  assemblage 
almost  deified. 

As  is  usual  on  such  occasions,  speechmaking  was  in  order, 
the  oratorical  talent  being  called  out  by  the  toasts  as  they 
went  the  round  of  the  board. 


X2U  DAKIBI<  DR^W. 

THieD  it  came  my  turn  to  speak,  I  followed  suit,  to  some 
extent,  i  a  picking  np  the  thread  of  the  general  glorification 
extendel  to  the  honored  guest,  to  whom  I  paid  marked 
def  eren  3e. 

"We  are  honored,"  I  said,  **  on  this  festive  occasion,  by  a 
gentleman  of  vast  wealth,  one  who  can  control  more  read/ 
money  than  any  man  in  America,  and  be  it  said  to  his  honor, 
it  has  all  been  of  his  own  creation.  He  is  a  true  represent- 
ative of  American  thrift  and  enterprise,  ffis  money  and  hifl 
genial  disposition  together  combined  make  all  men  his 
friends,  and  I  know  of  only  one  antagonistic  spirit  to  the 
continued  growth  of  this  already  marvellous  fortune ;  but 
that  ono,  in  all  probability,  may  yet  work  his  ruin.  I  refer 
to  our  honored  guest,  Mr.  Drew,  and  his  one  enemy  which  I 
have  in  mind  is  *  Avarice.' " 

In  five  years  from  that  memorable  dinner  Daniel  Drew 
was  a  ruined  man,  and  his  thirteen  millions  had  vanished 
like  the  baseless  fabric  of  a  vision,  leaving  nothing  bat  the 
miserable  wreck  of  an  avaricious  spirit  behind. 

The  manner  in  which  Drew  was  supposed  to  make  religion 
the  handmaid  to  speculation  was  satirically  touched  in  the  * 
following  verses  published  in  the  New  York  TrSmne  about 
fifteen  years  ago : 

He  was  a  long,  lank  countryman, 

And  he  stoppeth  one  of  two. 
"  Vm  not  acquaint  in  these  yeere  partsi 

An'  I'm  a  lookin'  fur  Danl  Drew." 

'Tm  a  stranger  in  the  vineyard. 

An'  my  oallin'  I  pursoo 
At  the  Institoot  at  Madison, 

That  was  buUfc  by  Dan'l  Drew," 

•*rm  a  stranger  in  the  vineyard, 

An*  my  'arthly  wants  are  few; 
But  I  want  sum  pints  on  them  yershaarei^ 

An'  rm  a  lookin'  fur  Danl  Drew." 

Again  I  saw  that  laborer. 

Comer  of  WaU  and  New ; 
He  was  looking  for  a  ferry  boat^ 

And  not  for  Daniel  Drew. 


HK  D&KSSKD  l,lKlSi  A  DROVKR.  ISI 

Upon  bis  baol^  be  bore  a  sack. 

Inscribed  "  Preferred  Q.  U." 
Some  Canton  scrip  was  in  bis  grip, 

A  little  Wabash,  too. 

At  tbe  ferry  gate  I  saw  him  late, 

With  his  white  hat  aslcew. 
Paying  bis  f  nre  with  a  registered  share 

Of  that  * '  Ptef erred  Q.  U.'» 

And  these  words  came  back  from  the  "Haokenaaok^ 

**  £f  yew  want  ter  gamble  a  few, 
Jest  git  in  yer  paw  at  a  game  o'  draw. 

But  don't  take  a  'and  with  Drew.'* 

Mr.  Drew  was  negligent  in  his  attire,  even  to  the  verge  of 
slovenliness.  He  dressed  like  a  drover,  having  originally 
been  employed  in  that  capacity.  By  the  way,  the  signifi- 
cant term  of  "  watering  stock*'  originated  in  the  practice  of 
Uncle  Daniel  giving  his  cattle  salt  in  order  to  create  a  thirst 
in  them  that  wonld  cause  them  to  imbibe  large  qoantities  of 
i^ater,  and  thus  appear  bigger  and  fatter  when  brought  to 
market.  Until  he  met  with  Gould  and  Fisk,  it  was  difficult 
for  anybody  to  get  the  best  of  him  in  a  deal. 

He  was  wonderfully  prolific  in  resources  for  the  purpose 
of  getting  advantage  of  those  who  attempted  to  overreach 
him. 

A  good  story,  illustrative  of  this  trait  in  his  speculative 
character,  is  told  of  the  time  that  he  was  so  severely 
squeezed  in  Northwestern  stock.  He  was  greatly  grieved  at 
lu8  ill  luck,  while  the  brokers  and  operators  who  had  been 
prosperous  at  his  expense  were  highly  elated.  They  con- 
flidered  it  a  great  thing  to  have  caught  the  wily  old  Daniel 
napping.  He  was  accordingly  made  the  victim  of  much 
libeddry  and  jesting  for  several  days  in  Wall  Street.  Some 
of  the  young  men  carried  the  joke  so  far  as  to  meet  him 
and  laugh  significantly  and  irritatingly  in  his  face.  He 
seemed  to  take  it  all  in  good  part,  for  he  had  a  happy  flow 
of  animal  spirits,  but  he  had  a  terrible  rod  in  pickle  for 
these  young  men  who  were  making  him  an  object  of  ridicule. 


122  BANIKL  DREW. 

He  watched  for  his  opportanity,  and  one  evening  as  seyeral 
of  them  were  enjoying  themselves  in  an  uptown  club,  Uncle 
Daniel  walked  in,  %an»  ceremonie.  He  appeared  to  be  look- 
ing after  some  man,  and  though  invited  to  remain,  seemed 
to  be  in  a  great  hurry  to  get  away,  and  was  apparently  ex- 
cited and  warm.  He  seemed  to  have  something  important 
on  hand.  He  drew  a  big  white  handkerchief  out  of  his 
pocket  a  few  times  and  wiped  the  perspiration  from  his 
heated  brow.  When  he  was  about  to  depart  there  came  oat 
of  his  pocket  with  the  handkerchief  a  small  slip  of  white 
paper  which  floated  around  apparently  unseen  by  him,  and 
alighted  at  the  feet  of  one  of  the  bystanders,  who  quickly 
set  his  foot  upon  it.  When  Mr.  Drew  made  his  exit  the 
white  scrap  of  paper  was  instantly  scanned.  It  contained 
these  ominous  words  in  his  own  handwriting :  ^^Buy  me  all 
the  Oshkosh  stock  you  can  at  any  price  you  can  get  it 
below  par." 

Here  was  a  speculative  revelation  for  the  boys,  for  every- 
body believed  at  the  time  that  Oshkosh  had  already  gone 
too  high,  and  the  point  had  been  circulated  to  sell  it 
**  short."  The  mysterious  words  written  on  this  erratic 
slip  of  paper,  however,  convinced  these  operators  that  there 
must  be  a  new  deal  to  give  Oshkosh  another  '^kiting." 
There  was  no  time  to  be  lost  in  taking  advantage  of  the 
unexpected  and  highly  valuable  information.  They  formed 
a  pool  to  purchase  30,000  shares  the  next  day.  They 
bought  the  stock  according  to  pre-arrangement,  and  a  new 
broker  of  Daniel  Drew's  was  the  man  who  sold  it  to  them* 
They  only  discovered  how  badly  they  themselves  had  been 
sold  by  Mr.  Drew's  handkerchief  trick  when  Oshkosh  be- 
gan to  decline  at  the  rate  of  a  dozen  points  a  day,  and 
Uncle  Daniel  soon  raked  in  from  the  jokers  and  their  friends 
more  than  he  had  lost  in  Northwest. 

Mr.  Drew  first  entered  the  Board  of  Directors  in  Erie 
about  the  year  1852,  and, remained  there  until  he  was 
squeezed  out,  and  almost  ruined,  in  1868.  He  held  the  office 
of  treasurer  to  the  corporation. 


'TH^  SPieCULATnm  DIRECTOR.' 


128 


Brew  was  born  in  the  town  of  Carmel,  Pntnam  ooonty,  in 
the  year  1797,  and  was  three  years  younger  than  Yanderbilt. 
As  I  have  intimated  above,  in  early  life  he  drove  cattle  from 
his  native  town  to  New  York.  He  afterward  became  pro- 
prietor of  the  Bull's  Head  tavern  in  this  city. 

He  never  changed  his  style  of  dress  from  that  to  which 
he  was  accustomed  to  wear  when  he  was  a  drover,  and  when 
he  was  worth  thirteen  millions,  instead  of  sporting  a  gold 
headed  cane,  he  went  around  Wall  Street  with  the  handle  of 
an  old  broken  tmibrella  in  his  hand.  While  treasurer  of 
Srie  he  used  every  opportunity  to  manipulate  the  stock  to 
his  own  advantage,  irrespective  of  the  rights  or  interests  of 
any  other  person.  He  was  the  leading  bear  of  the  market 
for  many  years.  Like  Yanderbilt,  he  was  interested  to 
some  extent  in  steamboats,  but  he  made  Erie  stock  the  great 
medium  of  acquiring  his  vast  wealth.  He  got  the  name  of 
the  speculative  director,  and  at  the  outbreak  of  what  was 
known  as  the  Erie  war  he  was  supposed  to  be  almost 
financially  impregnable. 

The  '^  comer  "  of  1866  was  the  beginning  of  Uncle  Daniel's 
troubles.  Up  to  that  period  all  had  gone  merry  as  a  mar- 
riage bell  with  him,  and  he  was  piling  up  the  millions  at  a 
rate  which  no  other  financier  or  speculator  had  ever  dared 
to  imitate.  Erie  stock  was  selling  at  95  in  the  spring  of 
that  year.  The  company  was  badly  off  for  money.  It  made 
application  to  its  treasurer  for  the  needed  relief.  He  was 
ready  to  serve  it  in  that  way  at  all  times,  but  he  wanted 
security  for  the  loan.  There  were  then  28,000  shares  of 
unissued  Erie  stock.  The  company  also  claimed  the  right 
to  raise  money  by  the  issue  of  bonds  convertible  into  stock 
at  the  option  of  the  holder. 

This  was  an  old  trick  in  the  management  of  Erie  matters. 
It  had  saved  Jacob  Little  on  one  occasion,  as  I  have  men- 
tioned in  a  former  chapter,  during  the  earlier  history  of 
speculation  in  Wall  Street.  It  was,  therefore,  not  original 
with  the  Ihrew  management  of  Erie,  as  some  people  have 
supposed. 


124  DANIBI/  DR^W. 

The  28,000  shares  of  nnissaed  stock  then,  and  three  mil- 
lions of  dollars  of  convertible  bonds,  were  placed  in  the 
hands  of  Mr.  Drew  as  security,  and  he  advanced  the  loan  of 
8^  million  dollars  to  relieve  the  pressing  necessities  of  the 
corporation. 

When  Drew  found  himself  thus  fortified  with  the  convert- 
ible bonds,  he  laid  another  trap  for  the  boys  in  the  Street 
Erie  had  been  rapidly  absorbed  for  some  time,  and  was  very 
strong  at  95  with  anxious  purchasers.  The  stock  was,  there- 
fore, becoming  very  scarce.  Mr.  Drew  had  a  large  number 
of  contracts  to  fill,  and  operators  were  wondering  where  he 
would  get  the  stock  to  settle.  Many  of  them  were  laughiog 
in  their  sleeves  at  his  impending  embarrassment,  as  they 
had  done  on  a  former  occasion,  and  were  in  ecstacies  of  de- 
light at  the  idea  of  the  terrific  ^^ squeeze"  which  the  old  man 
was  about  to  experience.  When  he  seemed  on  the  veiy 
horns  of  this  dilemma,  upon  which  the  rampant  bulls  thought 
they  would  successfully  impale  him,  he  converted  his  three 
million  bonds  into  an  equivalent  amount  of  stock,  threw  58,- 
000  shares  on  the  market,  met  all  his  contracts,  and  fed  the 
voracious  bulls  with  all  they  wanted. 

Hungry  as  the  Street  had  been  for  Erie,  this  was  an  over- 
dose that  it  was  utterly  incapable  of  digesting.  The  bulla 
were  paralyzed,  and  before  they  could  rally  their  broken 
ranks  from  the  demoralizing  effects  of  this  unexpected  sortie 
from  the  stronghold  of  Erie,  the  stock  had  declined  from  96 
to  50,  wiping  out  the  broadest  margins  and  putting  the  whole 
army  of  bulls,  reserve  forces  and  all,  to  utter  rout. 

Millions  were  lost  and  won  in  a  day  in  this  deal. 

This  was  regarded  as  a  grand  coup  d^etat,  and  one  of 
Drew's  most  brilliant  exploits  in  operating.  In  fact,  at  the 
time,  it  seemed  to  throw  every  prior  operation  of  this  na- 
ture totally  in  the  shade,  and  the  other  leading  operators  of 
the  street  were  blue  with  envy,  green  with  jealousy,  and 
raging  mad  over  their  losses  and  the  way  they  had  been 
entrapped  and  almost  ruined  by  the  deeply-laid  scheme  of 


AMUSING  AN  AMATKUR  SPECUI^ATOR.  125 

file  Erie  treasurer.  Drew  was  despised,  feared  and  revered 
on  acconnt  of  this  unparalleled  achievement.  He  then  es- 
sayed to  rest  on  his  oars  for  a  short  time,  but  his  period  of 
leiKMse  was  but  short-lived. 

There  was  a  little  side-show  in  connection  with  the  ma- 
turing of  the  operations  in  the  pool  just  referred  to,  which 
is  so  characteristic  of  Daniel's  methods  that  it  is  worth  re 
lating.  There  was  a  young  man  in  the  Erie  pool,  but  not 
in  the  wheel-within-the-wheel  in  that  sacred  circle,  who 
imagined  that  the  purpose  of  the  pool  was  to  put  Erie  stock 
up,  and  accordingly  he  borrowed  money  from  Uncle  Daniel, 
his  credit  being  good  and  having  money  in  the  pool  funds, 
to  purchase  Erie.  The  accommodating  treasurer  not  only 
lent  him  the  money,  but  his  private  brokers  sold  the  young 
man  the  Erie  stock  desired.  He  was  duly  fed  from  day  to 
day  with  the  quantity  which  his  speculative  appetite  craved. 
After  the  slump  just  referred  to,  this  unsophisticated  youth 
and  some  other  members  of  the  pool  among  his  friends, 
went  to  Uncle  Daniel  and  requested  him,  as  manager  of  the 
pool,  according  to  the  programme  supposed  to  have  been 
agreed  upon,  to  put  Erie  again  on  the  line  of  advance,  in 
order  that  the  young  man  and  his  friends  might  get  in  and 
out  again,  so  as  to  cover  their  recent  losses. 

Mr.  Drew,  however,  coolly  informed  them  that  the  pool 
had  no  Erie  stock  and  did  not  want  any,  and  was  not  pre- 
pared to  trade  in  that  security  any  more  at  that  time. 

^^  I  sold  all  our  Arie  at  a  profit,"  said  Uncle  Daniel,  ^^  and 
am  now  ready  to  divide  the  money." 

So  this  youthful  member  had  the  felicity  of  discovering 
that  while  he  was  speculating  on  his  own  account  for  a  rise, 
Uncle  Daniel  was  looking  after  his  interests  in  another  direc- 
tion, and  had  realized  at  the  most  opportune  moment,  ' 

Thus  this  amateur  operator,  whom  Uncle  Daniel  had 
amused,  without  letting  him  into  the  secret,  in  the  way  de- 
scribed, got  nearly  enough  of  money  back  to  pay  the  loss 
he  had  sustained  experimenting  outside  the  pool  on  his  own 


126  DANIEI«  DRAW. 

aoconnt,  and  upon  his  own  independent  but  f aUacious  jadg- 
meni 

If  he  had  not  speculated  outside,  he  would  hare  had  yeiy 
handsome  profits  from  the  pool,  but  he  would  not  have 
obtained  the  useful  experience  which  was  connected  with 
his  losses,  and  the  independent  attitude  he  was  ambitious 
to  assume  in  speculations. 


CHAPTEB    XV. 

DREW  AND  VANDERBILT. 

Vakdbbbilt  Essats  to  Shallow  Ebie,  and  Has  a  Nabbotv 
Escape  from  Choking.— He  Tries  to  make  Dbew 
Commit  Financial  Suicide.  -Manipulating  the  Stock 
Market  and  the  Law  Courts  at  the  Same  Time. — ^At- 
tempts TO  " Tie  Up"  the  Hands  op  Drew.— Manufac- 
turing Bonds  with  the  Erie  Paper  Mill  and  Print 
ING  Press. — Fisk  Steals  the  Books  and  Evades  the 
Injunction. — Drew  Throws  Fifty  Thousand  Shares 
on  the  Market  and  Defeats  the  Commodore. — The 
"Corner"  IS  Broken  and  Becomes  a  Boomerang. — 
Vandbrbilt's  Fury  Knows  no  Bounds. — In  his  Eage 
HE  Applies  to  the  Courts.— The  Clique's  Inglorious 
Flight  to  Jersey  City. — Drew  Crosses  the  Ferry 
with  Seven  Millions  of  Vanderbilt's  Money— The 
Commodores  Attempt  to  Beach  the  Befugees. — A 
Detective  Bribes  a  Waiter  at  Taylor's  Hotel,  who 
Delivers  thr  CoiatoDORE's  Letter,  which  Brings 
Drew  to  Terms.— Senator  Mattoon  gets  "Boodle" 
FROM  Both  Parties. 

ONE  of  the  most  interesting  episodes  connected  with  the 
speculative  life  of  Drew,  in  the  somewhat  sensational  his- 
tory of  Erie  affairs,  was  the  interposition  of  Commodore  Yan- 
derbilt  in  one  of  the  famous  deals  of  the  Erie  clique.  His  ob- 
ject was  to  swallow  up  the  corporation,  and  it  came  pretty 
near  swallowing  him.  He  was  only  saved  by  the  skin  of  the 
teeth,  after  one  of  the  most  prolonged  and  desperate  finan- 
cial struggles  of  his  life. 

In  order  to  explain  clearly  the  manner  in  which  the  Com- 
modore became  involved  in  the  Erie  matter  with  Drew  and 
his  partners,  it  will  be  necessary  to  take  a  brief  resume  of 
the  history  of  a  few  of  his  other  prominent  deals,  more  fully 
dwelt  upon  elsewhere. 

In  1860  Harlem  stock  had  sold  as  low  as  eight  or  nine 


128  DRKW  AND  VANDERSn^^r. 

dollars  a  share.  In  January,  1863,  when  Yanderbilt  got 
full  control  of  the  property,  the  stock  had  advanced  to  30, 
and  in  July  of  the  same  year  it  had  bounded  to  92.  In 
August,  when  the  **  corner"  was  eflfected,  it  went  to  the  re- 
markable figure  of  179. 

It  was  put  through  a  similar  operation  the  succeeding 
year,  and  the  stock,  which  sold  in  January  below  90,  was 
settled  for  in  the  following  June  at  285.  Drew  had  been 
drawn  into  one  of  these  transactions,  and  his  losses  reached 
nearly  a  million. 

Vanderbilt's  prospects  with  the  Harlem  property  were 
seriously  menaced  by  the  competition  of  the  Hudson  Eiver 
dailroad.  He  bought  up  the  competing  line,  and  thus  de- 
stroyed the  competition.  He  made  this  purchase  when  the 
stock  was  at  par.  He  soon  manifested  his  superior  power 
in  management,  and  displayed  his  skill  in  the  art  of  ^^  water- 
ing," which  he  had  invented.  He  had  the  stock  advanced  to 
180  in  a  very  short  time. 

Seeing  his  great  success  with  these  two  properties,  through 
his  novel  and  unique  methods  of  financiering,  the  managers 
of  the  New  York  Central,  thinking  that  discretion  was  the 
better  part  of  valor,  and  perceiving  that  they  could  not  hold 
out  against  the  edicts  of  manifest  destiny  very  long,  offered 
their  property  to  him  almost  at  his  own  price,  which  he 
very  cordially  accepted,  approving  their  good  judgment  and 
keen  perception. 

He  obtained  full  control  of  New  York  Central  early  in 
1867.  As  soon  as  this  triple  amalgamation  was  complete 
he  set  his  insatiable  and  avaricious  heart  upon  Erie,  and 
essayed  to  compass  his  designs  and  effect  his  purpose  of 
reducing  it  to  possession  through  the  speculative  machinery 
of  Wall.  Street. 

It  was  through  this  channel  that  he  had  obtained  Hudson, 

^and  in  defiance  of  the  scientific  maxim  that  lightning  never 

strikes  twice  in  the  same  place,  he  was  inspired  with  full 

confidence  in  his  ability  to  ^^ scoop''  Erie  in  the  same  man- 


DR^W.  129 

ner.    He  tried  first  to  arbitrate  and  consolidate,  but  his 
efforts  in  that  direction  failed. 

With  all  his  marvellons  foresight  and  almost  nnerring 
judgment  in  specnlatiye  affairs,  the  Commodore  was  greatly 
at  fanlt  in  his  calcnlation  regarding  the  magnitude  of  the 
task  he  had  now  undertaken  in  Erie.  He  had  no  idea  of 
the  immense  Yolume  of  the  stock  which,  after  the  speculative 
battle  began  to  rage,  seemed  to  spring  out  of  the  ground, 
spontaneously,  as  the  reserve  troops  of  Wellington  were  said 
to  appear  to  do  in  the  eyes  of  Napoleon  when  the  struggle 
waxed  warm  at  Waterloo.  He  had  to  contend  with  the 
ablest  generals  in  speculation  and  finance  that  ever  Wall 
Street  had  produced.  His  first  bold,  flank  movement  was 
an  attempt  to  "  corner  "  Drew.  He  knew  how  to  manipulate 
the  courts  almost  as  well  as  the  Erie  Bing  did.  According- 
ly, he  made  use  of  the  services  of  Frank  Work  to  ob- 
tain an  injunction  from  Judge  Barnard,  of  Tweed  Bing 
notoriety,  restraining  Drew  from  the  payment  of  interest  on 
8^  million  bonds,  pending  an  investigation  of  his  accounts 
as  treasurer  of  Erie.  This  was  followed  up  in  a  few  days 
by  another  application  to  the  court  for  the  treasurer's  remo- 
val from  office. 

These  measures  were  resorted  to  by  Yanderbilt  to  prevent 
the  issue  of  this  stock,  into  which  these  3^  million  bonds 
were  convertible,  and  thus  enable  him  to  get  a  "corner"  in " 
the  stock  with  greater  facility.  He  thus  attempted  to  make 
the  court  instrumental  in  forcing  Drew  into  a  position  where 
he  would  be  obliged  to  commit  financial  suicide. 

The  Erie  Bing  had  managed  to  get  legally  around  what  in 
reality  was  an  over-issue  of  Erie  stoc\  and  bonds  in  the  fol- 
lowing subtle  manner : 

There  was  a  statute  of  New  York  which  authorized  any 
railroad  to  create  and  issue  its  own  stock  in  exchange  for 
the  stock  of  any  other  road  under  lease  to  it.  The  Bing 
had  obtained  the  Buffalo,  Bradford  &  Pittsburg  road, 
which  was  comparatively  worthless,  for  carrying  out  this 


ISO  DRBW  AND  VANDKRBILT. 

scheme.  The  Erie  management  then  set  about  suppljing 
themselves  with  the  amount  of  Erie  stock  required,  by  leas- 
ing their  own  road  to  the  road  of  which  they  wore  directors. 
They  then  created  stock  and  issued  it  to  themselves  in  ex- 
change under  the  authority  vested  in  them  by  law. 

The  nominal  price  of  the  road  with  which  they  worked 
this  game  of  legerdemain  was  $250,000.  They  issued  bonds 
in  its  name  for  two  millions  of  dollars,  payable  to  one  of 
themselves  as  trustee. 

Vanderbilt,  before  he  could  get  a  "  comer  "  in  Erie,  had 
to  place  a  limit  to  the  issue  of  the  stock.  Otherwise  he 
would  have  been  throwing  away  millions,  like  pouring  water 
into  a  sieve,  in  his  attempt  to  make  a  "comer." 

Drew  was  enjoined  by  the  Commodore  to  return  to  the 
Treasury  68,000  shares  of  the  capital  stock  of  Erie.  This 
was  the  amoimt  that  was  said  to  remain  in  the  unsettled 
transactions  of  the  Erie  corner  of  1866.  This  was  the 
sword  of  Damocles  which  Vanderbilt  had  suspended  oyer 
Drew's  devoted  head* 

Vanderbilt  thus  undertook  to  play  the  double  game  of 
manipulating  the  courts  and  the  stock  market  at  the  same 
time,  and  against  wily  opponents,  who  were  experts  in  both 
operations. 

There  were  at  this  time  three  competitors  for  the  posses- 
sion of  Erie  in  the  field.  The  Drew  party,  the  VanderbUt 
party,  and  the  Boston,  Hartford  and  Erie  party.  Drew  had 
tried  to  appease  Vanderbilt  to  some  extent,  and  had  an  in- 
terview with  him  at  Vanderbilt's  own  house  prior  to  the 
election  of  the  Erie  directors.  He  agreed  to  "let  up"  on 
Vanderbilt,  and  offered  him  greater  swing  in  purchasing 
Erie,  while,  on  the  other  hand,  Vanderbilt  consented  not  to 
press  the  proceedings  in  court  against  Drew. 

Before  this,  the  Boston  party  and  Vanderbilt  had 
been  fixing  matters  to  oust  Drew  from  the  Erie  directory. 
Now,  Vanderbilt  changed  his  tactics,  and  resolved  to  let 
Drew  remain.    The  Boston  party  was  with  him,  but  to  keep 


THB  COMMODORE  ON  THB  WAR  PATH  181 

op  fhe  appearance  of  what  had  been  formerly  determined, 
the  new  board  was  to  be  elected  ostensibly  without  Drew, 
and  a  yacancy  created  afterwards  by  which  he  could  be 
chosen  in  the  board.  This  method  of  whipping  the  Devil 
aronnd  the  stump  was  adopted  to  put  public  opinion  off  its 
gnard,  and  help  to  forward  Vanderbilt's  purposes  of  con- 
solidation. The  election  scheme  was  successfully  effected, 
but  the  ruse,  though  well  conceived,  fell  far  short  of  accom- 
plishing its  designs. 

There  were  wheels  within  wheels  during  this  speculative 
deal.  Drew  and  Yanderbilt  entered  into  a  secret  alliance 
to  exclude  the  Boston  party,  who  was  Vanderbilf  s  ally. 
The  new  board  was  elected,  leaving  Drew  out.  This  was  a 
SQipriBe  to  Wall  Street,  but  a  greater  surprise  was  in  store 
for  it  when  a  vacancy  was  created  the  next  day,  and  Drew 
was  re-elected  to  the  Erie  Board  of  Directors.  The  Street 
was  confused  aud  confounded,  and  at  a  loss  to  know  how  to 
act,  and  the  Boston  party  was  groping  around  to  find  out 
where  it  stood.  Frank  Work  was  elected  to  the  Erie 
Board  in  the  Yanderbilt  interest.  A  pool  was  then  formed 
to  put  up  Erie,  as  it  was  in .  a  very  depressed  condition. 
Brew  was  to  manage  the  pool  and  manipulate  the  market. 

The  proposed  plan  for  consolidating  with  the  Yanderbilt 
interests  failed  because  the  Erie  people  said  that  the  great 
railroad  king  would  only  consent  to  give  them  one-third  of 
the  earnings,  while  they  contributed  more  than  half  to  the 
pool.  So,  when.this  scheme  collapsed,  Yanderbilt  went  on 
the  speculative  war  path,  and  determined  to  snatch  Erie 
from  the  hands  of  the  Bing  in  the  way  he  had  obtained 
Hudson.  He  began  his  operations  about  the  middle  of 
February,  1868,  and  pursued  his  policy  in  the  courts  for  the 
porpose  of  limiting  the  apparently  unlimited  supply  of  Erie 
stock. 

In  the  leasing  process  above  referred  to  with  the  Buffalo, 
Bradford  &  Pittsburgh,  the  Erie  clique  added  $140,000  a 
year  to  its  income. 


Itt  DRJSW  AND  VANDBRBII,T. 

Mr.  Work  got  an  additional  injunction  to  prevent  Erie 
from  issuing  stock  in  addition  to  the  251,058  shares  which 
had  appeared  in  the  previous  report  of  the  road,  and  for- 
bidding  a  guarantee  by  Erie  of  the  bonds  of  any  other  road, 
and  Drew  was  further  restrained  from  any  transactions  in 
Erie  until  he  should  return  the  68,000  shares  of  capital 
stock  to  the  treasury. 

It  will  thus  be  seen  that  Yanderbilt  had  taken  very  rigid 
measures  to  ^Hie  up"  the  hands  of  the  veteran  speculator. 

The  case  was  set  down  for  hearing  in  the  court  of  the 
immaculate  Judge  Barnard,  on  the  10th  of  March.  When 
Yanderbilt  thought  he  had  everything  fixed  to  force  Drew 
to  ruin  himself  by  the  return  of  these  shares,  which  would 
enable  Yanderbilt  to  effect  his  '^  corner,"  he  was  checkmated 
by  a  counter  injunction  issued  in  the  interest  of  the  Erie 
people  by  Judge  Balcom,  of  Binghamton,  which  stayed  all 
proceedings  in  Barnard's  court. 

Bichard  Schell  then  applied  to  Judge  Ingraham  and  got 
out  another  injunction  in  the  interest  of  the  Yanderbilt 
party,  staying  all  proceedings  before  Judge  Balcom. 

In  the  meantime  the  Erie  directors  were  busy  preparing 
their  new  issue  of  stock,  despite  the  injunctions,  in  order 
that  the  bulls  of  the  Yanderbilt  party  might  be  generously 
fed  with  Erie  when  the  opportunity  should  arrive. 

The  Executive  Committee  of  Erie  resolved  to  issue  bonds 
for  improvements,  extensions  and  steel  rails.  The  bonds 
were  convertible  into  stock  at  not  less  than  72^.  Five  mil- 
lions of  these  were  manufactured  by  the  "Ede  paper  mill 
and  printing  press,  to  be  exchanged  for  Yanderbilt's  good, 
solid  cash. 

A  great  difficulty  presented  itself  at  this  juncture,  which, 
even  to  the  majority  of  clever  speculators,  would  have  been 
insurmountable.  The  genius  of  ^^Jim"  Fisk  was  called  in 
to  cut  the  Gordian  knot.  The  certificates  of  the  new  Erie 
shares  were  in  the  hands  of  the  secretary  of  the  oompanyi 
but  he  was  enjoined  from  issuing  them.    They  had  been 


GONE  1^  JBRSAY  WITH  SEVAN  MILUONS.  188 

made  ont  on  Satnrdaj  night.  On  Monday  the  secretary 
directed  a  messenger,  in  the  Erie  office  in  West  street,  to  take 
the  books  containing  the  certificates  to  the  tranfer  office  in 
Pine  street.  The  messenger  took  the  books  and  walked  out. 
He  was  hardly  a  minute  absent  when  he  retomed,  apparently 
frightened,  without  the  books.  He  stated  that'Mr.  Fisk, 
M  ho  had  been  standing  at  the  door,  took  the  books  from  him, 
aiid  ran  away  with  them  I 

The  certificates  were  then  where  no  injunction  could 
molest  them.  The  next  day  the  convertible  bonds  were 
found  upon  the  secretary's  desk. .  In  a  day  or  two  after- 
wards the  certificates  appeared  in  Wall  Street.  An  order  ' 
was  obtained  from  Judge  Gilbert  enjoining  all  the  previous 
orders  of  that  legal  luminary.  Judge  Barnard.  Mr.  Drew 
then  threw  60,000  shares  of  Erie  stock  on  the  market  The 
boldness  of  the  operation  threw  the  Yanderbilt  brokers  ofif 
their  guards  for  it  never  struck  them  for  a  moment  that 
Diew  would  risk  contempt  of  court,  and  use  the  new  issue 
of  Erie  in  the  face  of  an  injunction,  so  they  eagerly 
devoured  the  fresh  bait  before  they  got  time  to  examine  the 
quality  of  it  or  suspect  its  origin. 

Erie  had  opened  at  80,  and  advanced  to  83.  When  the 
facts  became  known  the  stock  broke,  and  declined  to  71 ;  but 
under  heavy  purchases  by  the  Vanderbilt  party,  soon  recov- 
eied  to  78.  The  ^^  corner,''  however,  was  broken  by  the  large 
blocks  which  Drew  had  thrown  on  the  market,  and  Yander- 
bilt was  signally  defeated,  and  had  a  narrow  escape  from 
being  completely  swamped.  The  comer  proved  a  boomerang 
to  Yanderbilt  In  his  wrath  he  again  applied  to  the 
courts.  As  the  result,  the  Erie  clique  were  obliged  to  fly 
and  take  refuge  in  Jersey  City.  Drew  crossed  the  ferry 
heavily  loaded  with  a  big  carpet  bag,  which  contained  seven 
millions,  which  had  recently  changed  hands  from  Yandar* 
bilt  to  himself  in  the  cornering  operation. 

Oonld  and  Fisk  decamped  by  different  routes.  When  the 
party  had  taken  refuge  in  "  Fort"  Taylor  (Taylor's  Hotel)| 


184  BRBW  AND  VANDBRBH^T. 

safe  from  the  laws  of  New  York,  they  determined  that  no 
papers  should  be  served  upon  them,  and  gave  strict  orders  to 
the  host  that  they  would  not  receive  anything  in  the  shape  of 
letters  or  notes.  Commonications  of  all  kinds  were  prohib- 
ited except  through  persons  well  known  to  the  clique,  and 
the  waiters  at  the  hotel  were  strictly  enjoined  to  observe 
this  rule,  on  pain  of  being  discharged. 

While  Yanderbilt  was  working  hard  to  reach  the  refugees 
through  the  courts,  the  Legislature  and  his  detectives,  he 
discovered  a  method  of  communicating  with  Drew  in  spite  of 
the  precautions  with  which  the  latter  was  surrounded.  The 
Commodore's  scheme  would  have  done  honor  to  a  first-class 
Nihilist  of  the  present  day.  He  instructed  a  person  in  Ids 
service  to  play  temporary  detective,  to  go  to  the  Taylor 
Hotel  in  the  garb  of  a  commercial  traveler  from  the  Far 
West^  and  to  watch  the  movements  of  Drew,  so  as  to  get  a 
note  slipped  into  his  hand  in  a  way  that  he  would  be  certain 
to  read  it. 

The  amateur  detective  watched  for  a  day  or  two,  and  saw 
that  his  only  chance  of  success  was  when  Drew  was  at  lanch, 
and  that  the  person  who  waited  on  him  must  hand  him  the 
note.  He  saw  the  waiter,  and  told  him  what  he  wanted,  and 
that  when  he  should  be  discharged  the  Commodore  would 
find  him  a  better  place. 

The  waiter  agreed  to  hand  Mr.  Drew  the  note.  Drew  was 
enraged,  sent  for  the  host,  and  the  waiter  was  instantly  dis- 
charged, only  to  enter  Vanderbilt's  service,  according  to 
agreement,  at  much  higher  remtmeration.  The  note  of  the 
Commodore,  however,  had  the  desired  effect.  What  tiiat 
note  contained,  probably,  nobody  but  Vanderbilt  and  Drew 
ever  knew.  Though  the  friends  of  Drew  attempted  to 
frighten  him  from  going  by  arousing  his  suspicions  of  being 
kidnapped,  he  came  over  to  New  York  on  the  following  Sun- 
day and  had  an  interview  with  the  Commodore.  The  matter 
was  fixed  up  between  them,  and  while  Gould  and  Fisk  were 
fighting  Yanderbilt  tooth  and  nail  at  Albany,  and  Qould 


DRBW  APPQAS^  VAND«RBII,T.  186 

"Was  arrested  and  arraigned  for  contempt  of  court  and  other 
high  crimes  and  misdemeanors  in  the  eyes  of  the  Yander- 
bilt  lawyers,  Drew  was  left  unmolested  to  pursue  the  even 
tenor  of  his  way. 

As  treasurer  of  Erie,  however,  Drew  took  an  active  part  in 
the  progress  of  legislative  matters.  He  was  the  first  to  see 
that  Senator  Mattoon,  who  was  chiefly  instrumental  in  or- 
ganizing the  Investigating  Committee,  wanted  tangible 
recognition  of  his  services  before  the  Conunittee  made  its 
report.  He  thought  he  was  using  Mattoon,  but  the  Senator 
used  him,  and  gave  his  casting  vote  in  favor  of  Yanderbilt, 
whom  he  used  also,  after  the  most  approved  method  of  Albany 
legislators.  Mattoon  was  also  found  on  the  winning  side  at 
the  end  of  the  legislative  farce,  when  the  bill  in  favor  of  the 
Erie  clique  and  its  over-issue  of  stock  was  passed,  and  no 
doubt  got  his  fair  share  of  the  half  million  with  which  Drew 
fortified  Oould  from  the  Erie  treasury  when  this  gentleman 
went  to  Albany  to  conduct  the  war  in  the  Legislature  against 
Yanderbilt  concerning  the  extra  issue  of  Erie  stock. 


CHAPTEE    XVI. 

DREW  AND  THE  ERIE  "CORNERS."* 
A  Habmonious  Ukdebstandino  with  thb  Comhodobs.— 

How  THE  COMPBOMISB    WAS    EFFECTED. — An    InTEBEST 

IHG  Intebview  with  Fisk  and  Gould  in  the  Oommo 
dobe's  Bed-Room. — ^How  Riohabd  Sohell  Raised  thil 
Wind  fob  the  Oommodobe. — Dbew's  Shabb  of  the 
Spoha.— He  Tbies  to  Retibe  fbom  Wall  Stbeet,  but 
Can't. — The  Settlement  Cost  Ebie  Nine  Millions. — 
Gould  and  Pisk  **  Wateb  "  Ebie  again,  to  the  Extent 
of  Twentt-thbee  Millions,  but  leaye  Dbew  out. — 
** Uncle  Daniel"  Retubns  to  the  Stbeet. — BEe  is  In- 
veigled into  a  Blind  Pool  by  Gould  and  Pisk, 
Loses  a  Million  and  Retbeats  fbom  the  Pool.— He 

THEN  OpEBATES  AlONE  ON  THE  ^^ShOBT"  SiDE  AND 

Thbows  Away  Millions. — He  Tbies  Pbayeb,  but  it 
"AvAiLBTH  Not."— "It's  no  Use,  Bbotheb,  the  Mab- 
KBT  Still  Goes  Up."— Pbaying  and  Watching  the 
Tickeb.— Hopelessly  "Cobnebed"  and  Ruined  by  his 

FOBMEB  PXTPILS  AND  PaBTNEBS. 

ABOUT  the  middle  of  April  Drew  emerged  from  his  re- 
treat in  Jersey  City,  and  appeared  openly  in  Wall  Street, 
apparently  without  any  fear  of  arrest.  Other  members  of  the 
Erie  cliqne  had  gone  through  the  formality  of  purging  their 
contempt  of  court,  but  had  not  made  their  peace  with  the 
Commodore,  and  things  went  forward  without  any  special 
interruption  or  excitement  until  July,  when  a  settlement  was 
made  with  Yanderbilt. 

It  was  agreed  that  the  Commodore  should  be  relieved  of 
60,000  shares  of  Erie  stock  at  70,  for  which  he  was  to  re- 
ceiTO  $2,600,000  in  cash,  and  $1,250,000  in  bonds  of  the 
Boston,  Hartford  &  Erie  at  80.  It  was  further  stipulated 
that  he  was  to  receive  $1,000,000  for  the  privilege  of  calling 
on  him  at  any  time  within  four  months  for  the  remaining 
60,000  shares  of  Erie  at  70.    He  was  allotted  two  seats  in 


138  DRBW  AND  Tnn  KRIH   "CORNERS." 

the  Erie  Board  of  Directors.  All  suits  between  the  two 
high  contending  parties  were  to  be  dismissed  and  all 
offenses  whatsoever  relating  to  the  case,  in  the  language  of 
the  law,  were  to  be  condoned. 

The  manner  in  which  the  compromise  was  effected  is  not 
the  least  interesting  part  of  the  famous  deal  in  Erie.  Some 
time  after  Drew  had  got  through  his  famous  Sunday  evening 
interview  with  the  Commodore,  paving  the  way  for  his 
partners,  by  weeping  and  showing  other  manifestations  of 
deep  contrition  on  account  of  his  inglorious  flight  to  Jersey 
City,  Gould  and  Fisk  came  over  early  one  morning  to  seo 
the  Commodore  at  his  residence  in  Washington  Place.  Fisk 
told  the  story  of  meeting  the  Commodore  with  great 
unction,  in  his  bold,  brazen  and  lively  manner.  '^  Qoold 
wanted  to  wait,"  said  Fisk,  ^^  until  the  Commodore  should 
have  time  to  get  out  of  bed,  but  I  rang  the  bell,  and  when 
the  door  was  opened  I  rushed  up  to  his  room.  The  Commo- 
dore was  sitting  on  the  side  of  the  bed  with  one  shoe  off  and 
one  shoe  on.  He  got  up,  and  I  saw  him  putting  on  the  other 
shoe.  I  remember  that  shoe  from  its  peculiarity.  It  had 
four  buckles  on  it.  I  had  never  seen  shoes  with  buckles  in 
that  manner  before,  and  I  thought,  if  these  sort  of  men 
always  wear  that  sort  of  shoe,  I  might  want  a  pair.  He  said 
I  must  take  my  position  as  I  found  it ;  that  there  I  was,  and 
he  would  keep  his  bloodhounds  (the  lawyers)  on  our  track; 
that  he  would  be  damned  if  he  didn't  keep  them  after  us  if  we 
didn*t  take  the  stock  off  his  hands.  I  told  him  that  if  I  had 
my  way,  Fd  be  damned  if  I  would  take  a  share  of  it ;  that  he 
brought  the  punishment  on  himself  and  he  deserved  it.  This 
mellowed  him  down.  I  told  him  that  he  was  a  robber.  He 
said  the  suits  would  never  be  withdrawn  till  he  was  settled 
with.  I  said  (after  settling  with  him)  that  it  was  an  almighty 
robbery ;  that  we  had  sold  ourselves  to  the  Devil,  and  that 
Gould  felt  just  the  same  as  I  did." 

Among  the  friends  who  adhered  to  the  Commodore  in  the 
trying  hour  of  the  ^^  corner,"  besides  those  mentioned,  were 


TH«  COMMODORE  NKARLY   **  BtJRST."  ^^^ 

William  Heath,  Bichard  Schell  and  his  brother  Augustua, 
and  Snfns  Hatch.  Bichard  Schell  was  highly  practical  and 
remarkably  shrewd.in  the  aid  which  he  offered  the  Commo- 
dore to  obtain  money  for  the  speculatiye  fight.  He  man- 
aged, through  his  tact  and  shrewdness,  to  get  loans  on  Erie 
after  the  banks  had  absolutely  refused  to  lend,  on  account 
of  the  over-issue  of  the  stock.  After  this  refusal,  he  made 
inquiry  at  the  banks,  and  found  that  most  of  them  had  New 
Tork  Central  stock.  He  then  went  to  a  bank  and  said :  ''If 
you  don't  lend  the  Conmiodore  half  a  million  on  Erie  at  50, 
he  will  put  Central  down  to  50  to-morrow,  and  break  half  the 
houses  on  the  Street.  You  know  whether  or  not  you  will  be 
among  them." 

The  threat  was  repeated  at  other  banks,  and,  in  almost 
every  instance,  had  the  desired  effect,  and  the  Commodore 
was  supplied  with  the  sinews  of  war,  but  he  was  only  throw- 
ing away  his  ammunition. 

The  Erie  stock  from  the  inexhaustible  fountain  of  over- 
issue was  supplied  to  him  without  stint,  and  his  attempts  to 
** comer''  the  clique  were  absolutely  futile. 

While  these  gamesters  were  feeding  the  Commodore  with 
this  extemporized  stuff  to  order,  Fisk  said :  ^'  If  this  printing 

press  don't  break  down,  I'll  be  d d  if  I  don't  give  the  old 

hog  all  he  wants  of  Erie." 

The  printing  press  did  not  break  down,  but  did  its  work 
well  until  the  Conmiodore  was  nearly  "  burst,"  and  had  it 
not  been  for  his  indomitable  courage  and  the  hold  he  had 
acquired  on  the  courts,  he  would  have  been  bankrupt.  His 
escape  seemed  ahnost  a  miracle  to  the  people  of  Wall 
Street,  and  Gould  and  Fisk  were  not  less  surprised  that  they 
had  met  a  f oeman  worthy  of  their  steel.  In  spite  of  the  fact 
that  he  spilled  over  seren  millions  like  water,  fhe  Commo- 
dore managed  to  sustain  the  market  through  it  all,  and  pre- 
vented a  crash  that,  in  its  local  effects,  at  least,  would  have 
been  as  disastrous  as  that  of  Black  Friday. 

Certain  innocent  holders  who  had  been  badly  crushed  in 


140  bRBW  AKB  tW^  BRI]9  ^'CORNVRS.*^ 

the  colIiBioii  between  the  great  leaders  received  a  financial 
emollient  for  their  lacerated  feelings,  amounting  in  the  ag- 
gregate to  $4299250.  The  Boston  party,  represented  by 
Mr.  Eldridge,  was  to  be  relieved  of  five  millions  of  its 
precious  Boston,  Hartford  &  Erie  bonds,  receiving  there- 
for four  millions  of  Erie  acceptances. 

Thus,  the  settlement  in  full  cost  Erie  about  nine  million 
dollars.  The  Erie  stock  and  bondholders  were  saddled  with 
this  liability  in  defiance  of  law  and  justice. 

Gould  and  Fisk  pretended  to  be  opposed  to  the  settle- 
ment^ leaving  the  public  to  infer  that  it  was  all  the  work  of 
Drew  with  Vanderbilt.  However  this  may  have  been,  it 
was  probably  the  best  thing  the  others  could  have  done  to 
relieve  themselves  of  their  various  complications  at  the 
time.  No  doubt  the  Vanderbilt  note  to  Drew,  for  which  the 
waiter  was  discharged  from  Taylor's  Hotel,  was  at  the  bot- 
tom of  the  whole  settlement. 

Drew  was  left  to  enjoy  his  share  of  the  fruits  of  the 
^corner,"  which  netted  seven  millions,  except  that  he  had 
to  pay  into  the  Erie  treasury  the  trifling  item  of  $540,000  in 
discharge  of  interest  and  all  claims  or  causes  of  action 
which  might  be  presented  against  him  by  the  Erie  Com- 
pany. The  Erie  Railway  fell  to  the  lot  of  Gould  and  Fisk 
as  their  share  of  the  spoils  growing  out  of  the  entente  cordiale. 

Drew  then  retired  from  Wall  Street  in  the  same  way  that 
Gk)uld  has  so  often  retired  since  that  time,  except  that  Drew 
had  probably  an  honest  intention  so  far  as  it  was  passible 
for  him  to  have  such  a  conception  of  leaving  the  Street  for- 
ever, but  it  would  seem  that  he  had  not  the  power  to  do  so. 
Once  in  "Wall  Street,  always  in  Wall  Street.  It  is  like  the 
doctrine  of  the  final  perseverance  of  the  saints,  as  laid  down 
in  the  Westminster  Confession  of  Faith.  It  is  impossible 
to  get  out  of  it  when  the  speculator  gets  fairly  into  its  fas- 
cinating grasp. 

Drew  might  have  enjoyed  life  and  the  consolations  of 
religion  on  the  few  millions  he  had  left  if  he  had  retired*  io 


TH^  COMMODORE  ON  TH^  WAR  PATH.  141 

company  with,  his  Bible  and  Hymn  Book,  to  some  lovely, 
secluded  spot  in  the  peacefol  vales  of  Putnam  county ;  but 
he  was  under  the  infatuation  of  some  latent  and  mysterious 
force  or  attraction,  the  victim  of  some  potent  spell,  like  the 
one  in  whose  weird  grasp  Nancy  Sykes  was  firmly  held  when 
&he  essayed  to  get  away  from  the  murderous  ^^Bill,"  as  de- 
scribed by  Dickens,  in  Oliver  Twist. 

Drew  came  back  to  Wall  Street,  and  saw  and  was  van- 
quished, quite  unlike  CsBsar. 

When  he  returned  to  the  ^  Street''  after  a  few  months  ab- 
sence, the  scene  was  greatly  changed.  His  two  pupils  had 
shown  themselves  to  be  such  apt  scholars,  that  in  the  in- 
terim they  had  exceeded  the  wildest  dreams  of  avarice  that 
ever  their  able  preceptor  had  conjured  up  or  inculcs^ted.  In 
four  months  Gould  and  Fisk  had  inflated  the  capital  stock 
of  Erie  from  84  millions  to  57  millions.  No  doubt,  Uncle 
Daniel  was  astounded  at  their  progress,  and  his  feelings  can 
be  better  imagined  than  described  when,  in  the  presence  of 
this  marvellous  increase  of  wealth,  he  reflected  that  he  was 
BO  longer  treasurer  of  Erie,  and  had  neither  lot  nor  part  in 
its  unprecedented  prosperity. 

His  natural  propensity  to  operate,  however,  was  still 
strong,  but  when  he  again  tried  his  hand  at  speculation,  it 
seemed  to  have  lost  its  cunning,  and  he  felt  almost  as  much 
disappointed  as  Bip  Van  Winkle  did  when  he  awoke  in 
Sleepy  Hollow,  after  his  twenty  years'  nap,  and  began  to 
examine  the  changed  aspect  of  the  conn  try 'in  the  vicinity  of 
Irvington,  now  Gould's  country  seat 

The  speculative  tactics  in  operation  had  been  changed, 
and  he  soon  found  that  it  was  a  losing  game  to  go  on  the 
bear  side  of  the  market.  He  was  invited  into  the  pool  by 
his  old  partners,  to  have  a  little  practice  at  the  popular  game 
of  spider  and  fly.  Drew  had  been  the  spider  for  a  long 
time  who  had  inveigled  the  unwary  flies  from  every  direc- 
tion into  his  insidious  net.  He  was  now  asked  to  assume 
the  role  of  a  fly,  while  his  former  pupils  played  spiders.    In 


142  DRKW  AND  TH^  ^RI^ 

plain  terms,  he  was  coollj  requested  to  go  into  a  ^^  blind 
pool ''  in  Erie,  deposit  fonr  millionli,  shut  his  eyes  and  open 
his  mouth,  leaving  the  Erie  sharpers  to  put  taffj  or  candy 
into  it,  just  as  they  pleased. 

He  was  no  longer  to  have  the  privilege  of  pulling  the 
wires,  nor  the  wool  over  other  people's  ejes.  On  the  con- 
trary, he  was  to  be  one  of  the  puppets  that  should  dance  to 
the  music  of  Qould  and  Fisk,  and  let^them  pull  the  wool 
over  his  eyes.  He  was  not  to  ask  any  questions,  but  pay 
his  money  and  take  his  choice,  that  is  to  say,  whatever 
Gould  and  Fisk  chose  to  give  him.  The  terms  were  rather 
humiliating,  and  on  reflection,  Uncle  Daniel  revolted.  He 
did  not  see  the  point  of  paying  the  piper  without  having 
the  privilege  of  choosing  the  tune.  He,  therefore,  withdrew 
his  funds  after  losing  a  million,  and  undertook  the  task  of 
bearding  these  two  young  lions  in  their  den — the  den  which 
he  had  constructed  for  them,  and  the  two  young  lions  which 
he  had  so  carefully  nurtured  to  destroy  him.  They  were 
very  wroth  with  him  on  account  of  what  they  regarded  as 
his  treachery,  which  virtually  consisted  in  his  refusal  to  bo 
totally  devoured  by  them.  The  fact  is,  however,  Daniel 
could  not  have  been  true  to  any  one,  any  more  than  they. 
^^Can  the  Ethiopian  change  his  skin,  or  the  leopard  his 
spots?" 

After  considering  the  matter  prayerfully,  as  he  always 
did  in  such  emergencies,  he  resolved  to  operate  alone,  and 
the  oracle  told  him  to  go  on  the  short  side.  It  was  evident 
that  the  Gods  had  doomed  him  to  destruction,  so  he  rushed 
in  madly  to  sell  the  market,  which  moved  persistently  up- 
ward. 

In  this  emergency  he  took  counsel  of  a  Christian  brother, 
who  advised  him  to  pray.  He  tried  hard  to  pray,  but  his 
irresistible  desire  to  keep  constant  watch  on  the  tape  of  the 
ticker,  to  see  the  quotations,  evidently  distracted  his  devo- 
tions. This  was  probably  the  first  time  that  he  lost  faith  in 
the  power  that  moves  the  arm  that  moves  the  world.    He 


HOW  DR«W  WAS   "CORN«R«D."  113 

^eni  to  his  Christian  hrother  with  tears  in  his  eyes,  saying: 
^It  is  no  use,  brother;  the  market  still  goes  np."  And 
Uncle  Daniel  ceased  to  pray,  and  despairingly  fixed  his  at- 
tention on  the  ticker. 

Daring  November,  Drew  contracted  for  the  delivery  of 
70,000  shares  of  Erie  at  current  prices.  It  was  then  in  the 
vicinity  of  38.  He  proceeded  on  this  line  of  operation  un- 
til he  was  hopelessly  "  cornered."  He  then  applied  to  the 
conrL  Application  was  made  for  an  injunction  in  the  name 
of  August  Belmont,  but  Gould  and  Fisk  offset  it  by  apply- 
ing for  another  injunction  to  their  faithful  Barnard.  That 
upright  Judge  not  only  granted  an  injunction  restraining  all 
suits  brought  against  his  two  eminent  proteges,  but  ap- 
pointed Gould  Receiver  of  Erie.  He  also  gave  authority  to 
the  directors  of  Erie  to  use  the  funds  of  the  corporation  to 
purchase  and  cancel  200,000  shares  of  stock,  the  legality 
of  whose  issue  had  been  questioned,  at  any  price  less  than 
the  par  value,  without  regard  to  the  rate  at  which  it  had 
been  issued. 

Gould  and  Fisk  had  issued  these  shares  in  the  bear  in- 
terest at  40,  ran  the  stock  down  to  35,  and  now  obtained  the 
power  to  purchase  it  back  at  par  in  the  bull  interest.  This 
they  did  by  the  authority  and  permission  of  a  Judge  of  the 
Supreme  Court,  in  spite  of  the  law  prohibiting  members  of 
corporations  to  deal  in  their  own  stock.  So  these  two  great 
manipulators  ^^ cornered"  their  old  friend  and  teacher, 
Drew,  by  legally  over-riding  the  law 

Erie  became  scarce  after  this  skilful  movement  was  per- 
formed, and  was  selling  at  47.  Drew  made  desperate  at- 
tempts to  cover  at  this  price,  but  the  stock  ran  up  to  57 
between  Monday  and  Wednesday.  Wall  Street  was  in  a 
terrible  ferment,  and,  as  the  newspapers  say,  the  gi'eatest 
excitement  prevailed.  Erie  made  still  another  leap  and 
reached  62.  It  was  .evident  that  it  was  bound  to  keep  on 
the  upward  grade,  and  there  was  no  apparent  relief  for 
Drew,  at  least  for  two  or  three  days,  when  an  incoming 


144  DR9W  AND  TH«  KRI«   "  CORNERS." 

steamer  was  expected  to  have  a  considerable  amount  of  Erie 
on  board.  It  was  manifest,  however,  that  by  that'  time  Drew 
wonid  have  reached  the  end  of  his  millions,  and  probably 
most  of  his  credit  would  have  vanished  with  his  own  filthy 
lucre.  His  oppressors  were  bearing  down  upon  him  with 
all  their  might,  and  were  evidentlj  determined  to  make 
short  work  of  him. 

The  struggle  waxed  hotter  as  the  hour  of  three  in  the 
afternoon  approached,  and  these  two  young  lions  of  speca* 
lation  were  determined  to  crush  the  old  bear  unmercifally 
and  effectually. 

When  Drew  was  apparently  on  the  very  brink  of  utter 
financial  destruction,  and  almost  at  the  close  of  the  market, 
two  events  happened  that  preserved  him  from  total  annihil- 
ation. There  had  been  300,000  shares  of  Erie  issued  in  ten 
share  lots,  which  the  operators  thought  were  safely  secreted 
in  London  and  Amsterdam.  When  the  stock  reached  60 
these  ten-share  lots  began  to  come  out.  It  turned  out  that 
most  of  them  had  never  left  home,  but  were  securely  held 
by  tradesmen,  mechanics,  grocers  and  small  bankers  and 
brokers.  They  were  thrown  on  the  market  with  great 
rapidity  to  realize  handsome  profits,  and  the  efforts  of  the 
clique  to  absorb  them  before  they  got  into  the  hands  of 
Drew,  made  serious  inroads  on  the  reserve  funds  of  the 
champion  operators.  As  troubles  never  come  singly,  at 
this  new  juncture  the  banks  refused  to  certify  their  checks. 
Drew  was,  therefore,  enabled  to  make  good  his  contracts 
at  47,  but  speculatively  speaking,  he  was  ruined.  He  came 
pretty  near  bringing  down  his  desperate  assailants,  however, 
in  his  sad  and  frightful  fall.  The  stock  then  fell  to  42,  and 
Erie  became  a  drug  in  the  market.  The  victors  had  got  the 
spoils,  but  they  paid  dearly  for  them,  and  had  come 
pretty  near  being  destroyed  in  the  moment  of  their 
triumph.  They  had  purchased  their  Erie  at "  corner ''  prices, 
and  they  were  obliged  to  carry  it,  for  nobody  wanted  it 
Added  to  this  Erie  was  struck  from  the  Board  for  a  timei 


GOTJU)  AND  FISK   AR]^  RKI^KNTI^QSS.  145 

and  had  it  not  been  for  the  gullibility  of  onr  English 
ooosinSy  this  stock  would  haye  ceased  to  be  a  disturbing 
element  in  the  market  for  a  great  while  longer. 

Although  old  Drew  was  badly  treated,  yet  there  was  little 
sympathy  for  him,  since  he  had  merely  become  the  yictim 
of  his  own  avarice,  vacillation,  treachery  and  scheming  to 
eatch  others  in  the  same  net. 

He  could  not  justly  complain  of  his  former  partners,  and 
Fisk  told  him  so,  for  their  methods  of  operation,  and  the 
immense  inflation  of  the  Erie  stock  by  which  he  was  ruined 
had  been  accomplished  by  the  machinery  which  he,  himself 
had  set  in  motion,  only  his  cf-cZ^an^  colleagues  had  improved 
upon  it,  and  had  received  various  new  patents  on  inventions 
and  improvements,  which  they  had  joined  to  the  old  one 
invented  by  **  Uncle  Daniel,''  making  one  of  the  best  com- 
binations for  the  purpose  of  creating  and  working  "comers* 
that  had  ever  been  devised  in  Wall  Street. 

But  the  unkindest  cut  of  all  was  the  way  in  which  Fisk 
taunted  him,  on  the  eve  of  his  crushing  defeat,  with  the  ab- 
surdity  of  his  complaints  about  the  management  of  Erie 
matters. 

'^You  should  be  the  last  man,"  said  this  worthy  pupil, 
sneeringly,  to  his  dear  old  preceptor,  "  that  should  whine 
over  any  position  in  which  you  may  be  placed  ia  Erie.'* 

It  was  a  sad  truth,  heartlessly  uttered  by  the  generous 
*•  Jim."  Drew  had  no  mercy  on  others,  and  could  not  ex- 
pect to  be  shown  any  of  that  "twice  blessed  quality''  tow- 
ards himself. 

The  private  scene  in  the  Erie  office  between  old  Drew  and 
Fisk  and  Gould,  just  prior  to  their  final  and  victorious 
charge  upon  him,  was  deeply  pathetic,  yet  none  of  the  three 
showed  more  conspicuously  that  they  were  destitute  of  that 
proverbial  honor  among  "boodlers''  than  Drew  himself. 
He  had  secured  Vanderbilt  to  assist  him  in  the  courts,  and 
also  in  the  market,  against  the  machinations  of  the  Erie 
cUque,  and  then,  turning  around,  he  went  straight  to  Qould« 


140  DR^W  AND  TH^  KRIE   "  CORNERS." 

and  to  liiin  betrayed  his  ally  and  the  plans  he  had  arranged 
with  him,  expecting  mercy  from  his  old  coUeagae  by  this 
dastardly  act  of  humiliation  and  deception. 

He  must  have  lost  his  head  at  this  crisis,  for  he  ought  to 
have  knowQ  Gould  better.  He  begged  and  pleaded  with 
Gould  and  Fist,  and  was  ready  to  throw  himself  at  their 
feet.  He  implored  them  to  join  him,  with  the  remnant  of 
his  fortune,  in  giving  the  old  paper  mill  another  turn  to 
grind  out  more  Erie  stock,  that  he  might  be  permitted  to 
emerge  from  that  cruel  "  corner "  in  which  he  was  placed 
like  a  scorpion  girt  by  fire,  brooding  over  his  guilty  woes. 

But  his  pupils  proved  that  they  had  profited  only  too 
well  by  his  instructions.  Just  as  he  would  have  acted  under 
similar  circumstances,  they  were  perfectly  relentless.  They 
seemed  to  be  a  double  incarnation  of  Shylock  personified, 
or  two  Dromios  bereft  of  conscience  and  human  sympathy. 
Drew  had  no  Daniel  but  himself,  to  come  to  judgment 
There  was  no  fair  Portia  to  plead  his  cause,  and  if  there  had 
been  such  an  angelic  creature  in  the  case,  though  she  might 
have  ^^  broke  up  "  Fisk,  it  is  almost  certain  that  Gould  would 
have  successfully  resisted  her  charms. 

When  Drew  saw  they  were  implacable  he  bade  them  good 
night,  and  with  the  courage  of  despair  returned  to  the  charge 
in  Wall  Street  the  next  morning,  with  the  results  which  have 
been  briefly  related.  He  lost  nearly  two  millions  in  that 
fatal  struggle. 


CHAPTEB    XVII. 

INTERESTING  EPISODES  IN  DREWS  LIFE. 

Ihoidents  in  the  Eably  Life  of  Dbew,  and  How  he  Beqan 
TO  Make  Money. — He  Bobbows  Money  fbom  Henry 
Abtob,  Bttyb  Cattle  in  Ohio  and  Drives  them  oveb 
the  Alleghany  Mountains  undeb  Great  Habdship 
AND  Suffering. — His  Great  Career  as  a  Steamboat 
Man,  and  his  Opposition  to  Vanderbilt. — His  Mab- 
BiAGEAND  Family. — He  Builds  and  Endows  Beligious 
and  Educational  Institutions. —Eeturns  TO  his  Old 
Home  after  his  Speculative  Fall,  but  can  Find  No 
Best  so  Fab  away  fbom  Wall  Stbeet.— His  Hopes, 

THBOUGH  Wm.  H.  VaNDEBBILT,  OF  ANOTHEB  StABT  IN 

Life.— His  Bankbuptcy,  Ll^bilitibs  and  Wabdbobb.— 
His  Sudden  but  Peaceful  End.  —  Chabaotebistio 
Stobies  of  his  Eccentbioities. 

I  HAD  intended  at  first  to  give  only  a  sketch  of  the  salient 
points  in  the  speculative  career  of  Drew,  but^  on  re* 
flection,  I  find  that  the  lives  of  great  men  all  remind  us  that 
people  want  to  know  a  great  deal  of  minutiae  concerning 
men  who  have  made  their  mark  in  this  world.  Our  enter- 
prising newspapers  are  encouraging  this  laudable  curiosity 
more  and  more  every  day.  So  in  the  case  of  Drew,  I  must 
try  to  furnish  answers  to  questions  that  may  be  asked  about 
him  in  order  that  popular  expectation  may  not  be  disap- 
pointed. I  shall  endeavor  to  anticipate  what  the  reader 
may  naturally  want  to  know  when  he  comes  to  the  end  of 
Drew's  great  speculative  ventures.  One  of  these  questions 
will  probably  be,  what  kind  of  a  boy  was  Daniel  I>ew,  and 
how  did  he  begin  to  make' money  ? 

It  goes  without  saying  that  Drew  was  the  modt  unique 
figure  that  Wall  Street  has  ever  seen,  and  a  characteristic 
specimen  of  one  kind  of  American  thrift,  entsrprise  and 
speculation.  Every  side  of  his  many  sided  and  peculiar 
character,  therefore,  is  of  interest  as  the  representative  of  a 


148  INT]$RESTING  EPISODES  IN  DRKW'S  I,IFK. 

class  to  the  reader  who  sets  his  heart  on  making  money,  and 
the  majority  of  readers  have  this  weakness.  He  is  of  special 
interest  to  all  tf|)eculators  not  only  in  this  coontry,  bat 
throughout  the  civilized  world.  These  facts  constitute  my  ^ 
apology  for  dwelling  so  long  and  minutely  on  his  character-  .^^ 
istics.  I  have  an  idea  that  his  life  and  adventures  will  be 
read  with  deep  interest  many  years  hence,  and  help  to  pro- 
long the  existence  and  reputation  of  this  book.  They  will 
also  assist  to  immortalize  tbe  man  who  was  one  of  the  most 
wonderful  products  of  American  civUization,  and  who  could 
hardly  have  been  evolved  from  any  other  soil  or  clime.  Such 
prodigies  of  success  cause  the  members  of  the  older  social 
fabrics  to  stare  with  astonishment  at  the  stupendous  capa- 
bilities of  our  great  country. 

There  is  nothing  interests  people  so  much  as  the  start  in 
lifll  probably  because  tb^re  are  so  few  who  concdder  them- 
selves able  to  get  a  good  %tart.  So  far  as  I  can  leam^  in 
the  case  of  Daniel  Drew,  the  boy  was  father  to  the  man. 
He  worked  on  a  farm,  going  to  school  at  intervals,  where 
he  was  unable  to  learn  anything,  except  that  he  obtained  a 
notion  of  the  current  theological  idqas  of  that  day,  until  he 
was  fifteen  years  of  age,  when  bis  father  died,  leaving  him, 
a  younger  brother  and  their  mother  to  shift  for  themselves 
on  a  poor,  small  farm.  His  father  was  of  English  and  his 
mother  of  Scotch  descent. 

In  his  seventeenth  year  young  Drew  enlisted  as  a  sidbsti- 
tute  in  the  State  Militia,  which  had  then  been  called  into 
service  on  account  of  the  second  war  with  England. 

The  regiment  was  placed  at  Fort  Gansevoort,  on  the 
Hudson,  opposite  New  York.  Hostilities  ceased  between 
this  country  and  England  a  few  months  after  his  enlistment, 
and  the  regiment  was  mustered  out.  Daniel  returned  home.  ^ 
His  mother  had  taken  charge  of  his  substitute  money,  which 
probably  did  not  exeged  a  hundred  dollars,  the  amount 
with  which  his  great  rival.  Commodore  Vanderbilt  com- 
menced life,  and  which  he  earned  from  his  mother  by 
ploughing  and  planting  a  field. 


o 


HB  BORROWS  MONKY  TO  BUY  CATTLE.  149 

^^  I  want  my  snbstitute  money,''  said  Drew  to  his  mother, 
one  day  shortly  after  his  return.  '^  What  are  you  going  to 
do  with  it?"  queried  the  old  woman,  for  Iteingof  Scotch 
descent,  she  was  quite  as  thrifty  in  looking  after  the  pennies 
as  her  American  contemporary,  old  Mrs.  Vanderbilt.  They 
both  had  the  gripping  sense  by  nature,  and  to  thik  trans- 
missible quality  may  probably  be  attributed,  in  a  large 
degree,  the  financial  success  of  both  of  their  sons. 

'^I  am  going  to  buy  cattle,  and  sell  them  in  New  York,'' 
replied  Daniel. 

"Are  you  sure  you  will  not  lose  money  by  it  I"  rejoined 
his  mother. 

"I  am  sure  I  will  make  money,"  he  said. 

He  started  to  purchase  cattle  in  the  country  and  to  sell 
ihem  in  New  York.  His  profits  were  at  first  very  small, 
especially  as  his  capital  was  so  limi^.  He  soon  discov^lMl 
that  if  he  could  purchase  his  caWe  in  Ohio  he  would  be 
able  to  increase  his  profits  largely,  and  he  applied  to  Henry 
Astor,  a  butcher  in  Fulton  Market,  and  a  brother  of  the 
great  millionaire,  John  Jacob  Astor,  for  a  loan  to  speculate 
in  Ohio  cattle.  Astor  ..accommodated  him,  though  he  at 
first  thought  he  was  running  a  considerable  risk.  He  was 
mistaken,  for  Drew  made  money  and  soon  established  his 
credit  on  a  solid  basis.  He  bought  cattle  throughout  Ohio, 
and  droYC  them  OYer  the  Alleghany  mountains.  He  is  said 
to  h%ye  been  the  first  droYer  who  attempted  this  daring  ezr 
periment.  It  required  sixty  days  then  to  make  the  journey. 
He  suffered  great  hardship  and  privation,  and  would  some- 
times lose  a  third  part  of  a  drove  of  600  or  1,000  in  crossing 
the  mountains.  Yet,  as  cattle  were  very  cheap  in  Ohio,  his 
profits  were  still  very  large. 

One  terrible  night,  in  a  terrific  thunderstorm,  the  tree 
under  which  he  took  shelter  was  shattered  to  splinters,  his 
horse  was  killed  under  him,  and  he  h^self  was  struck  sense- 
less for  a  time.  But  no  hardship  or  privation  could  deter 
him  in  the  pursuit  of  making  money.  He  afterwards  ex- 
tended his  operations  to  Kentucky  and  Illinois. 


16*  INTERESTING  EPISODES  IN  DREW'S  LIFE. 

In  1829  Drew  opened  a  cattle  yard  at  Twentj-fooith 
street  and  Third  avenue  and  ran  the  Ball's  Head  TaveriL 
He  went  into  the  steamboat  business  in  1834.  Yanderbilt 
had  then  been  seventeen  years  in  the  business.  Westeheiter 
and  Emerald  were  the  names  of  his  first  two  boats,  and  thej 
ran  between  New  York  and  Albany,  in  opposition  to  the 
Yanderbilt  Line.  Drew  reduced  the  fare  from  three  dollars 
to  one,  and  attempted  to  freeze  out  Yanderbilt.  The  war  of 
rates  became  so  fierce  that  people  were  carried  100  miles 
between  these  two  cities  for  a  shilling.  Drew  added  the 
KnickerbockcTy  the  Oregon^  Q-eorge  Law^  Isaac  Newton  and  the 
New  World  to  his  river  fleet,  and  became  quite  a  formidable 
competitor  of  the  Commodore. 

In  1840  Isaac  Newton  organized  the  People's  Line  on  the 
Hudson,  of  which  Drew  became  the  largest  stockholder. 
The  boats  St.  John^  Dean  Richmond  and  Drew  were  built 
The  Isaac  Newton  was  burned  and  the  Nw  W&rii  was  sunk. 

When  the  Hudson  Biver  Bailroad  was  openedp<j|(^|^2, 
Drew  refused  to  sell  out  his  stock.  "  You  can 
fares  as  you  choose,^'  he  said  to  the  President  of  the^ 
road  Company,  **  but  the  only  way  you  can  regulate  my 
steamboat  fares  is  to  buy  the  People's  Line,  and  this  I 
don't  believe  you  have  money  enough  to  do."  The  raikoad 
line  merely  stimulated  traffic,  as  the  elevated  railroads  have 
done  in  our  day,  and  Drew  was  only  a  gainer  instead  of  a 
loser  by  the  apparent  competition.  He  also  controlled  the 
Stonington  Line  for  twenty  years. 

Drew  made  his  debut  in  Wall  Street  in  1844,  just  thirteen 
years  prior  to  my  first  appearance  on  the  boards  of  this 
financial  theatre,  and  he  was  quite  a  war  horse  in  specula- 
tion when  I  entered  the  arena.  He  formed  a  partnership 
with  his  son-in-law,  a  Mr.  Kelly,  and  Nelson  Taylor,  as 
'  stock  brokers  and  bankers.  Their  business  was  large  and 
their  credit  good-  Th§  firm  continued  for  ten  years,  until 
it  was  dissolved  by  the  death  of  his  partners.  Drew  then 
became  one  of  the  most  daring  atid  successful  operators  in 
Wall  Street 


HIS  DREAD  OP  DYING  IK  POVKRtY.  161 

Drew  was  married  at  the  age  of  25  to  Boxana  Mead,  a 
lumer's  daughter,  by  whom  he  was  the  father  of  three 
diildren,  William  H.,  Josephine,  who  died  in  infancy,  and 
Catharine,  who  was  married  to  the  Bey.  W.  I.  Clapp,  a 
Baptist  clergyman,  who  died  and  left  his  widow  in  good 
circumstances.  So  there  were  very  little  groands  for 
''Unele  Daniel's "  dread  that  he  should  probably  die  in 
miserable  destitation,  as  it  seems  that  his  two  surviving 
children  were  very  kind  to  him.    His  wife  died  in  1876. 

Drew  was  a  member  of  St.  Paul's  Methodist  Episcopal 
Ohurch  of  New  York  for  several  years.  He  contributed 
large  sums  to  various  religious  and  educational  institutionS| 
bat  like  Wilkins  Micawber,  he  usually  paid  the  money  in 
notes,  which  appeared  in  the  schedule  of  his  liabilities  when 
he  had  lost  his  large  fortune,  and  had  become  bankrupi 
He  founded  the  Drew  Seminary  at  Carmel,  for  young  ladies, 
at  a  cost  of  $250,000.  He  built  the  Drew  Theological 
BembjgjguiJk  Madison,  New  Jersey,  also  at  a  cost  of  $250,-. 
midowed  it  with  a  similar 'amount.  He  only  paid 
on  the  latter.  He  increased  the  endowment 
fnnd  of  the  Wesleyan  University,  at  Middletown,  Oonn«, 
and  the  Concord  Biblical  Institute.  He  added  $100,000  to 
the  endowment  fund  of  Wesley  University,  but  only  paid 
the  interest  on  that  also.  These  appear  in  the  schedule,  in 
the  list  of  his  unsecured  claims.  He  owned  several  large 
grazing  farms  in  Putnam  county,  but  they  were  heavily 
mortgaged. 

Drew  had  some  intention  of  returning  to  his  old  home 
after  the  bankruptcy  proceedings  in  1876,  to  spend  the  re- 
mainder of  his  days  there  among  his  grandchildren.  This 
desire  shows  that  there  was  something  inherently  soft  and 
good,  after  all,  in  his  avaricious  nature,  and  reminds  me  of 
the  touching  lines  of  Cowper  on  the  same  subject : 

**  Be  it  a  weakness:,  it  deserves  some  praise, 
We  loYe  the  play  place  of  our  early  days. 
The  scene  is  touching,  and  the  heart  is  stone. 
That  f eela  not  at  the  sight,  and  feels  at  none.^ 


152  INTERESTING  EPISODES  IN  DREW*S  WFE. 

He  went  out  to  Putnam  county  in  1876,  when  he  was  sick, 
but  he  was  soon  glad  to  get  back  to  the  city.  He  said :  '^  1 
was  troubled  with  visitors,  some  of  'em  well  on  to  100  years 
old.  Some  of  them  said  I  bought  cattle  from  them  when 
I  was  young,  on  credit,  and  they  wanted  their  bills.  I  kept 
no  books,  and  how  was  I  to  know  I  owed  'em  for  them  crit- 
ters ?  It  was  dull  outen  thar,"  he  continued,  "  and  yer  never 
can  tell  till  the  next  day  how*  sheers'  is  gone." 

So  Uncle  Daniel  came  back  and  stopped  at  the  Hofimaa 
House,  where  he  could  have  ready  access  to  the  ticker,  and 
kept  constantly  posted  on  the  price  of  stocks.  His  principal 
broker  was  Mr.  David  Groesbcck. 

The  city  still  seemed  to  have  certain  fascinations  for  him 
that  the  country  was  unable  to  afford*  He  often  spoke  re- 
gretfully, in  his  latter  days,  of  being  too  old  to  retrieve  his 
fortune.  He  said  he  longed  for  rest  Nothing  seemed  to 
weigh  more  heavily  upon  his  mind  than  his  inability  to  carry 
out  the  plans  connected  with  his  religious  endowments,  and 
he  grieved  deeply  that  he  had  not  the  means  to  return  to  Wall 
Street  that  he  might  have  another  lucky  turn  that  would 
enable  him  to  fulfil  these  religious  obligations  according  to 
the  original  intention. 

In  the  bankruptcy  schedule  his  personal  property  is  item- 
ized as  follows :  watch  and  chain,  $150 ;  sealskin  coat,  $150 ; 
wearing  apparel,  $100 ;  Bible,  hymn  books,  &c.,  $130. 

Although  he  was  economic  in  his  domestic  expenses,  he 
entertained  friends  liberally,  and  his  house  at  the  southwest 
corner  of  Seventeenth  street  and  Union  Square  was  always 
open  to  Methodist  ministers,  free  of  charge,  from  all  quartens 
of  the  world. 

Some  years  prior  to  his  death  Mr.  Drew  gave  the  foUoi^ 
ing  candid,  succinct  and  pathetic  account  of  his  embarraM' 
ment  to  a  journalist  who  interviewed  him ; 

'^  I  had  been  wonderfully  blest,"  said  Uncle  Daniel^  ^in 
money  making.  I  got  to  be  a  millionaire  before  I  knowed 
it  hardly.    I  was  always  pretty  lucky  till  lately,    I  didn't 


dink  I  oonld  oyer  lose  money  extensiyely.  I  was  ambitions 
of  making  a  great  f ortane,  like  Yanderbilt,  and  I  tried  every 
way  I  knew,  but  got  caught  at  last  Besides  that,  I  liked 
the  excitement  of  making  money,  and  giving  it  away,  and 
am  glad  of  it.  So  much  has  been  saved  anyhow.  Wall 
Street  was  a  great  place  for  making  money,  and  I  could  not 
give  up  the  business  when  I  ought  to  have  done  so.  Now, 
I  see  very  clearly  what  I  ought  to  have  done.  I  ought  to 
have  left  the  Street  eight  or  ten  years  ago,  and  paid  up  what 
I  owed  When  I  gave  $100,000  to  this  institution  and  that, 
I  ought' to  have  paid  the  money,  and  I  ought  to  have  pro* 
Tided  better  for  my  children,  by  giving  them  enough  to 
make  them  rich  for  life.  Instead  of  that  I  gave  my  noteS| 
and  only  paid  the  interest  on  'em,  thinking  I  could  do  better 
with  the  principal  myself.  One  of  the  hardest  things  I  have 
had  to  bear  has  been  the  fact  that  I  could  not  continue  to 
pay  the  interest  on  the  notes  I  gave  to  the  schools  and 
churches." 

"  I  gave  my  son  the  old  homestead,''  continued  Mr.  Drew, 
^  and  some  other  small  property  up  in  Putnam,  where  we 
came  from,  which  I  hope  will  make  him  independent  at 
least.  .  My  daughter  married  a  rich  man,  and  when  he  died, 
leaving  considerable  property  to  five  children,  I  was  made 
executor  of  the  wilL  For  so  great  a  trust  as  their  property 
I  was  obliged  to  give  security,  which  I  did  by  making  over 
to  them  this  house  where  we  are,  and  the  North  Biver 
steamboats,  the  Drew,  Dean  Eichmond,  St.  John  and 
Chauncey  Yibbard.  This  security  makes  them  whole,  and 
I  thank  Ood  that  breach  of  trust  is  not  on  my  conscience. 
Their  mother,  my  daughter,  is,  of  course,  well  provided  for, 
through  her  children  and  deceased  husband.  My  son's 
principal  business  is  now  in  connection  with  the  manage- 
ment of  the  boats,  by  which  he  is  getting  on  very  well."I 

After  Drew's  great  disaster  in  the  Erie  '^  corner,^  he  became| 
a  special  partner  in  the  firm  of  Kenyon,  Cox  &  Co.,  and  when ' 
th^g  house  failed,  after  the  panic  of  1873,  Uncle  Daniel  was 


154  INTKRESTING  KPISODliS  IN  DRBW'S  I*IFB. 

compelled  to  make  an  assignment.  He  had  been  for  years 
on  the  losing  side,  having  dropped  between  two  and  three 
millions  in  the  Erie  "corner ^through  the  machinations  of 
Gould  and  Fisk.  Horace  F.  Clark  and  Gould  had  also 
cornered  him  in  Northwestern  to  the  tune  of  $750,000. 
After  the  panic  he  had  made  an  assignment  to  Wm.  L. 
Scott,  of  Erie,  Pa.,  but  was  not  legally  declared  a  bankrupt 
until  1876.  His  KabiUties  were  $1,074,131.83,  and  his 
assets  were  estimated  at  $746,499.46. 

Like  Yanderbilt,  Brew  kept  his  accounts  in  his  head,  and 
considered  the  whole  paraphernalia  of  book-keeping  a  con- 
founded  fraud. 

His  failure,  which  at  one  time  would  have  induced  a  panic, 
did  not  cause  a  ripple  on  the  surface  of  speculation.  After 
his  discharge  in  the  bankruptcy  proceedings,  he  appeared  to 
pluck  up  fresh  courage,  and  said,  ^^  The  boys  think  Vm 
played  out,  but  I'll  give  'em  many  a  turn  and  twist  yet/'  He 
was  interested  in  Toledo  &  Wabash,  Canada  Southern, 
Qoicksilyer  Mining  Company  and  Canton  (Land)  Company 
stock. 

Wm.  H.  Yanderbilt,  who  had  receiyed  his  early  financial 
training  as  a  clerk  in  Drew's  office,  still  retained  a  kindly 
feeling  for  his  old  employer,  and  sometimes  gave  him 
^  pints "  as  Drew  called  them,  on  which  he  made  a  little 
turn.  It  was  said  that  Mr.  Yanderbilt  had  intended  to  give 
him  another  start  in  life  about  the  time  Drew  passed 
suddenly  over  to  the  majority.  He  died  at  10.45  P.  M., 
September  18,  1879,  at  tiie  residence  of  his  son,  Wm.  H. 
Drew,  No  3  East  Forty-second  street. 

His  death  came  without  any  prior  warning.  He  had  been 
apparently  in  his  usual  health  during  the  day,  and  had 
dined  witii  Mr.  Darius  Lawrence,  of  Lawrence  Brothers, 
brokers  in  Broad  street,  at  the  Grand  Union  Hotel,  at  six 
o'clock  in  the  evening.'  After  dinner  he  returned  to  thehoose 
of  his  son.  About  nine  o'clock  he  complained  of  feeling  ill, 
but  refused  to  permit  anybody  to  sit  up  with  him,  saying 


HK  "BtrCHims"  CAI^IFORNIA  PARKKR.  156 

he  would  call  Mr.  Lawrence,  who  slept  in  an  adjacent  room, 
if  he  should  feel  worse.  About  ten  o'clock  he  went  into 
Mr.  Lawrence's  apartments  and  said  he  felt  much  worse. 
Dr.  Woodman,  his  family  physician,  was  immediately  sum** 
moned,  but  before  his  arrival  Mr.  Drew  had  expired.  The 
cause  of  his  death  was  apoplexy. 

Among  the  nimfierous  stories  related  of  Uncle  Daniel's 
eccentricities,  one  is  noteworthy  in  relation  to  his  habit  of 
getting  in  a  mellow  mood  when  prayer  failed  to  soothe  him, 
and  covering  himself  up  in  bed  after  any  speculatiye  disap- 
pointment. He  was  found  in  this  condition  one  day  at  the 
Sturtevant  House,  the  year  in  which  he  died,  by  two  Wall 
Street  acquaintances  who  called  upon  him,  and  were  conver- 
sant with  his  peculiar  habits.  He  had  aU  the  windows  closed, 
80  that  the  atmosphere  in  the  room  was  stifling,  and  was 
enveloped  in  several  pairs  of  double  blankets.  His  friends 
called  for  a  bottle  of  champagne,  of  which  he  refused^  to 
partake.  When  this  was  drunk  they  called  for  another,  and 
left  it  with  him,  believing  that  when  he  was  left  alone  he 
might  be  iziclined  to  imbibe  without  any  feeling  of  embar- 
rassment. 

Another  story  is  related  characteristic  of  Uncle  Daniel's 
methods  of  making  the  best  use  of  a  secret,  and  any  confi- 
dence that  a  person  might  foolishly  repose  in  him,  in  a 
speculative  deal.  During  the  war  a  young  man  known  as 
California  Parker,  who  had  more  money  than  brains,  began 
to  buy  Erie  in  the  vicinity  of  par,  and  put  it  up  to  120.  He 
went'  to  Drew  and  told  him  that  he  would  let  him  in  at 
fifteen  per  cent  below  the  market,  if  he  would  only  aid  him 
with  a  little  money  to  carry  the  price  higher.  Mr.  Drew 
blandly  appeared  to  entertain  the  yoimg  millionaire's  propo- 
sition favorably  and  Parker,  on  the  strength  of  that,  con- 
tinued the  struggle  until  he  had  almost  reached  the  end  of 
his  California  gold.  The  next  morning  when  he  met  Drew 
the  latter  told  him  that  he  was  unable  to  raise  the  money, 
and  appeared  to  be  grieved  at  his  disappointment.    In  the 


166  INTERESTING  EPISODES  IN  DREW'S  UFE. 

meantime  Drew  had  instracted  his  brokers  to  sell  Eri« 
^^  short,"  knowing  that  Parker  was  nnable  to  absorb  any 
more  of  that  precious  paper,  Erie  stock.  The  market  went 
down,  Drew  made  a  ^Iscoop/'  and  Mr.  Parker  retired  from 
Wall  Street  a  mined,  but  a  wiser  man. 

In  personal  appearance  Drew  was  tall,  strong  and  sinewji 
and  in  his  latter  days  his  face  was  seamed  with  deep  lines, 
indicating  intense  thought  and  worry.  He  had  restless 
twinkling  eyes,  with  a  steady  cat-like  tread  in  his  gait.  His 
general  demeanor  was  bland,  good-natured  and  insinuating^ 
with  a£fected  but  well  dissembled  humility^  which  was 
highly  calculated  to  disarm  any  resentment,  and  enable  him 
to  moTe  smoothly  in  society  among  all  shades  and  conditions 
of  men.    He  has  often  been  mistaken  for  a  country  deacon. 

So,  now,  having  reviyed  and  collated  the  chief  incidents 
in  the  chequered  career  of  this  great  speculative  celebritji 
I  close  this  sketch  with  the  ardent  hope  that  he  may  have 
found  that  peace  beyond  the  tomb  which  the  ordinary  spec- 
ulator in  Wall  Street  can  seldom  or  never  hope  to  achieve 
on  this  side  of  '^  that  beautiful  shore.'^ 


CHAPTEB    XVIII. 

PANICS.— THEIR  CAUSES  —HOW  FAR  PREVENTABLE. 

Not  Accidental  Fbeaks  of  the  Mabeet. — We  are  still  a 
Nation  of  Pioneebs — The  Question  of  Panics  Pegu 
LiABLY  American.  -  Violent  Oscillations  in  Tbade 
Owing  to  the  Oreat  Mass  op  New  and  iMMAXuRifi 
Unbebtaeings.  —  Uncertainty  About  the  Intrinsic 
Value  of  Properties.— Sudden  Shrinkage  of  Rail- 
road Pbopebties  a  Fruitful  Cause  of  Panics- 
Bisks  and  Panics  Insepabable  FBOxPiONEERiNa  Enteb- 
PRISE. — ^Wb  are  Becoming  Less  Dependenf  on  the 
Money  Markets  of  Europe. — In  Panics  Much  Depends 
UPON  THE  Prudence  and  Self-control  of  the  Money 
Lenders.— The  Law  WHICH  Compels  a  Reserve  Fund  in 
the  National  Banes  is  at  Certain  Crises  a  Provoca- 
tive OF  Panics. -George  I.  Seney. -  John  C.  Eno.— 
.  Ferdinand  Ward.— The  Clearing  House  as  a  Prevbn- 
tiye  of  Panics. 

rERE  are  few  subjects  on  which  there  is  more  loose  theo- 
rizing than  that  of  the  origin  and  remedy  of  panics. 
These  crises  are  commonly  spoken  of  as  accidental  freaks 
of  the  markets,  due  to  antecedent  reckless  speculations, 
controlled  in  their  progress  by  the  acts  of  men  and  banks 
whoha^e  lost  their  senses,  but  quite  easily  prevented,  and  as 
easily  cured  when  they  happen. 

These  are  the  notions  of  mere  surface  observers.  They 
may  be  in  a  measure  true,  when  applied  to  the  markets  of 
some  of  the  older  countries,  whose  business  moves  in  long- 
established  grooves  and  embraces  but  little  of  the  rit^k 
attendant  on  new  enterprises.  In  France  and  Germany, 
for  instance,  the  hazards  of  business  are  almost  entirely 
confined  to  the  accidents  of  political  events ;  and  such  na- 
tions are  comparatively  exempt  from  panics  due  to  purely 
commercial  causes.  In  the  United  States,  panics  arise, 
principally,  from  causes  from  which  European  countries  are 
exempt 


168  PANICS. 

Notwithstanding  our  immense  population  and  the  large 
measure  of  well-ordered  oonsolidation  that  has  been  effected 
in  our  various  interests,  we  are  still  a  nation  of  pioneers.  In 
every  ten  years,  we  now  add  nearly  fifteen  millions  to  our 
population,  which  means  that  each  successive  decade  we  are 
piling  up  the  equivalent  of  a  first-class  European  state  upon 
our  past  marvellous  accumulation  of  empire.  Inseparable 
from  this  unparalleled  national  growth  are  great  ventures 
and  great  commercial  and  financial  risks.  Our  new  popula- 
tion has  to  subdue  new  territory.  New  lands  have  to  be 
cleared ;  new  mines  have  to  be  opened ;  new  industries  have 
to  be  established;  new  railroa'ds  have  to  be  built;  new 
banks  created  and  new  corporations  founded.  These  new 
ventures  are  necessarily  in  a  measure  experimental.  Some 
of  them  fail  utterly ;  others  succeed  magnificently.  They 
require  large  outlays  of  capital  in  advance  of  obtainable  re- 
sults. These  outlays  are,  in  many  cases,  met  by  borrowing; 
the  loans  being  secured  by  liens  upon  the  uncertain  under* 
takings,  and  therefore  lacking  the  stability  of  value  that 
attaches  to  well  developed  investments. 

We  have  thus  a  ceaseless  stream  of  new  issues  of  stocks^ 
mortgages  and  commercial  paper,  and  have,  therefore,  at  all 
times  outstanding  a  large  amount  of  obligations  which,  from 
the  tiiucertainty  of  their  basis,  are  liable  to  wide  fluctuations 
in  value.  Besides  these  absolutely  new  investments,  we  have 
also  at  all  times  an  equal  or  larger  amount  of  obligations 
issued  against  enterprises  which,  although  not  properly 
new,  are  still  in  an  unconsolidated  and  experimental  stage, 
and  the  value  of  which  is,  therefore,  subject  to  wide  fluctua- 
tions. Issues  of  this  character  naturally  appeal  to  the 
adventurous  instincts  of  our  people  and  elicit  a  vast  extent 
of  speculative  activity. 

It  is  this  peculiarity  in  the  development  and  trade  of  the 
United  States  that  renders  our  markets  more  exposed  to 
panic  than  those  of  any  other  nation,  and  which  makes  the 
question  of  panics  a  peculiarly  American  one.    In  any  and 


INTSRNAI,  NAl^tmB  OF  PANICS.  1^9 

Gverj  oommercial  nation,  trade  is  sabjeot  to  regular  siiooeo* 
fiions  of  prosperity  and  depression;  This  oscillation  rescdts 
from,  or  constitutes  a  natural  law. 

The  aotion  of  commerce,  like  the  motion  of  the  sea  or 
the  atmosphere,  follows  an  nndnlatory  line.  First  comes 
an  ascending  waye  of  actiyitj  and  rising  prices ;  next^ 
when  prices  have  risen  to  a  point  that  checks  demand, 
comes  a  period  of  hesitation  and  caution  ;  then,  care 
among  lenders  and  discounters ;  then  comes  the  descend- 
ing moYement,  in  which  holders  sunultaneouslj  endeayor  to 
realize,  thereby  accelerating  a  general  fall  in  prices.  Credit 
then  T>ecomes  more  sensitiye  and  is  contracted ;  transactions 
are  diminished ;  losses  are  incurred  through  the  depreciation 
of  property,  and  finally  the  ordeal  becomes  so  severe  to  the 
debtor  class  that  forcible  liquidation  has  to  be  adopted,  and 
insolvent  firms  and  institutions  must  be  wound  up.  This 
process  is  a  periodical  experience  in  every  couniary ;  and 
4he  extent  of  the  destructiveness  of  the  crisis  that  attends  it 
depends  chiefly  on  the  steadiness  and  conservatism  of  the 
business  methods  iu  each  particular  community  affected.  In 
addition  to  this  ordinary  and,  I  would  even  say,  natural 
liability  to  commercial  crises  with  a  greater  or  lesser  de- 
gree of  panic,  we,  in  the  United  States,  have  to  stand  the 
far  more  violent  oscillations  so  inseparable  from  our  great 
mass  of  new  and  immature  undertakings. 

In  times  of  crisis,  the  obligations  issued  against  such  en- 
terprises suffer  instantly  from  the  uncertainty  about  their 
intrinsic  value.  Holders  are  anxious  to  get  rid  of  them; 
banks  which  have  advanced  money  on  them,  call  in  their 
advances;  and  they  become  virtually  unavailable  as* 
sets.  Every  panic  that  has  happened  since  the  beginning 
of  the  era  of  railroads  in  this  country,  has  been  intensified 
many-fold  by  the  sudden  shrinkage  in  the  value  of  this  class 
of  assets ;  and  it  is  precisely  here  that  the  aggrayation  and 
the  chief  danger  of  an  American  panic  centres. 

In  view  of  these  facts,  what  is  the  use  of  discussing  the 


160  PAKIC3. 

poBsibility  of  averting  our  periodic  pai^OB  I  Bisks  and  pan 
ics  are  inseparable  from  our  vast  pioneering  enterprise ;  and 
all  we  can  liope  is,  that  they  maj  diminish  in  severity  in 
proportion  as  our  older  and  more  consolidated  interests 
afiford  an  increasing  power  of  resistance  to  their  operation. 
I  am  disposed  to  think  that,  in  the  future,  the  counter- 
action from  this  source  will  be  much  more  effective  than  it 
hasHbeen  in  the  past.  The  accumulations  of  financial  re- 
source available  for  market  purposes  at  our  monetary  cen* 
tres  are  increasing  at  a  very  rapid  rate.  Evidence  of  this 
is  seen  in  the  fact  that,  while  the  magnitude  of  our  corporate 
undertakings  is  augmenting  every  year,  we  are  also  every 
year  becoming  less  dependent  on  the  money  markets  of 
Europe,  and  our  large  corporate  loans  are  now  mado  princi- 
pally  at  home.  These  accumulations  afford  elasticity  to 
our  financial  system  and  serve  as  a  buffer  against  the  vio- 
lence  of  great  financial  disturbances. 

I  do  not  see  how  we  can  in  any  other  way  satisfactorily 
explain  how  it  is  that,  while  we  have  had  two  distinct  waves 
of  commercial  depression  since  the  great  crisis  of  1873,  such 
as  have  ordinarily  been  attended  with  more  or  less  panic, 
we  have  had  no  disturbance  that  can  be  regarded  as  a  fully 
developed  panic.  The  only  approach  to  it  was  the  disturb- 
ance brought  about  by  the  Grant  &  Ward  failure  in  May, 
1884,  which  was  merely  a  restricted  and  comparatively 
temporary  affair. 

But,  whilst  maintaining  that  panics  cannot  be  avoided  in  a 
country  situated  as  ours  is  in  its  present  incomplete  develop- 
ment, I  cannot  avoid  expressing  the  opinion  that  conditions 
are  permitted  to  exist  which  needlessly  aggravate  the  perils 
of  these  upheavals  when  they  do  occur.  In  every  panic  very 
much  depends  upon  the  prudence  and  self-control  of  the 
money  lenders.  If  they  lose  their  heads  and  indiscriminately 
refuse  to  lend,  or  lend  only  to  the  few  unquestionably  strong 
borrowers,  the  worst  forms  of  panic  ensue ;  if  they  accom- 
modate to  their  fullest  ability  the  larger  and  reasonably  safe 


imFAXR  KKSTRAINTS  ON  NATIONAL  BANKS.  161 

of  horrowerSy  then  the  latter  may  be  relied  upon  to 
protect  those  whom  the  banks  rejecti  and  thus  the  mischief 
may  be  kept  within  legitimate  bounds.  Everything  depends 
npon  rashness  being  held  in  check  by  an  assurance  that 
deserving  debtors  will  be  protected.  This  is  tantamount  to 
saying  that  all  depends  on  the  calmness  and  wisdom  of  the 
bcuiks.  They  may  easily  mitigate  or  aggravate  the  severity 
oi  the  crisis,  according  as  they  are  prudently  liberal  or 
blindly  selfish.  It  is,  perhaps,  safe  to  say,  that  the  banks 
never  do  all  they  may ;  but  the  banks  of  this  city  must  be 
credited  with  having  shown  great  sagacity  under  repeated 
derai^ements  of  this  kind  within  the  last  twenty-five  years. 
They  have  largely  succeeded  in  combining  self-protec- 
tion with  the  protection  of  their  customers ;  and  the  ante- 
cedents  they  have  established  will  go  far  toward  breaking 
the  force  of  any  future  panic. 

But,  unfortunately,  the  law  imposes  restraints  upon  Hie 
national  banks  which  seriously  interfere  with  the  wise  dis- 
cretion of  those  institution.  As  the  law  now  stands,  the 
banks  are  liable  to  be  wound  up  at  the  order  of  the  Govern- 
ment if  they  permit  their  lawful  money  reserves  to  fall  below 
26  per  cent,  of  their  legal  deposits.  This  establishes  a 
**dead  line"  which  is  so  dreaded  when  approached  that  it 
becomes  almost  a  panic  line.  When  that  limit  is  reached, 
the  banks  are  compelled  to  contract  their  loans ;  and, ' 
in  certain  conditions,  the  contraction  of  loans  means  forci- 
Ue  liquidation,  without  regard  to  consequences.  Thus 
the  very  contrivance  designed  to  protect  the  banks  be- 
comes a  source  of  most  serious  danger  to  their  customers 
and  therefore  to  the  banks  themselves ;  and,  in  times  of 
monetary  pressure,  it  is  the  most  direct  provocative  of  panic 
Were  the  banks  allowed  to  use  their  reserves  under  such 
dienmstances,  a  fund  would  be  provided  for  mitigating  the 
iocce  of  the  crisis,  and  the  danger  might  be  gradually  tided 
over ;  but,  as  it  is,  the  banks  can  legally  do  little  or  nothing 
to  avert  panic ;  on  the  contrary,  the  law  compels  them  to 


162  PANICS. 

take  a  oonrse  which  {nrecipitates  it ;  and  when  the  crash  V  is 
come,  they  haye  to  tinite  in  common  cause  to  disregard  the 
law  and  do  what  they  can  to  repair  the  catastrophe  that  a 
preposterous  enactment  has  helped  to  bring  about  This  is 
one  of  not  a  few  unwise  restrictions  upon  our  national  banks 
which  needs  to  be  stricken  from  the  statute  book.  These 
periods  of  the  breaking- down  of  unsound  enterprises  and  of 
the  weeding  out  of  insolvent  debtors  and  of  liquidation  of 
bad  debts  can  neyer  be  wholly  averted ;  nor  is  it  desirable 
that  they  should,  for  they  are  essential  to  the  maintenance 
of  a  sound  and  wholesome  condition  of  business  ;  but  it  is  a 
grave  reproach  to  our  legislators  if,  when  the  day  of  purga- 
tion comes,  the  law  treats  the  deserving  and  the  undeserving 
with  equal  severity. 


Oeobgb  I.  Seney. 

The  most  prominent  characters  in  the  short  lived  panic 
of  1884,  as  every  observing  person  knows,  were  Ferdinand 
Ward,  James  D.  Fish  and  a  few  others  who  acted  minor 
parts  in  connection  with  the  methods  of  financiering  which 
precipitated  the  crisis  in  Wall  Street. 

There  are  many  people  who  think  that  Ward — ^the  Young 
Napoleon  of  finance,  as  he  was  popularly  called — was  able  to 
dupe  everybody,  his  accomplices  included,  and  that  he  was 
chiefly  responsible  for  all  the  trouble.  But  this  is  an  ex- 
aggerated and  unscientific  view  of  the  case. 

Among  the  financiers  who  came  to  grief  in  the  general 
embarrassment  caused  by  the  peculiar  methods  of  the  two 
financiers  referred  to,  was  George  I.  Seney.  Seney  gave  his 
money  away,  and  it  was  placed  in  the  wrong  quarters 
for  any  tangible  return.  He  was  a  great  patron  of  the 
churches  and  religious  institutions.  If  he  had  studied 
the  life  of  Daniel  Drew,  he  might  have  discovered  that 
investments  in  such  enterprises  as  these  were  not  particu- 
larly profitable.     In  his  financial  diffioultiesy  Seney  was 


aBNBY'S  WONDBRFUI^  FINANCIAI*  ABH^ITI^.  16S 

left  high  and  dry  without  friends  who  wonld  come  to  hit 
rescue.  The  result  was,  that  the  two  financial  institutionsk 
the  Metropolitan  Bank  and  the  Brooklyn  bank  with  which  he 
was  thoroughly  identified,  had  to  go  under  as  the  result  of 
Mr.  Seney's  misfortunes.  And  an  insurance  company  in 
Brooklyn,  which  had  loaned  about  all  of  its  surplus  to  Mr* 
Seney,  taking  Metropolitan  Bank  stock  as  collateral,  was 
swamped  as  well. 

There  are  few  of  the  speculative  magnates  who  succumbed 
to  the  crash  of  1884,  whose  financial  histories  are  more  in- 
teresting than  that  of  Mr.  Seney.  He  is  the  son  of  a 
Methodist  minister,  and  was  bom  at  Astoria,  Long  Island, 
about  sixty  years  ago.  He  has  always  manifested  the 
deepest  devotion  to  his  paternal  church^'and  in  the  very 
height  of  his  prosperity  the  church  was  the  first  object  of 
his  financial  care.  He  was  educated  at  the  University  of 
the  City  of  New  York,  and  shortly  after  he  graduated, 
and  when  about  22  years  of  age,  entered  the  Metropolitan 
Bank  as  a  clerk.  He  was  afterwards  teller  and  then  cashier. 
This  was  when  Mr.  Williams  was  President  and  when  Mr. 
Jacques  was  Vice-President.  Mr.  Jacques  resigned  that 
position  several  years  ago  and  made  a  prolonged  journey  to 
Europe.  Mr.  Williams  died  a  few  years  ago,  and  Mr.  Senej 
became  his  successor  as  President  of  the  bank. 

Mr.  Seney's  wonderful  financial  abilities  were  a  compara- 
tively recent  outgrowth  of  his  mental  evolution,  at  an  age 
when  very  few  men  exhibit  signs  of  new  developments. 

Up  to  a  date  shortly  prior  to  the  panic,  he  was  generally 
regarded  as  slow  and  phlegmatic,  without  manifesting  any 
special  parts  that  indicated  superior  brilliancy  as  a  financier 
He  first  distinguished  himself  in  Wall  Street  during  the 
speculative  fiurore  of  1879,  and  came  to  the  front  then  with 
sudden  and  surprising  activity.  He  carved  out  an  original 
course  for  himself  in  speculation— so  original,  in  fact,  as  to 
stamp  the  enterprises  with  which  he  became  identified  with 
his  name.    The  Seney  properties  became  almost  as  familiar 


164  PANICS, 

to  the  financial  world  as  the  Gonlds,  the  Yanderbilts  and  the 
ViUards. 

Mr.  Senej's  chief  securities  (so  called  through  the  comtesj 
of  speculative  parlance)  were  Ohio  Central,  Kochester  and 
Pittsburgh,  East  Tennessee,  Virginia  A  Georgia,  and  the 
celebrated  *•  Nickel  Plate  "  Boad.  These  were  known  as  the 
Seney  Syndicate  properties,  and  the  system  of  handling 
them  was  entirely  novel  in  the  history  of  Wall  Street, 
causing  the  financial  veterans  of  Wall  Street  to  stand  and 
stare  at  the  boldness  and  rapidity  of  the  Seney  move- 
ments. 

Instead  of.  starting  with  moderate  issues  in  amount,  as  has 
usually  been  the  custom  of  most  men  handling  railroad 
and  telegraph  properties,  and  doing  the  watering  process 
by  degrees,  Mr.  Seney  boldly  began  the  watering  at  the  very 
inception  of  the  enterprise,  pouring  it  in  lavisUy  and  with- 
out stint.  There  was  nothing  mean  or  niggardly  about  his 
method  of  free  dilution,  the  sight  of  which  threw  some  of 
the  old  operators  into  a  fit  of  consternation.  The  stocks 
were  strongly  puffed,  and  as  they  were  so  thoroughly  diluted 
their  owners  could  afford  to  let  them  get  a  start  at  a  very 
low  figure.  The  future  prospects  of  the  properties  were  set 
forth  in  the  most  glowing  colors,  the  public  took  the  bait, 
and  the  stocks  became  at  once  conspicuous  among  the 
leading  active  fancies  of  the  market. 

The  cause  of  the  vigorous  life  and  amazing  activity  so 
suddenly  imparted  to  the  stocks  of  the  Seney  Syndicate  can 
only  be  revealed  by  a  careful  perusal  of  Mr.  Seney's  check- 
book, which,  if  still  in  existence,  will  show  commissions  paid 
for  the  execution  of  the  orders  to  buy  and  the  orders  exe- 
cuted to  sell,  both  by  the  same  pen  and  in  the  same  hand- 
writing. 

These  transactions,  in  the  language  of  the  '^  Street,''  are 
called  washed  sales.  In  this  way  Mr.  Seney  was  understood 
to  have  made  a  very  large  amount  of  money,  and  from  being 
almost  one  of  the  poorest  men  in  Brooklyn,  he  soon  became 


SKNBT  AS  A  PHU^ANTHROPIST.  165 

marked  as  the  richest  While  he  continued  to  thrive  it 
was  a  singular  fact  that  the  majority  of  his  financial iriends 
seemed  to  fall  into  a  decline. 

When  the  affairs  of  the  Senej  enterprise  were  wound 
up,  it  was  discovered  that  these  people  had  little  left  ex- 
cept the  certificates  which  bore  the  high-sounding  term  of 
the  Seney  Syndicate  Property. 

One  peculiarity  about  Mr.  Seney  in  his  social  relations 
was,  that  while  he  appeared  almost  bereft  of  sympathy  for 
used-np  friends  whom  his  schemes  had  ruined,  he  drew 
largely  on  his  immense  gains  for  philanthropic  purposes, 
and  in  the  aggregate  must  have  distributed  over  (2,000,- 
000  in  a  very  magnanimous  manner. 

It  would  seem  that  Mr.  Seney  at  one  time  aspired  to 
be  a  great  philanthropist,  and  had  it  not  been  for  the 
unfortunate  expose  which  was  the  re^sult  of  the  panic,  he 
might  one  day  have  stood  in  as  high  and  lordly  a  posi- 
tion as  the  renowned  Peabody,  with  even  a  greater  repu- 
tation as  a  financier.  It  is  sad  to  picture  the  contrast 
presented  by  the  den(mement  with  what  might  have  been, 
in  a  career  which  began  with  so  much  promise,  dating 
from  the  time  that  Mr.  Seney  was  installed  as  President 
of  the  Metropolitan  Bank,  whose  standing  and  credit  were 
the  highest  in  the  State. 

Mr.  Seney's  speculative  career  affords  an  example  of  the 
way  in  which  this  kind  of  speculation  reflects  on  the 
stability  of  our  best  banking  institutions.  The  lesson  is 
one  that  should  be  carefully  taken  .to  heart  by  the  finan. 
ciers  of  this  country. 

It  is  due,  however,  to  Mr.  Seney  to  state  that  he  alone 
was  not  responsible  for  the  misfortunes  of  the  Metropolitan 
Bank,  although  he  was  the  ruling  spirit ;  for  it  could  hardly 
be  possible  that  the  directors  of  that  institution  could  have 
been  ignorant  of  its  affairs  in  connection  with  the  Seney 
speculations.  The  Metropolitan  Bank  cannot  be  compared 
with  the  Marine  Bank,  which  met  a  similar  misfortune^  for 


166  PANICS. 

it  was  no  family  affair,  and  Mr.  Seney  had  none  of  his 
relatives  connected  with  it,  as  Mr.  Fish  had  with  the  Marine 
Bank. 

It  appears  that  it  was  chiefly  owing  to  the  fact  that  Mr. 
Seney  had  so  little  personal  interest  in  the  Metropolitan 
Bank  that  he  was  so  anxious  to  gat  the  concern,  knowing 
tbat  the  loss  would  fall  upon  others. 

The  most  important  point  for  speculators  and  inyestors, 
however,  connected  with  the  enterprises  of  these  men  is, 
that  the  terrible  shrinkage  of  Stock  Exchange  values  at 
the  time,  amounting  to  over  $1,000,000,000,  was  in  a  large 
measure  brought  about  by  a  foregone  conclusion  on  the 
part  of  the  sagacious  bear  cliques  that  disaster  would  sooner 
or  later  overtake  the  institutions  over  which  Mr.  Seney  and 
Mr.  Fish  presided. 

This  should  afford  a  wholesome  lesson,  through  the  medium 
of  practical  experience,  to  speculators  and  investors  for  all 
future  time.  For  this  very  reason  the  facts  are  worthy  of 
being  put  on  permanent  record  as  a  reminder  and  a  guide, 
particularly  to  Wall  Street  men,  who  are  too  often  prone  to 
forget  the  past  and  thus  leave  themselves  liable  to  be  caught 
in  a  similar  net  again. 

The  transactions  of  the  four  prominent  speculators 
who  played  the  most  conspicuous  part  in  the  events  which 
resulted  in  the  panic  of  May,  1884,  should  be  preserved  for 
reference,  as  a  guide  when  similar  cases  arise,  for  in 
spite  of  the  deep  disgrace,  shame  and  misery  that  have 
followed  in  the  wake  of  their  enterprises,  these  men  will 
have  hosts  of  imitators  for  many  years  to  come.  Ward, 
Fish,  Seney  and  Eno,  with  probably  the  one  exception,  Fish, 
are,  by  many,  considered  smart  men,  who  simply  had  the  mis- 
fortune to  become  involved,  but  who  had  a  fair  chance  of 
coming  out  of  all  their  troubles,  great  millionaires  and  pub- 
licly honored  for  their  ability  and  success. 

It  must  be  admitted  that  there  are  some  examples  in  the 
financial  world  whose  careers  will  fully  support  this  theory 


JOBS  C  Vf&S  INUJtWUrfV,  187 

and  belief^  bot  they  are  the  exoepiions  which  only  proTe  the 
role  in  speculation,  as  in  other  lines  of  business,  that  '^  honesty 
is  the  best  policy."  These  men,  who  have  been  apparently 
so  snccesttfol  through  dishonest  methods,  are  never  free  from 
dread  of  being  tripped  up  at  any  period  of  their  inflated 
prosperity.  They  are  always  subject  to  be  called  upon  by  the 
application  of  the  stem  methods  of  honest  financiering  to 
give  an  account  of  their  stewardship,  and  to  have  the  trans- 
actions of  a  lifetime  eventually  gauged  by  the  standard  of 
public  honesty.  It  is  the  winding  up  that  tells  the  tale, 
and  exposes  the  duplicity  of  the  ablest  financiers,  who  vainly 
imagiQe  that  dishonest  methods  will  always  prevail. 


John  0.  Eno« 

Of  the  four  famous  '^  financiers  "  mentioned  who  were  most 
prominent  in  the  Summer  panic  of  1884,  the  speculative 
history  of  John  0.  Eno  was  in  some  respects  the  most  re* 
markable  and  most  interesting. 

Eno  was  a  young  man,  not  more  than  twenty-six  years  of 
age,  and  a  representative  of  that  class  of  ardent  and  youth- 
ful speculators  who  plunge  into  the  market  with  all  the 
recklessness  incident  to  young  and  sanguine  imaginations, 
with  many  roseate  schemes  of  wealth  and  greatness,  for 
which  inexperienced  youth  is  proverbial.  Eno  was  a  vic- 
tim of  that  rashness,  impulsiveness  and  desire  for  extrava- 
gance, by  which  the  possessors  of  these  attributes  frequent- 
ly g^t  themselves  and  many  of  their  associates  ^nbroiled  in 
numerous  difficulties  and  embarrassments. 

Another  point  of  interest  in  the  curious  career  of  Eno  was 
his  position  as  President  of  the  Second  National  Bank  of 
New  York,  up  to  the  time  of  the  panic.  Seldom  does  it  fall 
to  the  lot  of  a  youth  of  his  tender  years  to  have  conferred 
upon  him  a  position  of  such  responsibility  and  dignity.  The 
manner  in  which  he  made  use  of  this  position  of  trust,  for 
appropriating  money  which  did  not  belong  to  him,  was  not- 
able for  its  peculiar  ingenuity. 


168  PAincs. 

Most  of  the  money  lent  by  the  bank  was  upon  oollateiai 
secnritiesy  which,  for  convenience,  as  well  as  for  safety,  were 
kept,  not  at  the  bank,  which  was  situated  under  the  Fifth 
Avenue  Hotel,  but  in  a  vault  down  town. 

The  capital  stock  of  the  bank  was  $100,000,  and  it  had 
$4,000,000  of  deposits,  all  of  which  was  appropriated  to 
speculative  use  by  this  smart  young  man,  who  decamped  to 
Canada  in  company  with  a  Boman  Catholic  priest. 

Eno  happened  to  have  a  rich  father,  who  had  made  his 
money  by  thrift  and  economy  during  a  long  and  prosperous 
life.  To  his  credit,  it  must  be  said,  that  he  came  promp Jy 
to  the  rescue  of  this  wayward  and  erring  son,  and  paid  the 
bank,  of  which  he  was  director,  three  and  one-half  millions 
of  dollars,  on  condition  that  the  other  half  million  should  be 
contributed  by  the  other  directors,  all  of  whom  were  very 
rich  men.  The  directors  willingly  accepted  the  proposition, 
and  thus  the  entire  deficiency  was  made  good  by  this  gen- 
erous arrangement,  so  that  none  of  the  depositors  suffered 
the  loss  of  a  dollar. 

The  methods  which  Mr.  John  C.  Eno,  the  PresideBt,  re- 
sorted to  for  the  purpose  of  capturing  the  institution  root 
and  branch,  were  ingenious  ^d  unique  in  their  character, 
inasmuch  as  they  had  a  tendency  to  inspire  the  fullest  confi- 
dence in  his  vigilance  and  honesty  regarding  the  affairs  ol 
the  bank,  instead  of  exciting  any  suspicion. 

He  discouraged  the  custom  of  keeping  the  securities  of  the 
bank  in  its  own  vaults,  on  the  pretense  that  they  were  not 
sufficientiy  secure,  and  suggested  that  a  safe  should  be 
rented  in  one  of  the  down  town  safe  deposit  companies. 
This  was  done  at  his  request.  He  argued,  further,  that  the 
funds  on  hand  being  mostly  family  deposits,  the  depositors 
were  not  of  a  class  that  often  required  to  be  accommodated 
with  discounts,  and  that  the  money  was  not  taken  by  the 
bank  to  be  locked  up  and  kept  on  hand  so  as  to  have  the 
name  of  having  it,  but  to  be  used  to  the  best  possible  ad- 
vantage consistent  with  safety,  to  make  profitable  reionui 


KNO'S  DOWN-TOWN  GAME.  ^^^ 

fliroogh  interesi  Oonseqndnily,  he  was  allowed  to  use  the 
monej  of  the  bank  freely  to  make  loans  to  Wall  Street 
brokers  on  interest,  with  approved  collaterals,  and  he  repre- 
sented to  the  directors  that  he  was  carrying  ont  this  course. 

As  the  bank  was  located  so  far  up  town,  (at  Twenty- third 
street,)  the  distance  from  Wall  Street  made  it  extra  hazard- 
ous to  send  securities  back  and  forth,  as  adyenturous  thieves 
might  seize  the  messengei:  on  the  way.  This  has  frequently 
happened  in  this  city.  It  was,  therefore,  desirable  to  have 
the  safe  deposit  vault  in  close  proximity  to  Wall  Street.  Of 
the  combination  to  the  safe  in  this  vault  Mr.  John  0.  Eno 
was  the  sole  possessor.  Having  things  fixed  in  this  manner 
it  was  indispensable  that  the  President  himself  should  go 
down  town  every  day,  so  as  to  accommodate  the  brokers  in 
the  loaning  of  money.  The  directors  were  by  this  plan 
convinced  that  the  risks,  through  the  careful  methods  adopted 
by  the  President,  were  no  greater  than  if  the  bank  was  located 
iaWall  Street.  These  conservative  methods,  so  skilfully 
planned  and  plausibly  explained,  increased  the  confidence  of 
the  directors  in  the  able  and  careful  management  of  Mr.  Eno, 
and  nobody  was  so  much  surprised  as  they,  when  the  wool 
was  raised  from  their  dyes  and  they  discovered  that  these 
various  and  ostensible  ^^safeguards''  were  ingeniously  de- 
vised for  the  sole  purpose  of  screening  their  skilful 
inventor  in  the  accomplishment  of  his  huge  defalcations 

Instead  of  loaning  the  money  to  Wall  Street  brokers,  as 
he  represented  to  the  directors,  he  placed  it  as  margin 
with  his  own  brokers  in  various  speculative  ventures, 
and  in  that  manner  he  made  away  with  the  entire  $4,000,000 
of  the  bank's  deposits  without  exciting  the  least  suspicion 
in  the  confiding  breasts  of  the  directors. 

Such  another  instance  of  a  clean  sweep  of  the  deposits  of 
a  bank  by  any  of  its  officials,  is  probably  not  on  record  in 
the  whole  history  of  this  kind  of  manipulation. 

When  the  President  represented  to  the  Cashier,  every 
CfToning^  that  he  had  lent  specified  sums  on  certain  secur- 


170  PANICS. 

ities,  his  word  was  taken,  and  his  checks  for  the  amonnts 
dnlj  honored,  without  exciting  a  feeling  of  suspicion.  Thus, 
by  degrees  the  books  of  the  bank  showed  $4,000,000  of 
call  loans  upon  unexceptionable  collaterals,  when  in  fact  the 
money  had  all  gone  to  the  President's  private  account. 

Eno  speculated  with  the  greater  portion  of  the  money 
in  stocks  that  were  continually  declining  in  price,  and  at 
length  the  time  arrived  when  he  was  obiiged  to  make  a  clean 
breast  of  the  terrible  condition  ot  his  affairs  to  his  father. 
As  I  have  stated,  the  old  gentleman,  Mr.  Amos  B.  Enoy 
nobly  came  to  the  relief  of  his  prodigal  son,  and  saved  the 
htnk  from  suspension. 

As  Eno  senior  is  still  worth  about  $25,000,000,  he 
will  never  suffer  the  pangs  of  poverty  through  this  great 
loss ;  but  it  will  take  a  long  time  to  enable  him  to  survive 
the  disgrace  which  the  flagrant  acts  of  his  son  have  brought 
upon  an  honest  and  highly  respected  name. 


THE  GLEABmO-HOnSE  AS  A  PBEVEKTEB  OF  PAHIOB. 

In  this  panic  the  boldest  and  most  remarkable  instance  of 
self  sacrifice  on  record  was  manifested  by  the  Clearing- House 
banks.  The  panic  of  1884,  in  its  incipient  stage,  was  differ- 
ent to  any  that  had  preceded  it — at  least  any  of  the  finan- 
cial convulsions  within  my  recollection — owing  to  the  influ- 
ence exercised  upon  it  by  the  prompt  and  liberal  policy  of 
the  banks.  In  every  respect  their  action  was  notable, 
showing  that  those  at  the  head  of  their  management  had 
largely  profited  by  the  lessons  of  former  panicb. 

It  was  chiefly  due  to  the  masterly  management  of  the 
banks,  together  with  the  magnanimous  conduct  of  Mr,  Amos 
B.  Eno  and  his  associate  directors  of  the  Second  National 
Bank,  that  the  panic  was  short  lived  and  so  narrowly  cir- 
cumscribed. Had  it  not  been  for  the  determinate  and  in- 
stantaneous joint  action  of  these  parties  there  would  have 
been  a  very  serious  crash,  which  would  have  been  far* 
reaching  in  its  results. 


SKNBY*S  PICTX7IUBS  AS  CXUXATKRAIo  if  1 

The  results  of  the  timely  action  taken  on  the  part  of  the 
managers  of  these  institutions  in  this  crisis,  proyes  that 
panics  can  be  arrested  by  proper  methods,  and  that  quick  and 
determined  action  is  indispensable  in  the  incipient  stage  of 
the  emergency.  If  bank  presidents  could  only  be  relied  upon 
"by  the  business  community  to  act  promptly  and  in  unison 
^with  the  business  men,  as  they  did  in  this  instance,  threatened 
panics  need  ha^e  but  little  terror  for  the  people,  who  now 
liire  constantly  in  dread  that  these  outbursts  of  busings 
disaster  may  be  sprung  upon  them  at  any  time  in  any 
decade. 

In  the  past  history  of  panics  bank  managers,  as  a 
rule,  have  acted  without  system,  without  judgment  and 
almost  entirely  without  any  well  defined  plan  of  action. 
There  has  been  an  astonishing  lack  of  vigor  in  their  meth- 
ods and  purposes,  which  were  weak  and  vacillating  in  their 
character — ^frequently  more  like  the  acts  of  children  than 
those  of  business  men. 

If  the  panic  of  1873  had  received  the  same  vigorous 
treatment  in  its  origin  as  that  of  1884,  it  could  just  as  easi- 
ly have  been  checked  as  the  latter,  and  the  entire  country 
-would  have  been  saved  a  large  portion  of  the  depressing 
effects  of  that  serious  collapse  and  its  attendant  disasters, 
-which  caused  a  state  of  general  prostration  for  five  or  six 
years  succeeding  the  event.  These  years,  from  a  business 
standpoint,  appear  as  a  blank  in  the  history  of  the  country's 
progress.    Indeed,  they  constitute  a  black  mark. 

In  1884  the  bears  indulged  in  much  adverse  criticism  in 
regard  to  the  action  of  the  Clearing- House  in  taking  Mr. 
Seney's  pictures  as  collateral.  At  the  time,  this  method  of 
financiering  was  without  precedent;  but  the  result  has 
fully  justified  the  policy  of  the  Clearing- House  Association 
and  its  management.  Such  an  exceptionally  fine  collection 
of  paintings  in  a  country  like  this,  now  filled  with  connois- 
seara  who  have  sufficient  wealth  to  gratify  their  tastes, 
BtimnlateB  the  demand  for  these  luxurious  articles  of  value 


172  PANICS. 

and  transforms  them  into  the  best  collateral  to  be  found  in 
the  market.  When  the  Seney  pictures  were  offered  for  sale 
at  auction  they  attracted  greater  competition  in  the  purchase, 
at  good  prices,  than  could  have  been  obtained  for  almost  any 
class  of  railroad  securities  connected  with  Wall  Street  for 
months  afterwards.  While  Mr.  Seney  seems  to  have  been 
as  much  of  a  virtuoso  as  the  late  Mrs.  Morgan,  he  did  not 
permit  his  love  of  the  beautiful  to  rise  to  such  a  pitch  of 
exaltation  as  would  cause  him  to  pay  tlie  extravagant  prices 
which  almost  ruined  that  eccentric  woman.  He  never  forgot 
that  the  picture  had  a  ^^  market"  value,  and  never  permitted  his 
enthusiasm  for  the  fine  arts  to  make  him  a  victim  of  sharp 
and  unconscionable  dealers.  In  fact  he  appeared  to  have 
been  more  wide-awake  in  picture  buying  than  banking,  and 
demonstrated  that  the  former,  rather  than  the  latter,  was  his 
forte.  If  the  bank  presidents  had  not  acted  in  the  praise- 
worthy manner  referred  to,  the  financial  revulsion  of  that 
panic  would  have  been  very  serious.  Several  millions  of 
deposits  in  the  Metropolitan  and  Second  National  were 
promptly  drawn  out,  and  forthwith  entered  into  circulation. 
This  saved  the  community  from  the  evil  influence  of  a  large 
number  of  panic  makers  in  the  persons  of  the  depositors  of 
these  banks.  Instead,  therefore,  of  helping  to  stir  up  the 
excitement — as  they  would  Lave  done  by  pursuing  the  selfish 
policy  formerly  resorte^d  to  in  similar  circumstances — every 
person  with  funds  in  these  two  institutions,  assisted  very 
effectively  to  allay  suspicion  and  create  confidence,  instead 
of  distrust. 

It  was  the  disturbing  element  of  panic  makers,  who  gen- 
erally constitute  one  of  the  most  potent  factors  of  disruption 
to  be  dealt  with  in  seasons  of  business  trouble,  that  caused 
the  greater  part  of  the  trouble  at  the  time  of  Jay  Cooke's 
failure.  The  holders  of  the  Northern  Pacific  bonds  then, 
finding  that  the  security  was  no  longer  equal  to  that  of 
Government  bonds  (as  they  had  been  taught  to  believe),  bat 
was  apparently  worthless,  became  panic-stricken  at  their 


HOW  PANIC  HAKKSS  ARB  HADH.  173 

and  were  all  transformea  into  panio-makers,  infosing 
the  spirit  of  distnust  into  every  person  with  whom  they  oame 
into  contact^  until,  like  a  fatal  virus,  it  inoculated  the  whole 
oountiy,  spreading  busineas  disaster  far  and  wide. 


1 


J 


OHAPTEB    XIX. 

OLD  TIME  PANICS. 

The  Panic  of  1837.— How  it  was  Bbouoht  About.— The 
State    Banks.— How  they   Expanded  theib  Loans 

UNDEB     GK)y£BNM£NT    FaTBONAOE. —  SPECULATION     WAS 

Stdculated  and  Values  Became  Inflated. — ^Pbesi- 
dxnt  Jackson's  "Specie  Cerculab  "  Pbecipitates  the 
Panic.  — Bank  Contbactions  and  Consequent  Fail- 
UBEs.— Mixing  up  Business  and  Politics —A  Genebal 
Collapse,  with  Intense  Suffebing. 

THE  first  panic  of  any  great  importance  was  that  of  1837. 
This  panic  had  its  origin  in  a  misunderstanding  between 
the  United  States  Bank,  with  headquarters  located  at  Phila- 
delphia, and  President  Jackson,  whose  election  the  officials 
of  the  bank  had  opposed. 

The  bank  had  been  chartered  in  1816,  and  went  into  opera- 
tion in  1817.  Its  charter  had  twenty  years  to  run.  The 
bank  had  been  kept  in  operation  with  varying  success  until 
1830,  when  it  was  considered  to  be  on  a  very  stable  footing, 
so  that  the  Finance  Committee  of  the  United  States  Senate 
were  enabled  to  testify  to  its  efficiency  as  follows :  "We  are 
satisfied  that  the  country  is  in  the  enjoyment  of  a  uniform 
national  currency,  not  only  sound  and  uniform  in  itself,  but 
perfectly  adapted  to  the  purposes  of  the  Gk>vernment  and 
the  Gommunity,  and  more  sound  and  uniform  than  that 
possessed  by  any  other  nation." 

This  was  the  second  United  States  Bank ;  the  first  had 
been  chartered  in  1791. 

The  bank  applied  to  Congregs,  in  1832,  for  a  renewal  of 
its  charter,  which  would  eipire  in  1836.  A  bill  was  passed 
by  Congress  to  re  charter  the  bank.  The  bill  was  vetoed 
by  the  President  for  the  reason  above  stated.  In  the  fol- 
lowing year  the  Treasurer  announced,  by  order  of  the  Presi- 


176  oi,D  rum  PANICS. 

dent)  that  thepablio  funds,  amounting  to  $10,000,000,  would 
be  drawn  from  the  custody  of  the  bank  because  it  was  an 
unsafe  depository. 

The  transfer  of  the  Gorernment  funds  to  the  State  banks 
created  great  agitation  in  political  and  financial  circles. 
The  State  banks,  under  this  f  arorable  turn  of  Gk)yernment 
patronage,  quickly  assumed  a  thriving  condition  and  began 
to  expand  their  loans  and  circulation.  This  stimulated 
speculation  in  all  parts  of  the  country,  but  especially  land 
speculation.  Large  purchases  of  land  were  made  from  the 
Government,  and  payment  was  made  in  notes  of  State  banks. 

With  the  rapid  sales  of  its  lands  the  Government  was  soon 
able  to  pay  ofif  the  public  debt,  and  had  still  a  surplus  of 
^50,000,000  in  the  Treasury.  This  apparent  prosperity 
continued  for  the  next  year  or  two,  money  was  plenty  and 
speculation  was  greatly  stimulated  and  values  became  in- 
flated. 

The  crisis  came  in  1837,  and  was  hastened  by  the  '^  Specie 
Circular,"  which  was  the  last  official  act  of  President  Jack- 
son, and  which  pricked  the  bubble  of  inflation.  This 
circular,  which  was  issued  from  the  Treasury  in  July,  1836, 
required  all  collectors  of  the  public  revenue  to  receive 
nothing  but  gold  and  silver  in  payment.  The  purpose 
of  the  circular  was  to  check  the  speculation  in  public  lands, 
but  it  caused  too  sudden  a  contraction  in  values,  and  created 
widespread  disturbance  in  business  circles  generally. 

The  public  protest  against  the  ^^  Specie  Circular"  was  so 
strong  and  universal,  that  a  bill  went  through  both  houses 
of  Congress  partially  repealing  it.  "  Old  Hickory  "  did  not 
yield  to  Congress,  however,  and  though  he  did  not  veto  the 
bill,  he  delayed  signing  it  until  after  Congress  adjourned, 
thus  preventing  it  from  becoming  a  law. 

The  State  banks  sought  to  tide  over  the  troubles  arising 
from  the  Jacksonian  method  of  financiering  by  loans  of 
public  money  to  certain  financial  concerns  and  individual^ 
but  this  plan  only  made  matters  worse.    There  was  a  sud- 


BFFKCT  OF  TUC  JACKSONIAN  POWCY.  177 

cba  expansion  of  papor  money,  wMoh  enoonraged  a  wild 
spirit  of  specolation  and  excessive  importations,  and  im* 
parted  an  nnnatural  stimulus  to  business  and  commercial 
affairs.  This  state  of  overtrading  and  reckless  speculation 
'was  suddenly  checked  by  bank  contractions,  and  in  the 
spring  of  1837  there  were  failures  amounting  to  $100,000,000 
in  New  York  city  alone. 

The  shock  was  communicated  to  the  entire  country,  and 
a  state  of  general  paralysis  in  business  circles  ensued. 

In  the  meantime  theBauk  of  the  United  States  continued 
in  operation,  and  did  not  even  suspend  in  1836,  when  its 
charter  expired,  but  obtained  another  charter  from  the 
State  of  Pennsylvania,  which  was  entitled  *^An  Act  to 
repeal  the  State  taxes  on  real  and  personal  property,  and  to 
continue  and  extend  the  improvement  of  the  State  by  rail* 
roads  and  canals,  and  to  charter  a  State  bank  to  be  called 
a  United  States  bank/' 

This  United  States  bank  did  not  expire  until  1839,  though 
it  suspended  specie  payment  with  the  State  banks  in  1837, 
when  by  this  method  they  escaped  a  general  collapse,  and 
dragged  through  an  agonizing  existence  for  two  years 
longer.  The  circulating  notes  and  deposits  of  the  Bank  of 
the  United  States  were  paid  in  full,  but  the  $28,000,000  of 
capital  were  a  total  loss  to  the  stockholders,  who  never  ob- 
tained a  dividend.  Such  were  the  good  old  times  of  finan- 
ciering when  General  Jackson  and  his  successor,  Martin  Van 
Buren,  sat  in  the  Executive  chair. 

The  entire  capital  stock  of  the  bank  was  $35,000,000,  of 
which  $7,000,000  were  to  be  subscribed  by  the  Government. 

The  real  cause  at  the  bottom  of  the  failure  of  this  bank 
was  its  error  of  mixing  up  its  legitimate  business  of  banking 
with  politics  and  speculation,  showing  that  keeping  those 
matters  as  distinct  as  possible  is  one  of  the  great  secrets  of 
success  in  each  of  them. 

The  panic  of  1837  was  further  aggravated  by  the  action 
of  the  Bank  oi  England  which,  in  one  day,  threw  out  all  the 


178  OI.D  TIME  PANICS, 

paper  connected  with  t'le  United  States.  The  banks  on  this 
side  refused  to  discount  paper,  and  as  a  retaliatory  measure 
in  self-dofense  the  business  men  and  speculators  withdrew 
their  deposits  from  the  banks.  This  had  a  tendency  to~ 
cripple  business  still  more,  and  cause  utter  prostration.  Tn 
their  selfish  frenzy  bankers  and  merchants  completed  the 
ruin  of  each  other,  hastening  the  catastrophe  from  their 
inability  to  take  a  broad,  cool  and  generous  view  of  the 
situation. 

There  was  a  general  suspension  of  the  New  York  banks 
on  May  10,  1837,  and  the  banks  throughout  the  country 
followed  in  their  wake  within  a  week  afterwards,  producing 
a  financial  convulsion  unparalleled  in  the  history  of  the 
Bepublic.  The  country  was  brought  to  the  verge  of  bank- 
ruptcy from  the  effects  of  which  a  long  time  was  required 
for  recovery. 

After  two  years'  struggle  to  regain  the  credit  and  stability 
lost  through  false  methods  of  financiering,  the  banks  suffered 
a  relapse,  and  underwent  a  severe  process  of  weeding  out 
the  weakest,  nearly  ona  third  of  which  happened  to  be  of 
this  description.  Out  of  850  banks,  343  closed  their  doors 
permanently. 

The  Sub-Treasury  at  New  York  was  established  the  fol- 
lowing year,  1840,  by  an  act  of  Congress  which  provided 
that  the  officers  of  the  Government  should  keep  the  public 
funds  in  their  own  custody,  that  coin  alone  should  be  re- 
ceived in  payment  to  the  United  States,  and  bank  notes  were 
to  be  no  longer  received  and  paid  out  at  the  Treasury. 

While  this  short  chapter  deals  with  matters  which  go 
back  beyond  my  personal  recollections  of  twenty  eight 
years  in  Wall  Street,  still  as  the  panic  of  1837  was  the  first 
of  the  great  upheavals  of  its  kind,  that  had  a  marked  effect 
on  Wall  Street  affairs,  it  properly  falls  within  the  scope  of 
this  book  to  chronicle  the  chief  incidents  of  that  great  busi- 
ness convulsion. 

For  this  reason,  therefore,  I  find  room  for  it,  in  some 


A  Lrrri^K  history.  179 

measure  commensurate  with  its  importance,  and  the  space 
which  can  be  afforded  to  it,  as  a  matter  of  financial  history, 
,  the  facts  of  which  were  still  fresh  in  the  recollection  of  sev- 
eral speculators,  bankers  and  business  men,  with  whom  I 
had  the  honor  of  being  acquainted  shortly  after  my  adrent 
in  Wall  Street  immediately  succeeding. the  panic  of  1857. 

Of  those  who  gave  me  lirely  descriptions  of  their  yivid 
recollections  of  that  panic,  but  few  now  survive. 

I  think,  therefore,  it  is  well  for  me  to  do  my  part  in  help- 
ing to  preserve  the  leading  features  of  this  important  episode 
in  the  early  history  of  Wall  Street,  as  there  will  soon  be 
none  of  those,  who  took  an  active  part  in  the  exciting  events 
of  that  period,  left  to  tell  the  tale. 


OHAPTEB    XX. 

THE  TRUE   STORY  OF   BLACK    FRIDAY  TOLD    FOR  THE 

FIRST  TIME. 

Thb  Great  Black  Pbiday  Scheme  obiginates  in  patbiotio 

MOTIYE8. —  ADYISINa     BOUTWELL    AND    GraNT   TO   SELL 

Gold  — ^The  part  Jim  Fisk  played  in  the  Speculative 
Drama. — "  Gone  where  the  Woodbine  Twineth." — A 
general  state  oe  Chaos  in  Wall  Street.— How  the 
Israelite  Fainted. — "  What  ish  the  prish  now  ! " — 
Gould  the  Head  Centre  of  the  Plot  to  *' Corner '^ 
Gold. — How  he  Managed  to  Draw  Ample  Means 
FROM  Erie.— Gould  and  Fisk  Attempt  to  Manipulate 
President  Grant  and  Compromise  him  and  his  Family 
IN  THE  Plot. — Scenes  and  Incidents  of  the  Great 
Speculatiye  Drama. 

IN  the  year  1869  this  country  was  jblessed  with  abundant 
crops,  far  in  excess  of  our  needs,  and  it  was  apparent  that 
great  good  would  result  from  any  method  that  could  be  de- 
vised to  stimulate  exports  of  a  part,  at  least,  of  the  surplus. 

Lietters  poured  into  Washington  by  the  thousand  from 
leading  bankers,  merchants  and  business  men,  urging  that  the 
Treasury  Department  abstain  from  selling  gold,  as  had  been 
the  practice  for  some  time,  so  that  the  premium  might,  as  it 
otherwise  would  not,  advance  to  a  figure  that  would  send 
our  products  out  of  the  country,  as  the  cheapest  exportable 
material  in  place  of  coin,  which,  at  its  then  artificially  de- 
pressed price,  was  the  cheapest  of  our  products,  and  at  the 
same  time  the  only  one  undesirable  to  part  with.  So  the 
Government  decided  to  suspend  gold  sales  indefinitely. 

Jay  Gould  and  others,  being  satisfied  that  this  was  to  be 
the  policy  of  the  Administration,  commenced  at  once  buying 
large  amounts  of  gold,  actuated,  doubtless,  by  the  purest  of 
patriotic  motives,  namely,  to  stimulate  cotton  and  cereal 
exports.    They  succeeded  in  accumulating  a  considerablo 


182  tun  TRU«  STORY  OF  BI^ACK  FRIDAY. 

amount  of  gold  at  prices  ranging  from  135  to  140,  ooyering 
a  period  of  three  months'  steady  buying. 

This  was  the  honest  foundation  on  which  the  great  Black 
Friday  speculative  deal  was  erected. 

The  eruption  on  Black  Friday  was  really  caused  by  the 
erratic  conduct  of  James  Fisk,  Jr.,  who  actively  joined  the 
movement  on  Thursday,  the  day  before,  and  became  wild 
with  enthusiasm  on  the  subject  of  high  gold.  He  began  on 
Friday,  early  in  the  morning,  to  buy  large  blocks  through 
his  own  brokers,  William  Belden  and  Albert  Speyer,  ran* 
ning  the  price  up  very  rapidly. 

The  original  syndicate  consisted  of  Jay  Gould,  Arthm 
Eimber,  representing  Stern  Brothers,  of  London,  and  W.  S, 
Woodward,  of  Bock  Island  comer  notoriety.  The  two  latter, 
however,  sold  out  their  interest  to  Gould,  who  directed  the 
deal  to  the  end,  with  the  assistance  of  several  able  and 
wicked  partners.  Their  office  was  located  in  Broad  street, 
on  the  present  site  of  the  Drexel  Building. 

When  the  excitement  arising  from  the  above  causes  was 
at  its  height,  I  sent  a  telegram  to  Secretary  Boutwell,  and 
one  to  President  Grant,  representing  the  exact  condition  of 
affairs  in  Wall  street,  and  urging  the  sale  of  gold  without 
delay.  I  also  prevailed  upon  General  Butterfield,  the  New 
York  Sub  Treasurer,  and  Moses  H.  Grinnell,  the  Collectoi 
of  the  Port,  to  send  similar  telegrams,  which  ihey  did,  and 
timely  action  was  taken  at  once  by  an  order  coming  tc 
sell  $5,000,000.  The  moral  effect  of  tiiis  Government  action 
was  to  strike  terror  to  the  holders  of  gold,  and  a  general 
rush  was  made  to  sell  out,  thereby  driving  down  the  premium 
from  160,  in  less  than  two  hours,  to  132.  The  down  grade 
produced  an  excitement  quite  equal  to  the  early  furore  in 
the  up  movement.  Albert  Speyer  had  from  Fiak  *a  verbal 
earte  Ihnche  order  to  buy,  in  million  lots,  all  the  gold  he 
could  get  at  160 ;  while  he  was  thus  buying  millions  upon 
millions  at  this  figure,  on  the  opposite  side,  and  in  other  sec- 
tions of  the  room,  sales  were  freely  made  in  moderate  amounts 


MY  T9I<^ORAM  TO  BOUTWBl«I«  AND  GRANT.  IBS 

at  140, 145, 147  and  150,  almost  aiinaltaiieocislj  ;  and  eyen 
when  135  was  reached,  which  was  soon  thereafter,  Speyer 
still  kept  on  bidding  160  for  a  million  at  a  time,  making  one 
of  the  wildest  and.  most  ludicrous  spectacles  ever  witnessed 
among  men  not  idiots.  Fisk  afterwards  repudiated  the  con- 
tracts made  on  his  account  by  Speyer  &  Belden,  simply  de- 
nying having  given  the  orders,  and  as  they  were  not  in  writ- 
ings they  could  not  well  be  proven,  hence  both  brokers  failed, 
throwing  immense  losses  upon  an  innumerable  number  of 
others.  Quite  a  noted  firm  sold  Speyer  some  of  his  million 
lots,  which  they  bought  back  at  140,  being  satisfied  with  the 
profit  of  20  per  cent. ;  when  they  had  finished  buying,  the 
price  instantly  broke  to  132,  and  the  announcement  of  Spey- 
er^s  failure,  which  was  made  before  the  close  of  the  day, 
caused  them  also  to  fail,  as  well  as  half  the  members  of  the 
Gold  Boom.  Owing  to  the  serious  complications  prevailing^ 
and  the  disaster  being  so  widespread,  it  was  found  impossi- 
ble to  continue  the  clearances  through  the  Gold  Bank,  and 
the  Governing  Committee  of  the  Gold  Boom  were  at  once 
convened,  and  passed  a  resolution  to  suspend  all  dealings  in 
gold  for  one  week,  in  order  to  enable  the  members  to  adjust 
their  difficulties  and  differences  between  themselves  pri- 
vately. The  Gold  Bank  also  suspended  business  in  the 
meantime.  While  Albert  Speyer  was  vigorously  buying  and 
continuing  to  bid  160  for  one  million  after  another,  the 
clique  were  as  actively  engaged  in  seULng  all  the  market 
would  take  at  ten  points  less,  and  also  busy  making  private 
settlements  with  the  shorts. 

As  the  transactions  were  purely  phantom  in  their  nature^ 
the  great  parties  in  the  speculative  contest  did  not  really  lose 
much*  Contrary  to  popular  opinion  about  such  transactions, 
they  did,  virtually,  incur  heavy  losses,  but  in  one  way  or  an- 
other they  managed  to  evade  them.  Gould's  losses  were 
estimated  at  over  four  millions.  Fisk's  were  equally  large,  but 
he  repudiated  all  of  them.  Others  were  heavily  saddled, 
however,  with  the  burden  which  he  should  have  borne. 


.184  THK  TRUK  STORY  OF  BI.ACK  PRIDAT. 

Importing  merchants  were  among  the  greatest  snffererSi 
and  a  large  number  of  them  were  forced  to  cover  at  high 
figures. 

The  suspension  of  the  Gold  Board  caused  many  important 
failures.  Private  settlements  were  made  during  a  period  of 
sixty  days  following,  in  many  instances  on  the  basis  of  a 
compromise. 

When  Fisk  heard  that  Secretary  Boutwell  had  ordered 
gold  sold,  he  exclaimed  that  it  would  knock  spots  out  of 
phantom  gold,  and  send  him  and  others  with  their  long 
stuff  "  where  the  woodbine  twineth.'*  The  full  effect  of  the 
disaster  became  more  fully  realized  when  the  Gold  Board 
and  Gold  Bank  suspended  and  the  numerous  large  failures 
were  announced  ;  then  it  almost  seemed  that  a  general  state 
of  chaos  reigned,  and  how  to  unravel  the  complications  was 
the  problem  to  be  solved.  No  one  that  had  any  connection 
with  gold  dealings  during  the  eventful  day  could  positively 
tell  how  they  actually  stood,  or  how  to  estimate  their  losses 
or  gains;  such  was  the  uncertainty  as  to  future  results, 
and  the  doubt  as  to  who  was,  and  who  was  not,  going  to 
pay  the  differences  due.  The  Board  Koom  was  crowded ' 
almost  to  suffocation,  and  the  scene  just  prior  to  its  dose 
partook  of  the  appearance  of  Bedlam  let  loose  ;  in  fact,  it 
had  not  been  much  different  during  the  entire  day.  Late 
in  the  afternoon,  a  formidable  body  of  enraged  sufferers 
assembled  at  the  doors  of  Smith,  Gould  &  Martin's  office, 
and  many  and  boisterous  were  the  threats  that  were  in* 
dulged  in  against  the  members  of  the  firm,  in  consequenoe 
of  which  a  police  guard  was  detailed  for  their  protection. 

The  gold  furore  brought  many  Israelites  to  Wall  Street 
who  since,  by  their  numbers  and  natural  shrewdness,  hav6 
become  quite  formidable  in  our  midst. 

One  of  them,  being  very  long  of  the  precious  metal,  on  ite 
break  from  160  to  140,  fainted ;  water  was  soon  obtained  to 
bathe  his  feverish  brow,  and  rubbing  was  also  adopted 
When,  finally,  he  had  sufficiently  recovered  to  raise  his  head 


tHZ   HEBREW  WHO  PAINTHB.  185 

and  open  his  eyes,  looking  all  around  he  said :  '^What  ish 
the  prisb  now?  "  Upon  finding  it  still  lower,  he  closed  his 
eyes  again,  ani  fell  into  another  swoon.  He  was  finally 
carried  from  the  Gold  Boom  a  sick  and  mined,  but  a  wiser 
Hebrew,  and  is  now  in  the  ^^ole  cloe"  business  on  the  East 
aide. 

This  is  the  history  in  brie^  but  the  scenes  and  incidents 
of  that  day  would  furnish  material  for  an  interesting 
volume. 

Although  I  am  not  much  given  to  the  sensational,  I  haye 
collected  a  few  of  the  leading  events  in  detail,  which  I  think 
are  worth  putting  in  permanent  form,  if  I  may  presume  that 
this  book  itself  may  happily  partake  of  that  character. 

The  inside  history  of  the  conspiracy  to  put-up  the  price 
of  gold  is  also  fuU  of  interesting  material,  and  shows  how 
deeply  laid  the  schome  was  to  take  advantage  of  the  eircum- 
stances  and  of  the  feeling  which  existed  in  favor  of  stimu- 
lating our  exports  at  the  time.  I  shall,  therefore,  give  an 
epitome  of  tbe  salient  points  behind  the  scenes  of  the  great 
speculative  plot,  and  the  bold  attempt  made  to  involve 
President  Qxant  and  his  family  in  the  conspiracy. 

As  I  have  intimated,  Jim  Fisk,  Jr.,  or  Jim  Jubilee  Junior, 
aa  he  was  then  popularly  called,  was  eventually  put  forth  as 
the  active  member  of  the  manipulating  coterie.  The  clique 
made  very  good  use  of  him,  also,  at  intervals  during  the 
period  they  were  concerting  their  plans. 

Fisk  had  originally  been  a  peddler  in  New  England,  as  his 
flkther  had  been.  He  appeared  in  Wall  Street  a  few  years 
previous  to  the  great  gold  conspiracy  as  one  of  the  confi- 
dential men  of  Daniel  Drew.  Having  shown  that  he  was 
too  sharp  for  some  of  the  people  in  tlie  broker's  office 
where  Mr.  Drew  made  his  headquarters,  he  received  a  polite 
hint  that  his  presence  there  was  undesirable.  Mr.  Fisk 
then  opened  an  office  of  his  own,  and  united  his  specula- 
tive fortunes  vriih  those  of  Mr.  William  Belden.  The  name 
of  the  firm  was  Fisk  &  Belden.    It  was  of  but  short  duration. 


186  THM  TRUB  STORY  OP  BIACK  MUDAY. 

It  seems  that  they  had  difficulty  in  finding  bankers  to 
accommodate  them  to  the  extent  required,  and  they  closed 
up  the  business.  But  though  Fisk  failed  of  success  in  this 
instance  as  a  broker,  his  resources  were  not  by  any  means 
exhausted.  He  made  himself  generally  useful  to  Mr.  Drew, 
who  still  adhered  to  him. 

As  the  result  of  this  friendship  and  his  own  smartnoss, 
in  a  short  time  afterwards  Mr.  Fisk  was  elected  to  the 
directory  of  the  Erie  Bailroad  Company,  and  Mr.  ]>rew, 
who  had  forwarded  his  interest  in  that  direction,  was  left 
out.  This  is  an  instance  of  the  way  Fisk  made  the  best 
use  of  his  friends. 

As  the  result  of  Fisk's  election  to  the  Erie  Board,  forty 
thousand  shares  of  new  stock  were  issued.  Bold  attempts 
were  made  to  gobble  up  other  railroads  through  the  same 
instrumentality.  Fuller  information  on  these  matters  is 
given  in  my  chapters  on  Drew,  Gould,  and  the  stru^le  with 
Vanderbilt. 

Fisk  began  to  be  considered  a  uniyersal  genius  at  that 
lime,  and  had  acquired  the  soubriquet  of  Prince  of  Erie. 
Though  he  had  no  money  to  operate  with  when  he  made 
his  debut  in  Wall  Street,  soon  after  this  large  issue  of  Erie 
stock,  he  began  to  show  signs  of  wealth  very  rapidly.  He 
had  the  reputation  of  being  the  fortunate  owner  of  several 
railroads  and  steamboats,  an  opera  house,  at  least  one  bench 
of  judges,  an  unlimited  number  of  lawyers  and  a  bevy  of 
ballet  girls. 

The  Head  Centre  of  this  gold  conspiracy  needs  no  intro- 
duction here,  as  I  have  attempted  to  do  him  ample  justice 
in  another  chapter.  He  was  also  the  power  behind  the  throne 
in  Erie  as  well  as  in  the  Qold  clique.  He  pulled  the  wires 
while  Fisk  was  the  imposing  factotum  who  was  exhibited  to 
an  admiring  public.  He  managed  the  courts,  the  judges 
and  the  lawyers,  while  Fisk  got  the  reputation  of  doing 
this  fine  yrork,  but  was  simply  the  mechanical  executive. 
He  had  made  himself  solid  with  the  Legislature  also,  and 


THE  HBAD  CSNTRH  OF  I^HS  CONSPIRACY.  187 

had  acquired  a  hold  on  Erie  that  enabled  him  to  use  thai 
property  just  as  he  pleased  for  his  own  personal  benefit^ 
ambition  and  purposes. 

Erie  was  a  mighty  power  at  that  time,  with  a  wonderful  lev- 
erage for  raising  money.  When  cash  was  needed  to  purchase 
another  railroad,  a  legislature  or  a  court,  all  that  was  neces- 
sary was  to  sell  a  few  hundred  thousand  of  Oonvertible  Bonds 
and  turn  tbem  into  Erie  shares.  Mr.  Gould  was  thus  forti 
fied  with  ample  means  of  raising  money  on  call  at  the  time 
he  played  the  heavy  role  in  the  events  which  culminated  in 
the  disaster  of  Black  Friday. 

Though  the  circumstances  at  that  time  were  all  in  favor 
of  success  in  such  a  plot,  it  required  a  mind  with  great 
grasp  and  wonderful  powers  of  generalization  to  take  ad- 
vantage of  aU  the  bearings  of  the  situation,  and  to  utilize 
everything  toward  the  great  end  in  view.  Gould  did  his 
work  as  chief  of  the  conspiracy  with  rare  tact  and  mar- 
vellous sagacity. 

A  resume  of  the  conspicuous  points  in  the  situation  and 
the  plot  will  make  this  clear. 

The  supply  of  gold  in  the  New  York  market  then  did  not 
exceed  25  millions.  The  Government  held  less  than  100 
millions,  and  about  one-fourth  of  this  was  in  the  form  of 
special  deposits  represented  by  gold  certificates,  part  of 
which  were  deposited  in  the  banks  and  the  remainder  cir- 
culating thronghout  the  country.  Gold  was  then  being  sold 
by  the  Treasury  at  the  rate  of  a  million  a  month,  in  accord- 
ance with  a  plan  that  had  been  adopted  as  the  best  financial 
policy,  both  for  the  administration  and  the  prosperity  of 
the  country.  This  had  always  a  tendency  to  keep  the  price 
down,  but  on  account  of  the  circumstances  briefly  related 
in  the  beginning  of  this  chapter,  this  policy  of  selling  gold, 
owing  to  our  commercial  relations,  was  no  longer  considered 
for  the  best  interests  of  the  country,  and  Mr.  Boutwell,  with 
his  coadjutors  in  the  Treasury,  were  bound  to  give  ear  to  the 
opinions  of  the  bankers  and  business  men  in  the  interest  of 
oar  export  trade. 


188  TH«  TRim  STORY  OF  BI,ACK  FRIDAY. 

Although  the  policy  of  stopping  the  sale  of  gold  had  been 
agreed  upon  in  deference  to  the  views  of  the  best  finanoiers 
of  the  country,  yet  Mr.  Gould  and  his  fello'vr  strategistB 
thought  it  was  best  to  make  assurance  doubly  sure  on  this 
point,  in  order  that  nothing  might  stand  in  the  way  of  the 
great  speculative  intrigue,  to  get  a  **  comer  "  in  gold.  Presi- 
dent Grant  was  conservative  on  the  subject.  The  conspira- 
tors, therefore,  conceived  the  design  of  arranging  things  so 
that  Secretary  Boutwell  could  not  depart  from  this  policy, 
no  matter  what  emergency  might  arise. 

This  bold  and  wicked  strategy  could  only  be  suocessfol 
by  first  getting  President  Grant  convinced  that  the  theory 
of  stopping  the  gold  sales  was  the  only  commercial  salva* 
tion  for  the  country  in  the  then  condition  of  business  stag- 
nation and  the  possible  panic  threatened.  The  theory  was 
then  to  impress  him  with  the  necessity  of  giving  Secretary 
Boutwell  an  absolute  order  not  to  sell  gold,  and  afterwards 
to  fix  things  so  that  it  would  be  impossible  for  the  President 
to  revoke  that  order  until  the  brilliant  speculative  purposes 
of  the  clique  in  cornering  gold  should  be  accomplished. 

The  scheme  was  but  little  short  of  treason,  regarded  from 
a  patriotic  point  of  view,  and  it  is  very  questionable  if  the 
perpetrators  would  have  stopped  short  of  this  dastardly  act, 
had  they  not  been  convinced  that  their  purpose  was  fully 
compassed  by  a  method  less  villainous  and  shocking.  It 
was  considered  indispensable  by  the  conspirators,  for  the 
consummation  of  their  plans,  that  Grant  should  be  got  out 
of  the  way  by  some  means  or  other.  Fortunately  for  him, 
and  for  the  honor  of  the  nation,  the  plan  succeeded  without 
the  necessity  of  offering  him  any  violence. 

Before  explaining  how  this  was  done  it  is  necessary  to 
describe  briefly  a  few  of  the  preliminary  events  which 
formed  a  portion  of  the  plot 

It  was  arranged  that  General  Grant  should  accompany  a 
party,  one  beautiful  evening  in  the  middle  of  June,  who 
were  going  to  attend  the  great  Peace  Jubilee  of  Patrick 


TH3$  PWT  TO  ENTRAP  THJBi  PRKSIDBNT.  189 

Sarsfield  Qilmore  in  Boston.  Jim  Fisk  did  the  executive 
iRTork  in  the  arrangement.  There  was  a  fine  champagne 
snpper  on  board  the  Boston  boat,  and  several  gentlemen 
iRrere  present  who  were  thoroughly  conversant  with  financial 
questions,  and  could  talk  glibly  on  the  state  of  the  country. 
The  subject  of  exports  and  the  policy  of  stopping  the  sale 
of  gold  were  thoroughly  discussed.  It  was  a  feast  of  reason, 
and  those  who  have  imagined  that  it  was  all  flow  of  soul, 
on  that  festive  occasion,  do  very  scant  justice  to  the  intel- 
ligence that  was  at  the  bottom  of  the  deep  design  of  the 
nocturnal  excursion,  planned  by  Gould,  Fisk  &  Co.  General 
Grant  was  an  eager  listener  to  all  that  was  said  on  the  most 
interesting  subject  of  that  day,  but  his  mind,  it  would  seem, 
was  not  then  thoroughly  made  up  that  the  best  policy  for 
ihe  prosperity  of  the  country  was  to  stop  the  sale  of  gold. 
He  was  undecided  on  that  point,  and  it  required  well  di 
Tected  reasons  to  convince  him.  Mr.  Gould  observed  this 
and  foresaw  what  was  necessary  to  be  done.  The  drift  of 
the  conversation,  when  this  point  was  brought  clearly  out, 
waa  very  succinctly  described  by  Mr.  Gould  in  his  testi- 
mony before  the  Garfield  Investigating  Committee.  He  said : 
•*The  President  was  a  listener.  The  other  gentlemen  were 
discussing.  Some  were  in  favor  of  Boutwell's  selling  gold, 
and  some  were  opposed  to  it.  After  they  all  interchanged 
their  views,  some  one  asked  the  President  what  his  views 
were.  He  remarked  that  he  thought  there  was  a  certain 
amount  of  fictitiousness  about  the  prosperity  of  the  country 
and  the  bubble  might  as  well  be  tapped  in  one  way  aa 
the  other.  That  was  the  substance  of  his  remark.  He 
asked  me  what  I  thought  about  it.  I  remarked  that  I 
thought  if  that  policy  was  carried  out  it  would  produce 
great  distress  and  almost  lead  to  civil  war ;  it  would  pro- 
duce strikes  among  the  workmen,  and  the  workshops,  to  a 
great  extent,  would  have  to  be  closed ;  the  manufactories 
would  have  to  stop.  I  took  the  ground  that  the  Govern- 
ment ought  to  let  gold  alone,  and  let  it  find  its  commercial 


190  TH«  TRU«  STORY  OF  BI^ACK  FRIDAY. 

leyel ;  that,  in  fact,  it  ought  to  facilitate  an  upward  more- 
ment  of  gold  in  the  fall.  The  fall  and  winter  is  the  only 
time  that  we  have  any  interest  in.  That  was  all  that  oc- 
curred at  that  time." 

It  may  be  necessary  to  observe  that  I  am  merely  quoting 
Gk>uld  from  the  report,  and  am  not  by  any  means  responsible 
for  his  confusion  of  ideas  and  grammar. 

This  is  sufficient  to  show  how  ably  Mr.  Gould  played  his 
part  in  attempting  to  get  the  President  into  the  proper 
frame  of  mind  to  enable  him  to  endorse  a  policy  so  vital  to 
the  interests  of  the  country  and  to  the  success  of  the  gold 
clique. 

**I  took  the  ground,"  says  Gould,  "  that  the  Government 
ought  to  let  gold  alone  and  let  it  find  its  commercial  level." 

This  reference  to  ^^  its  commercial  level "  is  rich,  coming 
from  the  head  centre  of  the  plotters  who  wanted  to  put  the 
article  up  to  200.  Then,  in  another  afterthought,  he  says: 
*^  It  (the  Government)  ought  to  facilitate  an  upward  move- 
ment of  gold  in  the  fall." 

How  artfully  insinuating  was  this  suggestion  in  the  in- 
terest of  our  foreign  commerce  I  It  showed  clearly  the  power 
the  man  possesses  of  rising  to  the  patriotic  height  of  the 
occasion.  This  is  a  characteristic  of  Mr.  Gould  that  few 
people  know  how  to  appreciate  at  its  true  worth.  It  has 
stood  out  conspicuously  in  his  character  in  many  other 
exigencies.  It  reminds  one  of  the  unkind  but  vigorous 
remark  of  the  famous  old  English  critic.  Dr.  Samuel 
Johnson :  ^^  Patriotism,  Sir,"  said  the  old  cynic,  ^^  is  the  last 
refuge  of  a  scoundrel." 

About  the  time  the  above  events  were  transpiring,  the 
Assistant  Secretary  of  the  Treasury,  Mr.  H.  H.  Van  Dyck, 
resigned  his  office  in  this  city.  Mr.  Gould's  chief  ambition 
at  that  time  was  to  name  his  successor,  in  order  that  he 
might  be  able  to  control  the  Treasury  when  the  time  to  get 
a  "  corner"  in  gold  should  be  ripe.  Mr.  Abel  B.  Corbin  came 
in  quite  handy  at  this  juncture  to  help  to  further  the  designs 


GOULD  TRIBS  TO  CONTROL  THE  TREASURY.  191 

of  Mr.  Gould  He  was  a  man  of  fair  eduoation  and  con- 
siderable experience  both  in  business  and  politics.  He  had 
been  a  lobbyist  in  Washin^on  for  some  years.  He  was 
well  informed  on  financial  matters,  a  pretty  good  writer,  and 
could  ^'  talk  like  a  book."  His  wife  was  a  sister  of  Mrs. 
Grant,  and  he  had  good  opportunities  for  reacLing  the  Pres- 
idential ear,  which  he  employed  to  the  best  advantage. 

A  gentleman  named  Bobert  B.  Catherwood,  who  was 
married  to  a  step-daughter  of  Mr.  Corbin,  was  approached 
by  Gould  and  Corbin  on  the  subject  of  the  assistant- 
treasuryship.  They  were  anxious  that  Mr.  Catherwood 
should  take  the  office,  and  told  him  he  could  make  a  great 
deal  of  money  in  a  perfectly  legitimate  manner  if  he  were 
once  installed. 

So  Mr.  Catherwood  stated  in  his  testimony  before  the 
Investigating  Committee,  but  he  adds,  ^^  My  ideas  differed 
from  theirs  in  what  constituted  a  legitimate  manner,  and  I 
declined  the  office." 

The  office  then  sought  another  man  in  the  person  of 
General  Daniel  Butterfield.  He  received  the  intimation  of 
his  appointment  in  a  very  different  spirit  from  Mr.  Cather- 
wood, showing  thathe  was  fully  equal  to  the  occasion.  He 
wrote  a  letter  to  Mr.  Corbin  thanking  him  kindly  for  the 
offer,  saying  that  he  was  under  numerous  obligations  to 
bim,  and  expressing  a  hope  that  he  would  be  eminently 
successfol  in  his  undertaking.  General  Butterfield  received 
his  commission  in  dae  course. 

This  made  perfect  another  link  in  the  chain  of  Mr.  Gould's 
speculative  design,  as  he  supposed.  It  made  Corbin  ^^  solid" 
with  Gould  also,  a  position  which  they  both  highly  appro- 
ciated.  Mr.  Gould  paid  the  following  tribute  of  admiration 
to  the  true  value  of  Corbin  in  the  enterprise :  ^^  He  was  a 
very  shrewd  old  gentleman.  He  saw  at  a  glance  the  whole 
case,  and  said  he  thought  it  was  the  true  platform  to  stand 
on;  that  whatever  the  Government  could  do  legitimately  and 
fairly  to  facilitate  the  exportation  of  breadstuffs  and  produce 


192  THB  TRUS  Sl^ORY  OF  BI^CK  FRIDAY. 

good  prices  for  the  West^  ihej  ought  to  do  so.  He  was 
anxious  that  I  should  see  the  President,  and  communicate  to 
him  my  views  on  the  subject."  Corbin  talked  with  Grant 
until  he  received  a  positive  assurance  that  Boutwell  was  not 
to  sell  any  more  gold.  At  a  meeting  in  Grant's  house, 
where  Gould  and  Corbin  were  present^  the  President  said  : 
^  Boutwell  gave  an  order  to  sell  gold,  and  I  heard  of  it,  and 
countermanded  the  order." 

It  was  not  until  Gould  had  received  positive  assurance 
from  the  President's  own  lips,  that  he  considered  his  scheme 
perfect.  But  the  links  of  this  strategic  chain  were  now 
nearly  all  forged.  The  bankers  and  merchants  were  largely 
in  his  favor  through  commercial  necessity,  the  Sub-Treasury 
was  ^^  fixed,"  as  he  thought,  and  the  Executive  fiat  had  placed 
the  Treasury  of  the  United  States  itself  where  it  could  not 
spoil  the  deal  if  Grant  did  not  change  his  mind.  There 
were  reasons,  of  course,  to  apprehend  that  he  would  do  so 
in  case  of  an  emergency ;  for  he  never  was  privy  to  the 
scheme,  no  matter  what  his  traducers  and  political  enemies 
may  have  said. 

To  ensure  perfect  safety,  then,  Grant  must  be  put  out  of 
the  way  temporarily.  This  was  the  crowning  effort  of  the 
conspirators.  After  the  Boston  Peace  Jubilee,  this  Cabal 
spent  the  remaining  part  of  the  summer  in  maturing  its  de- 
signs. Large  enterprises  of  this  nature  always  require  time 
and  patience.  I  am  told  that  "  Billy"  Porter,  '^  Sheeny" 
Mike  and  other  eminent  burglars  will  work  assiduoudy 
from  six  to  twelve  months  studying  all  the  ins  and  outs  of  a 
bank  or  other  financial  concern  before  coming  to  the  point 
of  using  the  *^  jimmy,"  blowing  the  safe  or  chloroforming 
the  janitor. 

It  seemed  necessary  that  all  the  members  of  the  Cabal 
should  be  fully  acquainted  with  the  combination  to  Grant's 
purposes  as  regarded  his  orders  to  Boutwell,  and  that  his 
ideas  should  remain  fixed  on  the  theory  of  increasing  export- 
tation  for  the  country's  safety.  Accordingly  it  was  arranged 


GRANT  NOT  PRIVY  TO  TH«  PM)T.  193 

that  Jim  Fisk  should  visit  the  President  at  Newport,  where 
he  was  on  a  visit,  some  time  about  the  middle  of  August,  a 
monthor  so  prior  to  Black  Friday.  It  would  seem  that  Grant 
at  this  date  was  still  wayering,  and  adhering  to  his  policy 
of  selling  gold  in  spite  of  the  order  which  he  had  given 
Boutwell.  He  may  have  been  suspecting  that  the  anxiety 
ofOonld,  Corbin  &  Co.  for  the  prosperity  of  the  country 
was  not  altogether  genuine.  The  necessity  of  bringing 
further  pressure  to  bear  upon  him  was  therefore  clearly 
manifest. 

Beferring  to  the  interview  at  Newport,  Fisk  said :  "  I 
think  it  was  some  time  in  August  that  General  Grant 
started  to  go  to  Newport.  I  then  went  down  to  see  him.  I 
had  seen  him  before,  but  not  feeling  as  thoroughly  ac- 
quainted as  I  desired  for  this  purpose,  I  took  a  letter  of 
introduction  from  Mr.  Gould,  in  which  it  was  stated  that 
there  were  three  hundred  sail  of  vessels  then  on  the  Medi- 
terranean, from  the  Black  Sea,  with  grain  to  supply  the 
Liverpool  market.  Gold  was  then  about  thirty-four.  If  it 
continued  at  that  price,  we  had  very  little  chance  of  car- 
rying forward  the  crop  during  the  fall.  I  know  that  we 
felt  nervous  about  it.  I  talked  with  General  Grant  on  the 
subject  and  endeavored,  as  far  as  I  could,  to  convince  him 
that  his  policy  was  one  that  would  only  bring  destruction  on 
Qs  alL  He  then  asked  me  when  we  should  have  an  inter- ' 
view,  and  we  agreed  upon  the  time.  He  said :  *  During 
that  time  I  will  see  Mr.  Boutwell,  or  have  him  there." 

The  President  was  carefully  shadowed  after  this  by  the 
detectives  of  the  clique,  and  great  care  was  taken  to  ttirow 
men  across  his  path  who  were  fluent  talkers  on  the  great 
financial  problem  of  the  day,  the  absolute  necessity  of  stimu- 
lating the  export  trade  and  raising  the  premium  upon  gold 
for  that  patriotic  purpose.  In  this  way,  President  Grant 
began  to  think  that  the  opinion  of  almost  everybody  he 
talked  with  on  this  subject  was  on  the  same  side,  and  must^ 
fheref ore,  be  correct. 


194  TH«  TRUE  STORY  OF  BI,ACK  FRIDAY. 

About  the  1st  of  September  it  was  considered  that  the 
opinions  of  the  President  had  been  worked  up  fairly  to  the 
sticking  point,  and Oould bought $1,500,000  in  gold  at  132vi 
for  Corbin.  Gould,  however,  was  timid  in  his  purchasing 
at  first,  as  he  had  heard  that  a  number  of  operators  who 
were  short  of  gold  were  making  arrangements  to  give  Secre- 
tary Boutwell  a  dinner.  On  further  assurances  from  Corbin 
that  the  President  had  written  Boutwell  to  sell  no  gold  with- 
out consulting  him,  Gk)uld  prepared  to  go  ahead  with  the 
execution  of  his  great  scheme.  Nothing  remained  to  be 
done  in  the  completion  of  the  plot  except  to  stow  away  the 
President  in  a  place  of  safety  until  the  financial  storm  should 
blow  over. 

Things  were  so  managed  that  the  President  was  placed  in 
a  position  that  his  honor  was  seriously  in  danger  of  being 
compromised,  yet  so  ably  was  the  matter  engineered  that  he 
was  perfectly  unconscious  of  the  designs  of  the  plotters. 

He  was  prevailed  upon  to  go  to  a  then  obscure  town  in  Penn- 
sylvania, named  Little  Washington.  The  thing  was  so  ar- 
ranged that  his  feelings  were  worked  upon  to  visit  that  place 
for  the  purpose  of  seeing  an  old  friend  who  resided  there. 
The  town  was  cut  off  from  telegraphic  communication,  and 
the  other  means  of  access  were  not  very  convenient.  There 
the  President  was  ensconced,  to  remain  for  a  week  or  so 
about  the  time  the  Cabal  was  fully  prepared  for  action. 

Sometime  about  the  period  of  the  President's  departure 
for  Little  Washington,  Fisk  bought  seven  or  eight  milUons 
of  gold.  Gould  then  said  to  Fisk :  ^^  This  matter  is  all  fixed 
up.  Butterfield  is  all  right.  Corbin  has  got  ButterfielS  all 
right,  and  Corbin  has  got  Grant  fixed  all  right,  and  in  mj 
opinion  they  are  all  interested  together." 

This  was  patriotism  with  a  vengeance.  Just  think  of  the 
audacity  of  it  I  Gould  enters  into  a  scheme  to  place  the 
President  in  a  position  where  he  could  not  interfere  with  the 
plan  of  getting  a  ^^  corner  "  in  gold,  and  then  he  turns  around 
and  accuses  the  first  Magistrate  of  the  Bepublic  with  beisg 
privy  to  a  plot  that  was  calculated  to  create  a  panic,  and 


PUTTING  TBJS;  PRESIDENT  OUT  OP  THK  WAY.  196 

cause  widespread  disaster  in  business  circles,  and  render 
him  an  object  of  universal  contempt. 

Gould  and  Fisk,  through  Corbin,  also  attempted  to  com- 
promise Grant's  family,  as  well  as  his  private  Secretary, 
General  Horace  Porter.  This  intention  was  fully  disclosed 
through  the  interview  of  Fisk  with  Corbin.  Fisk  testified : 
"  When  I  met  Corbin  he  talked  very  shy  about  the  matter 
at  first,  but  finally  came  right  out  and  told  me  that  Mrs. 
Grant  had  an  interest ;  that  $500,000  in  gold  had  been 
taken  at  31  and  32,  which  had  been  sold  at  37  ;  that  Mr. 
Corbin  held  for  himself  about  two  millions  of  gold,  $500,- 

000  of  which  was  for  Mrs.  Grant  and  $500,000  for  Porter. 

1  did  not  ask  whether  he  was  General  or  not.  I  remember 
the  name  Porter.  This  was  given  out  very  slowly.  He 
let  out  just  as  fast  as  I  did  when  he  found  that  Gk)uld  had 
told  me  about  the  same  thing.  I  said  :  '  Now,  I  have  had 
nothing  to  do  with  your  transactions  in  one  way  or  the 
other.  We  have  embarked  in  a  scheme  that  looks  like  one 
of  large  magnitude.  Mr.  Gould  has  lost  as  the  thing  stands 
now.  It  looks  as  if  it  might  be  a  pretty  serious  business 
before  getting  out  straight  again.  The  whole  success  de- 
pends on  whether  the  Government  will  unload  on  to  us  or 
not.'  He  said  :  ^  You  need  not  have  the  least  fear.'  I  said : 
'I  want  to  know  whether  what  Mr.  Gould  told  me  is  true. 
I  want  to  know  whether  you  have  sent  this  $25,000  to  Wash* 
ington,  as  he  states?'  He  then  told  me  that  he  had  sent  it, 
that  Mr.  Gould  had  sold  $500,000  in  gold  belonging  to  Mrs. 
Grant,  which  cost  32,  for  37  or  something  in  that  neighbor- 
hood, leaving  a  balance  in  her  favor  of  about  $27,000,  and 
that  a  check  for  $25,C00  had  been  sent.  Said  I :  *  Mr.  Cor- 
bin, what  can  you  show  me  that  goes  still  further  than  your 
talk  V  *  Oh,  well,'  the  old  man  said,  *  I  can't  show  you  any- 
thing, but,'  said  he,  ^  this  is  all  right.'  He  talked  freely  and 
repeated :  *I  tell  you  it  is  all  right.'  When  I  went  away 
from  there,  I  had  made  up  my  mind  that  Corbin  had  told 
me  the  truth." 


196  tan  TRim  story  of  black  Friday. 

An  attempt  was  made  to  prove,  before  the  Garfield  Com 
mittee,  that  a  paekage  containing  $25,000  was  sent  to  Mrs. 
Grant  through  the  Adams  Express  Company,  but  expert 
testimony  failed  to  decide  whether  the  amount  was  that  or 
$250,  as  the  two  noughts  at  the  extreme  right  were  crowded 
into  the  cents  column,  and  it  was  difficult  to  determine 
whether  or  not  a  very  light  "period''  was  placed  between 
them  and  the  "  $250." 

The  dasign  of  the  clique  was  manifest,  however,  to  impli- 
cate the  family  of  the  President  in  some  way  or  other,  in 
order  that  they  might  make  use  of  the  Executive  inflnenoe 
to  help  accomplish  their  great  speculative  purpose.  But  aa 
the  Garfield  Committee  truly  said  in  its  report:  "The 
wicked  and  cunningly  devised  attempt  of  the  conspirators 
to  compromise  the  President  of  the  United  States  or  his 
family  utterly  failed." 

The  scheme  might  have  succeeded  if  Fisk  had  been  pos- 
sessed of  the  coolness  and  penetration  of  his  partner,  bat 
his  impetuosity,  anxiety  and  enthusiasm  aroused  suspicion 
and  partially  spoiled  the  plot. 

Fisk  was  so  eager  to  be  satisfied  that  Grant  was  all  right 
that  he  overdid  the  thing  by  urging  Corbin  to  write  Grant 
a  letter  to  stand  firm  and  not  to  permit  the  Treasury  to  sell 
gold  under  any  consideration.  The  outcome  of  this  afforded 
clear  proof,  if  any  were  wanting,  that  Grant  had  no  guilty 
knowledge  of  the  base  purposes  for  which  he  was  being  used. 
Fisk  had  this  letter  from  Corbin  sent  by  a  special  messenger 
from  Pittsburgh,  who  rode  twenty  eight  miles  on  horse- 
back, and  delivered  it  in  person  to  the  President.  He  read 
Ihe  letter,  and  had  his  suspicions  at  once  aroused.  He  said 
laconically  to  the  messenger,  "It  is  satisfactory ;  there  is  no 
answer."  He  began  to  see  through  the  game,  and  at 
once  desired  Mrs.  Grant  to  write  to  Mrs.  Corbin  requesting 
her  husband  to  have  nothing  more  to  do  with  the  Gk>uld-Fiflk 
gang. 

Mrs.  Grant  wrote  to  Mrs  Corbin  to  say  that  the  President 


'    GRANT  RiSPUDlATM  1*H«  GOUI^D-FISK  GANG.  197 

was  greatly  troubled  to  learn  that  her  husband  had  been 
speculating  in  Wall  Street^  and  that  she  should  desire  him 
to  disconnect  himself  immediately  with  the  parky  who  were 
attempting  to  entrap  the  President. 

Ciorbin  hastened  to  obey  the  mandate  from  Little  Wash- 
ington. He  was  greatly  agitated,  but  the  ruling  passion  of 
tTarice  was  strong ;  in  bidding  Gould  farewell,  and  before 
taking  his  final  adieu  of  the  clique,  he  requested  the  arch 
plotter  to  hand  him  over  his  share  of  the  profits.  Bef erring 
to  this  incident,  Gould  said :  "  I  told  him  I  would  give 
$100,000  on  account,  and  that  when  I  sold,  if  he  liked,  I  would 
give  him  the  average  of  my  sales.  I  did  not  feel  like  buy-  ' 
ing  any  gold  of  him  then." 

This  was  the  denouement  of  the  plot  against  the  Presi* 
dent,  who  immediately  hastened  to  big  Washington. 

Now,  let  me  again  ask  the  reader  to  turn  his  attention  for 
a  moment  to  the  concluding  scenes  in  the  speculative  drama 
in  Wall  Street  on  Black  Friday.  How  the  clique  tried  to 
manipulate  Assistant- Secretary  Butterfield  was  kept  as  pro- 
foundly secret  as  possible,  and  as  it  turned  out,  he  did  not 
hayeas  much  power  over  the  events  of  that  great  day  as  was 
expected.  When  somebody  charged  Fisk  with  tapping  the 
telegraph  wires,  however,  to  obtain  information  from  the 
GoTernment^  he  replied :  ^^  It  was  only  necessary  to  tap 
Butterfield  to  find  out  all  we  wanted." 

This  was  very  likely  a  vain  boast  of  Fisk. 

On  Wednesday,  the  22d  September,  two  days  preceding 
Black  Friday,  the  clique,  it  is  believed,  owned  several  millions 
more  gold  than  there  was  in  the  city  outside  the  vaults  of 
the  Sub-Treasury.  Belden  bought  about  eight  millions  of 
gold  on  that  day,  while  Smith,  Gould,  Martin  &  Co.  were 
also  heavy  purchasers.  The  clique  held  a  caucus  in  the 
office  of  William  Heath  &  Co.,  in  Broad  street,  and  con- 
cluded that  it  had  gold  enough  to  put  the  price  to  200,  if  it 
sould  carry  the  gold  without  lending  and  compel  the  ^'  shorts" 
lo  purchase.  But  the  idea  of  finding  a  market  for  over  thirty 


198  TH«  TRUE  STORY  O^  BM.CK  FRIDAY. 

millions  of  gold  was  also  a  gigantic  problem,  and  they  felt 
the  risk  of  being  ground  between  the  upper  and  the  nether 
millstones  of  their  scheme. 

On  the  morning  of  Thursday  another  council  of  war  was 
held  in  the  o£Sce  of  Belden  &  Co.,  on  Broadway.  At  this 
meeting,  Gould,  Fisk,  Henry  N.  Smith  and  William  Belden 
were  present.  The  proceedings  of  this  meeting  were  kept 
a  profound  secret,  but  one  result  of  it  was  that  Belden  gaye 
his  clerk  the  famous  order  to  put  gold  to  144  and  keep  it 
there.  On  that  day  Belden  purchased  about  twenty  millions 
of  gold,  the  price  opening  at  141^  and  closing  at  IISJ. 

The  chiefs  of  the  Cabal  had  another  private  meeting  up 
town  that  evening.  The  great  question  of  closing  up  the 
transactions  on  the  following  day  was  the  chief  topic  of 
discussion.  These  operators  held  contracts  for  over  $100,- 
000,000  in  gold.  Gould  said  that  the  "  short  '^  interest  was 
$250,000,000.  The  total  amount  of  gold  in  the  city  did  not 
exceed  $25,000,000,  and  the  difference  between  this  and  the 
aggregate  amount  of  the  contracts  of  the  clique  was  the 
enormous  amount  that  would  have  to  be  settled  in  the  event 
of  a  ^*  corner." 

Fisk  proposed  that  the  clique  show  its  hand,  publish  the 
state  of  affairs,  and  offer  to  settle  with  the  shorts  at  150. 
His  plan  was  rejected  by  his  brother  conspirators. 

On  the  morning  of  the  fatal  day,  Belden  and  William 
Heath  had  an  early  breakfast  together  at  the  Fifth  Avenue 
Hotel,  and  repaired  immediately  to  their  offices.  Belden 
announced  that  gold  was  going  to  200.  "This  will  be  the 
last  day  of  the  Gold  Boom,"  he  added.  Moved  by  Belden's 
threat,  a  large  number  rushed  to  cover.  In  the  language  of 
Henry  N .  Smith,  "  They  came  on  with  a  rush  to  settle."  He 
was  settling  in  the  office  of  Smith,  Gould  &  Martin,  at  150 
to  145,  while  Albert  Speyer,  acting  as  broker  for  Fisk  and 
Gould,  was  bidding  up  to  160  for  a  million  at  a  time.  It 
was  only  when  the  price  came  down  to  133  that  Speyer 


CWSING  SCBNK3  OP  TH«  DRAUA."  199 

tealized  the  hmnorous  absurdity  of  his  position.  He  had 
then  bought  26  millions  since  morning  at  160. 

A  voracious  demand  for  margins  about  midday  brought 
the  work  to  a  crisis.  The  scene  at  the  office  of  Heath  was 
indescribable  when  Belden  went  there  to  see  Gould  and  his 
confederates,  to  find  out  what  was  to  be  done  next  with  the 
frenzied  purchasers.  An  eyewitness  thus  describes  the 
scene  at  Heath's  office  :  "  I  went  outside  while  Belden  went 
in.  I  walked  up  and  down  the  alley-way  waiting  for  him  to 
come  out.  Deputy  sheriffs,  or  men  appearing  to  be  such, 
began  to  arrive  and  to  mount  guard  at  Heath's  office  to  keep 
out  visitors.  After  waiting  a  prodigious  long  time,  as  it 
seemed  to  me,  Jay  Gould  came  creeping  out  of  the  back 
door,  and  looking  round  sharply  to  see  if  he  was  watched, 
slunk  off  through  a  private  rear  passage  behind  the  build- 
ings. Presently  came  Fisk,  steaming  hot  and  shouting.  He 
took  the  wrong  direction  at  first,  nearly  ran  into  Broad 
street,  but  soon  discovered  his  error,  and  followed  Gould 
through  the  rear  passage.  Then  came  Belden,  with  hair 
disordered  and  red  eyes,  as  if  he  had  been  crying.  He 
called :  *  Which  way  have  they  gone  V  and,  upon  my  point- 
ing the  direction,  he  ran  after  them.  The  rear  passage  led 
into  Wall  street.  At  its  exit  the  conspirators  jumped  into 
a  carriage  and  fled  the  Street." 

They  did  not  fly  the  Street,  however,  but  went  to  the 
Broad  street  office  of  Smith,  Gould  &  Martin,  where  the 
crowd  assembled,  evidently  with  riotous  intent,  apparently 
bent  upon  an  application  to  Judge  Lynch  for  justice ;  and 
had  any  of  the  gentlemen  appeared  outside  the  confines  of 
the  front  wall,  the  chances  were  that  the  lamp-post  near  by 
would  have  very  soon  been  decorated  with  a  breathless 
body.  To  ensure  their  safety  inside,  however,  a  small  police 
force  kept  guard  outside,  which  made  the  barricade  com* 
plete.  These  gentlemen  remained  under  this  shelter  until 
thesmall  hours  of  the  morning,  busily  endeavoring  to  find 
out  where  they  stood  in  the  result  of  the  gold  deal,  and  the 


THB  TRUB  STORY  OP  BI^CK  FRIDAY. 

more  they  pondered  over  it,  the  greater  grew  the  doabt  in 
their  minds  whether  the j  were  standing  on  their  heads  oi 
their  heels. 

Although  the  Blacfk  Friday  "corner"  was  a  temporary 
calamity,  perhaps  it  was  worth  all  it  cost,  in  teaching  us  a 
useful  lesson  in  financial  and  speculative  afiiEdrs.  In  mj 
chapter  on  "Panics,  and  How  to  Prevent  Them,"  I  think  I 
have  made  several  points  clear  that  can  be  utilized  b j  finan- 
ciers, speculators  and  investors  to  advantage^  in  case  of  as 
impending  panic  or  "corner.^' 


CHAPTEB    XXI. 

CAUSES  OF   LOSS   IN  SPECUUTION 

Inadequate  Infobmation. — ^False  Inpobmation.- Defeotb 
OF  Netvs  Agencies. —Insufficiency  of  Margins.— 
Dangebs  op  Personal  Idiosyncbasies. — Opebating  in 
Season  and  out  of  Season.— Necessity  of  Intelli 
oence,  Judgment  and  Nebve. — An  Ideal  Standabd. — 
What  Makes  a  King  Among  Speculatobs  i 

AS  there  is  always  a  class  of  speculators  whose  opera- 
tions, in  the  long  ran,  leave  a  net  result  of  loss 
rather  than  profit,  it  may  not  be  amiss  if  I  state  what 
experience  has  taught  me  as  to  the  causes  of  this  want  of 
success. 

Undoubtedly,  many  who  enter  the  arena  of  speculation 
are  in   every  way  unfitted  to  take  the  risks  against  such 
wQy  opponents  as  they  must  encounter.      They  are  either 
too  ignorant  or  too  wise,  too  timid  or  too  bold,  too  pessi- 
mistic or  too  sanguine,  two  slow  or  two  hasty,  too  diffident  or 
too  conceited,  too  confiding  or  too  incredulous.      These  are 
constitutional  defects,  any  one  of  which  may  easily  cost  an 
operator  a  fortune.    And  yet  self-knowledge,  with  self -con 
control,  may  prevent  these  natural  disqualifications  from 
seriously  interfering  with  success.     There  is  no  mental  dis- 
cipline morp  severe  and  exacting  than  that  of  speculation. 
There  is  no  pursuit  in  which  a  man  can  less  afford  to  indulge 
in  whims,  or  prejudices,  or  pet  theories,  than  that  of  stak- 
ing his  money  against  the  prospective  changes  in  financial 
Talaes.     He  must  be  as  calm  and  as  impartial  as  a  judge, 
not  less  in  respect  to  the  risks  he  incurs  than  in  regard  to 
the  integrity  of  his  own  judgment.     I  should  lay  it  down  as 
the  first  rule  necessary  to  success,  that  the  judgment  be  not 
carped  by  any  natural  idiosyncrasies  ;  this  being  secured^ 
a  man  may  succeed  in  spite  of  his  constitutional  defects. 


202  CATTSKS  OF  I.OSS  IN  SPKCITI.ATION. 

Singolar  as  it  may  seem,  there  are  no  advantages  beset 
with  greater  dangers  than  information— the  one  thing  most 
largely  sought  after  and  most  highly  prized.  Very  naturally^ 
most  men  object  to  taking  a  risk  without  possessing  some 
knowledge  of  the  conditions  that  determine  the  risk ;  and 
yet  how  few  take  care  that  their  knowledge  is  adequate 
enough  or  certain  enough  for  the  formation  of  a  safe 
judgment.  In  some  cases,  knowledge  is  unattainable  and 
the  operation  must  be  a  leap  in  the  dark ;  and  in  such  in- 
stances a  man  is  unwise  to  step  in  unless  his  experience 
satisfies  him  that  he  is  uncommonly  sagacious  in  guessing. 

Many  speculators  lose  because  the  information  on  which 
they  base  their  operations  is  vimfficient ;  more  because  it 
is  false ;  and  others  because,  while  their  information  is  cor. 
rect,  they  do  riot  Inow  how  to  turii  it  to  accoimt. 

Between  one  or  other  of  these  difficulties  in  the  use  of 
information  must  be  distributed  a  very  large  proportion  of 
the  losses  incurred  in  speculation.  Incomplete  or  insuffi- 
cient information  is  especially  dangerous.  One-sided  know- 
ledge is  nowhere  so  deceiving  as  here.  A  railroad,  for 
instance,  may  report  an  increase  of  gross  earnings  which  is 
construed  as  making  its  stock  worth  two  or  three  per  cent 
more  than  its  current  price ;  but  the  improvement  may  be 
due  to  transient  special  causes,  and  the  road's  current  expen- 
ses may  be  growing  at  a  rate  which  makes  the  net  increase 
show  a  d  crease.  A  financially  embarrased  company  may 
announce  an  assessment  of  its  stockholders,  upon  which 
there  is  a  rush  to  sell  the  stock  ;  a  little  further  explanation 
shows  that  the  proceeds  of  the  assessment  will  so  improve 
the  facilities  of  the  company,  or  so  enable  it  to  reduce  itis 
fixed  charges,  as  to  make  the  stock  intrinsically  far  more 
valuable  than  it  was  before ;  this  discovery  causes  a  sharp 
advance  in  the  shares,  and  the  "  short"  sellers  have  to  cover 
their  sales  at  a  loss.  A  stock  is  bought  up  freely  at  New 
York  because  London  is  taking  large  amounts  of  it ;  a  day 
or  two  later,  the  deliveries  show  that  large  holders  connec- 


UUtGK  RISKS  ON  MANUIfACTURBD    **  POINTS."  203 

ted  with  the  management  are  unloading  on  the  foreign 
market  upon  knowledge  of  facts  damaging  to  the  prospects 
of  the  property  ;  the  late  luyors  then  rush  to  realize,  and 
pocket  a  Iors  instead  of  a  profit.  Every  day  furnishes 
now  instances  of  speculations  undertaken  on  this  incom- 
plete kind  of  information,  and  which  end  disastrously 
because  the  operators  did  not  wait  to  be  informed  on  all 
sides  of  the  case,  but  were  satisfied  to  take  a  pound  of 
assumption  with  but  an  ounce  of  fact. 

One  of  the  strongest  anomalies  of  speculation  is  in  the 
facility  with  which  men  are  induced  to  take  large  risks  on 
false  information  and  manufactured  "  points."  Considering 
the  readiness  with  which  a  numerous  class  of  '^  outside " 
operators  buy  or  sell  on  sensational  rumors,  it  is  not  sur- 
prising that  the  professional  operators  should  keep  the 
market  well  supplied  with  such  decoys ;  and  it  is  not  easy 
to  say  which  most  deserves  condemnation  -  the  heedless 
credulity  of  the  dupes,  or  the  deliberate  lies  of  the  canard- 
makers.  There  is,  however,  a  third  party  not  less  blameable 
than  either  of  the  foregoing.  I  refer  to  those  who  make  it 
a  part  of  their  business  to  circulate  false  information.  Prin- 
cipal among  these  caterers  are  the  financial  news  agencies 
and  the  morning  Wall  Street  news  sheet,  both  specially  de- 
voted to  the  speculative  interests  that  centre  at  the  Stock  Ex- 
change. The  object  of  these  agencies  is  a  useful  one  ;  but 
the  public  have  a  right  to  expe'ct  that  when  they  subscribe 
for  information  upon  which  immense  transactions  may  be 
undertaken,  the  utmost  caution,  scrutiny  and  fidelity  should 
be  exercised  in  the  procurement  and  publication  of  the  news. 
Anything  that  falls  short  of  this  is  something  worse  than  bad 
service  and  bad  faith  with  subscribers  ;  it  is  dishonest  and 
mischievous.  And  yet  it  cannot  be  denied  that  much  of  the 
so-called  news  that  reaches  the  public  through  these  instru- 
mentalities must  come  under  this  condemnation.  The 
'^points/'  the  ''puffs,"  the  alarms  and  the  canards,  put  out 
expressly  to  deceive  and  mislead,  find  a  wide  circulation 


20«  CAUSBS  OF  I.OSS  IN  SPKCUI^ATION. 

while  everybody  else  is  baying  them.  He  is  simply  nziik 
ing  himself  through  UDConsciousness  that  he  yiews  every- 
thing through  bilious  spectacles.  Equally  is  the  man  to  be 
commiserated  who,  from  a  constitutional  intoxication  of 
hope,  keeps  on  buying  and  holding  when  it  is  manifest  that 
the  country  has  passed  the  summit  of  an  era  of  prosperity 
and  is  destined  to  a  general  reaction  in  trade  and  values 
Of  course,  such  men  never  remain  long  in  Wall  Street ;  their 
pockets  are  soon  emptied,  and  they  retire  to  reflect  on  the 
folly  of  refusing  to  appreciate  and  to  follow  the  natural 
drift  of  the  conditions  that  regulate  values. 

A  minor  source  of  losses  lies  in  operating  at  times  when 
the  market  is  so  evenly  balanced  between  opposing  forces 
that  there  is  no  chance  for  making  profits.  At  such  times, 
operators  get  disgusted  at  the  sluggishness  of  the  market ; 
they  change  their  holdings  from  day  to  day,  with  no  advan- 
tage except  to  their  broker ;  and  their  monthly  statement 
shows  a  heavy  list  of  charges  for  interest  and  commissions, 
with  no  offset  of  profits.  These  intervals  of  stagnancy 
sometimes  run  for  weeks,  sometimes  for  months  ;  and  at 
such  times  a  wise  speculator  would  take  care  to  keep  out  of 
the  market  and  hold  himself  in  readiness  for  anything  that 
may  turn  up. 

It  is  necessary  to  the  avoidance  of  loss  that  the  operator 
should  maintain  an  intelligent  watch  upon  the  influenoea 
that  control  the  market.  Those  influences  are  two-fold — 
such  as  are  intrinsic  to  the  market,  and  such  as  are  external 
to  it.  Of  the  former  class  are  those  that  relate  to  the  spirit 
and  tone  of  the  market ;  the  position  and  disposition  of  the 
cliques;  the  action  of  the  large  operators  ;  the  over-loaded 
or  over-sold  state  of  the  market,  as  indicated  by  the  loan* 
ing  rates  for  stocks ;  the  influence  exerted  by  the  upward 
or  downward  movements  in  stocks  which  at  the  moment  are 
specially  active ;  the  possibility  of  closing  out  holders  on 
**  stop  orders"  or  ou  the  impairment  of  margins ;  the  unload- 
ing of  influential  cliques  and  the  covering  of  important  lineg 


AN  INSTINCTIVE  FACUI^TY  FOR  DISCERNMENT. 

of  short  sales,  &c.,  &c.  Influences  of  this  kind  are  yery 
freqnentlj  sufficient  of  themselyes  to  control  the  market  for 
a  considerable  period  in  direct  opposition  to  the  tendency 
indicated  by  external  conditions.  It .  is,  however,  no  easy 
matter  to  form  a  correct  conclusion  as  to  the  drift  resulting 
from  this  set  of  factors.  They  are  so  concealed  and  so 
changeful,  and  the  symptoms  are  so  vague,  that  it  requires 
long  experience,  added  to  unusual  sagacity,  to  determine 
what  may  be  the  tendency  resulting  from  the  complex  action 
and  counteraction  of  this  set  of  conditions.  Some  except- 
ional operators  eujoy  an  instinctive  faculty  for  weighing 
these  shadowy  indications  wdth  almost  unerring  certainty. 
Such  men  usually  care  little  about  outside  influences,  except 
so  far  as  they  may  aflect  the  market  for  the  moment.  From 
the  nature  of  the  case,  their  transactions  are  apt  to  be  brief 
ones,  and  follow  quickly  the  momentary  course  of  the  mar* 
ket  They  are  reckoned  among  the  most  sagacious  specula- 
tors, and  are  usually  very  successful.  But  their  success  is 
the  result  of  a  special  natural  gift,  and  therefore  cannot  be 
won  by  others. 

The  second  class  of  influences  above  alluded  to  as  external 
to  the  market  are  of  a  very  broad  and  varied  character. 
They  embrace  almost  everything  that  affects  the  welfare  of 
the  country.  Those,  however,  which  are  most  potent  are, 
the  state  of  the  crops ;  the  condition  of  manufacturing  indus- 
tries ;  the  state  and  propects  of  trade  ;  the  earnings  of  the 
transportation  companies ;  the  course  of  the  imports  and 
exports ;  the  attitude  of  the  foreign  markets  towards  Amer- 
ican securities ;  the  movements  of  the  precious  motals  ;  the 
condition  of  the  London  and  Continental  money  markets  ; 
the  position  of  the  New  York  banks  and  the  course  of  cur- 
rency movements ;  the  action  of  Congress,  of  the  Logisla- 
tores  and  of  the  Courts  on  matters  affecting  the  value  of 
investments ;.  the  acts  of  labor  unions  and  tho  drift  of  labor 
agitations,  and  the  course  of  political  and  social  issues. 
This  may  be  considered  a  rather  startling  list  of  topics  for 
a  man  to  keep  himself  well  informed  upon,  but  there  is  not 


CAUSES  OF  I.OSS  IN  SPECUI<ATION. 

one  of  them  which  may  not  any  day  become  a  controlling 
factor  in  the  condition  of  the  stock  market.  For  a  man, 
therefore,  who  aims  to  keep  his  knowledge  abreast  with  his 
business,  it  is  necessary  that  he  should  be  a  close  obserrer 
of  events.  Undoubtedly  few  possess  this  breadth  of  infor- 
mation, and  most  men  think  it  sufiSicient  to  get  their  knowl- 
edge as  best  they  may  when  the  events  happen.  The  mis- 
fortune in  such  cases  is,  that  those  better  informed  utilize  the 
event  while  the  others  are  "  getting  posted.**  Considering 
how  many  half -informed  or  wholly  ignorant  persons  engage 
in  speculation  with  more  or  less  success,  it  cannot  be  pre- 
tended that  to  keep  informed  on  the  foregoing  set  of  condi- 
tions is  essential  to  a  fair  degree  of  success.  But  it  must 
be  maintained  that  such  knowledge  is  of  incalculable  value 
and  that  a  man  who  has  it  is  in  a  position  to  act  with  more 
intelligence,  assurance  and  success  than  one  without  it.  To 
those  who  desire  to  turn  to  account  all  coming  changes,  and 
to  stand  always  prepared  for  the  good  or  evil  events  of  the 
future,  this  intelligent  comprehension  of  the  status  of  aU  the 
forces  that  make  or  unmake  values  is  absolutely  indispens- 
able. And  yet  it  is  one  thing  to  possess  this  information ; 
another  to  know  how  to  draw  correct  conclusions  from  it, 
and  yet  another  to  know  how  best  to  use  it  in  the  area  of 
speculation.  Failure  at  any  one  of  these  points  may  be 
fatal  to  success  and  result  in  disaster. 

I  conclude,  then,  that  for  a  man  to  be  a  thoroughly  equip- 
ped speculator,  it  is  necessary  that  he  be  possessed  of  ex- 
traordinary parts  and  attainments.  He  must  be  an  un- 
ceasing and  intelligent  observer  of  events  at  large,  and  a 
sagacious  interpreter  of  symptoms  on  the  Exchange ;  his 
judgment  must  be  sound,  not  only  as  to  existing  conditions, 
but  as  to  coming  tendencies,  and  he  must  possess  the  calm- 
ness and  nerve^to  face  unflinchingly  whatever  emergencies 
may  arise.  Whoever  enjoys  these  qualities  in  the  highest 
degree  must  be  the  King  of  Speculators.  As  to  others,  their 
rank  must  correspond  to  the  degree  of  their  conformity  to 
this  ideal  standard* 


OHAPTEB    XXII. 

VILURD  AND  HIS  SPECULATIONS, 
BSTUBK  OF   THE  BeNOWNED  SpECULATOB  TO  WaLL  StBEET. 

— ^Begallinq  the  Famous  "Blind"  Pool  in  Nobth 
ebn  Pacific.  —  How  Villabd  Captubed  Nobthebn 
Pacific— PuBsuiNO  the  Tactics  of  Old  Vandebbilt. 
Baisinq  Twelve  Million  Dollabs  on  Papeb  Cbedit  — 
Villabd  Emebges  fbom  the  *  Blind  "  Pool  a  Gbeat 
Bailboad  Magnate. — He  Inflates  His  Gbeat  Scheme 
FBOM  Nothing  to  One  Hundbed  Million  Dollabs  — 
Hbb  Unique  Methods  op  Watering  Stock  as  Oom- 

PABED   with  those  OP  GeOBGE  I.   SeNEY. 

THE  return  of  Mr.  Henry  Villard  to  Wall  Street,  after 
two  years'  absence  in  Germany,  his  native  land,  renews 
the  public  interest  in  the  career  of  that  bold  speculator. 
My  reminiscences  of  Wall  Street  affairs  would  be  incom- 
plete without  a  sketch  of  the  daring  railroad  operations  of 
this  gentleman,  which  so  fully  illustrate  some  of  the  evils 
to  which  I  have  referred  in  my  chapter  on  "  Bailroad 
Methods." 

The  culminating  point  in  the  speculative  history  of  Mr, 
Villard,  which  covered  a  period  of  five  years,  from  1879  to 
1884,  was  the  famous  blind  pool  in  Northern  Pacific. 

Instead  of  taking  up  the  events  of  his  life  in  detail,  and 
carrying  my  readers  to  this  point,  I  shall  depart  from  the 
Tisual  course  of  biography,  and  present  the  more  interesting 
facts  of  the  career  of  my  hero  at  the  beginning. 

In  his  capture  of  Northern  Pacific  he  seems  to  have 
followed  the  methods  of  the  elder  Vanderbilt  very  closely, 
^ith  the  important  exception  that  he  failed  in  the  consum- 
mation of  his  purpose.  Vanderbilt  always,  eventually,  tri- 
umphed. 

Villard  was  the  chief  agent  in  forming  the  Oregon  Bail- 
way  and  Navigation  Company,  which  was  organized  for  the 


210  vii^i^RD  ai:d  his  specui^tions. 

purpose  of  consblidatiLg  the  business  of  the  Oregon  Steam 
Navigation  Company  with  that  of  the  Oregon  Steamship 
Company,  and  for  the  purpose  of  buying,  building  and  oper 
ating  railroads,  as  stated  in  the  circular  setting  forth  the 
objects  of  the  company  The  lines  of  the  Oregon  Railway 
and  Navigation  Company  extended  from  Portland  west  to 
Wallula  Junction. 

The  value  of  this  property  was  seriously  menaced  by  the 
project  of  the  Northern  Pacific  to  extend  its  lines  west, 
with  a  terminus  at  Tacoma. 

President  Billings,  of  the  Northern  Pacific,  rejected  a 
proposition  from  Mr.  Villard  to  accommodate  the  Northern 
Pacific  by  peimitting  it  to  reach  the  Pacific  coast  over  the 
lines  of  the  Oregon  Eailway  Navigation  Company. 

It  was  at  this  juncture  that  Villard  resorted  to  the  old  Van- 
derbilt  tactics,  by  attempting  to  purchase  stock  enough  of 
the  Northern  Pacific  to  enable  him  to  control  the  property. 
For  this  purpose  lie  formed  a  biiud  pool,  in  which  Messra 
Woerishoffer,  Pullman  and  Endieott,  and  a  host  of  other 
solid  men,  were  the  original  members.  A  fund  of  $8,- 
000,000  was  subscribed  to  purchase  Northern  Pacific 
stock.  During  the  spring  of  1881  the  pool  kept  on  buying 
steadily,  and  couiinued  t-ieir  operations  uuLil  the  middle  of 
summer,  when  it  was  discovered  that  the  treasury  of  the 
pool  was  almost  exhausted  without  having  effected  its 
purpose  of  acquiring  control  of  tlie  Northern  Pacific 
property. 

Mr.  Villard  then  called  a  meeting,  explained  matters, 
proposed  to  extend  the  scope  of  the  pool's  operations,  aiid 
to  increase  its  membership.  By  showing  the  enormous 
profits  to  be  gleaned  in  the  future,  he  succeeded  in  getting 
$12,000,000  more  subscribed.  Tiiis  secured  the  control 
of  the  road,  and  in  September,  1881,  Mr.  Villard  was 
elected  President  of  Northern  Pacific. 

Villard  at  once  emerged  from  this  blind  pool  into  a  great 
railroad  magnate,  in  a  manner*  to  the  oyu  of  the  general 


A  MODERN  MONTE  CRISTO, 

pfublic,  as  miraculous  as  the  springing  forth  of  Xlinerva 
fully  armed  from  the  brain  of  Jupiter. 

The  stock  of  Northern  Pacific  advanced  rapidly  in  price, 
and  VillarJ  aud  his  friends  were  supposed  to  be  accumu- 
lating millions  with  unprecedented  celerity.  Villard  ap- 
peared to  have  realized  all  the  financial  dreams  of  Monte 
Cristo,  and  he  was  fast  looming  up  into  a  proud  and  dan- 
gerous rival  of  Gould,  Vanderbilt  and  Huntington. 

He  went  forward  with  the  building  of  the  Northern 
Pacific  road,  which  was  finished  two  years  after  his  success 
in  capturing  it  through  the  medium  of  his  blind  pool.  His 
phenomenal  success  induced  him  to  enter  largely  into  the 
extension  of  other  investments.  He  became  lavish  in  his 
personal  expenses  also,  although  he  had  formerly  been 
accustomed  to  the  closest  economy  in  his  mode  of  living, 
and  he  built  a  palace  at  Madison  Avenue  and  Fiftieth 
street. 

When  seemingly  on  the  highest  tide  of  prosperity,  Vil- 
lard suddenly  became  embarrassed,  and  when  an  accounting 
of  tlie  cost  of  finishing  the  road  was  made,  he  Avas  found  to 
be  away  behind.  There  was  a  miscalculation  of  $20,- 
000,000  somewhere.  Villard  explained  it  by  declaring  that 
the  estimate  of  the  engineers  for  finishing  the  road  was 
$20,000,000,  whereas  the  real  cost  reached  $40,000,000. 

For  the  $20,000,000  subscribed  by  the  blind  pool  the  sub- 
scribers  received  the  stock  of  the  Oregon  &  Transcontinen- 
tal. This  company  had  been  organized  to  build  branch 
lines  to  the  Northern  Pacific,  as  the  charter  of  the  latter  did 
not  pfTmit  it  to  build  such  lines. 

This  is  the  speculative  history,  in  brief,  of  Mr.  Villard 
from  the  time  he  took  hold  of  the  Oregon  &  California  Kail- 
road  up  to  the  juncture  of  his  grand  collapse.  There  were 
several  incidents,  however,  of  more  than  ordinary  interest 
in  his  railroad  history  prior  to  the  time  he  set  his  heart  upon 
Northern  Pacific.  As  a  stock-waterer  he  had,  probably,  no 
saperior,  and  was  only  equalled  by  Mr  George  I.  Seney,  in 


212  VIWfARD  AND  HIS  SPBCUI^ATIONS. 

that  important  department  of  railroad  management.  His 
methods  in  obtaining  control  of  the  Oregon  Steam  Naviga- 
tion Company  and  the  Oregon  Steamship  Company  amply 
illustrate  his  remarkable  ability  in  this  respect.  When 
Yillard  proposed  to  purchase  these  two  companies  he  had 
no  money,  but  he  had  unlimited  confidence  in  his  own 
ability.  He  asked  each  company  to  give  him  an  option 
to  run  a  year  for  $100,000.  They  agreed  to  do  this,  a^d 
Yillard  forthwith  consulted  a  number  of  capitalists,  who 
came  together  and  filed  articles  of  incorporation  of  the 
Oregon  Eailway  &  Navigation  Company,  a  consolidation  of 
the  two  companies  above-named.  When  this  company,  with 
such  a  high  sounding  name,  was  organized,  it  had  no  assets, 
and  the  prospects  of  acquiring  any  seemed  exceedingly  blue. 
The  names  of  the  incorporators  were  as  follows:  Henry 
Villard,  James  H.  Fry,  Artemus  H.  Holmes,  Christian  Bors, 
W.  H.  Starbuck  and  Charles  E.  Brotherton,  all  of  the  city 
and  State  of  New  York,  and  W.  H.  Corbett,  C.  N.  Lewisi 
J.  N.  Dolph,  Paul  Schulze  and  N.  Thielson,  all  of  Portland, 
Oregon.  The  capital*  was  nominally  six  million  dollars, 
divided  into  60,000  shares.  This  arrangement  was  made  in 
June,  1879. 

The  next  problem  to  be  solved  after  the  reorganization 
was  how  to  raise  money  to  run  the  concern. 

The  Board  of  Directors,  under  the  management  of  Mr. 
Yillard,  were  equal  to  the  occasion.  They  met  at  Portland 
a  few  days  after  the  organization  and  executed  a  mortgage 
to  the  Farmers'  Loan  and  Trust  Company  of  New  York,  and 
under  this  mortgage  issued  6,000  bonds  of  $1,000  each,  pay- 
able in  thirty  years  after  July  1, 1879,  with  interest  at  6  per 
cent. 

Mr.  Yillard  then  paid  the  $100,000  bonus  money  to  the 
companies  which  had  been  incorporated,  took  his  option, 
stock  and  bonds  and  came  East  to  negotiate  his  securities. 
It  is  said  he  presented  them  to  Jay  Gould,  who  refused  to 
touch  them,  as  he  believed  there  was  not  much  stamina  in 


<yt—  PROPERTY  OP  

NEW  YORK  CHAPTHI^ 
^"^  An«rlcaR  institute  of  Banking. 

THBRB  WBRB  MILUONS  IN  Vt.  218 

the  scheme,  and  he  wished  to  avoid  trouble  with  the  Northern 
Pacific,  which  he  plainly  saw  the  project  inyolved.  Villard 
was  more  fortunate  with  Mr.  Endicott,  Jr.,  of  Boston,  Mr. 
George  Polhnan  and  others  whom  thej  interested  in  the 
enterprise. 

The  property  of  the  two  companies,  out  of  which  the  new 
company  had  been  formed,  whose  securities  were  so  boldly 
placed  upon  the  market,  was  not  in  reality  purchased  until 
March  of  the  following  year. 

After  the  organization  was  complete,  the  visible  assets  of 
the  Oregon  Bailway  and  Navigation  Company  did  not  ex- 
ceed $3,500,000,  while  the  total  liabilities  amounted  to 
$21,000,000.     This  was  made  up  as  follows  : 

Ori^al  stock $6,000,000 

Water 8,000.000 

Water 0,000.000 

Mortgage  bonds 6,000,000 

It  will  thus  be  seen  that  there  were  seven  dollars  of  lia- 
bilities for  every  dollar  of  assets,  and  the  intrinsic  value  of 
the  stock  was  represented  by  a  minus  quantity  of  20  per 
cent.,  having  no  positive  value  at  all.  In  other  words,  it 
was  20  per  cent,  worse  than  nothing. 

In  spite  of  these  facts,  however,  Mr,  Villard  had  the  stock 
listed  at  the  Stock  Exchange,  and  through  a  carefully  pre- 
pared report,  showing  iiomense  and  unprecedented  earnings, 
he  had  the  stock  bulled  up  to  200.  It  was  when  it  reached 
this  high  figure  that  the  $9,000,000  of  water  (noted  before) 
were  thrown  in  to  prevent  it  from  becoming  top-heavy. 

This  was  the  preparatory  and  successful  process  of  water- 
ing which  preceded  the  transactions  of  Mr.  Villard  on  a  more 
magnificent  scale  in  his  manipulation  of  Northern  Pacific,  as 
described  at  the  opening  of  this  chapter.  Mr.  Villard  ex- 
celled Mr.  Seney  in  one  respect  which  is  noteworthy.  As  I 
have  shown  in  a  former  chapter,  Mr.  Seney  poured  the  wa- 
ter in  lavishly  at  the  reorganization,  and  prior  to  having  his 
properties  listed  on  the  Stock  Exchange. 

Villard  improved  upon  this  process  by  employing  Seney's 


314  VILMJtD  AND  HIS  SPECULATIONS. 

method  liberally  in  the  first  instance,  and  also  by  a  free  snd 
copioos  dilution  after  the  stocks  had  been  inflated  to  tiie 
Tery  point  of  bursting. 

There  is  probably  no  instance  in  the  whola.  histoiy  ci, 
railway  manipal:ition  iu  which  a  man  has  presented  to  the 
public,  and  with  such  amazing  success,  such  a  specious  ap- 
pearance of  possessing  solid  capital  where  so  little  existed 
in  reality. 

He  began  with  nothing  in  1879  and  succeeded  in  the  course 
of  a  year  in  possessing  himself,  by  various  adroit  methodSy 
as  described,  ot  $3,500,000  of  assets  in  railroad  seouritieB. 
With  this  as  a  basis  of  operation,  in  five  years  he  managed 
to  obtain  temporary  control  of  property  aggregatinginyalQe 
oyer  $1,000  000,000. 


CHAPTEB    XXIII, 

FERDINAND    WARD. 

Peculiab  Poweb  akd  Methods  of  the  Pbikce  of  Swind- 
leb8.~b[0w  he  duped  astute  flnan0i£b8  and  busi- 
NESS Men  of  all  Sobts,  and  Seoubed  the  Suppobt 
OF  Eminent  Statesmen  and  Leading  Bank  Offioebs, 
WHOM  HE  Bobbed  of  Millions  of  Money. --The  most 
Abtful  Dodgeb  of  Modbbn  Times. — ^Ths  Tbuth  of 
the  Swindle  Pbacticosd  upon  Oenebal  Obant  and 
HIS  Familt. 

IN  making  a  fair  estimate  of  the  part  that  Ferdinand  Ward, 
of  the  firm  of  Grant  A  Ward,  played  in  the  panic  of 
1884, 1  can  only  say  that  Ward's  methods,  taken  altogether 
in  their  conception  and  execution,  constitnted  a  huge  con- 
fidence game  He  bnilt  up  confidence  by  deceiying  a  few 
eminent  men  in  financial  and  social  circles,  who,  from  his 
iDSLnnating  and  plausible  demeanor,  were  induced  to  place 
reliance  upon  his  representations. 

His  presence  was-  magnetic,  and  his  manner  deceitfully 
nimflg^TnJi^g  He  had  the  art  of  dissembling  in  great  per- 
fection and  was  possessed  of  extraordinarily  persnadye 
powers,  without  appearing  to  have  any  selfish  object  in 
view.  So  highly  developed  in  him  were  these  social  gifts, 
through  the  power  of  cultivation,  that  he  could  convince  his 
mihappy  victims  that  he  was  actuated  with  a  single  purpose 
for  their  welfare. 

By  practicing  in  this  way  on  the  credulity  of  certain 
people,  Ward  managed  to  got  into  his  hands,  for  his  own  per- 
sonal use,  sums  of  money  aggregating  millions.  Some  of 
the  richest  financiers  became  his  victims,  chiefly  induced  by 
promises  of  high  rates  of  interest  and  large  proAti  on 
"various  ventures. 

Ward  would  ascertain  the  names  and  cireumttaiicesof  car* 


216  FERDINAND  WARD. 

tain  peoplo  who  had  large  balances  in  their  banks  and  were 
unable  to  make  satisfactory  and  paying  investments  with 
them.  He  would  bring  certain  influences  to  bear  upon 
them  to  take  their  money  out  of  the  bank  and  invest  it 
through  him  in  ^^  Government  contracts,"  which  he  said 
afforded  immense  returns,  but  were  of  a  delicate  character, 
and  required  some  secrecy  in  the  manipulation.  This  cir- 
cumstance naturally  prevented  him  from  going  into  an  ex- 
planation of  the  details  of  the  enterprise,  which  it  was  not 
necessary  for  the  investors  to  know  when  their  profits  were 
secured  through  such  a  stable  investment.  It  was  suffi- 
cient for  them  to  be  assured  that  the  returns  would  be  very 
large. 

As  an  instance  of  the  successful  manner  in  which  Ward's 
specious  pretences  worked,  I  will  relate  the  experience  of 
one  gentleman  who  deposited  $50,000  with  him,  on  the 
strength  of  these  representations — just  as  an  experiment 

This  gentleman  was  going  on  a  trip  to  Europe  and  he  left 
the  amount  stated  in  the  possession  of  Mr.  Ward  to  be  used 
to  the  best  possible  advantage  during  his  absence,  and  in- 
vested in  his  own  way. 

About  six  months  after  the  date  of  this  deposit,  the  gen- 
tleman returned  from  Europe  and  called  at  the  office  of 
Grant  &  Ward  to  learn  what  progress  had  been  made  with 
his  investment.  He  saw  Ward,  and  called  his  attention  to 
the  fact 

The  young  Napoleon  of  finance  recollected  the  appear- 
ance of  his  customer  at  a  glance,  for  he  is  admirably  de- 
veloped in  what  phrenologists  term  individuality,  and  never 
forgets  a  face,  but  in  the  immense  rush  of  his  speculative 
business  he  had  forgotten  the  circumstance  until  he  referred 
to  his  books.  He  was  but  a  few  minutes  absent  in  the  in- 
terior office  when  he  returned  and  informed  the  gentleman 
that  his  $50,000  had  been  invested  with  the  ordinary  turn  of 
luck  that  usually  accrued  under  his  management,  and  he  was 
very  happy  to  be  able  to  hand  him  ^  check  for  $260,000^ 


0N«  OP  ward's  BIGGieST  SWINDLES.  217 

after  deducting  the  ordinary  oommission,  as  the  result  of 
the  invjestment.    . 

The  man  was  overpowered  with  this  unexpected  turn  of 
lack,  and  the  enormous  profits  taxed  his  credulity  to  its  ut- 
most capacity.  This  was  a  speculative  mine  that  he  had 
never  dreamed  of,  and  instead  of  sleeping  any  that  night  he 
,  set  his  entire  mind  to  calculate  the  profits  on  $230,000  in 
the  same  ratio  that  his  $50,000  investment  had  been  trans- 
formed into  this  amount 

It  reqtdred  very  little  mathematical  knowledge  to  arrive 
at  the  conclusion  that  with  such  another  turn  of  speculative 
prosperity,  he  would,  within  the  next  six  months,  be  a  mil- 
lionaire and  have  the  original  investment  left  intact.  Then 
if  he  should  make  this  on  three  turns,  which  seemed  not  un- 
likely, when  he  should  be  present  to  look  after  his  own 
business,  he  might  pile  up  millions  by  the  dozen. 

The  mind  of  this  fortunate  speculator  being  filled  with 
such  thoughts  as  these,  he  lost  no  time  after  breakfast  in 
taking  the  train  on  the  elevated  road  and  arrived  at  Ward's 
office  before  business  had  begun.  When  Ward  arrived  he 
met  his  customer  with  a  gracious  smile,  took  the  check  in 
the  most  handsome  manner  and  made  a  note  of  it  in  his 
book. 

The  investor  had  not  very  long  to  wait  this  time  before 
he  knew  the  result  of  his  venture.  It  was  only  a  few  days 
prior  to  the  12th  of  May,  1884,  at  which  date  the  failures  of 
Grant  &  Ward  and  the  Marine  Bank  were  announced  in 
Wall  Street,  as  the  avant  eowrier  of  a  sudden  panic.  So,  the 
only  thing  that  interfered  with  the  second  check  producing 
similar  results  to  those  of  the  first,  was  the  unfortunate 
panic,  but  of  course  Mr.  Ward  could  tell  his  customer  that 
he  was  not  responsible  for  that. 

In  this  connection  an  important  financial  question 
arises.  Would  there  have  been  any  panic  had  it  not  been 
for  Ward,  Fish,  Eno  &  Co.?  However  this  may  be^  there 
is  one  thing  very  evident,  namely,  that  Mr.  Ward  must  be 


218  FERDINAND  WARD. 

accorded  the  power  of  ability  to  control  men  with,  whom  lie 
came  in  contact  in  a  remarkable  manner,  and  of  being 
able  to  get  the  best  of  them  in  all  financial  matters.  Old 
and  astute  financiers,  who  were  considered  experts  in  every 
method  of  speculation,  and  who  knew  all  the  artifices  of 
making  a  sharp  bargain,  became  helpless  in  the  mystical 
presence  of  Ward,  and  were  completely  non-plussed  by  bis 
superior  acumen  in  taking  advantage  of  every  situation  that 
offered  the  least  opportunity  of  practicing  his  peculiar 
methods  of  chicanery  and  fraud. 

Ward  seems  to  have  been  very  much  of  a  mind  reader. 
E(e  knew  when  he  passed  that  check  over  to  the  gentleman 
referred  to,  for  $250,000,  that  it  would  come  back  again,  that 
it  would  keep  burning  that  man's  pocket  while  he  kept  it 
there,  and  that  sooner  or  later  he  was  bound  to  return  it  to 
the  mysterious  place  of  its  issue.  Doubtless  this  was  not 
the  first  case  that  Ward  had  experimented  upon  in  this  way. 
He  had  evidently  made  a  regular  practice  of  it,  and  could 
calculate  the  proportion  of  his  victims  with  as  much  accur- 
acy as  tables  of  mortality  are  made  out  for  insurance  com- 
panies. There  was  no  blind  chance  about  Ferdinand's 
methods.  He  worked  according  to  a  rule,  having  calculated 
to  a  nicety  the  exceptions  that  proved  it,  and  his  success 
showed  that  he  had  not  wasted  much  time  over  stubborn 
cases. 

Ward  displayed  marvellous  tact  in  discovering,  at  a  glance, 
those  who  were  sufficiently  credulous  to  be  entrapped  into 
acquiescence  with  his  sehemes,  and  manifested  great  execu- 
tive ability  in  pouncing  upon  his  prey  at  the  proper  moment 
His  methods  of  operation  were  admirably  suited  to  his  pur- 
poses. He  s^w,  for  instance,  that  this  man  would  not  put 
the  money  in  any  other  kind  of  investment,  and  would  not 
be  likely  to  operate,  except  through  Ward  himself,  as  no 
other  man  could  be  found  anywhere  who  could  make  him* 
self  the  instrument  of  realizing  such  stupendous  returns  for 
the  money  invested. 


ward's  arts  o^  persuasion.  219 

It  is  maryellons  how  the  idea  of  large  profits,  when  pre- 
sented to  the  mind  in  a  plausible  light,  has  the  effect  of 
stifling  suspicion. 

The  specions  pretexts  of  Ward  appeared  equal  to  the  task 
of  oyercoming  the  most  obdurate  cases  of  incredulity.  So, 
it  is  not  so  singular,  after  all,  that  men  utterly  unacquainted 
with  business  methods  and  sharp  practice  in  speculation, 
were  so  easily  Tictimized  by  the  sinister  methods,  concilia- 
tory manners  and  seductive  schemes  of  this  consummate  im- 
postor. 

Ward  was  so  successful  in  his  arts  of  persuasion  that  he 
cotdd  not  only  succeed  in  getting  possession  of  all  the  avail* 
able  capital,  for  his  own  practical  use,  of  many  eminent 
financiers,  but  he  had  the  power  of  transforming  them  into 
walking  advertisements  for  the  promotion  of  his  nefarious 
designs,  and  turned  them  to  the  best  account  in  drumming 
up  business  and  customers  for  him  while  they  were  bliss- 
fully ignorant  that  they  were  all  the  time  the  subservient 
mediums  of  swindling  projects.  In  fact^  they  made  them- 
selves the  willing  instruments  of  '^roping"  in  others  for 
Ward's  purposes,  inspired  by  the  purest  motives  of  gratitude 
toward  him  as  their  confidential  broker  and  benefactor. 

In  this  way  General  Grant  and  his  sons  became  the  help- 
less victims  of  Ward's  deeply  designing  duplicity. 

People  who  have  blamed  General  Grant  fail  to  reflect  on 
the  fact  that  the  famous  soldier  and  able  tactician  was  no 
better  than  a  raw  recruit  in  the  hands  of  a  disciplined  war- 
rior when  he  was  placed  in  contact  with  Ferdinand  Ward's 
superior  financial  tactics. 

One  great  point  in  the  confidence  game  worked  on  joint 
account  between  Fish  and  Ward  was  to  obtain  men  of  well 
known  reputation  to  vouch  for  the  genuiness  of  the  enter- 
prises in  which  they  were  engaged.  This  enabled  them  to 
solidify  and  extend  their  credit.  It  was  for  this  purpose  that 
General  Grant  was  inveigled  into  signing  the  well-known 
letter  No.  2,  addressed  to  Fish,  which  has  been  the  subject 


220  FERDINAND  WARD. 

of  SO  much  criticism  and  comment.    Following  is  a  copy 
of  this  letter : 

No.  2  Wall  Street,     \ 
Boom  6,  f 

New  Tobk,  July  6, 1882. 
•  My  Dear  Mb.  Fish  : — ^In  relation  to  the  matter  of  dis- 
counts, kindly  made  by  you  for  account  of  Grant  &  Ward, 
I  would  say  uiat  I  think  the  inyestments  are  saf e^  and  I  am 
willing  that  Mr.  Ward  should  derive  what  profit  he  can  for 
the  film  that  the  use  of  my  name  and  influence  may  bring. 

Yours  very  truly, 

U.  S.  Obant. 

This  letter  was  written  in  answer  to  one  from  Jas.  D. 
Fish,  President  of  the  Marine  Bank,  saying  he  had  nego- 
tiated notes  for  the  benefit  of  Grant  &  Ward,  to  the  amount 
of  $200,000.  He  said  in  explanation:  '^ Those  notes,  as  I 
understand  it,  are  given  for  no  other  purpose  than  to  raise 
money  for  the  payment  of  grain,  &o.j  to  fill  the  Goyemmeni 
contracts." 

This  letter,  signed  by  General  Gramt  was  designated  by 
his  counsel  as  '^  only  an  ordinary  letter  in  the  course  of  bus- 
iness," and  that  is  all  it  is  whei'e  a  man  placed  confidence  in 
another  as  General  Grant  did  in  Ward  and  Fish. 

It  was  .Ward  who  wrote  the  letter,  through  the  instruction 
of  Fish,  and  got  General  Grant  to  sign  it 

In  an  interview  with  a  reporter  of  the  New  York  Warldj 
in  July  last.  Ward  explained  the  circumstances  under  which 
the  letter  was  signed,  as  follows : 

<<Do  you  know  anything  about  that  letter  addressed  to 
Mr.  Fish  and  simed  py  Gen.  Grant,  regarding  the  Govern* 
ment  contracts?"  asked  the  reporter. 

"Of  course  I  do,"  quickly  replied  Ward.  "I  made  the 
original  draft.  It  waslby  Mr.  Fish's  direction,  and  he  asked 
me  to  do  it,  suggesting  what  I  should  write.  He  had  had 
some  trouble  in  getting  Grant  &  Ward's  paper  discounted, 
for  he  attended  to  that  and  raised  millions  of  dollars.  He 
wanted  something  to  show  to  Mr.  Cox,  President  of  the 
Mechanic's  Bank,  and  others  from  whom  he  tried  to  get 
money  for  the  firm.    The  contract  business  was  the  gieat 


GRANT'S  MKMORY  UNSUU^I^D.  221 

thing,  and  he  said  if  he  only  had  something  from  the  Gen- 
eral to  show  that  he  knew  about  the  contracts,  it  would  be 
easier  for  him  to  go  to  these  men.  I  distinctly  remember 
the  circumstances  under  which  this  letter  was  prepared. 
Fish  gaye  me  an  idea  what  it  ought  to  be  like  and  I  wrote 
it.  Tnen  Mr.  Fish  went  oyer  it  and  made  some  corrections 
in  his  own  handwriting.  It  W€ts  scrawled  on  a  piece  of 
paper  that  happened  to  oe  handy  in  the  office,  and  after  he 
had  it  to  suit  him  he  handed  it  to  me  and  I  gaye  it  to  Spen- 
cer, our  cashier,  to  copy.  I  am  not  sure  but  that  I  haye  got 
that  draft  somewhere  amon^  my  papers.  I  think  I  haye 
seen  it  since  the  failure,  and  if  it  is  still  in  existence  it  can 
plainly  be  seen  that  Mr.  Fish  knew  all  about  it  before  it 
receiyed  Gen.  Grant's  signature.  The  General  was  in  the 
habit  of  signing  papers  I  asked  him  to  without  pacing  much 
attention  to  what  they  were;  So  when  I  asked  him  to  sign 
this  one  he  did  so  without  much  if  any  questioning.  I  un- 
derstood well  enough  what  Fish  wantedf  it  for,  because  he 
told  zne,  and  I  haye  no  doubt  that  Mr.  Cox  and  oiher  gentle- 
men from  whom  he  borrowed  money  saw  the  letter." 


CHAPTER    XXIV. 

HENRY  N.  SMITH. 

How  Mb.  Smith  Stabted  in  Life  and  bsoame  a  Sttoobssful 
Opbbatob — His  oonneotion  with  thb  Tweed  "Bingj" 

AND  HOW  HE  AND  THE  FaHOUS  ^^BoSS"  MADE  LUOKT 

Speculations,  thbough  the  use  op  the  City  Funds,  in 
Making  a  Tight  Money  Mabket.— On  the  Yebge  of 
Ruin  in  a  Pool  with  W.  K.  Vandebbilt.  —He  is  Con- 

TEBTED  TO  THE  BeAB  SiDE  BY  WOEBISHOFFEB,  AND  AgAIN 

Makes  Money,  but  by  Pebsistenoe  in  his  Beabish 
Policy  Ruins  himself  and  Dbags  Wm.  Heath  &  Co. 

DOWN  ALSO. 

I  HAVE  already  had  occasion  to  speak  of  Henry  N. 
Smith,  who  was  a  member  of  the  firm  of  Smith,  Qoold 
A  Martin,  bnt  I  consider  him  of  sufficient  importance, 
specnlatiyely  speaking,  for  a  separate  biographical  sketch. 

This  genUeman  is  a  native  of  Buffalo,  and  had  been  in 
the  mercantile  business  there  before  coining  to  Wall  Street. 
He  was  familiarly  known  as  the  young  man  from  Buffalo. 
He  had  then  a  decidedly  Hebrew  aspect ;  was  a  strawberry 
blonde,  with  full  beard  of  auburn  hue,  sharp;  piercing  eyes, 
and  an  air  of  self-confidence.  He  had  made  some  money  in 
Buffalo,  and  was  lucky  in  his  first  yentures  in  Wall  Street, 
being  one  of  the  few  who  emerged  from  the  panic  of  1864 
on  the  winning  side.  Smith  became  a  bold  operator,  and 
accumulated  considerable  money.  He  was  invariably  suc- 
cessful in  his  transactions  whenever  he  was  governed 
by  his  own  judgment.  The  first  disaster  overtook  him 
in  the  panic  of  1873.  Immediately  prior  to  that  he  had 
been  under  the  influence  of  Commodore  Yanderbilt,  who 
put  him  into  Western  Union,  and  the  loss  which  he  sus- 
tained by  its  terrible  fall  in  that  year  almost  ruined  hinu 
He  lost  all  his  ready  money,  being  left  without  anything 
but  his  New  York  residence  and  a  stock  farm. 


224  HENRY  N.  SMITH. 

He  did  not  lose  courage,  however,  by  this  specolatiYeblow, 
but  picked  himself  up  again  and  soon  became  quite  a  power 
in  the  Street,  and  in  spite  of  the  ups  and  downs  of  specala- 
tion  and  the  various  panics,  Smith  kept  clearly  ahead  of 
the  market  for  many  years,  and  became  a  successful  and 
comparatively  wealthy  operator. 

He  always  managed  to  ingratiate  himself  with  wealthy 
connections  in  his  various  operations,  and  was  able  to  c(^- 
mand  an  enormous  amount  of  credit  in  comparison  with  his 
actual  means. 

A  few  years  ago,  on  his  return  from  Europe,  he  met  W. 
K. Yanderbilt,  and  they  began  to  discuss  the  probable  future 
of  the  market.  Yanderbilt  had  been  a  bull  for  some  time 
previously.  They  entered  into  an  agreement  to  operate  on 
the  bull  side  together.  The  result  was  that  Yanderbilt  lost 
several  millions,  and  came  pretty  near  running  the  risk  of 
exhausting  a  large  part  of  his  then  anticipated  share  of  his 
father's  estate.    The  deal  was  disastrous  to  Smith  also. 

Soon  after  this  discomfiture,  one  day,  on  his  way  to  Long 
Branch,  Mr.  Smith  met  the  late  Mr.  Woerishoffer,  who  was 
the  great  bear  on  the  market,  while  Smith  and  Yanderbilt 
were  still  then  the  leading  bulls.  Woerishoffer  succeeded  in 
convincing  Smith  that  his  position  on  the  market  was 
wrong — that  he  had  better  make  a  clean  sweep  of  it  in  sell- 
ing out  the  stocks  which  he  held,  and  join  hands  with  him 
on  the  bear  side. 

Smith  was  impressed  with  WoerishoflFer's  advice,  earnest- 
ness and  personality. 

The  great  bear  was  also  in  a  position  to  back  up 
his  theory  by  examples  of  his  success,  the  best  and  most 
convincing  argument  that  could  possibly  be  employed, 
especially  by  a  Wall  Street  speculator.  As  the  result  of 
this  bearish  counsel.  Smith  soon  recuperated  from  the  effect 
of  his  former  losses,  and,  in  consequence,  got  bearish 
notions  so  badly  on  the  brain  that  he  was  prepared  to  swear 
by  Woerishoffer's  judgment,  and  considered  his  own  equally 


HPFSCTS  OF  SPECUI.ATIVK  FANATICISM,  228 

infallible.  He  could  see  nothing  bat  disaster  ahead  any 
more  than  his  general,  and  was  recklessly  prepared  to  follow 
whereyer  the  champion  bear  should  lead  in  the  destruction 
ofyalues.* 

Smith  seemed  to  have  the  same  abiding  faith  in  Woer- 
ishoffer  that  Ignatius  Loyola  reposed  in  the  Pope  of  his 
day.  *^If  the  Holy  Father,"  said  that  eminent  Jesuit, 
^'diould  command  me  to  row  several  leagues  into  the  ocean 
ia  an  open  boat,  in  the  midst  of  a  terrific  gale,  I  should 
straightway  obey  his  mandate  without  asking  why  or 
wherefore.'' 

Such  is  hardly  an  exaggerated  illustration  of  the  thorough 
appreciation  which  Smith  entertained  of  the  perfection  of 
Woerishoffer's  bearish  discipline,  and  the  exact  certitude  of 
his  judgment  in  all  matters  of  a  speculatiye  character.  It 
is  almost  impossible  for  a  man  who  has  had  no  experience 
in  Wall  Street  matters  to  estimate  the  extremes  of  fanaticism 
in  speculation  to  which  a  man  is  prepared  to  go  when  he  is 
seized  with  a  monomania  either  on  tho  bull  or  the  bear  side, 
bat  especially  on  the  latter. 

The  evidence  of  his  senses  counts  for  nothing,  and  the 
evidence  of  other  people's  senses,  if  possible,  goes  for  less. 
He  is  a  consistent  bull  or  bear,  as  the  case  may  be,  and  that 
settles  it.  He  is  Sir  Oracle  on  the  stock  ms^ket,  and  when 
he  speaks  let  no  dog  bark. 

This  inveterate  combination  of  egotism  and  fanaticism 
has  ruined  many  hundreds,  to  my  own  knowledge.  The  dis- 
ease is  contagious,  and  Smith  had  a  very  obstinate  form  of . 
it.  His  symptoms  were  even  worse  than  those  of  Woeri- 
shoffer,  by  whom  he  was  smitten,  a  peculiarity  that  very  often 
occurs  in  the  recipient  of  this  financial  malady. 

Like  WoerishofiSsr,  Smith  fought  the  market  with  despera- 
tion on  every  advance.  He  adhered  steadily  to  the  policy 
of  attacking  prices  on  every  rally  during  the  sunmier  of 
1886,  while  values  were  constantly  advancing,  with  occasional 
healthy  reactions.    When  his  own  money  was  exhausted  he 


22G  HKNRY  N.   SMITH. 

began  to  incur  cumulatiye  liabilities  \dth  the  house  of  Wm. 
Heath  &  Co.,  until  that  famous  firm  had  become  almost  de- 
pleted of  its  available  resources  in  replacing  margins  as  fast 
as  they  were  wiped  out  by  the  persistent  tide  of  advancing 
prices  in  speculation. 

Thus  Mr.  Smith  proceeded,  in  obedience  to  the  spirit  of 
bearish  fanaticism,  until  his  loss  became  so  great  that  he  not 
only  had  to  pay  out  all  his  own  money,  but  was  in  debt  to 
the  firm  of  Wm.  Heath  &  Co.  in  a  million  dollars,  which 
was  the  cause  of  their  failure,  and  which  crippled  or  caused 
to  collapse  several  smaller  houses. 

When  Mr.  Smith  appeared  before  the  Governing  Conunit- 
tee  of  the  Stock  Exchange  to  make  application  for  the  exten- 
sion of  time  on  his  seat,  he  made  the  following  extraordinary 
statement:  "On  January  1,  1885,1  was  worth  $1,400,000. 
I  had  $1,100,000  in  money,  and  the  balance,  $300,000,  in 
good  real  estate.  On  the  following  January  I  had  lost  tbe 
whole  amount,  and  was  $1,200,000  in  debt,  a  million  of  which 
I  owed  to  Wm.  Heath  &  Co." 

Many  people  were  surprised  that  Mr.  Smith  was  enabled 
to  obtain  such  an  enormous  and  unlimited  amount  of  credit 
in  one  house.  I  took  the  ground  at  the  time,  and  I  am  still 
of  the  same  opinion,  that  the  animal  magnetism  or  psycho- 
logic power  of  Henry  N.  Smith  over  the  elder  Heath  was 
the  real  cause  of  all  the  trouble. 

Tfix.  Heath  had  been  in  bad  health  for  some  time,  conse- 
quently he  left  the  general  management  of  the  business  to 
Mr.  McCanless,  the  head  clerk  and  general  manager  of  the 
firm,  through  whom  the  orders  of  Mr.  Heath  were  strictly 
executed. 

Mr.  Heath  being  weak  in  both  body  and  mind,  yielded  his 
opinions  to  those  of  Mr.  Smith,  by  virtue  of  the  superior 
mental  force  of  the  latter. 

In  conducting  a  large  Wall  Street  business  ft  is  necessary 
that  a  man  should  have  the  mental  stamina  to  say'' no '^ 
firmly,  and  stand  to  it.  In  order  to  be  able  to  do  this  he 
must  be  backed  up  by  a  vigorous,  healthy  physique. 


BOSS  TWSBD  AND  THK  MONEY  MARKET.  227 

The  power  to  utter  a  negatiye  in  a  determined  manner 
requires,  generally,  a  fair  degree  of  physical  force,  and  it  is 
absolutely  necessary  to  the  success  of  a  Wall  Street  broker 
that  he  should  be  able  to  do  it  when  occasion  requires.  A 
deficiency  either  in  will  power  or  physical  force  to  pronounce 
this  small  negative  distinctly  and  firmly  may  result  in  finan- 
cial ruin,  as  it  did  in  the  case  of  Wm.  Heath  &  Co. 

Henry  Nelson  Smith  made  many  successful  turns  in 
speculation  during  the  Tweed  regime,  owing  to  the  facilities 
which  the  municipal  bankers  belonging  to  that  famous 
coterie  afforded  him  for  manipulating  the  money  market. 

There  were  great  fluctuations  in  stocks  while  William 
Marcy  Tweed  was  the  power  behind  the  throne  in  the 
government  of  the  city  of  New  York.  Mr.  Tweed  contribu- 
ted largely  towards  these  fluctuations.  He  and  his  trusty 
companions  pulled  the  wires  at  the  City  Hall  while  the 
puppets  in  several  of  the  brokers'  offices  in  the  vicinity  of 
Wall  Street  danced  to  the  sweet  will  of  the  managers  in  the 
mmucipal  building. 

One  of  Tweed's  three  famous  maxims  was,  "  The  way  to 
have  power  is  to  take  it."  The  other  two  were,  "  He  is 
human,"  and  "What  are  you  going  to  do  about  it  ?"  In  con- 
formity with  the  first  maxim,  Mr.  Tweed  took  control  of  the 
city  funds,  besides  a  number  of  the  city  savings  banks,  and 
other  financial  institutions,  which  he  had  organized  through 
special  charters  from  the  Legislature,  which  he  also  owned 
during  the  period  of  his  Boss-ship. 

These  funds  were  so  managed  that  a  very  tight  squeeze 
could,  at  almost  any  time,  be  effected  in  the  money  market. 
The  city  funds  on  hand  were,  at  that  time,  usually  about 
from  six  to  eight  millions  of  dollars,  and  were  deposited  in 
the  banking  institutions  of  the  *'  Boss."  They  were  osten- 
sibly under  the  control  of  the  City  Chamberlain,  who  was 
under  the  control  of  Tweed. 

Henry  N.  Smith  and  a  few  other  favorite  members  of  the 
syndicate  would  draw  their  balances  from  these  banks, 


228  HENKY  N.   SMITH. 

making  money  scarce  to  the  general  public,  and  the  money 
market  would  su£fer  a  sudden  squeeze,  and  consequently  the 
stock  market  would  break,  sometimes  with  such  rapidity^  as 
to  produce  disastrous  results  to  a  number  of  brokers,  bnsi* 
ness  houses  and  other  financial  concerns  outside  the  Tweed 
Bing. 

On  one  of  these  occasions  Mr.  Smith  drove  up  to  the 
Tenth  National  Bank,  the  Black  Friday  ring  institution, 
in  a  cab,  and  drew  his  balance  therefrom,  amounting  to 
$4,100,000.  He  took  it  home  and  kept  it  there  several 
days  under  lock  and  key.  In  the  meantime  Mr.  Tweed 
and  his  companions  withdrew  from  circulation  the  greater 
portion  of  the  amount  under  their  immediate  control, 
making  a  tie-up,  on  the  whole,  of  nearly  twenty  millions 
of  dollars.  At  that  time  this  was  an  amount  sufficient 
to  make  a  very  stringent  money  market,  and  cause  Wall 
Street  operators  to  feel  very  uncomfortable.  It  was  then 
a  mighty  power  to  be  wielded  by  a  few  unscrupuloos 
men.  At  that  time  Mr.  Smith  considered  himself  worth  at 
least  five  million  dollars.  He  lost  most  of  this  in  the  panic 
of  1873,  largely  in  Western  Union  stock,  as  above  stated, 
into  which  Commodore  Vanderbilt  had  kindly  put  him. 

I  have  referred  to  the  prominent  part  which  Mr.  Smith 
played  in  the  great  speculative  drama  of  Black  Friday,  in 
the  scenes  and  incidents  of  my  chapter  on  that  ever-to-be- 
remembered  day  in  Wall  Street. 

I  shall,  in  another  chapter,  briefly  review  some  of  the 
methods  to  which  the  Tweed  Bing  resorted  to  make  specula- 
tion and  politics  play  into  each  other's  hands,  and  show 
how  a  bold  attempt  was  made  to  add  the  control  of  tha 
National  Treasury  to  that  of  New  York. 


CHAPTEB    XXV. 

KEENE'S  CAREER. 

Se  Stabts  IK  Spsgitlation  as  a  California  Bboeieb. — 
A  LuoKx  Hit  In  a  Mining  Stock  Puts  Him  on  the  Road 

TO  BS  A    MiLLIONAIBE.— His   SPECULATIVE    EnOOUNTEB 

with  the  Bonanza  Kings. — He  Makes  Foub  Millions, 
Stabts  fob  Eubope  and  Stops  at  Wall  Street, 
Whebe  He  Fobms  an  Alliance  With  (Jould,  Who  . 
"Euchbes"  Him  and  Othebs.— SelovebDbops  Gould 
in  an  Abba  Way. — ^Keene  Goes  Alone  and  Adds  Nine 
Millions  Mobe  to  His  Fortune. — He  Then  Speculates 

BeCKLESSLT  in  EvEBYTHING.  -  SUFFEBS  A  SUDDEN  Re- 
YEBSAL   AND  GeTS  SwAMPED. — ^OVEBWHELMING  DiSASTEB 

IN  A  Beab  Campaign,  Led  by  Gould  and  Cammack,  in 
Which  Keene  Loses  Seven  Millions.  — HisDespebate 
Attempts  to  Becoveb  a  Pabt  Entail  Fubtheb  Losses, 
AND  He  Appboaohes  the  End  of  His  Thibteen  Mil- 
lions.—His  Pbincely  Libebality  and  Social  Rela- 
tions WITH  Sam  Wabd. 

r\NE  of  the  most  remarkable  up-and-down  lives  known  to 
V^  Wall  Street  is  that  of  James  R.  Eeene.  His  rise  and 
fall  are  both  of  recent  date. 

Mr.  Keene  is  of  English  parentage,  and  was  born  in 
London,  abont  48  years  ago.  He  came  to  this  conntrj  at 
the  age  of  17,  lived  in  the  South  and  studied  law  there.  He 
removed  to  San  Francigco  in  1863,  and  became  well  informed 
in  mining  matters  through  several  mining  cases  that  were 
put  into  his  hands  while  practising  at  the  bar  in  that  city. 
I  am  told  he  was  also  connected  with  a  Western  newspaper 
for  some  time.  He  caught  the  speculative  fever  shortly  after 
his  arrival  in  California,  and,  as  it  seems,  abandoned  both 
law  and  journalism  to  become  a  broker. 

Keene  had  hard  work  for  some  time  to  make  both  ends 
meety  and  his  struggle  for    existence  in  the  wild  West 


280  KBKNE'S  CAREKK. 

made  serious  inroads  on  his  health.  His  physician  told 
him  he  must  give  up  work,  and  advised  him  to  take  a  long 
sea  voyage  if  he  intended  to  prolong  his  life.  Acting  on 
this  advice,  he  secured  his  passage  to  the  East.  This  was  the 
turning  point  in  both  his  health  and  fortune. 

Prior  to  his  departure,  Mr.  Eeene  was  urged  to  invest 
a  few  hundred  dollars  in  a  mining  stock  then  selling 
very  low.  The  length  of  his  journey  and  the  change  of 
scene  caused  him  almost  to  forget  about  his  investment,  and 
the  methods  of  communication  between  the  far  West  and 
the  far  East  in  those  days  were  so  very  slow  that  he  had 
hardly  any  chance  of  being  informed  of  his  lucky  venture 
until  his  return.  As  an  illustration  of  this  slow  transit  of 
news  at  that  time,  it  maybe  stated  that  gold  was  discovered 
January  19, 1848,  but  the  news  did  not  reach  the  Eastern 
States  until  the  following  December.  It  was  authoritatively 
announced  in  the  President's  annual  message,  and  created 
great  excitement.  Mr.  Alfred  Bobinson,  with  about  tweniy 
companions,  were  the  first  to  leave  New  York  for  the  scene 
of  the  new  El  Dorado,  on  the  bark  "  John  Benton." 

After  nearly  a  year's  absence  Keene  was  surprised  to  find, 
on  his  return,  that  mining  stocks  had  taken  a  prodigious 
bound  upward  and  carried  the  one  in  which  he  had  invested 
with  them.  The  mine  had  turned  out  to  be  a  veritable 
bonanza,  and  the  stock  which  had  cost  him  only  a  few 
hundred  dollars  was  then  worth  over  $200,000. 

Had  Mr.  Keene's  health  not  required  his  absence  from 
the  scene  of  speculation  the  chances  are  that  he  would  have 
disposed  of  his  stock  as  soon  as  it  should  have  realized  a 
few  thousand  dollars. 

This  was  a  wonderful  realization  for  one  who  had  been 
comparatively  poor,  and  was  sufficient  to  turn  the  head  of 
any  ordinary  man ;  but  it  only  made  Keene  more  anxious 
for  greater  success,  which  he  set  himself  diligently  to 
achieve. 

The  speculative  craze  was  then  intense  and  epidemic. 


H^  NKTS  MII.I.IONS  ON  THK   ** SHORT"   SIDE.  281 

W&aters  and  chambermaids  bloomed  into  millionaires  with 
the  rapidity  of  mushroom  growth  Mr.  Kcene  secured  a 
seat  in  the  Board,  and  began  to  do  an  immense  business. 

Flood,  Mackaj,  Fair  and  O'Brien  were  then  the  prominent 
operators.  The  speculative  contagion  spread  rapidly  over 
the  coast,  and  soon  imparted  its  influence  to  the  entire  con- 
tinent. Keene's  further  investments  were  crowned  with 
similar  success  to  that  of  his  first  venture,  and  even  in  a 
greater  ratio  of  profit. 

Seeing  the  great  and  rapid  advance  in  the  stocks  of  the 
Comstock  mines,  he  naturally  reasoned,  like  old  Daniel 
I^ew,  that  what  had  gone  up  so  high  and  so  fast  was  bound 
to  come  down.  There  were  but  few  people  on  the  coast  at 
that  time,  however,  in  a  mood  to  reason  so  soberly,  and  it 
required  more  than  ordinary  nerve  to  make  the  experiment 
of  selling  "  short."  Mr.  Keene,  however,  had  the  courage 
of  his  convictions,  and  made  an  onslaught  upon  the  market. 

There  was  a  strong  contingent  to  oppose  him,  for  the 
"wealthy  syndicate  just  named,  with  the  Bank  of  California 
behind  them,  were  his  bitter  foes,  and  they  did  their  best 
to  crush  him.  In  spite  of  their  efforts,  however,  the  market 
began  to  yield  under  the  pressure  of  Keene's  "  short "  sales. 
In  a  little  while  the  list  gave  way  and  stocks  began  to  topple 
from  their  dizzy  eminence,  even  quicker  than  they  had 
dimbed  to  that  unprecedented  height.  Eeene  netted 
millions  in  their  fall.  He  cleared  two  and  a-half  millions 
in  the  Belcher  and  Crown  Point  mines,  and  over  half  a 
million  in  Ophir. 

So,  in  a  few  years,  this  poor  lawyer,  journalist,  curb- 
stone broker  and  invalid,  found  himself  the  happy  possessor 
of  millions,  his  name  covered  with  speculative  glory,  and  the 
fame  of  his  fabulous  fortune  heralded  in  every  city,  town, 
hamlet  and  mining  camp  between  the  two  oceans. 

Eeene  was  still  found  on  the  right  side  of  the  market 
when  the  great  bubble  burst,  when  the  Bank  of  California 
went  nnder^  and  its  president,   Mr.   Balston,  committed 


232  K^EN^'S  CAREER. 

snicide  while  pretending  to  take  a  bath  in  the  Paeifie 
Ocean. 

In  1877  Mr.  Eeene  started  on  a  voyage  for  Europe  for  the 
good  of  his  health,  and  made  a  friendly  call  in  Wall  Street 
to  see  how  business  was  transacted  there.  He  found  the 
speculative  attraction  irresistible.  Mahomet  had  come  to 
the  mountain  and  was  held  by  its  magnetic  power. 

Although  Mr.  Eeene  had  been  a  grand  success  in  Califor- 
nia, he  had  a  good  deal  to  learn  when  he  came  to  Wall 
Street.  He  soon  discovered  that  California  tacidcs  would 
not  do  here.  He  began  to  sell  ^^  short,"  but  found  the  market 
failed  to  yield  to  the  touch  of  his  bearish  wand  as  it  had 
done  in  Saa  Francisco.  When  he  sold  ten  thousand  shares 
of  a  certain  stock  the  decline^  instead  of  being  a  slump,  as 
he  expected,  was  only  an  insignificant  fraction,  and  the 
market  soon  reacted.  Mr.  Eeene  quickly  discovered  that 
he  was  throwing  water  into  a  sieve,  and  stopped  sacrificing 
his  California  gold  so  lavishly. 

A  pool  was.  then  formed  by  Mr.  Eeene  and  Jay 
Gould  to  put  down  Western  Union.  Eeene  and  Selover 
sold  the  stock  in  large  blocks,  but  it  was  absorbed  by  some 
pitrty  or  parties  unknown  as  fast  as  it  was  thrown  out.  It 
was  gravely  suspected  that  Mr.  Gould  was  the  wicked  part* 
ner  who  was  playing  this  absorbing  game  behind  the  scenes. 
Major  Selover  brooded  over  the  matter  so  seriously  that  his 
suspicions  began  to  take  tangible  form  and  '^  body  them- 
selves forth''  in  violence. 

The  Major  and  Eeene  met  one  morning  at  the  rear  en- 
trance of  the  Stock  Exchange,  in  New  street^  and  inter- 
changed intelligent  glances  on  the  subject,  after  the  fashion 
oi  those  passed  between  Bill  Nye  and  his  companion  at  the 
card  table  with  the  Heathen  Chinee.  Selover  walked  down 
the  street  with  blood  in  his  eye,  and  meeting  Mr.  Gould  on 
the  corner  of  New  street  and  Exchange  Place,  caught 
him  up  by  the  collar  of  the  coat  and  a  part  of  his  pants  and 
dropped  him  in  the  area  way  of  a  barber's  shop. 


HIS  I.UCKY  VENTURES  IN  NEW  YORK.  283 

The  little  man  promptly  picked  himself  up,  went  quietly 
to  his  office,  and  made  a  transaction  by  which  Selover  lost 
$16,000  more.     This  was  his  method  of  retaliation. 

Mr.  Eeene  next  went  into  the  Atlantic  and  Pacific  Tele- 
graph pool,  and  was  again  fortunate.  It  has  been  frequently 
asserted  that  he  lost  heavily  in  this  deal,  but  I  have  it  on 
good  authority  that  he  came  out  ahead.  In  the  deal  with 
Gould  in  Western  Union,  he  and  Gould  netted  on  joint  ac- 
count $1,300,000.  It  is  popularly  believed  that  Gould 
"euchred  "  Keene  in  this  pool,  but  these  are  the  bare  facts. 

Eeene  looked  over  the  speculative  field,  and  found  that 
there  had  been  great  depreciation  in  values  prevailing 
here  since  the  panic  of  1873.  He  had  arrived  in  the  nick  of 
time  to  take  advantage  of  the  situation.  He  was  backed  by 
four  millions  of  money,  and  the  few  losses  which  he  at  first 
sustained  were  not  felt  by  him,  and  only  seemed  to  initiate 
him  properly. 

This  new  blood  was  just  what  Wall  Street  then  wanted 
to  put  the  wheels  of  speculation  in  motion.  Mr.  Keene 
informed  himself  about  the  principal  stocks  dealt  in  at  the 
Exchange.  He  did  so  with  remarkable  rapidity.  They 
were  all  down  to  panic  prices,  and  seeing  that  most  of  them 
were  intrinsically  cheap,  he  bought  heavily.  Soon  the  turn 
came  which  resulted  in  the  high  tide  of  speculation  which 
continued  with  but  slight  reactions  all  through  1879-80. 

The  advance  was  immense,  as  can  be  seen  in  the  tabular 
statement  at  the  end  of  this  book,  and  the  profits  were  enor- 
mous. 

Eeene's  millions  were  doubled  and  trebled.  He  must  have 
felt  himself  a  modern  Croesus. 

Fully  nine  millions  were  added  to  the  four  which  he 
brought  from  California.  He  stood  in  the  centre  of  that 
great  pile,  figurately  speaking,  the  cynosuro  of  all  eyes  from 
Haine  to  California,  and  his  fame  was  noised  abroad  in 
Borope. 

Gould  and  other  old  speculators  began  to  grow  green  with 


284  kkkne's  career* 

envy  at  Keene's  nnprecedented  success.  He  seemed  likely 
to  exceed  the  wildest  dreams  that  ever  the  avarice  of  Monte 
Gristo  or  Daniel  Drew  had  conjured  up,  and  with  him 
the  imaginary  profits  of  Col.  Sellers  had  become  material 
realities.  His  investments  were  nearly  all  in  good,  reliable 
securities.  No  dubious  paper  acceptances  nor  rotten  rail- 
road items  were  mixed  up  with  his  tangible  fortoDe, 
which  was  without  parallel  in  Wall  Street  for  its  size  and 
rapidity  of  accumulation. 

The  history  of  speculation  was  ransacked  in  vain  for  an 
illustration  of  such  amazing  success  in  so  short  a  period. 
But  here,  I  regret  to  say,  this  marvellous  prosperity  ends. 

In  an  evil  hour  Mr.  Eeene  was  induced  to  spread  himself 
out  all  over  creation,  while  he  still  retained  his  immense 
interest  in  stocks.  He  was  so  flushed  with  successive  yie- 
tories  that  he  began  to  regard  failure  impossible,  and 
thought  he  was  a  man  of  destiny  in  speculation,  such  as 
Kapoleon  considered  himself  in  war.  He  speculated  in 
everything  that  came  along — ^in  wheat^  lard,  opium  and  fast 
horses. 

Eeene's  attempt  to  get  a  corner  in  all  the  grain  in  the 
country,  however,  was  a  signal  failure.  The  very  week  that 
Foxhall  won  the  Grand  Prix  in  Paris  he  himself  was  sadlj 
beaten  in  the  speculative  race  by  the  steady  going  farmers 
of  the  West^  who  sent  their  wheat  to  market  quicker  than  he 
could  purchase  it  with  his  thirteen  million  dollars,  and  all 
the  credit  which  that  implied. 

All  of  a  sudden,  reversal  in  the  tide  of  speculation  set  in. 
Mr.  Cammack  was  quick  to  perceive  that  Mr.  Keene  was  ex 
tending  his  lines  and  his  ventures.  He  had  a  conversation 
with  Mr.  Gould.  They  became  convinced  that  the  Calif orn- 
ian  must  soon  be  obliged  to  leave  some  of  his  enterprises  in 
a  weak  and  unguarded  position.  It  was  impossible  that  he 
could  take  care  of  them  all.  These  two  champion  bears 
united  their  e£fbrts  to  upset  the  market^  and  each  daj 
brought  additional  force  to  their  aid.    By  dint  of  persever 


CAUSES  OF  HIS  SUDDEN  COU^APSE.  235 

anoe  their  efforts  commenced  to  bear  f  mit,  and  it  was  ap- 
parent that  they  would  soon  be  rewarded  with  success.  The 
bears  began  to  muliiply  while  the  bulls  diminished,  and  the 
remnant  of  the  latter  that  were  left  were  anything  but  ram- 
pant at  that  time 

The  bankers  became  timid.  The  brokers  were  inspired  with 
the  same  spirit  and  were  still  calling  out  for  more  margin. 
Loans  were  called  in  as  a  part  of  the  programme  of  a  bear 
campaign,  and  all  the  machinery  of  depressson  was  put  in 
actiye  motion.  Prices  were  torn  to  pieces.  Properties  that 
had  been  considered  good  as  solid  investments  for  a  long 
torn,  were  mercilessly  raided,  and  some  of  them  shattered 
to  fragments.  In  fact,  there  was  a  regular  panic.  In  the 
general  slaughter,  many  of  the  brokers  sold  Mr.  Keene's 
stocks  out.  His  wheat  was  also  sold  in  immense  quantities 
at  great  sacrifice,  and  his  load  was  lightened  all  around,  even 
more  quickly  than  it  had  been  heaped  up. 

His  losses  are  said  to  have  amounted  to  seven  millions  of 
dollars  at  this  time. 

The  manly  efforts  of  Mr.  Keene  to  recover  these  losses, 
as  is  usually  the  case  in  such  instances,  only  resulted 
in  farther  misfortune.  Disaster  followed  disaster,  and  as 
he  became  desperate  in  his  efforts  to  get  back  something, 
his  losses  became  constantly  greater,  until  nearly  the  whole 
of  his  immense  pile  was  buried  in  fruitless  efforts  to  recover 
a  portion  of  it. 

Great  sympathy  has  been  felt  in  Wall  Street  for  Eeene 
since  his  failure,  for  the  Street  had  never  before  found  such 
a  liberal  man.  By  general  consent  he  decidedly  took  the 
palm  in  this  respect,  not  only  from  all  his  speculative  con- 
temporaries, but  the  archives  of  Wall  Street  since  the  days 
of  the  £rst  meetings  of  the  brokers  in  the  Tontine  Coffee 
House,  opposite  the  sycamore  tree,  early  in  the  century,  can 
furnish  no  such  parallel  of  princely  liberality  as  that  of 
James  ^.  Keene  during  the  period  of  his  matchless  pros- 
peri^. 


^6  KBENE^S  CARJ^IECIL 

The  parasites  tliat  waxed  fat  on  his  bounty  and  bnsiness 
are  numerons.  At  least  a  score  of  Wall  Street  brokers  were 
raised  from  penury  to  wealth  by  the  commissions  which  they 
made  out  of  him.  Many  of  them  are  to- day  living  in  luxury 
who  started  with  a  desk  and  a  few  plain  office  chairs  to  do 
business  for  the  California  millionaire,  and  now  he  is  com- 
paratiyely  poor^  and  thrown  on  the  slender  resources  of  his 
wife. 

Eeene  arose  from  nil  to  be  worth  thirteen  millions.  He 
is  DOW  back  where  he  started. 

A  full  and  correct  history  of  Keene's  beneficences  would 
fill  this  Yolume,  and  however  much  I  admire  him,  I  cannot 
afford  to  give  him  so  much  space. 

I  shall  relate  one  remarkable  instance  of  his  unbounded 
generosity,  however,  as  the  object  has  been  so  oniversallf 
known,  and  was  himself  such  a  popular  society  man. 

Long  prior  to  Mr.  Keene's  advent  in  Wall  Street,  Sam 
Ward  had  been  a  conspicuous  figure  in  Washington  and 
Wall  Street,  and  had  acquired  a  society  reputation  in 
Europe. 

This  gentleman  was  originally  forced  into  prominence  by 
his  marriage  with  Miss  Astor^ 

Mr.  Ward  had  changed  from  one  thing  to  another  until 
finally  he  took  up  his  abode  in  Washington,  and  became  a 
lobbyist. 

When  Mr.  Keene  came  to  New  York  with  his  four  mil- 
lions of  dollars,  which  he  had  made  when  the  majority  of 
New  York  investors  had  been  on  the  losing  side,  dropping 
their  money  almost  as  fast  as  water  runs  down  hill,  through 
the  unprecedented  shrinkage  in  values,  there  was  a  wide 
field  for  profitable  investment.  This  shrinkage  had  been 
going  on  from  the  panic  of  1873,  step  by  step  downward 
until  1878,  when  society  had  reached  a  stratum  by  dint  of 
levelling  down  that  placed  almost  everybody  upon  aa 
equality.  Property,  in  many  instances,  became  a  serious 
encumbrance  instead  of  a  benefit,  and  many  were  glad  to  he 


'  SAM  ward's  dbkp  aivtachmbnt.  287 

rid  of  the  responsibility  of  their  holdings  for  what  was  suffi- 
cient to  settle  the  mortgage.  Eyerybody  felt  poor,  and  was 
really  bo,  with  a  few  fortunate  exceptions. 

Mr.  Eeene  arrived  here  at  the  most  fortunate  moment  for 
investment.  Everything  was  down  to  bed-rock  prices.  He, 
therefore,  became  an  object  of  actual  curiosity,  and  was  as 
much  of  a  lion  in  our  midst  as  he  had  been  in  San  Francisco. 

He  was  not  only  the  favorite  of  fortune,  but  a  favorite  of 
society,  which  generally  go  together  with  curious  inconsist- 
ency in  our  social  democracy. 

One  of  the  first  acquaintances  Mr.  Keene  made  on  his 
arrival  was  this  great  society  man,  the  celebrated  Sam 
Ward,  who  at  once  recognized  his  social  worth,  not  only  in 
dollars  and  cents,  but  in  considerable  liabilities,  genuine 
representatives  of  dollars  and  cents.  The  more  tangibly  he 
realized  this  fact  the  more  tenacious  was  his  attachment^ 
until  Mr.  Keene  found  Mr.  Ward  the  very  beau  ideal  of 
Scriptural  fraternity,  namely,  ^^  a  friend  that  sticketh  closer 
than  a  brother." 

Wherever  Keene  appeared,  though  apparently  alone,  it 
was  safe  to  bet  that  Ward's  shadow  could  soon  be  seen. 

It  is  said  of  Seneca,  when  he  observed  a  house  falling, 
and  nobody  near  it,  that  he  asked :  **  Where  is  the  woman  ?  '* 
So  Keene's  presence  naturally  suggested  Ward  to  the  mental 
vision  of  every  Wall  Street  man  and  every  sporting  man. 

Whether  it  was  up- town  or  down- town,  at  Newport,  or  in 
London,  at  the  Derby,  or  the  Grand  Prix,  it  was  all  the 
same,  where  Keene  was,  there  Ward  soon  appeared  with  the 
promptitude  of  the  genius  that  stood  before  Aladdin  when  he 
touched  his  wonderful  lamp  or  rubbed  his  magic  ring. 

This  self-sacrificing  friendship  and  ardent  devotion  on 
the  part  of  Mr.  Ward  was  recognized  by  Mr.  Keene  in  the 
most  tangible  manner.  He  made  an  investment  for  his  pro- 
tege, of  $50,000  in  solid  securities,  placing  them  in  the  hands 
of  trustees,  so  that  his  ward  received  the  income  therefrom 
of  three  thousand  dollars,  as  an  annuity,  for  life. 


2C8  KBKim'S  CAH^]E(R. 

Mr.  Keene  bestowed  nameroas  benefits  ou  other  newij 
made  acquaintances,  of  which  this  is  a  fair  Bample. 

A  Pacific  coast  biographer  draws  the  following  graphic 
sketch  of  Keene,  some  time  after  his  departure  from  Call* 
fornia,  which  is  curious  reading  in  the  light  of  the  events 
which  I  have  related : 

"No  series  of  sketches  of  men,  prominently  identified  with 
the  stock  interests  of  the  Pacific  coast,  would  be  complete 
without  a  pen  portrait  of  James  R  Keene,  the  free  lanoe 
operator  of  the  San  Francisco  stock  marked  who  dared  to 
beard  the  Bonanza  Kings  in  their  den,  and  came  off  victor- 
ious with  many  shekels  of  gold  and  silver.  Mr.  Keene  is 
no  longer  with  us.  Some  time  since,  after  having  realized 
largely  on  his  stock  ventures,  he  concluded  to  take  a  trip 
East,  to  be  extended  to  Europe,  unless  on  tlie  Atlantic  sea- 
shore he  regained  the  health  which  too  active  exertions  on 
the  Pacific  had  impaired.  And  so  he  went  with  his  faioily. 
Those  who  bade  him  God^speed  expected  to  see  him  return 
within  a  few  months,  certainly  within  a  year,  with  recovered 
health,  new  ambitions,  new  conquests  to  miake.  But  he 
comes  not.  New  York  has  presented  more  attractions  than 
his  old  love,  San  Francisco.  Bailroad  stocks,  Jay  Gould, 
Sam  Ward,  Eufus  Hatch,  Long  Branch,  Trenor  W.  Park, 
Newport,  have  been  too  many  attractions  for  Jim  Keene. 
He  lell  into  the  New  York  market  as  easily  as  any  man 
generally  falls  among  thieves — but  he  scem?^  to  have  got  the 
best  of  the  thieves  in  every  issue.  When  it  was  rumored 
that  Keene  contemplated  makinj;  Wall  Street  his  head* 
quarters,  his  old  San  Francisco  friends  genwally  wrote  out 
their  calendars,  and  figured  up  when  ^  Jim'  would  be  back, 
bursted  out  and  out,  looking  for  a  job.  A  few  who  had 
abiding  faith  in  Keene,  who  knew  his  pluck,  who  had  gauged 
his  capacities,  who  had  measured  his  horse  ^vense,  consulted 
their  calendars  and  said :  *  Jim  is  gone  I  He  never  will  come 
back  to  couch  his  lance  in  such  a  narrow  field  as  ours.  New 
York  is  big,  Wall  Street  is  big — ^just  about  the  size  of  insti 
tutions  that  Keene  wants  to  tackle,'  The  few  were  right. 
Keene  hasn't  come  back  to  look  for  a  job.  He  has  tried 
conclusions  with  the  smartest  of  the  Wall  Street  operators, 
and,  novice  that  he  was,  came  out  triumphant.  The  Cali- 
fornia goose  that  was  to  be  plucked  wasn't  plucked.  Even 
Jay  Gould)  with  all  his  shrewdness,  gave  it  up  aa  a  bad  job; 


MIGHT  HAV«  MAD«  T«N  MII«UONS.  289 

and  Yanderbilt  condescends  to  confer  with  Keene  on  mo- 
mentona  occasions. 

''Keene  started  in  his  career  as  a  stock  operator  years  ago 
in  San  Francisco.  He  first  was  conspicuous  as  an  impolsive, 
dare-devil  sort  of  a  street  broker,  acting  for  big  firms,  with 
an  occasional  dash  for  liberty  and  himself.  Gradually  he 
worked  his  way  from  steerage  to  cabin,  from  the  private's 
ranks  to  the  position  of  the  heutenant  of  the  watch,  then  to 
officer  of  the  day,  and  finally,  boss  of  the  stock  concern.  No 
man  in  the  stock  market  exercised  so  much  influence  as  Mr. 
Keene.  He  had  hosts  of  friends,  friends  whom  he  grappled 
with  hooks  of  steel,  ready  to  swear  by  him  on  any  and  every 
occasion.  Generous  to  a  fault,  brusque  in  manner  at  times, 
but  with  the  heart  of  a  woman,  ready  to  melt  at  a  moment's 
notice,  o|>en-handed  and  open-hearted  to  the  appeal  of  even 
an  acquaintance,  no  wonder  that  Jim  Keene  was  the  ideal 
of  the  market." 

It  is  not  generally  known  that  Keene  was  chiefly  instru- 
mental in  rehabilitating  the  Bank  of  California  after  the 
death  of  Balston.  He  raised  a  large  subscription  in  the 
Stock  Board,  and  got  the  Hon.  WiUiam  Sharon,  D.  O.  Mills 
and  ''Lucky"  Baldwin  to  subscribe  a  million  each,  and  he 
put  in  a  million  himself.  The  bank  was  thus  enabled  to  meet 
all  immediate  demands,  and  a  threatened  panic  was  averted. 

At  the  time  of  Keene's  failure  he  was  chief  of  a  syndicate 
which  had  purchased  25,000,000  bushels  of  wheat,  which 
would  soon  have  netted  many  million  dollars  of  profit,  if  it 
had  been  firmly  held,  but  one  or  two  of  his  partners  in  the 
pool  became  timid  and  sold  out.  The  syndicate  went  to 
pieces,  and  both  profits  and  capital  vanished.  He  laid  his 
misfortune  mainly  to  the  newspapers  which  raised  such  a 
universal  cry  about  the  immense  '^  corner  "  that  was  being 
manipulated  in  wheat,  threatening  a  famine  in  the  great  sta- 
ple of  human  life. 

Keene  was  next  shaken  out  of  his  stocks.  This  was  done 
chiefly  by  an  ably  concocted  scheme  of  the  bears,  and  he 
had  the  mortification  of  seeing  the  stocks  which  he  had 
held  advance  within  a  few  months'  time  to  a  point  that 
would  have  enabled  him  to  realize  ten  million  dollars,  if  he 
had  been  able  to  hold  them. 


CHAPTEE    XXVI. 

OUR   RAILROAD   METHODS. 

Decepttvb  Financiebing. — Oveb-Capitalization,— Stock 
*  Watering.*' —  Financial  Beconstructions.  —  Losses 
TO  the  Public. — Pbopits  op  Constbuctobs. — BadKepu- 
tation  op  oub  Bailboad  Securities.  —  Unjust  and 
Danqebous  Dibtbibution  op  the  Public  Wealth. 

THE  following  chapter,  on  the  subject  of  ''  Our  Bailroad 
Methods,'^  was  delivered  by  me  as  a  Fourth  of  July  ad- 
dress at  Mr.  H,  0.  Bowen's  Annual  Symposium  atWoodstock, 
Conn.,  to  an  assemblage  of  over  3,000  people.  It  was  so 
favorably  received  by  the  press  and  the  public  in  general, 
that  I  have  been  encouraged  to  publish  it  in  this  book  with- 
out any  material  changes : 

^^In  the  whole  range  of  our  law-making  there  is  no  one 
branch  in  which  there  has  been  such  an  utter  lack  of  judg- 
ment, foresight  and  just  regard  for  the  rights  of  the  citizen, 
as  in  the  legislation  provided  for  our  railroads  and  railroad 
companies.  For  the  ipost  part,  the  statutes  relating  to  this 
class  of  corporations  are  a  set  of  general  enactments,  loose- 
ly defining  the  large  powers  granted  to  the  incorporators, 
comparatively  silent  on  the  duties  and  obligations  of  the 
companies  to  the  public,  and  conferring  upon  them  a  virtual 
carte  blanehe  as  to  their  methods  of  finance  and  of  conduct- 
ing their  business. 

In  a  country  whose  products  are  mainly  bulky,  and  have 
to  be  carried  to  markets  hundreds  or  thousands  of  miles 
distant,  it  is  of  the  first  moment  that  its  railroads  should  be 
built  with  the  strictest  economy  and  on  the  lowest  possible 
capitalization.  The  low  cost  of  land  and  the  cheapness  of 
material  for  road-bed  are  especially  favorable  to  our  secur- 
ing this  advantage ;  but  the  laws  have  permitted  a  system 
of  inflated  financieringwbich  neutralizes  these  natural  adap- 
tations and  immensely  increases  the  cost  of  transportation. 

As  railroads  have  to  be  largely  built  with  borrowed 


242  OUR  RAILROAD  METHODS. 

money,  their  construction  in  this  country  afforded  an  oppor- 
tunity for  establishing  credit  relations  with  the"  great  lend- 
ing centres  of  Europe,  which  might  have  been  of  incalculable 
value  in  promoting  the  development  of  our  vast  resources  in 
various  directions.  England,  Holland  and  Germany  have 
indeed  loaned  us  very  large  amounts  for  railroad  jaiiter 
prises";  but  the  law  has  permitted  these  undertakings  to  be 
conducted  with  so  much  concealment,  misrepresentation 
and  actual  fraud,  and  has  so  disregarded  the  rights  of  the 
bondholders,  that  American  credit  La3  become  a  scandal 
and  a  by-word  on  the  European  bourses.  The  result  is,  that 
foreign  capitalists  are  seeking  other  fields  of  investment; 
and  their  respective  Governments  are  encouraging  them  by 
opening  up  new  colonies,  and  thus  getting  fresh  sources  for 
the  supply  of  products  which  otherwise  would  have  con- 
tinued to  be  readily  taken  from  the  United  States.  Such 
are  the  rewards  of  immoral  financiering ;  and  these  bad  meth- 
ods are  directly  traceable  to  the  encouragements  afforded 
by  our  negligently  constructed  railroad  laws. 

Perhaps  I  may  best  succeed  in  making  myself  understood 
on  this  subject  by  illustrating  the  way  in  which  our  railroads 
are  usually  built.  Under  the  laws  of  the  State  of  New  York 
— ^which  are  a  fair  sample  of  the  laws  of  most  other  States-- 
a  number  of  persons  form  a  company  under  the  general  rail- 
road laws,  registering  at  Albany  the  proposed  route  of  the 
road,  the  amount  of  capital  stock  and  bonds  to  be  issued, 
and  a  few  other  particulars  required  in  the  papers  of  incor- 
poration. The  incorporators  then  proceed  to  form  them- 
selves into  a  syndicate  or  company,  for  the  purpose  of 
contracting  to  build  and  equip  the  road.  Here  comes  the 
first  step  in  the  system  of  "crooked"  financiering.  In  their 
capacity  of  incorporators,  the  same  men  make  a  contract 
with  themselves,  in  the  capacity  of  constructors.  Of  coarse, 
they  do  not  fail  to  make  a  bargain  to  suit  their  own  interests. 
They  would  be  more  than  human  if  they  did.  Usual- 
lyi  the  bargain  is  that  the  construction  company  undertdces 


COVERING  COST  WITH  FIRST  MORTGAGE.  248 

to  build  the  road  for  80  to  100  per  cent,  of  the  face  yalne  of 
the  first  mortgage  bonds,  with  an  eqnal  amount  of  stock, 
and  sometimes  also  a  certain  amount  of  second  mort- 
gages thrown  in,  virtually  without  consideration.  The  first 
mortgages  are  supposed  to  represent  the  real  cash  outlay 
on  the  construction  and  equipment ;  but,  as  a  matter  of 
fact,  the  true  cash  cost  of  the  work  done  and  materials 
furnished  ranges  from  60  to  80  per  cent,  of  the  amount 
of  first  lien  transferred  to  the  constructors.  The  Construe* 
tion  Company  disposes  of  the  bonds,  partly  by  negotiat* 
ing  their  sale  to  the  public  through  bankers,  at  an  advance 
upon  the  valuation  at  which  they  had  received  them,  and 
partly  by  using  them  in  payment  for  rails  and  equipment. 
Beyond  the  profits  made  from  building  the  road  for  the 
first  mortgage  bonds,  there  remains  in  the  hands  of  the 
constructors  the  entire  capital  stock  and  any  second  mort« 
gage  bonds  they  may  have  received,  m  a  clear  hanitSj  to  be 
held  for  future  appreciation,  and  to  keep  control  of  the 
Company  and  be  ultimately  sold  on  a  market  deftly  man- 
ipulated for  that  purpose. 

This  is  the  way  in  which  a  large  majority  of  our  railroads 
hare  been  and  others  are  still  constructed.  It  will  thus  be 
seen  that  the  actual  cash  cost  of  a  railroad  is  ordinarily  less 
than  60  per  cent,  of  the  stock  and  bonds  issued  against  the 
property,  and  that  its  first  mortgage  exceeds  the  amount 
of  the  legitimate  actual  cost  of  the  road. 

The  basis  of  all  the  discredit,  the  embarrassments,  the 
bankruptcies  and  the  robberies  of  our  railroad  system  is 
tlius  laid  at  the  inception  of  the  enterprises.  They  ve-^t 
upon  an  intrinsically  rotten  and  dishonest  foundation  ;  a:.d 
the  evil  is  far  from  having  reached  the  end  of  its  mischief 
to  the  financial,  political  and  social  interests  of  the  coun- 
try. In  some  few  cases,  railroads  thus  exorbitantly  capi- 
tally have  proved  able  to  earn  the  interest  on  their  debt, 
provide  for  additional  outlays  on  construction  and  better- 
ments, and  even  to  pay  dividends  on  their  stock ;  but,  in 


M4  OUR  RAILROAD  METHODS. 

a  large  majority  of  cases,  they  haye  had  to  nndergo  a  pro- 
cess of  financial  reconstruction,  in  order  to  bring  the  debts 
of  the  Company  within  its  ability  to  meet  its  fixed  chains. 
It  is  not  a  risky  estimate  to  suppose  that  of  our  present 
125,000  miles  of  raiboad,  with  its  $7,500,000,000  of  stock 
and  debts,  60  per  cent,  has  undergone  this  process  of  debt- 
scaling  and  rehabilitation.  Were  it  iiot  that  the  new  roads 
have  opened  up  new  country  for  settlement,  which  has  be- 
come an  immediate  source  of  traffic,  these  bad  financial 
results  would  have  been  more  general  and  worse  than  they 
have  proved  to  be.  The  risks  attending  the  building  of 
lines  into  unsettled  regions  ought  to  have  been  a  reason 
why  they  should  be  constructed  upon  conservative  prind* 
pies ;  but,  in  reality,  the  prospects  of  settling  new  popula* 
tions  and  of  tapping  new  sources  of  wealth,  have  been  so 
magnified  to  the  eyes  of  distant  and  credulous  lenders  as 
to  enable  the  speculative  constructors  to  easily  consummate 
their  illegitimate  schemes. 

The  general  result  of  this  system  of  financiering  has  been 
to  deprive  the  legitimate  original  investors  of  their  chances 
of  making  a  fair  return  out  of  their  investment.  As  a  rule, 
the  bondholders  have  provided  all  the  capital  expendedf 
and  the  stockholders  have  invested  nothing.  The  bond- 
holders incur  all  the  risks;  the  stockholders  have  no  re- 
sponsibilities. If  the  enterprise  proves  a  success,  the 
bondholders  get  their  interest,  while  the  stockholders, 
without  a  dollar  of  original  outlay,  get  vastly  more  than 
ever  falls  to  the  mortgage  creditors  through  the  stock  be- 
coming an  instrument  of  profitable  speculation.  If  the 
enterprise  is  a  failure,  the  bondholder  has  to  forego  inter* 
est  and  finally  to  accept  a  new  mortgage  for  a  less  amount 
and  at  a  lower  rate  of  interest ;  whilst  the  original  stock- 
holder has,  in  the  meantime,  made  money  out  of  artificially 
** booming^'  the  shares  in  Wall  Street. 

The  profits  realized  on  these  speculative  constructions 
are  enormous,  and  have  constituted  the  chief  source  of  the 


FIFTY  PKR  C«NT.   IN  EXCESS  OF  COST.  246 

phenomenal  fortunes  piled  np  by  our  railroad  millionaires 
within  the  last  twenty  years.      It  is  no  exaggeration  to 
characterize  these  transactions  as  direct  frauds  upon  the 
public    They  may  not  be  such  in  a  sense  recognized  by 
the  law^  for  legislation  has  strangely  neglected  to  provide 
against  their  perpetration ;  but,  morally,  they  are  nothing 
less,  for  they  are  essentially  deceptive  and  unjust,  and  in* 
toIto  an  oppressive  taxation  of  the  public  at  large  for  the 
benefit  of  a  few  individuals,  who  have  given  no  equivalent 
for  what  they  get.    The  result  of  this  system  is  that,  on  an 
average,  the  railroads  of  the  country  are  capitalized  at  prob- 
ably folly  50  per  cent,  in  excess  of  their  actual  cost.    The 
managers  of  the  roads  claim  the  right  to  earn  dividends  upon 
this  fictitious  capital^  and  it  is  their  constant  effort  to 
accomplish  that  object.    So  far  as  they  succeed,  they  exercise 
an  utterly  unjust  taxation  upon  the  public,  by  exacting  a  com- 
pensation in  excess  of  a  fair  return  upon  the  capital  actually 
invested.    This  unjust  exaction  amounts  to  a  direct  charge 
and  burthen  on  the  trade  of  the  country,  which  limits  the 
.ability  of  the  American  producer  and  merchant  to  compete 
with  those  of  foreign  nations,  and  checks  the  development 
of  our  vast  natural  resources.    In  a  country  of  ^^magnificent 
distances,"  like  ours,  the  cost  of  transportation  is  one  of 
the  foremost  factors  affecting  its  capacity  for  progress ;  and 
the  artificial  enhancement  of  freight  and  passenger  rates 
due  to  this  false  capitalization  has  been  a  far  more  serious 
bar  to  our  material  development  than  public  opinion  has  yet 
realized.    The  hundreds  of  millions  of  wealth  so  suddenly 
accumulated  by  our  railroad  monarchs  is  the  measure  of 
this  iniquitous  taxation,  this  perverted  distribution  of  wealth. 
This  creation  of  a  powerful  aristocracy  of  wealth,  which 
originated  in  a  diseased  system  of  finance,  must  ultimately  * 
become  a  source  of  very  serious  social  and  political  dis- 
order.   The  descendants  of  the  mushroom  millionaires  of 
the  present  generation  will  consolidate  into  a  broad  and 
almost  omnipotent  money  power,  whose  sympathies  and  in* 


246  OUR  RAII.ROAD  METHODS. 

flaence  will  conflict  with  our  political  institutions  at  oTerj 
point  of  contact.  They  will  exercise  a  vast  control  over 
the  larger  organizations  and  moyements  of  capital ;  monop 
olies  will  seek  protection  under  their  wing ;  and,  bj  the 
ascendancy  which  wealth  always  confers,  they  will  steadily 
broaden  their  grasp  upon  the  legislation,  the  banking  and 
the  commerce  of  the  nation. 

The  illegitimate  methods  by  which  the  wealth  of  this 
class  has  been  accumulated  cannot  always  remain  a  mystery 
to  the  masses.  The  time  will  come  when  every  citizen  will 
clearly  perceive  how  his  interests  have  been  sacrificed  for 
the  creation  of  this  abnormal  class ;  and^  when  that  time 
comes,  a  series  of  public  question^  will  arise  that  will  strain 
our  political  institutions  to  their  very  foundations.  Already 
the  working  masses  begin  to  see  the  dim  outline  of  the 
gigantic  wrong  that  has  been  inflicted  upon  th«n  in  com- 
mon with  all  other  classes.  If  they  do  not  understand  the 
exact  method  by  which  a  portion  of  the  rewards  of  labor 
has  thus  been  diverted  from  them,  they  clearly  comprehend 
which  is  the  class  responsible.  The  labor  troubles  that. 
have  80  seriously  shaken  confidence  during  the  spring  of 
this  year  have  been  largely  stimulated  by  an  idea  that  a 
serious  wrong  has  been  done  to  ihe  workman  in  the  creation 
of  these  abnormal  fortunes.  It  is  not  surprising — although 
it  may  lead  to  disappointing  results — if  workingmen  should 
reason  that,  if  railroads  can  afford  to  make  a  few  men  so 
wonderfully  rich,  they  can  afford  to  pay  their  employes 
higher  wages  and  for  shorter  hours.  Nor  can  we  wonder  if, 
when  capitalists  are  on  every  hand  piling  up  their  wealth 
by  the  tens  of  millions,  the  laborer  should  conclude  that  he 
ought  to  be  able  to  get  a  few  dollars  a  week  more,  or  deduct 
an  hour  or  two  off  his  day's  work,  without  very  seriously  hurt- 
ing the  employing  class.  Tiiis  may  be  and  is  very  fallaeioos 
reasoning ;  but  it  is  what  might  very  naturally  be  expected 
under  these  circumstances,  from  a  class  who  are  not  trained 
to  think  beyond  surface  depth.    It  will  be  of  no  avail  to 


niMKNSltt  FORTUNES  OF  RAILROAD  MAGNATES.  247 

teQ  tbe  workmen  that  this  unjust  distribution  of  wealth  is 
final  and  irrevocable ;  that  there  is  no  power  of  redress  by 
which  a  wrong  of  this  nature  can  be  righted ;  or  that,  as 
voting  citizens,  ihey  are  as  much  responsible  as  anybody 
else  for  permitting  the  neglects  and  defects  of  legislation 
that  have  made  those  inequalities  possible.  This  class 
never  reason  either  calmly  or  logically,  and  it  will  take  a 
great  deal  of  fruitless  agitation  to  satisfy  them  of  the  hope- 
lessness of  their  methods  of  seeking  reparation. 

The  Socialistic  seductions  which  have  captivated  such 
large  masses  of  tho  working  population  of  Europe  will  all 
the  more  readily  find  acceptance  among  our  millions  of 
laborers  because  they  have  before  their  eyes  such  conspic- 
uouh  instances  of  the  unequal  division  of  wealth  and  of  the 
overwhelming  power  of  organized  capital.  Certainly,  if  any 
facts  could  be  supposed  to  justify  the  doctrines  of  Socialism 
and  Communism,  it  would  be  the  sudden  creation  of  such 
fortunes  as  those  which,  within  a  very  few  years,  have  come 
into  the  hands  of  our  railroad  magnates.  A  few  years  later, 
the  public  will  understand  much  better  than  it  now  does 
how  facts  like  these  have  contributed  to  the  raising  of  qoes* 
tions  of  government  which  will  dangerously  test  the  coha* 
sion  and  endurance  of  our  political  instit^tions• 

Artificial  methods  of  establishing  our  railroad  corpora* 
tions  have  naturally  led  to  artificial  methods  of  regulating 
their  operations.  Over-capitalization  incapacitates  the  roads 
for  competition ;  for  it  necessarily  holds  out  a  temptation  to 
parallel  existing  roads  by  others  at  a  lower  capitalization. 
As  roads  running  between  the  same  points  were  multiplied, 
competition  for  ^  through "  business  became  more  active, 
until  not  only  were  dividends  threatened  on  some  of  the  best 
lines,  but  some  roads  were  driven  into  default  on  their  mort- 
gages. At  this  point  the  "pool"  was  introduced — a  device 
by  which  all  lines  running  between  the  same  points  agree  to 
pat  their  business  from  through  traffic  into  a  oommon  ag« 
gregate,  to  be  distributed  among  the  several  members  accord^ 


848  GVH  RAII^ROAD  METHODS. 

ing  to  certain  accepted  percentages.  It  was  hoped  that^  in 
this  way,  uniformity  of  charges  could  be  maintained,  at 
such  rates  as  were  necessary  to  make  the  business  satisfac- 
tory to  each  member.  This,  however,  was  soon  found  to  be 
a  step  "from  the  mud  into  the  mire.''  The  pool  was  dis- 
covered to  operate  as  a  premium  on  the  construction  of  ne^ 
parallels. 

Speculators  were  quick  to  perceive  that  they  could  build 
new  lines  on  the  same  routes  for  much  less  cost  than  the  old 
ones,  and  that,  with  a  lower  capitalization,  they  could  easily 
compel  the  pool  to  admit  them  to  membership,  with  all  the 
privileges  of  a  ready-made  traffic  and  with  all  the  guaran- 
tees the  pool  could  afford  of  exemption  from  competition, 
and  of  ample  charges.  Thus,  the  pools  that,  in  the  first 
instance,  were  made  necessary  through  the  evils  of  specnla- 
tive  methods  of  construction,  became,  in  turn,  the  source  of 
a  new  and  even  worse  form  of  the  same  evlL  New  roads 
were  built,  or  sets  of  old  detached  ones  were  connected,  so 
as  to  afford  additional  parallels  to  the  existing  trxmk  lines^ 
with  no  other  object  than  to  compel  the  latter  to  support 
them  by  dividing  with  them  a  portion  of  their  traffic,  or  to 
accept  the  alternative  of  a  reckless  cutting  down  of  rates. 
The  end  to  this  viciously  excessive  system  of  construction 
can  only  come  when  the  pools  have  been  reduced  to  such  a 
low  condition  that  they  will  no  longer  care  to  take  new- 
comers into  their  co-partnership ;  in  which  case  specolatiye 
builders  will  see  no  chance  for  profit  in  such  ventures.  The 
fate  of  the  "Nickel  Plate"  and  of  the  West  Shore  specula- 
tions, by  which  nearly  1,000  miles  of  needless  road  was 
built  to  divide  traffic  with  the  Vanderbilt  system,  serves  as 
a  warning  against  the  danger  of  building  roads  to  live  upon 
pool  support ;  but,  nevertheless,  the  Eastern  trunk  pool  still 
stands  exposed  to  a  great  deal  of  harassing  outside  compe- 
tition from  possible  and  contemplated  new  combinations  of 
existing  detached  links.  Boutes  of  the  latter  kind  are  even 
more  formidable  competitors  than  new  lines;,  because  they 


1PHB   *'POOi;'*  SYSTEM  A  FAILURE.  249 

can  be  provided  at  a  lower  capitalization,  and  have  already 
the  sapport  of  an  established  way  traffic.  It  would  not  bo 
surprising  if,  within  the  next  three  or  four  years,  several  new 
routes  should  in  this  way  be  established  between  New  York 
and  Chicago. 

It  will  thus  be  seen  that  the  very  contrivance  intended  to 
stave  off  the  vicious  effects  of  artificial  capitalization  is 
contributing,  by  a  sort  of  punitive  process,  towards  the  end 
of  reducing  earnings  to  a  just  ratio  to  the  true  value  of  the 
pro]>erties.  The  weakness  of  the  pool,  arising  from  its 
temptations  to  new  competitors  to  enter  the  field,  is  not  the 
only  cause  of  its  failure.  Up  to  this  time  it  has  been  found 
impossible  to  find  a  form  of  pool  stringent  enough  to  restrain 
the  members  from  cutting  rates  against  each  other.  The 
modes  of  possible  evasion  are  so  numerous,  the  sacrifices  of 
special  advantages  that  each  member  has  to  make  are  so 
gaUing,  the  small  share  that  remains  to  each  road  in  a 
ntmierously  divided  business  is  so  small,  and  the  tempta- 
tions of  agents  to  get  freight  "  by  hook  or  by  crook,''  in  dull 
times  are  so  irresistible,  that  the  strictest  watching  and  the 
severest  penalties  fail  to  secure  a  faithful  obseivance  of  the 
pool  agreements.  Much  forbearance  is  shown  towards 
transgressions,  and  deliberate  violations  have  to  be  condoned 
or  connived  at ;  but,  all  the  time,  the  pools  are  in  imminent 
danger  of  jealousies  and  breaches  of  faith  causing  their  dis* 
ruption.  No  sooner  have  they  won  public  confidence  by 
maintaining  harmony  through  a  period  of  prosperous  busi- 
ness, than  the  public  wake  up  to  find  that  some  member  has 
been  secretly  ^^  cutting,"  and  the  agreements  are  torn  to 
pieces. 

The  result  is,  that  the  public  have  lost  all  confidence  in 
{he ability  of  the  pool  to  regulate  competition;  and,  still 
worse  for  the  railroads,  their  managers  are  losing  faith  in 
them  also.  The  great  crucial  test  of  this  expedient,  so 
far  as  respects  the  Eastern  lines,  is  likely  to  come  when  the 
number  of  smaller  outside   competitors,  of  the  character 


250  OUR  RAII.ROAD  METHODS. 

jast  alluded  to,  comes  to  be  increased.  The  pool  will  not 
be  likelj  to  admit  them  into  its  fold,  which  already  includes 
too  many  diverse  interests  to  permit  of  harmony  ;  and  if  it 
did,  the  danger  of  disagreements  and  disruption  would  be 
only  thereby  increased.  And  yet,  if  those  routes  are  shut 
out,  they  will  act  as  so  many  free  lances,  attacking  the  older 
lines  in  every  direction,  and  doing  business  at  rates  which 
will  leave  the  pool  companies  no  alternative  but  to  follow 
suit.  In  this  dilemma,  the  outlook  for  some  time  ahead 
is  not  an  encouraging  one  for  the  older  companies.  To 
my  view,  it  seems  very  probable  that  their  original  sins 
of  construction  and  their  subsequent  transgressions  of  stock 
''watering  "  are  about  to  find  them  out.  The  natural  law  of 
competition  is  a  terrible  foe  to  the  violators  of  conmierci^ 
justice.  It  is  the  inevitable  police  power  of  trade.  Its 
working  may  be  evaded  for  a  time ;  its  final  conquest  over 
wrongs  and  monopolies  may  sometimes  be  delayed  beyond 
the  limits  of  human  patience,  and  men  may  at  such  times 
lose  confidence  in  its  power  to  right  the  wrongs  of  society ; 
but  its  ultmate  success  in  the  restoration  of  equity  and  fair- 
play  is  as  certain  as  the  rising  of  the  sun. 

My  absolute  confidence  in  the  ultimate  triumph  of  this 
principle  prompts  me  to  venture  the  assertion  that,  at  no 
very  distant  periody  the  wrongs  practised  in  the  original  con- 
struction of  our  railroads  and  in  the  subsequent  ^^  water- 
ings ''  of  their  stocks,  will  be  compensated  through  compe- 
tition adjusting  theprofits  of  the  companies  to  the  equivalent 
of  a  fair  return  upon  a  true  valuation  of  the  properties ;  that 
is,  a  value  measured  by  what  they  are  able  to  earn  under  the 
conditions  of  free  competition  and  the  now  current  cash 
cost  of  providing  like  facilities.  That,  it  appears  to  me,  is 
the  solution  towards  which  our  railroad  problem  is  now 
steadily  working;  and  neither  Congressional  legislation, 
nor  State  regulation,  nor  the  resistance  of  organized  capital, 
can  be  expected  much  longer  to  stave  off  that  result. 

It  may,  however^  be  very  properly  asked,  whether  legisla- 


i;«GisieATrvH  r^triction  required.  251 

tion  has  no  duty  in  the  premises  i  To  me,  it  appears  that 
it  has  a  very  weighty  one.  The  consequences  of  the  origi- 
nal neglect  to  prescribe  proper  regulations  for  the  construc- 
tion, capitalization  and  financial  management  of  railroads 
has  been  so  fully  exposed  by  their  past  history,  tbat  the 
Legislatures  will  greatly  err  if  they  neglect  to  impose  re- 
restrictions  upon  future  corporations  that  will  prevent 
further  repetition  or  perpetuation  of  the  evils.  When  tho 
Government  bestows  upon  railroads  important  privileges 
and  franchises,  under  which  fundamental  private  rights 
are  held  in  abeyance  for  the  common  good,  it  is  due  to  the 
public  protection  that  the  recipients  of  these  favors  should 
be  held  under  restrictions  which  will  prevent  them  from 
abusing  the  privilege  to  the  public  disadvantage. 

When  a  railroad  company  capitalizes  its  property  at 
double  its  actual  cost,  and  seeks  to  collect  charges  calculated 
to  yield  dividends  upon  such  false  capital,  it  grossly  per- 
verts and  abuses  the  privileges  conferred  by  its  charter,  and 
virtually  perpetrates  a  public  robbery.  This  appears  to  bo 
a  perfectly  plain  proposition,  and  yet  this  glaring  wrong 
has  been  so  long  tolerated  that  not  only  the  railroads,  but  a 
portion  of  the  public  even,  have  come  to  regard  it  as  a  sort 
of  right  inherent  in  these  corporations.  One  of  the  first 
duties  of  the  State  Legislatures,  therefore,  is  to  enact  laws 
requiring  that  the  stocks  and  bonds  issued  against  any  rail- 
road hereafter  built  shall,  in  no  case,  exceed  in  the  aggre- 
gate the  triLe  cash  east  of  the  property ;  the  penalty  for  tho 
violation  of  this  restriction  to  be  forfeiture  of  charter.  The 
responsibility  of  managers  should  be  definitely  fixed.  All 
extensions,  betterments  or  improvements  should  be  provided 
for  by  issues  of  stock  or  bonds  on  like  conditions.  The 
issue  of  mortgages  should  be  restricted  within  60  per  cent, 
of  the  true  cost  of  the  property. 

In  order  to  prevent  wrongful  speculative  profits  being 
realized  by  the  incorporators,  they  should  be  prevented 
from  becoming  tho  constructors  of  their  road,  directly  or  in- 
directly ;  and  all  contracts  for  construction,  equipment,  ex- 


252  OT7R  RAII^ROAD  METHODS. 

tensions  or  improvements  should  be  made  Qi>on  open  com- 
petitive bidsy  the  lowest  bid  to  be  accepted,  with  sabstantial 
guarantees  for  the  faithful  performance  of  the  contract 
Also,  it  should  be  made  the  duty  of  a  board  of  State  rail- 
road commissioners  to  see  to  it  that  all  these  conditions  are 
strictly  complied  with.  Begulations  should  be  provided 
prohibiting  issues  of  stock  for  any  other  than  construction 
or  equipment  purposes,  forbidding  the  payment  of  dividends 
not  actually  earned^  and  enforcing  the  amplest  publicity  of 
details  relating  to  current  traffic  and  the  financial  afiEiedrs  of 
the  companies. 

Had  our  original  railroad  laws  incorporated  provisions  of 
this  character,  our  railroads  would  have  all  along  ranked  as 
the  safest  and  most  stable  investments  of  the  country  ;  the 
discredit  that  hangs  over  our  corporate  enterprises  would 
have  been  averted ;  transportation  would  have  been  done  at 
lower  rates  with  steadier  charges,  and  we  should  have  been 
saved  the  social  and  political  excrescence  of  an  aristocracy 
based  upon  ill-gotten  wealth.  After  our  bitter  experience  ol 
the  dangerous  results  of  neglecting  to  guard  the  railroad  in* 
terest  by  some  such  restraints  as  the  foregoing,  it  surely  is 
not  too  early  now  to  apply  these  safer  methods  to  all  future 
enterprises  of  this  character.  Not  only  is  such  legislation 
due  as  a  measure  necessary  for  the  protection  of  our  com- 
merce and  investors,  but  it  would  go  very  far  towards 
remedying  the  evils  that  have  grown  up  under  the  old  and 
badly  regulated  system.  To  a  man  of  business  it  is  hardly 
necessary  to  point  out  what  would  be  the  competitive  ad- 
vantages of  roads  constructed  under  the  proposed  regula- 
tions. As  a  rule,  their  capitalization  would  not  exceed  50 
to  60  per  cent,  of  that  of  the  older  companies,  and  they 
could,  therefore,  be  run  upon  a  much  lower  rate  of  charges. 

The  thoroughly  conservative  nature  of  their  organization 
would  bespeak  for  them  a  degree  of  public  confidence  which 
would  enable  them  to  get  all  the  capital  needed  for  really 
legitimate  undertakings,  whilst  purely  speculative  ventures 
would  be  put  under  conservative  check.    Under  these  di^ 


DISASTROUS  RESUI.TS  OF  COMPETITION.  253 

cumstances  new  roads  could  do  a  profitable  business,  and 
yet  compete  disastrous! j  with,  the  old  excessively  capital- 
ized companies.  The  ultimate  result  of  this  competition 
from  the  new  order  of  roads  would  inevitably  be  to  reduce 
the  earnings  of  the  older  class  to  a  point  which  would  admit 
of  interest  and  dividends  being  earned  only  on  the  same  rate 
of  capitalization  as  existed  among  the  new-system  companies.  In 
other  words,  the  effect  of  the  honest  method  of  capitalization 
here  suggested  would  be  to  squeeze  all  the  ^' water"  out  of 
the  old  companies,  and  to  bring  them  in  effect,  though  pos- 
sibly not  in  form,  to  the  same  financial  level  as  the  new. 

If  my  reasoning  here  is  correct,  there  is  cause  for  our 
great  rsdlroad  capitalists  to  look  out  for  the  security  of  their 
iavestments.  The  basis  for  their  wealth  may  prove  far  less 
certain  than  they  have  imagined  it  to  be.  With  the  prevail- 
ing and  steadily  increasing  public  feeling  against  the 
methods  of  railroad  capitalists  and  the  working  of  otu:  rail- 
road system,  what  assurance  can  there  be  that,  when  a  rem- 
edy for  these  corporate  wrongs  comes  to  be  clearly  pro- 
pounded, it  will  not  be  eagerly  urged  upon  the  attention  of 
the  Legislatures  and  adopted  without  much  ceremony  ?  The 
dash  of  a  Governor's  pen  is,  therefore,  all  that  stands  be- 
between  the  railroad  millionaire  and  the  sudden  extinction 
of  a  large  portion  of  his  inflated  paper  wealth.  Is  this  a 
chimerical  conclusion  i  The  question,  it  seems  to  me,  de- 
serves a  far  more  serious  consideration  than  those  most 
vitally  concerned  have  yet  bestowed  upon  it.  No  man  can 
confidently  deny  the  possibility  of  such  a  result  as  is  here 
indicated.  17o  one  familiar  with  the  present  public  temper 
on  the  subject  of  railroad  monopoly  can  reasonably  question 
the  probability  even  of  a  settlement  of  this  kind  being  ere  long 
resorted  to.  Under  these  circumstances,  it  is  a  question  very 
pertinent  to  the  times,  whether  the  foundation  of  our  rail- 
road aristocracy  is  as  broad  or  as  firm  as  it  has  been  sup- 
posed to  be,  and  whether  a  healthy  solution  of  the  great 
lailroad  problem  is  as  difficult  and  as  remote  as  some  deft* 
pendent  people  have  represented  it  to  be.'' 


cr 
o 

UJ 

O 


< 


Q  .2 

^^ 

O    CL 

q: 
< 


o 

Q 
Q 

< 
CO 


O 

< 


CHAPTEB   XXVII. 

THE    GEORGIA    REPUDIATION    BOND    SWINDLE 

How  A  SOYBBEION  SOUTHEBN  StATB  CHEATED  THE  NoBTH* 

EBK  Men  who  Helped  Heb  m  Dibtbess.— A  New 
Wat  to  Pax  Old  Debts.— Cancellation  m  Kepu- 
DiATioN  OF  Just  Claihb  roB  Cash  Loaned  to  Sub- 
tain  THE  State  Gk)yEBN]C£NT»  Build  Publio  Schools 
AND  Make  Needed  Impboyements.— Bottox  Facts 
OF  THE  OuTBAGE.— The  Becent  Atteicpt  to  Place  a 
New  Issue  of  Geobgia  Bonds  on  the  Mabket,  while 
THE  Old  Ones  Bemain  Unpaid. — ^Thb  Case  Befobb  the 
Attgbney-Genebal  of  the  State  of  New'Tobk.— He 
Examines  the  Legal  Status  OF  THE  Bonds  in  Connec- 
tion with  THE  Savings  Banes. — ^His  Decision  Pbohib- 
iTS  THESE  Institutions  fbox  Investing  the  Habd 
Eabnings  of  the  Wobking  People  in  these  Doubtful 
AND  Dangebous  Secubities. — ^A  Bold  Effobt  to  have 
THE  Fbebh  Issue  of  Geobgu  Papeb  Put  Upon  the 
Lnrr  of  Legitdcate  Secubities  of  the  New  Yobk 
Stock  Exchange  Fibmlt  Opposed  and  Eventually 
Fbustbated.— Befleotions  on  the  Bad  Policy  which 
Advocated  Bepudiation  and  Has  Injubed  Geobgia 
Cbedit  in  the  Eyes  of  the  Wobld.— Geneeal  Obseb- 

VATIONS  UPON  THE  NaTUBE  OF  BePUDIATION  OF    STATES^ 

Debts,  and  the  Mobal  Influence  oh  the  Geneeal 
Cbedit  of  the  United  States.— Successful  Appeal  of 
Bondholdebs  of  the  Bepudiated  Bonds  to  the  Stock 
Exchange. 

ONE  of  the  saddest  events  of  my  bnsmess  experience 
arose  from  the  purest  motives  on  my  part,  to  aid  the 
Sonth  in  the  work  of  reconstruction,  in  tiie  way  of  which, 
as  I  have  stated  in  the  previous  chapter,  President  Johnson 
threw  the  greatest  obstacles. 

I  ventored  my  money  and  offered  my  friendship  at  a  time 
when  that  section  of  the  conntry  stood  in  need  of  bolh 


266  THB  GEORGIA  REPUDIATION  BOND  SWINDI«E. 

money  and  friendship,  and  used  my  best  efforts  to  bring 
about  the  return  of  such  feelings  of  fraternal  harmony  as 
should  exist  among  all  the  citizens  of  this  great  country. 
For  these  kindly  offices  I  was  treated  with  the  basest  in- 
gratitude by  some  of  the  Southern  States. 

I  held  a  large  amount  of  Southern  securities,  all  issued 
for  full  value  received,  which  went  into  the  internal  im- 
provements of  that  section,  enhancing  the  taxable  ^alue  of 
its  property.  These  securities  bore  the  great  seals  of  the 
Sovereign  States  of  Georgia  and  Alabama. 

The  dishonor  attaching  to  repudiation  in  these  instances 
has  been  brought  out  in  more  glaring  colors,  from  the  fact 
that  these  States  have  long  since  become  abundantly  able 
to  liquidate  their  obligations,  and  to  erase  the  black  spot 
from  the  escutcheons  of  their  chivalrous  people. 

The  people  themselves  are  not  so  much  to  blame  as  the 
disreputable  politicians  into  whose  hands  the  management 
of  their  affairs  had  fallen. 

It  is  of  the  sovereign  and  high-toned  State  of  Georgia 
that  I  have  most  occasion  to  complain.  On  accoimt  of  the 
bad  faith  of  that  State,  through  her  political  managers»  I 
suffered  a  terrible  reverse  in  my  fortune,  which  came  near 
crushing  out  my  financial  existence. 

It  is  not,  therefore,  surprising,  I  think,  that  having  placed 
my  faith  in  the  integrity  of  that  State  and  the  promises  of 
its  officials  and  governing  power,  and  having  been  so  basely 
deceived,  that  I  should  now  be  aroused  to  act  in  self  defenoe, 
fight  for  my  rights  and  do  all  in  nay  power  to  cause  the 
bonds  or  securities  for  which  I  paid  good  money  to  be  re- 
deemed, and  to  have  my  just  claims  satisfied.  It  has 
therefore,  been  incumbent  upon  me  to  leave  no  stone  un- 
turned in  fighting  this  battle,  with  the  hope  of  recovering  the 
money,  or  a  part  of  it,  that  was  filched  from  me  through 
the  ostensible  defalcations  of  these  sovereign  and  chivalrous 
States. 

About  thirteen  years  ago  the  repudiation  which  has  le- 


GTO&GIA  POUTICIAKS  "lX)GROIAINO.*'  ^^ 

fleeted  saoh  disgrace  upon  the  Sonth  became  prevaleiit  in 
ftat  section,  and  took  the  character,  for  a  time,  of  a  severe 
financial  epidemic. 

It  was  for  this  reason  that  the  Legislature  of  the  State 
of  New  York,  as  well  as  the  legislatures  of  several  other 
States,  considered  it  necessary  for  the  protection  of  the  sa- 
vings banks,  which  are  the  custodians  of  many  hundreds  of 
millions,  chiefly  of  the  hard  earnings  of  the  working  people, 
to  prohibit  these  institutions  from  investing  in,  or  loaning 
upon,  the  securities  of  any  State  in  the  Union  that  had  with- 
in ten  years  previously  repudiated  any  of  its  lawful  obliga- 
tions. 

The  laws  of  the  Stale  of  New  York,  in  chapter  409,  section 
260,  of  the  laws  of  1882,  provides  that  savings  banks  shall 
be  prohibited  from  investing  money  in  stocks  or  bonds  of 
any  State  which,  in  the  language  of  the  statute,  ^^  has  within 
ten  years  previous  to  making  such  investment  by  such  cor* 
poration  defaulted  in  the  payment  of  any  part  of  either 
principal  or  interest  of  any  debt  authorized  by  any  legisla- 
tore  of  such  State  to  be  contracted." 

It  was  for  this  reason  that  the  newly  issued  securities  of 
some  of  the  Southern  States  have  been  unable  to  find  a  rest- 
ing place  in  the  monied  institutions  of  the  North. 

The  State  of  Georgia,  recently  finding  that  she  had  some 
obligations  becoming  due,  and  seeing  that  money  was  cheap 
in  the  North,  and  that  more  than  ten  years  had  expired 
fiboe  she  repudiated  her  former  obligations,  thought  there 
was  a  good  opportunity  of  issuing  a  fresh  batch  of  these  so- 
called  securities,  similar  to  those  that  had  been  dishonored 
in  1873. 

The  politicians  of  (Georgia  thought  there  was  a  good 
opening  in  the  State  of  New  York  to  remove  the  restriction 
placed  upon  the  savings  banks  in  1882.  They  saw  that  the 
Governor  and  the  Legislature  were  both  Democratic,  with  a 
Democratic  Attorney-General  also,  and  therefore  determined 
to  take  advantage  of  this  political  condition,  which  they 


260  ^HK  GEORGIA  REPUDIATION  BOND  SWINDW. 

the  reatiired  ten  years,  and,  after  making  such  ample  proTi- 
sion,  then  pass  an  act,  as  heretofore,  repudiating  the  bonds 
issuedy.and  keep  repeating  it  each  decade?  Supposing  the 
same  rule  held  good  with  a  bank  robber — ^and  there  is,  as 
far  as  integrity  goes,  really  no  great  difference  between  the 
two,  only  one  seeks  protection  in  Canada  and  the  other  be- 
hind her  sovereign  rights,  which  is  her  Canada  refuge.  The 
robber  breaks  into  a  savings  bank,  guts  it  of  several  mil- 
lions of  dollars,  flees  to  Canada,  and  there  lives  in  affluence 
for  ten  years.  How  silly  it  would  appear  if,  after  ten  years, 
provided  he  could  show  a  record  free  from  tJiieving  durine 
that  time,  he  had  the  legal  right  then  to  come  back,  and 
thereby  be  entitled  to  a  clean  record  as  an  honest  man,  and 
in  consequence  be  accorded  a  high  credit.  The  position  of 
the  State  of  Georgia  in  assuming  such  a  role,  in  coming  here 
at  this  time  to  ask  our  savings  oanks  to  aid  her  in  such  a 
nefarious  business,  simply  lacks  a  parallel  for  audacity. 
The  management  of  savings  banks  must  be  conducted  so  as 
to  inspire  confidence  with  the  depositors  and  with  the  entire 
community  also.  It  is  necessary,  especially  at  panic  pe- 
riods, for  full  confidence  to  be  felt  in  the  investments  of 
such  institutions.  If  the  prohibition  is  removed,  as  is  now 
sought  to  be,  and  savings  banks  be  permitted  to  invest  in 
Georgia  securities,  and  one  of  them  should  buy  $500,000  of 
the  bonds,  I  venture  the  prediction  that  such  an  investment 
will  sooner  or  later  form  the  basis  of  a  rumor  which  will 
cause  a  panic  among  Its  depositors  and  break  that  institu- 
tion. This  would  result  in  a  most  serious  disaster  to  prob- 
ably thousands  of  poor  people  whose  money  had  oeen 
lodf^ed  there  for  safe-keeping.  The  mere  whisper  during  a 
panic  that  a  certain  institution  had  $500,000  of  Georgia 
bonds,  and  they  were  about  to  be  repudiated,  would  bring 
about  just  such  a  disaster  as  I  have  stated. 

I  ask  your  Honor  if  it  would  be  wise  for  any  saving  bank 
to  be  permitted  by  the  Superintendent  of  the  Banking  De- 
partment to  become  thus  exposed  to  ruin }  A  State  that  is 
abundantly  able  to  meet  her  obligations  and  dishonors  them 
is  too  despicable  for  either  credit  or  tolera«ice  in  a  civilized 
community,  and  it  is  a  disgrace  to  the  nation  that  States  com- 
prising it  have  the  power  to  make  such  obligations  and  repa- 
diate  them  at  will  and  screen  themselves  behind  their  sove- 
reign rights,  whereby  they  cannot  be  sued,  and  in  consequence 
leave  the  outrageously  wronged  innocent  bondholders  witbr 


Gl^RGIA  SLANDERS  H^R  CREDITORS.  261 

oat  means  of  redress  whatsoever.  If  the  United  Statee 
OoTernment  ever  expects  to  obtain  that  permanent  high 
credit  in  the  money  markets  of  tiie  world  to  which  the  im- 
mense resonrces  of  this  magnificent  conntrj  jostly  entitle 
her,  the  great  and  growing  evil  of  State  repudiation  must 
be  remedied.  For  States  to  repudiate  with  impunity,  as  the 
State  of  Georgia  has  done,  leaving  no  means  whatever  for 
redress  on  the  part  of  the  victimized  creditors,  is  a  blot  upon 
the  escutcheon  of  the  whole  country.  This  is  not  a  fipht, 
your  Honor,  on  the  battle  field  against  the  South ;  it  is  a 
fight  on  the  financial  field,  and,  as  it  is  second  only  in  im- 
portance to  the  other,  it  must  be  settled,  and  now  is  the  time 
to  strike  the  blow,  as  it  will  do  the  most  good  in  that  direc- 
tion. We,  the  creditors  of  Georgia,  have  not  only  borne  the 
loss  and  hardship  of  having  our  securities  made  valueless  by 
a  l^slative  body,  and  many  of  us  ruined  thereby,  but  we 
have  also  been  vilely  defamed — being  branded  as  conspira- 
tors to  rob  the  State — simply  because  we  were  found  to  be 
holders  of  these  dishonored  bonds.  This  has  been  done 
by  the  State  to  cover  up  her  own  infamy,  and  make  it  appear 
that  we  were  the  guilty  parties  and  not  the  State.  The  at- 
titude of  the  State  of  Georgia,  your  Honor,  is  not  unlike  that 
of  a  pickpocket,  who,  after  rifling  his  neighbor's  pockets,  is 
the  first  to  cry  "stop  thief'"  to  elude  detection.  AH  that 
the  bondholders  ask  and  claim  is  to  have  the  entire  case 
submitted  to  a  proper  judicial  tribunal.  This  rightwe  have 
been  denied  by  the  State,  and  the  Constitution  leaves  us 
powerless  to  enforce  it.  The  State  simply  says,  the  bonds 
are  fraudulent  and  we  will  not  pay  them.  It  is  a  very 
remarkable  circumstance,  however,  that  there  has  not  been 
a  single  one  of  the  numerous  officials,  from  ex-Governor 
Bullock  down,  who  were  connected  with  the  issue  of  these  so- 
called  fraudulent  bonds,  prosecuted  to  conviction  in  the  thir- 
teen years  that  have  intervened  since  their  issue.  Still  these 
bonds  are  all  repudiated  on  the  ground  of  being  fraudulently 
issued,  and  the  innocent  bondholders  aJone  are  made  to  suffer 
the  harsh  penalty  imposed  for  having  staked  their  money  on 
their  belief  in  the  honor  and  integrity  of  the  people  of 
Georda,  which  it  is  quite  apparent  are  now  nan  ut. 

I  addressed  a  letter  to  your  Honor  on  May  27th  last,  which 
contains  important  information  in  connection  with  these 
repudiated  bonds.  I  ask  permission  to  read  this  letter  at 
the  present  time,  so  that  it  may  become  a  part  of  the  en- 
deuce  in  this  case. 


262  TH«  GEORGIA  REPUDIATION  BOND  SWINDLl^. 

The  following  circular  letter  contains  a  variety  of  opinions 
analyzing  the  true  relations  of  the  State  of  Georgia  to  her 
creditors,  and  clearly  setting  forth  the  nature  of  her  liability 
in  the  matter  of  the  repudiated  bonds  in  connection  with  the 
house  of  which  I  was  the  head : 

BEPXTDIATION  BOBBERY  BY  THE  "SOVEEEIGN'' 
STATE  OF  GEORGIA, 

**  27ie  divine  doctrine  of  State  Sovereignty^  which  makes  a  State 

too  dignified  to  he  sued  for  its  debts,  ought  to  make 

it  also  too  respectable  to  cheat  its  creditors** 

NoTiOE. — Managers  of  Insurance  Companies  or  Savings 
Banks  should  be  and  are  likely  to  be  held  responsible,  by 
stockholders  and  depositors,  for  any  losses  incurred  in  the 
event  of  their  buying  or  loaning  upon  any  bonds  issued 
hereafter  by  States  which  are  under  the  cloud  of  repu- 
diation. 


New  York,  May  27, 1886. 

Hon.  Wm.  A.  Post,  Deputy  Attomey-Q^eneral^  Atbany^  N.  T.: 

Deab  Sir  : — ^I  deferred  answering  your  telegram  of  Satur- 
day until  this  morning  for  the  purpose  of  ascertaining 
whether  the  bondholders'  counsel  would  be  in  readiness  to 
meet  you  at  the  time  proposed,  and  only  ascertained  the  fact 
this  morning  that  he  would,  so  I  wired  you  accordingly.  I 
presume  that  this  Georgia  repudiation  question  comes  be- 
fore you  for  the  purpose  of  removing  the  prohibition  from 
the  savings  banks  of  this  State  to  their  buying  or  loaning 
upon  Georgia  State  bonds,  owing  to  that  State  being  under 
the  cloud  of  repudiation.  The  prohibition  of  the  savings 
banks,  issued  by  Mr.  A.  B.  Hepburn,  the  former  Superin- 
tendent of  the  Banking  Department,  was  based  upon  a 
thorough  and  exhaustive  examination  in  reference  to  all 
matters  appertaining  thereto.  This  I  have  reason  to  know, 
as  that  gentleman  visited  New  York  and  took  my  testimony 
and  others  in  the  case.  The  State  of  Georgia  has  always 
charged,  as  the  justification  for  repudiation,  that  B.  B.  Bul- 
lock, Governor  at  the  time  of  the  issue  of  said  bonds,  had 
issued  the  bonds  without  proper  legislative  authority,  and 


GOVieRNOR  BUI,W)CK  ACQUITTED.  263 

esides  liad  stolen  or  misappropriated  most  of  the  avails. 
About  three  years  since  Governor  Bullock  visited  Atlanta, 
6a.,  and  demanded  his  trial  under  the  several  indictments 
against  him.  The  trial  came  up  soon  thereaf  ter,  and  he  was 
acquitted  on  all  the  char^e^.  This  gentleman  is  now  a  resi- 
dent of  Atlanta,  Ga.,  and  is  to-day  one  of  its  most  prominent 
citizens.  It  has  been  also  charged  that  as  he  was  a  Northern 
bom  man,  that  he  was  a  "carpetbag*'  Governor,  and  for 
that  reason  the  bonds  were  not  a  legal  issue.  That  attitude 
is  also  unwarrantable,  as  the  ex-Governor  remained  8outh 
during  the  period  of  the  entire  war,  and  took  a  prominent 

8 art  on  the  Confederate  side,  in  giving  aid  and  comfort,  and 
lerebv  can  justl;^  be  considered  as  bein(^  a  Southerner  and 
not  a  Northerner  in  his  interests  and  feelmgs.  Most  of  the 
bonds  repudiated  were  passed  upon  as  legally  issued  and 
properly  signed,  by  our  best  lawyers,  such  as  Messrs.  Evarts, 
Southmayd  &  Choate,  ex-Judge  Emott,  Abbott  Bros.,  E. 
Bandolph  Bobinson,  the  brother  of  Judge  Sedgwick,  of  this 
eiW,  and  others. 

Some  of  these  repudiated  bonds  were  also  passed  upon  by 
ihe  New  York  Stock  Exchange,  and  because  repudiated  were 
afterwards  stricken  from  the  list  of  securities  to  be  dealt  in. 
The  face  of  these  securities  were  worth  par  a  few  days  prior 
to  their  repudiation,  and  immediately  after  that  Act  was 
passed  were  reduced  to  no  more  than  the  value  of  the  paper 
upon  which  they  were  engraved.  The  same  may  at  any  time 
be  the  fate  of  anv  new  securities  to  be  issued  by  that  State. 
Those  who  had  these  bonds  were  and  are  innocent  parties,  and 
amonffthe  sufferers  are  Trust  Companies  and  savings  banks. 
The  Metropolitan  Savings  Bank  holds  $100,000  of  the  7  per 
cent.  Georgia  gold  bonds,  bought  about  par  ;  the  Brooklyn 
Trust  Trust  Co.  holds  $100,000 ;  the  Union  Trust  Co.  holds 
$100,000;  the  Commercial  Warehouse  Co.  held  between 
$300,000  and  $400,000  of  the  bonds,  and  their  repudiation 
caused  the  failure  of  that  institution.  The  New  xork  State 
Loan  and  Trust  Co.,  Henry  A.  Smyth,  President,  also  had 
$100,000  of  the  bonds,  which  loss  was  largely  instrumental 
in  causing  the  collapse  of  that  concern.  The  Broadway 
National  Bank  holds  $200,000  of  these  bonds  as  collateral, 
upon  which  they  loaned  $160,000 ;  Morton,  Bliss  &  Go., 
Morris  K.  Jesup,  Drexel,  Morgan  &  Co.,  Ezra  A.  Boody, 
George  Morgan,  son-in-law  of  J.  S.  Morgan,  of  London ;  J. 
Sowman  Joonson  &  Co.,  Bichard  Lrviu  &  Co.,  L.  Yon  Hoff- 


264  THS  GEORGIA  REPUDIATION  BOND  SWINDI,«. 

man  &  Co.,  Russell  Sage  and  many  other  first-class  parties 
that  I  can  name  are  prominent  sofferers  resulting  from 
Georgia's  repudiation ;  oesides  which,  my  firm  in  1873  held 
over  12,500,000  State  of  Georgia  securities,  all  of  which  had 
been  paid  for  or  advanced  upon,  and  my  firm's  suspension 
at  that  time  was  attributable  thereto. 

The  only  way  to  do,  in  my  judgment,  is  to  make  the 
Southern  States  which  are  now  under  the  serious  cloud  of 
repudiation,  understand  that  their  credit  is  impaired  and 
facilities  for  obtaining  money  materially  lessened  because 
of  it.  Then,  realizing  that  as  their  position,  and  finding  that 
they  are  shut  out  of  me  financial  markets  of  the  world  owing 
thereto,  they  will  soon  make  a  compromise  with  their  lenient 
creditors,  and  remove  the  blot  from  their  escutcheons.  The 
Federal  Government  is  comprised  of  the  various  States  of 
the  Union,  and  to-day  enjoys  as  high  a  credit  as  any  nation 
in  the  world.  If  the  various  States  comprising  the  United 
States  are  permitted,  however,  to  repudiate  with  impunity 
and  screen  themselves  behind  their  sovereign  rights  so  that 
creditors  have  no  recourse,  the  odium  will  soon  fall  upon  the 
General  Government,  and  its  credit  will  finally  become 
tarnished  if  not  crippled  in  consequence.  The  State  of 
Georgia,  as  can  be  proven,  received  full  value.  The  internal 
improvements  in  Georgia  bear  testimony  of  this.  The  tax- 
able property  of  the  State  has  been  immenseljr  enhanced  by 
these  improvements,  and  the  debt  repudiated  is  a  merebaga- 
telle  as  compared  with  the  ability  of  the  State  of  Georgia  to 
provide  for  it.  She  has  become  rich  in  late  years,  and  if  the 
stain  of  repudiation  should  be  wiped  out^  would  stand  an 
excellent  chance  of  becoming  a  favorite  resort  for  emigration 
and  for  the  flow  of  capital.  Emigrants  from  other  countries 
to  this,  in  locating,  first  look  to  the  credit  enjoyed  by  th® 
State  their  attention  is  called  to,  and  if  found  high,  their 
conclusion  is  that  there  is  safety  for  property,  and  if  so, 
corresponding  safety  for  life ;  but  they  will  not  ^o  to  a  repu- 
diating State,  and  in  this  way  the  South  is  held  in  check  id 
the  development  of  her  resources,  owing  to  the  want  of  new 
blood.    The  bondholders  of  the  State  of  Georgia  have  fre* 

2uently  offered  to  leave  all  points  at  issue  in  reference  to 
teorgia's  repudiation  to  the  Courts  of  that  State,  to  the 
United  States  District  Judge,  or  to  arbitration,  the  parties  to 
be  selected  b  v  both  sides,  all  of  which  lias  been  denied,  the 
veply  being  the  ^^  bonds  are  repudiated,  and  we  simply  wiu 


INDIVIDUAL  CANNOT  SUE  A  STATE.  265 

not  take  any  steps  to  provide  for  their  recognition  or  pay- 
ment, and  what  are  you  going  to  do  about  it  V  "  Under  the 
drcnmstances,  creditors  are  powerless,  of  course,  to  do  any- 
thing, as  the  State  cannot  be  sued.  If  you  desire  it,  I  will 
send  you  a  sample  bond  of  some  of  the  issues  repudiated,  so 
that  you  may  see  how  beautifully  the  signatures  are  written, 
and  now  firmly  fixed  the  seal  of  the  Commonwealth  is  placed 
upon  them,  besides  the  magnificent  steel  engraved  workman- 
ship of  the  Continental  Bank  Note  Company  of  tliis  city.  If 
there  was  not  a  prospect  of  the  State  of  Georgia  being  forced 
by  public  opinion  to  provide  for  these  bonds  at  some  future 
tune,  they  would  be  worthy  to  be  framed  and  hung  up  in  our 
parlors  as  a  complete  and  fine  work  of  art. 

Jud^e  Lochrane,  former  Chief-Justice  of  the  State  of 
Georgia,  has  wired  me  that  he  will  appear  before  you  on 
Wednesday ;  Colonel  B.  A.  Crawford,  of  Georgia,  will  also  do 
BO ;  Messrs.  Abbott  Brothers,  of  this  city,  and  others  will 
appear  before  you. 

You  will  please  append  this  communication  as  a  part  of 
the  testimony,  and  snould  you  desire  more  on  the  subject, 
call  ui>on  me  therefor. 

I  have  the  honor  to  remain. 

Your  obedient  servant, 

Henby  Clews. 


EnwABD  Bbandon,  Esq.,  Chairman  of  the  Committee  on  the  Ad* 
minion  of  Securities  to  the  N,  T.  Stock  Exchange  : 
Deab  Sib: — It  is  currently  reported  that  the  State  of 
Qeorgia  is  about  to  apply  to  your  Committee  to  list  a  new 
issue  of  bonds.  In  behalf  of  myself  and  others  who  have 
suffered  most  seriously  bv  that  State's  unwarrantable  repu- 
diation of  bonds,  which  tave  as  full  a  right  to  an  equal 
standing  as  representing  the  credit  of  the  State  of  Georgia 
as  possessed  by  the  new  bonds  to  be  issued,  and  fully  real- 
izing that  the  cruel  fate  of  the  former  merely  represents  what 
nay  be  that  of  the  latter,  I  claim  the  righ^  as  a  member  of 
the  New  York  Stock  Exchange,  as  a  sufferer  to  the  extent  of 
seyeral  millions  of  dollars  by  the  State  of  Georgia's  bad 
faith,  to  protest  against  the  admission  of  any  new  securities 
hereafter  to  be  issued  by  that  State  until  her  repudiated 
bonds  are  recognized  and  provided  for. 

Yours  very  truly, 

Henbt  OiiEwa 


266  THE  G:eORGIA  REPUDIATION  BOND  SWINDUS- 

Ex-Governor  Bullock's  Democratic  successor,  soon  after 
he  was  elected  to  that  position,  appointed  as  Attorney  and 
Agent  for  the  State  of  Geor^^a,  one  of  the  State's  ablest 
lawyers,  a  gentleman  distinguished  as  having  been  a  meio- 
ber  of  the  Confederate  Congress,  to  investigate  all  the  busi- 
ness transactions  between  Henry  Clews  &  Co.  and  the  State 
of  Georgia.  Under  his  signature  as  Attorney  and  Agent  foi 
the  State,  he  makes  the  following  statement :  "I  would  say, 
with  a  great  deal  of  pleasure,  that  after  a  very  thorough  and 
complete  examination  of  the  books  of  account,  papers  and 
correspondence  of  Messrs.  Clews  &  Co.,  so  far  as  they 
relate  to  transactions  of  that  house  with  the  State  of  Georgia 
diuring  Governor  Bullock's  administration,  I  am  satisfied  th&t 
in  all  the  dealings  of  that  firm  with  the  State  of  Georgia, 
they  have  acted  with  both  fairness  and  liberality,  and  I  am 
convinced  that  in  all  these  matters  Mr.  Clews  did  nothing 
that  would  not  bear  the  closest  scrutiny,  and  he  did  nothing, 
in  my  opinion,  to  affect  his  character  for  integrity  and  fair 
dealing.  I  make  this  statement  with  the  more  pleasure  be- 
cause I  began  this  examination  of  accounts  of  Clews  &  Co. 
under  impressions  very  unfavorable  to  Mr.  Clews." 


The  opinion  of  ex-Governor  Brown,  now  our  able  senior 
United  States  Senator,  was  asked  by  thirty-five  members  of 
the  Legislature  of  1873.  In  the  course  of  a  comprehensive 
and  exhaustive  argument,  the  distinguished  Senator  says: 
'^  The  State  will  be  driven  to  abandon  this  position  (legisla- 
tive repudiation)  and  to  permit  a  case  te  be  made  by  her 
creditors  to  test  the  validity  of  these  bonds  in  the  courts  of 
the  country,  or  she  must  stand  dishonored  in  the  estima- 
tion of  all  good  men,  and  her  credit  must  sink  to  a  ruinous 
depth." 

The  late  ex-Governor  Alexander  H.  Stephens,  ex- Vice- 
President  of  the  bouthern  Confederacy,  is  on  record  as  say- 
ing, in  reference  to  this  repudiation,  that  it  is  ^'nothing  short 
of  public  swindling.  Not  less  infamous  than  obtaining 
money  under  false  pretences."  -But  the  partisan  feelingwas 
then  so  intense  that  even  tiie  lamented  ex-Governor  Jenkins 
was  hardly  accorded  a  respectful  hearing  in  ilie  Constita- 
tional  Convention,  of  which  he  was  president,  when  he  plead 
against  sweeping  repudiation  without  granting  the  holoers  a 


RECEIVING  TH«  BSNKFITS  OF  REPUDIATION.  267 

Judicial  hearing.  Ex-Gbyernor  Jenkins  said  on  that  memor- 
able occasion  :  "  Now,  sir,  I  take  this  ground :  that  for  the 
proper  examination  and  investigation  of  these  claims,  neither 
the  Legislature  nor  this  Conyention,  nor  the  people  them- 
sdves,  are  a  proper  tribunal  to  decide  these  matters.  Thev 
ought  to  be  examined  and  determined  judicially.  It  will 
now,  I  presume,  be  admitted  that  tho  ^'^o  vears*  time  between 
lepslatiye  and  constitutional  convention  repudiation  was  not 
allowed  to  pass  unnoticed  by  the  parties  having  these  bond 
claims  against  the  State.  Having  waived  our  sovereignty  in 
the  past  to  allow  the  State  to  be  sued  in  every  county  in 
the  State  on  claims  for  small-pox  expenses,  I  submit  that  our 
sovereignty  ought  not  to  be  plead  to  bar  so  important  an 
issue  as  that  now  under  consiaeration.  The  State  can,  in  no 
event,  be  put  to  loss.  The  whole  State  has  been  largely 
benefited  by  the  legislation  and  by  the  executive  action 
which  was  subsequently  repudiated.  We  have  been  for 
fifteen  years  past  collecting  annual  taxes  on  fifty  millions 
of  enhanced  value  of  our  taxable  property ;  an  increase 
which  is  directly  traceable  to  the  good  effects  of  tho  ne\9 
railroads  built  under  that  legislative  and  executive  authority. 
Shall  wo — can  we  honestly  receive  these  benefits  and  repu* 
diate  our  liabilities  ?  " 


An  interview  with  ex-Govemor  Bufus  B.  Bullock,  of 
Georgia,  May  29th,  1885: 

A  reporter  called  upon  ex-Govemor  Bullock  at  his  rooms, 
Fifth  Avenue  Hotel,  and  obtained  the  following  interview : 

Governor  Bullock  :  "  Any  information  in  my  possession  is 
at  your  service.  I  have  published  from  time  to  time,  over 
my  own  signature,  my  views  on  this  subject,  and  I  have  no 
objections  to  repeating  them.  I  desire  to  say,  however,  that 
I  am  in  no  wise  a  party  to  the  recent  proceedings  which  have 
been  had  before  the  Attorney-General  of  New  lork.  I  was 
in  the  city  on  private  business  and  without  any  previous 
knowledge  of  the  proposed  hearing.  I  attended  the  hearing 
out  of  curiosity,  expecting  to  hear  an  argument  by  ex- Chief 
Justice  Lochrane,  and  while  there  was  invited  by  the  Acting 
Attorney-General  to  respond  to  his  inquiries.  "  This  I  did 
with  the  result  as  reported  in  your  valuaole  paper.  During 
my  administration  in  1868 -'69-70  and  71,  bonds  of  the 
State  were  issued  for  State  purposes,  and  the  endorsement 


'270  THU  GEORGIA  I^PTJDIATION  BOND  SWINI>lA 

believe  that  the  Empire  State  of  the  South  will  eyentually 
keep  pace  with  her  sister  States  in  the  Union  in  meting  oat 
exact  justice  through  her  courts  to  every  man,  come  from 
whence  he  may. 

Hon.  Wm.  A.  Post,  Deputy  Attorney- General  of  this 
State,  by  appointment,  visited  this  city  last  Friday  to  take 
evidence  on  the  Georgia  repudiated  bond  question,  the 
object  being  to  determine  the  legal  status  of  a  new  issue  of 
bonds  by  the  State*  of  Georgia  in  connection  with  the  sav- 
ings banks  of  this  State,  Owing  to  the  repudiation  of  that 
State,  at  present  these  institutions  are  debarred  from  in?est- 
in^  in  bonds  of  any  repudiating  State,  and  the  effort  now  is 
being  made  by  the  representatives  of  the  State  of  Georgia 
to  remove  that  barrier,  so  that  the  savings  banks  can  be  gut- 
ted of  their  surplus  means  and  filled  up  with  the  bonds 
issued  by  that  State,  which  are  more  than  likely  to  share 
the  wicked  fate  of  repudiation,  as  previous  issues  to  the  ex- 
tent of  18,000,000  have  done.  The  savings  banks  managers, 
even  in  the  event  of  obtaining  a  decision  authorizing  tnem 
to  take  Georgia  bonds  for  investment,  should  be  held  per- 
sonally liable  for  any  losses  that  may  fall  upon  such  insti- 
tutions if  they  hereafter  invest  the  funds  of  widows  and 
orphans  in  a  security  which,  judging  from  past  experience,  is 
almost  sure  to  be  wiped  out  and  made  worthless.  Mr.  Clews 
charged  that  Mr.  Calhoun's  appearance  in  representing  the 
State  before  the  Attorney-General  at  Albany  was  a  surrepti- 
tious proceeding,  and  was  only  heard  of  by  mere  chance  by 
the  holders  of  the  repudiated  bonds  through  a  squib  in  a 
(Georgia  paper.  He  also  stated  that  the  bondholders  had 
patiently  waited  twelve  years  for  their  money,  and  no  body 
of  creditors  had  ever  been  so  lenient  as  those  of  the  S^te 
of  Georgia,  and  justice  demanded  that  these  long  suffering 
and  much-defamed  creditors  should  be  settled  with  prior 
to  the  financial  world  according  to  the  State  of  Georgia  a 
sufficiently  high  credit  to  admit  of  her  floating  any  new 
issues  of  bonds.  A  motion  was  made  to  adjourn  the  meeting 
until  the  20th,  which  Mr.  Post  said  he  would  accede  to  after 
asking  ex  Governor  Bollock  a  few  questions  in  relation  to  the 
connection  of  the  firm  of  Henry  Clews  &  Co.  and  the  State  of 
Georgia  during  the  time  he  was  its  Governor.  He  desired  to 
make  these  inquiries  now,  as  the  ex-Governor  was  present  asd 
might  not  be  at  the  adjourned  meeting.    Mr.  Clews  request^ 


r-  I 

I 

1 


GEORGIA  BOiq)S  AS  SECURITY.  271 

permission  to  state  that  his  firm — ^Henry  Clews  Ai  Co. — ^had 
neyer  been  agents  for  the  State  of  Georgia,  bat  merely 
acted  for  her  as  bankers  and  brokers.  The  agent  of  the 
State  during  the  entire  period  of  Governor  Buflock's  term 
of  office  was  the  Fonrth  National  Bank  of  this  city.  He 
rtated  that  his  firm  received  no  bonds,  excepting  by  purchase 
or  as  collateral,  and  advanced  money  to  the  State  as  it  was 
needed.  At  one  time  the  State  owed  for  said  advances  as 
much  as  $1,650,000 ;  the  money  so  advanced  was  stated  by 
Geoi^a's  officials  as  required  to  meet  the  expenses  of  the 

Kvemment  of  the  State.  Ex-Governor  Bullock  fully  ratified 
r.  Clews'  statement.  He  admitted  that  the  Fourth  National 
Bank  was  the  State  financial  agent,  and  that  he  had  placed 
a  large  quantity  of  bonds  with  Henry  Clews  &  Co.  to  market 
and  as  collateral  for  advances.  ^'I  will  say,"  said  the  Gov- 
ernor, "that  every  dollar  secured  on  the  sale  or  pledge  of 
these  bonds  was  received  by  the  State,  and  it  was  expresslv 
agreed  that  the  firm  of  Henry  Clews  &  Co.  should  hold  ail 
the  bonds  in  their  hands  as  security  for  the  indebtedness 
due  them  by  the  State  of  Georgia." 


Geobgia's  Outlawed  Bonds. 

Newspapers  in  Atlanta,  Savannah  and  other  parts  of 
Georgia  have  violently  assailed  The  Chravhic  for  its  com- 
ments on  the  new  issue  of  Geor^a  State  oonds  as  affected 
by  the  repudiation  of  a  former  issue*  These  journals  are 
short-sighted,  as  are  the  people  of  Georgia  who  imagine  that 
they  save  money  by  outlawingthe  obligations  of  their  State 
issued  in  the  usual  manner.  We  will  not  impute  deliberate 
dishonesty  to  them,  but  they  certainly  do  not  place  their 
own  motives  in  a  favorable  light  when  they  exclude  the 
holders  of  the  repudiated  bonds  from  even  the  right  to  pre- 
sent their  claims  before  the  civil  courts  of  Georgia.  JBx- 
Govemor  Bullock  has  been  berated  in  the  same  connection^ 
and  he  cogently  replies  : 

"  I  have  no  pecuniary  interest  in  the  repudiated  bonds  or 
obligations*  I  have  no  lot  or  part  in  any  scheme  or  com- 
bination by  or  through  which  public  attention  is  or  has  been 
called  to  this  matter.  My  attitude  is  that  of  a  private  citizen 
who  has  as  high  a  regard  for  the  honor  and  good  name  of 
Georgia  as  any  man  within  her  borders.  I  never  obtrude 
^  the  Dond  question  "  upon  the  public  attention.    But  when 


272  THB  GEORGIA  RKPUDIATION  BOITD  SWiNlTIrB. 

my  oflScial  action  is  attacked  in  that  connection  I  stall  nevet 
fail  to  assert  and  re-assert  that  the  financial  statement  made 
by  me  to  my  successor  in  office  was  the  exact  truth  and  that 
its  correctness  never  has  and  never  will  be  successfully 
controverted.  In  that  financial  statement  were  man;^  of  the 
State  obligations,  which  in  a  time  of  great  public  excitement 
and  partisan  zeal  were  *  outlawed'  by  the  action  of  a  politi- 
cal body,  and  up  to  this  day  and  hour  the  holders  of  such 
obligations  have  been  denied  that  cool,  dispassionate  hear- 
ing of  their  claims  which  our  courts  alone  can  give.  My 
'attitude'  is  that  Georgia  is  too  great,  that  she  stands  too 
prominent  in  this  country  and  in  the  world  at  large  to  accept 
the  position  of  being  a  semi-annual  defaulter  and  refusing 
to  the  creditor  a  hearing  in  her  own  courts.  It  is  idle  for 
me  to  assert  or  for  you  to  deny  the  validity  of  the  defaulted 
securities.  That  is  a  question  of  law,  and  no  Qeorgian  can 
defend  his  State  while  she  slams  the  door  of  our  courts  in 
the  face  of  our  creditors.  I  assert  that  it  does  make  a  vast 
difference  to  Georgia  whether  her  new  securities  are  listed 
at  the  Exchange  in  New  York.  Our  own  people  or  other 
people  can,  of  course,  buy  and  own  them,  and  I  know  the 
interest  and  principal  will  surely  be  paid,  but  unless  the 
bonds  are  listed'  they  are  not,  in  mercantile  parlance^  a 
*good  delivery,'  and  will  not  stand  abroad  as  they  should, 
equal  with  the  best  State  in  the  Union." 

A  State  which  once  repudiates  its  obligations  cannot  be 
trusted  not  to  do  the  same  thing  again.  What  ^arantee 
can  any  investor  have  that  the  bonds  which  Georgia  is  now 
trying  to  put  upon  the  market  may  not  be  outlawed  by  the 
next  Jjegislature  ?  The  Graphic  has  no  interest  in  t£e  matter 
beyond  that  of  upholding  public  morals,  the  good  name  of 
the  State  and  the  rights  of  swindled  creditors.  The  State 
which  repudiates  is  as  foolish  as  the  imbecile  who  cut  off 
his  nose  to  spite  his  f ace.— i^.  Y.  Q-raphie^  June  6th,  1885. 

The  extreme  care  with  which  so-called  securities  or  new 
issues  of  bonds  are  scrutinized  in  this  market  now-a-days  is 
shown  in  the  ppposition  which  has  sprung  up  to  the  proposed 
listing  on  the  New  York  Stock  Exchange  of  $3,500,000 
new  Georgia  State  bonds.  While  money  is  a  glut  in- the 
markets  and  our  banks  are  now  carrying  a  larger  idlereserre 
than  ever  before  known  in  the  history  of  business^  there  is 
no  disposition  to  permit  Southern  repudiators  to  come  in 


OPPOSITION  OF  NSW  YORK  BANKERS.  273 

and  secure  any  part  of  the  funds.  The  applicatiou  to  the 
Attorney-G(eneral  to  permit  our  savings  banks  to  "invest" 
ID  the  bonds,  and  the  remiest  that  thoj  be  listed  in  the  Stock 
EzchaDge,  aroused  New  xork  bankers  to  action,  and  their 
opposition  has  been  so  far  very  effective.  It  has  had  this 
good,  at  least,  that  it  has  revived  attention  in  regard  to  the 
repudiation  of  old  obligations  of  Southern  States.  By  its 
act  of  repudiation,  Georgia  mulcted  the  New  York  investors 
to  the  tune  of  millions.  I  know  of  on©  banker  who  now 
holds  more  than  $2,500,000  of  these  bonds,  on  which  there 
is  an  interest  accumulation  of  twelve  years'  duration,  and 
at  least  three  leading  financial  institutions  were  carried 
to  the  wall  by  the  same  means.  Now,  it  is  considered  very 
poor  grace  for  the  modem  Christian  statesmen  of  Georgia 
to  pass  around  the  hat  again.  Let  the  State  first  repudiate 
its  repudiation,  pay  up  old  scores,  and  then  it  will  be  quite 
early  enough  to  ask  for  further  loans.  The  argument  that 
the  credit  of  the  State  is  really  benefited  by  the  repudiation, 
as  she  has  so  much  less  obligations  to  meet,  is  a  quaint  one, 
and  worthy  the  source  from  which  it  emanates.  This  is  not 
the  sort  of  "  prosperity  "  that  invites  further  investment  of 
Northern  funds. — Syracuse,  N.  Y.j  Sunday  Herald. 

(BditorUa  from  The  "  AtlaTUa  ITaUoncU,''  Atlanta,  Oa.,  June  Ist,  1885. 

Georgia  Bonds. 

When  a  Georgia  bond  is  put  on  the  market,  our  Demo- 
cratic friends  cry  out  "  Great  is  the  Credit  of  Georgia." 
They  claim  that  Georgia  pays  all  of  her  obligations  wnen- 
ever  they  are  due,  knowing  their  claim  to  be  utterly  false. 
Oeorgia  has  not  only  repudiated  legal  obligatious,  in  the 
hands  of  innocent  purchasers,  but  she  denies  the  parties  who 
have  paid  value  for  her  bonds  the  right  to  take  the  judgment 
of  her  own  courts  on  the  validity  of  those  bonds.  So  in  the 
bond  business  the  State  of  Georgia  acts  not  only  the  role  of 
the  thief  and  robber,  but  also  of  the  coward.  The  man 
who  claims  that  Georgia  meets  all  h^r  obligations  is  simply 
a  liar. 


Bespecting  State  securities,  investors  are  showing  a  very 
proper  discrimination  against  the  issues  of  States  tainted 
with  repudiation.  The  action  of  the  Superintendent  of  the 
Banking  Department  of  this  State,  in  forbidding  savings 


^4  THB  GEORGIA  REPUDIATION  BOND  SWINDI.K. 

institations  from  investing  in  the  new  issues  of  the  bonds  of 
Georgia,  has  attracted  attention  to  the  danger  of  inyestments 
thus  tainted,  and  is  very  generally  approved  by  the  invesi- 
ing  public  as  a  check  to  future  acts  of  this  kind.  The  dis- 
position shown  by  certain  managers  of  savings  banks  to  pat 
the  funds  in  their  charge  into  such  doubtful  securities  should 
be  strongly  condemned ;  and  it  is  a  question  whether  it  is 
not  necessary,  as  a  protection  to  such  depositors,  to  make 
such  a  use  of  the  deposits  of  the  poorer  classes  a  penal 
offence.— Fee/.  Zy  Financial  Circular  of  Henyy  Clews  ^  Co^ 
June  ^th,  1885. 


How  THE  Geobgia  Bonds  were  Negotiated. 

The  following  circular  explains  the  manner  in  which  the 
Georgia  bonds  were  negotiated  with  my  firm : 

New  yoBK,  July  3, 1885. 
Hon.  Wm.  A.  Post, 

Deputy  Attorney -Q-eneral^  State  of  New  York: 

The  firm  of  Henry  Clews  &  Co.  did  not  solicit  the  acooimt 
of  the  State  of  Georgia,  but  it  was  opened  at  tKe  request  o^ 
Mr.  I.  C.  Plant,  the  leading  private  banker  of  Macon,  G«., 
and  the  most  influential  and  affluent  banker  of  the  State  of 
Georgia  then  and  at  the  present  time.  Mr.  Plant  was 
brou^t  to  my  office  by  Mr.  P.  0.  Calhoun,  President  of  the 
Fourth  National  Bank,  which  institution  was  the  financial 
agent  of  the  State  of  Georgia  at  the  time.  Mr.  Calhoun  in- 
troduced Mr.  Plant  to  me,  by  giving  that  gentleman  a  very 
strong  endorsement,  and  stated  that  Mr.  ^lant  was  in  this 
city  for  the  purpose  of  raising  money  for  the  State  of 
Georgia,  whicn  money  was  reqmred  to  pay  off  the  members 
of  the  Legislature.  Mr.  Calhoun  stated  that  his  bank  had 
loaned  to  Mr.  Plant  $400,000  on  currency  7  per  cent. 
Georgia  bonds,  and  as  money  was  very  stringent  at  the 
present  time  and  the  calls  were  very  numerous,  he  felt  as 
though  $400,000  was  as  much  as  he  ought  to  loan  in  any 
one  quarter.  ^'  But  if  you  have  any  money,  Mr.  Clews,  that 
you  are  willing  to  loan  at  the  present  time,  if  you  will  ac- 
commodate Mr.  Plant,  it  may  result  in  your  doing  some 
good  business  with  the  State  of  Georgia.  I  would  say," 
said  he,  ^'  that  you  cannot  advance  money  in  any  quarter 
where  it  would  be  safer  than  to  lom  Qu  the  Georgia  State 


HOW  THIJ  IX>AN  WAS  CONTRACTSD.  276 

bonds  wHch  Mr.  Plant  will  offer  you.    I  know  the  State  of 
C3teorgia  well.  I  have  ridden  on  horseback  over  almost  every 
foot  of  ground  in  the  State  in  my  early  life  in  my  collecting 
trips.     My  father  was  in  the  saddlery  and  hardware  busi- 
ness, and  the  larger  part  of  his  business  was  in  that  State. 
I  know  the  people  of  this  State ;  and  as  an  evidence  of  my 
opinion  of  the  future  of  this  State  and  its  bonds,  I  will  say 
tliat  if  I  had  my  choice  to  put  my  money  into  these  bonds 
of  the  State  of  Georgia,  or  those  of  the  State  of  New  York, 
to  leave  to  my  family,  I  would  give  the  bonds  of  Georgia  the 
preference,  for  the  reason  that  her  debt  is  so  small  as  com- 
peared with  the  debt  of  the  State  of  New  York  at  the  present 
time,  and  the  future  of  the  State  of  Georgia  is  destined  to 
l>e  one  of  great  prosperity."    Mr.  Plant  then  said:  *'Mr. 
Olews,  Mr.  Calhoun  has  advanced  $400,000  towards  the 
ctmount  I  need,  and  I  want  $250,000  in  addition.    I  know 
the  money  market  is  very  tight  [as  it  was  at  that  time, 
money  being  worth  7  per  cent,  per  annum  and  1  per  cent. 
per  day  commission];  still,  I  thinks  if  you  will  loan  this 
money  to  the  State  of  Georgia,  that  it  will  enable  you  to 
make  a  connection  which  will  prove  profitable  to  you  in  the 
end,"    I  said :  "  Very  well,  Mr.  Plant,  I  will  make  the  loan 
to  the  State  of  the  $250,000  which  you  require."    Mr.  Plant 
then  said :  ^'  Well,  place  it  to  the  credit  of  the  State  of 
Georgia,  and  I  will  bring  in  500,000  of  Georgia  7  per  cent, 
currency  bonds,  the  same  character  of  bonds  wmch  have 
been  lodged  as  collateral  with  the  Fourth  National  Bank.   I 
-will  go  at  once  to  the  Fourth  National  Bank,  where  they 
are,  and  bring  them  down  here ;''  which  he  did.     The  $250,- 
000  was  then  placed  to  the  credit  of  the  State  and  a  tele- 
gram to  that  effect  was  sent  to  the  Governor,  and  it  was  at 
once  drawn  out  on  the  official  drafts  of  the  State.    This 
started  a  correspondence  with  Governor  Bullock,  in  hi.^ 
official  capacity,  he  being  entirely  unknown  to  me  before. 
Other  applications  were  then  made  direct  by  the  Governor 
for  additional  loans,  which  were  made  from  time  to  time, 
until  the  amotint  so  advanced  reached  to  $1,650,000.    After 
receiving,  in  addition  to  the  500,000  bonds  referred  to,  800,- 
000  more  of  similar  bonds  came  into  our  possession  from 
time  to  time  as  collateral,  being  put  up  at  50  cents  on  the 
dollar ;  and  when  we  afterwards  received  a  large  installment 
of  the  gold  quarterly  7  per  cent,  bonds,  having  at  that  time 
an  excess  of  collateral  in  our  hands,  we  voluntarily  for- 


276  TH^  GEORGIA  REPUDIATION  BOND  SWINDUC. 

warded  to  the  State  500,000  of  the  Currency  7s.  This 
precisely  and  exactly  the  way  my  firm's  connection  was  com- 
menced with  the  State  of  Georgia.  Mr.  I.  O.  Plant,  who  is 
still  a  banker  of  Macon,  Ga.,  I  am  sore,  will  testify  to  the 
correctness  of  my  statements. 

The  State  of  Georgia  gold  7  per  cent,  quarterly  interest 
bonds  were  place  1  by  the  (Governor  of  Georgia  in  my  firm's 
hands  as  additional  collateral  against  the  advances  made  to 
the  State,  with  full  instructions  to  sell  same  and  credit 
avails.  Application  was  made  by  request  of  Goveruor  Bul- 
lock to  have  this  issue  of  bonds  placed  on  the  regular  list  of 
the  New  York  Stock  Exchange,  and  after  a  full  investiga- 
tion by  that  body,  thev  were  admitted.  A  portion  of  these 
S[old  bonds  were  sold  in  this  country  and  the  balance  in 
Wope.  When  the  Georgia  Bond  Committee  came  here 
77,000  of  these  bonds  were  in  Europe  in  the  banker's  hands 
there  for  sale,  and  my  New  York  firm  held  25,000,  all  others 
received  having  been  sold.  These  102  bonds  were  reported 
to  this  committee  as  unsold  at  that  time,  but  soon  there- 
after, and  before  the  Act  of  repudiation  was  passed  by  the 
Georgia  Legislature,  these  102  bonds  were  sold  and  reported 
as  sold,  and  1  think  the  price  was  97^,  and  the  State's  ac- 
count was  credited  with  the  avails,  and  theproper  authori- 
ties of  the  State  were  duly  notified  thereof.  Up  to  the  time  of 
sale  of  these  102  bonds  our  standing  order  to  sell  continued 
and  was  never  revoked;  because,  however,  these  102,000 
had  been  reported  to  the  Georgia  Bond  Oommittee  when  in 
this  city  as  being  on  hand  at  that  time,  they  were  repudi- 
ated, together  with  the  other  bonds  which  we  were  supposed 
to  still  hold.  The  New  York  Stock  Exchange  was  called 
upon  by  the  Treasurer  of  the  State  of  Georgia  to  order 
struck  from  the  list  these  102  bonds,  and  the  Exchange  was 
compelled  to  be  governed  thereby,  as  official  notice  had 
been  received  of  their  repudiation.  The  following  were  the 
numbers  of  these  bonds  *  ♦  *  *  You  will  perceive 
that  the  numbers  are  not  consecutive,  thus  showing  that 
they  were  not  the  last  of  the  bonds  placed  in  our  hands. 
The  low  numbers  were  received  first  and  the  highest  num- 
bers last,  in  the  deliveries  made  to  us  by  Governor  Bullock. 
Under  tliis  statement  of  facts,  which  lam  prepared  to  prove, 
I  insist  that  these  102,000  bonds  are  as  binding  upon  the 
State  of  Georgia  as  any  of  those  which  are  now  recognized. 
My  fellow  members  of  the  Stock  Exchange  who  have  made 


ACKNOWI*«DGING  TH^  DSBT.  277 

ioTestigation  fully  confirm  this  opinion.   A  large  niimber  of 
the  coupons  of  these  bonds  were  paid  by  the  S^te  on  these 
10'2,000  bonds,  thus  showing  the  State's  recognition  of  them 
at  one  time.    My  firm  repeatedly  called  upon  the  officials  of 
the  State  of  Georgia  to  pay  the  balance  due,  but  we  could 
get  no  response.     After  waiting  patiently  a  very  long  time, 
we  called  in  eminent  counsel  for  advice  in  this  matter,  and 
ander  said  advice  the  Governor  and  Treasurer  of  the  State 
of  Georgia  were  notified  in  the  regular  legal  form  that  if  the 
said  indebtedness  was  not  paid  on  or  before  a  specified  date 
the  collateral  in  our  hands,  each  item  being  specified,  be- 
longing to  the  State,  would  be  sold  at  public  auction  at  the 
Merchants'  Exchange  fiooms,  111  Broadway,  at  12  o'clock, 
by  A.  H.  Mnller&  Sons,  auctioneers.     This  notice  of  said 
Bale,  together  with  list  of  securities,  was  inserted  in  the 
newspapers ;  the  sale  took  place,  and  the  800,000  Currency 
and  other  bonds  were  disposed  of  to  the  highest  bidders, 
and  the  State's  account  credited  with  the  avails.    All  these 
securities  should  be  considered,  therefore,  as  having  passed 
out  of  my  firm'spossession  and  in  the  hands  of  other  hold- 
ers for  value.     The  State  of  Georgia  in  this  matter  is  cer- 
tainly amenable  to  New  York  laws,  and  the  entire  business 
was  conducted  in  accordance  with  said  law.     Governor  Bul- 
lock's successors  did  all  they  could  to  depreciate  the  securi- 
ties issued  by  their  predecessors,  and  are  responsible  for 
the  low  prices  which  the  State  of  Georgia  bonds  afterward 
sold  for,  as  during  Governor  Bullock's  administration  the 
State  7s  were  at  about  par  and  the  first  mortgage  Brunswick 
&  Albany  bonds,  guaranteed  by  the  State,  sold  at  90  and 
upwards.     As  an  evidence  of  the  high  credit  which  my  firm 
bad  worked  up  for  the  State,  we  bought  out  the  first  million 
issued  of  Brunswick  &  Albany  First  bonds  guaranteed  by  the 
Slate  of  Georgia,  in  the  Berlin  and  Frankfort  markets  at  104, 
and  there  were  seven  millions  of  bids  therefor,  and  the  one 
million  had  to  be  distributed  ^o  rata  amongst  the  said  bid- 
ders.    In    testimony    of    the    correctness    of  this  state* 
ment,  I  refer  you  to  Mr.  Budge,  the  head  active  partner  of 
Hallgarten  &  Co.,  and  Mr.  Schi£^  the  head  active  partner  of 
Knhn,  Loeb  fc  Co.,  of  this  city,  who  were  interested  with 
me,  and  through  these  two  gentlemen  the  bonds  were  sold. 
After  this  great  success,  I  ask  you,  or  any  fair-minded  man, 
was  not  my  firm  entitled  to  continue  to  advance  upon  Brims- 
^riok  k  Albany  first  mortgage  bonds  endorsed  bv  Georgia  t 


278  THK  GTORGIA  RKPUPIATION  BOND  SWINDI«]$. 

and  as  the  276  Carteisrille  &  Yan  Wert  bonds,  endorsed  by 
the  State  of  (Georgia,  were  offered  to  mj  firm  shortly  after 
this  signal  success  as  collateral,  were  they  not  also  equally 
justified  in  adyancing  167,000  upon  them  1  and  m  that  way, 
and  tn  that  alone,  these  securities  came  into  our  hands.  I 
most  positively  assert  that  my  firm  never  had  any  other 
pecuniary  interests  but  as  herewith  set  forth  in  these  two 
enterprises.  At  the  time  of  the  repudiation  of  the  State, 
my  firm  held 

760,000  Brunswick  k  Albany  first  mortgage  bonds,  en 
dorsed  by  State  of  Georgia. 

276,000  Cartersville  &  Yan  Wert  first  mortgage  bonds,  en- 
dorsed by  State  of  Georgia. 

587,000  State  of  Georgia  Gold  7s. 

860,000  Brunswick  &  Albany  first  mortgage  bonds. 

400,000  Coupons  cashed  by  us  on  the  State  of  Georgia 
securities,  but  a  legal  claim  against  the  State. 

800,009  State  of  Georgia  Currency  7s. 

3,162,000 

Also,  a  judgment  of  625,000  obtained  in  favor  of  Henry 
Clews  &  Co  in  the  State  courts  of  Georgia  against  the 
Brunswick  &  Albany  Bailroad  Company,  being  an  amount 
due  my  firm  over  and  above  all  securities  in  our  hands.  My 
firm  also  obtained  in  the  United  States  District  Court  of 
Georgia  a  judgment  to  secure  our  advances  of  167,000  to 
the  Cartersville  &  Yan  Wert  Company.  Keiilier  of  these 
judgments  have  ever  been  satisfied. 

^is  leaves  out  entirely  the  102,000  Georgia  7s  (quarter- 
lies), as  well  as  many  other  scattering  lots  of  different  is- 
sues of  the  Sta^e  of  Georgia  securities.  The  past  dae 
bonds  referred  to  b^  Mr.  Hammond  were  being  hawked 
about,  both. here  and  m  London,  for  the  purpose  of  forcing 
their  payment,  and  the  holders  threatened  to  use  them  to 
interfere  with  the  sale  of  the  gold  7  s  which  we  were  about 
to  bring  out  in  this  and  foreign  markets.  I  mentioned  this 
matter  to  Governor  Bullock  when  on  a  visit  here.  He  then 
directed  me  to  bay  up  such  of  these  bonds  which  were  in 
troublesome  hands,  and  as  they  were  a  demand  claim 
against  funds  then  in  the  State  Treasury,  all  you  have  to  do, 
he  said,  is  to  charge  up  the  amount  whiclx  you  paid  for  said 
bonds  to  the  Staters  account  and  retain  in  your  hands  the 
ponds  as  collateral  and  when  the  State  is  flush  enough  I'll 


.POUTICIANS  DKPRKCIATB  THH  BONZ>S.  279 

see  that  jon  are  paid  direct  from  the  Treasury.  These  past 
due  bonds  belonged  to  us,  and  were  taken  up  by  our  money 
and  not  the  Staters ;  the  98,000  which  were  cancelled,  which 
Mr  Hammond  refers  to,  were  so  cancelled  by  error,  which 
I  am  fully  prepared  at  any  time  to  prove.  The  depreciation 
in  Greorgia  State  bonds  which  Mr.  Hammond  refers  to  did 
not  exist  during  Gorernor  Bullock's  administration,  but  was 
brought  about  by  his  successors  in  office,  as  they  did  all 
they  possibly  could  to  depreciate  the  bonds  of  tne  State 
authorized  and  issued  by  the  previous  Legislature. 
I  have  the  honor  to  remain, 

Your  obedient  servant, 

Henby  Clews. 


Geobgia  Secubities  akd  New  Yobk  Savings  Banes. 

The  efforts  that  are  being  made  to  place  Georgia  securi- 
ties in  the  savings  banks  of  New  York  ought  to  be  resisted 
for  two  very  good  reasons :  First,  such  investment  would  be 
contrary  to  tbe  law  of  the  State ;  second,  even  if  it  were 
legal  it  would  be  imprudent  and  unsafe. 

As  to  the  authority  of  our  savings  banks  to  invest  in  these 
securities,  it  is  understood  that  the  opinion  of  the  Attorney- 
Qeaeral  has  been  asked.  On  this  point  there  is  not  much 
room  for  question.  Savings  banks  are  prohibited  by  law 
from  iavesting  in  the  stocks  or  bonds  of  any  State  that  has 
within  ten  years  defaulted  in  the  payment  of  any  part  of 
the  principal  or  interest  of  its  debt.  By  a  constihitional 
amendment  adopted  in  1877,  Georgia  ratified  previous  acts  of 
the  Legislature  repudiating  more  than  eight  millions  of  its 
obligations.  The  excuse  given  for  this  proceeding  was  that 
the  State's  obligations  had  not  been  lawfully  contracted, 
and  therefore  were  not  binding.  On  this  ground  it  is 
claimed  that  Georgia  securities  do  not  fall  within  the  prohi- 
bition put  b V  the  law  upon  the  savings  banks  of  New  York. 
There  would  be  some  force  in  this  view  if  Georgia  were  sus- 
tained by  any  judicial  decision  holding  the  bonds  invalid. 
But  it  took  advantage  of  that  principal  which  protecta  a 
State  against  suit  by  a  citizen,  it  decided  the  question  by 
its  own  arbitrary  edici  It  gave  its  victimized  creditors  no 
voice  in  the  matter.  In  the  absence  of  judicial  support  or 
warrant,  its  action  can  be  regarded  only  as  a  repudiation. 

But  if  there  were  no  legal  obstacle  in  the  way,  prudence 


PROPERTY  OP 

NEW  YORK  CHAPTER 

^^^ncan  institute  of  Ban..ne. 


280  THA  GKORGIA  REPUDIATION  BOND  SWINDI«^ 

alone  shoold  deter  any  savings  institution  from  investing  id 
the  bonds  of  a  State  that  has  so  recently  broken  its  mth 
and  repudiated  its  obligations.  The  managers  of  a  savings 
bank  hold  an  exceptional  trust.  These  institutions  are  the 
depositories  of  the  earnings  of  the  poor.  The  first  consider- 
ation in  their  management  is  safety.  With  that  end  in 
view  the  law  imposes  the  most  strmgent  regulations  on 
their  supervision  and  the  disposition  of  their  funds.  Their 
investments  are  properly  restricted  to  the  safest  and  mosfc 
unquestionable  securities.  There  is  neither  authority  nor 
excuse  for  taking  any  risk.  Let  individuals,  if  they  wish, 
invest  in  Georgia  bonds.  That  is  their  own  business.  Bat 
the  managers  of  a  savings  bank  cannot  run  any  such  risk 
without  failing  in  their  duty  to  thousands  of  poor  depositors. 
—N.  Y.  Eeraldy  July  17, 1885. 


The  Attobney-Gbnbbal's  Decision. 

The  decision  of  the  Attorney-General,  as  was  expected, 
wisely  prohibited  the  savings  banks  of  this  State  from  risk- 
ing any  of  the  hcurd  earnings  of  their  large  number  of  depos- 
itors in  such  an  uncertain  security  as  Georgia  bonds. 

The  Bank  Superintendent,  Willis  S.  Paine,  referring  in  - 
his  report  of  March,  1886,  to  this  decision,  says  : 

^^For  some  time  there  has  been  a  determined  effort  to 
have  the  bonds  issued  by  the  State  of  Georgia  accepted  as  a 
lawful  investment  for  savings  banks  of  this  State.  My 
predecessor  in  office  declined  to  recognize  their  legal  right 
to  invest  in  bonds  of  the  State  mentioned.  Late  in  1»B5 
the  State  issued  a  considerable  amount  of  bonds,  which  were 
offered  to  the  savings  banks  on  terms  advantageous  to  them, 
and  there  was  a  desire  on  the  part  of  some  of  the  banks  to 
purchase  the  bonds.  The  matter  was  by  me  referred  to  the 
Attorney-General  to  determine  whetiier  the  State  had 
defaulted.  Several  hearings  were  had,  at  which  the  various 
interests  involved  were  represented  by  eminent  counsel 
The  conclusions  reached  by  the  Attornev-G^neral  were 
based  upon  a  consideration  of  the  facts  an^  circumstances 
relating  to  the  issue  by  the  State  of  Georgia  of  its  guarantee 
of  $1,500,000  of  bonds  of  the  Brunswick  and  Albany  railroad, 
which  he  holds  are  in  default  of  interest,  the  principal  not 


G^RGIA'S  DB]?AXJI.f  ON  iTS  BONDS.  281 

yet  being  due.  He  reaches  the  conolusion  that  at  least  in 
the  case  of  the  bonds  issued  ofindorsed  in  aid  of  the  Bruns- 
wick and  Albany  railroad  it  has  defaulted,  and  this  brings 
the  case  within  the  prohibition  of  the  statute  of  New  York 
i^;alating  inTestments  by  trustees  of  saying  banks.  He 
therefore  concludes  that  tne  sayings  banks  of  I^ew  York  may 
not  lawfully  inyest  their  deposits  in  the  bonds  of  the  State 
of  Qeoi^a. '  

Geobgu's  New  Issue. 

An  attempt  was  made  last  summer  to  haye  seyeral 
millions  of  the  new  issue  of  Georgia  bonds  listed  on  the 
Stock  Exchange  in  a  second  hand  style,  through  the  instru- 
mentality of  Mr.  Fred.  Wolf,  who  was  presumably  an  inno- 
cent holder  of  these  bonds.  On  this  occasion  I  addressed  to 
the  Goyerning  Committee  the  following  protest : 

June  22, 1886. 
To  the  Q-avemmff  Cdmmittee  of  the  N.  Y.  Stock  Exchange  : 

jyRASL  SiBS : — I  haye  just  been  informed,  whether  cor- 
rectly or  not,  that,  not  the  State  of  Georgia,  but  a  person 
by  the  name  of  Mr.  Fred.  Wolf,  of  this  city,  has  applied  to 
your  Committee  to  list  $3,300,000  State  of  Georgia  4i  per 
cent,  bonds,  and  sets  forth  that  said  bonds  are  to  take  up 
those  of  the  State  maturing  in  February,  April  and  July. 
I  am  adyised  that  the  bonds  which  matured,  during  the  two 
months  first  named,  long  since  past,  haye  already  been 
taken  up  by  the  State,  so  there  remains  but  those  which 
mature  on  the  1st  of  July  next  outstanding  of  the  class  of 
bonds  referred  to.  At  the  time  I  was  instrumental  in  defeat- 
ing the  State  of  Georgia  from  remoying  a  yery  necessary 
restriction  imposed  by  a  New  York  State  law  from  lodging 
these  same  bonds  upon  the  sayings  banks,  the  officials  of 
the  State  of  Geor^a  exulted  oyer  me  fact  that  the  said  de- 
feat in  no  way  injured  the  State  of  Georgia,  as  the  bonds 
had  already  been  disposed  of  at  a  satisfactory  price  to  the 
State,  and  therefore  no  longer  belonged  to  them  ;  thus  show- 
ing that  the  State  of  Georgia  does  not  make  the  application 
for  the  admission  of  these  bonds  to  the  Exchange,  but 
clearly  shows  that  they  are  in  possession  of  the  ayaUs  of 
these  said  bonds  to  proyide  for ;  not  only  those  that  had 
matured  but  those  that  are  due  on  the  1st  of  July  next,  con- 


THS  GEORGIA  REPUDIATION  BOND  SWINDIA 

sequently  it  takes  away  the  necessity  of  the  State  hating 
the  application  now  made  favorably  acted  upon  by  your 
Committee.  Mr.  Wolf,  therefore,  makes  the  application  in 
his  own  behalf,  doubtless  to  enable  him  to  extricate  himself 
from  his  own  speculative  venture  in  these  so-called  securi- 
ties, which  he  was  in  hopes  when  he  took  them  of  turning 
over  to  certain  saving  banks  who,  by  the  Attorney-GeneraFs 
opinion,  were  precluded  from  buying  these  identical  bonds, 
which  misfortune,  from  the  statements  made  by  the  officials 
of  the  State  of  Georgia,  falls  not  upon  them  but  the  party 
who  has  bought  the  bonds.  As  the  original  plan  of  lodging 
these  bonds  in  the  savings  banks  was  a  failure  and  the  poor 
people's  money  on  deposit  there  was  saved  from  wreck 
thereby,  it  is  now  sought  to  land  them  upon  others,  provid- 
ing the  New* York  Stock  Exchange  can  be  secured  to  give 
character  to  them  by  listing  them  as  is  now  attempted.  My 
firm  represents  two  seats  on  the  New  York  Stock  Ex- 
change and  has  large  interest  there  and  I  protest  against 
the  proposition  to  Ust  these  Georgia  bonds  for  regular  deal- 
ings at  the  Exchange,  as  the  State  of  Georgia  is  not  only  ui 
default  in  payment  of  her  bonds,  both  principal  and  inter- 
est and  long  since  past  due,  but  besides  has  repudiated 
eight  millions  of  her  bonded  debt  which  were  issued  for 
value  received  under  the  great  seal  of  the  commonwealth, 
pro{)erly  signed,  legally  issued  and  in  the  hands  of  innocent 

Jiarnes  who  have  acquired  vested  rights  therein,  and,  there- 
ore,  are  the  victims  of  a  gigantic  robbery  by  tiie  repudia- 
tion of  said  bonds.  It  is  but  fair  to  assume  that  a  State 
which  undertakes  to  blot  out  by  a  legislative  act,  with- 
out being  willing  to  submit  any  questions  at  issue  to  the 
judiciary — who  alone  have  the  right  to  decide  upon  such 
questions— find  that  to  be  so  simple  a  method  of  paying 
debts  will  not  unlikely  be  tempted  to  repeat  repud- 
iation often  in  the  future.  These  bonds  now  attempted  to 
be  foisted  on  the  public  cannot,  by  any  possibility,  be  ex- 
pected to  have  any  greater  permanency  of  value  than  those 
that  have  already  received  the  shameful  fate  of  being  re- 
duced by  repudiation  to  the  value  of'  brown  paper.  I 
foresee,  therefore,  that  if  theN.  Y.  Stock  Exchange  lists  this 
new  issue  of  bonds,  that  by  ficticious  methods  quotations 
may  be  obtained,  and  in  all  probability  the  members  of  the 
N.  X.  Stock  Exchange  be  induced  to  deal  in  them  and 
suffer  the  cruel  loss  that  has  already  been  my  fate.     The 


SHAU  REPUDIATION  B^  RECOGNIZED?  288 

State  of  Georgia,  with  interest  to  date,  owes  me  and  my  old 
firm  at  least  nve  million  dollars ;  therefore,  I  have  a  right^ 
owing  to  my  large  interests  in  the  Stock  Exchange,  to 
urge  that  the  application  to  list  these  new  Georgia  bonds 
be  denied,  for  I  fear  that  should  it  be  otherwise,  many  of 
the  members  whose  seats  are  in  part  security  for  transac- 
tions, may  be  tempted  to  deal  in  these  so  called  "  securities  " 
and  suffer  great  loss  if  not  ruin  thereby,  for  when  the  time  of 
repudiation  takes  place  the  security  in  their  seats  at  the  Ex- 
change may  be  made  valueless  through  said  loss  to  honest 
creditors.  When  the  State  of  Georgia  wipes  out  the  dis- 
gracefnl  blot  of  repudiation  which  now  stains  the  escutcheon 
of  the  commonwealth,  she  will  then  be  entitled  to  have  the 
facility  which  the  New  York  Stock  Exchange  has  the  power 
of  granting,  to  aid  her  in  restoring  her  crecut  to  rank  along- 
side others.  She  will  then  be  entitled  to  credit  on  a  3  per 
cent,  basis  similar  to  the  States  of  New  York,  Massachusetts, 
Maryland  and  many  others,  but  not  before. 

Bespectfully  yours, 

Henby  Clews. 


SHALL  BEPITDIATION  BE  BEOOGNIZED? 

New  Yobk,  June  26, 1886. 

To  the  Chcveming  Committee  of  the  N.  T.  Stock  Exchange : 

Deab  Sib  : — I  send  you  an  exact  copy,  published  in  the 
Graphic  newspaper  undfer  date  of  June  15th,  1886,  of  a  bond 
issued  by  the  State  of  Georgia,  which  you  will  perceive  is 
an  out-and  out  State  bond  and  represents  an  issue  of  1,800 
bonds  of  $1,000  each.  The  act  of  authorization  of  the 
State  was  passed  upon  by  the  eminent  legal  firm  of  Evarts, 
Southmayd  &  Choate,  also  by  the  late  Judge  Emott  as  bein^ 
in  conformity  with  law  and  in  every  respect  a  regular  and 
legally  issued  bond  of  that  State.  The  innocent  holders  of 
these  bonds  are  the  following : 

The  Broadway  NationalBank $200,000 

The  Metropolitan  Savings  Bank 100,000 

The  Brooklyn  Trust  Co 100,000 

BussellSage 200,000 

Henry  Clews  &  Co 486 ,000 

The  Union  Trust  Co 100,000 


284  THE  GEORGIA  REPUDIATION  BOND  SWINDIX 

Ezra  A.  Boody     200,000 

Bichard  Irvin  &  Co 133.000 

The  Commercial  Warehouse  Co.  about 200,000 

The  balance  is  in  small  lots  scattered  in  numerous  bands. 
None  of  these  bonds  was  disposed  of  for  less  than  90  cents 
in  money.  The  Broadway  Bank  loaned  $160,000  upon  theirs^ 
taking  them  as  collateral.  Some  other  institutions  held 
them  as  collateral  against  advances  similar  to  that  of  the 
Broadway  Bank.  The  whole  of  this  issue  was  repudiated 
by  the  State. 

The  State  of  Geor^a  also  notified  the  Exchange  that  a 
large  number  of  bonds  known  as  Quarterly  Gold  Georgia 
Bonds  were  also  repudiated.  The  numbers  of  these  bonds 
were  scattered  in  amongst  an  issue  of  two  and  one -half 
millions  of  that  class  of  bonds,  all  of  which  were  long  pre- 
viously admitted  to  dealings  at  the  N.  Y.  Stock  Excb^nge. 
The  N.  Y.  Stock  Exchange  having  received  notice  from  me 
State  that  they  had  been  repudiated,  ordered  them  stricken 
from  the  list.  These  bonds  are  all  in  the  hands  of  innocent, 
bona  fide  holders,  who  paid  in  the  neighborhood  of  par  for 
them  in  all  instances  and  the  avails  therefor  were  received 
by  the  State. 

Those  not  repudiated  of  these  issues  have  since  and  are 
now  daily  quoted  at  the  N.  Y.  Stock  Exchange,  the  price 
being  at  the  present  time  nominally  about  112. 

I  have  only  noted  a  part  of  the  bonds  repudiated  by  the 
State  of  Georgia,  so  that  you  may  be  convinced  of  the  fact 
that  the  bonds  are  out-and-out  State  bonds  and  just  as  good 
an  obligation  issued  under  the  great  seal  of  the  common- 
wealth of  Georgia  and  as  absolutely  binding  upon  the  State 
as  the  new  bonds  which  are  now  attempted  to  be  listed ;  and 
should  the  latter  be  listed,  the  chances  are  that  they  will 
share  the  same  fate  as  those  noted. 

If  a  State  can  issue  such  obligations,  and  wipe  them  out 
by  an  act  of  repudiation  with  impunity,  and  the  Sto<^ 
Sfxchange  ignore  such  shameful  conduct,  there  will  then  be 
no  safety  in  buying  bonds  issued  by  any  State,  as  it  is 
thereby  made  to  appear  that  there  is  no  stain  left'upon  her 
escutcheon,  the  evidence  of  which  is  that  the  N.  Y.  Stock 
Exchange  has  backed  them  up  in  their  action.  Under  the 
Constitution  which  gives  sovereign  righte  to  States  a  citiaeii 
holding  these  repudiated  obligations  cannot  sue  a  States 
therefore  there  is  no  redress  for  a  great  wrong  done* 


A  REMINBKR  TO  SENATOR  EVARTS.  285 

I  shall  be  (^ad  to  appear  before  your  Committee  and  give 
you  all  the  evidence  in  the  case  before  you  decide  upon  the 
application  now  before  jou  to  admit  $3,300,0U0  Georgia  4i 
per  cent,  bonds. 

Very  respectfully  yours, 

Kenby  Clews. 


A  BEMINDEB  TO  SENATOR    EVABTS. 

In  connection  with  this  Georgia  bond  affair,  eyen  at  the 
ejipense  of  stringing  the  subject  out  to  a  considerable  length, 
I  cannot  omit  the  following  communication  to  Senator 
£Tarts  on  the  subject : 

New  York,  April  13, 1886. 
Sen.   WiUtam  M.  Evarts^  WashtTigton^  D.  0. : 

Dear  Sir — It  is  quite  generally  understood,  from  infor- 
mation lately  receiyed  here  from  Washington,  that  there  is 
soon  to  be  sprung  upon  Congress  a  bill  proyiding  for  large 
appropriations  for  the  improyement  of  riyers  and  harbors 
and  other  so-called  public  improyements  in  the  South. 
There  is  a  feeling  of  sfa*ong  opposition  in  financial  circles  in 
ihis  city  against  the  justice  of  the  General  Goyemment 
making  such  appropriations  to  many  of  the  Southern  States 
at  the  present  time.  This  opposition  is  based  upon  thd 
fact  that  the  State  of  New  York  contributes  by  taxation 
about  one-fifth  of  all  the  revenue  raised  in  this  country 
which  proyides  for  the  expenses  incurred  in  carrying  on  the 
Goyernment^  so  that  whateyer  moneys  are  spent  for  the  so- 
called  public  improyements,  at  least  one-fifth  of  the  amount 
is  extracted  from  the  pockets  of  the  citizens  of  this  State, 
through  taxation  ;  and  as  many  of  our  .citizens  haye  been  so 
yillainously  yictimized  by  the  repudiation  of  the  Southern 
States,  especially  by  the  State  of  Georgia,  it  is  but  just  and 
fair  to  these  yictims,  therefore,  that  no  appropriations  of 
money  for  the  purposes  named  should  pass  Congress  for  the 
benefit  of  any  State  which  is  at  present  under  repudiation. 
It  is  eminently  proper  that  Congress  should  take  a  stand 
against  this,  as  the  yery  people  who  haye  been  so  robbed 
are  to  pa/  the  cost.  A  large  number  of  them  haye  been 
rained,  as  a  penalty  for  belieying  in  the  honor  and  good 


286  THS  6BORGIA  REPUDIATION  BOND  SWINDI<B. 

faith  of  Southern  States,  and  while  such  claims  remain  un- 
paid, it  certainly  does  appear  harsh  that  these  citizens 
should  be  taxed  by  the  General  Government  and  compelled 
to  contribute  to  funds  to  be  appropriated  for  the  benefit  of 
States  now  in  default  of  both  principal  and  interest  for 
bonds  issued  by  them  under  proper  legislative  authoritj 
and  bearing  the  great  seal  of  the  commonwealth.  The 
money  paid  for  these  bonds  by  confiding  people  has  gone 
into  public  improvements  in  those  States.  If  the  Cbvern- 
ment  desires  to  make  appropriations,  they  should  be  mode 
to  the  holders  of  these  bonds,  and  the  share  to  the  various 
States  be  in  their  own  bonds  in  place  of  money.  The  States 
thereby  would  take  the  place  of  the  present  holders.  When 
repudiated  bonds  are  all  extinguished  it  will  be  time  for  the 
Government  to  begin  the  appropriation  of  money  direct  No 
greater  public  improvement  for  the  South,  as  well  as  for  the 
credit  of  the  entire  country,  would  equal  the  removal  from 
the  various  States  of  the  blot  of  repudiation  which  now 
stains  their  escutcheons,  and  reflects  most  injuriously  upon 
the  credit  of  the  General  Government  itself. 

Yours  very  respectfully, 

Henby  Olewb. 


ANOTHEB  STBONO  PBOTEST. 

September  2,  1886. 
JaitM%  jD.  Smiliy  President  of  the  Stock  Exclvomge : 

Deab  Sib — I  beg  to  hand  you  herewith  a  memorial  in 
relation  to  the  new  issue  of  Georgia  bonds,  signed  by  a  nnm- 
ber  of  the  largest  and  most  important  firms  and  corpora- 
tions in  this  city,  most  of  whom  are  connected  by  member- 
ship with  the  Stock  Exchange,  and  all  of  whom,  like  myself, 
are  victims  of  the  State  of  Georgia's  repudiation. 

I  understand  that  the  subject  of  admitting  this  new  issue 
of  these  bonds  is  to  come  up  for  consideration  at  the  next 
regular  meeting  of  your  committee.  Will  you  do  me  the 
favor  of  presenting  this  petition  at  said  meeting  ?  Hooiiig 
this  matter  will  receive  your  favorable  consideration  and  in- 
fluencei  I  have  the  honor  to  remain, 

Yours  very  respectfully, 

Henbx  Cle^ 


H0I3K&S  OP  BONDS  APPBAI^  TO  TH^  STOCK  SZCHANGK.287 

To  ike  Gcveming  Committee  of  the  New  Tori  Stock  Exchange  : 

We,  {lie  undersigned,  holders  of  repudiated  bonds  of  the 
State  of  Georgia,  have  learned  that  an  application  has  been 
made  for  listing  upon  jour  Exchange  new  issues  of  bonds  of 
that  State. 

We  respectfully  urge  upon  jou  that  so  long  as  the  name 
of  Georgia  remains  dishonored  by  repudiation,  you  should 
stamp  upon  such  application  your  absolute  disapproval,  and 
thus  maintain  the  well  known  and  uncompromising  hostility 
which  the  New  York  Stock  Exchange  has  always  shown 
against  bad  faith  and  dishonest  practice. 
August  24, 1886. 

BIOHABD  IBYIN  H  00.  DBBXBI.,  MOSGAK  H  CO., 

MOBTOM,  BUSS  h  00^  V08TBB  ft  THOMSON, 

JAS.  B.  JOHNSTON.  NATIONAL  BBOADWAT  BANS, 

&  W.  KILBiLNK,  ?y  F.  A.  Palxib,  Pmk, 

H8KBY  CLEWS  ft  OO^  L.  YON  HOFFMAN  ft  Oa, 

HALLQABTSN  ft  Ca,  BUS8KLL  SAOB, 

rULTOH  BANK  OF  BBOOXLTN,  O.  F.  TIMP80N  ft  CO., 

BjJ.A.KlX8Br,0Mh]cr,  HEBMAN  B.  LB  BOT, 

WALTER  B.  JOBNSTON,  SAMUEL  RATNOB  ft  CO., 

B«eiTw  Maiae  National  BUk,  THB  N.  Y.  WABBHOUBB  ft  SBODBITT  CO., 
BOBBIBX.  JB8UP,  By  a  O.  KvAPP,  Seonfeuy, 

JAMES  B.nBUP,  OOMMBBOIAL  WABBHOUBB  0O.« 

J.  F.  Natabbo,  Pnrt. 

The  petition  of  these  gentlemen  was  granted,  and  true  to 
its  honorable  record,  the  Governing  Committee  of  the  Stock 
Exchange  refused  to  have  anything  to  do  with  the  bonds  of 
the  repudiating  State  of  Georgia. 


CHAPTEB    XXVIII. 

ANDREW   JOHNSON'S  VAGARIES. 

**8iaNGiNO  Abound  the  Cibclb.*'— How  Mb.  Johnson  Game 
TO  Visit  New  Yobk  on  His  Bemarkable  Toitb.— The 
Oeanb  Beception  at  Delmonioo's.— The  Pbesident 
Loses  his  Tempeb  at  Albany  and  Becomes  an  Object 
op  Public  Bidicule.— His  Pboclamation  of  "My  Pol- 
icy "  IbONICALLY   BeOEIVED.— BeTUBNS  to  WASHmOTON 

DisoBACED.— The  Massacbb  op  New  Obleanb.— The 
Impeaohkent  op  the  Pbesident. 

AS  I  have  attributed  the  ill  luck  of  myself  and  others  in 
certain  business  Tentnres  in  Southern  securitiea  to 
President  Andrew  Johnson,  it  will  be  necessary  to  describe 
some  of  the  vagaries  of  that  gentleman  which  had  such  a 
ndnous  effect  upon  the  investments  of  Northern  men  in  the 
South. 

In  common  withseveral  other  WallStreetmen,  Ihad  an  idea 
that  the  President  might  be  favorably  affected  by  the  social 
influence  of  the  North,  if  that  were  brought  to  bear  upon 
him  in  the  right  way.  So  when  we  heard  that  he  had  been 
invited  to  attend  the  laying  of  the  corner-stone  in  the  erec- 
tion of  a  monument  to  the  memory  of  Stephen  A.  Douglas,  at 
Chicago,  I  got  up  a  paper  signed  by  several  Wall  Street 
men  and  other  prominent  citizens,  urging  the  President  to 
accept  said  invitation  and  also  invited  him  to  stop  at  New 
lork,  on  his  way  to  the  West. 

The  invitation  was  graciously  accepted,  and  preparations 
weie  made  at  once  to  give  him  a  suitable  reception-  It  was 
hoped  that  this  demonstration  of  our  good  will  would 
have  the  effect  of  smoothing  down  the  asperities  of  the  Pres- 
ident, and  that  it  might  remove  any  harsh  feelings  that  he 
entertained  towards  the  members  of  Congress  who  represented 
theEastem  and  Western  sections,  and  hence  prove  a  means  of 


200  ANDREW  JOHNSON'S  VAGARIES. 

inducing  liim  to  advise  the  people  of  the  South,  over  whom  he 
had  considerable  influence,  to  lay  aside  their  sentiments  of 
hostility  and  attend  to  their  business  interests  in  a  manner 
that  should  redound  to  the  mutual  benefit  of  the  two  great 
sections  of  the  country.    This  was  in  1866. 

The  President  left  Washington  about  the  end  of  August, 
accompanied  by  General  Grant,  Admiral  Farragut,  Secretary 
Wells,  Postmaster  Bandall,  and  a  few  others  of  less  note. 

When  the  party  arrived  in  New  York  it  was  joined  by 
Secretary  of  State  Seward. 

The  preparations  for  the  President's  reception  were  on  a 
magnificent  scale  for  that  time,  and  the  people  turned  out 
en  masse  eagerly  to  do  honor  to  the  Executive  of  the 
nation.  There  was  a  grand  procession  which  conducted 
him  to  the  City  Hall,  where  he  was  received  by  the  officials 
of  the  City  and  State,  and  the  procession  afterwards 
escorted  him  to  Delmonico's,  at  Fourteenth  Street  and  Fifth 
avenue,  where  a  dinner  was  served  in  the  most  sumptuous 
style,  with  every  mark  of  honor  and  respect  befitting  the 
distinguished  guest  and  his  numerous  friends. 

There  was  an  address  of  welcome  pertinent  to  the  occa- 
sion, and  the  President  responded  in  a  very  happy  style. 
This  was  said  to  have  been  one  of  his  best  efforts  in  oratory, 
in  which  he  was,  at  times,  exceedingly  forcible  and  per- 
suasive. 

He  was  always  pithy  and  powerful,  and  there  has  per- 
haps never  been  a  President  who  produced  stronger,  more 
brilliant,  and  more  argumentative  state  papers  than  Andrew 
Johnson. 

The  audience  at  Delmonico's  was  thoroughly  delighted 
with  him,  the  dinner  came  off  in  a  way  that  left  nothing  to 
be  desired,  and  everything  seemed  to  indicate  that  the  pres- 
idential visit  would  be  a  potent  influence  in  creating  a  new 
era  of  harmony  between  the  two  hostile  divisions  of  the 
oountry. 

Everything  was  lovely  until  the  presidential  party  ar- 


JBERBD  AND  HOOTED  AT  AI^BANY.  ^^1 

riTed  at  Albany,  when  it  became  manifest  that  the  Presi- 
dent had  set  out  with  the  full  intention  of  giving  the  joor- 
ney  the  aspect  of  a  political  canvass,  and  of  taking  occa- 
tion  to  abuse  his  enemies  in  the  strongest  terms,  and  to  vin- 
dicate his  policy  of  reconstniction  in  opposition  to  that  of 


The  crowd  which  met  him  on  his  arrival  at  Albany  was 
immense,  and  on  the  whole  was  disposed  to  accord  the  Pres- 
ident a  kind  and  courteous  welcome. 

The  President  was  called  upon  to  make  a  speech,  in 
which  he  made  violent  attacks  upon  his  supposed  enemies, 
or  those  who  opposed  his  policy,  thereby  sinking  beneath 
the  dignity  which  he  was  expected  to  maintain  as  President 
of  the  United  States,  to  the  level  of  a  mere  political  dema- 
gogue* His  utterances  in  that  motley  assembly,  of  course, 
yrere  soon  met  by  sharp  opposition.  There  were  many, 
bowever,  who  did  not  treat  the  fiery  demonstration  of  the 
President  seriously,  and  several  of  the  crowd  indulged  in 
the  pastime  of  firing  off  a  few  good-natured  jokes  at  the 
tailor  of  Tennessee,  who,  by  a  mysterious  fate,  had  been 
raised  to  such  a  dizzy  eminence.  These  jests  were  taken 
seriously  by  thp  President,  whose  hot  Southern  blood  be- 
came so  aroused  that  he  forgot  the  dignity  of  his  office  and 
station  and  condescended  to  bandy  words,  and  exchange 
terms  of  ribaldry  with  people  in  the  crowd.  He  then  be- 
csame  a  butt  for  savage  ridicule.  A  small  black  flag  was  ex- 
hibited which  seemed  to  have  the  same  effect  upon  h^r^  as 
a  red  rag  has  upon  a  Texan  steer. 

The  President  became  furious,  and  losing  entire  control 
of  himself,  pointed  towards  a  man  in  the  crowd  saying, ^^Who 
is  that  man  who  dares  to  hoist  that  black  flag.  Let  hinr^ 
come  up  here  and  I  will  tell  him  what  I  think  of  him." 

This  descent  of  personal  dignity  on  the  part  of  the  Pres- 
ident was  received  by  the  audience  with  a  feeling  of  ineff- 
able disgust.  He  had  stooped  beneath  the  level  of  the 
Average  electioneering  stump    speaker.     He  was  greeted 


292  ANDREW  JOHNSON'S  VAGARIES. 

^vith  jeers  and  hooting,  and  the  meeting  was  turned  into  a 
roaring  farce,  in  which  the  President  played  harlequin,  to 
the  great  delight  of  the  ignorant  element  in  the  crowd, 
and  the  terrible  mortification  of  those  who  had  conducted 
him  thither. 

His  friends  were  greatly  incensed  at  his  conduct.  My 
business  friends  and  I  were  heartily  sorry  that  we  had  any- 
thing to  do  with  this  unruly  Executiye,  who  had  evidently 
lost  his  head  through  the  sudden  acquisition  of  power. 

The  President's  journey  was  continued  to  Chicago  by  way 
of  Cleyeland,  where  he  made  similar  outbursts  to  those  dis- 
played at  Albany.  By  the  time  he  had  reached  Chicago  he 
had  become  a  public  object  of  ridicule.  He  spoke  so  vocif' 
erously  about  "  my  policy  "  that  the  very  boys  in  the  streets 
began  to  utter  these  words  ironically  and  jeeringly. 

The  tour  of  the  President  was  designated  ^'Swinging 
around  the  circle/'  and  when  he  returned  to  Washington  he 
had  become  an  object  of  national  contempt^  and  the  major- 
ity of  the  people  had  entirely  lost  confidence  in  him. 

One  thing  about  this  time  that  intensified  the  popular 
feeling  of  hostility  against  him  was  the  attitude  he  assuined 
concerning  the  massacre  of  New  Orleans,  which  occurred 
about  a  month  before  he  started  on  his  political  tour. 

The  Convention  which  had  formed  the  free  constitution  of 
the  State  of  Louisiana  in  1864  had  been  ordered  to  reas- 
semble by  its  President.  The  Confederate  sympathizers, 
who  had  been  greatly  encouraged  by  the  acts  of  the  Presi- 
dent to  keep  alive  their  old  feelings  of  hostility  to  the 
North,  resolved  that  the  Bepublican  Convention  should  not 
be  permitted  to  meet.  The  ground  they  urged  for  this  pro- 
posed action  was  that  the  Convention  proposed  to  recom- 
mend the  imposition  of  Negro  sufirage  upon  the  State. 
There  was  a  riot  and  a  terrible  massacre,  in  which  over  a 
hundred  lives  were  lost^  and  several  hundred  persons  were 
"pounded.  The  municipal  authorities  of  New  Orleans  gave 
%id  and  comfort  to  the  rioters. 


THB  REPUDIATION  SCHEME.  -**» 

The  Congressional  Oommittee  that  investigated  the  cir-  I 

cumstances  connected  with  the  riot  reported  that  the  Presi*  j 

dent  knew  that  riot  and  bloodshed  were  apprehended.    He  > 

knew  what  military  orders  were  in  force,  and  yet  without  the 
confirmation  of  the  Secretaiqy  of  War,  or  the  General  of  the 
Army,  npon  whose  responsibility  these  military  orders  had 
been  issued,  he  gave  orders  by  telegraph,  which,  if  enforced, 
as  they  woold  be,  wonld  have  compelled  our  soldiers  to  aid 
the  rebels  against  the  men  in  New  Orleans  who  had  remained 
loyal  during  the  war,  and  sought  to  aid  and  support,  by 
official  sanction,  the  persons  who  designed  to  suppress,  by 
arrest  and  criminal  process  under  color  of  the  law,  the  ~ 
meeting  of  the  Convention ;  and  all  this  although  the  Con* 
vention  was  called  with  the  sanction  of  the  (Governor  and 
by  one  of  the  judges  of  the  Supreme  Court  of  Lousiana 
claiming  to  act  as  President  of  the  Convention.  The  effect 
of  the  action  of  the  President  was  to  encourage  the  heart,  to 
strengthen  the  hand,  and  to  hold  up  the  arms  of  those  who 
intended  to  prevent  the  Convention  from  assembling. 

The  President's  opposition  to  the  Reconstruction  Bill 
probably  rendered  him  more  unpopular  than  any  other 
executive  act  during  his  administration.  The  bill  was 
passed  by  large  majorities  in  both  Houses  of  Congress. 

The  President's  repudiation  scheme  was  another  very 
unpopular  reconmiendation,  for  which  he  was  very  strongly 
reproved  by  the  action  of  Congress.  He  stated  in  his  mes- 
sage of  December,  1868 :  ^^  That  the  holders  of  our  secur- 
ities have  already  received  upon  their  bonds  a  larger  amount 
than  their  original  investments,  measured  by  the  gold  stand- 
ard. Upon  this  statement  of  facts,  it  would  seem  but  just 
and  equitable  that  the  six  per  cent,  interest  now  paid  by  the 
Govenmient  should  be  applied  to  the  reduction  of  the  prin- 
cipal, in  semi-annual  instalments,  which  in  sixteen  years  and 
eight  months  would  liquidate  the  entire  national  debt" 

This  clause  of  the  President's  message  was  condemned  by 
an  almost  unanimous  vote  of  both  Houses. 


294  ANDREW  JOHKSON*S  VAC^AklM. 

The  great  eyent  in  President  Johnson^s  career,  however, 
was  his  impeachment  trial,  which  lasted  from  March  5 
imtil  May  26,  1868.  He  was  arraigned  at  the  bar  of  the  Sen- 
ate, which  was  presided  over  bj  the  Chief  Justice  of  the 
United  States,  the  Eon.  Sahnon  P«  Chaae. 

The  counsel  of  the  President  were  Attorney-General 
Henry  Stanberry,  who  resigned  his  position  to  defend  the 
President,  te-Judge  Benjamin  B.  Ourtis,  William  8. 
Groesbeck,  who  acted  as  substitute  for  Judge  "Jerry" 
Black,  and  Hon.  Wm.  M.  Evarts.  General  Benjamin  F. 
Butler  made  the  opening  argument  against  the  President^ 
accusing  him  of  high  crimes  and  misdemeanors.  Hon.  Wm. 
Lawrence,  of  Ohio,  posted  him  on  the  law  of  impeachment 
The  chief  charge  in  the  articles  of  impeachment  was  the 
removal  of  Mr.  Stanton  from  the  office  of  Secretary  of  Wai^ 
in  alleged  violation  of  the  Tenure-of -office  Act.  According 
to  this  act  Stanton  had  a  right  to  hold  office  during  the  term 
of  the  President  by  whom  he  was  appointed,  and  a  month 
longer.    He  was  appointed  by  President  Lincoln. 

The  question  to  be  decided  then  was  whether  JohnBon 
was  serving  out  Lincoln's  unexpired  term,  or  whether  he  was 
President  de  facto.  Judge  Curtis  took  the  latter  ground,  and 
argued,  therefore,  that  Stanton's  term  had  expired. 

At  the  conclusion  of  the  trial,  the  Senate  was  addressed 
against  the  President  by  General  John  A.  Logan  and  Mr. 
Boutwell.  Thaddeus  Stevens  attempted  to  read  a  speech, 
but  was  too  weak.  He  handed  his  manuscript  to  General 
Butler,  who  read  it  to  the  Senate,  but  it  fell  comparatively 
flat.  The  Hon.  Thomas  Williams,  of  Pennsylvania,  read  a 
speech  in  favor  of  impeachment,  which  was  well  received. 
The  case  on  behalf  of  the  Senate  was  summed  up  by  Hon. 
John  A.  Bingham,  who  arrayed  all  the  charges  against  the 
President  in  a  very  strong  and  unfavorable  light.  His  con- 
cluding sentences  were,  '^I  ask  you,  Senators,  how  long  men 
would  deliberate  upon  the  question  whether  a  private  citizen 
arraigned  at  the  bar  of  one  of  your  private  tribunals  of 


KAHKOW  BSCAPB  OP  THB  PRKSIBBKT.  295 

Jntioe^  for  oriininal  violation  of  law^  should  be  permitted 
to  interpose  a  plea  in  justification  of  his  criminal  act  that 
his  only  purpose  was  to  interpret  the  Constitution  and  laws 
for  himself ;  that  he  violated  the  law  in  the  exercise  of  his 
prerogcitiYe  to  test  it  hereafter,  at  such  day  as  might  suit  his 
own  convenience,  in  the  courts  of  justice  1  Surely,  Senators, 
it  is  as  competent  for  the  private  citizen  to  interpose  such 
justification  in  answer  to  his  crime  as  it  is  for  the  President 
of  the  United  States  to  interpose  it,  and  for  the  simple  rea* 
son  that  the  Constitution  is  no  respecter  of  persons,  and 
Tests  neither  in  the  President  nor  in  the  private  citizen 
judicial  power.  For  the  Senate  to  sustain  any  such  plea 
would,  in  my  judgment,  be  a  gross  violation  of  the  already 
violated  constitution  and  laws  of  a  free  people." 

The  speech  of  ^^Our  own  Evarts"  was  the  chef  SiBuwrt  of 
bis  Ufe,  and  probably  did  much  to  help  the  President's  nar- 
row eeoapa  As  it  was,  he  was  only  saved  from  impeachment 
by<Mvote^namel7|thatof  Mr.  Bos^of  Kansaa. 


CHAPTEB    XXIX. 

THE   DIX   CONVENTION. 
ttow  THE  Wab  Democbat,  Genebal  Dec,  was  Elected  Goy- 

EBNOB   BY  the    KePUBLICAN    PABTT.— ThE    CANDIDATES 

OF  Senatob  Conklinq  Kejeoted.— How  Dix  was  Spbuno 

ON  the  CONVENTIO'N,  TO  THE  CONSTEBNATION  OP  THE 

Caucus.—  Judge  Bobebtson's   Disappointment.— Ex 
CITING  Scenes  in  the  Convention.— Genebal  Dix  de- 

OOLINES  THE  NOMINATION,  BUT  BeCONSIDEBS  AND  ACCBPTS 
ON  THE  AdYIOE  OF  HIS  WiFE  AND  GeNEBAL  GbANT.— HoW 

Drx's  Election  Enbubed  Gbant's  Second  Tebm  as 
Pbesident. 

AMONG  the  political  events  of  the  last  quarter  of  a  cen- 
tury in  which  I  took  an  active  part,  in  common  with 
some  other  Wall  Street  men,  I  think  the  Utica  Convention, 
at  which  General  Dix  was  nominated  for  Governor  of  this 
State,  is  entitled  to  special  notice,  particularly  on  account  of 
its  effect  upon  national  politics. 

I  was  a  delegate  to  that  Convention.  Just  as  I  was  step- 
ping from  fhe  train  to  the  platform  at  Utica  I  was  met  by  a 
gentleman  who  introduced  himself  to  me  as  the  Private  Sec- 
retary of  Senator  Conkling.  He  said  he  came  to  convey 
an  invitation  to  me  from  the  Senator  to  be  his  guest  during 
my  stay  in  that  city.  He  escorted  me  to  the  carriage  in  wait- 
ing, and  I  was  taken  to  the  palatial  mansion  of  the  Senator. 
I  was  the  only  resident  guest  during  my  stay — an  honor 
which  I  highly  appreciated. 

Several  gentlemen  were  invited  that  evening  to  din- 
ner, amongst  whom  were  Hon.  Chester  A.  Arthur,  A.  B. 
Cornell,  Wm.  Orton  and  General  Sharpe. 

At  the  conclusion  of  a  sumptuous  repast  the  subject  mat- 
ter relating  to  the  Convention  was  introduced  by  Senator 
Gonkling.  The  Senator  turned  to  me  and  said :  ^^  Mr.  Clews, 
why  would  not  Gtoorge  Opdyke  be  the  best  man  for  Gov- 
ernor?''   Mr.  Opdyke  and  Senator  Conkling  had  always 


298  THE  DIX  CONVENTION. 

been  on  excellent  terms,  and  a  few  weeks  preTioosly  this 
aspirant  for  Gabernatorial  honors  had  been  a  guest  at  the 
house  of  the  Senator,  and  General  Grant  had  been  there  at 
the  same  time.  It  was  apparent,  therefore,  that  Mr.  Opdyke 
had  gained  special  recognition  from  the  Senator  as  his  can 
didate  for  Governor,  and  that  the  choice  had  been  sanc- 
tioned by  General  Grant.  So  the  visit  of  these  two  distin- 
guished guests  seemed  to  indicate  that  the  matter  had  been 
virtually,  harmoniously  and  finally  arranged,  simply  await- 
ing the  official  approval  of  the  Convention.  Hence,  the 
point  of  the  Senator's  inquiry  directed  to  myself. 

I  replied :  **  Senator,  I  have  a  very  high  regard  for  Mr. 
Opdyke,  as  a  man  of  great  ability,  as  well  as  a  brother 
banker,  but  as  we  have,  all  of  us,  a  greater  interest  in  what 
is  to  be  done  at  this  Convention,  with  a  view  of  re-electing 
General  Grant,  we  must,  in  my  judgment,  sacrifice  all  other 
interests  thereto.  Looking  at  the  matter  from  that  point  of 
view,  I  am  bound  to  say,  therefore,  that  (George  Opdyke  is 
not  our  best  man.  As  you  remember,  he  was  Mayor  of  the 
city  of  New  York  at  the  time  of  the  great  riots  of  1863,  which 
was  the  most  critical  period  of  the  country's  existence,  and 
it  was  generally  understood  that  in  his  official  capacity  he 
showed  the  white  feather.  While  I  admit  that  the  excite- 
ment at  the  time  was  calculated  to  intimidate  some  of  the 
strongest  hearts,  still,  Mr.  Opdyke,  as  Chief  Magistrate  of 
the  city,  was  supposed  to  be  equal  to  the  emergency,  and  to 
meet  it  with  firmness,  irrespective  of  personal  danger.  He 
was  expected  to  be  equal  to  the  task  of  ordinary  self  sacri- 
fice in  such  a  position,  and  he  did  not  come  up  to  popular 
expectation." 

"  And  you  will  recollect.  Senator,"  I  continued,  "  that  yoor 
own  brother-in-law,  that  able,  worthy  and  popular  man,  Hon. 
Horatio  Seymour, was  so  far  carried  away  by  his  predilections 
then,  that  he  addressed  the  crowd  of  peace-breakers  as 
"  friends.'*  I  confess  that  when  a  man  like  him  was  so  pro- 
nounced on  that  side  it  was  a  difficult  matter  for  a  Mayor  to 


^  conkung's  man  not  avaii.abw.  29U 

haYe  backbone  enough  to  withstand  the  pressure.  But  pub- 
lic opinion  is  not  in  the  habit  of  making  such  fine  distinctions 
to  excuse  want  of  courage." 

"  If  this  is  not  an  ample  reason,"  I  said,  **  I  can  give  you 
another,  which  should  be  sufficient  to  determine  that 
Mr.  Opdyke  is  not  our  best  man  at  thl;i  time.  He  is  young 
enough,  however,  and  may  be  available  at  a  future  period, 
when  the  asperities  associated  with  these  troublous  times 
have  been  fully  smoothed  down.  During  the  war  Mr. 
Opdyke  had  the  misfortune  to  be  a  special  partner  in  a 
clothing  manufacturing  firm  which  had  received  a  contract 
from  the  Government  to  make  clothing  for  the  poor  fellows 
who  were  fighting  our  btriitles  for  the  salvation  of  the  country. 
The  clothing  made  by  this  firm  was  rejected  on  account  of 
the  inferiority  of  the  material,  and  this  is  said  to  have  been 
the  first  application  of  the  term  ^  shoddy '  to  army  clothing 
in  this  country." 

Mr.  Conkling  seemed  to  be  amazed  at  my  statement,  and 
admitted  that  his  proteg^  would  not  do.  He  felt  consider- 
ably embarrassed  in  regard  to  his  position  with  reference 
to  Mi:.  Opdjke.  He  said,  "Mr.  Opdyke  is  here  and  expects 
the  nomination.     Some  one  ought  to  tell  him  to  withdraw." 

Thereupon  Mr.  A.  B.  Cornell  volunteered  to  undertake 
this  delicate  duty.  He  promptly  performed  it,  and  after- 
wards reported  that  the  work  had  been  accomplished.  He 
said  that  Mr.  Opdyke  at  once  consented  to  comply  with  the 
modest  request,  but  was  so  mad  about  it  that  he  had  left  the 
city  by  the  first  train  for  home,  being  unwilling  to  remain  for 
the  convention. 

Prior  to  his  departure,  however,  he  had  advised  the  Hon. 
W.  H.  Bobertson,  who  was  the  next  prominent  candidate,  of 
his  withdrawal,  and  of  the  support  of  his  constituency  so  far 
as  his  name  could  control  it. 

Mr.  Bobertson,  who  had  been  prominent  in  the  prelimi- 
nary canvass,  was  gratified  at  this  turn  of  affairs,  and  en- 
couraged by  his  new  accession  of  strength.     He  was  quick 


BOO  rnn  dix  convention. 

fo  embrace  the  opportunity  now  left  open,  as  there  were  no 
other  candidates  whom  he  feared.  So  the  whole  of  that 
night  he  worked  arduously  and  faithfully  for  the  object  in 
view. 

When  I  left  the  Conkling  mansion  next  morning,  after 
breakfast,  I  mingled  ireely  with  the  delegates,  and  found, 
from  the  efforts  made  the  previous  night,  that  the  nomina- 
tion of  Judge  Bobertson  was  a  foregone  conclusion,  and  the 
candidate  himself  was  sure  of  it.  The  Bobertson  boom  had 
become  suddenly  popular.    In  fact,  it  was  in  the  air. 

I  was  invited  to  General  Arthur's  parlors,  where  the 
caucus  had  its  headquarters.  It  was  customary  with 
General  Arthur,  in  those  days,  to  take  parlors  for  that  pur- 
pose at  State  Conventions.  I  found  the  rooms  filled  with 
distinguished  members  of  the  party,  and  it  was  assumed  by 
all  that  Bobertson  was  the^  candidate  for  Governor  ;  it  was 
also  proposed  that  we  should  march  in  a  body  to  his  hotel, 
to  congratulate  him,  and  to  assure  him  of  the  fact  that  we 
were  all  for  him.  I  declined  to  be  of  the  number  on  that 
mission,  to  the  great  chagrin  of  some  of  my  friends.  When 
asked  for  my  reasons,  I  said  that  I  had  no  feeling  of  per- 
sonal hostility  towards  Mr.  Bobertson,  but  as  the  New  York 
Times  had  not  been  pleased  with  his  conduct  while  State 
Senator,  and  had  severely  criticized  him  thereafter,  I  felt 
satisfied  that  under  no  circumstances  could  we  rely  upon  the 
Times  to  support  our  ticket  if  he  were  at  the  head  of  it ; 
and  as  that  was  the  only  paper  in  New  York  that  we  had  to 
fight  our  battles  then,  it  was  all  important  that  we  should 
nominate  a  ticket  that  would  not  be  antagonistic  to  it,  in 
order  that  we  might  have  its  endorsement  and  full  co-opera- 
tion. 

The  rest  of  the  gentlemen  went  to  pay  their  respects  to 
Judge  Bobertson,  as  pre-arranged,  and  during  their  absence 
I  went  to  the  telegraph  office  and  sent  the  following  mes- 
sage to  General  John  A.  Dix,  to  his  residence  at  8  West 
Twenty-first  street,  New  York : 


A  WIU>  HITRRAH  FOR  DIX« 


801 


"  You  are  f aTored  b^  many  of  «he  delegate!  for  €k>TenioT.  If  nomiiiated 
win  70a  acoept  f    For  the  sake  of  the  country,  anawer  in  the  affirmatiTe. 

To  this  I  receiyed  the  following : 

"I  haye  telegraphed  your  diipatch  to  West  Hampton,  where  my  father 
nowia. 
*'Aiig,  21   1873.  "JohrW.  Dec." 

A  short  time  afterwards  the  Convention  met,  and  the 
name  of  Bobertson  was  presented.  The  management  had 
been  so  ably  conducted  since  tiie  departore  of  Mr.  Opdjke, 
that  there  seemed  to  be  an  overwhelming  hurrah  in  favor  of 
Bobertson,  though  it  was  evident  that  many  of  the  delegates 
did  not  know  why  they  cheered,  except  by  force  of  imitation. 
The  Convention  at  first,  as  has  been  the  case  on  many  similar 
occasions — except  that  there  never  was  any  occasion  precisely 
similar  to  ibis  one — did  not  seem  to  know  its  own  mind,  and 
was  apparently  well  in  hand  by  the  management.  Several 
most  laudatory  speeches  were  made  in  favor  of  Bobertson, 
which  placed  him  on  the  very  pinnacle  of  popularity  with  the 
Convention,  as  manifested  by  the  cheering  and  wild  hurrahs 
with  which  the  speeches  were  received.  The  management 
was  thoroughly  convinced  that  the  popular  tide  had  begun 
to  flow  in  favor  of  their  candidate,  beyond  the  possibility 
of  ebbing  until  it  carried  him  to  port,  and  tiiere  was  prob- 
ably no  man  in  that  enthusiastic  audience  more  fully  con- 
vinced of  the  fact  than  Bobertson  himself. 

Several  other  nominations  were  made,  but  that  of  Bobert- 
son overshadowed  them  all. 

When  the  gavel  was  about  to  descend  on  the  choice  of 
the  people,  as  expressed  through  their  intelligent  represent- 
atives by  every  sign  of  enthusiastic  approval,  the  audience 
being  almost  exhausted  with  this  high  pressure  of  excite- 
ment, and  when  it  was  just  prepared  to  relapse  into  a  more 
thoughtful  and  deliberate  mood,  I  sprung  General  Dix  on 
the  Convention.  The  mere  mention  of  the  name  of  that 
veteran  seemed  to  inspire  the  vast  assemblage  with  new 
life.    The  announcement  acted  like  magic,  and  appeared  to 


302  THK  DIX  CONVENTION. 

throw  all  the  previous  work  of  the  Convention  into  utter 
oblivion. 

After  Mr.  Bmce  and  the  Hon.  E.  DelaBeld  Smith  had 
spoken,  I  said :  '^  On  behalf  of  the  bankers  and  bosiness 
men  of  New  York,  regardless  of  party,  the  nomination  of 
John  A.  Dix  would  do  more  for  the  Bepublican  party  in  the 
national  contest  than  any  other  that  could  be  named.  No 
other  man  would  receive  equal  confidence  of  the  great 
monied  interests  of  the  metropolis.'' 

The  scene  that  followed  the  remarks  of  these  gentlemen 
and  myself  is  indescribable.  The  whole  audience  arose  to 
their  feet  and  cheered  vehemently.  If  the  house  had  been 
struck  with  lightning  the  caucus  managers  could  not  have 
been  more  surprised,  and  Judge  Bobertson  must  have  be- 
gun to  doubt  his  own  identity. 

Concerning  the  scene  in  the  Convention  at  this  juncture, 
the  New  York  Herald  the  next  morning  had  the  following : 

"  The  enthusiasm  excited  by  the  representatives  of  Homy 
Clews  carried  the  Convention,  and  it  only  wanted  to  put  the 
question  to  the  delegates  to  result  in  a  triumph  for  the  Dix 
interest.  There  was  great  confusion  in  the  hall  at  this 
moment.  Delegates  attempted  to  make  themselves  heard 
from  all  parts  of  the  hall.  There  were  heard  the  first  notes 
of  the  coming  avalanche  of  victory  for  the  Dix  ticket.  The 
stentorian  voice  of  a  delegate  from  St.  Lawrence,  mighty, 
almost  as  the  cataract  of  Niagara,  was  heard  above  the  din, 
proclaiming  that  the  St.  Lawrence  delegation  endorsed  the 
nomination  of  Dix.  Further  enthusiasm  was  thus  excited. 
Then  followed  Kings,  Jefferson,  Cayuga  and  others,  lost  in 
the  cheering  that  was  incessantly  kept  up.  The  whole  of 
the  delegation  seemed  under  one  impulse  to  fall  into  line 
under  the  flag  raised  by  Dix  as  the  standard-bearer  of  the 
party.  Then  came  a  demand  that  no  ballot  should  be  taken, 
formally  or  informally,  but  that  the  nomination  of  General 
Dix  be  made  by  acclamation.  The  Hon.  William  A. 
Wheeler,  the  chairman,  said  such  a  motion  was  not  in  order, 
as  there  were  other  candidates  before  the  Convention.  Tina 
diflBiculty,  like  every  other,  was  soon  swept  away  in  the 
tornado  of  excitement  consequent  upon  the  sudden  and  on* 
expected  course  of  affairs,  so  lately  garbled  and  mixed  up. 


TH9  PR^SS  RATIPI^  TH9  CHOICE.  SOS 

*had  taken ;  and  the  clear  course  that  the  name  of  one  man^ 
held  back  to  the  Incky  moment,  had  arrived,  to  give  it  a  talis- 
manic  power,  opened  to  the  preyioos  bewildered  senses  of 
ihe  delegates  when  the  Bald  Eagle  of  Westchester,  the  pro- 
poser of  Jndge  Bobertson,  arose  and  announced  the  with- 
drawal of  his  nominee's  name.  A  thunder  of  applause  fol- 
lowed this  announcement,  which  was  echoed  and  re-echoed, 
when  the  several  other  proposers  withdrew  in  quick  succes- 
sion the  names  of  their  candidates.  Then  came  again  the 
call  to  ^ut  the  name  of  (General  Dix  by  acclamation  to  the 
CSonyenhon.  The  vote  was  put  and  was  unanimously  carried, 
with  the  greatest  excitement  ever  before  witnessed  at  a  Con- 
vention.'" 

The  New  York  Times  said  editorially : 

^^The  Convention  of  this  State  has  placed  at  the  head  of 
its  ticket  two  of  the  strongest  names  it  could  possibly  have 
selected*  In  General  Dix  it  has  nominated  a  Democrat  who 
is  free  from  all  the  reproaches  which  the  last  twelve  years 
have  brought  upon  the  Democratic  party — a  man  ^hose 
character  is  without  a  stain,  whose  strenuous  efforts  to  assist 
tiie  Union  during  the  rebellion  ought  never  to  be  f  orgotten, 
who  has  been  one  of  our  most  indefatigable  assistants  in 
the  work  of  reform,  and  whose  integrity  and  abilities  alike 
entitle  him  to  the  respect  of  the  public.  No  one  can  doubt 
that  if  we  have  General  Dix  as  Governor  of  this  State  the 
affairs  of  the  community  will  be  managed  with  discretion, 
dignity  and  a  hi^h  sense  of  honor.  Wepurposely  refrained 
from  recommending  candidates  to  the  Convention,  but  now 
that  all  is  over,  we  need  not  disguise  our  opinion  that  Gen- 
eral Dix  was  the  ver^  best  man  that  could  have  been  chosen. 
HonestDemocrats  will  gladly  support  him,  Bepublicans  have 
every  reason  to  arrange  themselves  by  his  side,  for  he  has 
identified  himself  with  every  great  work  in  which  they  have 
been  interested.  He  has  always  done  his  duty,  no  matter 
what  position  he  has  occupied,  and  we  shall  be  proud  to 
assist  in  electing  him  as  Governor  of  this  State.  If  we  could 
not  trust  such  a  man  as  General  Dix,  it  would  be  very  hard 
to  carry  on  the  work  of  popular  government  at  all.'* 

At  ihe  close  of  the  proceedings  I  sent  the  following 
despatch  to  General  Dix: 

'*  I  took  tbe  responsibility  of  putting  your  name  forward  as  a  candi- 
date  for  Goyernor,  and  now  rejoice  in  apprising  jou  of  your  nomina- 
tlon  hj  tb»  Convention  by  aooUuuation. 

*•  Hehbt  CiaO* 


804  TH«  DIX   CONVENTION. 

On  my  return  to  New  York,  to  m j  ntter  dismay,  I  found 
the  following  telegram  awaiting  me : 

*'  WKtfT  Hampton,  Aug.  23, 1873^ 

•*  HKI7BT  CliEWB: 

^*I  hare  been  oompeUed  to  deoUna 

"John  A.  Dix." 

That  afternoon  I  went  down  to  Long  Branch  to  see  Gen- 
eral Grant,  and  spent  the  evening  with  him.  I  showed  him 
the  despatch  from  General  Dix,  declining  the  nominatioiii 
and  expressed  the  opinion  that  it  was  all  important  that  he 
should  be  prevailed  upon  to  reconsider  his  first  resolve,  and 
permit  his  name  to  head  our  ticket.  "You  know,  GeneKJ," 
I  said,  **  Dix  is  a  war  Democrat.  Ho  will  act  as  a  bridge  to 
bring  over  to  our  ranks  all  the  war  Democrats.  It  was  chiefly 
for  that  reason  that  I  sprung  him  on  the  Convention." 

General  Grant  realized  the  position  at  once,  and  folly 
agreed  with  me. 

I  said :  "  General,  you  must  write  a  letter  to  General 
Dix,  urging  him  to  accept  the  nomination.''  He  wrote  to 
General  Dix  in  a  day  or  two.  The  veteran  was  greatly 
moved  by  a  letter  from  a  renowned  brother  in  arms,  but 
still  had  some  difficulty  in  making  up  his  mind,  lest  he 
might  lay  himself  open  to  the  charge  of  inconsistency.  And 
here  comes  in  the  predominating  influence  of  lovely  woman, 
even  cruelly  deprived  as  she  is  of  the  ballot.  General  Dix 
held  his  final  answer  in  abeyance  until  he  should  consolt 
his  wife. 

General  Gbant  to  Genebal  Dix. 

Following  is  the  letter  which  General  Grant  wrote  after 
my  interview  with  him : 

"Long  Branos,  N.  J.,  Aug.  24, 1872. 
**Mt  Dear  Gknerai<: 

*•  I  oongratulate  you  upon  the  unanimitj  and  enthusiasin  of  theUtl<}B 
Gonreution  on  the  occasion  of  your  nomination  for  the  honorable  and 
responsible  position  of  Governor  of  the  great  State  of  New  York. 
Especially  do  I  oongratulate  the  citizens  of  that  State,  almost  irrespeo- 
tive  of  party,  upon  your  nomination.  I  believe  you  wm  receive  tM 
active  support  of  the  great  majority  of  the  best  people  of  the  Stat^ 


GEN.   GRANT  AND  MRS.  DIX  P«RSUADK  HIM.  805 

MMl  tbe  aeoret  sympatby  of  thousflnds  who  may  be  so  bound  up  bj 
psrty  ties  and  pledges  as  to  force  them  to  support  joor  opponent. 

**  Bnt  to  doubt  jour  election  wonld  be  to  impugn  the  intelUgenoe  and 
patriotism  of  s  people  by  whose  enlightened  discrimination  such  good 
men  a8  Tompkins,  Clinton,  Marcy,  Fish,  King  and  Morgan  have  been 
lif tedto  the  Chief  Magistracy  of  the  Empire  State.  With  your  election 
reforms  in  the  Slate  will  nattirally  follow,  which  all  acknowledge  have 
been  much  needed  for  years. 

^No  one  acquainted  with  the  political  history  of  New  York  for  the 
past  eight  years  will  claim  that  aU  the  abuses  of  legislation  are  due  to 
Democratic  rule,  but  members,  or  at  least  pretended  members,  of  both 
political  parties  share  the  responsibility  of  them. 

'*  When  I  read  the  proceedings  of  the  Conyention  of  the  dirt  inst^ 
and  of  the  unanimity  of  feeling  in  favor  of  you  and  your  associates  on 
the  State  ticket,  I  felt  that  victory  had  been  already  achieved  and  re- 
fonn  inaugurated  in  the  State  of  New  York. 

"  AgiUn,  I  congratulate  you,  not  upon  the  prospect  of  being  Qo7^ 
enior,  but  upon  haying  it  within  your  reach  to  render  snoh  senicefl  to 
your  State. 

"It  is' a  happy  day  when  conventions  seek  candidates,  not  candidatea 
nominations.  This  dream  has  been  realized  in  the  action  of  the  Con- 
Tention  of  the  21st  inst.  at  Utica,  New  York. 

^I  haye  the  honor  to  be.  General,  your  most  obedient  aeryant, 

U.  &  GSASH" 

^Qmbu  JoBzi  A.  Dix»  N.  Y*** 

General  Diz's  Beplt. 

''Leafisld)  West  HAJOTozr^  K.T., 

Augurt  28^  1879L 
*MtDbab  Oktbrai.; 

**  I  am  very  thankful  to  yoa  for  your  kind  letter  of  oongratulatlon  OD 
By  nomination  for  the  ofOioe  of  Goyemor  of  this  State.  You  are  awara^ 
no  doubt,  that  I  declined  it  before  the  Conyention  was  held.  1  am 
deeply  sensible  of  the  honor  conferred  on  me,  especially  by  the  manner 
In  which  It  was  tendered ;  but  my  objections  to  the  acceptance  of  tbe 
nomination  are  so  strong,  that  I  would  not  think  of  it  a  moment,  wero 
it  not  for  the  deep  concern  I  feel  in  the  result  of  the  election,  and  the 
great  public  interests  at  stake. 

^  I  expect  Mrs.  "Dix  to  arriye  from  Europe  on  the  2nd  or  8rd  proximo, 
«id  as  soon  as  I  am  able  to  confer  with  her,  I  shall  reply  to  the  letter  of 
tbe  President  of  the  Conyention,  adyising  me  of  my  nomination. 

*1  am,  dear  General,  very  respectfully  and  sincerely  yours, 

JOHN  A.  DDL* 

«BlB  EXCKZ^VNCT,  Uf  8.  Gbakt.* 


J 


806  ^H«  mx  CONVENTION. 

It  is  evident  from  this  eorrespondenoe  that  General 
Oranf  s  letter,  which  I  take  the  credit  of  haying  inspired, 
reinforced  by  the  latent,  loving  power  and  good  judgment 
of  Mrs.  Dix,  assisted  in  the  wise  decision  of  the  war  Demo- 
crat to  accept  the  Bepublican  office  which  was  judidotualy 
throst  npon  him. 

The  election  of  Dix  made  the  second  calling  and  election 
of  Grant  sure.  The  Bepublican  party  took  General  Dix 
into  its  fold,  and  the  effect  was,  as  I  had  anticipated,  to  bring 
thousands  of  others  similarly  situated,  to  vote,  at  the  Presi- 
dential election,  for  General  Grant. 

The  Dix  nomination  was  the  worst  black  eye  that  Mr. 
Greeley  received  during  that  campaign,  and  the  Sage  of 
Chappaqua  acknowledged  on  his  death  bed  that  that  events 
together  with  the  Grant  mass  meetings  at  the  Cooper  Insti- 
tute, described  in  another  chapter,  sealed  his  political  doom. 


CHAPTEB    XXX. 

CONSEQUENCES  OF  THE  UTICA  (DIX'S)  CONVENTION. 

A  Chapteb  of  Secbet  History. —  Conkling  gets  the 
Cbedit  for  Dix's  Nomination  and  his  "Silence  Gives 
Consent"  to  the  Honor. — ^Robertson  Eeqards  him  as 
A  Marplot. — The  Senator  Innocently  Condemned.  — 
The  Misunderstanding  which  Defeated  Grant  fob 
the  Third  Term,  and  Elected  Garfield. — ^How  the 
Noble  "306  "  were  Discomfited, — **  Anything  to  Beat 
Gbant." — ^The  Stalwabtsand  the  Half  Bbeeds. — • 
•*Me  Too." — The  Excitement  which  Aboused  Gui- 
teau's  Murderous  Spirit  to  Kill  Garfield. 

rIE  political  events  succeeding  the  Utica  Convention  and 
the  nomination  of  General  Dix  for  Governor  contain 
some  inside  history  of  more  than  ordinary  importance. 

Had  I  not  sprang  General  Dix  on  that  Convention  at 
the  peculiar  moment,  as  described  in  the  last  chapter, 
Judge  Bobertson  would  have  carried  the  day  with  fly- 
ing colors.  It  was  a  sudden  and  crushing  blow  to  the 
prospects  of  himself  and  his  political  friends,  and  it  dissi- 
pated some  of  the  brightest  hopes  and  brilliant  schemes  that 
had  ever  originated  in  the  fertile  brain  of  Senator  Conkling. 
As  a  consequence  of  the  unique  turn  thai  affairs  took  on 
that  dajy  the  Senator  was  placed  in  a  false  position  in  rela- 
tion to  some  of  his  best  friends.  Several  of  the  latter 
were  put  in  an  attitude  whereby  they  misinterpreted  the 
actions  of  Senator  Conkling  at  that  Convention,  and  unjustly 
accused  him  of  betraying  friends  that  he  had  promised  to 
support.  This  was  the  result  of  a  misconception  on  their 
part,  that  the  Senator  was  the  prime  mover  of  the  coup  cPetat 
that  surprised  the  Convention  in  the  nomination  of  General 
Dix. 
The  credit  was  awarded  to  Conkling,  without  any  hesitation 
i  or  inquiry,  and  he  was  either  too  proud,  or  too  indifferent 


803  CONSKQUENCKS  OB  THH  UTICA.  (dIX's)  CONVENTION. 

to  public  opinion  to  explain.  If  he  had  explained  his  posi- 
tion candidly  the  chances  are  that  his  explanation  would 
have  been  taken  in  a  Pickwickian  or  political  sense.  In 
{act|  he  was  in  a  position  where  he  could  hardly  escape  tfie 
responsibility  of  Dix's  nomination,  and  everybody  was  readj 
to  believe  that  the  movement  in  favor  of  Dix  was  too  good  a 
thing  to  be  engineered  by  a  man  of  less  calibre. 

It  would  have  been  useless,  therefore,  for  anybody  else 
to  explain,  as  the  person  attempting  to  do  so  would  only 
have  been  laughed  to  scorn. 

Judge  Bobertson,  himself  the  greatest  sufferer  by  the 
curious  turn  affairs  had  taken,  was  the  first  to  believe  that 
the  nomination  of  Dix  was  one  of  Conkling's  masterstrokes 
of  political  policy.  He  never  thought  of  looking  to  any 
other  source  for  its  emanation.  He  believed  in  his  soul 
it  was  the  work  of  Conkling,  and  he  thinks  so  to  this  day. 

I  happened  to  have  been  better  informed,  however ;  bat 
my  explanation  would  have  hardly  passed  muster  at  that 
time,  and  I  would  have  been  charged  with  egotism  if  Ihad 
attempted  to  explain.  I  think  an  explanation  is  now  in 
order,  however,  and  may  point  a  moral  as  well  as  help  to 
adorn  a  tale. 

History  is  said  to  be  philosophy  teaching  by  example^ 
and  one  great  historian  has  said  that  no  one  event  in  itself 
is  any  more  important  than  another,  except  from  what  it 
teaches  posterity  by  its  example.  So,  for  the  benefit  of 
posterity,  I  now  state  the  facts  on  this  historical  principle. 

I  am  willing  to  make  affidavit  on  the  revised  edition  of 
the  good  book  that  prior  to  the  Utica  Convention  the  name 
of  General  Dix  was  not  even  lisped  by  Senator  Conkling 
within  my  hearing,  nor  was  Dix  ever  thought  of  even  re* 
motely  by  the  Senator  as  a  possible  candidate. 

I  am  almost  certain  that  the  Senator  had  taken  no  action 
that  could  possibly  conflict  wi  h  ihe  interests  of  Judge 
Bobertson  prior  to  the  mention  of  the  name  of  Dix  at  the 
Convention.    In  fact,  with  the  exceptions  previously  statedi 


SEPARATING  CHIEF  FRIENDS.  309 

I  am  quite  certain  that  the  name  of  Dix  was  a  gennine  sur- 
prise to  the  entire  Convention,  managers  and  all. 

Judge  Bobertson  thought  differently,  however.  He  be- 
lieved that  Conkling  was  the  cause  of  his  defeat,  and  to 
this  misapprehension  is  due  the  enmity  that  sprang  up  be- 
tween these  two  men,  and  worked  with  various  results  to 
the  defeat  of  the  political  aims  of  both  ever  since. 

As  I  was  Senator  Conkling's  guest,  this  seemed  to  create 
a  conviction  in  the  mind  of  Judge  Bobertson,  without  any 
inquiry  into  the  matter,  that  I  had  acted  at  the  instigation 
of  Conkling  in  bringing  Dix  to  the  front ;  whereas  the  con- 
ception of  Dix  as  the  best  candidate  originated  solely  with 
myself,  nor  did  I  ever  suggest  the  idea  to  Conkling  until  I 
addressed  the  Convention,  in  favor  of  General  Dix. 

Believing  as  he  did,  that  the  Senator  had  played  the  mar- 
plot to  such  perfection  at  Utica,  Bobertson  was  naturally 
on  the  watch  for  the  first  opportunity  that  would  enable 
liim  to  get  even  with  the  friend  whom  he  suspected  of  hav- 
ing BO  basely  betrayed  him,  and  with  having  blocked  his 
way  to  political  preferment. 

This  opportunity  came  at  the  Chicago  Convention,  when 
the  Utica  statesman  was  managing  matters  very  successfully 
to  nominate  General  Grant  for  a  third  term. 

It  is  curious  that  the  very  circumstance  which  was  most 
conducive  to  Grant's  success  for  the  second  term  was  the 
remote  cause  of  his  defeat  for  the  third.  Senator  Conkling 
had  no  idea  of  the  deep-seated  enmity  that  lodged  in  the 
breast  of  Bobertson.  He  had  done  nothing,  knowingly? 
to  merit  it,  and  had  been  calculating  on  the  co-operation  of 
Bobertson,  as  usual.  He  was  not  aware  of  the  smouldering 
fire  of  vengeance  that  lay  latent  in  the  bosom  of  his  friend. 
He  supposed  that  Bobertson  and  his  co-mates  in  politics 
vere  with  him  as  in  days  of  yore  in  the  support  of  General 
Grant.  He  imagined  that  he  had  gone  to  Chicago  with  a 
fnll  hand,  but  instead  of  that  he  was  short  of  some  of  his 
best  cards,  and  his  enemies  had  them  stocked  in  a  way  that 
finally  brought  him  to  grief. 


8K  CONSKQUBNCl^  O^  TH«  UTICA  (dIX's)  CONVENTION. 

Conkling  only  discovered  his  dilemma  after  the  Ck>nyen- 
tion  met,  when  lie  found  to  iiis  dismay  that  Sobertson  had 
bolted  the  Grant  ticket. 

Bobertson  had  first  made  an  alliance  with  the  Blaine 
party,  bnt  findingan  insufficiency  of  power  among  that  party 
to  carry  his  point  against  the  solid  phalanx  of  the  GraDt 
movement^  he  joined  forces  with  John  Sherman's  supporters, 
who  were  under  the  management  of  James  A.  (Garfield 

The  able  strategist  from  Utica,  at  the  head  of  his  306 
chosen  followers,  so  disconcerted  the  Sherman  contingent 
that  it  also  failed  to  carry  the  necessary  nxmiber  of  guns. 

As  day  after  day  passed  without  any  change,  it  seemed  as 
if  the  Conkling  forces  had  adopted  the  motto  of  Napoleon's 
old  guard,  ^^  The  Guard  dies,  but  does  not  surrender." 

At  length  Bobertson  and  his  lieutenants  collected  the 
shattered  ranks  of  Blaine  and  Sherman,  and  with  (Garfield 
at  their  head,  like  Key  attacking  the  English  centre  at 
Waterloo,*  hurled  them  with  desperation  on  the  solid  square 
of  Conkling,  which  still  remained  unbroken. 

The  united  forces,  however,  with  the  war  cry,  "Anything 
to  beat  Grant !"  carried  the  day,  Garfield  was  nominated 
and  Conkling  retired  in  good  order,  but  greatly  disoom* 
fited. 

Bobertson  had  taken  up  this  cry  at  the  Convention  in  the 
same  spirit  that  was  displayed  by  another  man  about  whom 
a  good  story  was  told  during  that  campaign.  He  had  got 
that  shibboleth  on  the  brain,  *' Anything  to  beat  Grant  I" 
As  the  story  goes,  a  prediction  had  been  made  by  some 
religious  enthusiast  that  the  world  was  coming  to  an  end 
early  in  November  of  that  year.  A  preacher  was  reminding 
his  congregation,  one  Sunday,  of  the  prediction,  and  the 
possibility  of  its  fulfilment— -at  least  that  it  was  well  to  be 
prepared  for  such  an  event.  At  the  conclusion  of  his  exhor- 
tation,  a  man  in  the  congregation  arose  to  his  feet,  and  in  a 
solenmly  pathetic  voice  said,  "  Thank  God.^'  At  the  end  of 
the  service  the  minister's  curiosity  was  excited  to  convezse 


ANTAGONISM  BETWKBN  BI^INl^  AND  CONKI<ING.        811 

wiA  the  man  who  had  so  fervently  thanked  heaven  for  what 
most  people  regarded  as  a  universal  calamity.  He  saw  the 
lean,  and  asked  why  he  had  made  such  a  remarkable  ejacu- 
lation at  the  prospect  of  such  a  terrible  consummation. 
**  Anything  to  beat  Grant,"  was  the  reckless  and  self-sacri- 
fioing  response. 

It  was  in  this  spirit  that  the  Bobertson  party  made  the 
fight  at  Chicago,  and  in  this  spirit  that  they  triumphed.  It 
was  anything  to  beat  Senator  ConkliDg,  however,  so  far  as 
Judge  Bobertson  was  concerned,  who  on  other  grounds 
would  probably  have  preferred  Grant.  Thus  he  avenged 
upon  the  wrong  man  his  defeat  at  the  Utica  Convention,  and 
I  was  permitted  to  escape  scathless,  though  innocently  re- 
sponsible for  blasting  his  Gubernatorial  aspirations. 

This  was  not  the  end  of  Judge  Bobertson's  enmity  to 
Senator  Conkling,  however.  When  the  new  Government 
came  into  power,  Garfield,  in  making  up  his  cabinet,  selected 
31aine  as  a  member  of  that  special  body.  This  created  a 
bad  feeling  between  Blaine  and  Conkling,  as  it  seemed  to 
the  latter  like  a  continuation  of  the  conspiracy  between 
Bobertson  and  Blaine,  hatched  at  the  Chicago  Convention. 
Thus  the  seeds  of  a  strong  and  bitter  antagonism  were 
sown  between  these  two  leading  spirits  in  the  Bepublican 
party,  each  aspiring  to  be  at  least  the  power  behind  the 
throne. 

After  Garfield's  inauguration  Blaine  was  made  Secretary 
of  State.  Great  credit  for  the  Presidential  succesi^  was  not 
only  due  to  Mr.  Blaine,  but  in  a  large  degree  to  Judge  Bob- 
ertson also,  as  without  his  assistance  Garfield  could  not 
have  been  nominated.  So  it  was  necessary  to  take  care  of 
Judge  Bobertson  too.  This  was  done  by  making  him  Col- 
lector of  the  Port  of  New  York.  These  appointments  were 
severe  political  blows,  which,  in  the  nature  of  circumstances, 
fell  witii  full  force  upon  the  devoted  head  of  Senator  Conk* 
ling. 

These  events  led  to  the  sudden  resignation  of  Senator 


812  CONSKOUENCES  OF  THE  UTICA  (DIX's)  CONVENtlOK. 

Conkling  and  Senator  Piatt,  "Me  Too,"  and  a  very  serioua 
division  in  the  ranks  of  the  party,  under  the  respectiTC 
names  and  banners  of  the  Stalwarts  and  the  Half-Breed& 

The  excitement  growing  out  of  the  political  battle  between 
these  factions  aroused  the  intemperate  zeal  and  insane  de- 
lusions of  Guiteau  to  kill  the  President.  Thus  the  thread 
of  cause  and  effect,  when  followed  up  in  this  vay,  is  en- 
tangled in  the  deepest  mjBibTjr. 


CHAPTER    XXXI. 

GRANTS    SECOND    TERM. 
!Fh£  Best  Man  fob  the  PosrnoN  and  Most  DESEBrn^a  oi 

THE  HONOB. — ^HOW  THE  "BoOM"  WAS  WOBKED    IJp   W 

Patob  OF  Gbant.— The  Great  Finanoiebs  and  Speci?' 

LATOBS  ALL  COME  TO  THE  FrONT  IN  THE  InTEBEST  OP  THE 

Nation's  Pbospebity  and  of  the  Man  who  had  Saved 
THE  Countby. — The  Gbeat  Mass  Meeting  at  Coopeb 
Union. — ^Why  A.  T.  Stewabt  Befused  to  Pbeside. — 
The  Besxtlts  of  the  Mass  Meetino  and  how  thet 

WEBB  ApPBECIATED.BT  THE  FrIENDS  OF  THE  CANDIDATE, 

Leading  Eepbesentatiyes  of  the  Business  Community 
AND  THE  Public  Pbess  Genebally,  Ibbespeotiye  of 
Pabty. 

I  WISH  to  relate  briefly  the  part  which  I  took  in  the  re- 
election of  General  Grant,  whose  defeat,  when  he  was 
ipoken  of  as  a  candidate  for  the  second  term,  was  fore- 
shadowed among  a  large  number  of  politicians  of  every 
stripe.  There  were  serious  divisions  in  the  ranks  of  his 
fonner  friends  and  adherents,  and  an  organized  effort  was 
made  to  destroy  his  prospects  a  long  time  in  advance  of  the 
meeting  of  the  Philadelphia  Convention. 

All  tiie  political  machinery  of  his  enemies,  and  of  dis- 
appointed office  seekers  and  their  friends,  was  put  in  force, 
and  all  the  tactics  and  prejudices  employed  that  were  put 
iato  operation  with  greater  success  four  years  later. 

I  felt  assured  that  the  nomination  of  any  other  man  might 
result  in  the  defeat  of  the  party,  and  that  it  was  absolutely 
^  necessary  to  its  strength,  maintenance  and  autonomy  that 
General  Grant  should  again  be  our  choice.  He  had  been 
tried  for  one  term  and  found  to  be  a  very  satisfactory  execu- 
tive. There  was  no  important  risk  involved  in  trying  him 
for  a  second  term>  while  the  experiment  with  another  man 
in  the  then  sensitive,  unsettled  and  tentative  condition  of 


8U  GRANT'S  SECOND  T^RM. 

reconstniction,  might  have  been  injurious  to  the  best  politi 
cal  and  industrial  interests  of  the  country  ;  and  the  experi- 
ment would  have  been  especially  risky  if  the  nominee  should 
have  been  a  Democrat. 

The  people  of  the  South  were  not  then  in  a  proper  frame 
of  mind  to  be  trusted  with  any  power  implying  the  mere 
possibility  of  obtaining  a  controlling  influence  in  the  affairs 
of  the  Government.  I  perceived  it  was  important  that  the 
Bepublicans  should  make  a  nomination  that  had  a  fair  pros- 
spect  of  being  successful,  and  I  felt  satisfied  that  the  result 
would  be  extremely  doubtful  if  we  should  nominate  any 
other  man. 

Besides,  no  other  man  was  more  deserving  of  the  national 
compUment^  considering  that  he  had  done  so  much  to  termi- 
nate the  struggle  for  national  existence^  and  had  been  the 
chief  force  in  suppressing  the  Bebellion.  His  genius  and 
courage  had  been  chiefly  instrumental  in  preserving  to  the 
country  the  blessing  of  a  Bspublican  form  of  Government, 
For  this  boon  no  people  could  ever  be  too  profuse  in  the 
manifestations  of  their  gratitude. 

This  was  the  patriotic  feeling  deep  in  the  hearts  of  the 
people  at  large,  but  there  was  a  secret  movement  engineered 
by  ** sore-head"  politicians,  behind  whom  were  even  more 
dangerous  enemies,  to  thwart  patriotic  purposes.  Some  of 
these  conspirators  had  been  brooding  over  latent  schemes  of 
anarchy  for  a  long  period,  and  had  been  attempting  to  put 
them  in  organic  shape  before  half  the  first  term  of  General 
Grant  had  expired.  They  were  hard  at  work  training  public 
opinion,  by  every  means  in  their  power,  to  prevent  Grant's 
renomination. 

This  hostile  element  was  sedulously  hatching' scandals 
and  ventilating  them  in  subsidized  newspapers,  and  throu^ 
various  other  disreputable  channels. 

This  opposition  increased  in  violence  and  intensity,  and 
as  the  time  approached  when  the  country  was  to  choose  its 
next  President,  the  renomination  of  General  Grant  became 


TH«  BUSINESS  COMMUNITY  FOR  GRAKT.  815 

%  matter  of  serious  doubt,  even  to  some  of  his  most  enthnsi- 
iastic  supporters.  It  had  become  a  foregone  conclusion  that 
the  Democrats  would  draw  largely  from  the  BepubHcan 
ranks,  and  the  anxiety  on  this  point  was  intensified  by  the 
hostility  of  the  Tribune^  and  the  prospect  of  Horace  Gree- 
ley's candidacy.  It  was  absolutely  necessary,  therefore,  that 
an  energetic  effort  should  be  made,  and  the  requisite  steps 
taken  to  ensure  General  Grant's  success  at  the  Convention. 

I  entered  into  this  feeling  with  a  great  deal  of  personal 
enthusiasm.  What  was  my  motive  ?  some  one  reading  this 
may  ask. 

Because  I  believed  the  sacredness  of  contracts,  the  stabil- 
ity of  wealth,  the  success  of  business  enterprise,  and  the 
prosperity  of  the  whole  country  depended  on  the  election 
of  Grant  for  President. 

If  the  reader  wants  to  get  at  the  selfish  motive,  as  all  read- 
ers do,  I  shall  be  perfectly  candid  with  him  in  that  respect 
also.  Of  course  I  knew  that  Wall  Street  business  would 
boom  in  the  wake  of  this  general  prosperity.  That  was  the 
selfish  motive,  from  which  no  man  is  free.  Of  course,  I  ex- 
pected to  share  in  Wall  Street's  consequent  prosperity. 

I  did  not  want  office,  as  several  of  the  highest  were  offered 
me  which  I  respectfully  declined  ;  and  no  office  in  the  gift 
of  the  people  would  have  compensated  me  financially ;  and 
moreover,  my  highest  ambition  has  been  satisfied  in  my  own 
line  of  business. 

I  went  to  work  then  in  the  interest  of  Grant  for  the  second 
term.  I  employed  numerous  canvassers  at  my  own  expense, 
to  find  out  the  minds  of  the  representative  business  men  on 
the  subject,  and  to  talk  the  matter  up  with  those  interested 
in  Bopublican  success.  These  men  reported  to  me  daily, 
and  in  a  short  time  I  had  sounded  the  minds  of  that  part  of 
the  business  community  who  had  the  greatest  stake  in  the 
country,  and  whose  influence  is  always  most  felt  when  any 
important  achievement  is  to  be  compassed.  I  sent  out  a 
petition,  and  obtained  the  names  of  a  splendid  array  of 


816  GRANT'S  SKCOND  TBRM. 

merchants  and  business  men  of  all  shades  of  opinion  and 
politics  in  favor  of  Grant.  Following  is  the  heading  of  tlie 
petition : 

"A  Public  Meeting. 

''  To  the  merchants,  bankers,  manufacturers  and  other bos- 
iness  men  in  favor  of  the  re-election  of  General  Grant: 

**  The  undersigned,  desiring  publicly  to  express  their  earn- 
est confidence  in  the  sagacity,  fidelity,  energy  and  unfalte^ 
ing  patriotism,  so  signally  displayed  by  Ulysses  S.  Grant  in 
securing  the  restoration  of  peace  at  home,  upholding  nation- 
al rights  abroad,  and  in  maintaining  throughout  the  vorld 
tiiie  honor  of  the  American  name,  do  hereby  invite  their  fel- 
low citizens  to  assemble  in  mass  meeting  at  the  Cooper  In- 
stitute, on  Wednesday  evening,  the  17th  of  April,  1872." 

This  call  was  chiefly  the  result  of  the  personal  canTaes 
which  I  had  instituted  a  few  weeks  previously.  I  selected 
the  names  of  the  persons  to  be  called  on  from  day  to  daj, 
and  kept  these  men  working  the  matter  up,  until  I  had  se- 
cured almost  all  the  reputable  business  firms  in  the  city  of 
New  York.  The  following,  whose  original  signatures  I  hare 
still  in  my  possession,  were  prominent  in  the  list : 

WILLIAM  E.  DODGE,  R.  H.  McOUBDY, 

JOHN  C.  GBSBN,  JOSEPH  SELIGMAN, 

HENBT  F.  VAIL,  THEODORE  EOOSEVELI^ 

GBOBGB  T.  ADBS,  WILLIAM  OBTON, 

BSV.  SAMUEL  OSGOOD,  GHABLES  P.  KTRKLAWD^ 

WILLIAM  H.  FOGG,  PBTEB  COOPEB, 

BENJAMIN  B.  BHEBMAK,  HUGH  J.  HASTINGS, 

BOBBBT  L.  STEWABT,  SAMUEL  B.:BUGGLB8, 

WILLIAM  HENBY  ANTHON,  OOBTLANDT  PALMBB. 

B.  D.  MOBGAN,  JONATHAN  EDWABDB, 

JAMES  BUELL,  CHARLES  ENXBLAND* 

H.B.CLAFLIN.  &  B.  OOMSTOOK« 

W.  B.  VEBMILTE,  PITT  OOOK, 

WM.  M.  VEBMILTE,  THOMAS  J.  OWEN, 

OHABLBS  L.  FBOST,  OTIS  D.  SWAN, 

NATHANIEL  HAYDEN,  GBOBGB  OPDYZX^ 

JESSE  HOYT,  HABPEB  ft  BBO&, 

WILLIAM  B.^BTCar  FBAEB,  JOHN  C.  HAMILTQH» 

BMIL  SAUEE,  GEO.  W.  T.  LOBD, 

JAOQB  OTTO,  SAMUEL  T.  BEIDMOBB, 

JOSEPH  STUABT,  JONATHAN  STUBGEfl^ 

J.  STUABT,  WM.  H.  VANDERBILi; 

THOS.  GARNER  ANTHONY,  SHEFABD  ENAPF, 

FBBDBBIOK  B.  WINSTON,  WM.  K,  ABPINWALI^ 

M0BBI8  FBANSLIN,  J.  S.  BOOKWBLL. 

WM.  0.  bbyant; 


didn't  hav]9  his  wiWs  relatives  promoted.     817 

It  is  sad  to  reflect  that  these  are  all  now  nmnbered  with 
Uie  mighty  dead. 

These  names  will  serve  to  sho^  the  great  number  of 
prominent  people  gradually  depaiting  from  us  every  few 
years. 

The  name  of  the  nmnber  of  those  yet  alive  who  signed 
that  petition  is  legion.  In  fact  those  who  did  not  sign  it 
were  those  whose  names  were  not  worth  having.  To  put  it 
mildly,  I  secured  through  their  own  signatures,  by  this 
method,  all  whose  names  were  desirable.  Our  forces  having 
been  mustered  in  this  way,  the  next  thing  was  to  disconcert 
the  enemy,  and  inspire  our  own  party  by  showing  our  avail- 
able strength,  and  the  power  and  enthusiasm  behind  the 
Hovement.  This  we  proceeded  to  do  by  calling  a  mass 
meeting  at  the  Cooper  Institute  for  April  17, 1872. 

The  meeting  was  an  immense  success,  in  numbers,  brains 
And  respectability.  The  hall  was  crowded  and  the  outside 
Vieeting  was  several  times  larger. 

Mr.  A.  T.  Stewart  had  been  invited  to  preside.  He  had 
been  a  warm  friend  of  General  Grant,  but  had  then  become 
lukewarm  and  indifferent,  owing  to  the  fact  that  he  had 
failed  to  obtain  a  Custom  House  promotion  for  one  of  his 
wife's  near  relations.  I  had  endeavored  for  several  days  to 
soften  Stewart's  heart  and  get  him  to  consent  to  be  chair- 
man of  the  meeting,  but  he  was  incorrigible.  Finally,  I 
succeeded  in  extorting  a  promise  f rpm  him  that  if  he  did 
aiot  vote  for  General  Grant  he  would  not  vote  against  him, 
but  beyond  this  it  was  impossible  to  mollify  him.  He  was 
1  paragon  of  obduracy  when  he  had  once  resolved  upon  any 
course.  Even  the  recollection  that  he,  though  an  alien  born, 
had  been  offered  the  second  highest  position  of  trust  in  the 
nation,  Secretary  of  the  Treasury,  which  he  could  not  accept 
on  account  of  being  in  business,  failed  to  draw  out  his  feel- 
ings of  gratitude  sufficiently  to  forget  the  fancied  slight  of 
refusing  his  wife's  relative  promotion. 

Failing  to  secure  Mr.  Stewart,  I  invited  Mr.  William  E» 


B18  grant's  skcond  tkrn. 

Dodge  to  preside.    He  graciously  accepted  the  inyitation 
and  made  a  very  good  chairman  indeed. 

The  array  of  Vice-Presidents  was  said  to  excel  anythiDg 
that  had  ever  appeared  in  a  similar  list  of  the  proceedings 
of  any  meeting  in  this  city. 

I  had  invited  Fred.  Douglas  and  P.  B.  S.  Pinchhack,  the 
eminent  colored  orators,  to  the  meeting,  but  they  could  not 
attend,  as  they  were  at  a  New  Orleans  convention  of  their 
own  people.  Mr.  Bainey,  a  colored  gentleman,  spoke  most 
eloquently  and  with  telling  effect.  This  was  the  first  timT 
since  the  war  that  a  colored  orator  had  addressed  a  meetiii|; 
of  whites  on  politics  in  New  York,  or  probably  in  the 
North.  Prior  to  this  the  colored  vote  for  Grant  had  been 
in  doubt,  as  Horace  Greeley,  whose  name  was  a  word  to 
conjure  with  among  these  people,  had  recently  been  swing* 
ing  around  the  circle  down  South,  with  a  view  of  capturing 
alike  the  vote  of  the  colored  people,  who  loved  him,  and 
that  of  the  Democrats,  who  hated  him.  By  a  curious  fatality 
he  failed  to  capture  either.  As  Blaine  has  truly  said  Oi 
him:  ^^No  other  candidate  could  have  presented  such  a& 
antithesis  of  strength  and  weakness." 

There  had  been  no  meeting  for  a  long  time  previous  tc 
this  that  had  been  the  cause  of  such  an  enthusiastic  awaken- 
ing in  the  party  and  among  politicians  generally  over  the 
whole  country,  as  this  great  demonstration  of  the  people  at 
the  Cooper  Union.  It  crushed  the  aspirations  of  the  so' 
called  Independents  and  smothered  the  lingering  hopes  ol 
the  Democratic  party. 

In  order  to  show  the  influence  of  this  mass  meeting  upon 
the  destiny  of  political  parties  in  the  Presidential  election 
of  1872,  it  will  be  necessary  to  take  a  retrospect  of  the  im- 
pression it  made  on  parties  most  deeply  interested  in  the 
result,  and  to  make  known  their  private  opinions  on  the 
subject  Inside  history  of  this  nature  is  always  instructive, 
tod  time  has  clothed  with  the  attribute  of  public  propertji 
what  at  one  time  was  a  very  precious  political  secret. 


TH«  CANDIDATE'S  OPINION  OV  THK   *' BOOM."         819 

Among  the  striking  incidents  of  the  night  of  that  meeting 
1  distinct]  J  recollect  one  that  was  truly  prophetic,  in  regard 
to  Senator  Henry  Wilson,  of  Massachusetts.  A  niunber  of 
the  speakers  and  other  prominent  men  took  supper  with  me 
at  the  Union  League  Club  after  the  meeting,  and  in  pro- 
posing the  health  of  Senator  Wilson,  who  had  spoken  so 
eloquently,  I  nominated  him  for  the  Vice-Presidency,  and 
sure  enough  he  was  afterwards  elected  to  that  position. 

I  shall  take  the  liberty  in  this  place  of  introducing  to  the 
reader  a  few  letters  hitherto  unpublished,  which  throw  con- 
siderable light  on  the  value  of  the  political  work  done  by 
myself  and  friends  at  that  time,  and  how  it  was  appreciated 
by  those  most  deeply  interested  in  its  outcome. 

The  following  from  the  White  House  shows  how  anxious- 
ly the  current  of  events  was  being  watched  from  that  great 

centre: 

"EzKonnYBM^NBioir,  \ 

Washington,  D.  C,  AprU  17,  1872.  / 
Mt  Dsab  Cijewb  : 

I  have  received  yoar  seyeral  interesting  letters  in  regard  to  the  great 
meeting  in  New  York,  and  have  shown  them  to  the  President,  who  read 
them  with  deep  interest.  I  have  not  written  any  suggestions,  beoanse 
I  know  yon,  being  on  the  ground,  could  judge  so  muoh  better  of  the  sit- 
uation, and  the  temper  of  the  New  York  people.  You  hare  done  a  great 
work,  and  this  evening's  success  wiU,  I  have  no  doubt,  be  the  reward  of 
yoar  efforts.  We  shall  look  anxiously  for  the  reports.  What  you  say  is 
carious  about  the  use  of  Dlz*s  name  and  others.  Oar  people  are  at  work 
in  Congress  getting  up  telegrams  signed  by  the  Republican  members  of 
all  the  S^tate  delegations  endorsing  the  administration  of  General  Grant. 
I  wish  we  had  thought  of  these  sooner,  but.  still  we  can  get  them  all  in 
time,  I  hope.  I  have  Just  come  from  the  House,  where  I  was  looking 
after  this  matter.    Wishing  you  every  success, 

I  remain  yours  very  sincerely, 

HORACS  PORTER, 

(Sec'y  to  President  GrantJ 

After  the  meeting   the  President's  Secretary  'writes  as 

follows : 

EZBOUnVB  BiANBlOF, 

Washington,  D.  i 

April  19,  1872. 
Ut  Dkab  Cuews : 

I  haye  only  a  moment  before  the  mail  closes  to  say  how  earnestly  INj^ 
nil  oongratulate  you  upon  the  great  success  of  the  meeting. 


1873.  j 


820  GRANT'S  s:bcond  thmi. 

It  was  glorious  and  genuine.  We  read  the  proceedings  In  full  in  tbe 
Timei  last  night.  It  has  created  a  marked  effect  in  Ck>ngreB8  and  else- 
where. Nearly  every  Republican  in  the  House  would  hare  signed  tbe 
congratulatory  telegrams,  but  the  movement  was  started  so  late  to  the 
day  that  the  paper  was  not  presented  to  any  one. 

Tours  very  truly, 

HORACE  PORTER. 

Tlid  following,  from  the  Hon.  Boscoe  Conkling,  is  a  yery 
flattering  reminiscencei  which  I  highly  appreciate  : 

Unpced  States  Senatb  Chamber,       \ 
Washwoton,  April  19, 1872.  > 
Mt  Dbjlb  Sib  : 

As  a  New  Yorker  and  a  Republican,  I  want  to  thank  you  for  the  great 
service  you  haye  rendered  oar  country  and  our  cause  in  oonoeiying  and 
oarryinK  forward  the  great  meeting  of  night  before  last. 

The  eJDFect  of  it  will  be  wholesome  and  widefelt ;  it  was  most  timely, 
and  its  whole  management  was  a  success.  Our  friends  aU,  I  think,  know 
^d  appreciate  the  large  debt  due  you  in  the  premises. 
Noting  your  suggestions  as  to  the  future,  I  lay  them  to  heart. 

Yours  sincerely, 

BOSCOE  CONKLING. 
Henbt  Ci^bws,  Esq. 

The  New  York  HeraUPB  special  from  Washington  neztday 
after  the  meeting  said : 

"  The  President,  in  conversation  with  Senators  who  called 
upon  him  this  morning,  expressed  himself  as  much  pleased 
with  the  demonstration  in  New  York  last  night,  which  he 
regards  only  as  evidence  of  the  popularity  of  the  Bepub- 
lican  Darty.  He  has  been  assured,  from  reliable  sources, 
that  the  leading  Democratic  merchants  and  bankers  in 
different  parts  of  the  country  are  anxious  that  the  Sepab- 
lican  party  may  completely  triumph  at  the  coining  Presiden- 
tial election,  as  the  surest  way  of  maintaining  our  credit^ 
and  resisting  anything  like  a  financial  crisis,  which  they 
regard  as  certain  if  their  own  party  should  succeed." 

Following  are  the  address   and  resolutions  expressed 
through  the  representatives  of  a  grateful  people  in  favor  of 
the  hero  who  had  saved  the  country  : 
Orant  Meeting  at  Cooper  Institute^  March  17,  l&72,-^Addre9$  and  Betobttiont. 

ADDRESS. 

Hon.  E.  Delafield  Smith,  on  behalf  of  the  Committee  of  Arrange- 
ments, read  the  foUowing  address,  remarking  that  It  was  prepared  by 
one  of  the  most  eminent  and.  substantial  of  oar  business  men : 


PtTBUC  APFAIKS  UND^R  GRANT'S  ADMINISTRATION.  321 

Tbd  admlntetratioii  of  pablio  affairs  nndor  the  goyemment  of  Presi- 
dent Grant  has  been  eminently  wise,  conservative  and  patriotic ;  our 
fordgn  relations  have  been  conducted  with  ascrupulotis  respect  for  the 
rights  of  other  nations,  a  jealous  regard  for  the  honor  of  our  own ;  the 
noble  aspiration  with  which  General  Grant  emphasized  his  acceptance 
of  his  great  office,  '*  Let  us  have  peace,"  has  been  happily  realized ;  the 
tJnion  has  been  completely  re-established  on  such  principles  of  justice 
and  equity  as  to  insure  its  perpetuity ;  tbe  Constitution,  with  all  its 
amendments,  has  been  adhered  to  with  rigid  fidelity ;  domestic  tran- 
quility has  been  restored;  a  spirit  of  humaoity  has  been  infused  into 
our  Indian  policy ;  the  revenues  of  the  country  haye  been  faithfully 
collected  and  honestly  disbursed,  so  that,  while  the  burdens  of  taxation 
have  been  materially  lightened,  the  public  debt  has  been  largely  reduced, 
and  tiie  national  credit  appreciably  strengthened  ;  all  branches  of  in- 
dustry have  been  stimulated  to  healthy  activity ;  and  throughout  the 
length  and  breadth  of  the  land  security,  prosperity  and  happiness  re- 
ward the  perils  and  sacrifices  by  which  the  rebellion  was  suppressed 
and  the  Union  preserved. 

It  Is  an  act  of  poetic  justice  that  the  soldier  whose  victories  in  war, 
and  the  statesman  whose  triumphs  of  peace  haye  made  the  last  decade 
the  most  glorious  in  the  annals  of  American  history,  should  receiye  an 
earnest  of  the  gratitude  of  his  countrymen  by  his  re-election  to  the 
Ptesidenoy. 

It  is  an  auspicious  circumstance  that  the  people  are  eyidently  awak- 
ening to  a  higher  sense  of  the  duties  and  responsibilities  of  public  offi- 
cials. There  is  a  general  disposition  to  hold  men  entrusted  with  place 
and  power  to  a  strict  accountability  for  their  acts,  and  to  demand  that 
honesty  and  capability  shall  be  the  inflexible  conditions  of  appointment 
to  office.  The  recommendations  of  the  president  in  favor  of  the  prin- 
eiples  enunciated  in  the  report  of  the  Civil  Service  Commission,  were 
timely  and  apposite,  and  deserve  universal  endorsement. 

Numerous  inyestigations  haye  been  set  on  foot  during  the  present 
session  of  Congress,  having  for  their  object  the  discovery  of  corruption 
in  tlie  public  service.  Disaffected  Bepublicans  and  partisan  Democrats 
have  made  common  cause  in  the  endeavor  to  elicit  evidence  tending  to 
show  acts  of  wrong  doing,  and  to  implicate  the  President  in  knowledge 
or  toleration  of  such  acts.  As  in  the  days  of  Daniel,  "  they  sought  to 
find  occasion  against  him."  But,  like  the  enemies  of  Daniel,  **theif  eottld 
findfum4cee€Ukm  nor  fault,  forasmuch  as  he  toaa  faithful^  neHJur  was  there 
onf  error  arfauU  found  with  him. " 

The  more  incisiye  the  scrutiny,  the  more  palpable  the  demonstration 
of  his  purity.  The  cost  of  pursuing  these  inyestigations  has  exceeded 
the  aggregate  loss  incurred  by  the  Government  through  the  dishonesty 
of  its  subordinates  since  the  admlnifitration  came  into  power. 

A  record  so  clear  and  honorable  challenges  the  admiration,  and  com- 


822  grant's  skcond  tsrm. 

pr  ]9  the  approyal  of  citizens  whose  only  ^  Im  is  to  secure  a  stable  and 
benofloent  Goyemment— to  preserre  inviolate  the  faith  of  the  nation— 
to  give  security  to  capital,  adequate  reward  to  labor,  and  equal  lights 
to  aU. 

With  the  grievances  of  disappointed  office  seekers,  the  masses  wlio 
thriye  by  their  own  toil,  cannot  bo  expected  to  find  time  or  patience  to 
sympathize.  Whether  this  Senator  has  had  more  or  that  Senator 
iess  than  his  share  of  patronage,  are  insignificant  questions  compared 
with  the  graye  issues  involved  In  a  Presidential  canyass.  It  is  the  coosti- 
tntional  prerogatiye  of  the  President  to  make  appointments  to  office. 
That  he  has  not  exercised  these  functions  unwisely,  the  sacoess  of  hl^ 
administration  abundantly  proyes. 

Believing  that  General  Grant's  civic  ccreer  fitly  supplements  his  mili- 
tary greatness,  that  he  has  brought  to  the  discharge  of  his  duties  to  the 
State  the  same  energy,  foresight  and  judgment  which  marked  his 
aohieyements  in  the  field,  and  made  his  campaigns  from  Donelson  to 
Appomatox  for  ever  illustrious;  and  that  he  possesses  and  deserves 
the  confidence  of  the  American  people,  we  pledge  to  him  our  united 
and  hearty  support  as  a  candidate  for  re-election. 

RBSOLUnONS. 

Hon.  E.  Delafield  Smith,  Chairman  of  the  Committee  on  Resolutions, 
presented  the  following : 

Firit.  That  the  merchants  and  mechanics,  tlie  bankers  and  business 
men  of  New  York,  represented  in  this  meeting  and  in  the  ca'l  under 
which  it  is  assembled,  are  satisfied  with  the  wisdom,  abiUty,  moderation 
and  fidelity  with  which  the  national  government  is  administered,  and 
in  common  with  the  bulk  of  our  brethren  throughout  the  Union  flavor 
the  continuance  of  its  distinguished  head  in  the  office  which  he  holds 
with  usefulness  and  honor. 

Second,  That  the  practical  result  of  the  coalition  movement,  if  suc- 
cessful, would  be  to  restore  the  Democratic  party  to  power. 

Third.  That  such  a  restoration,  after  the  late  glorious  triumph  over 
rebellion,  would  reiid  in  history  like  the  record  of  a  Tory  resurrection 
at  the  close  of  our  revolutionary  war. 

F<mrVi,  That  Republicans  elected  to  office  mainly  by  those  who  as' 
sailed  the  Union  at  the  South  and  at  the  North  embarrassed  its  defend* 
ers,  would  inevitably  become  serviceable  to  the  powers  that  sustain 
them,  like  those  northern  presidents  who  were  chosen  by  the  South  and 
did  its  bidding  better  than  its  own  statesmen. 

Fifth,  That  the  patriotism  that  made  Grant  President  of  the  Repub- 
lic he  saved,  is  akin  to  that  which  placed  Washington  at  the  head  of  tl^^ 
natien  he  created.  The  trust  was  accepted  by  each  at  a  manifest  sao- 
rifice  of  interest  and  inclination,  with  modest  misgiving  as  to  civil 
experience  and  qualification.  But  haying  been  well  and  wisely  admin- 
istered, the  confidence  imxiiled  in  a  re-electiou  is  an  appropriate  rewara 


1MB  CHOICE  O?  THIt  "PWIN  PBOPI^B."  823 

for  faitlifiil  serrioefl,  and  aooorda  with  the  broadest  views  of  publio 
poUoy. 

SiBBth.  That  against  hostile  oritlolsms  and  unfounded  imputationa, 
■ominrt  alluring  promises  and  prismatic  theories,— we  array  the  practi- 
cal reforms  constantly  inaugurated  and  the  substantial  results  already 
Koliieyed  by  tlie  present  administration.  The  clironio  vices  of  existing 
systems,  unfairly  paraded  to  its  injury,  have  been  plaoed  in  a  course  of 
amelioration  or  remoyal.  The  reduction  of  the  national  debt  has  eli* 
cited  the  admiration  of  the  world.  Our  diplomacy  has  made  peace  the 
ally  of  national  honor.  And  our  President  has  been  in  deed  as  in  name 
a  Idind  and  "great  father  **  to  the  Indian  tribes  still  lingering  within  our 
borders. 

Seoeath,  That  while  honorable  opposition  is  entitled  to  respect,  CTery 
effort  to  blacken ,  for  political  purposes,  the  character  of  President  Grant, 
Is  a  crime  against  troth  wliich  vindicates  him,  and  an  insult  to  the 
American  people  who  lienor  and  exalt  him.  Pure  in  private  as  irre- 
proachable in  public  life,  with  strong  convictions  yet  deferential  to  the 
popular  will,  pal  lent  under  attack,  more  ready  to  listen  than  to  speak, 
'With  no  display  and  no  ostentation— those  who  know  him  best  bear 
testimony  to  the  sense,  the  sagacity,  and  the  power  of  analjBiB  by  which 
Jiis  ntterancea  are  characterized  and  impressed. 

Mgklh,  That  in  the  judgment  of  this  meeting  a  majority  of  the  peo- 
ple of  the  country  expect,  desire,  and  decree  the  re-nomination  and  re- 
eleotion  of  Ulysses  8.  Grant. 

BFE1B0H  OT  HON.  B.  DICLAnBIJ)  SMITH. 

Ur.  E.  Delafield  Smith  said  .-—Fellow  Citizens :— It  is  manifest  to  us  all 
tbat  Prerident  Grant  wiU  be  re-nominated  at  the  Convention  in  Phila- 
delphia.  It  is  equally  clear  that  such  is  the  wish  of  the  American  peo- 
ple. This  is  due  to  a  confidence  reposed  in  him  by  the  '*  pl^n  people  ** 
cft  the  country,  which  no  misrepresentation  seems  able  to  impair.  His 
opponents  assert  that  the  public  declarations  in  his  favor  are  influenced 
by  the  office  holders.  But  this  cannot  well  be,  for  the  office  holders  are 
al'ways  far  outnumbered  by  the  office  seekers.  With  regard  to  executive 
patronage,  it  is  as  true  now  as  when  Talleyrand  first  said  it,  that  every 
office  conferred  makes  one  ingrate  and  forty-nine  enemies.  The  truth 
is,  possession  of  the  offices  is  a  source,  not  of  strength,  but  of  actual 
ireakness  to  any  political  party.  In  spite  of  this,  General  Gra:it  is  so 
strong  and  popular  that  a  coalition  is  frantically  sought  as  the  only  and 
foorlom  hope  of  defeating  him.  It  is  thought  that  the  Democratic  mas- 
ses  can  be  carried  over  bodily  to  the  few  Republican  seceders.  Bat  the 
moment  the  Democratic  organization  is  relaxed,  it  will  lose  its  hold  upon 
thousands  of  its  own  members,  nnd  they  may  and  will  prefer  in  voting 
for  a  BepubUcan  to  make  the  choice  themselves,  and  they  will  rally  in 
large  numbers  to  the  hero  of  our  patriotic  armies.    The  coalition  meet^ 


824  GRANT'S  SBCpND  TBRM. 

big,  lately  held  fn  this  city,  recalls  the  old  arrangement  aa  to  colored 
troops,  where  the  officers  were  white  men,  but  the  rank  and  file  negroes. 
80  here,  the  platform  was  covered  with  Republicans,  bat  the  audience 
was  made  up  of  Democrats.  In  thus  acting  with  their  old  opponents 
our  disaffected  friends  boast  of  their  independence,  and  impute  senril* 
ity  to  us.  But  they  are  wrong.  That  man  is  most  independent  who  is 
at  once  loyal  to  his  country,  true  to  his  party,  and  faithful  to  his  friends  I 
With  these  brief  obsenrations,  I  moye  the  adoption  of  the  address  and 
resolutions. 

My  only  apology  for  inserting  the  above  address  and 
resolutions  is,  that  I  believe  they  constitute  a  valuable 
epitome  of  a  very  important  chapter,  yet  to  be  more  folly 
written,  of  the  political  history  of  the  United  States. 

A  greater  criterion  of  the  success  of  the  meeting,  how- 
ever,  was  the  editorial  opinion  of  the  Evening  Post  next  day, 
which  had  been  for  a  long  time  previously  very  bitter  in  its 
attacks  upon  Greneral  Grant.    It  said : 

*'  The  meeting  held  last  evening  at  the  Cooper  Institate 
was,  we  believe,  without  precedent  in  our  political  history. 
It  was  expressly  called  as  a  gathering  of  that  branch  of  the 
Bepublican  party  which  desires  the  nomination  and  re-elec- 
tion of  President  Grant.  Yet,  when  it  came  together,  the 
officers  and  speakers  assumed  that  it  was  a  mass  meeting  of 
the  Eepublicans  of  New  York.  This  is  to  say,  according  to 
the  organizers  and  promoters  of  this  gathering,  the  one  test 
of  Bepublicanism  now  is  the  political  support  of  one  man's 
aspirations,  and  that  before  any  nomination  has  been  made 
by  that  party.  This  is  a  singular  position  to  receive  the 
approval,  at  least,  by  their  acquiescence,  of  such  men  as 
some  scores  of  those  whose  names  are  prominent  in  the 
report  of  the  meeting,  and  who,  as  we  know,  would  prefer 
some  other  candidate  than  General  Grants  if  they  could 
hope  to  control  the  Philadelphia  nomination. 

"  The  power  of  this  meeting  was  wholly  in  its  organization. 
The  list  of  officers  chosen  by  it  is,  on  the  whole,  the  best, 
most  reputable,  and  most  influential  commanded  by  any 
partisan  meeting  within  our  recollection.  There  are  a  few 
names  on  it  which  disgrace  their  fellows  ;  there  are  many 
which  carry  no  weight,  but  an  unusually  large  proportion  of 
the  very  long  list  are  eminent  and  representative  names  in 
this  city.  The  audience  assembled  was  in  many  respects  in 
keeping  with  the  officers.  It  consisted  mainly  of  reputably 
thoughtful  voters." 


THH  Busnmss  m:bn  intersstsd.  825 

The  good  work  was  continued  until  Noyember  with  the 
result  that  is  now  historical. 

The  New  York  Sun  said  :  **  We  believe  that  Henry  Clews 
did  more,  in  a  pecuniary  way,  to  promote  the  success  of  Grant, 
than  any  Bepublican  millionaire  of  the  Union  League  Club  " 

Another,  mass  meeting  was  held  late  in  the  fall.  Bef er- 
ring to  ity  and  other  events  of  that  period,  the  President's 
Secretary  writes  a  few  days  prior  to  the  election  as  follows : 

Washinotok,  D.  C,  Nov.  2, 1872. 
Mt  Dear  Clejwb  : 

We  are  all  greatly  obUged  for  tbe  doouments  aod  information  which 
yoQ  have  sent  us  during  the  campaign.    The  President  says  the  list  of  - 
Tioe-presidentBof  tlie  last  Cooper  Institate  meeting  is  the  most  remark- 
able list  of  prominent  names  he  has  ever  seen  upon  one  paper.    It  wiU 
of  itself  do  great  good. 

Om*  newtf  is  charming  from  oU  quarters,  and  aU  our  hopes  will,  with- 
out donbt,  he  faUy  realized  on  Tuesday  next. 

If  the  defeat  of  the  enemy  is  oyerwhelming,  it  will  be  sufficient  re* 
wud  for  all  our  labprs. 

Tour  very  truly, 

HOBA.GE  PORTER. 

To  show  still  further  the  interest  which  the  leading  mer- 
chants, bankers  and  business  men  of  this  city  took  in  the 
moYement  to  re-elect  General  Grant  at  that  time,  the  fol- 
lowing circular  furnishes  an  excellent  and  historical  record. 
It  constitutes,  in  a  small  compass  and  compact  form,  a  vain 
able  chapter  of  financial  history  : 

CIRCUIiAR 

Ofihe  Btmnets  Men  of  Ifew  York  on  the  Financial  Condition  of  the  National 

Debt  of  the  UniUd  States.     Further  Beduction  October  1, 

10,327,000  DoUars. 

The  undersigned,  merchants,  bankers  and  business  men  of  New  Yorlc, 
respectfuUy  submit  the  foUowing  statements  for  the  information  of  aU 
parlies  interested  therein : 

The  Republican  candidate  for  President  of  the  United  States  is  Oen. 
Ulysses  S.  Grant,  who  was  unanimously  named  for  re-election  at  PhUa- 
delphia,  in  May  last. 

At  the  commencement  of  Oen.  6rant*s  first  term  of  office,  March  4, 
1869,  the  national  debt  was  $3.G25,000,000.    On  the  first  day  of  Septem- 
ber, of  the  present  yenr,  there  liad  been  paid  and  cancelled  of  the  prin- « 
otpal  of  this  debt,  $348,000,000,  leaving  a  balance  of  principal  remaining  . 


S2G  GiLAJ^nf'S  SECOND  TBRM. 

unpaid  at  that  date,  in  accordance  with  the  ofllcial  stotement  oftbe 
Secretary  of  the  Treasury,  the  sum  of  $2,177,000,000. 

Of  this  amount,  $1,177,000,000  are  represented  in  a  funded  debt,  bear- 
ing interest  in  gold,  while  $400,000,000  remain  unfunded  in  Treuarj 
circulation. 

Up  to  the  oloee  of  the  last  session  of  Congress,  the  annual  redaction 
of  taxes,  as  measured  by  the  rates  of  1869,  had  been  as  follows : 

Internal  revenue  tax, $82,000,000 

Incometax,  (repealed,) 80.000,000 

Duties  on  imposts 58,000^000 

Making  a  total  reduction  of $170,000,000 

The  reduction  of  the  yearly  interest  on  the  public  debt  exceeds  the 
sum  of  $28,200,000,  of  which  $2'  ,743,000  are  saved  by  the  purchase  sad 
cancellation  of  the  six  per  cent,  public  securities. 

A  careful  consideration  of  these  results  of  a  prudent  and  faithful  ad- 
ministration of  the  national  Treasury,  inducer  the  undersigned  to  ex- 
press the  confident  belief,  that  the  general  welfare  of  the  country,  the 
interests  of  its  commerce  and  trade,  and  the  consequent  stability  of  i^ 
public  securities,  would  be  best  promoted  by  the  re-election  of  Q«tt« 
Grant  to  the  ofiBLce  of  President  of  the  United  States. 
New  York,  Oct,  4, 1873. 

PHELPS,  DODGE  &  CO.,  WILLIAM  OBTOH, 

OBOBGB  OPDYKB  &  CO.,  ISAAC  H.  BAILET, 

A.  A.  LOW  3t  BBOTHBBS,  SHEPHEBD  KKAPP, 
JOHN  A.  STEWABT,  WILLIAMS  &  GUION, 
TBBMILTB&Oa,  EDWABDS  PIEBBBPOHT, 
JAY  GOOSE  &  CO.,  BtJSSELL  SAGE, 
JOHKSTEWABD,  PETEBCOOFEB, 
HABPEB&BBOTHEES,  ANTHONT,  HALL  ft  00., 
JOHN  TATLOB  JOHNSTON,  GABNEB  &  CO., 
FBEDEBICK  &  WINSTON,  J.  a  T.  8TBANAHAN, 
PEAKB,  OPDTCEB  &  CO.,  B.  D.  MOBGAN  it  CO., 
MOBBIS  FBANEUN,  DBBXEL,  MOBGAN  &  00., 
8CHULTZ,  SOUTHWICE  di  Oa,  AUGUSTINE  SMITH. 

J.  S.  BOCEWELL  &  CO.,  WM.  H.  YANDEBBILT, 

BOBEBT  H.  MoCUBDY,  MOBTON,  BLISS  k  CO., 

WILLIAM  M.  VEBMILYE,  JONATHAN  STUBGSS, 

B.  W.  HOWES,  J.  k  W.  BELI6MAN  k  CO., 
WILLIAM  CULLEN  BBYANT,  J.  k  J.  STUABT  k  CO. , 

a  L.  TIFFANY.  JOHN  A.  PABKEB, 

SPOFFOBD  BBOS.  k  CO.,  BENJAMIN  B.  SHEBMAN, 

JOHN  C.  GBEEN,  JOHN  D.  JONES, 

H.  B.  CLAFUN  St  CO.,  J.  D.  VEBMILYE, 

MOSES  TAYLOB,  SAMUEL  T.  BKIDMOBI^ 

WM.  H.  ASPINWALL,  HENBY  P.  VAIL. 

BOBEBT  LENOX  EENNEDY,  LLOYD  ASPINWALL, 

S.  B.  CHITTENDEN  k  CO.,  JACOB  A.  OTTO, 

JAMES  G.  BING»8  SONS,  GEOBGE  W.  T.  LOBD, 

HENXSY  E.  PIBBBBPONT,  SAMUEL  McLEAN  k  OfXf 

BMIL  SAUEB,  HENBY  CLEWS  k  00^ 
BOOTH  k  BDGAB, 


OHAPTEE    XXXII. 

THE  TWEED  RING.  AND  THE  COMMITTEE  OF  SEVENTY. 

The  Bing  Makes  Itself  Useful  in  Speculative  Deals.— 
How  Tweed  and  His  **  Heelers'*  Manipulated  the 
Money  Market. — The  Bma  Conspires  to  Organize  a 
Panic  fob  Political  Purposes— The  Plot  to  Gain 
A  Democratic  Victory  Defeated  and  a  Panic  Averted 
Through  President  Grant  and  Secretary  Boutwell, 
Who  Were  Apprised  of  the  Danger  by  Wall  Street 
Men. — How  the  Committeb  of  *^ Seventy"  Origin- 
ated.— The  Taxpayers  Terrorized  by  Boss  Tweed 
AND  His  Minions.— How  **  Slippery  Dick"  Got  Him- 
self Whitewashed. — Offering  the  Office  of  City 
Chamberlain  as  a  Bribe  to  Compromise  Matters.— 
How  THE  Ho^.  Samuel  Jones  Tilden,  as  Counsel  to 
the  Committee,  Obtained  His  Great  Start  in  Life. 

TTTFt  Tweed  Bing  had  considerable  experience  in  and  oat 
of  Wall  Street  for  several  years  during  the  municipal 
reign  of  the  famous  Boss.  I  have  made  some  reference  to 
their  attempts  to  manipulate  the  market  through  tight 
money,  in  my  biographical  sketch  of  that  Wall  Street  ce- 
lebrily  Henry  N.  Smith. 

The  Bing  was  often  highly  subservient  in  assisting  certain 
operators  in  speculative  deals  in  stocks,  one  notable  instance 
being  in  Hannibal  &  St.  Jo.  shares,  which  resulted  in  a  terri- 
ble loss  to  Boss  Tweed  &  Co.  This  stock  became  quite 
neglected  for  a  long  period  afterwards,  and  so  remained 
until  the  famous  ^^  comer  "  was  engineered  many  years  after 
by  John  B.  Duff^  of  Boston,  through  his  New  York  broker, 
Wm.  J.  Hutchinson,  and  by  which  poor  Duff  was  almost,  if 
not  entirely,  ruined.  It  is  only  justice  to  Mr.  Duff,  in  this 
connection,  to  state  that  he  was  not  to  blame,  as  an  exhaust- 
ive investigation  by  the  Governing  Committee  of  the  Stock 
Exchange  showed  that  his  trouble  chiefly  arose  through 


828  Tim  TWKSD  RING, 

flagrant  dishonesty  and  betrayal  of  trust  on  the  part  of  hia 
agent,  in  whom  he  reposed  too  much  confidence. 

Boss  Tweed  and  his  special  retainers  sometimes  made 
Wall  Street  instrumental  in  engineering  national  and  State 
political  movements.  About  the  time  of  an  election,  if  their 
opponents  happened  to  be  in  power,  thefiing  would  produce 
a  stringency  in  the  money  market,  by  calling  in  simultan- 
eously all  the  city  money,  which  was  usually  on  temporary 
loans  in  the  Street. 

This  the  Bing  managers  would  accomplish  through  some 
of  the  banks  which  were  the  depositories  of  the  city  funds, 
and  were  under  their  control 

By  this  means  they  worked  up  a  feeling  of  antagonism 
against  the  Bepublicans  who  were  in  office,  by  throwing  the 
blame  on  them,  and  thus  rendering  them  odious  in  the  eyes 
of  those  who  had  lost  money  in  speculation.  The  blame  was 
not  unnaturally  fastened  on  the  party  in  power,  and  most 
men,  when  they  lose  money,  are  credulous  enough  to  belieye 
anything  that  seems  to  account  for  the  manner  in  which  the 
loss  has  been  sustained.  It  seems  to  hare  a  soothing  e£fect 
upon  their  minds,  and  furnishes  them  with  a  tangible  object 
upon  which  they  may  wreak  their  vengeance  and  feel  satis- 
fied. There  is  nothing  so  iiritating  to  the  disappointed 
speculator  as  the  harassing  doubt  of  where  to  fix  the  blame. 

The  Tweed  Bing  supplied  this  long-felt  want,  and  filled 
the  aching  void  in  the  heart  of  the  man  who  happened  to 
get  on  the  wrong  side  of  the  market.  liVhen  speculators  fre- 
quently had  their  margins  ^^  wiped  out,"  and  were  almost 
beggared  of  everything  except  their  votes,  they  found  that 
consolation  which  Wall  Street  refused  them,  in  the  sympa- 
thetic hearts  of  Tweed's  '*  heelers,"  who  pointed  to  the  poor 
office-holders  of  the  Bepublican  party,  representing  them  as 
the  sole  possessors  of  Pandora's  box,  which  contained  all 
evils  that  flesh  is  heir  to. 

So  these  financial  disasters  were  brought  about  by  the 
Tweed  party  for  the  purpose  of  getting  their  friends  into  office^ 


TWBBD'S  gang  ORGANIZlft  A  PANIC.  329 

which  always  paid  tribute  to  the  Boss  when  he  was  instm- 
mental  in  elerating  a  person  to  a  fat  position.  He,  himself, 
did  not  want  any  better  office  than  receiver  general  of  this 
tribate. 

In  those  days  a  Presidential  election  was  largely  influ- 
enced by  the  way  Pennsylvania  went,  so  that  it  had  grown 
into  a  political  maxim,  ^^As  goes  the  Keystone  State  so  goes 
the  Union." 

In  the  Spring  of  1872,  the  year  in  which  General  Grant 
was  the  Republican  candidate  for  the  second  term,  when  it 
was  decided  that  Horace  Greeley  should  be  the  Democratic 
candidate,  great  efforts  were  made  to  produce  a  panic  in 
Wall  Street.  It  was  arranged  by  the  Tweed  party  that 
the  panic  should  take  place  simultaneously  with  the  State 
election  in  Pennsylvania,  so  as  to  illustrate  the  evil  results 
of  Bepublican  rule,  and  turn  the  influence  in  favor  of  Mr. 
Greeley's  election. 

I  received  intimation  of  this  politico-speculative  conspir- 
acy, and  communicated  my  information  to  Senator  Gonkling, 
who  was  stopping  at  the  Fifth  Avenue  Hotel  at  the  time.   I 
told  him  that  the  Democrats  were  working  up  a  panic  to 
help  to  defeat  General  Grant.     He  said  it  was  the  first  he 
had  heard  of  it,  but  it  was  so  like  a  move  that  Tweed  and 
his  party  would  make,  that  he  felt  there  was  just  cause  for 
alarm  about  it,  and  he  requested  me  to  go  and  see  Governor 
If  organ,  and  also  George  Opdyke,  on  the  subject.     I  found 
that  the  Governor  was  at  a  church  meeting,  and  I  left  my ' 
card  telling  him  to  call  upon  me  at  the  rooms  of  the  Eepub- 
lican   National  Committee,  as  I  wanted  to  see  him  upon 
important  business.     I  left  word  for  Mr.  Opdyke  to  call 
also. 

The  Governor  soon  presented  himself  at  the  Committee 
rooms,  and  I  divulged  to  him  my  information  and  suspi- 
cions. He  did  not  exhibit  so  much  interest  as  I  imagined 
the  importance  of  the  case  demanded,  and  he  appeared  to 
doabt  the  correctness  of  the  report  of  the  political  inten- 


880  THK  TWK^D  RING. 

tions  of  the  Tweed  Bing,  or  rather  he  seemed  to  imagme 
that  the  Bing  was  hardly  capable  of  a  move  that  involved 
such  subtlety  and  depth  of  design.  Therein  he  greatly 
underestimated  the  power,  resources  and  statecraft  of  Peter 
"Brains"  Sweeney.  The  Gbvemor  was  of  a  phlegmatic 
temperament,  and  it  was  difficult  to  convince  him  of  any- 
thing that  was  not  very  clearly  demonstrable,  I  told  him 
that  my  information  was  of  such  a  positive  and  reliable  na- 
tnre  that  I  knew  I  was  right,  and  that  if  there  should  be  a 
panic  in  Wall  Street  I  had  serious  apprehensions  that  it 
would  prove  disastrous  to  the  Bepublicans  in  the  national 
campaign. 

Governor  Morgan  appointed  a  meeting  for  the  next  day 
to  discuss  the  matter  more  fully  and  obtain  further  light 
upo^  the  subject.  I  took  with  me  to  see  the  Governor,  whom 
I  had  now  convinced  of  the  reality  of  the  political  plot^  Mi; 
George  Opdyke  and  Mr.  H.  B.  Claflin. 

In  the  meantime  the  Governor  had  seen  Travers,  who, 
being  an  inveterate  bear  on  the  situation,  had  an  inkling  of 
what  was  in  progress  to  break  the  market.  The  Governor 
had  satisfied  himself  that  my  representations  were  correct^ 
and  that  trouble  was  really  brewing.  He  then  entered  with 
earnestness  into  the  question  of  the  best  policy  to  be  adopt- 
ed to  obstruct  the  schemes,  and  frustrate  the  purposes  of 
the  Democratic  party. 

I  then  suggested,  that  as  the  matter  did  not  admit  of  delay, 
it  was  highly  essential  that  some  one,  or  more,  of  us  should 
go  to  Washington  to  see  General  Grant.  The  Governor 
said  he  could  not  go.  I  could  not  go,  and  neither  could 
Mr.  Claflin.  So  Mr.  Opdyke,  who  was  very  ready  in  such 
matters,  consented  to  bear  the  important  message  in  porsoo, 
provided  we  all  agreed  to  back  him  up  by  writing  a  strong 
letter  to  the  President,  setting  forth  the  facts  in  relation  to 
the  emergency.  This  we  did,  and  Mr.  Opdyke  left  at  once 
for  Washington.  This  was  on  Friday  evening,  and  he  trans- 
acted  his  business  with  more  than  ordinary  despatch,  and 


TH«  TIGHT  MON^Y  CONSPIRACY  DKFSATHD.  331 

returned  on  Sunday  morning.  He  sent  forme,  and  told 
me  that  he  had  explained  the  matter  to  the  President,  who 
felt  exceedingly  grateful  for  the  vaming  which  he  and  onr 
letters  had  conveyed,  and  that  he  had  forthwith  consulted 
with  the  Secretary  of  the  Treasury,  and  it  was  resolved  to 
order  the  purchase,  on  Monday,  of  ten  millions  of  bonds,  and 
the  sale  of  ten  millions  of  gold,  for  the  purpose  of  averting, 
in  advance,  any  financial  disturbance  that  might  arise 
through  the  project  of  the  Tweed  Ring  to  create  an  artificial 
stringency  in  the  money  market. 

Then  I  saw  that  these  men  who  were  engaged  in  the  con- 
spiracy to  create  a  panic,  and  benefit  themselves  both  politic- 
ally and  financially  by  its  results,  were  a  deeply  designing  lot, 
and  that  under  the  law,  gold  could  be  bid  up,  the  highest  bid- 
ders obtaining  it,  having  the  option  of  either  paying  by  de- 
positing their  money  in  payment  for  it  in  the  National  depos- 
itories, which  were  the  Fourth  National  Bank  and  the  Bank 
of  Commerce,  or  else  depositing  it  in  the  Sub -Treasury. 
If  deposited  in  the  latter  it  would  be  locked  up,  and  the 
effect  intended  by  the  Treasury,  to  make  money  easy,  would 
be  neutralized,  in  so  far  as  the  influence  of  the  money  as  a 
circulating  medium  was  concerned. 

In  order,  therefore,  to  provide  for  that  probable  contin- 
gency, my  firm  subscribed  for  the  whole  ten  millions  of  gold* 
the  names  being  the  clerks  of  my  office.  "We  were  awarded 
eight  millions,  and  we  paid  the  money  into  the  Bank  of 
Commerce,  and  the  Fourth  National  Bank,  through  which  it 
was  brought  into  circulation. 

Thus  ten  millions  of  greenbacks  and  also  ten  millions  of 
gold  came  fresh  from  the  Sub-Treasury  into  circulation  im- 
mediately, promptly  anticipating  and  defeating  the  machin-  . 
ations  of  the  Bing. 

The  Tweed  Eing  being  "  all  broke  up  "  on  this  deal,  the 
effect  was  magical  on  the  market.  The  plans  of  the  con- 
spirators had  been  entirely  upset,  and  the  Pennsylvania 
election  took  place  a  few  days  afterward  with  an  overwhelm- 
ing majority  for  the  Kepublicans. 


882  TH«  TWKKD  RING. 

Had  the  panic,  which  was  projected  by  the  Bing,  taken 
place,  the  result  might  have  been  otherwise,  and  the  re- 
election of  Grant  thus  jeopardized. 

After  this  triumph  orer  Tweed  and  his  gang,  I  set  my  wits 
to  work  to  plan  their  overthrow.  I  saw  that  their  power  was 
entirely  money  pcv«  or,  obtained  by  official  position  throng 
official  theft.  I  was  satisfied  that  these 'patriots  who  had 
put  their  hands  up  to  the  elbows  in  the  City  Treasury  of 
New  York  were  bent  upon  buying,  stealing  or  otherwise 
obtaining  their  way  to  the  National  Treasury  at  Wash- 
ington. 

They  had  hoped  to  do  there  oix  a  large  scale  what  they  had 
accomplished  on  a  smaller  scale  in  the  city  of  New  York, 
where  they  were  becoming  restive  under  their  limited 
resources. 

It  was  with  the  view  of  suppressing  the  dangerous  aspiia- 
tions  of  this  band  of  political  marauders  that  I  originated 
the  well  known  Vigilance  Committee  of  Seventy,  and  at  the 
first  meeting  to  organize  this  committee  I  nominated  sixty- 
five  of  its  members. 

The  committee  was  thus  backed  at  the  start  by  so  many 
prominent  citizens  as  to  make  it  at  once  a  power  in  the 
community. 

Then  for  the  first  time  in  many  years  the  citizens  of  New 
York  were  emboldened  to  become  outspoken  on  the  subject 
of  political  plunder  and  tyranny,  and  against  the  officials 
who  had  ruled  the  city  with  a  rod  of  iron. 

For  a  long  time  previous  to  this  there  had  been  grave 
suspicions  that  robbery  on  a  large  scale  was  being  perpe- 
trated, but  no  one  dared  to  give  utterance  to  the  fact  except 
with  bated  breath  and  in  half  smothered  whispers.  No  one, 
with  the  possible  exception  of  a  few  who  were  not  taxpayers 
had  the  temerity  to  open  his  mouth  to  say  a  word  against 
the  desperate  men  who  controlled  the  destinies  of  the  city, 
through  fear  that  on  the  event  of  any  remark  reaching  the 
ears  of  the  Boss  or  his  minions,  the  property  of  the  person 


SUPPBKY  dick's  whitewashing  SCH]BM«.  88S 

tlms  offending  should  be  marked  up  to  an  artificial  value  and . 
Ills  taxes  accordingly  increased.  This  was  one  of  the  most 
effectiye  methods  pursued  by  the  King  to  choke  off  unfriendly 
criticism  by  the  rich  men  of  the  city.  In  this  way  the 
power  of  some  of  the  most  influential  citizens  became 
paralyzed,  being  held  in  complete  subjection  under  the 
terrorism  of  this  subtle  system  of  blackmailing. 

The  power  theBing  possessed  of  coyeringup  the  rascality 
of  its  members  and  bamboozling  the  public  is  hardly  con- 
ceivable at  this  day  except  by  those  who  had  experience  of 
it  at  the  time.  As  an  instance  of  this  I  may  state  that  some 
time  prior  to  the  appointment  of  the  Committee  of  Seventy 
certain  accusations  were  ventilated  against  Bichard  Oon- 
nolly,  the  City  Comptroller.  He  put  on  a  bold  front,  and 
insisted  upon  an  investigation  of  his  department  by  a  com* 
mittee  of  leading  and  prominent  citizens.  He. named  his 
committee,  who  were  Moses  Taylor,  Marshall  Boberts  and 
John  Jacob  Astor.  These  were  men  against  whom  no 
person  could  have  any  objection.  They  were  wealthy  and 
independent  citizens,  and  it  might  have  been  di£Gicult  at  the 
time  to  have  selected  any  other  three  who  commanded 
greater  confidence  in  the  community.  The  investiga- 
tion, through  the  unblushing  effrontery  and  audaciousness 
of  Connolly  and  his  ^'pals/'  resulted  in  an  acquittal  of  Mr. 
Connolly,  which  gave  him  a  new  lease  of  political  life,  and 
rendered  it  more  dangerous  than  ever  for  any  one  to  utter  a 
word  of  hostile  criticism  against  his  methods  of  managing 
the  city  finances. 

Besults  showed,  when  the  Bing  was  exposed,  that  Connolly 
had  made  the  very  best  use  of  this  investigation  in  appro- 
priating additional  sums  out  of  the  City  Treasury. 

The  Bing  was  now  supreme  in  city  affairs,  and  the  city 
was  under  a  reign  of  terror.  This  state  of  things  existed 
until  the  summer  of  1872,  when  the  Committee  of  Seventy  got 
into  harness,  after  which  the  despotic  thieves  that  had  ruled 
the  roast  so  long^  were  driven  from  power  one  after  another 


£S4  THB  TWl^KD  RING. 

in  rapid  saocession,  and  scattered  to  the  f  ottr  comers  of  the' 
globe. 

The  task  of  ousting  this  brazen  band  of  plunderers,  root 
and  branch,  was  attended  with  considerable  difficulty,  as 
their  resources  were  so  numerous  and  powerful.  When  they 
were  no  longer  able  to  exercise  their  arbitrary  power  they 
stooped  to  every  form  of  cajolery  and  bribery  in  order  to 
adhere  to  the  remnant  of  their  official  authority.  As  an  illus- 
tration of  this,  I  may  state  that  at  the  beginning  of  my  ef- 
forts in  connection  with  the  Committee  of  Seventy  I  was 
waited  upon  by  a  member  of  the  Bing  and  asked  if  I  would 
not  accept  the  position  of  City  Chamberlain.  I  said: 
'^  That  is  a  matter,  of  course,  which  I  could  not  decide  upon 
at  once,  as  there  is  no  vacancy  at  present.  It  will  be  time 
enough  for  me  to  consider  the  matter  when  a  vacancy  occnrfl^ 
and  then  when  the  position  is  offered  to  me." 

This  answer  carried  with  it  an  intimation,  which  I  had 
intended,  with  a  view  of  drawing  out  some  of  the  internal 
methods  of  procedure  in  such  cases,  that  I  would  probably 
accept  the  position  and  help  to  smooth  over  impending  reve* 
lations.  I  thought  that  the  end  which  the  Committee  had  in 
view  justified  this  means  of  mildly  extorting  an  important 
secret  in  methods  of  Bing  management,  that  was  calculated 
to  aid  us  in  the  work  of  municipal  reform. 

Next  day  I  was  again  waited  upon  by  one  of  Tweed^i 
most  trusty  friends,  who  graciously  informed  me  that  the 
City  Chamberlain  had  resigned,  and  that  there  was  a  vacancy 
which  I  could  fill  to  the  entire  satisfaction  of  the  then  ap- 
pointing power.  I  desired  him  to  convey  my  feelings  of 
deep  gratitude  to  the  powerf^  that  were  then  on  the  point  of 
being  dethroned,  and  to  say  that  I  very  respectfully  de- 
clined the  flattering  offer.  I  said  that  I  had  thought  earn- 
estly over  the  matter  since  the  previous  day,  and  as  I  was  t 
member  of  the  Committee  of  Seventy,  which  was  a  reform- 
ing organization,  I  felt  that  I  could  not  consoientioiisly  ae* 
cept  the  position. 


OPPICIAM  PI.Y  TO  PARTS  UNKNOWN.  855 

It  was  neoessarjthat  the  office  slioaldbe  filled  immediately, 
and  it  was  next  offered  to  Mr.  F.  A.  Palmer,  President  of  the 
Broadway  Bank,  which  had  been  one  of  the  Sing's  depositor 
lies  of  the  city  fands. 

Soon  after  this  the  majority  of  the  city  officials  had  re- 
signed and  taken  their  flight  to  parts  unknown.  They  were 
scattered  broadcast  over  the  world.  Some  had  gone  to 
Europe,  some  to  Cuba,  and  others  to  that  favorite  and 
paradisaical  colony  of  defaulters,  the  New  Dominion,  leav- 
ing the  Committee  of  Seventy,  as  a  reform  and  revolutionary 
body,  in  complete  control  of  the  city. 

Tweed  remained,  but  was  not  quite  so  audacious  in 
putting  his  pet  interrogative,  ^' What  are  you  going  to  do 
about  it  1"  He  seemed  to  be  convinced  that  the  Committee 
of  Seventy  meant  business.  Mayor  Oakey  Hall  also  re- 
mained, and  facetiously  protested  that  as  far  as  he  was 
ooneemed  everything  was  "  O.  K." 

The  Hon.  Samuel  J.  Tilden  began  to  loom  into  prominence 
about  this  time.  Through  the  influence  of  William  F.  Have- 
meyer,  he  was  chosen  one  of  th6  three  legal  advisers  of  the 
oomndttee.  Abraham  E.  Lawrence  and  Wm.  H.  Peckham 
were  the  other  two.  Mr.  Tilden  was  quick  to  seize  this 
opportunity  of  sudden  prominence  to  bring  himself  to  the 
front  and  pose  as  a  great  reformer.  Had  it  not  been  for 
the  Committee  of  Seventy,  I  believe  it  is  very  doubtful 
whether  this  great  reformer  would  ever  have  been  known  as 
8acbf  and  it  is  also  exceedingly  problematical  whether  he 
IfOUld  have  ever  got  the  chance  of  being  counted  out,  or, 
A^^inpting  through  the  magic  of  his  occult  cyphers,  to  count 

ybody  else  out  of  the  Presidency  of  the  United  States. 


f 


SAMUEL  JONES  TILDEN. 


OHAPTEE    XXXIII. 

HON.    SAMUEL   J.   TILDEM, 

fliOW  TiLBEH  BEGAN  TO  MakE  HIS  FOBTXTNE  15  OONKBOTIOH 

WITH  William  H.  Hayemeyeb. — Tilden's  Gbeat  Fobt 
IN  Politics.  —  He  Improyes  his  Oppobtunity  with 
THE  Disgebnment  OF  Genius.  —  How  Tilden  begamk 
one  of  the  Counsel  of  the  "Committee  of  Seventy." 
—His  Politioal  Eleyation  and  Fame  dating  fbok 
THIS  Lucky  Eyent.— The  Sage  of  Greystone  a  Tbult 
Gbeat  Man.— Attains  Maryelous  Success  by  His 
OWN  Industry  and  Brain  Power.— He  not  only  Db- 
SEBYED  Success  and  Bespect,  but  Commanded  them. 
How  his  Large  Generosity  was  Manifested  in  Hib 
Last  Will  and  Testament. — The  Attempt  to  Bbeas 
,      that  Pbecious  Public  Document. 

MR.  WM.  H.  HAVEMETER  had  long  been  associated 
with  Mr.  Tilden  in  railroad  wrecking  and  the  reorgani- 
zation of  broken  concerns  of  this  character.  Through  this 
process  both  these  gentlemen  became  wealthy.  When, 
therefore,  Mr.  Havemeyer  extended  the  right  hand  of 
fellowship  to  his  confidential  companion  in  money  mak- 
ing affairs,  and  invited  him  to  officiate  as  one  of  the 
CQnnsel  of  three  for  the  Committee  of  Seventy,  M^; 
Tilden  was  sharp  enough  to  appreciate  the  opportunity, 
which  he  seized  with  avidity. 

He  was  quick  to  discern  the  tide  in  the  affairs  of  men 
which,  when  taken  at  the  flood,  leads  on  to  fortune.  He 
iid  not  wait  until  the  tide  began  to  ebb,  but,  like  an  able 
seaman,  set  his  sail  at  the  propitious  moment  to  catch  the 
prosperous  breeze  as  well  as  the  tide.  Thus,  through  a 
lucky  chance  and  other  men's  exertions,  Mr.  Ti!den  was 
raised  high  on  the  very  crest  of  the  tidal  wave  of  reform, 
almost  before  he  knew  it. 

In  the  first  instance,  this  happy  accident  of  being  one  of 
(he  trinity  of  legal  advisers  to  our  committee,  for  which  ha 


HON.  SAMTTKly  J.   TIIJ>EN. 

was  well  paidy  did  not  lead  immediately  so  much  to  f orfame 
as  to  fame,  but  it  formed  an  important  portion  of  the 
pedestal  upon  which  the  sereral  millions  which  he  so  mnni- 
ficentlj  bequeathed  to  educational  purposes  were  sabse- 
quently  raised.  To  fame  he  was  then  comparatively 
unknown.  The  Committee  of  Seventy  enabled  him  to 
obtain  the  start  which  was  chiefly  instrumental  in  elevating 
him  to  a  position  of  renown  in  national  politics. 

Tilden's  great  forte  in  politics,  as  in  financial  affairs  and 
railroad  matters,  was  to  set  a  cash  value  on  everything)  and 
measure  it  accordingly.  If  he  opened  his  "barrel"  the 
contents  were  not  distributed  indiscriminately,  but  on  the 
principle  directed  by  the  most  expert  judgment  of  where 
the  money  would  do  the  most  gooH — according  to  Mr. 
Tilden's  ideas  of  good.  What  they  were  I  don't  attempt  to 
explain,  but,  like  the  popular  novelist,  charitably  leave  them 
to  the  inference  of  the  reader,  or  to  that  expert  Moses  who 
so  ably  deciphered  occult  telegrams  from  Florida  and 
Louisiana  when  there  was  such  a  close  contest  for  the  office 
of  National  Executive. 

Without  departing  from  the  main  issue  of  my  subject, 
however,  I  may  say  that  the  position  which  Mr.  Tilden  was 
enabled  to  assume  as  counsellor  to  our  committee  made  it 
possible  for  him  to  rise  from  the,  not  to  say  dignified,  al- 
though money-making,  attitude  of  railroad  wrecker  to  that 
of  Governor  of  the  Empire  State  of  the  Union,  thus  paving 
the  way  for  him  to  become  almost  a  successful  candidate 
for  the  highest  position  in  the  gift  of  the  Great  Bepablio. 

Such  a  sudden  transition  from  comparative  obscurity  waa 
enough  to  turn  any  ordinary  head. 

Seeing  the  unexpected  course  that  both  our  local 
and  national  history  have  taken,  it  is  impossible  to  say  what 
might  have  been  the  course  of  this  man's  destiny,  and  the 
fate  of  this  new  Daniel  come  to  judgment  in  canal  mg 
matters,  had  it  not  been  that  his  friend  Havemeyer  dis- 
covered him  at  an  opportune  moment,  and  rescued  him  from 
oianif est  oblivion  in  the  nick  of  time. 


fTHB  POWER  OF  THE  COMMITTEE  OF  SEVENTY^       839 

It  must  be  said,  on  behalf  of  Mr.  TUden,  howeyer,  that 
he  improved  the  occasion  with  the  discernment  of  genius, 
and  in  the  fullest  degree,  and  to  the  highest  extent,  thor- 
oughly justified  Haremeyer's  choice. 

The  soundaess  of  that  proverbial  philosophy  which 
holds  that  lightning  never  strikes  twice  in  the  same  place 
seems  to  have  been  fully  appreciated  by  Mr,  Havemeyer,  al- 
though this  was  a  little  ahead  of  the  time  that  John  Tyndall 
and  other  scientists  of  the  modern  school  of  discovery  had 
demonstrated  some  of  the  recent  wonders  of  electricity. 

Tilden  struck  while  the  iron  was  hot,  and  though  he  failed 
to  reach  the  highest  pinnacle  of  his  soaring  ambition,  he 
demonstrated  the  wonderful  possibilities  which  lie  in  the 
path  of  obscure  men  who  are  blest  with  friends  who  look 
out  for  their  welfare^  and  wHo  have  the  precaution  to  turn 
the  wheel  of  fortune  in  the  right  direction. 

Whether  it  was  the  result  of  fate,  genius,  or  wise  direo- 
tio%  or  a  combination  of  aU  these  attributes,  I  don't  pretend 
to  decide,  but  I  have  noted  the  simple  facts  from  my  own 
observation  and  experience,  associated  with  the  rise  and 
financial  progress  of  the  Hon.  Samuel  J.  Tilden,  leaving 
others  deeper  in  scientific  and  philosophic  matters  to 
supply  the  details  and  hidden  mysteries  of  the  causes  of 
his  marvellous  prosperity. 

The  CSommittee  of  Seventy,  when  entering  upon  its  labors, 
passed  a  resolution  authorizing  the  appointment  of  a  sub- 
committee by  the  chair  to  select  and  retain  three  lawyers 
to  represent  it  in  the  matters  of  litigation  that  might  arise 
in  connection  with  the  investigation.  Mr.  Havemeyer,  be> 
ing  a  member  of  the  sub-committee,  through  his  influence 
Samuel  J.  Tilden  was  one  of  the  three  appointed. 

To  give  the  reader  an  idea  of  the  power  and  prestige  of 
the  Gommittee  of  Seventy  at  that  time  it  is  only  necessary 
to  state  that  it  was  instrumental  in  making  Mr.  Abraham 
Ijavrrence  one  of  the  Judges  of  the  Supreme  Court,  and  Mr. 
W.  H.  Peckham,  the  third  counsel,  could  have  obtained  al- 
most any  judgeship  he  had  desired,  with  perfect  facility. 


840  HON.  SAMUKI*  J.  TWDiSaX. 

These  cases  are  on  official  record,  and  are  liying  examples 
to  show  that  I  am  not  exaggerating.  Judge  Lawrence  still 
adorns  the  bench,  with  an  excellent  record  behind  him,  and 
Mr.  Peckham  has  been  a  prominent  figure  in  many  of  the 
most  important  suits  that  have  become  historic  in  the  State 
and  City  of  New  York. 

Mr.  Tilden  saw  the  power  which  this  committee^  used  as 
an  instrument  of  recommendation,  wielded,  and  he  set  his 
astute  mind  to  avail  himself  of  the  reformatory  advantages 
which  it  afforded.  The  committee  was  a  reform  body,  and 
he  saw  his  opportunity,  as  one  of  its  counsel,  to  become  a 
reformer  also.  He  builded  almost  better  than  he  knew,  if  I 
may  be  permitted  to  quote  Scripture  in  this  case,  and  he  did 
not  build  on  a  sandy  foundation  either.  He  planted  him- 
self on  the  solid  rock  of  reform  principles,  independent  of 
politics  or  previous  condition.  It  must  be  said,  to  his  crediti 
that  he  used  the  material  at  his  disposal  with  great  tact  and 
good  judgment,  and  made  an  excellent  reformer. 

Whatever  may  have  been  said  about  him  by  political  op* 
ponents,  the  late  Sage  of  Greystone  must  be  judged  in  this 
sinful  world  by  the  positions  to  which  he  honorably  at- 
tained. He  became  a  prominent  and  most  estimable  citizen 
of  our  great  Republic,  and  had  it  not  been  for  his  age^ 
and  certain  physical  infirmities,  the  existence  of  which  was  i 

a  matter  of  dispute,  he  would  have  made  a  very  good  Presi*  j 

dent,  judging  from  his  record  as  a  Governor.  i 

I  have  not  intended  to  say  anything  especially  disparag-  | 

ing  or  ill-natured  about  Mr.  Tilden  through  any  hostile  I 

feeling  towards  him,  of  which  I  never  had  any.    My  inten-  I 

tion  has  been  simply  to  show  how  easily  a  man  can  rise  if 
he  has  the  ability  required  to  take  passage  on  the  tide  of 
prosperity  exactly  at  its  flow,  the  magic  point  of  embarka- 
tion which  William  Shakespeare  has  suggested. 

So  what  I  have  stated  about  Mr.  Tilden  is  in  the  main 
rather  to  his  credit  than  otherwise. 

For  a  man  who  attained  such  an  elevated  position  of 


TURNING  THIO  CURRENT  OF  HIS  DSSTINY,  841/ 

81100688  by  Ids  own  industry  and  brain  power  I  have  the 
highest  respect  and  the  deepest  sympathy,  knowing  myself 
a  good  deal  about  the  toil  attendant  upon  climbing  above 
the  heads  of  the  great  majority  of  the  '^  masses ''  with  a 
strong  contingent  of  the  envious  ^'classes''  always  using 
their  best  efforts  to  pull  a  man  down  who  attempts  to  aspire 
above  a  certain  level.  In  fact,  Mr.  Tilden  not  only  deserved 
success  and  respect^  but  he  commanded  them.  Such  a  man 
should  always  be  accorded  most  graciously  his  well-earned 
deserts. 

I  can,  therefore,  conscientiously  subscribe  myself  one  of 
the  great  admirers  of  his  successful  career  on  the  whole, 
bearing  always  in  mind  that  human  nature  is  not  perfect, 
and  that  there  are  few,  if  any,  who  have  not  had  some 
murky  clouds  cast  over  their  fair  fame. 

Although  on  strict  moral  principles  we  should  never  do 
evil  that  good  may  come,  yet  the  manner  in  which  Tilden 
disposed  of  the  greater  portion  of  his  fortune  will,  even  in 
the  eyes  of  straight-laced  moralists,  go  far  to  cover  a  multi- 
'  tude  of  sins  in  the  acquisition  of  his  wealth.  There  are 
probably  few,  if  any,  churches  in  the  land  that  would  have 
refused  a  portion  of  the  bequest,  no  matter  how  familiar 
their  members  or  their  clergy  might  have  been  with  Mr. 
Tilden's  railroad  methods. 

In  this  imperfect  sketch  of  the  turning  point  of  prosperity 
in  Mr.  Tilden's  career,  I  have  desired  to  show  how  little  it 
requires  to  change  the  entire  current  of  a  man's  apparent 
destiny.  A  man  who  attains  such  eminent  success  has  his 
Creator  to  thank  for  endowing  him  in  the  first  instance  with 
the  capacity  to  take  advantage  of  the  chances  thrown  in  his 
way,  and  his  own  smartness  for  turning  them  to  the  best 
account. 

I  have  taken  Mr.  Tilden  up  and  devoted  to  his  extraor- 
dinary career  a  few  pages,  from  personal  reminiscences,  in 
this  book,  owing  to  the  fact  that  he  was  identified  with  a 
number  of  railroads  in  the  way  which  I  have  indicated 


**2  HON.   SAMXmi.  J.  TII.DBN. 

aboye.  His  position  in  this  respect  natarallj  classifies  him 
with  some  of  our  most  prominent  Wall  Street  specolatoiSi 
investors  and  operators,  and  he  thus  naturally  falls  within 
the  scope  of  the  main  subject  of  this  book. 

Mr.  Tilden,  in  his  wiU,  ordered  that  if  the  will  should  be 
contested  by  any  of  the  beneficiaries  each  and  all  of  tEe 
contesting  parties  should  be  disinherited. 

In  spite  of  this  prohibition,  George  H.  and  Samuel  J. 
Tilden,  sons  of  Henry  A.  Tilden,  and  nephews  of  the  testa- 
tor, contested  the  validity  of  the  instrument,  not  on  the 
ground  of  incapacity  or  undue  influence,  but  upon  constrac 
tion. 

Henry  L.  Clinton  and  Aaron  Yanderpoel  were  the  lawyers 
for  the  contestants. 

It  is  curious  that  the  will  of  a  man  so  deeply  learned  in 
the  law  as  Mr.  Til  den  was,  should  be  questioned  as  to 
whether  it  was  a  legal  document  or  not  But  such  was  the 
ground  of  the  contest.  The  point  was  this  :  The  resida- 
ary  clause  empowers  the  trustees  to  apply  to  the  Legislature 
for  an  act  to  incorporate  a  body  to  be  called  the  Tilden 
Trust.  This  body,  when  incorporated,  was  to  become  the 
legatee.  This  method  of  procedure,  according  to  the 
opinion  of  learned  counsel  in  the  law,  bequeathed  to  the 
trustee  under  the  will  the  power  to  name  the  public  legatee 
of  the  testator.  It  seems  that  a  testator  has  no  power  to  do 
this,  according  to  the  recent  decisions  of  the  Courts  of  last 
resort  in  this  country,  which,  it  would  seem,  Mr.  Tilden  had 
not  read.  Nobody  but  the  testator  himself  has  power  to 
name  the  legatee.  It  appears  he  had  the  decision  of  the 
English  Court  in  his  mind,  which  allows  of  this  method  of 
bequeathing  property.  Following  is  the  residuary  clause  in 
full,  bearing  upon  this  point :  ^'  I  request  my  said  execu- 
tors and  trustees  to  obtaii),  as  speedily  as  possible,  from  the 
Legislature  an  act  of  incorporation  of  an  institution  to  be 
known  as  the  Tilden  Trust,  with  capacity  to  establish  and 
maintain  a  free  library  and  reading-room  in  the  city  of  New 


TRYING  TO  BRHAK  HIS  WII,I*.  313 

fork,  and  to  promote  sach  scientific  and  educational  objects 
as  my  said  executors  and  trustees  may  more  particularly  des- 
ignate.    Such  corporation  shall  have  not  less  tlian  five 
trostees,  with  power  to  fill  vacancies  in  their  number,  and  in 
case  said  institution  shall  be  incorporated  in  a  form  and 
manner  satisfactory  to  my  said  executors  and  trustees  dur- 
ing the  lifetime  of  the  survivor  of  the  two  lives  in  being, 
upon  which  the  trust  of  my  general  estate  herein  created  is 
limited,  to  wit,  the  lives  of  Kuby  S.  Tilden  and  Su3ie  Whit- 
tlesey, I  hereby  authorize  my  said  executors  and  trustees  to 
organize  the  said  corporation,  designate  the  first  trustees 
thereof,  and  to  convey  to  or  apply  to  the  use  of  the  same 
the  rest,  residue  and  remainder  of  all  my  real  and  personal 
estate  not  specifically  disposed  of  by  this  instrument,  or  so 
much  thereof  as  they  may  deem  expedient,  but   subject, 
nevertheless,  to  the  special  trusts  herein  directed  to  be  con- 
stituted for  particular  persons,  and  to  the  obligations  to 
make  and  keep  good  the  said  special  trusts,  provided  that 
the  said  corporation  shall  be  authorized  by  law  to  assume 
such  obligation.    But  in  case  such  institution  shall  not  be  so 
incorporated  during  the  lifetime  of  the  survivors  of  the  said 
Kuby  S.  Tilden  and  Susie  Whittlesey,  or  if  for  any  cause  or 
reason  my  said  executors  shall  deem  it  expedient  to  con- 
vey said  rest,  residue  and  remainder,  or  any  part  thereof,  or 
to  apply  the  same,  or  any  part  thereof,  to  the  said  institu- 
tion^  I  authorize  my  said  executors  and  trustees  to  apply  the 
rest,  residue  and  remainder  of  my  property,  real  and  per- 
sonal,   after  making  good  the  said  special  trusts  herein 
directed  to  be  constituted,  or  such  portion  thereof  as  they 
may  not  deem  it  expedient  to  apply  to  its  use  to  such  chari- 
table, edacational  and  scientific  purposes,  as  in  the  judgment 
of  my  said  executors  and  trustees  will  render  the  said  rest, 
residue  and  remainder  of  my  property  most  widely  and  snb- 
stantially  beneficial  to  the  interests  of  mankind*" 


J 


^/l 


Cc-^k^ 


CHAPTER    XXXIV. 

COMMODORE  VANDERBILT.— HOW  HIS  MAMMOTH    FOR- 
TUNE WAS  ACCUMULATED. 

Pkbbyman. — ^Steamboat  Owneb.— Ruks  a  Great  Commbb- 
cuL  Fleet. — The  Fibst  and  Obeatest  of  Bailboad 
Kings.— The  Hablem  "Cobneb."— Reobganizationof 
N.  ¥•  Centbal.— How  He  Milked  His  Co-speoulatobs. 
—His  Fobtunb. — ^Its  Vast  Incbeasb  by  Wm.  H. 

THE  most  conspicuous  man  connected  with  Wall  Street 
in  my  early  days  of  speculation  was  ^'  Commodore" 
Yanderbilt.     Without  going  minutely  into  the  early  ex- 
ploits of  {he  man,  it  will  be  sufficient,  for  the  purposes  of 
this  narrative,  that  I  trace  his  start  in  life  in  connection  with 
a  row-boat  of  which  he  was  Captain,  plying  between  Staten 
Island,  Gk)vemor's  Island,  and  New  York,  in  which  he  him- 
self did  the  rowing.    This  enterprise,  in  course  of  time, 
grew  into  one  with  boats  propelled  by  steam,  instead  of 
manual  labor.    During  his  progress  as  ferryman  he  became 
proprietor  of  a  hotel  at  New  Brunswick,  New  Jersey.    This 
side  issue  did  not  prove  very  lucrative,  perhaps,  because 
the  Commodore,  with  all  his  versatile  ability,  did  not  pos- 
sess the  special  talents  required  to  keep  a  hoteL    The  hotel 
still  exists,  and  is  situated  near  the  railroad  station,  and  is 
now,  as  it  was  then,  merely  a  railroad  tavern.    The  first 
vivid  recollection  of  the  Commodore  in  Wall  Street  ^^  dick- 
ering^ was  in  connection  with  the  Nicaragua  Transit  Com- 
pany, the  capital  of  which  was  over  $4,000,000,    He  be- 
came President  of  the  Company,  and  soon  afterward  the  head 
and  front  of  the  whole  enterprise.  The  Directors  and  stock- 
holders,  and  in  fact  every  one  else  connected  with  the  Com- 
panjy  were  soon  crushed  into  nonentities.     When  their 
complete  subjection  was  obtained,  the  Commodore  loomed 
np  into  gigantic  dimensions,  and,  as    he  expanded,  the 


846  COMMODORE  VANPSRBIl^T. 

Nicaragua  Oompanj  became  small  by  degrees  and  beanti- 
fully  less  in  inverse  proportion.  Eventually  the  greatlj 
depressed  stockholders,  like  the  worm  when  trodden  under 
foot,  turned  and  showed  resentment  The  case  came  into 
Oourt  and  was  the  subject  of  ordinary  investigation,  bat  I 
never  heard  of  the  Company  recovering  anything.  I  pre- 
sume their  claims  were  relegated  to  the  profit  and  loss 
account  in  perpetuity. 

After  this,  the  Commodore  started  a  line  of  steamers  in 
opposition  to  the  fleet  of  Pacific  Mail,  and  kept  his  boats 
running  until  he  was  bought  off.  About  this  time  an  event 
happened  which  has  preserved  for  posterity  a  good  stoiy, 
highly  characteristic  of  the  Commodore.  His  son-in-law, 
James  M.  Cross,  had  conceived  the  idea  of  embarking  in 
the  wholesale  leather  business  in  the  ^^  Swamp."  He  had 
been  talked  into  it  by  an  experienced  man  who  was  to  be 
his  partner.  A  store  was  secured,  and  everthing  pat  under 
way  for  the  start,  with  the  exception  of  the  capital,  which  Mr. 
Cross  had  agreed  to  contribute  against  the  experience  of 
his  partner.  The  amount  was  to  be  $50,000.  Mr.  Cross, 
knowing  that  the  Commodore  had  at  this  time  become 
rich  and  prosperous,  felt  satisfied  that  it  was  only  nec- 
essary to  make  application  to  his  enterprising  father- 
in  law  for  the  amount  required.  Thereupon,  with  the 
confidence  begotten  of  implicit  trust,  he  approached  the 
Commodore  for  this  temporary  accommodation,  giving 
him  a  full  description  of  the  nature  of  the  business. 
After  listening  attentively  to  the  statement  of  his  es- 
teemed son-in-law,  the  Commodore  said  in  reply:  "Now, 
James,  if  I  let  you  have  this  $50,000  to  put  in  the  leather 
business,  how  much  do  you  think  you  will  be  able  to 
make  for  your  share  out  of  the  profits !  '^  Mr.  Cross  thought 
the  best  position  to  take  with  a  rigid  business  man  like  his 
father-in-law  was  to  be  prudently  conservative  in  his  expec- 
tations, and  to  keep  all  his  Colonel  Seller  prospects  in  the 
background.    After  a  few  moments  reflection  he  replied :  '^I 


VANDEKBH^T  AND  GARRISON.  347 

belieye  I  am  almost  certain  to  make  $5,000  a  year."    Tha 
Commodore  promptly  responded :  ^^  James,  as  I  can  do  bet- 
ter than  that  myself  in  handling  $50,000, 1  will  give  yon 
$5,000  a  year  hereafter,  and  you  may  consider  yourself  in 
my  employ  at  that  salary."    There  was  no  way  for  James  to 
wriggle  out  of  it,  and  he  accepted  the  situation  with  appar- 
ent good  grace,  whatever  his  internal  emotions  may  have 
been  at  the  time.    The  Commodore  forthwith  dispatched  Mr. 
Cross  to  San  Francisco  to  manage  his  steamboat  business 
there.    He  soon  discovered,  however,  that  James  was  hardly 
aggressive  enough  for  the  go-ahead  fellows  on  the  gold 
coast,  and  he  was  recalled.    After  looking  around  some  time 
for  a  man  possessing  the  necessary  requirements  to  be  placed 
in  successful  competition  with  the  adventurous  spirits  of  the 
Pacific  Slope,  his  search  was  rewarded  by  an  introduction  to 
Commodore  G.  K.  Garrison,  then  in  command  of  a  Missis* 
sippi  steamboat.    Garrison  had  established  his  reputation 
for  being  the  best  euchre  player  on  the  river,  and  for  much 
besides  which  that  term  implies.  He  was  brave  and  fearless — 
in  fact,  in  some  respects,  a  Jim  Bludso  of  real  life,  with  the 
self-sacrificing  qualities  of  that  hero  largely  discounted, 
or  perhaps  entirely  left  out.    It  required  men  of  mettle 
in  those  days  to  run  a  steamboat  on  the  Father  of  Waters, 
when  the  greater  portion  of  the  passengers  belonged  to  the 
gambling  fraternity,  and  were  all  experts  with  the  bowie 
knife  and  the  ready  revolver. 

The  Conunodore  had  an  interview  with  Garrison,  which 
resulted  in  an  engagement,  and  he  was  sent  to  San  Francisco 
as  the  Commodore's  agent.  It  was  soon  found  that  he  was 
the  ma>n  for  the  Wild  West,  and  he  was  not  slow  to  appreci- 
ate his  own  value  and  importance  to  the  increasing  fortunes 
of  his  employer.  He  struck  very  often  for  higher  wages, 
and  was  always  able  to  command  his  price.  He  rose,  from 
one  advance  to  another,  until  his  salary  at  that  day  had 
reached  the  marvellous  figure  of  $60,000  a  year.  Numerous 
stories   of  Garrison's  fabulous  prosperity  on  the  Pacific 


848  COMMODORE  VAKD^RSn^T. 

Coast  reached  this  city  and  the  ears  of  the  Gommodoie,  and 
his  fame  began  to  penetrate  farther  than  the  name  of  thfl 
latter  had  ever  been  heard.  These  accounts  had  their  effect 
on  a  mind  so  naturally  enyioos  as  that  of  the  Commodore. 
He  began  to  realize  the  humiliating  fact  that,  instead  of 
Garrison  being  in  his  employ,  the  former  captain  of  the 
Mississippi  steamboat  had  him  in  tow,  and  was  eveijwliere 
regarded  as  the  Boss,  while  Yanderbilt  was  simply  supposed 
to  be  his  Eastern  agent.  This  brought  matters  to  the  point 
where  patience  ceased  to  be  a  virtue,  and  the  connection  was 
severed.  Soon  after  this  the  Commodore  sold  oat  to  tiie 
Pacific  Mail  Company,  which  again  became  a  monopoly,  and 
as  the  fight  had  been  a  losing  one  to  him,  he  was  obliged  to 
find  other  waters  for  his  boats. 

Since  his  advent  with  a  common  row  boat  on  the 
waters  of  our  own  handsome  bay,  thence  through  the 
gradations  of  ferry  boats  and  steamboats,  nothing  bat 
unremitting  success  had  attended  his  ventures,  until  his 
unequal  struggle  in  competition  with  Pacific  Mail  He 
appeared  to  have  met  his  Trafalgar  when  he  encountered 
that  fleet  His  dissociation  with  Qarrison  seemed  tot  a 
time  to  forebode  disaster.  He  gathered  himself  up  tem- 
porarily again,  but  never  took  to  the  waters  so  kindly  after- 
wards. He  began  to  feel  that  his  financial  destiny  was  verg- 
ing towards  a  firmer  foundation.  His  last  boat  was  the  fam- 
ous steamship  Yanderbilt,  which  was  recognized  at  the  time 
as  one  of  the  finest  ships  to  be  found  on  any  sea.  He  made 
a  present  of  her  to  the  Government  during  our  great  Na- 
tional struggle,  or  according  to  another  account,  he  lent  her, 
and  the  Government  kept  her.  The  Commodore  at  one 
time  had  a  fleet  of  sixty  ships. 

The  Commodore  became  convinced  that  the  growing  pros- 
pects of  railroads  pointed  to  greater  facilities  for  tranqKnv 
tation  in  the  future,  and  also  a  more  profitable  investment 
than  those  watery  regions  wh^'ch  had  hitherto  appeared  to 
be  his  natural  element.    He  promptly  resolved  to  torn  Hm 


TH«  *' corner"  in  HARI*]BM.  849 

back  on  the  domain  of  Neptune,  and  to  devote  his  great  ener- 
gies to  enterprises  on  land.    He  saw  there  was  compara- 
tiyel J  little  room  for  development  in  water  traffic,  while  in 
the  railroad  business  the  field  was  practically  unlimited. 
He  then  commenced  to  buy  up  Harlem  Bailroad  stock,  so 
as  to  obtain  control  of  that  road,  and  in  the  operation  got 
up  the  celebrated  Harlem  ^^  corner.''    Application  had  been 
made  to  the  Legislature  for  some  advantages  in  connection 
with  the  road,  which  were  refused  for  reasons  best  known 
to  leading  members  of  that  body.    In  the  meantime  Harlem 
stock  had  been  knocked  down  to  a  very  low  figure.    The 
Commodore  remained  in  ambush,  and  was  secretly  purchas* 
ingit.     He  then  went  to  the  Legislature  to  get  his  bill 
passed.    Most  of  the  members  of  the  Legislature  thought 
they  had  got  the  ^^deadwood"  on   the  Commodore,  and 
enlisted  a  large  number  of  their  friends  in  the  enterprise. 
They  attempted  ^^to  work  the  Commodore  for  all  he  was 
worth,"  and  for  a   time   appeared  anxious  to   pass  the 
measure  required.    On  the  strength  of   this  anticipated 
action  on  the  part  of  the  Legislature  the  stock  advanced, 
when  the  members  sold  ^^  short"  and  failed  to  legislate. 
The  stock  naturally  went  down,  and  Yanderbilt  bought  it 
up.   The  collapse  anticipated  by  the  Legislature  did  not  take 
place,  and,  instead  of  that,  the  Commodore  got  a  ^^  comer''  in 
the  stock,  and  the  members  of  the  Legislature  were  the  parties 
mulcted.     They  had,  therefore,  all  to  go  to  the  Commodore's 
office,  and  settle  up  with  him  on  his  own  terms,  and  he 
made  arrangements  to  get  his  measure  in  favor  of  the  road 
through  the  Legislature  as  part  of  the  bargain.    This  trans- 
action is  more  fully  described  in  another  chapter. 
'  His  next  great  enterprise  was  in  connection  with  the  New 
York  Central.    Having  successfully  euchred  the  legislators 
in  the  matter  of  Harlem,  he  was  encouraged  to  play  a  still 
higher  game.    As  soon  as  he  obtained  control  of  this  prop- 
erty, it  seemed  as  if  it  had  been  touched  by  a  magic  wand, 
or  ttiat  famous  stone  of  Midas,  contact  with  which  turned 


850  COMMODO&B  VAND^RBII«T. 

eYerything  into  gold*  Prior  to  this  eyent  the  road  had 
been  dragged  along  nnder  the  management  of  Dean  Bich- 
mond,  Samael  Sloan  and  Henry  Keep,  without  any  signs  of 
prosperity ;  bat  when  Yanderbilt  took  hold  of  it  there  was 
a  sadden  change  to  visible  progress  and  prosperity.  It 
never  looked  behind  afterwards,  and  both  enterprises  hsTo 
enjoyed  signal  and  increasing  success  ever  since,  thus  illus- 
trating the  marvellous  capacity  of  the  Commodore  for  the 
organization  and  management  of  large  enterprises.  The 
hydraulic  operations  of  the  Commodore  with  the  stock  of 
this  property  would  alone  furnish  material  for  a  very  int6^ 
esting  chapter.  Sending  it  up  on  one  occasion  at  a  bound, 
between  Saturday-and  Monday,  20  per  cent.,  was  a  new  move 
in  manipulation  which  caused  some  of  the  boldest  operatois 
on  the  Stock  Exchange  to  stand  aghast  He  kept  working 
the  stock  up  and  down,  in  some  such  way  as  Mr.  S.  Y.  White 
now  keeps  toying  with  Lackawanna,  until  he  ^^  milked  "  the 
street  sometimes  very  dry.  He  kept  the  tempting  prize  of  a 
coming  dividend  glittering  before  the  eyes  of  the  dazzled 
imaginations  of  his  friends  who  were  dealing  in  the  stock, 
but  the  ^'milking ''  process  was  so  ably  managed  that,  when 
the  famous  80  per  cent  dividend  was  actually  declared,  they 
had  become  so  poor  that  they  were  unable  to  carry  any  of  the 
stock,  so  as  to  avail  themselves  of  the  profits.  There  was 
but  one  man  that  I  know  of  who  reaped  any  benefit  from  it» 
and  that  was  an  old  friend  of  the  Commodore,  who  still 
lives,  and  who  had  met  with  signal  reverses  in  some  of  the 
Erie  deals  at  the  time  Mr.  Gould  so  ably  managed  that  con- 
cern. This  man  had  been  wiped  out  in  Erie,  and  his  de- 
pressed condition  awoke  a  sympathetic  cord  momentarily  in 
the  heart  of  the  Commodore.  He  gave  his  friend  the  tip 
the  day  before  the  dividend  was  declared,  and  he  found 
another  friend  who  bought  enough  of  stock  to  realize  $700,- 
000,  which  was  divided  between  them.  This  is  the  solitary 
exception  within  my  knowledge  where  the  Commodore  failed 
to  bag  the  entire  game  without "  saying  turkey  once  "  to  any 
person  connected  with  the  deal 


R«I.ATl\m  success  OF  FATHER  AND  SON.  851 

The  life  of  the  Commodore  affords  singular  scope  for  re- 
flection on  the  immense  possibility  of  a  great  business 
capacity  to  amass  a  large  fortune  in  a  few  years,  especially 
in  this  country.    The  Commodore  and  his  son  William  H., 
in  a  little  more  than  half  a  century,  accumulated  the  largest 
private  fortune  in  the  world,  excepting  the  aggregate  wealth 
of  all  the  Bothschilds  combined,  which  has  been  the  result  of 
the  most  expert  financiering  in  all  the  capitals  of  Europe 
through  several  generations,  with  all  the  resources  of  the 
great^t  monarchs  on  the  earth  to  back  their  various  enter- 
prises. With  all  these  advantages  in  favor  of  the  Bothschilds, 
the  Yanderbilt  fortune  amounts  to  two-thirds  of  the  sum 
total  of  theirs.    The  result  is  certainly  astounding  when  sub- 
mitted to  a  test  of  the  highest  standard  of  comparison  that 
can  be  found  anywhere  on  this  globe.    But,  wonderful  as 
the  success  of  the  Commodore  was  in  its  rapid  gradations, 
from  the  possession  of  a  rowboat  on  our  bay  to  that  of  a 
fleet  of  sixty-six  steamboats  that  brought  mercantile  argosies 
from  all  parts  of  the  world,  and  in  later  years  his  great  rail- 
road acquisitions,  yet  the  success  of  his  son  is  more  marvel- 
lous still. 

In  seventy  years  the  Commodore  arose  from  nothing 
financially  to  be  the  proud  possessor  of  $90,000,000.  Wm. 
H.  obtained  $76,000,000  of  that  and  nearly  trebled  it  in  a 
tenth  part  of  the  time.  He  made  three  times  as  much  in 
seven  years  as  his  father  made  in  seventy,  or  he  made 
as  much  on  an  average  every  two  and  one-half  years  as  his 
father  had  done  during  the  three  score  and  ten  of  his  active 
business  and  speculative  career.  If  any  person  having  the 
necessary  amoxmt  of  temerity  had  ever  ventured  to  make 
such  a  prediction  as  this  in  the  presence  of  the  old  Com- 
modore^  what  a  natural  born  idiot  he  would  have  been  re- 
regarded  by  that  grand  old  man.  If  the  spirits  of  the  de- 
parted ever  visited  the  glimpses  of  the  moon  in  these  days, 
what  a  profound  sense  of  humiliation  that  of  old  Yander- 
bilt must  feel,  as  it  makes  its  nightly  rounds  through  those 


862  COMMODORE  VANDKRBn^T. 

spacious  marble  corridors  in  Fifth  avenue,  or,  perched  on 
the  dome  of  the  Grand  Central  Depot,  it  contemplates  the 
mighty  development  and  expansion  of  its  earthly  designs, 
now  extended  far  beyond  the  limits  of  what  its  highest  am- 
bition had  dared  to  foreshadow. 

Some  people  may  argue  that  it  required  greater  abil- 
ity to  acquire  these  first  $90,000,000  than  the  present 
sum  total  of  the  wealth  of  the  Yanderbilts.  Those  who 
argue  thus,  however,  have  no  precedent  to  suggest  their 
position.  An  instance  of  such  prosperity  on  so  large 
a  scale  in  so  short  a  time  has  never  occurred  in  the 
history  of  financiering.  The  accumulations  in  all  the 
wealthy  families  that  I  know  of  have  been  comparativelj 
slow,  and  the  history  of  the  family  of  European  millionaires 
shows  a  similar  principle  of  gradation,  except,  indeed,  that 
the  gradation  in  the  majority  of  instances  has  gone  back- 
wards. Very  few  wealthy  men,  with  the  exception  of  the 
Bothschilds,  the  Astors  and  a  few  others,  have  had  any 
children  capable  of  increasing  their  wealth,  except  where  it 
was  ahnost  impossible  to  do  otherwise  under  the  law  of 
primogeniture.  In  this  country,  therefore,  where  the  Ism 
of  distribution  has  full  scope,  Wm.  H.  Yanderbilt,  who  had 
to  that  time  been  regarded  as  a  man  of  very  moderate  capsr 
city,  proved  himself  to  be  the  ablest  financier  of  which 
there  is  any  record  either  in  ancient  or  modern  history. 

Jay  GoTild,  with  all  the  resources  of  science  at  his  dis- 
posal, and  all  the  talent  that  money  could  command,  wiih 
newspapers,  politicians,  lawyers,  judges,  and  courts  at  his 
will,  with  as  good  a  start,  financially  dating  from  1878,  as 
Wm.  H.  Yanderbilt  had,  has  been  left  far  behind  in  the 
race  for  wealth,  and  for  the  highest  prize  ever  gained  bj 
one  man  in  any  nation.  It  has  been  truly  said  tiiat  a  lool 
can  make  money,  but  it  takes  a  wise  man  to  keep  it  Wm. 
H.  Yanderbilfs  financial  wisdom,  as  well  as  his  abilitj,  was 
signally  displayed  in  keeping  this  great  fortune  intact, 
besides  adding  fully  three  times  as  much  more  to  it;  and 


iipioyes  that  his  father  made  no  mistake  in  selecting  him 
to  hand  his  name  and  fortune  down  to  posterity.  This  im- 
mense pile  of  ^  filthy  lucre,"  howeveri  in  spite  of  all  the 
eredit  that  is  justly  due  to  its  late  manager,  has  had  one 
serious  drawback  from  a  public  standpoint  In  fact,  the 
Teiy  announcement  of  this  mammoth  fortune  in  the  news- 
papers, at  the  time  of  Mr.  Wm.  H.  Yanderbilt's  death,  had  a 
most  demoralizing  effect  upon  a  large  number  of  the  wealthy 
portion  of  the  community,  who  began  to  feel  that  they  were 
nonentities  in  comparison.  In  making  this  statement  I  ab« 
solve  the  Yanderbilt  family  from  any  blame.  Every  man  in 
this  great  Bepublic  has  the  privilege  of  walking  in  the  foot- 
steps of  the  two  great  Yanderbilts  if  he  only  has  the  ability; 
but  it  would  not  be  wisdom  for  a  large  number  of  men  to 
attempt  it.    They  would  be  pretty  certain  to  "get  left*' 

The  story  of  the  distribution  of  the  Yanderbilt  wealth,  how- 
ever, has  brought  discontent  to  many  a  home  where  happi- 
ness reigned  before.    It  could  hardly  be  otherwise,  consti- 
tuted as  human  nature  is,  and  especially  human  nature  in 
our  highly  strung  commercial  society,  where  the  spirit  of 
ambition  is  always  strenuously  aiming  at  higher  flights. 
People  who  heretofore  had  considered  themselves  rich,  and 
socially  important,  with  a  million  or  so  to  draw  upon,  felt 
that  they  were  mere  ciphers  in  the  scale  of  wealth ;  they 
seemed  to  themselves  to  be  financially  blighted,  and  miser- 
ably poor  in  contrast  with  the  colossal  magnitude  of  the 
Yanderbilt  possessions  as  exhibited  in  the  Surrogate's  Court 
The  plain,  cold,  prosy  figures  brought  out  there  read  like  a 
romance,  or  the  story  of  Sinbad  the  Sailor  and  the  Yalley  of 
Diamonds.    But  it  was  all  stem  reality.    This  is  why  the 
feelings  which  suffer   from  this    contrast    are  so  deeply 
pathetic.  It  is  a  reality,  and  a  stem  reality,  that  can  hardly 
be  imitated  or  duplicated  by  any  other  two  men  in  this 
generation.    The  thing  is  possible,  but  just  about  as  prob- 
able fts  it  was'  for  every  private  soldier  of  Napoleon  the 
Ghreaty  who  each  had  a  Marshal's  baton  in  his  knapsack,  to 


ft&i  COHHODORB  VANDBRBn/r. 

become  a  Marshal.  '^  Every  blacksmith,"  says  the  Be?. 
Bobert  Collyer,  "  might  become  a  preacher,  but  it  would  be 
a  great  public  calamity  if  it  should  happen  to  that  extent" 
The  bare  outlines  of  the  Vanderbilt  wills,  which  hare  made 
such  a  deep  impression  on  the  community  at  large,  ¥ill  be 
found  in  another  part  of  this  book.  I  think  they  will  afford 
very  interesting  reading  for  generations  yet  unborn. 


CHAPTBB    XXXV. 

WILLIAM  H.  VANDERBILT. 

A  BuiLDEB  Instead  of  a  Debtboyeb  of  Pubuo  YaIiUES.— » 
His  Bespect  fob  Public  Opinion  on  the  Subject  of 
Monopolies. — His  Fibst  Expebienge  in  Bailboad 
Management.— How  he  Impboyed  the  Hablem  Bail- 
boad Pbopebty.— His  Gbeat  Executive  Poweb  Mani- 

FE8TBD  in  EtEBY  StAOE  OF  ADVANCE  UnTIL  HE  BECOMES 
PBESIDENTOF  the  VaNDEBBILT  CiONSOLIDATED  SYSTEM. — 

An  Indefatigable  Wobkeb.— His  Habit  of  Scbutiniz- 
ING  EvEBY  Detail.  —His  Pbudent  Action  in  the  Gbeat 
Stbihe  of  1877,  and  its  Good  Besults.— Settled  all 

MiSUNDEBSTANDINGS     BY    PeACE     AND     AbBITBATION. — 

Makes  Pbincely  Pbesents  to  his  Sistebs.— The  Sing- 

ULAB    GbATITUDE    OF     A     BbOTHEB-IN-LaW. — HoW    HS 

ciompbomibes  by  a  gift  of  a  million  with  young 
C!obneel.~Gladstonb's  Idea  of  the  Vandebbilt  Fob- 
tune  — Intbbview  of  Chauncey  M.  Depew  with  the 
G.  O.  M.  ON  THE  Subject.— The  Gbeat  Vandebbilt 
Mansion  and  the  Celebbated  Ball.— The  Immense 
PioTUBB  Galleby.  —  Mb.  Vandebbilt  Visits  Some 
of  the  Famous  Abtists— His  Love  of  Fast  Hobses. — 
A  Patbon  of  Public  Institutions. — His  Gift  to  the 
Waiteb  Students. — ^While  Sensitive  to  Public  Opin- 
ion, HAS  NO  Feabof  Thbbats  OB  Blackmailebs. — ^^Thb 
Public  be  Damned." — Explanation  of  the  Bash  Ex- 
pbession. — The  Pubchasb  of  "Nickel  Plate."— His 
Deguning  Health  and  Last  Days — His  Will  and 
Wise  Method  of  Distbibuting  200  Millions. — Ef- 
fects OF  THIS  Colossal  Fobtune  on  Public  Sentiment. 

IN  treating  of  the  family  in  the  order  of  descent,  I  shall 
now  make  a  brief  suryey  of  the  life  of  William  H* 
Yanderbilt,  espeoiallj  in  its  relation  to  Wall  Street  affairs  and 
the  management  of  his  great  railroad  system,  the  two  being 
closely  connected.  William  H.  Vanderbilt  was  not 
much  of  a  speculator  in  the  Wall  Street  sense  of  the  term. 
He  was  more  of  an  investor  than  a  speculator,  and  his  in- 


856  WII.UAM  H.   VANDBRBII^T. 

vestments  had  alwajs  a  healthy  effect  upon  the  market 
Unlike  Woerishoffer  and  others  of  that  ilk,  he  built  np  I 

instead  of  palling  down  values,  bat  was  at  the  same  time 
careful  to  avoid  the  error  of  inflation.    He  paid  due  defer-  | 

ence  to  public  opinion  also,  in  striving  to  allay  its  alarm  in  j 

regard  to  the  dangerous  overgrowth  of  monopolies.  A  grand 
illustration  of  this  was  seen  in  the  sale  of  the  large  block 
of  New  York  Oentral.      Bis  first  experience  in  railroad  I 

matters  was  in  connection  with  the  Staten  Island  Bailroad, 
thirteen  miles  in  length.  The  road  had  been  mismanaged 
and  was  deeply  in  debt,  and  became  bankrupt.  As  he  and 
his  father  had  considerable  interest  in  the  road  William  H.  ' 

was  appointed  receiver.  It  seems  this  was  done  secretly  at 
the  suggestion  of  the  Commodore,  who  wanted  to  disoover 
by  this  experiment  if  his  son  had  any  capacity  for 
railroad  management.  The  receivership  of  the  Staten 
Island  road  was  crowned  with  signal  success.  In 
two  years  the  entire  indebtedness  of  the  road 
was  paid^  and  the  stock,  which  had  been  worthless, 
rose  to  175.  William  H.  Vanderbilt  was  then  elected 
President  of  the  road.  It  was  at  this  time,  it  is  said,  that 
the  Oommodore  began  to  correct  his  judgment  regarding  tiie 
^^  executive  ability  of  William  H.,"  and  the  latter  relaxed  no 
effort  to  please  his  exacting  father  in  everything,  taking  aU 
his  abuse  without  complaint  or  anger.  After  the  Gonmiodore 
secured  control  of  the  Harlem  road,  which  was  his  first 
great  railroad  venture,  he  made  William  H.  Vice-President. 
As  a  co-worker  with  his  father  the  latter  further  demon- 
strated his  capacity  for  railroad  management,  and  Harlem 
stock,  which  had  been  down  to  nearly  nothing,  in  a  few  years 
became  one  of  the  most  valuable  railroad  properties  in  the 
country.  So,  it  is  a  fact,  although  not  generally  known, 
that  William  H.  Vanderbilt  had  proved  himself  to  be  a 
competent  railroad  manager  before  his  eminent  father  had 
fairly  begun  that  line  of  business.  It  was  almost  entirriy 
owing  to  his  individual  exertions  and  sound  judgment  tha^ 


HARD  WORK  HKl*PS  TO  KOX,  HIM.  867 

in  a  few  years,  the  Harlem  road  was  double-tracked,  and 
such  other  improyements  made  as  sent  the  stock  from  8  or  9 
to  above  par.  The  Commodore  was  so  highly  pleased  and 
agreeably  surprised  with  his  son's  management  of  the  Har* 
lem  road  that  he  made  him  Vice-President  of  the  Hudson 
BirerBailroad  also,  and  at  a  later  date  associated  him  in 
the  same  capacity  with  the  management  of  the  important 
coDsohdation  of  New  York  Central  &  Hudson  Biver. 
The  great  executive  power  of  William  H.  was  manifested  in 
every  successive  movement  which  his  father  directed,  and 
unparalleled  prosperity  was  the  result  in  every  instance. 
After  William  H.  was  fully  installed  in  the  Vice-Presidency 
of  the  consolidated  system  of  the  Vanderbilt  railroads  he 
became  an  indefatigable  worker,  taxing  his  physical  and 
mental  powers  to  their  utmost  capacity,  and  it  was  doubtless 
this  habit  of  hard  work,  persisted  in  for  many  years,  that 
resulted  in  so  sudden  and  comparatively  premature  death  for 
a  member  of  a  family  famous  for  its  longevity  throughout 
several  generations.  He  insisted  on  making  himself  familiar 
with  the  smallest  details  of  every  department,  and  examined 
everything  personally.  He  carefully  scrutinized  every  bill, 
check  and  voucher  connected  with  the  financial  department 
of  the  immense  railroad  system,  and  inspected  every  engine 
belonging  to  the  numerous  trains  of  the  roads.  In  addition 
to  this  general  supervision  of  everything  that  pertained  to 
the  railroads,  he  was  in  the  habit  of  going  over  a  large 
amount  of  correspondence  which  the  majority  of  other  men 
not  possessing  the  hundredth  part  of  his  wealth  hand  over  to 
their  clerks,  and  he  answered  a  great  number  of  letters  with 
his  own  hand  which  financiers  of  comparatively  moderate 
means  are  in  the  habit  of  dictating  to  their  stenographers. 
When  his  father  died,  at  the  age  of  82,  in  January,  1887, 
William  H.  Vanderbilt,  then  56  years  of  age,  found  himself 
the  happy  possessor  of  a  fortune  variously  estimated  at  from 
75  to  90  million  dollars.  The  remainder  of  the  Conmiodore's 
bequests  amounted  ^^  15  miUions. 


4B»ricao  Instituttof  BajikinrJ^ 


358  Wn^I^IAM  H.   VANVnKBllX. 

After  the  death  of  his  father  the  executive  powers  of  Wm 
H.  Yanderbilt,  in  the  management  of  the  vast  railroad  in- 
terests  bequeathed  to  him,  were  called  into  aotiye  play. 
The  great  strike  of  1877  among  the  railroad  employes 
threatened  to  paralyze  business  all  over  the  country,  and 
came  pretty  near  causing  a  social  revolution.  In  this  emer- 
gency a  cool  head  and  prudent  judgment  were  valuable 
attributes  to  a  railroad  manager.  Mr.  Yanderbilt  proved 
that  he  possessed  both  in  more  than  an  ordinary  degreCe 
Just  prior  to  encountering  the  knotty  problem  of  ihe  strike 
he  had  been  highly  instrumental  in  bringing  about  suspen- 
sion of  hostilities  in  the  freight  war,  and  the  course  which 
he  advised  led  to  an  arrangement  that  produced  harmony 
among  the  trunk  lines  for  a  considerable  period.  As  a  con- 
sequence of  the  rate  war  the  railroad  companies  were  obliged 
to  cut  down  the  wages  of  their  employes,  and  this  was  the 
chief  element  in  causing  the  strike.  There  were  12,000  men 
in  the  employ  of  the  New  York  Central  and  Harlem.  Their 
wages  had  been  reduced  ten  per  cent,  and  they  had  threat- 
ened to  annihilate  the  Grand  Central  Depot  Instead  of 
making  application  to  have  the  militia  called  out^  as  had 
been  done  in  Pennsylvania,  Mr.  Yanderbilt — although  a 
man  possessed  of  far  more  than  ordinary  courage — ^with 
keen  foresight  proposed  a  kindly  compromise  with  his  em- 
ployes. He  telegraphed  from  Saratoga  to  his  head  ofRcials 
an  order  to  distribute  $100,000  among  his  striking  employes 
and  promising  them  a.restoration  of  the  ten  per  cent,  reduc- 
tion as  soon  as  b^iness  improved  to  a  point  justifying  such 
an  advance.  This  prompt  and  prudent  action  had  the 
desired  effect,  and  the  consequence  was  that  while  there  was 
a  small  insurrection  in  Pittsburgh,  and  bloody  war  to  the 
knife,  at  great  cost  to  Allegheny  County,  calmness  reigned 
in  the  prominent  railroad  circles  of  New  York,  and  the  tax- 
payers escaped  the  burden  that  might  otherwise  have  been 
put  upon  their  shoulders,  and  the  demoralizing  effects  of 
violence  and  bloodshed  were  prevented.    Over  11,500  of  the 


A  SINGUI.AR  KIND  OF  GRATITUDE.  859 

12,000  men  returned  to  work,  thus  showing  their  gratitude 
to  Mr.  Yanderbilt  and  faith  in  his  promise,  which  was  after- 
wards duly  fulfilled.  The  policy  of  Wm.  H.,  in  the  manage- 
ment of  his  great  railroad  system,  unlike  that  of  his  father, 
was  entirely  pacific  in  its  character.  He  was  disposed  to 
settle  all  misunderstandings  by  reason  and  arbitration,  and 
had  no  inclination  for  fighting  and  conquest,  after  the  man- 
ner of  the  Commodore.  Although  a  very  close  calculator  in 
business  matters,  a  habit  to  which  he  adhered  even  to  the 
precision  of  striking  out  superfluous  items  which  should  not 
have  been  charged  in  his  lunch  bill,  Mr.  Yanderbilt  was  in 
many  respects  generous  to  a  fault.  He  compromised  the 
suit  with  his  brother,  ^^ Young  Corneel,"  allowing  him  the* 
interest  on  $1«000,000,  whereas  his  father  had  only  left  him 
the  interest  on  $200,000,  with  a  forfeiture  clause  in  the 
event  of  ^^Corneel "  contesting  the  will  Wm.  H.  also  made 
a  present  of  $500,000  in  United  States  bonds  to  each  of  his 
sisters,  out  of  his  own  private  fortune.  A  good  story  is 
related  in  connection  with  the  distribution  of  this  handsome 
gift.  Mr.  Yanderbilt,  it  is  said,  went  around  one  evening  in 
his  carriage,  taking  the  bonds  with  him  and  dispensing  them 
to  the  fortunate  recipients  from  his  own  hands.  One  of  his 
brothers-in-law  having  observed  by  the  evening  papers  that 
the  bond  market  had  declined  a  point  or  two  on  that  day, 
said, ''  William,  these  bonds  fall  $160  short  of  the  $500,000, 
according  to  the  closing  prices  of  this  day's  market.''  ^^  All 
right,"  replied  Mr.  Yanderbilt,  with  assumed  gravity,  "  I 
will  give  you  a  check  for  the  balance,"  and  he  wrote  and 
signed  it  on  the  spot.  It  is  related  that  another  brother-in- 
law  followed  him  to  the  door,  and  said,  ^^If  there  is  to  be 
anything  more  in  this  line  I  hope  we  shall  not  be  forgotten." 
It  is  said  that  these  remarkable  instances  of  ingratitude, 
instead  of  irritating  him,  as  they  would  have  in  the  case  of 
an  ordinary  individual,  only  served  to  arouse  his  risible 
faculties  and  that  he  regarded  the  exhibitions  of  human 
weakness  as  a  good  joke. 


860  wn^I^lAM  H.   VAND9RBII«T. 

One  of  the  greatest  works  of  Mr.  Vanderbilf  s  life  was  the 
building  of  the  beautiful  palace  on  Fifth  avenue,  between 
Fifty-first  and  Fif t j-second  streets,  which  he  adorned  exten- 
Bivelj  with  paintings  selected  from  the  great  masterpieces  of 
the  most  renowned  artists  of  the  world. 

One  reason  assigned  for  his  disinclination  to  speculate  was 
that  he  regarded  the  property  left  by  his  father  in  the  light 
of  a  sacred  trust,  and  while  he  considered  it  a  filial  duty  to 
look  after  its  increase  and  accumulation,  he  was  careful  not 
to  do  anything  that  might  risk  its  dissipation. 

Mr.  Chauncey  Depew,  who  succeeded  to  the  presidency 
of  the  New  York  Central  &  Hudson  Biyer  Bailroad  Com- 
pany, was  upon  one  occasion,  while  yisiting  in  London,  a 
guest  at  a  dinner  given  to  the  Hon.  Wm.  E.  Gladstone,  then 
Premier  of  England,  and  was  honored  by  a  seat  on  the  left 
of  Mr.  Gladstone,  with  whom  he  discussed  the  difterenoes 
between  American  and  English  railroad  and  financial  manage- 
ment In  the  course  of  conversation  Mr.  Gladstone  said, 
"  I  understand  you  have  a  man  in  your  country  who  is  worth 
£20,000,000  or  $100,000,000,  and  it  is  all  in  property  which 
he  can  convert  at  will  into  cash.  The  Government  ought  to 
seize  his  property  and  take  it  away  from  him,  as  it  is  too 
dangerous  a  power  for  any  one  man  to  have.  Supposing 
he  should  convert  his  property  into  money  and  lock  it  up, 
it  would  make  a  panic  in  America  which  would  extend  to 
this  country  and  every  other  part  of  the  world,  and  be  a 
great  injury  to  a  large  number  of  innocent  people."  Mr. 
Depew  admitted  that  the  gentleman  referred  to— who  was 
Mr.  Yanderbilt — had  fully  the  amount  of  money  named  and 
more,  and  in  his  usual  suave  and  conclusive  way,  replied, 
/'But  you  have,  Mr.  Gladstone,  a  man  in  England  who  has 
equally  as  large  a  fortune.'' 

Mr.  Gladstone  said,  ^'  I  suppose  you  mean  the  Dake  of 
Westminster.  The  Duke  of  Westminster's  property  is  not 
as  large  as  that.  I  know  all  about  his  property  and  hare 
kept  pace  with  it  for  many  years  past    The  Poke's  pro- 


WHAT  GlyADSTONlS  KNOWS  OF  BIG  FORTUNES.  861 

perty  is  worth  about  £10,000,000  or  $50,000,000,  but  it  is 
not  in  securities  which  can  be  turned  into  ready  cash  and 
thereby  absorb  the  current  money  of  the  country,  so  that  he 
can  make  any  dangerous  use  of  it,  for  it  is  merely  an  here- 
ditary ri^t,  the  enjoyment  of  it  that  he  possesses.  It  is 
inalienable,  and  it  is  so  with  all  great  fortunes  in  this 
country,  and  thus,  I  think,  we  are  better  protected  here  in 
England  than  you  are  in  America."  '^  Ah,  but  like  you  in 
England,  we  in  America  do  not  consider  a  fortune  danger- 
ous," was  the  ready  response. 

The  best  proof  of  Wm.  H.  Yanderbilf  s  great  ability  as  a 
financier  is  the  marvellous  increase  in  the  value  of  the 
estate  which  he  inherited  from  his  father  during  the  seven 
years  which  he  had  the  use  and  control  of  it,  and  in  which 
he  did  more  than  treble  the  value  at  which  it  was  estimated 
on  the  death  of  the  Commodore. 

The  weakest  financial  operation  on  his  part,  known  to  the 
public,  was  the  purchase  of  the  Nickel  Plate  Boad,  as  re- 
gards the  time  of  the  transaction,  in  which  he  was  rather 
premature.  It  is  now  positively  known  that  if  he  had 
waited  about  a  month  longer  the  road  would  have  gone  into 
bankruptcy  and  have  fallen  into  his  lap  on  his  own  terms. 
In  that  case  the  West  Shore  would  have  followed  suit. 

In  such  an  event  I  believe  Mi*.  Yanderbilt  would  have 
been  saved  an  immense  amount  of  money,  remorse  and 
mental  strain,  which,  no  doubt,  aggravated  the  malady 
which  was  the  cause  of  his  sudden  death.  He  realized  his 
error  when  it  was  too  late,  and  it  was  a  source  of  great 
mental  anxiety  to  him  in  his  latter  days.  He  was  very 
sensitive,  and  nothing  afforded  him  more  gratification  than 
a  clean  and  successful  transaction,  which  drew  forth  public 
approval,  and  in  the  purchase  of  Nickel  Plate  he  was  caught 
napping.  It  was  a  mistake  for  which  the  Commodore,  had 
he  been  alive,  could  never  have  forgiven  him. 

The  syndicate  that  built  the  road  had  solely  for  their 
object  to  land  it  upon  either  Gould  or  Yanderbilt,  and  it 


(62  ,  WILLIAM  H.   VANDKRBILT. 

was  upon  its  last  legs  at  the  time  it  made  the  transfer  to  Hr. 
Yanderbilt.  The  syndicate  laid  a  trap  for  him.  It  had 
been  coquetting  with  Mr.  Gould  in  reference  to  the  puiohase, 
and  had  made  it  to  appear,  through  the  press  and  other 
channels  of  plausible  rumors,  that  he  had  an  eye  upon  the 
road.  Mr.  Gould  had  occasion  to  go  West  about  this  time 
and  the  syndicate  invited  him  to  make  his  homeward  trip 
over  the  road,  taking  particular  pains  that  all  these  lumon 
and  reports  should  reach  the  ears  of  Mr.  Vanderbilt,  who 
was  impressed  with  the  idea  that  Mr.  Gould's  trip  was  one 
of  inspection^  with  the  intention  of  buying  the  road  if  he 
did  not  anticipate  him.  This  was  just  what  the  syndicate 
desired,  and  the  successful  consummation  of  their  financial 
plot. 

The  purchase  was  made  solely  in  the  interest  of  Lake 
Shore,  as  it  was  a  parallel  road,  and  the  road  was  afterwards 
turned  over  to  the  Lake  Shore  Company. 

The  conception  of  the  scheme  was  to  build  the  road  at  a 
nominal  price  and  sell  it  to  Mr.  Yanderbilt  as  high  as  posai* 
ble,  and  this  was  duly  accomplished.  I  am  quite  satisfied  thai 
if  this  road  had  not  been  sold  at  this  particular  time  it  would 
then  have  gone  into  the  hands  of  a  receiver,  while  a  number 
of  the  syndicate,  who  had  built  the  road,  would  have  failed, 
and  a  general  crash  would  have  ensued.  This  Mr.  Yande^ 
bilf  s  purchase  averted  for  the  time,  and  served  to  prolong 
the  period  of  its  coming  until  May,  1884. 

For  a  few  years  prior  to  his  death  Mr.  Yanderbilt  was  in 
a  weak  condition.  This  cause  of  mental  annoyance  came 
upon  him  at  a  time  when  he  was  not  robust  enough  to  bear 
it  and  had  not  sufficient  strength  to  throw  it  off.  He  had  been 
seized  with  a  slight  paralytic  stroke,  the  only  visible  effect 
of  which  was  a  twitching  of  the  lower  lip.  Shortly  after 
this  he  lost  the  entire  sight  of  one  eye,  about  a  year  before 
his  death.  This  was  not  generally  known  to  the  public,  how- 
ever,  and  it  was  the  principal  cause  of  his  giving  up  his 
favorite  pastime  of  driving,  which  was  one  of  his  greatest 


A  VARIANT  I^ADKR  IN  WALI*  STRBOT.  863 

pleasures  and  the  chief  sonroe  of  mental  diversion  from  the 
iieaTj  weight  of  his  worldly  cares  and  responsibilities. 

The  daj  after  Mr.  Yanderbilt's  death  I  sent  the  following 
circQlar  to  my  customers : 

"As  Mr.  Wm.  H.  Yanderbilt  was  a  very  important  factor 
in  Wall  Street  business,  I  feel  it  incumbent  upon  me  to 
issue  a  letter  to  my  friends  and  clients  on  the  subject  of  his 
decease,  especially  as  the  loss. to  the  Street  is  a  most  im- 
portant one,  and  certainly  will  be  felt  for  some  time  to  come. 
Mr.  Yanderbilt  undoubtedly,  at  the  time  of  his  death,  was 
the  largest  holder  of  American  securities  in  the  world,  and 
had  innumerable  followers,  who  were  also  vast  holders 
of  similar  properties  as  those  he  controlled,  who  acted  more 
or  less  in  concert  with  him,  and  who  were  at  his  beck  and 
call.  When  he  told  them  to  buy  or  sell  they  would  do  so. 
Those  parties  have  now  lost  a  valuable  friend  and  counsellor, 
and  a  leader  in  whom  they  believed  implicitly.  In  such 
Quarters,  for  some  time  to  come  at  least,  more  or  less  of  a 
oazed  condition  will  prevail,  precisely  the  same  as  would 
exist  in  an  army  in  the  event  of  the  general  in  command 
having  been  killed.  Mr.  Yanderbilt  was  a  bolder  and  larger 
operator  than  his  father  ever  dared  to  be,  as  he  spread  out 
over  more  interests.  The  market  has  lost  an  able  leader, 
who  was  usually  a  builder-up  of  the  interests  of  the  entire 
country,  and  unlike  many  other  large  operators,  who,  at 
times,  are  on  that  side,  but  quite  as  frequently  on  the  wreck- 
ing sida  It  will  be  a  long  while  before  so  conspicuous  and 
valiant  a  leader  as  Mr«  Wm.  H.  Yanderbilt  will  be  forth- 
coming, and  the  market  will,  for  a  protracted  period,  have 
cause  to  mourn  its  ^eat  loss.  It  is,  indeed,  fortunate  that 
Mr.  Yanderbilt  lived  long  enough  to  see  the  completion  of 
the  consolidation  of  the  West  Shore  and  New  York  Central 
roads ;  since  both  roads  are  under  the  able  direction  of  Mr. 
Depew,  they  are  now  secure  from  future  harm  ;  but  the  same 
cannot  be  said  of  the  South  Pennsylvania  enterprise,  as 
negotiations  remain  in  connection  therewith  unfinished, 
wmch  will  suffer  by  Mr.  Yanderbilt^s  death,  and  it  will  be 
found  difficult,  I  fear,  for  any  other  man  to  knit  the  dis-f 
cordant  elements  together  t&at  at  present  exist  in  that  quai^' 
tsr.  There  is  enough  in  this  for  some  ground  of  apprehen- 
sion, and  this  matter  may,  therefore,  disturb  the  harmony  of 
the  great  trunk  lines,  as  this  speck  of  trouble  may  yet  prove 


864  WILUAM  H.  VANDERBH^l^. 

a  cancer  in  the  body  of  the  stock  market.  As  it  is  capable 
of  infusing  its  poison  elsewhere,  beyond  where  it  is  at  pres- 
ent located,  it  is  certain  that  there  will  be  required  skill- 
ful  surgery  to  prevent  inoculation  therefrom. 

^'  The  stock  market  started  off  to^ay  as  if  held  by  concerted 
action,  and  the  appearances  indicating  that  such  attitode 
might  prevail  to  briJgo  over  the  Yanderbilt  shock.  While 
prices  had  a  moderate  break,  it  was  scarcely  adequate  as  a 
fitting  tribute  of  respect  to  Mr.  Yanderbilf  s  memory,  as  the 
great  Gbneral  of  the  Army  of  Finance  of  this  country.  It 
was  uimiistakable,  however,  that  the  large  selling  was  mostlj 
of  long  stock,  coming  from  numerous  frightened  holders 
who  were  shaken  out,  and  it  was  very  evident  that  the  bears 
were  more  conspicuous  as  buyers  than  as  sellers,  to  cover 
their  short  sales  made  during  the  previous  several  days.  I 
do  not  think  that  the  market  had,  considering  the  power  it 
has  lost  in  the  death  of  Mr.  Yanderbilt,  as  much  of  a  break 
as  should  have  occurred ;  still,  it  must  be  remembered,  thai 
the  dealings  have  been  so  enormous  during  the  past  month, 
which  represent  the  immense  number  of  operators  now  in- 
terested in  the  market,  that  it  has  taken  from  it  a  character 
which  previously  existed  as  a  one  man  market,  and  therefore 
it  is  owing  to  this  fact  that  the  removal  of  any  one  man,  or 
a  half  dozen  of  them,  by  death  or  otherwise,  could  not  bring 
about,  at  the  present  time,  any  very  wide  and  lasting  dis- 
aster to  Wall  Street.  This  market,  as  I  have  repeatedly 
stated,  can  fairly  be  now  considered  the  market  for  the  world, 
and  beyond  the  permanent  reach  of  any  one  man  doin^  it 
any  lasting  harm.  As  Mr.  Yanderbilt  invented  pegginK 
stocks,  and  stood  his  eround  when  taken  better  than  anj 
one  that  will  survive  him  in  that  plan  of  strat^c  moFe- 
ment,  he  will,  in  that  particular  alone,  be  sorrowful^  missed. 
I  am  of  the  opinion,  now  that  Mr.  Yanderbilt  is  no  more^ 
that  Mr.  Gould's  plan  of  leaving  the  Street  will  undergo  a 
modification,  at  least  by  his  remaining  for  some  time  longer 
at  the  helm.  This  will  prove,  in  such  an  event  an  impo^ 
tant  factor  in  the  future,  especially  as  the  buUs  oi  the  Sfareet 
have  for  at  least  a  year  past  recognized  Mr.  Gould  in  the  light 
of  a  benefactor.  To  them  he  has  proved  a  brave  and  able 
leader,  and  the  field  is  now  clear  for  him  to  become  eoBi!' 
mander-in-chief  of  all  the  forces,  without  any  one  to  dispata 
his  right  thereto.  This  should  be  enough  to  fire  his  ambi- 
tion and  keep  him  in  our  midst,  and  probably  will." 


A  GOOD  JUDGB  OF  TRim  AK'f.  865 

Among  fhe  popular  and  erroneous  impressions  entertained 
regarding  Wm.  H.  Yanderbilt,  the  one  that  he  was  no  judge 
of  pictures  seemed  to  have  taken  deep  root  in  the  public 
mind,  except  among  the  few  who  knew  him  intimately,  and 
the  celebrated  artists  whom  he  visited  and  from  whom  he 
purchased  many  of  the  works  of  art  which  adorn  his  great 
gallery  in  Fifth  avenue,  now  in  charge  of  his  youngest  son, 
Qeorge.  That  Mr.  Yanderbilt  had  an  intimate  knowledge 
and  correct  appreciation  of  true  art  has  been  amply  proved 
by  the  highest  authority.  I  am  well  aware  that  some  years 
ago  this  statement  would  have  been  ridiculed  by  the  major- 
ity of  the  newspapers ;  but  Mr.  Yanderbilt  never  bought  a 
picture  that  he  did  not  fully  understand  in  his  own  simple, 
unaffected  method  of  judgment.  He  may  not  have  been 
capable  of  the  highest  flights  of  fancy,  necessary  to  follow 
the  poetic  imagination  of  the  artist  to  its  extreme  height,  but 
he  was  equal  to  the  task  of  grasping  all  the  material  essen- 
tials from  a  common-sense  point  of  view. 

So  far  from  making  any  pretence  of  being  a  lover  of  art, 
he  was  in  the  habit  of  saying,  when  a  handsome  painting 
was  shown  him^>  '^It  may  be  very  fine^  but  until  I  can  appre- 
ciate its  beauty  I  shall  not  buy  it.'' 

Apropos  of  his  modesty  and  judgment,  in  regard  to  the 
fidelity  to  nature  of  a  picture,  a  circumstance  is  related  of 
his  visit  to  Boucheron,  a  French  picture  dealer,  where  he 
wanted  to  see  a  painting  by  Troyon,  with  the  object  of  buy- 
ing it  A  yoke  of  oxen  turning  from  the  plough  to  leave 
the  field  is  the  subject.  Experts  in  art  had  taken  exception 
to  the  manner  in  whicH  the  cattle  left  the  field.  When  Mr. 
Vanderbilt's  opinion  was  asked,  he  said,  **  I  douH  know  as 
much  about  the  quality  of  the  picture  as  I  do  about  the 
tmth  of  the  actions  of  the  cattle.  I  have  seen  them  act  like 
tiiat  hundreds  of  times."  The  artists  present  submitted  to 
his  judgment,  as  he  knew  more  about  the  oxen  than  they 
did.  When  in  France  he  visited  the  celebrated  Bosa  Bon- 
hsur,  at  Fontainebleau,  who  was  about  his  own  age,  and 


SCO  WILI^IAM  H.   VANDSRBIW. 

gave  her  an  order  for  two  pictures,  which  she  painted  to  his 
entire  satisfaction.  He  had  his  portrait  ])ainted  by  the 
celebrated  Meiseonier,  to  whom  he  paid  nearly  $200,000  for 
seven  pictures.  He  purchased  in  Germany  this  artisi's 
masterpiece,  '^The  Information — ^General  Desaix  and  the 
Captored  Peasant,"  for  $40,000,  giving  Meissonier,  who  had 
not  seen  it  for  many  years,  a  great  surprise,  and  filling  tiie 
heart  of  the  enthusiastic  artist  with  unbounded  gratitude  for 
rescuing  the  picture  from  Germany  and  bringing  it  to 
America. 

Mr.  Vanderbilf  s  taste  for  music,  especially  operatic  musie, 
was  refined,  and  he  had  a  keen  sense  of  the  humorous. 

Neither  Mr.  Yanderbilt  nor  any  of  his  family  ever  dis* 
played  any  anxiety  to  hobnob  with  those  people  who  are 
known  as  the  leaders  of  society,  although  possessed  of  more 
wealth  than  the  greatest  of  them.  The  celebrated  fancy 
dress  ball,  given  by  Mrs.  Wm.  E.  Yanderbilt,  at  the  sugges- 
tion of  Lady  Mandeville,  in  March,  1883,  seemed  to  have 
the  effect  of  levelling  up  among  the  social  ranks  of  upper- 
tendom>  and  placing  the  Vanderbilts  at  the  top  of  the  heaf^ 
in  what  is  recognized  as  good  society  in  New  York.  So  far 
as  cost,  richness  of  costume  and  newspaper  celebrity  were 
concerned,  that  ball  had,  perhaps,  no  equal  in  history.  It 
may  not  have  been  quite  so  expensive  as  the  feast  of  Alex-| 
ander  the  Great  at  Babylon,  some  of  the  entertainments  of 
Cleopatra  to  Augustus  and  Mark  Antony,  or  a  few  of  the 
magnificent  banquets  of  Louis  XIY.,  but  when  viewed  from 
every  essential  standpoint,  and  taking  into  account  our 
advanced  civilization,  I  have  no  hesitation  in  saying  that 
the  Yanderbilt  ball  was  superior  to  any  of  those  grand  his- 
toric displays  of  festivity  and  amusementreferred  to,  and  more 
especially  as  the  pleasure  was  not  cloyed  with  any  excesses 
like  those  prevalent  with  the  ancient  nobility  of  the  old 
world  and  frequently  exhibited  among  the  modern  "  salt  of 
the  earth''  in  the  mother  country.  The  ball  had  the  effeot 
of  drawing  the  Astors  and  the  Yanderbilts  into  social  union. 


TEOC  ORIIAT  BAU4  AND  ITS  SOCIAI,  ASPECTS. 


/ 


The  effUenU  earcUdU  was  brought  about  in  this  way,  as  the 
stoiy  goes: 

Seyeral  weeks  before  the  ball  Miss  Carrie  Astor,  daughter 
of  Mrs.  William  Astor,  organized  a  fancy  dress  quadrille,  to 
be  danced  at  the  ball.  Mrs.  Yanderbilt,  it  seems,  heard  of  this 
and  said,  in  the  hearing  of  some  friends,  that  she  was  sorry 
Miss  Astor  was  putting  herself  to  so  much  trouble,  as  she 
could  not  invite  her  to  the  ball,  for  the  reason  that  Mrs. 
Astor  had  never  called  on  her.  This  was  carried  to  Mrs. 
Astor,  who  immediately  unbent  her  stateliness>  called  on 
Mrs.  Yanderbilt,  and  in  a  very  ladylike  manner  made  the 
amende  honorable  for  her  former  neglect.  So  the  Astors 
were  cordially  invited  to  the  baU,  where  Miss  Astor  pre- 
sented a  superb  appearance  with  her  well  trained  quadrille. 

All  Mr.  Yanderbilf  s  other  attachments  vanished  in  pros* 
enoe  of  his  love  for  his  horses.  When  any  company,  of 
which  he  formed  a  part,  began  to  talk  horse  his  tongue  was 
inunediately  loosened  and  he  became  eloquent.  Although 
generally  a  man  of  few  words  and  diffident  as  a  talker,  he 
could  throw  the  eloquence  of  Chauncey  M.  Depew  in  the 
shade  when  the  subject  was  horse.  He  not  alone  admired 
the  speed  of  his  horses ;  he  seemed  possessed  of  the  fond- 
ness of  an  Arabian  for  them,  and,  like  old  John  Harper  of 
Kentucky,  would  probably  have  slept  with  them  only  through 
fear  of  the  newspapers  criticising  his  eccentricity.  It  was 
he  who  introduced  the  custom  of  fast  driving  teams,  first 
with  Small  Hopes,  purchased  by  his  father,  and  Lady  Mac, 
pnrchased  by  himself.  With  this  team,  in  a  top  road  wagon, 
he  made  the  then  remarkable  time  of  2.23^. 

A  host  of  rivals  immediately  sprang  up,  of  whom  Mr. 
Frank  Work  was  the  most  formidable.  Mr.  Yanderbilt  pro- 
cured faster  teams,  and  with  Aldine  and  Early  Bose,  under 
the  spar  of  competition,  reduced  the  time  to  2.16}.  Mr. 
Worl^  however,  was  a  daring  and  persistent  rival,  and  soon 
beat  this  record,  although  only  by  a  fraction  of  a  minute, 
which  in  trotting  or  facing  counts  just  the  same  as  if  it 


868  WIUIAM  H.   VANDERBILT. 

^vere  an  hour.  Mr.  Yanderbilt  then  pnrchased  the  {amoafl 
Mand  S.  in  Kentucky  for  $21,000,  and  with  her  and  Aldine 
made  the  mile  in  Fleetwood  Park  in  June,  1883,  in  2.15^. 

He  afterwards  reduced  this  time  to  2  08|,  leaving  Mr. 
Work  and  all  other  rivals  hopelessly  in  the  distance.  Event- 
ually  he  sold  Maud  S.  to  Mr,  Bobert  Bonner  for  the  com- 
paratively small  amount  of  140,000,  on  condition  that  she 
should  never  be  trotted  for  money.  Other  men  would  have 
given  $100,000  for  her  without  this  condition. 

On  the  12th  of  August,  this  year,  Murphy,  the  famoits 
jockey,  drove  Maud  S.  in  single  harness,  at  Tarrytown,  a  mile 
in  2.10i,  and  declared  he  did  not  push  her.  He  said  he  was 
confident  he  could  make  her  do  the  mile  in  2,06  or  2.07  if 
Mr.  Bonner  would  permit  him,  thus  smashing  all  trotting 
records. 

It  has  been  said  by  experts  in  driving  that  Mr.  Yan- 
derbilt was  the  best  double  team  driver  in  America,  either 
amateur  or  professional. 

Mr.  Vanderbilt's  bequests  were  liberal  and  numerous.  He 
added  $300,000  to  the  million  which  his  father  gave,  throngh 
the  wife  of  the  Commodore  and  Dr.  Deems,  to  the  Nashville 
University.  He  gave  half  a  million  to  the  College  of  Physi- 
cians and  Surgeons,  and  his  sister,  Mrs.  Sloane,  added  a 
quarter  of  a  million  to  this  generous  donation.  It  cost  him 
over  $100,000  to  remove  Cleopatra's  Needle  from  Egypt  to 
Central  Park.  He  offered  to  cancel  the  $160,000  check 
which  he  gave  to  General  Grant  to  relieve  him  from  the 
Ward-Fish  embarrassment,  and  his  munificent  gift  to  the 
waiter  students  in  the  White  Mountains  will  long  be  remem- 
bered. 

Although  Mr.  Vanderbilt  was  very  courageous,  as  was 
proved  by  the  fact  that  no  matter  how  many  threatening  let- 
ters he  may  have  received — and  their  name  was  legion— from 
cranks,  socialists  and  others,  he  never  made  any  change  in 
his  programme  or  his  routine  of  business  for  the  day,  and 
never  absented  himself  from  the  place  where  he  was  expected 


THS  GREAT  SAI*^  OF  CENTRAi;   STOCK. 

at  any  partictdar  hour  on  account  of  such  letters.  Yet  he  was 
peculiarly  sensitive  to  public  opinion,  and  sought  in  various 
ways  to  correct  its  hasty  judgment  in  regard  to  himself  and 
his  enormous  wealth. 

It  was  this  sensitive  feeling,  together  with  his  profound  re- 
spect for  popular  opinion  against  monopolies,  which  induced 
him  to  sell  a  controlling  interest,  300,000  shares  out  of  400,- 
000,  at  from  120  to  130,  ten  points  below  the  market  price,  of 
New  York  Central  stock  in  1879  to  a  syndicate,  the  chief  mem- 
bers of  which  were  Drexel,  Morgan  &  Co.,  Morton,  Bliss  &  Co., 
August  Belmont  &  Co.,  Winslow,  Lanier  &  Co ,  L.  Von  HoflT- 
man  &  Co ,  Cyrus  W.  Field,  Edwin  D.  Morgan,  Bussell  Sage, 
Jay  Gould  and  J.  S.  Morgan  &  Co.  of  London.  The  amount 
paid  for  the  s£ock  was  $35,000,000.  As  the  syndicate  largely 
represented  the  Wabash  system,  the  stock  of  that  property, 
as  well  as  New  York  Central,  had  an  important  advance. 

The  reasons  assigned  for  this  stupendous  and  unprecedented 
stock  transaction  are  briefly  condensed  by  Mr.  Chauncey  M. 
Depew  as  follows:  "Mr.  Vanderbilt,  because  of  assaults 
made  upon  him  in  the  Legislature  and  in  the  newspapers, 
came  to  the  conclusion  that  it  was  a  mistake  for  one  indivi- 
dual  to  own  a  controlling  interest  in  a  great  corporation  like 
the  New  York  Central,  and  also  a  mistake  to  have  so  many 
eggs  in  one  basket,  and  he  thought  it  would  be  better  for 
himself  and  better  for  the  company  if  the  ownership  were 
distributed  as  widely  as  possible.  The  syndicate  after- 
wards sold  it,  and  the  stock  became  one  of  the  most  widely- 
distributed  of  the  dividend-paying  American  securities. 
There  are  now  about  14,000  stockholders.  At  the  time  he 
sold  there  were  only  3,000." 

That  hasty  expression,  "  The  public  be  damned,"  which 
Mr.  Vanderbilt  used  in  an  interview  with  a  reporter  for  a 
Chicago  newspaper,  has  received  wide  circulation,  various 
comment  and  hostile  criticism.  Although  the  expression  is 
Uterally  correct,  the  public  at  first,  and  many  of  them  to 
this  day^  received  a  wrong  impression  in  regard  to  the  spirit  in 


870  WnXIAH    H.   VAKDBRBUcT. 

which  it  was  applied.  It  was  represented  as  if  Mr.  Yander- 
bilt  was  a  tyrannical  monopolisti  who  defied  public  opinion. 
A  true  and  simple  relation  of  the  interriew  is  a  sufficient 
answer  to  this.  The  subject  was  the  fast  mail  train  to 
Chicago.  Mr.  Yanderbilt  was  thinking  of  taking  this  train 
o£^  because  it  did  not  pay,  and  did  not  appear  to  him  there- 
fore to  be  a  necessity,  and  he  did  not  propose  to  run  traios 
as  a  philanthropist.  As  part  of  the  interview  which 
relates  to  this  point  has  become  so  widely  historic,  I  think 
it  will  bear  reproduction  here,  literally : 

^^  Why  arQ  you  going  to  stop  this  fast  mail  train  f"  asked 
the  reporter. 

'' Because  it  doesn't  pay,"  replied  Mr.  Yanderbilt  j  ^'I 
can't  run  a  train  as  far  as  this  permanently  at  a  loss." 

^^  But  the  public  find  it  very  convenient  and  useful.  Yoa 
ought  to  acconmiodate  them,"  rejoined  the  reporter. 

"  The  public,"  said  Mr.  Yanderbilt.  **  How  do  you  know, 
or  how  can  I  know  that  they  want  it )  If  they  want  it  why 
don't  they  patronize  it  and  make  it  pay  i  Thaf  s  the  only 
test  I  have  as  to  whether  a  thing  is  wanted  or  not.  Does  it 
pay  ?    If  it  doesn't  pay  I  suppose  it  isn't  wanted" 

"  Are  you  working,"  persisted  the  reporter,  *'  for  the  pub- 
lic or  for  your  stockholders?" 

'^The  public  be  danmed  I"  exclaimed  Mr.  Yanderbilt,  ^^I 
am  working  for  my  stockholders.  If  the  public  want  the 
train  why  don't  they  support  it." 

This,  I  think,  was  a. very  proper  answer  from  a  business 
standpoint,  and  the  expression,  when  placed  in  its  real  con- 
nection in  the  interview,  doos  not  imply  any  slur  upon  the 
public.  It  simply  intimates  that  he  was  urging  a  thing  on 
the  public  which  it  did  not  want  and  practically  refused. 
The  "  cuss  "  word  might  have  been  left  out,  but  the  onwhing 
reply  to  the  reporter  would  not  have  been  so  emphatic,  and 
that  obtrusive  representative  of  public  opinion  might  haye 
gone  away  unsquelched.  As  it  was,  however,  he  and  bis 
^tor  exhibited  considerable  ingenuity  in  making  the  bast 


''THB  PUBUC  BE  DAMNBD."  371 

nusrepresentation  possible  out  of  the  words  of  Mr.  Yander- 
bilt^  thus  giving  them  a  thousand  times  wider  circulation 
than  the  journal  in  which  they  were  first  printed,  and  afford- 
ing that  paper  a  big  advertisement.  This  is  the  ^jorrect 
account  of  that  world- renowned  expression,  ^^The  public  be 
damned  I" 

The  mausoleum  at  New  Dorp,  Staten  Island,  is  another 
outcome  of  the  genius  of  Wm.  H.  Yanderbilt.  Mr.  Bichard 
M.  Hunt  was  the  architect.  Pursuant  to  the  instructions  of 
Mr.  Yanderbilt,  it  was  built  without  any  fancy  work,  but  at 
the  same  time  on  such  a  grand  and  substantial  scale  that  it  is 
said  there  is  nothing  among  the  tombs  of  either  European  or 
Oriental  royalty  to  excel  it,  in  solidity  of  structure  and 
grandeur  of  design.  It  is  forty  feet  in  height,  sixty  in 
breadth  and  about  150  in  depth.  It  is  situated  on  an  emin- 
ence conomanding  the  largest  prospect  of  the  bay,  and  one 
of  the  finest  views  all  around  in  the  State  of  New  York. 
The  tomb  and  the  twenty-one  acres  of  land,  upon  the  highest 
part  of  which  it  stands,  cost  nearly  half  a  million  dollars,  and 
when  the  grounds  are  finished,  in  Uie  style  intended,  beautiful 
roads  and  walks  made,  flower  gardens  planted  with  the  requi- 
site adornments,  the  entire  expense  of  the  mausoleum  and 
its  surroundings  will  not  fall  far  short  of  a  million  dollars. 

The  precautions  taken  by  the  family  against  resurrec- 
tionists is  one  of  the  best  that  has  ever  been  adopted.  There 
is  a  guard  at  the  tomb  night  and  day.  Each  of  these  must 
put  on  record  his  vi^ance  every  fifteen  minutes  by  wind- 
ing up  a  clock,  which  is  sent  to  the  office  at  the  Orand  Cen- 
tral  Depot  every  morning. 

In  May,  1883,  Mr.  Yanderbilt,  finding  that  his  railroad 
duties  were  too  heavy  for  him,  resigned  the  presidencies  of 
his  roads  and  took  a  trip  to  Europe.  James  B.  Butter  was 
elected  President  of  the  Central,  and  on  his  death  was  suc- 
ceeded by  Chauncey  M.  Depew,  the  present  President,  who 
so  ably  fills  that  office.  About  a  year  before  his  death  Mr. 
Yanderbilt  gave  unmistakable  notice  of  his  approaching 


S72  WLLtXAM  H.   VANDBRBII«T. 

dissolution  when  he  stopped  driying  his  fast  teams,  and  went 
out  riding  with  some  other  person  to  drive  for  hun.  He 
must  have  keenly  felt  his  growing  weakness  when  he  was 
obliged  to  resign  the  reins  which  he  so  fondly  desired  to 
hold,  and  which  he  had  handled  with  such  inimitable  skilL 

The  death  of  Mr.  Yanderbilt  was  a  great  surprise,  espe- 
cially to  Wall  Street,  as  very  few  brokers  were  aware  even  of 
his  failing  health.  On  the  Still  day  of  December,  1886,  he  arose 
early,  apparently  no  worse  in  health  than  he  had  been  for  a 
year  previous.  He  went  to  the  studio  of  J.  Q.  A.  Ward  and 
gave  that  artist  a  sitting  for  the  bronze  bust  ordered  by  the 
Trustees  of  the  College  of  Physicians  and  Surgeons.  Mr. 
Depew  called  upon  him  at  one  o'clock,  but  finding  that  Mr. 
Bobert  Garrett,  President  of  the  Baltimore  &  Ohio  Baihoad 
Company,  had  also  called  to  see  Mr.  Yanderbilt,  Mr.  Depew 
waived  his  opportunity  in  favor  of  Mr.  Qarrett  Mr.  Ganett 
was  conversing  on  his  project  of  getting  into  New  York  by 
way  of  Staten  Island  and  a  bridge  over  the  Arthur  Kill,  They 
were  in  the  study.  Mr.  Yanderbilt  sat  in  his  large  aim 
chair  and  Mr.  Garrett  sat  on  a  sofa  opposite  to  him.  It 
seems  that  Mr.  Yanderbilt  was  in  perfect  harmony  with  the 
plans  of  Mr.  Gktrrett.  While  he  was  replying  to  the  remadcs 
of  Mr.  (Barrett  the  latter  observed  that  his  voice  began  to 
falter  and  there  was  a  curious  twitching  of  the  muscles  about 
his  mouth.  Soon  he  ceased  to  speak  and  had  a  si>asm.  In 
a  moment  he  leaned  forward  and  would  have  fallen  on  his 
face  on  the  floor,  but  Mr.  Garrett  caught  him  in  his  aims, 
laid  him  gently  on  the  rug  and  put  a  pillow  under  his  head. 
This  was  only  the  work  of  a  few  moments,  but  before  it  was 
accomplished  the  greatest  millionaire  in  America  had  ceased 
to  breathe.  When  Dr.  McLean,  the  family  physician,  arrived 
he  said  a  blood  vessel  had  burst  in  the  head,  and  so  death, 
according  to  the  frequently  expressed  wish  of  Mr.  Yander- 
bilt^ was  instantaneous. 

On  the  announcement  of  Mr.  Yanderbilf  s  death,  (which 
was  after  Board  hours),  a  panic  was  predicted  in  the  stoofc 


WHY  THERB  WAS  NO  PANIC.  873 

market.  A  pool  was  formed  of  the  most  wealthy  leading 
operators,  with  a  capital  of  $12,000,000,  to  resist  such  a  ca- 
lamity. It  was  not  required,  however.  There  was  a  reaction 
of  a  few  points  in  the  morning  following,  which  was  recov- 
ered before  the  close  of  the  market.  The  stocks  of  Mr.  Yan- 
derbilfs  properties,  as  well  as  the  properties  themselves,  had 
been  so  well  distributed  that  such  a  disaster  could  hardly 
have  occurred  without  a  strong  outside  combination  to  help 
it,  and  the  prevalent  desire  there  was  to  assist  speculation 
in  the  very  opposite  direction.  The  remains  of  Mr.  Yander- 
bilt  were  conveyed  to  New  Dorp  and  deposited  in  the  tomb 
without  any  ostentation. 

In  the  chapter  on  the  young  Yanderbilts  a  brief  account 
of  the  disposition  of  the  mammoth  fortune  of  $200,000,000 
IB  given. 


CHAPTER    XXXVI. 

"YOUNG    CORNEEL" 

The  ECOBNTBICITIES    OFCoBNELIUS    JeBEMIAH  YANBEBBILTy 

AND  HIS  Marvellous  Poweb  for  Bobbowing  Money. — 
He  Exercises  Wonderful  Influence  over  Greeley 
AND  Colfax. — A  Dinner  at  the  Club  with  Young 
"Corneel"  and  the  Famous  Smiler."~**Corneel 
tries  to  make  himself  Solid  with  Jay  Cooke.— 
The  Commodore  Befuses  to  Pay  Greeley.— *' Who 
the  Devil  Asked  You  1 "  retorted  Greeley  — '  Cob-  ^ 
neel's"  marriagbto  a  Charming  and  Devoted  Woman. 
How  SHE  Softened  the  Obdurate  Heart  of  heb 
Father- IN  Law. 

CORNELIUS  J.  VANDERBILT,  the  brother  of  Wm. 
H.,  popularly  known  by  the  name  of  "Young  Corneel,** 
is  entitled  to  a  place  in  this  book,  as  he  was  prominent 
among  the  many  financial  friends  I  have  had,  in  his  own 
pecnliar  line.  i 

''ComeeP'  was  eccentric,  and  was  possessed  of  some 
astonishing  peculiarities  that  made  him  a  genius  in  his  way. 
He  led  a  charmed  and  adventurous  life  in  his  own  circles. 

He  had  a  wonderful  facility  for  getting  into  scrapes,  and 
'' banked"  on  the  Commodore  to  extricate  him  therefrom, 
which  the  latter  did  on  many  occasions.  The  mere  fact^ 
•  however,  that  he  had  such  a  father,  was  in  itself  sufficient, 
very  often,  tp  get  him  out  of  his  troubles,  without  any  effort 
on  the  part  of  the  Commodore  in  that  direction.  "  Corneel,*' 
however,  worked  this  ^*  racket"  for  all  it  was  worth,  and  in 
time  it  became  almost  exhausted.  Still,  he  went  on  making 
new  acquaintances  without  limit,  and  to  many  of  them  the 
name  of  the  Commodore  was  a  sufficient  guarantee  of  security 
tor  sundry  loans,  that  were  promised  to  be  paid  on  the  ful- 
filment of  certain  expectations  which  only  existed  in  the 
borrower's  imagination. 


876 

But  it  was  not  very  safe  for  "Corneel"  to  rely  upon  his 
father,  or  to  bank  upon  his  credit  in  any  case.  If  he  had  de- 
pended solely  on  the  paternal  security,  he  would  often  have 
found,  when  in  his  worst  straits,  that  he  had  leaned  upon  a 
willow  cane  for  support.  "  Corneel "  had  a  peculiar  fascin- 
ation in  his  ability  to  catch  the  ear  of  prominent  men,  wbo 
would  listen  attentively  to  his  tale  of  woe,  and  some  of  them 
were  so  thoroughly  under  the  spell  of  his  persuasive  powers 
that  they  would  "fork"  out  the  required  amount  without 
hesitation,  to  relieve  his  pressing  necessities. 

It  is  sad  to  relate  that  the  money  thus  sometimes  piteous- 
ly  solicited,  and  really  required  to  pay  a  board  hill  or  room 
rent,  was  often  thrown  away  in  the  fiifet  gambling  den  that 
the  borrower  happened  to  be  passing,  while  the  landlady 
and  the  washerwoman  would  be  obliged  to  extend  their  bills 
of  credit  indefinitely. 

Amongst  the  special  friends  upon  whom  he  was  in  the 
habit  of  exercising  his  alluring  magnetism  were  the  Hon. 
Schuyler  Oolfax  and  Horace  Greeley,  Over  both  of  these 
eminent  gentlemen  he  seemed  to  have  perfect  control.  So 
hopelessly  were  they  under  the  charm  of  his  occult  pWer 
that  they  seldom  said  ^^no''  to  any  request  that  he  madoj 
especially  when  he  wanted  to  borrow  money.  No  sorcerer 
ever  had  his  helpless  victims  more  completely  at  his  mercy, 
nor  had  greater  power  by  the  touch  of  his  mysterious  wand, 
than  "Corneel"  had  over  these  and  certain  other  men,  when 
he  would  entertain  them  with  a  list  of  imaginary  wrongs 
which  he  had  suffered  at  the  hands  of  his  father  and  brother. 
In  their  ears  this  story  never  seemed  to  become  stale,  though 
it  was  the  same  old  story  every  time,  with  hardly  any  at- 
tempt at  variation.  To  them  and  others,  over  whom  he  e^' 
ercisedthisunaccoxmtable  influence,  the  thing  did  not  seem 
to  become  monotonous  like  other  twice-told  tales,  related  by 
ordinary  people. 

To  the  man  of  average  intellect  and  common  bnsineBB 
capacity  '*  Corneel  '*  was  a  shocking  "  bore  ".  and  a  victin*  of 


THB  SBCI«r  OF  HIS  BORROWING  POWKR.  877 

morMd  melancholia,  bnt  these  men  of  genius  were  won  by 
the  impression  which  he  had  made  upon  them,  and  thorough- 
ly imbued  with  the  deepest  sympathy  for  the  wrongs  which 
his  strange  hallucinations  conjured  up.  Unlike  most  men 
who  borrow  money  from  friends  and  don't  pay,  instead  of 
exhausting  his  credit  by  this  business  delinquency,  he  made 
it  the  basis  for  increasing  it,  and  it  generally  seemed  to  be 
a  potent  means  of  enabling  him  to  borrow  more.  Hence 
his  obligations  to  Mr.  Greeley  were  persistently  cumulative 
until  they  exceeded  $50,000. 

I  have  been  told  by  a  person  familiarly  acquainted  with 
him  that  years  after  Greeley's  death  he  would  sometimes  sit 
in  deep  meditation,  with  the  tears  welling  up  in  his  eyes, 
especially  when  in  a  great  financial  strait,  and  sighingly 
say :  "  When  Mr.  Greeley  died  I  lost  the  best  friend  in  the 
world."  Be  it  said  to  his  credit,  however,  in  spite  of  all  his 
shortcomings,  he  exhibited  his  honesty  by  paying  every 
cent  of  the  debt,  with  interest,  to  Mr.  Greeley's  daughters. 
He  also  paid  the  greater  part  of  all  the  other  debts  which  he 
had  contracted  under  similar  circumstances,  after  making  a 
settlement  with  Wm.  H.  and  receiving  a  much  larger  amount 
than  he  had  been  left  by  the  will  of  his  father,  who  be- 
queathed him  merely  a  decent  competence  for  his  rank  and 
station  in  life,  without  any  surplus  for  the  policy  shops  and 
faro  banks. 

One  of  the  qualities  possessed  by  "  Corneel "  in  a  remark- 
ahle  degree,  and  which  enabled  him  to  be  so  successful  a 
borrower,  was  his  extreme  earnestness.  He  bent  his  whole 
energies  to  the  work  in  hand,  and  his  requests  usually  met 
with  ready  response. .  If  he  had  put  the  same  energy  and 
intense  enthusiasm  into  legitimate  speculation,  he  would 
have  been  as  successful  as  his  father  or  Jay  Gould.  He 
must  have  been  an  intuitive  judge  of  character,  for  he  showed 
that  he  generally  knew  his  man  in  advance  of  making  appli- 
cation for  sundry  little  loans.  In  that  respect  he  was  not 
unlike  the  famous  huntsman  who  was  a  dead  shot  every 
time. 


878    .  "young  coRimHi*." 

My  first  acquaintance  with  "Oorneel"  was  through  one 
of  his  special  friends,,  the  Hon.  Schuyler  Colfax,  whom  he 
brought  to  my  office  for  the  purpose  of  having  himself  in- 
troduced by  Mr.  Colfax.  He  informed  me  that  he  had  ju3t 
then  returned  from  Hartford,  Conn.,  where  he  had  taken  his 
friend,  Mr.  Colfax,  for  a  week's  visit  at  his  house.  It  can 
be  readily  imagined,  therefore,  tliat  at  this  time  Mr.  Colfax 
had  but  little  control  over  his  own  bank  account  and  for  a 
long  time  afterwards. 

I  invited  both  these  gentlemen  to  dinner  at  the  Club  that 
afternoon.  Although  Mr.  Colfax  was  an  extraordinarily  good 
talker,  he  was  left  far  in  the  distance  and  almost  silenced 
by  "  Comeel."  Most  of  what  the  latter  said,  however,  had 
very  little  in  it  of  a  tangible  character,  and  was  ahnost  en- 
tirely made  up  of  unstinted  praise  of  his  friend  Colfax.  If 
ever  there  was  a  man  talked  up  to  the  skies,  or  if  the  thing 
were  possible,  Colfax  must  have  been  literally  in  that  ele- 
vated position  during  our  dinner. 

There  was  no  let-up  to  the  unqualified  adulation,  yet  I 
must  say  that  there  was  none  of  the  uninterrupted  stream  of 
fulsome  flattery,  fell  to  the  ground.  Schuyler  took  it  all 
in  as  he  did  his  viands,  and  as  if  it  were  legitimately  his 
due,  a  proof  positive  that "  Young  Corneel  '*  was  not  mistaken 
in  his  man  ;  and  a  further  demonstration  of  his  natural  sa- 
gacity in  striking  the  man  upon  whom  he  could  successfollj 
exercise  his  peculiar  charms  of  persuasion. 

When  he  got  tired  talking  about  Mr.  Colfax,  the  object  of 
his  next  theme  was  Mr.  Greeley,  on  whom  he  was  profusely 
prolific. 

I  met  Mr.  Greeley  frequently  afterwards,  and  told  him 
what  a  good  friend  he  had  in  young  Cornelius  "Vanderbilt. 
"  Yes,'*  he  said,  with  a  knowing  smile,  "  I  think  he  is  a  good 
friend  of  mine.  I  have  heard  of  his  frequently  saying  nice 
thinizs  about  me.  It  is  a  oreat  isitv.  however."  ha  addad 
significantly,  "  that  he  is  so  frequently  short  of  funds.  1* 
he  had  more  money  he  would  be  a  very  good  fellow,'* 


KXP15RIMKNTING  ON  JAY  COOKIf.  879 

It  was  generally  in  the  way  above  referred  to  that  he 
would  steal  a  march  on  Mr.  Greeley  and  impose  on  his  good 
nature.  He  would  say  nice  things  about  him  to  some  one 
who  would  quote  him  to  Mr.  Greeley,  and  thus  paye  the 
way  for  an  additional  loan.  In  a  few  days  afterward  "Cor- 
neel"  would  call  on  his  tried  and  trusty  friend,  and  never  fail 
to  obtain  the  needed  relief ,  or  a  large  portion  of  it. 

^^  CorneeP' had  great  tact  in  utilizing  his  various  advan- 
tages for  borrowing,  and  was  imbued  Vith  a  thorough  devo- 
tion to  his  object,  worthy  of  a  better  cause.  The  day  follow- 
ing his  first  visit  to  my  office,  he  called  again  and  told  me 
that  his  friend  Colfax  had  left  by  the  early  train  for  Wash- 
ington, and  had  urged  him  to  go  along,  but  as  he  had  some 
matters  to  attend  to  he  ha  J  postponed  his  departure  until 
the  night  train. 

He  said  to  me,  "By-the-bye,  you  know  Jay  Cooke  very 
welL" 

I  said,  "Yes.'' 

Then  he  replied,  "I  have  some  matters  to  look  after  in 
connection  with  the  Treasury  Department,  and  I  think  he 
could  be  of  some  service  to  me.  Will  you  be  good  enough 
to  oblige  me  with  a  letter  of  introduction  to  him?  I  may 
not  need  it,"  he  added  with  a  business  air  of  sang  frdd^  ^^but 
I  should  like  to  have  it  in  case  of  need." 

I  wrote  him  a  brief  and  non-committal  introduction,  some- 
what as  follows : 

**  This  wUl  introduce  to  you  Mr.  Comeiius  Vanderbllt,  Jr.,  son  of  the 
Commodore.  I  take  the  Uberty  of  maklDg  you  %oquainted  with  him 
through  this  medium,  at  hia  own  request. 

**  Truly  yours,  Hksbt  CLWwa" 

There  was  certainly  nothing  on  the  face  of  this  document^ 
except  the  Commodore's  name,  to  justify  any  person  in  util- 
izing it  as  a  bill  of  credit. 

-  Yet  the  financial  genius  of  ^'  Toung  Comeel"  was  equal  to 
the  tasic  of  an  indirect  negotiation  of  this  character,  and 
after  the  lapse  of  a  few  days  his  diaf ts  from  J^y  Cooke  be* 


880  "young  CORNISBI,." 

gan  to  pour  into  my  office  like  April  showers.  None  of  {hem 
wajs  very  large,  but  when  put  together  they  ^  aggregated  a 
pretty  fair  amount,  and  were  so  cumulative  in  their  cliarao- 
ter  that,  had  I  not  wired  Mr.  Cooke  to  stop  the  suppliee,  it 
is  difficult  to  say  what  figure  the  sum  total  would  haTO 
reached. 

The  last  time  I  saw  '*  Young  Oorneel  ^  was  at  Long  Branch, 
where  he  took  a  drive  with  me  one  fine  warm  afternoon.  He 
spoke  feelingly  about  his  wasted  life^  and  concerning  the 
many  good  friends  who  had  come  so  often  to  his  rescue,  and 
had  got  him  out  of  his  numerous  holes,  into  which,  throng 
misfortune,  he  had  been  thrown.  He  said  all  there  was  of 
life  for  him  was  to  live  long  enough  to  pay  up  old  scores. 
He  had  fully  determined  to  do  this,  and  then,  he  thought^  a 
prolongation  of  existence  would  have  no  further  charms  for 
him.  It  must  be  said  to  his  credit  that  he  accomplished  this 
work,  and  then  laying  himself  sadly  down,  died  by  Ms  own 
hand. 

Let  us,  therefore,  throw  the  mantle  of  charity  oyer  that 
tragic  scene  in  the  Glenham  Hotel,  and  hope  that  his  soul 
may  elsewhere  have  found  the  rest  which  in  its  poor,  afflicted 
body  it  vainly  sought  for  here. 

That  portion  of  the  Commodore's  will  in  which  he  makes 
provision  for  Cornelius  J.  is  thoroughly  characteristio  of 
the  old  man,  in  its  iron-clad  provisions.  It  says :  **I  direct 
that  1200,000  be  set  apart,  the  interest  thereof  to  be  applied 
to  the  maintenance  and  support  of  my  son,  Cornelius  J. 
Vanderbilt,  during  his  natural  life.  And  I  authorize  said 
trustees,  in  their  discretion,  instead  of  themselves  making 
the  application  of  said  interest  money  to  his  support,  to  pay 
over  from  time  to  time,  to  my  said  son,  for  his  support,  such 
portions  as  they  may  deem  advisable,  or  the  whole  of  tt® 
interest  of  said  bonds.  But  no  part  of  the  interest  is  to  be 
paid  to  any  assignee  of  my  said  son,  or  to  any  creditor  who 
may  seek  by  legal  proceedings  to  obtain  the  same ;  and  m 
case  my  said  son  should  make  any  transfer  or  assignment  of 


HIS  BESETTING  SIN  WAS  GAMBUNG.  881 

his  beneficial  interest  in  said  bonds  or  the  interest  thereof, 
or  encumber  the  same,  or  attempt  so  to  do,  the  said  interest 
of  said  bonds  shall  thereupon  cease  to  be  applicable  to  his 
use,  and  shall  thenceforth,  during  the  residue  of  his  natural 
life,  belong  to  my  residuary  legatee.  Upon  the  decease  of 
my  said  son,  Cornelius  J.,  I  give  and  bequeath  the  last 
mentioned  $200,000  of  bonds  to  my  residuary  legatee." 

Though  a  portion  of  this  provision  is  rather  whimsical, 
yet  it  was  ably  designed  to  force  "  Corneel"  to  desist  from 
his  besetting  sin,  the  gaming  table. 

If  the  trustees  were  permitted  to  pay  him  the  whole  of 
the  interest  at  whatever  period  they  should  choose,  it  seems 
harsh  that  the  beneficiary  should  forfeit  it  entirely,  if  he 
should  seek  to  relieve  present  and  pressing  necessities,  by 
borrowing  on  his  future  income.  It  showed  that  the  Com- 
modore, even  at  the  hour  of  his  death,  thought  that  "Cor* 
neel "  was  not  fit  to  be  treated  otherwise  than  as  a  child,  and 
that  it  was  necessary  he  should  be  kept  under  the  guardian- 
ship of  his  brother. 

This  circumstance  hurt  "Corneel's"  feelings  greatly,  as 
he  imagined  himself  a  bigger  man,  mentally,  than  Wm.  H. 
This  opinion,  however,  no  other  man  could  conscientiously 
endorse,  except  it  might  have  been  Greeley  or  Colfax. 

^^  Corneel,"  though  always  exclaiming  against  the  old 
man's  hard-heartedness,  had  an  intense  admiration  for  his 
father's  abilities,  and  he  was  as  sensitive  as  a  sunflower 
when  any  other  person  would  say  a  word  to  disparage  the 
Commodore.  While  railing  constantly  at  the  parsimony  of 
his  father,  he  was  as  devoted  a  hero-worshipper  of  the  Com- 
modore as  Thomas  Carlyle  ever  was  of  the  greatest  of  his 
heroes,  and  he  never  grew  tired  talking  of  his  achievements^ 
with  the  history  of  which  he  was  thoroughly  fanuliar.  He 
had  even  a  more  intense  hatred  against  Gould  than  his 
father  had,  and  solemnly  believed  that  Gould  and  Fisk  had, 
during  the  manipulation  of  the  Erie  '^  corner,"  conspired  to 
assassinate  the  Commodore. 


882  **  YOUNG  CORNKKI*.*' 

Of  course  this  was  one  of  his  manj  hallucinations,  and 
there  was  not  the  least  ground  for  it,  but  he  had  got  it 
indelibly  on  the  brain,  and  he  would  not  tolerate  contradic- 
tion in  that  notion  any  more  than  in  anj  other  opinion 
'which  he  had  got  fixed  in  his  morbid  mind.  He  once  went 
into  an  epileptic  fit  in  the  presence  of  a  friend  of  mine  who 
attempted  to  reason  with  him  on  the  improbability  of  such 
a  man  as  Gould  contemplating  murder* 

He  never  f orgare  his  father  for  haying  him  arrested  and 
incarcerated  in  Bloomingdale  Lunatic  Asylum.  He  had 
run  off  to  California  the  time  of  the  gold  fever,  and  shipped 
as  a  sailor.  He  was  then  in  his  eighteenth  year.  When  he 
returned,  which  was  pretty  soon,  as  he  had  no  ability  to 
enter  into  the  terrible  mental  and  physical  straggle  for 
wealth  on  the  gold  coast,  his  father  had  him  arrested.  It 
was  soon  discovered  that  he  was  no  lunatic,  however  eccen- 
tric he  might  be,  and  he  was  released,  but  he  took  the  mat- 
ter dreadfully  to  heart,  and  it  had  a  melancholy  and  de- 
moralizing effect  upon  all  his  future  li/e.  He  was  petulant 
and  still  complaining,  and  often  acted  like  a  crazy  man  in 
that  the  more  any  of  his  intimate  friends  tried  to  please  him 
he  seemed  the  more  dissatisfied ;  yet  it  was  impossible  to 
get  along  with  him  without.humoring  him,  and  it  was  ahnost 
next  to  impossible  to  humor  him.  In  this  way  he  cooid 
work  on  the  minds  of  the  strongest  of  his  friends,  so  as  al- 
most to  put  them  into  a  fit  as  bad  as  one  of  his  own. 

Dr.  Swazy's  patience  was  often  put  to  a  very  sever©  test 
in  his  attempt  to  please  this  eccentric  invalid. 

"  Corneel"  was  a  miser  everjrwhere  except  at  the  gaming 
table,  and  would  cling  to  a  cent  with  greater  teuacity  than 
ordinary  people  display  in  holding  on  to  a  ten  dollar  biU. 
But  among  the  gamblers  either  a  ten -dollar  bill  or  a  hun- 
dred-dollar bill  was  less  valuable  in  his  eyes  than  a  cent 
in  the  common  transactions  of  every  day  life.  "  Faro"  and 
"  keuo"  had  terrific  power  over  him.  He  has  often  been 
known  to  have  had  an  epiletio  fit  at  the  gaming  table^  g^ 


HORACiC  OViiHmAY  AND  TH^  COMMODOU*  888 

a  doze  afterwards  whicli  seemed  like  the  sleep  of  death, 
BO  cadayeroiis  did  he  look  on  those  occasions,  and  then 
awake  up  and  go  on  with  the  play,  whose  fascination  he  ap- 
peared  ntterlj  powerless  to  resist 

When  it  came  to  the  ears  of  the  Oommodore  that  Greeley 
was  lending  his  son  hnndreds  and  sometimes  thousands  of 
dollars  at  a  time,  he  visited  the  office  of  the  Tribune.  He 
rushed  without  ceremony  into  the  sanctum,  where  Greeley 
was  busy  at  his  high  desk,  grinding  out  a  tirade  against 
some  political  or  social  abuse,  and  thus  addressed  the  Sage 
of  Chappaqua :  "  Greeley,  I  hear  yer  lendin'  *  Comeel 
money."  "Yes,"  said  Greeley,  eyeing  the  monarch  of  steam- 
boat men  through  his  glasses,  with  an  air  of  philosophic  con- 
tempt mixed  with  commisseration ;  '^I  hare  let  him  have 
some."  **  I  give  you  fair  warning,"  replied  the  Commodore, 
**  that  you  need  not  look  to  me ;  I  won't  pay  you. "  "  Who 
the  devil  asked  you?'*  retorted  Greeley.    **Hav9  I T 

This  closed  the  interview.  The  Commodore  retraced  his 
steps  down  the  rickety  stairs  into  Spruce  street,  and 
Ghreeley  continued  to  grind  out  his  illegible  chirography  for 
the  profane  printers.  There  is  no  record,  I  believe,  that  the 
subject  was  ever  reverted  to  between  them.  Soon  after  the 
death  of  Greeley  the  Commodore  sent  a  check  for  $10,000 
each  to  his  two  daughters. 

The  Commodore  was  well  satisfied  with  the  marriage  of 
young  "Corneel"  to  Miss  Williams,  of  Hartford,  Connec- 
ticut, and  he  had  hoped  that  his  son  would  begin  then  to 
lead  a  new  life,  but  he  was  doomed  to  disappointment. 

There  is  a  good  story  told  about  an  interview  between  the 
^«ommodore  and  Mr.  Williams  prior  to  the  marriage. 

Mr.  Williams  called  upon  the  Commodore  at  his  office  in 
Fourth  street,  near  Broadway,  and  informed  him  that  his 
son,  Cornelius  Jeremiah,  had  asked  his  daughter  in  mar* 
riage,  and  she  was  willing  if  the  Commodore  bad  no  objeo* 
Hon  to  Hie  union. 

^Has  your  daughter  plenty  of  silk  dresses  P  asked  the 
Commodore,  sententiously. 


884  "young  corneei,." 

"Well,'*  replied  Mr.  Williams,  showing  some  senfiitiTeneaB 
at  what  he  at  first  considered  assumption  of  superiority  and 
purse-pride  on  the  part  of  the  Commodore,  "my  daughter, 
as  I  told  you,  is  not  wealthy.  She  has  a  few  dresses  like 
other  young  ladies  in  her  station,  bat  her  wardrobe  is  not 
very  extensive  nor  costly," 

"  Has  your  daughter  plenty  of  jewelry  ?  "  continued  the 
Commodore,  without  appearing  to  take  much  notice  of  Ifr. 
Williams'  explanation. 

"No,  sir,"  replied  Mr.  Williams,  becoming  slightly 
nettled,  and  showing  a  laudable  pride  in  opposition  to  what 
he  considered  a  slur  on  account  of  his  moderate  means,  '*I 
have  attempted  to  explain  to  you  that  I  am  in  comparatiTe- 
ly  humble  circumstances,  and  my  daughter  cannot  afford 
jewelry." 

"The  reason  I  ask  you,"  pursued  the  Commodore,  ** is, 
that  if  she  did  possess  these  articles  of  value,  my  son  would 
take  them  and  either  pawn  or  sell  them,  and  throw  awaj 
the  proceeds  at  the  gaming  table.  So  I  forewarn  you  and 
your  daughter  that  I  can't  take  any  responsibility  in  this 
matter." 

The  nuptials  were  duly  consummated,  however,  in  spite 
of  the  Commodore's  constructive  remonstrance. 

After  the  marriage  "Comeel"  asked  his  father  for  some 
money  to  build  a  house.  "  No,  Corneel,"  he  said  emphat- 
ically, "  you  have  got  to  show  that  you  can  be  trusted  before 
I  trust  you." 

His  wife  made  application  to  her  father-in-law  with  bet- 
ter success,  however.  He  gave  her  a  check  for  $10,000.  In 
a  few  months  afterward  she  paid  another  visit  to  the  Com- 
modore, who  received  her  cordially,  but  expected  she  had 
come  for  another  loan,  and  he  was  attempting  to  workup  his 
courage  to  the  point  of  refusal ;  for,  strong  and  almost  inyiu- 
cibly  obdurate  as  he  was  in  the  general  affairs  of  life>  ^ 
the  presence  of  the  fair  sex,  like  Samson  when  he  got  hifl 
hair  cut,  he  was  weak  and  like  another  man. 


A  PITTANCE  OF  $200  WKEKI^Y.  885 

^  Well,''  said  the  Commodore,  addressing  his  daughter-in- 
law  with  a  kindly  smile,  *^  what  can  I  do  for  you  now  ?" 

*^Well,  papa,"  she  replied  in  her  exceedingly  candid  and 
agreeable  manner,  *^  we  did  not  need  all  the  money,  so  I 
brought  you  back  $1,500." 

The  Commodore  could  hardly  believe  his  ears  and  eyes, 
and  thought  for  a  moment  that  he  must  be  under  some 
mysterious  delusion,  superinduced  by  the  spiritual  seances 
which  he  then  was  in  the  habit  of  attending.  But  when 
the  cash  was  put  in  his  hand  he  found  it  was  a  material 
reality.  This  sealed  a  warm  friendship  between  him  and 
his  worthy  and  economical  daughter-in-law,  which  was 
only  severed  by  her  premature  death  about  ten  years  before 
that  of  her  unfortunate  husband. 

The  sympathy  that  some  people  manifested  for  ^^  Young 
Gomeel "  was,  like  his  own  maladies,  of  the  most  morbid  or 
delusive  character.  He  had  $200  a  week  from  his  father  all 
the  time  that  he  was  whining  to  the  public  about  his  pinch- 
ing poverty  and  denouncing  the  old  man's  niggardliness. 
This  would  have  been  ample,  with  fair  economy,  not  only 
for  all  the  necessaries  of  life,  but,  under  judicious  manage- 
ment, would  have  afforded  the  recipient  many  of  its  luxuries. 

With  his  irresistible  propensity  for  gambling,  he  would 
not  have  been  any  better  off  physically,  but  worse,  with  the 
entire  income  from  his  father's  75  or  100  millions.  The  only ' 
difference  that  should  have  arisen  was  that  he  would  haro 
been  instrumental  in  carrying  out  in  part  the  socialistic  and 
communistic  idea  of  a  wider  distribution  of  private  property, 
amassed  by  thrift,  privation  and  industry,  among  the  drones, 
lazy  *' loafers"  and  criminals  of  society. 

The  Commodore's  judgment,  therefore,  in  limiting  his 
prodigal  son  to  $200  a  week,  was  not  only  comprehensive, 
but  beneficent  in  Its  results  both  to  his  son  and  to  society 
At  large. 


CHAPTEB    XXXVII. 

THE  YOUNG  VANDERBILTS  AND  THEIR  FORTUNES. 

Bekabkabub  fob  Phtsioal  and  Intelleotual  Abilitt.— 
The  Mixtube  of  Baoes  and  the  Law  of  Selec- 
tion.—The  WONDEBFUL  WiLL  AND  THE  WiSB  DlSTBI- 

bution  of  Two  Hundbed  Millions.— Tastes,  Habits 
AND  Social  Pboclivities  of  the  Young  Vandeb- 
BiLTs. — The  Mabbied  Belations  of  Some  of  Them.-^ 
Being   Happily   Assobted   they   make  Good  Hub- 

BANDS.- ThEIB     PbOPEBTY     BeGABDED     AS     A     GbEAT 

Tbust. — ^Theib  Bailboad  System  and  its  Gbeat 
Abmy  of  Employes. — The  Young  Men  Cautious 
about  Speculating,  and  (Tonsebyatiye  in  theib  Es- 

PENBES  GeNEBALLY. 

r[E  young  YanderbUts  who  have  succeeded  to  the  estate 
of  their  father,  William  H.,  are  all  remarkable  for  both 
inteilectoal  and  physical  power,  as  well  as  a  high  degree  of 
refinement,  showing  how  fast  human  evolution  under  favor- 
able circumstances  progresses  in  this  country.  In  other 
countries  it  takes  many  generations  to  develop  such  men  as 
the  present  Yanderbilts.  In  this  country  three  generations 
in  this  instance  have  produced  some  of  the  best  samples  of 
nature's  nobility,  which  is  superior  in  every  respect  to  the 
proud  and  vain-glorious  production  which  emanates  from 
the  succession  of  ^^  a  hundred  earls''  in  England,  or  even  a 
greater  number  of  barons,  princes  and  kings  dn  the  Conti- 
nent of  Europe.  It  would  be  difficult  to  produce  better 
types  of  men  in  the  short  period  named  than  Cornelius, 
William  K.,  Frederick  and  George  Yanderbilt,  in  personal 
appearance,  breeding  and  culture. 

The  mixture  and  amalgamation  of  races  from  all  parts  of  the 
world  have  doubtless  had  a  great  deal  to  do  with  such  favor* 
able  results  in  the  reproduction  of  our  species  in  the  United 
States.  In  the  old  country  close  intermarriages  seem  to 
have  a  deteriorating  effect  on  the  race,  with  pjobably  the 


888     THK  YOUNG  VANDERBII^TS  AND  THKIR  FORTUNES- 

one  apparent  exception,  namely,  the  house  of  Bothsdiild, 
and  a  little  longer  time  may  tell  that  the  rale  of  deteriora- 
tion holds  good  in  this  case  also. 

The  four  sons  of  William  H.  Yanderbilt  have  had  the 
greatest  start  in  life  of  any  family  in  all  the  records  of  his- 
tory, andent  and  modern,  with  the  single  exception,  prob* 
ably,  of  the  fire  Bothschild  brothers,  the  sons  of  old  An- 
selm,  and  they  had  not  near  so  much  money  to  begin  with, 
bat  had  the  advantage  of  the  Vanderbilts  in  their  locations 
and  in  their  methods  of  oombination.  These  methods,  as  I 
have  observed  elsewhere,  conld  only  be  attained  throiigh 
the  Hebrew  religion.  By  the  provisions  of  the  remarkable 
will,  which  revealed  such  enormous  wealth  as  to  make  almost 
every  other  millionaire  feel  comparatively  poor,  the  greater 
portion  of  200  million  dollars  was  divided  among  the  eight 
ehildren  of  the  testator.  Millions  were  distributed  in  this 
case  as  other  millionaires  have  been  in  the  habit  of  dealing 
with  thousands.  The  ordinary  human  mind  fails  to  grasp 
the  idea  of  such  a  vast  amount  of  wealth.  If  converted  into 
gold  it  would  have  weighed  600  tons,  and  it  would  have 
taken  600  strong  horses  to  draw  it  from  the  Grand  Central 
Depot  to  the  Sub- Treasury  in  Wall  street,  If  it  had  been 
all  in  gold  or  silver  dollars,  or  even  in  greenbacks,  it  would 
have  taken  Yanderbilt^himself,  woVking^^ght  hours  a  day, 
over  thirty  years  to  count  it.  If  the  first  of  the  Vanderbilts 
had  been  a  contemporary  of  old  Adam,  according  to  the 
Mosaic  account,  and  had  tiien  started  as  president  of  a  rail- 
road through  Palestine,  with  a  salary  oi  $30,000  a  year,  sav- 
ing all  this  money  and  living  on  perquisites,  the  situation 
being  continued  in  the  male  line  to  the  present  day,  the  sum 
total  of  all  the  family  savings  thus  accumulated  would  not 
amount  to  the  fortune  left  by  Wm.  H.  Yanderbilt,  unless 
this  original  $30,000  had  been  placed  at  compound  interest, 
and  that  in  a  bank  from  which  young  Napoleons  of  fioance 
had  been  strictly  excluded. 
'    The  will  itself  affords  one  of  the  best  ttots  on  record  ol 


/?^t^cz^.€.u^Lc.u^AX>^ 


PROVISIONS  OI^  TH«  MARVBI^WUS  WTLI^  889 

the  sonnd  judgment  and  equitable  mind  of  &e  testatoi*  He 
was  under  filial  obligations  to  a  certain  extent  to  revere  the 
memory  and  respect  the  opinions  of  the  father  through 
whom  he  had  acquired  the  means  of  accumulating  this  won- 
derful  fortune. 

The  Commodore  had  modified  ideas  of  primogeniture,  not 
exactly  in  the  English  sense  of  the  term,  but  he  had  an 
intense  desire  to  perpetuate  his  name  and  wealth,  and  would 
doubtless  hare  advised  William  H.,  and  perhaps  he  did,  to 
bequeathe  nearly  all  his  possessions  to  one  of  his  sons,  leav- 
iQg  the  rest  of  the  family  a  bare  independence. 

Wm.  H.,  in  accordance  with  his  sensitive  disposition, 
upright  mind,  and  a  due  respect  for  the  feelings,  opinions 
and  even  the  prejudices  of  others,  resolved  to  make  what 
public  opinion  would  be  likely  to  consider  an  approximately 
fair  division  of  his  immense  estate.  In  this  attempt,  I 
think  he  succeeded  pretty  well,  considering  all  the  circum- 
stances and  dijficulties  with  which  he  had  to  grapple.  A 
synopsis  of  the  will  itself,  however,  herewith  inserted,  will 
enable  the  public  to  be  the  best  judge  of  the  equity  of  the 
ease. 

In  the  first  place  Mr.  Yanderbilt  devised  to  his  wife  the 
palatial  residence,  which  cost  two  millions,  situated  between 
Slst  and  62d  streets  on  Fifth  avenue,  the  stables  on  Madi- 
son avenue,  the  paintings  and  statuary,  and  an  annuity  of 
1200,000  per  annum.  He  also  empowered  her  to  dispose  of, 
by  will,  in  any  way  she  might  desire,  $500,000  out  of  the 
sum  set  apart  to  produce  her  annuity  of  $200,000. 

He  bequea&ed  to  each  of  his  four  daughters,  Mrs.  Elliott 
F.  Shepard,  Mrs.  William  Sloane,  Mrs.  Hamilton  McE. 
Twombly  and  Mrs.  William  Seward  Webb,  an  elegant  house 
on  Fifth  avenue  in  the  vicinity  of  his  own  mansion.  He 
then  devised  40  million  dollars'  worth  of  securities,  25 
millions  of  which  were  in  United  States  bonds,  to  be 
divided  by  the  trustees  equally  among  his  eight  children, 
five  millions  each.    Next  he  bequeathed  40  millions  more  in 


890     THK  YOUNG  VAND«RBII,TS  AND  THHIR  FORTUNES. 

securities,  ten  millions  of  which  were  in  CTnited  States 
bonds,  and  the  balance  in  securities  of  his  own  railroads,  to 
his  eight  children,  share  and  share  alike. 

He  gave  to  his  son  Cornelius  two  million  dollars  in  addi- 
tion to  all  other  bequests  made  to  him. 

George  W.,  his  youngest  son,  is  to  receive  at  the  death  of 
his  mother  all  that  she  possessed  during  her  natural  life,  and 
if  he  should  die  without  issue  his  inheritance  shall  go  to 
Wm.  H.,  the  son  of  Cornelius,  but  in  the  event  of  this  con- 
tingency not  occurring,  the  grandson,  Wm.  H.,  is  to  receive 
a  million  on  attaining  the  age  of  30. 

Then  followed  a  host  of  small  legacies  to  relatives,  friends 
and  employes.  He  left  $2,000  a  year  to  each  of  his  uncle 
Jacob's  three  children* 

He  gave  $200,000  to  the  Vanderbilt  University  of  Nash- 
ville, Tenn.,  founded  by  his  father;  and  he  left  about  a 
million  in  ihe  aggregate  to  twelve  charitable  and  religioas 
institutions. 

The  twenty-second  clause  of  the  will  is  the  most  import- 
ant, especially  to  his  two  eldest  sons.    It  reads  as  follows : 

^^  Ail  the  rest,  residue  and  remainder  of  all  the  property 
and  estate,  real,  personal  and  mixed,  of  every  description 
and  wheresoever  situated,  of  which  I  may  be  seized  or 
possessed,  or  to  which  I  may  be  entitled  at  the  time  of  my 
decease,  I  give,  devise  and  bequeath  unto  my  two  sons, 
Cornelius  Vanderbilt  and  William  K.  Vanderbilt,  in  equal 
shares,  and  to  their  heirs  and  assigns,  to  their  use  forever." 

Mrs.  Vanderbilt  was  appointed  executrix  and  her  foor 
sons  executors  of  the  will.  The  witnesses  were  Judge 
Charles  A.  Bapallo,  Samuel  F.  Barger,  0.  0.  Clarke  and 
I.  P.  Chambers. 

This  remainder,  left  to  his  two  sons  named  in  the  clause 
cited,  amounted  to  about  50  million  dollars  each,  in  addition 
to  their  other  bequests,  thus  leaving  each  of  them  nearly  as 
wealthy  as  their  grandfather  was  when  he  died.  Oorneliai 
is  said  to  be  worth  over  80  million  doUars. 


BUSINESS  AND  DOM^TIC  ATTRIBUTES.  891 

Gomelios  is  the  oldest  son.  He  is  a  year  or  two  over 
forty.  He  received  a  good  education,  and  had  an  excellent 
business  training  in  his  father's  offices  at  the  Grand  Central 
Depot.  He  has  always  been  remarkable  for  strict  attention 
to  bnsiness,  and  for  his  thorough  familiarity  with  everything 
connected  with  his  own  department,  as  well  as  having  a 
good  general  knowledige  of  all  the  departments  of  the  great 
railroad  system.  When  his  father  retired  from  active  work, 
and  the  presidency  of  the  roads,  Cornelius  succeeded  him  as 
Chairman  of  the  Board  of  Directors  in  New  York  Central 
and  Michigan  Central. 

Wm.  E.  took  a  similar  position  in  Lake  Shore,  and  was 
also  elected  President  of  New  York,  Chicago  &  St.  Louis, 
generally  called  the  Nickel  Plate  road. 

Cornelius  was  married  about  fourteen  years  ago  to  Miss 
Alice  Gwinn,  a  handsome  young  lady  of  Cincinnati,  and  has 
four  children.  He  resides  in  an  elegant  house,  at  the  comer 
of  Fifty-seventh  street  and  Fifth  Avenue,  and  has  a  hand- 
some summer  residence,  ^^  The  Breakers,"  at  Newport. 

He  is  connected,  as  an  active  worker,  with  various  chari- 
table and  religious  institutions,  and  is  very  favorably  known 
and  highly  respected  in  the  best  social  circles.  He  is  gain- 
ing a  great  reputation  through  various  donations  to  laudable 
objects.  Among  these  may  be  mentioned  the  Club  House 
in  the  vicinity  of  the  Grand  Central  Depot,  for  the  accom- 
modation of  employes  of  the  various  railroads  connected 
with  the  Yanderbilt  system.  Also  his  magnificent  gift  to 
the  Metropolitan  Museum  of  Art,  thj  celebrated  picture  of 
Bosa  Bonheur,  ^^The  Horse  Fair,"  which  is  valued  at 
$60,000.  Li  this  he  surpassed  the  most  liberal  efforts  of 
Mr.  (}eorge  I.  Seney,  in  one  of  his  grand  specialties,  namely? 
contributions  to  Art. 

William  Eissam  Yanderbilt,  the  second  son  of  Wm.  H., 
also  received  a  fair  education,  and  graduated  in  business  in 
the  Transportation  Department  of  his  father's  great  railroad 
aystem,  where  he  exhibited  marked  ability  in  mastering  all 


892     THB  YOUNG  VAND^RBII^TS   AND  TH«IR  FORTUNES- 

the  essentials^  and  in  doing  his  work  with  rapidity  and 
accoraoj.  He  is  considered  the  most  handsome  and  the 
most  imposing  in  appearance  of  any  of  the  family,  alihongh, 
as  I  haye  intimated  at  the  beginning  of  this  chapter,  they 
are  all  above  the  average  in  regard  to  the  manly  and  gentle- 
manly virtues,  owing  to  what  Darwin  would  have  designated 
the  ^^  natural  law  of  selection."  Wm  K.  has  a  grand  man- 
sion, on  the  comer  of  Fifty-second  street  and  Fifth  Avenue^ 
and  a  country  residence  at  Islip,  Long  Island,  where  he 
usually  summers.  He  is  about  thirty-eight  years  of  age. 
He  is  married  to  Miss  Alva  Smith»  the  daughter  of  a  wealthy 
merchant  of  Savannah.  She  is  a  leading  lady  in  society, 
considerably  above  the  average  in  good  looks,  and  possessed 
of  rare  conversational  powers,  with  an  ample  fund  of  wit 
and  humor.    They  have  three  children. 

Frederick  W.  Yanderbilt,  the  third  son  of  the  late  million- 
aire, seemed  to  have  had  a  greater  desire  for  study  than  the 
two  former,  hence  after  going  through  the  ordinary  course 
for  boys  at  home,  he  went  to  Yale,  where  he  graduated  in  the 
Sheffield  Scientific  School.  Thus  equipped  he  went  into  his 
father's  office,  and  made  himself  thoroughly  acquainted  with 
the  general  routine  of  the  whole  business,  in  every  depart- 
ment, 

He  married  Mrs.  Torrance,  formerly  the  wife  of  his  cousin. 
Young  Yanderbilt  fell  in  love  with  her  and  married  her  in 
a  year  afterward.  She  is  an  exceedingly  attractive  woman, 
and  the  union  is  a  very  happy  one.  Mr.  Yanderbilt  gave 
Frederick  the  house  at  Fortieth  street  and  Fifth  Avenue,  in 
which  he  himself  had  resided  prior  to  his  removal  to  the 
Fifth  Avenue  palace.  This  house  was  built  by  the  old  Com- 
modore  for  his  son  W.  H.  It  was  considered  to  be  tlie  finest 
residence  in  the  city  at  the  time  of  its  completion. 

George  W.  Yanderbilt,  the  youngest  of  the  four  sons,  is 
now  about  25  years  of  age.  He  is  not  so  robust  as  the 
others,  but  enjoys  pretty  good  health.  He  manifested  a 
decided  tendency  at  an  early  age  for  study  and  reading. 


s^  • 


tBM  ANTI-POVERTY  SOCIETY.  893 

He  is  said  to  be  eztensiyely  read  in  literature  for  his  age, 
and  has  written  some  essays  on  various  subjects,  which 
give  considerable  promise  of  success  with  perseverance  in 
that  line.  He  is  a  lover  of  the  fine-arts,  knows  the  history 
of  all  the  pictures  in  the  great  gallery  which  his  father  col- 
lected, and  like  that  revered  parent,  whose  constant  com- 
panion he  was  during  the  last  few  years  of  his  life,  he  is 
very  fond  of  the  opera.  His  grandfather,  the  Commodore, 
left  him  a  million  dollars,  to  which  his  father  added  another 
million  on  his  twenty-first  birthday. 

Qeorge  WI  has  recently  made  a  handsome  present  to  the 
Bond  stroidt  free  public  library,  donating  thereto  $40,000 
to  build  a  branch  of  that  institution  at  251  West  Thirteenth 
street  He  bids  fair  to  be  a  liberal  patron  of  letters,  and 
no  doubt  his  gifts  in  this  way  will  be  prudently  directed 
and  made  with  good  judgment.  The  man  who  can  appre- 
ciate learning,  as  George  Yanderbilt  has  proved  he  can,  will 
never  be  likely  to  leave  the  terms  of  an  endowment  to  a 
public  library,  for  instance,  which  he  intended  for  the  ben- 
efit of  the  whole  community,  so  loose  that  a  clique  of 
trustees  can  restrict  all  its  privileges  to  a  limited  number 
of  ladies  and  gentlemen  of  leisure,  by  narrowing  the  hours 
of  keeping  the  institution  open,  as  has  been  done  with 
those  two  fine  libraries  intended  by  the  donors  for  the 
people  at  large,  namely,  the  Astor  and  the  Lenox. 

New  York  is  comparatively  poor  in  its  libraries,  even  on 
the  supposition  that  these  public  trusts  should  not  be  tam- 
pered with,  and  their  original  object  defeated ;  but  when 
the  best  of  them  are  diverted  from  the  purpose  originally 
intended  by  the  philanthropists  who  presented  them  to  the 
public,  a  great  wrong  is  inflicted  on  the  citizens  of  New 
York. 

There  has  been  a  great  deal  said  and  written  during  the 
past  few  years  about  the  Yanderbilt  system  of  raiboads 
being  a  great  monopoly.  I  am  not  in  favor  of  monopolies. 
On  the  contrary,  I  have,  in  this  book,  as  well  as  through 
othar  mediums  of  reaching  the  public,  and  in  interviews 


S94     'tHS  YOUNG  VANDERBII,TS  AND  THKIR  FORTUNES. 

published  all  oyer  the  conntry,  denounced  monopolies  in 
Tery  strong  terms,  I  regard  the  Vanderbilt  property,  how- 
ever, in  the  light  of  a  great  trust,  the  four  young  men  aboye 
referred  to,  with  Ohauncey  M.  Depew,  the  President  of  New 
York  Central,  being  the  trustees,  and  I  question  very  much 
if  that  eminent  team  of  honest  and  able  reformers,  Henry 
George  and  the  Eev.  Dr.  Edward  McGlynn,  with  other 
minor  lights  of  the  Anti- Poverty  Society,  could  administer 
that  trust  with  greater  benefit  to  the  public,  nor  could  they 
employ  a  greater  army  of  well-paid,  easy-worked,  and  well- 
fed  men  by  any  State  or  National  supervision  or  manage 
ment,  or  by  breaking  up  the  great  corporation  into  probably 
a  hundred  or  more  small  companies. 

The  Vanderbilt  system  employs  200,000  people  at  better 
wages  than  they  can  obtain  elsewhere,  any  place  in  the 
world.  It  pays  over  $160  an  hour  for  taxes.  The  State  is 
paid  $1  for  every  $2.70  received  by  the  stockholders. 

Nor  can  I  think  it  possible  that  the  paternal  system  of 
(Government  proposed  by  the  Socialists,  with  all  the  modem 
discoveries  and  appliances  of  dynamite  to  aid  them,  could 
accomplish  as  much  in  a  century  for  the  well-being  and  ad- 
vantage of  the  people  of  this  State  and  of  the  whole  coun- 
try as  the  Vanderbilt  system  of  [railroads  has  done  in  half 
that  time.  I  see  no  reason,  therefore,  to  regard  the  present 
Vanderbilt  regime  as  a  grinding  monopoly. 

Until  the  Georgeites,  the  McGlynnites,  and  the  Socialists 
demonstrate  that  their  untried  systems  will  confer  greater 
happiness  on  humanity  than  honest  enterprise  in  the  best 
circumstances,  under  our  present  social  system,  with  all  its 
defects,  has  developed,  I  shall  be  tardy  in  subscribing  my 
adhesion  to  the  new  order  of  things. 

I  don't  wish  to  be  understood  for  a  moment  as  implying 
that  I  am  averse  to  free  thought,  the  highest  development 
of  humanity,  mentally  and  physically,  and  the  most  ad- 
vanced  evolution  in  the  same  direction.  I  aim  at  keeping 
abreast  of  all  these  within  the  free  exercise  of  my  own 
judgment^  and  it  is  thus  that  I  can  heartily  applaud  Di 


l^Hie  PI,UCE:  OI^  THll  GEORG«-MC  GI.YNN  PARTY.         S^S 

McQljnn  for  his  polite  but  firm  refusal  to  visit  the  Eternal 
City  for  the  purpose  of  being  corrected  or  regulated,  in  re- 
gard to  free  thought  and  free  speech,  as  viewed  from  the 
American  standpoint,  by  a  foreign  potentate,  who  assumes 
the  guardianship  and  governorship  of  all  human  affairs,  both 
from  a  spiritual  and  secular  point  of  view. 

The  days  of  Hildebrand  (Pope  Gregory  VII.)  are  gone  for 
ever,  and  Leo  XIII.  should  have  sense  enough  to  know  it. 
McGlynn  will  never  stand,  like  Henry  lY.,  shivering  in  his 
shirt  at  the  door  of  the  Vatican,  awaiting  his  sentence  of 
penance  to  Ganossa.  Bismarck,  however,  came  pretty  near 
repeating  this  little  historical  episode  not  long  since,  but 
the  great  Chancellor  of  the  German  Empire,  unlike  Mc- 
Olynn,  did  not  have  the  advantage  of  an  American  educa- 
tion, and  the  independence  which  it  confers.  He  may, 
therefore,  to  some  extent  be  excused.  I  think,  however,  that 
McGlynn  will  stick,  and  I  admire  his  firmness.  No  church, 
no  matter  how  powerful  its  foreign  allies  may  be,  can  sup- 
press free  speech  in  the  home  of  the  brave  and  the  land  of 
the  free. 

So,  in  their  battle  for  freedom  of  speech,  I  admire  the 
pluck  of  the  Gcorge-McGlynn  party,  but  as  regards  thcdr 
social  theories,  I  shall  remain  in  a  waiting  mood  until  I  see 
them  more  fully  demonstrated. 

To  return  from  this  little  digression,  however,  I  wish  to 
express  the  hope  that  the  young  Yanderbilts  will  manage 
their  vast  estate  so  as  to  inure  to  the  public  benefit  in  such 
a  way  that  the  most  fastidious  Socialist  will  ^e  unable  to 
take  exception  to  the  benign  results. 

The  young  Yanderbilts  have  at  intervals  k>peculated  in 
Wall  street,  but  conservatively,  with  the  exception  of  Wil- 
liam K.,  who,  in  the  past,  has  made  numerous  and  spas- 
modic turns^  chiefly  on  the  advice  of  older  operators,  which 
have  not  always  redounded  to  his  interest.  As  a  rule  these 
young  men  are  shrewd  and  cautious  financiers,  and  I  think 
it  is  safe  to  say  that  none  of  them  will  run  the  risk  of  losing 
his  handsome  fortune  in  speculation. 


«?^ 


-  ^**  ^.^>s^^,^ 


Copyright,  Wi,  by  Harp«r  A  Brotbcra. 


SOLOMON  ROTHSCHILD,   ANSELM  MAYER  ROTHSCHILD,   CHARLES  ROTHSCHILD, 

Head  of  the  old  House  at  Head  of  the  House  at  Frankfort,  Head  of  the  old  House  at 

Vienna.  1S12-35.  Naples. 


CHAPTER    XXXVIII. 

THE  ROTHSCHILDS, 

The  Begikning*of  the  Financial  Oabeeb  of  the  Gbeat 
House  of  Rothschild.— The  Hessian  Blood  Money 
WAS  THE  Great  Foundation  of  their  Fortune.— How 
the  Firm  of  the  Fiye  Obioinal  Brothers  was  Con- 
stituted.—Nathan  the  Greatest  Speculator  of  the 
Family. — ^His  Career  in  Great  Britain,  and  How  He 
Misbepbesented  the  Result  of  the  ^^  Battle  of 
Watebloo  -'  FOB  Speculative  Pubposes.— Cbeating  a 
Panic  on  the  London  Stock  Exchange  — His  Tebbob 
OF  Being  Assassinated.— His  Death  Causes  a  Panic 
on  the  London  Exchange  and  the  Boubses. 

AS  the  Rothschilds  have  indirectly  made  an  immense 
amount  of  money  in  Wall  Street  from  time  to  time,  a 
sketch  of  the  famous  house  and  its  methods  of  doing  business 
will  be  of  interest  in  this  volume.  The  house  is  represented  in 
America  by  Mr.  August  Belmont,  than  whom  there  is  no 
banker  more  widely  known  and  more  highly  regarded  all  the 
world  over.  It  is  due  to  the  wise  and  conseryatiye  manage- 
ment of  Mr.  Belmont  that  the  famous  Rothschilds  have  reaped 
fmllions  of  profits  from  American  sources.  The  original  name 
of  Rothschild  was  Bauer.  The  family  adopted  the  name  Roths- 
child (Red  Shield)  from  the  sign  which  the  founder  of  the 
house  kept  over  his  dingy  little  shop  in  Prankfort-on-the- 
Main,  in  the  odoriferous  quarter  called  the  Judengasse 
(Jews'  street).  In  this  little  shop  Mayer  Anselm  Rothschild, 
the  founder  of  the  house,  discounted  bills,  changed  money, 
examined  the  quality  of  coins,  bought  cheap  and  sold  dear. 
"  How  do  you  get  so  rich,  Mr.  Rothschild  i "  said  a  friend  of 
his  to  old  Anselm  one  day,  as  he  leaned  over  his  dusky  little 
counter.  The  original  head  of  the  great  house  said:  '^I 
buys  *  sheep'  and  sells  'deer.'"  His  knowledge  of  the 
quality  of  coins  was  marvellous.    He  could  detect  a  light 


398  THB  KOTHSCHII,DS. 

coin  the  moment  he  took  it  in  his  hand,  and  there  was  no 
imitation  diamond  or  gem  could  escape  his  eye.  He  had  the 
instinct  of  genius  in  detecting  everything  in  the  form  of 
money  or  jewelry  that  was  not  genuine.  He  was  a  walking 
directory  so  far  as  the  financial  standing  of  every  com- 
mercial man  in  Frankfort  and  in  several  other  important 
cities  in  Germany  was  concerned.  At  the  age  of  seventeen 
young  Bothschild  took  rank  with  the  best,  oldest  and  ablest 
financiers  of  Frankfort.  His  father,  who  died  when  Mayer 
Anselm  was  thirteen  yeats  of  age,  had  intended  to  make  him 
a  Babbi,  but  the  coin  had  such  attraction  for  him,  that  it 
quickly  drew  him  from  the  Talmud,  and  he  established  him- 
self in  his  father's  narrow  quarters  as  a  financier. 

It  is  not  generally  known  that  Bothschild's  first  great  start 
in  financial  life  was  given  to  him  by  the  use  of  the  twenty  mil- 
lion dollars  which  was  paid  to  the  Landgrave  of  Hesse,  Fred- 
eric II.,  by  Oeorge  JH.  of  England,  for  17,000  Hessians  to 
hdp  to  whip  George  Washington  and  retain  the  American 
Colonies.  This  blood  money  was  the  original  basis  of  the 
vast  fortune  of  the  Bothschilds.  It  was  deposited  with 
Mayer  Anselm  by  William  IX.,  the  successor  of  Frederic, 
whose  example  was  followed  by  other  great  ones  of  the  earth, 
and  in  a  few  years  the  agents  of  the  kings  and  princes  of 
Europe  were  flocking  to  Frankfort  to  negotiate  loans  with 
Bothschild  on  behalf  of  their  mighty  patrons. 

There  is  a  very  interesting  story  related,  giving  the  reason 
why  the  Landgrave  passed  by  all  the  great  bankers  of  Frank- 
fort and  entrusted  this  large  amount,  together  with  a  similar 
amount  afterwards,  to  Bothschild.  The  latter  had  occasion  to 
visit  Prince  William  at  his  palace  in  Cassel,  and  found  him 
playing  a  game  of  chess  with  Baron  EstorfiF.  Bothschild  pru- 
dently kept  quiet  and  did  not  interrupt  the  game,  but  stepped 
lightly  up  and  stood  behind  the  prince's  chair,  where  he 
could  watch  every  move.  The  Prince  was  getting  the  worst  of 
the  game^  and  was  becoming  a  little  excited.  Turning  around, 
he  said :  '^  Bothschild,  do  you  understand  chess  ?"    ^^Suffi* 


A  LUCKY  CAM^  OF  CHBSS. 

cienily  well,  jour  Serene  Highness,"  replied  Boihsohild, 
'^to  indnce  me,  were  the  game  mine,  to  castle  on  the  king's 
side."  The  Prince  took  the  hint,  and  won  the  game.  Then 
taming  to  Bothschild,  he  said :  ^^  Yon  are  a  wise  man.  He 
who  can  extricate  a  chess  player  from  such  a  difficulty  as  I 
was  in,  mnst  have  a  very  clear  head  for  business.^' 

The  Prince  afterwards  told  the  Baron  that  Bothschild  was 
as  good  a  chess  player  as  Frederic  the  Great,  and  that  a  man 
of  sach  capacity  mnst  be  able  to  take  good  care  of  money. 
The  foriy  millions  which  were  obtained  on  deposit  remained 
with  the  house  of  Bothschild  for  nine  years,  and  when 
Napoleon  invaded  Germany  in  the  interim,  the  money,  to- 
gether with  other  yaloables,  was  hidden  in  wine  casks  in 
Bothflchild's  cellar,  but  the  Conqueror  neyer  thought  of  tap- 
ping the  casks.  After  peace  was  proclaimed,  and  William, 
who  had  been  obliged  to  seek  safety  in  flight,  returned 
home,  old  Bothschild  was  dead,  but  his  son  Anselm  handed 
over  to  the  Pjince  every  dollar  of  the  forty  millions,  and 
tendered  him  in  addition  two  percent,  interest  for  the  entire 
time  of  the  deposit.  The  Prince  made  him  a  present  of  the 
interest. 

The  elder  Bothschild  had  five  sons,  namely :  Anselm,  who 
succeeded  his  father  in  Frankfort;  Solomon,  of  Vienna; 
Nathan  Mayer,  of  London ;  Charles,  of  Naples ;  and  James, 
of  Paris.  According  to  their  father's  will,  the  five  sons  were 
to  constitute  but  one  firm,  in  which  they  were  to  enjoy 
equal  profits,  and  never  divide  the  fortune.  The  business 
was  to  be  managed  at  Frankfort  as  headquarters,  to  which 
great  money  centre  all  the  profits  from  the  other  moneyed 
capitals  were  to  be  raked  in.  The  intention  of  the  old  man 
was  to  make  these  five  money  kings  dominate  Europe  by 
the  power  of  their  wealth,  so  that  the  ordinary  kings  would 
become  their  subjects,  and  in  many  instances  the  hopes  of 
the  great  old  chess  player  have  been  realized.  All  the  an- 
nual settlements  were  made  at  Frankfort,  and  the  brothers 
met  there  at  least  once  a  year  for  a  general  conference. 


400  THB  RO'THSCHILDS. 

This  system  continues,  and  though,  the  original  five  brothers 
have  all  passed  over  to  the  majority,  the  last  of  them,  James^ 
having  died  in  Paris  in  1868,  at  the  ripe  age  of  76,  yet  the 
representatives  of  the  house  in  the  large  cities  of  Europe 
sustain  the  principles  of  union,  harmony  and  consolidation 
laid  down  by  old  Anselm  Mayer  Bothschild.  Although  this 
union  has  been  the  great  source  of  the  Bothschilds'  success, 
it  would  be  hopeless,  however,  for  any  other  parent  outside 
the  Hebrew  race  to  imitate  the  injunction  of  old  Bothschild. 
The  idea  of  an  equal  division  of  the  profits  could  not  be  en- 
tertained for  a  moment  by  an  American.  The  sociaUstio 
family  tie  that  enjoined  such  an  arrangement  could  only  be 
rendered  binding  through  the  power  of  the  Hebrew  religion. 
Just  imagine  how  an  American  would  feel  if  by  some  lucky 
turn  of  fortune,  like  that  of  Nathan  Bothschild  in  London, 
after  the  battle  of  Waterloo,  he  should  make  six  millions 
in  a  day,  and  be  requested  to  divide  it  with  his  four 
brothers  I  He  would  sooner  spend  a  million  of  it  to  try  and 
break  the  old  man's  will,  and  employ  several  of  the  best 
sophistical  lawyers  he  could  find  to  prove  that  his  father 
was  demented. 

It  is  supposed  that  the  elder  Bothschild  died  worth  15  or 
20  millions,  but  this  is  in  a  great  measure  merely  conjecture, 
as  nobody  outside  the  family  ever  knew  what  their  real  wealth 
was,  this  fact  having  always  boon  kept  an  inviolate  family 
secret.  It  must  be  said,  to  the  credit  of  the  oldman,  that  in 
his  latter  days,  instead  of  becoming  stingy,  as  many  do,  he 
was  quite  liberal,  and,  according  to  the  scriptural  injunction, 
distributed  his  alms  in  secret,  without  even  permitting  his 
sons  to  know  anything  about  the  matter.  He  contributed 
largely  to  various  charities  in  the  same  way.  It  is  said  he 
would  go  through  the  poverty-stricken  districts  of  the  city 
after  night,  giving  money  to  the  needy,  from  whom  he  would 
retreat  before  giving  them  time  to  thank  him  for  his  benefit 
cence.  He  had  a  notion  that  those  who  gave  without  re- 
ceiving thanks  were  greater  favorites  with  the  Divine  Beinj^ 
who  rules  the  destinies  of  man. 


Fruoi  Harper's  Msgaxiiie. 


Copyrljcht,  1873,  by  Harp«r  k  Bro. 


NATHAN    MAYER    ROTH SCI LD 

(The  Financial  Hero  of  Waterloo.) 


ON  TH«  FISI.D  OF  WATl^RI/X).  401 

The  greatest  speculator  of  the  five  brothers  was  Nathan 
Mayer  Bothschild,  the  third  son  of  the  great  old  man.  He 
made  the  grand  hit  of  his  life  after  the  battle  of  Waterloo. 
He  kept  watching  the  movements  of  the  opposing  armies  on 
the  Continent,  and  followed  Wellington  very  closely  as  he 
approiEushed  the  f  amons  field.  It  seems  that  the  Iron  Bake 
was  not  at  all  pleased  with  Nathan's  attention  to  him,  as  he 
took  him  for  either  a  spy  or  an  assassin,  and  was  on  the 
point  of  liaying  him  arrested  several  times.  But  Nathan 
kept  his  purpose  steadily  in  view,  in  spite  of  the  fact  that 
bullets  were  whizzing  around  his  ears  in  showers.  He  sat 
on  his  horse  on  the  hill  of  Hougomont  with  perfect  com- 
posure in  the  teeming  rain  the  whole  afternoon,  looking 
upon  that  terrible  struggle  that  was  td  decide  the  destiny  of 
nations,  until  Blucher  arrived  and  the  French  were  put  to 
route. 

As  soon  as  Nathan  saw  this  he  put  spurs  to  his  steed 
and  made  aU  possible  haste  to  Brussels,  where  a  carriage 
with  swift  horses  was  in  waiting  to  carry  him  to  Ostend. 
At  day  light  next  morning  he  arrived  on  the  Belgian 
coast,  where  he  found  it  exceedingly  difficult  to  obtain  a 
boat,  the  sea  being  very  rough.  At  length  he  obtained  a 
boatman  as  courageous  as  himself,  who  undertook  the  task 
for  2,500  francs,  and  landed  him  at  Dover  in  the  evening. 
He  lost  no  time,  but  with  relays  of  the  swiftest  horses 
pushed  forward  to  London,  and  was  on  the  Exchange  next 
morning  ready  for  business,  long  before  the  opening  of  the 
market.  That  was  the  morning  of  the  20th,  only  a  day  and 
two  nights  after  the  battle  that  decided  the  fate  of  nations. 
Nathan  had  performed  a  great  feat.  He  acted  his  role  welL 
like  the  great  hero  whose  political  history  had  just  closed, 
Nathan  was  *^  grand,  gloomy  and  peculiar,"  in  the  financial 
sense  of  the  phrase.  He  was  an  embodiment  of  the  latest 
information  from  the  Continent.  In  defiance  of  winds 
and  waves  he  had,  at  the  risk  of  his  life,  outstripped  the 
swiftest  couriers  and  the  best  special  correspondents  of  that 


402  Tnn  ROTHSCHIIJ>S. 

day.  The  great  operators  flocked  aronnd  him  asking, 
"What  is  the  news  t "  Nathan  sighed  heavily  and  seem^ 
reluctant  to  telL  Eyentoallj,  this  important  piece  of  in- 
formation was  extorted  from  him,  in  strict  confidence: 
"Blucher,  at  the  head  of  his  vast  army  of  veterans,  was 
defeated  by  Napoleon  at  Ligny,  on  the  16ih  and  17th  (of 
Jane),  and  there  can  be  no  hope  for  Wellington  with  his 
comparatively  small  and  undisciplined  force."  This  state- 
ment was  substantially  true,  and  it  forcibly  reminds  one  of 
Tennyson's  poetic  remarks : 

"  AUe  which  is aUaUe 
May  be  met  and  fought  with  outric^t^ 

But  a  lie  whioh  is  half  a  truth, 
Is  a  harder  matter  to  fight.'* 

True,  Blucher  had  been  repulsed  at  Ligny .  The  Doke  had 
an  awkward  squad,  with  the  exception  of  the  English,  the 
Irish,  and  the  Scotch  Greys,  to  marshal  in  fighting  order, 
but  he  ^^  got  there  all  the  same."  Nathan's  secret  point  soon 
oozed  out,  and  in  less  than  an  hour  after  the  opening  there 
was  a  perfect  panic  on  the  London  Stock  Exchange.  Nathan 
had  his  brokers  at  work,  first  selling  '^  short,"  and  then,  when 
the  market  reached  bed  rock,  buying  on  the  loi^  side.  He 
bought  everything  that  he  could  raise,  borrow  or  beg  the 
money  for— consols,  notes  and  bills.  When  the  news  of 
Wellinglon's  victory  arrived,  forty-eight  hours  after  Nathan 
had  begun  to  manipulate  the  market,  and  when  he  was  ^Uong" 
of  everything  that  he  had  money  or  credit  to  purchase, 
securities  went  up  with  a  boom.  Nathan  realized  six  mil- 
lion dollars,  and  it  is  said  that  a  large  number  of  the  great 
operators  flocked  around  him  to  congratulate  him.  It  was 
lucky  for  Nathan  that  the  scene  of  his  operations  was  io 
London  instead  of  Wall  Street,  otherwise  Judge  Lynch 
might  have  had  something  to  say  before  the  settlements  had 
been  made. 

The  career  of  Nathan  Bothschild  in  England  was  remark- 
able, and  his  success  from  the  very  start  phenomenaL   Be 


•SB  MARRIBD  A  MII,WONAlR«'S  DAUGHTKR.  403 

began  his  specnlations  and  money-lending  operations  in 
Manchester  with  $500,  being  the  limited  amount  which  he 
was  permitted  to  draw  from  the  family  treasury  on  taking 
his  departure  from  Frankfort  to  seek  his  fortune  in  Great 
Biitain.  In  five  years  he  had  augmented  the  $500  to  a  million. 
He  then  remoyed  to  London.  There  he  married  a  daughter 
of  Levi  Cohen,  one  of  the  wealthiest  Hebrews  of  the  great 
metropolis,  well  known  by  the  pseudonym  of  Pound- Adoring 
Cohen.  His  father-in-law  was  afraid  that  Nathan  would 
soon  ruin  himself,  so  reckless  did  he  seem  in  his  specula- 
tions, estimated  by  the  conserratiye  standard  of  old  Cohen. 
Nathan  was  yery  fortunate  in  his  speculatiye  yentures  in  the 
public  funds,  and  managed  to  get  himself  introduced  so  as 
to  do  considerable  business  for  the  Gk>yernment  inits  trans- 
actions on  the  Continent.  His  first  introduction  to  the  Gk>yem- 
ment  was  through  the  Duke  of  Wellington,  who  during  his 
peninsular  campaigns  had  made  drafts  that  the  Treasury  of 
Qieat  Britain  was  dilatory  in  meeting.  Nathan  purchased 
these  drafts  at  a  large  discount.  He  afterwards  renewed 
them  to  the  Goyernment,  and  they  were  eyentually  redeemed 
at  par.  This  was  the  means  of  bringing^him  into  confiden- 
tial relations  with  the  ministry  of  Great  Britain,  and  he 
was  entirely  trusted  as  their  chief  agent  in  all  their  finan- 
cial matters  on  the  Continent.  This  gaye  him  immense 
adyantage  in  speculating,  and  enabled  him  to  giye  his 
brothers  in  the  other  great  capitals  of  Europe  a  large 
amount  of  yaluable  and  inside  information,  which  put  them 
ia  a  position  to  speculate  with  success  in  the  funds  of  their 
respectiye  Goyemments.  Nathan  had  made  arrangements 
to  get  the  yery  latest  information  from  Frankfort,  then  the 
centre  of  European  financiering,  by  well  trained  carrier 
pigeons.  He  had  also  seyeral  boats  of  his  own  by  which 
to  send  personal  messages  across  the  channel  in  cases 
where  these  were  requisite,  and  a  boat  always  in  readiness 
at  a  moment's  notice  in  case  his  presence  should  be  indis- 
pensable at  the  great  money  centre,  and  the  central  counting 
and  clearing  house  of  the  family. 


104  1^H9  &OTHSCHII4>S. 

Nathan  Bothschild  was  a  strange  and  inconsistent  com- 
pound of  liberality,  aTaricioasnesSi  and  penorionsness.  He 
entertained  his  guests  in  a  princely  style,  and  often  princes 
were  mingled  with  those  guests,  but  he  was  miserably  mean 
with  his  clerks  and  employees  generally.  Unlike  A.  T* 
Stewart,  who  followed  the  yery  opposite  rule,  and  had  his 
place  filled  with  bankrupt  dry  goods  men  as  employees,  the 
Sothschilds  would  never  engage  anybody  who  had  beenuiL 
fortunate  in  business.  They  had  a  superstitious  feeling  that 
misfortune  is  contagious,  and  they  carefully  avoided  ooming  La 
contact  with  any  of  its  victims.  Nathan  was  even  mor«  predae 
thanWm.  H.  Yandarbilt  in  calculating  the  pennies  in  his  limch 
bill ;  but  while  Vanderbilt  did  this  as  a  mere  whim  to  illafl- 
trate  his  business  precision  and  correctness,  Bothschild 
really  loved  the  pennies  with  ardent  devotion.  But  Baron 
Nathan,  even  when  he  had  accumulated  $70,000,000  or  $80,- 
000,000,  was  not  happy.  He  was  tortured  by  the  fear  of 
enemies,  who,  he  believed^  intended  to  murder  him.  Like 
Yanderbilt,  he  received  many  threatening  lettecs;  but 
unlike  the  New  York  millionaire,  who  paid  no  attention  to 
threats,  but  walked  and  drove  out  defiantly,  Bothschild  vas 
still  in  mortal  terror,  and  believed  that  the  threats  were  in« 
tended  to  be  executed.  Nathan  made  one  of  his  biggest 
piles  out  of  the  Almaden  quicksilver  mines  in  Spain.  The 
Spanish  Government  wanted  a  loan,  which  he  granted,  reoeiv- 
ing  the  mines  as  security  for  several  years.  He  got  up  a 
^^  corner"  in  quicksilver,  and  raised  the  price  100  per  cent 
He  realized  almost  $6,000,000  out  of  this  transaction. 
It  was  as  good  for  him  as  the  Waterloo  deal,  only  the 
returns  did  not  come  in  so  quickly.  Nathan  died  in  Frank* 
fort,  at  the  age  of  59,  in  1836.  His  last  words  were^ "  He  is 
trying  to  kill  me.  Quick,  quick,  give  me  the  gold."  His 
death  created  a  panic  on  the  London  Stock  Exchange,  and 
the  Continental  Bourses  were  greatly  embarrassed  by  the 
event.  The  news  was  conveyed  by  a  carrier  pigeon,  which 
was  shot  by  a  boy  near  Brighton.    The  message  was  briefly, 


HIS  D^ATH  CRBATM  A  PANIC.  405 

U  est  mart — '*  He  is  dead."  The  interests  of  the  house  of 
Hothscliild  are  now  scattered  oyer  the  globe,  and  it  is  proba- 
ble that  the  aggregate  wealth  of  all  the  branches  of  the 
firm,  including  the  possessions  of  the  yarious  members  of 
tiieir  families,  exceeds  $1,000,000,000. 


^y^t^Oj^eA^/ 


CHAPTEB    XXXIX. 

TRAYERS. 

Thb  Uhique  Chabacteb  of  Tbavebs— His  Yebsatilb  At- 

TAINMBNTB  —  ALTHOUGH   OF   A  QeNIAI*   AND  HUMOBOUS 

Disposition,  He  Has  Always  Been  a  Bbab— How  He 
Was  the  Means  of  Pbbsebyino  the  Coxmebcul  Su 

PBEMACY  OF  NeW  YoBK  —  He  SqUASHES  THE  EnOLISH 

Bbayado,  and  Sayes  thb  Obatobical  Honob  of  Oub 
CouNTBY— Has  the  Oysteb  Bbains!— It  Must  Ha  ye 
Bbainb.  Fob  it  Knows  Enough  to  Shhot-shut  Up— 
The  Dog  and  the  Bat— I  D-d -don't  Want  to  Buy 
the  D  d-dog;  I  Will  Buy  the  R-b-bat— Tbayebs 
on  the  Boyal  Stand  at  the  Debby  -  How  He  Was 
EuGHBED  by  the  Pool-Selleb — My  Pboxy  in  a  Speech 
at  the  Union  Club. — If  You  abe  a  S-s-self-made  Man, 
Wh-wh-y  the  D-deyil  Didn't  You  Pur  Mobb  H  haib 
ON  the  Top  of  Youb  Head  ?    Otheb  Witioisms,  &o. 

WM.  B.  tbayebs  is  one  of  the  most  notable  men  of 
Wall  Street  in  our  time. 

His  success  in  speculation  has  nsoallj  been  on  the  bear 
side,  which  is  rather  singular,  as  he  is  a  man  of  such  a  genial 
disposition,  with  a  kind  nature,  an  inexhaustible  supply  of 
sparkling  wit,^ahd  always  brimfid  of  humor. 

He  is  also  fond  of  athletic  sports  of  every  description, 
and,  in  fact,  is  a  kind  of  universal  genius,  so  various  and 
versatile  are  his  attainments.  Owing  to  his  immense  var- 
iety of  qualities,  tastes  and  pursuits,  he  has  one  of  the  most 
remarkable  records  in  Wall  Street ;  and  the  most  singular 
ibing  about  him,  probably,  is,  that  while  having  all  the  at- 
tributes usually  inherent  in  a  bull,  he  has  always  been  a 
beai  in  his  transactions* 

This  genial,  benevolent  and  high  spirited  man  has  never 
Wn  known  to  believe  that  there  was  any  value  in  any 
property. 

If  he  ever  by  chance  happened  to  make  any  moneys  on 


408  TRAVl^RS. 

iho  boll  side  of  the  market,  it  must  have  made  him  feel  yery 
unqpmfortable — ^in  fact,  conscientiously  miserable— as  he 
could  not  realize  that  by  any  possibility  it  belonged  to  him. 

It  is  due  to  Mr.  Travers^  howeyer,  that  New  York  has 
been  so  highly  classified  in  the  catalogue  of  cities,  in  fact, 
as  occupying  the  highest  position  in  public  estimation,  and 
that  it  has  attained  full  credit  for  being  the  largest  in  wealth 
and  population  of  any  city  in  the  Union.  This  fact,  now 
generally  admitted,  seemed  to  have  been  suspended  in  doubt 
until  Mr.  Travers  came  from  Baltimore  to  reside  in  our 
midst. 

It  will  be  remembered  by  many  Wall  Street  men  that  prior 
to  the  advent  of  Mr.  Travers  the  rivalry  among  several  of  the 
seaboard  cities  on  the  Atlantic  coast  was  very  keen.  Boston, 
Philadelphia  and  Baltimore  were  each  in  turn  disposed  to 
claim  pre-eminence.  Thanks  to  this  Wall  Street  magnate, 
the  matter  is  now  no  longer  in  dispute.  It  was  finally  decided 
in  this  way: 

One  day  after  Mr.  Travers  became  one  of  ourselves,  an 
old  friend  from  Baltimore  met  him  in  Wall  Street.  As  it  had 
been  a  long  time  since  they  saw  each  other,  they  had  a  con- 
siderable number  of  topics  to  talk  over.  They  had  been 
familiar  friends  in  the  Monumental  Oity,  and  were  not  theie- 
fore  restrained  by  the  usual  social  formalities. 

"I  notice,  Travers,"  said  the  Baltimorean,  "that  yon 
stutter  a  great  deal  more  than  when  you  were  in  Balti- 
more." 

"  W-h-y,  y-e-s,"  replied  Mr.  Travers,  darting  a  look  of 
surprise  at  his  friend;  "of  course  I  do.  This  is  a  d-d- 
damned  sight  b-b-bigger  city." 

That  settled  it.  Since  this  famous  interview,  and  this 
scientific  eiqplanation  given  by  Mr.  Travers  to  his  old  friend, 
no  skeptic  has  had  sufficient  temerity  to  entertain  any  doubt 
regarding  the  financial  and  coumiercial  supremacy  of  New 
York ;  its  leading  position  as  the  great  emporium  of  the 
Continent  has  never  since  been  questioned ;  and  there  are 


ON  THK  «NGUSH  ORATORi         409 

few  cities  outside  of  Ohio  that  can  claim  sach  power  in 
politics. 

It  is  due  to  Mr.  Travers,  also,  that  this  country  still  re- 
tains the  palm  for  oratory  and  volubility  in  speech,  and  has 
successfully  resisted  the  intrusive  and  pretentious  claims  of 
Ghreat  Britain  in  regard  to  that  great  and  somewhat  limited 
accompUshment 

The  destiny  of  this  nation  in  that  respect  hung  in  the 
balance  at  one  time. 

A  sort  of  go-as-you-please  oratorical  contest  was  being 
arranged  to  decide  the  question  of  championship  between 
Oreat  Britain  and  ourselves,  and  a  vaunting  and  loquacious 
Britisher  had  appeared  in  our  midst  to  dispute  the  claim  of 
tiie  national  cup  in  oratory  as  Eowell  had  done  for  the  belt 
in  pedestrianism. 

This  English  bravado  had  letters  of  introduction  from 
LordBandolph  Churchill,  Sir  Charles  Dilke,  Lord  Salisbury, 
Mr.Gladstone,  and  other  British  declaimers  to  Mr.  Travers 
and  other  American  gentlemen.  It  was  in  the  yachting 
season,  and  the  voluble  champion  was  invited  to  accom- 
pany a  party,  of  which  Mr.  Travers  was  the  leading  spirit, 
down  the  bay  in  Mr.  Travers'  yacht.  The  orator  had 
talked  everybody  within  earshot  of  his  voice  almost  deaf. 
When  the  party  arrived  at  the  dinner  table  it  was  hoped 
that  he  would  cease  for  a  short  time ;  but  when  every  other 
topic  seemed  exhausted,  as  well  as  the  patience  of  his 
listeners,  he  started  off  with  renewed  fluency  on  the  subject 
of  oysters,  which  constituted  the  dish  then  at  table. 

"  It  is  now  a  debatable  point  among  scientists,''  he  began, 
^as  to  whether  or  not  the  oyster  has  brains."  Travers, 
who  up  to  this  time  had  endured  the  infliction  of  his  loqua- 
cious guest^  with  the  calmness  of  Job,  said,  "I  think  the 
oyster  must  have  b-b-brains  because  it  knows  enough  when 
to  shHsh-shut  up." 

By  this  satiric  stroke  the  English  orator  was  dumbfounded 
and  almost  paralyzed ;  his  fluent  tongue  ceased  to  wag  with 


410  ^  TRAVBRS. 

its  usual  Tolability,  and  when  requested  to  name  his  time 
for  the  international  contest,  he  begged  to  be  excosed  antil 
cured  of  his  cold.  He  took  the  next  steamer  for  Liverpool, 
and  has  not  been  heard  of  since,  Mr,  Travers'  incisive  re- 
mark about  the  mental  attributes  of  the  oyster  thorooglily 
squashed  him,  and  saved  the  oratorical  honor  of  our  coantrj. 

Mr,  Travers  started  in  life  in  the  grocery  business  in 
Baltimore,  but  disaster  overtaking  him  there,  he  came  to 
New  York,  and  soon  thereafter  formed  a  co-partnership  with 
Leonard  W.  Jerome,  the  firm  being  Travers  &  Jerome.    Mr.  J 

Travers  met  with  fair  prosperity  from  the  start,  and  soon  J 

acciunulated  wealth.    The  worst  set-back  probably  that  he  j 

ever  received  during  his  residence  in  this  city  was  on  one  j 

occasion  on  his  way  home  after  the  business  day  was  over.  ■ 

Being  attracted  by  the  display  in  the  window  of  a  bird  ! 

fancier  and  dog  dealer,  from  curiosity  he  was  tempted  to  j 

enter  the  place.  One  of  the  conspicuous  objects  that  met 
his  eye  was  a  very  large  sized  parrot  Mr.  Travers  inquired 
of  the  proprietor  of  the  establishment  who  was  in  attend- 
ance "i-i-if  th-th-th-that  p  p -parrot  c-c-could  t-t-talk  I 

Its  owner  quickly  replied,  "If  it  couldn't  talk  better  than 
you,  Fd  cut  its  damned  head  off." 

Mr.  Travers  for  a  long  time  afterwards  made  up  his  mind 
some  time  or  other  to  get  even  with  this  dealer  in  animals 
and  birds,  and  succeeded  most  effectually.  His  coachman 
made  a  complaint  to  him  that  the  stable  was  overrun 
with  rats.  Mr.  Travers  said,  *'  Well,  you  m-m-mnst  hunt 
for  a  r-r-rat  dog.''  The  coachman  made  it  known  that  Mr- 
Travers  wanted  a  dog,  and  all  those  engaged  dealing  in  dogs 
overran  Mr.  Travers'  house  as  ferociously  as  the  rats  had 
overrun  the  stable,  to  get  him  to  buy  a  dog.  Among  therest 
who  responded  was  this  identical  man  who  kept  the  st^^ 
where  the  parrot  was.  Mr.  Travers  recognized  him  atonoe> 
and  told  him,  "  I-i-if  he  w-w-would  b-b-b-be  d^-down  at 
the  s-s-stable  in  the  m-morning  with  t-th  the  d^-dog,  k^ 
would  g-g-give  him  a  tr-tr -trial,  and  if  he  p-pr-proved  to 
b-b-be  a  g-g-good  r-rat  c-c-catcher,  would  b-b-buy  him- 


GBIM^ING  EVEN  WITH  TH15  DOG  FANCIER.  411 

Mr.  Trayers  sent  for  his  coachman  and  told  him  to  catch 
three  or  four  rats  and  put  them  in  the  bin,  and  he  would  be 
down  in  the  morning  to  try  the  dog.  So,  good  and  early  next 
morning  Mr.  Travers  was  on  hand  at  the  stable,  and  also  the 
dog  man  and  his  terrier.  Three  rats  haying  already  been  put 
into  the  bin,  Mr.  Trayers  ordered  the  dog  put  inside,  as  the 
.man  said  he  was  ready  for  the  fray,  and  the  rats  were  so 
ferocious,  and  showed  such  determined  fight,  that  they  kept 
the  dog  at  bay,  and  he  took  to  the  corner  of  the  bin  for 
protection.  By  and  by  the  owner  pushed  him  right  on  the 
rats,  and  after  a  pretty -fierce  tussel  he  did  secure  one  of 
them  and  shook  him  until  dead.  This  success  encouraged  a 
tussel  with  another,  which,  after  a  long  fight,  shared  the  same 
fate.  The  third  rat,  howeyer,  was  determined  to  resist  the 
dog,  and  did  so  nobly  and  fiercely,  making  a  prolonged  fight, 
which  resulted  in  a  draw,  and  it  was  hard  to  tell  which  was 
the  worst  hurt,  the  dog  or  the  rat 

The  owner  of  the  dog  then  turned  to  Mr.  Trayers  and 
said :  "Now  you  see  what  a  fine  dog  that  is,  won't  you  buy 
him  l*^  Mr.  Trayers  replied :  "I  d-d-don't  w-w-want  t-t-to 
b-b-buy  the  d-d-dog,  b-b-but  I'll  b-b-b-buy  the  r-rat/' 

Mr.  Trayers,  when  he  first  saw  the  owner  of  this  dog, 
remembered  him  in  connection  with  the  parrot.  Since  the 
rat  fight,  howeyer,  this  same  man  has  neyer  ceased  to  remem- 
ber Mr.  Trayers,  so  that  honors  remain  easy  between  them. 
Mr.  Trayers  has  neyer  been  known  to  be  at  a  loss  for  wit  to 
meet  an  emergency,  and  it  is  recognized  that  it  flows  as 
freely  from  his  lips  and  in  as  perfectly  natural  a  way,  as 
ordinary  conyersation  does  from  most  people. 

Early  in  the  Spring  of  last  year,  on  the  adyice  of  his 
physician,  Mr.  Trayers  took  his  maiden  trip  to  Europe,  and 
would  not  haye  gone  but  for  the  urgency  of  the  case,  always 
regarding  that  this  country  was  big  enough  for  him  without 
leaying  its  shores.  When  he  reached  England,  howeyer,  he 
found,  when  his  arriyal  was  announced  through  the  medium 
of  the  papers,  that  he  was  as  well  known  amongst  the  nobil- 


412  TRAVERS. 

iijy  sporting  world  and  other  distingaished  people  there  as 
he  was  in  his  own  country,  owing  to  his  connection  with  the 
turf  and  athletic  sports,  together  with  his  widely  published 
witticisms  which  had  preceded  him.  He  consequently  was 
overpowered  by  attention  and  hospitality,  and  participated 
to  as  full  an  extent  as  his  health  would  permit.  He  attended 
the  Derby,  and  took  an  interest  in  a  pool  which  resulted  ia 
his  fayor.  As  soon  as  he  ascertained  his  good  fortune,  he 
went  to  bag  his  money,  but  found  that  the  pool  man  had 
decamped  with  the  funds.  This  was  a  sad  disappointment 
He  could  scarcely  believe  his  eyes  or  the  various  statements 
which  went  to  corroborate  this  man's  disappearance^  bat  it 
was  evident  that  he  was  non  est,  as  he  was  nowhere  to  be 
found  about  the  stand  or  on  the  field.  Travers  made  com* 
plaint  to  a  policeman,  who  appeared  perfectly  indifferent  to 
the  charge.  Mr.  Travers  said:  "W-w-we  d-don't  d-d-do 
th-th-that  way  in  m-my  c-c-c-country.  I  b-b-belong  to 
America."  The  policeman  turned  impertinently  and  said: 
"You  had  better  go  back  to  your  own  country,  if  thaf s  tbe 
case."  This  was  an  indignity  to  which  Mr.  Travers  did  not 
feel  inclined  to  submit,  and  he  at  once  exhibited  his  badge^ 
which  admitted  him  to  the  royal  stand.  The  policeman 
recognized  it  with  affright,  and  almost  f  eU  on  his  knees  in 
making  profuse  apologies  and  offers  of  service,  showing  the 
cringing  spirit  which  prevails  in  England  to  royalty  and 
nobility,  by  the  people  who  occupy  the  position  as  servants 
to  these  high-born  personages.  Mr.  Travers  overlooked  this 
official  rudeness,  and  submitted  to  his  loss  as  cheerfully  as 
possible  under  the  circumstances. 

I  met  Mr.  Travers  on  board  the  Newport  boat  immediately 
on  his  return,  and  he  told  me  this  story.  I  replied,  "  that  I 
was  surprised  that  a  man  of  that  character  should  have  acted 
so  villainously,  as  I  had  always  supposed  that  such  men  were 
influenced  by  the  recognized  principle  the  world  over|Of 
honor  among  thieves."  Mr.  Travers  instantly  replied:  "Ho 
one  could  have  t-t-told  him  that  I  was  a  th-th-tiiief.** 


WITTICISMS  Olf  TH«  UNION  CI*UB,  413 

I  lememember  another  instance,  which  was  during  the 
war  period.  I  had  written  a  series  of  letters  on  national 
financial  matters,  which  were  then  before  the  country  for 
discussion,  and  they  were  published  in  the  New  York  Times, 
Mr.  Travers  was  met  on  his  way  downtown  by  a  Wall  Street 
friend  on  the  morning  that  one  of  these  letters  appeared  in 
the  paper,  who  asked  Mr.  Travers  if  he  had  seen  Mr.  Clews' 
last  letter.     Mr.  Travers  said,  "  I  h-h-hope  so." 

Shortly  after  this  I  was  a  guest  at  a  dinner  party  at  the 
Union  Club,  and  was  late  in  presenting  myself.  When  I 
reached  the  entertainment  (which  was  a  sort  of  mutual 
admiration  gathering),  the  speeches  had  commenced,  and 
I  no  sooner  had  taken  my  seat  than  Mr.  Lawrence 
Jerome  proposed  my  health.  While  it  was  being  drank, 
Mr.  Travers,  who  sat  immediately  opposite,  came  over 
and  whispered  iamyear,  "Clews,  you  d-d-don't  w-want 
t-to  speak  so  soon  after  o-c-oming  in  here,  d-d-do 
you  ?"  "  No,  I  do  not,"  I  replied.  ''  I'll  t-t-teU  th  th-them 
80,  will  11"  *'Tes,  I  wish  you  would,"  I  said.  He 
went  back  to  his  place  and  said,  '^Gentlemen,  I  have 
talked  with  Mr.  Clews,  and  he  d-d-desires  me  t-to  ask  you 
t-to  excuse  him  f-from  making  a  speech  on  th-th-this  occa- 
oon  and  i-if  you  w-  will  d-d-do  so,  he  w-will  w-write  yon  a 
Uetter." 

To  show  the  rapid  fluctuations  that  take  place  in  Wall 
Street,  and  how  even  the  best  judges  of  the  market  are  often 
mistaken  in  their  prognostications,  I  will  note  an  instance  in 
connection  with  Mr.  Travers.  On  his  return  from  Europe, 
which  was  early  in  July,  1885,  when  the  market  on  this  side 
was  weak,  cables  prior  to  his  departure  evidently  indicated 
to  him  that  much  lower  figures  were  in  order.  Just  prior 
to  the  arrival  of  the  steamer,  in  conversing  with  an  asso- 
ciate member  of  the  Exchange,  he  said,  "  B-b-barnes,  Til 
make  a  l-l-little  b-b-bet  with  you  ;  I'll  b-b-bet  you  L  1- 
lackawanna  will  b-b-be  under  six-ty  when  we  r-reach  New 
Y-York.''    Barnes  was  not  willing  to  make  the  bet,  how* 


414  TKAVKRS. 

ever,  but  on  their  arriyal,  which  was  two  days  after,  nothing 
surprised  Mr.  Trayers  so  much  as  to  find  Lackawanna  110 
instead  of  the  figure  60  or  less  which  he  had  predicted, 
especially  as  its  advance  did  not  cease  thereafter  until  it 
sold  at  130. 

It  has  been  justly  said,  that  if  a  man  will  wear  a  good 
looking  hat,  and  good,  well  polished  boots,  the  head  and  feet 
being  the  parts  which  first  catch  the  eye  of  an  observer,  it 
matters  veiy  little  what  kind  of  material  the  coat,  vest  and 
trousers  may  be  made  of,  if  they  are  whole  and  kept  clean. 
Though  they  may  be  threadbare  the  man  will  appear  to  be 
fairly  dressed,  and  will  look  much  younger  than  if  he  were 
careless  regarding  the  covering  of  his  extremities.  If  the 
latter  are  fairly  adorned  he  can  pass  muster. 

Knowing  this  fact,  I  had  always  been  in  the  habit  of  posing 
before  the  public  as  a  youth.  In  this  I  was  materiallj 
assisted  by  having  no  hair  on  the  top  of  my  head,  in  the 
place  where  other  people's  hair  usually  grows.  I  had  been 
this  way  for  twenty  years,  just  presenting  about  the  same 
appearance  as  when  I  was  born,  and  it  has  always  been  a 
matter  of  remark  how  youthful  I  looked. 

I  have  often  been  asked  what  I  did  to  keep  myself  look- 
ing BO  young.  My  truthful  answer  always  has  been  tha^ 
**  Virtue  is  its  own  reward."  This  theory  invariably  passed 
as  sound  in  my  case  until  it  was  knocked  into  a  cocked  hat 
by  Travers.  One  unlucky  day  he  removed  the  mask,  and 
changed  the  current  of  public  opinion  against  me  on  the 
much  cherished  subject  of  my  perpetual  bloom  of  youth. 

It  occurred  in  this  way.  Frank  Leslie's  Illustrated  Weekly 
had  published  a  number  of  pictures  of  the  active  busmess 
men  of  New  York,  v.  ho  were  known  in  the  community  as 
self-made  men,  and  mine  was  among  them. 

A  few  days  after  the  appearance  of  my  picture  in  this 
paper,  I  happened,  one  afternoon,  on  my  way  uptown,  to 
drop  into  the  Union  Club,  and  as  usual,  went  into  the  main 
room.  It  was  full  of  members,  largely  composed  of  a  scat- 
tering of  Wall  Street  bankers  and  brokers. 


EXPOSING  A  DKARLY  CHERISHED  SECRET.  415 

Travers  was  present,  and  when  he  is  on  hand  on  such  oc- 
casions, it  always  means  laughter  for  the  multitude  at  some 
one's  expense/   In  this  instance  it  happened  to  be  at  mine. 

As  I  entered  the  room,  Travers  said,  in  an  audible  voice: 
^' Hallo,  boys  I  here  comes  Clews,  the  self- made  man."  Then, 
addressing  himself  to  me,  he  said :  "I  s-s-say,  Cl-Cl-Clews, 
as  you  are  a  shs  -self-made  man,  wh-wh-why  the  d-d-devil 
didn't  you  p-put  more  h-h-hair  on  the  top  of  your  head  ?" 

This  story  having  gone  the  rounds,  as  it  soon  did,  drew 
attention  to  my  summer-appareled  head,  which  before  that 
time  had  enabled  me  to  pass  myself  off  as  a  youngster  just 
striking  out  at  the  commencement  of  life.  That  stroke  of 
Travers'  wit,  however,  has  been  the  cause  of  consigning  me 
ever  since  to  the  ranks  of  the  old  "  fogies.'*  Now,  everybody 
is  convinced  that  my  hair,  now  ncn  estj  had  already  come 
and  gone,  and  that  my  head  represents  the  work  of  ages. 

This  is  another  vivid  instance  illustrating  the  saying  that 
"many  a  truth  is  spoken  in  jest." 

When  Travers  thus  removed  my  mask  of  adolescence,  it 
made  me  feel  unhappy  for  some  time,  as  it  really  trans- 
formed my  entire  identity,  and  deprived  me  of  that  luxury 
so  dear  to  all  the  fair  sex,  and  to  many  of  my  own,  of  sail- 
ing under  false  colors  in  reference  to  my  age. 

StUl,  as  Travers  is  such  a  righteous,  good  fellow,  I  have 
had  to  forgive  him,  notwithstanding  the  gravity  of  the 
offense  in  having  hurt  the  most  tender  part  of  my  sensitive 
nature.  So  we  can  make  up  and  become  friends  again,  as  I 
Talue  the  renewal  of  his  friendship  even  at  the  cost  of  such 
a  great  personal  sacrifice  as  the  deprivation  of  my  supposed 
youthfulness. 

On  the  principle  that  misery  loves  company,  and  as  Mr. 
Travers  had  brought  misery  to  my  lot  by  drawing  public 
attention  to  my  bare  head,  I  found  consolation,  shortly  after- 
wards, in  a  huge  joke  that  the  same  facetious  individual  per- 
petrated upon  another  member  of  the  Club,  who  happened 
to  be  one  of  New  York's  most  celebrated  lawyers.    This 


416  fTRAVBRS. 

gentleman,  it  is  well  known,  has  been  connected  with  some 
of  the  largest  and  most  remanerative  railroad  cases  in  our 
courts  for  many  years,  and  being  considered  a  great  anthoiitj 
in  that  branch  of  legal  lore,  he  was  accastomed  to  exact  his 
own  terms  from  his  wealthy  clients,  which  meant,  in  most 
instances,  a  very  fat  fee.  This  gentleman  was  standing  on 
the  side  of  the  street  opposite  the  Club  one  afternoon,  while 
Travers  was  surrounded  by  a  cluster  of  club  men  on  the 
other  side.  **  Look  across  the  way,  boys,"  observed  Travers^ 
"th-th- there's  B-B- Barlow  with  his  hands  in  his  ownp-p- 
pockets  at  last." 

On  another  occasion,  when  Travers,  who  resides  at  New- 
port in  the  summer,  and  is  the  possessor  of  a  small  sized 
yacht  there,  which  he  obtained  some  years  ago  in  lien  of  a 
debt,  was  taking  a  refreshing  sail  on  his  yacht  in  the  bay 
one  morning,  it  happened  that  a  squadron  of  yachts  appeared 
in  his  vicinity,  and  there  was  going  to  be  a  race.  Trayers 
having  been  made  acquainted  with  the  fact,  invited  a  parfy 
of  friends  to  go  to  see  the  race.  As  soon  as  it  became  known 
to  the  yachtsmen  that  the  renowned  Travers  had  appeared 
on  the  deck  of  his  yacht,  a  committee  was  assigned  to  con- 
vey to  him  the  respects  of  the  members  of  the  sqoadroD. 
When  they  came  alongside  his  craft  he  invited  them  on 
board,  and  saw  at  a  glance  that  they  nearly  all  happened  to 
be  bankers  and  brokers.  Oasting  his  eyes  across  theglitte^ 
ing  water,  he  beheld  a  number  of  beautiful  white-winged 
yachts  in  the  distance,  and  finding,  by  inquiry^  that  they  all 
belonged  to  Wall  Street  well  known  brokers,  he  appew^ 
thereby  to  be  thrown  momentarily  into  a  deep  reverie,  and, 
without  turning  his  gaze  from  the  handsome  sqoAdron, 
finally  asked  his  distinguished  visitors,  "  wh-wh-where  w* 
the  cu-cu-customers'  yachts?" 

Comment  would  be  entirely  superfluous. 

A.  T.  Stewart,  the  world  renowned  retail  dry  goods  jn«^ 
chant,  was  elected,  on  one  occasion,  to  preside  at  a  me^^^i 
of  citizens  during  the  war  period,  Travers  being  amongst  ^'^^ 


A  HARD  HIT  AGAINST  A.   T.  STBWART.  417 

onmber  presont.  When  Mr.  Stewart  took  his  gold  penoU 
csuse  from  his  pocket  and  rapped  with  its  head  on  the  table 
for  the  meeting  to  come  to  order,  Travers  called  out,  in  an 
audible  tone,  ^^  O-cash  I "  which  brought  down  the  house, 
and  no  one  laughed  more  heartily  than  Mr.  Stewart,  although 
it  was  a  severe  thrust  at  himself. 

As  it  is  sometimes  said  of  a  stranger  who  comes  from  a 
foreign  country,  Travers  came  to  New  York  well  recom- 
mended, bringing  letters  of  introduction  with  him  from  the 
first  families  of  Baltimore,  and  credentials  which  at  once 
established  his  status  and  reputation.  So  it  was  not  neces- 
sary for  him  to  remain  long  on  probation  in  New  York. 
Coming  here  was  not  a  new  birth  to  him,  although,  in  some 
measure,  he  may  be  said  to  have  risen,  Phoenix-like,  from 
the  ashes  of  his  former  self,  as  business  misfortunes  had 
OTertaken  him  in  Baltimore. 

Travers  had  not  only  to  start  in  a  new  place  and  in  a  new 
business  when  he  came  here,  but  he  had  to  begin  the  ascent 
of  his  prosperous  career  at  the  very  bottom  of  the  financial 
ladder.  Owing  to  his  incomparable  geniality  he  met  with 
hosts  of  friends  from  the  very  start,  and  he  prospered  from 
the  word  "  go." 

Travers  formed  several  partnerships  at  various  times. 
After  making  considerable  money  in  the  one  above  alluded 
to  with  Mr.  Jerome,  the  partnership  was  dissolved,  and 
Travers  then  continued  business  alone  as  a  Wall  Street 
operator,  and  as  I  have  formerly  stated,  usually  acted  on 
the  bear  side  of  the  market,  which  was  remarkable  for  a 
person  of  such  a  buoyant  and  hopeful  disposition. 

In  his  business  operations  Mr.  Travers  has  always  shown 
great  sagacity,  mingled  with  caution,  and  his  prestige  as  a 
leader  became  so  great  that  he  soon  attracted  a  numerous 
following  of  operators,  who,  with  their  eminent  leader, 
formed  a  set  widely  known  in  speculative  circles  all  over 
this  country  as  the  "  Twenty-third  Street  Party."  Of  this 
party,  Mr.  Addison  Cammack,  the  celebrated  bear,  was  a 
prominent  member,  and  a  great  admirer  of  Mr.  Travers* 


418  TRAVKRS. 

Mr.  Travers  was  well-born  and  received  a  good  education, 
with  an  excellent  training  for  a  business  career.  He  mar- 
ried a  daughter  of  the  Hon.  Keverdy  Johnson,  who  was 
United  States  Minister  to  England  dnring  the  administra- 
tion of  Andrew  Johnson,  aud«who  was  one  of  the  most 
prominent  members  of  the  Bar. 

ilr.  Travers  has  always  been  famous  for  his  attachment  to 
out  door  sports  and  amusements,  and  on  the  principle  that 
water  finds  its  level,  so  did  Mr.  Travers  in  the  sporting 
world.  He  soon  became  President  of  the  Jerome  Jockey 
Club,  President  of  the  Bacquet  Club,  President  of  the  Ath- 
letic Club,  and  was  thoroughly  identified  as  a  leader  in 
the  large  majority  of  manly  and  out-door  sports,  in  which 
the  youth  of  New  York  city  and  its  suburbs  were  inter* 
ested. 

It  is  due  both  to  Mr.  Travers  and  his  quondam  partner, 
the  renowned  Leonard  W.  Jerome,  to  state  that  the  efforts 
of  these  two  men  have  been  chiefly  instrumental  in  ele- 
vating the  social  and  moral  tone  of  the  race-course  in  this 
part  of  the  country,  and  raising  it  to  a  standard  of  re* 
spectability,  to  which  before  their  reformatory  efforts  it 
was  partially  a  stranger.  It  was,  in  a  great  measure, 
through  their  exertions  that  the  race- track  became  a  fash- 
ionable resort,  in  the  North,  for  ladies,  as  it  had  been  in  the 
South  for  many  years,  especially  in  Kentucky.  The  ladies 
of  the  present  day  can  now  talk  horse  at  Jerome  Park, 
Sheepshead  Bay  and  Long  Branch  with  a  volubility  that 
twenty  years  ago  would  have  shocked  their  mothers,  and 
would  still  cause  their  grandmothers  to  have  epileptic  fits. 
So  the  ladies  of  the  present  generation  are  greatly  indebted 
to  these  two  gendemen  for  having  removed  the  socmJ  stigma 
from  the  turf,  in  this  section,  thus  enabling  the  fair  sex  to 
enjoy,  in  common  with  the  lords  of  creation,  and  without 
compunction  and  loss  of  dignity,  one  of  the  greatest  pleas- 
ures in  the  whole  range  of  out-door  recreations. 

The  breed  of  horses  has  been  improved  to  an  extent  that 


asm  OP  HIS  BEST  BON  MOTS.  ^19 

kayes  the  famoiis  Arabian  steed  of  yore,  that  outstripped 
the  flight  of  the  ostrich,  far  in  the  distance.  This  develop- 
ment in  speed  has  been  brought  to  its  highest  pitch  in 
Harry  Bassett,  and  TVm.  H.  Vanderbilt's  fondly  cherished 
Maud  S.,  now  the  property  of  Mr.  Bobert  Bonner.  For  this 
immense  evolution  in  speed  and  staying  powers  the  patrons 
of  the  turf  are  largely  indebted  to  Jerome  and  Travers. 

One  of  Travers'  best  bon  mots  was  inspired  by  the  sight 
of  the  Siamese  Twins.  After  carefully  examining  the 
mysterious  ligature  that  had  bound  them  together  from 
birth,  he  looked  up  blankly  at  them  and  said,  ^^B-b-br- 
brothers,  I  presume." 

Among  Travers'  contemporaries,  Mr.  Charles  L.  Frost 
was  very  well  known  a  few  years  ago.  His  specialty  was 
purchasing  the  junior  securities  of  foreclosed  railroads  which 
were  supposed  to  be  wiped  out,  so  far  as  any  visible  element 
of  value  was  concerned. 

Then,  at  a  time  when  it  was  quite  inconvenient  for  there- 
organized  companies,  he  would  pounce  down  upon  them 
with  some  sort  of  vexatious  litigation,  and  would  often  levy 
on  the  bank  balances  of  these  corporations  as  a  part  of  his 
proceedings  and  peculiar  methods  of  management.  He 
was  enabled  to  take  such  action  as  they  were  foreign  corpor- 
ations. In  this  way  he  made  it  exceedingly  difficult  for 
these  corporations  to  defend  the  various  suits  in  law  en- 
gineered by  him,  and  rendered  their  existence  exceedingly 
imcomfortable  by  placing  their  money  in  a  tight  place  and 
catting  off  the  interest. 

These  peculiar  methods  of  financiering  identified  Mr. 
Frost  in  a  measure  with  Wall  Street  men,  as  a  character 
whom  most  of  the  bankers  and  brokers  who  had  any  deal- 
ings with  him  have  had  good  reason  to  remember  feelingly. 
Frost  had  bushy,  white  curly  hair,  a  beardless,  full  face,  and 
a  very  red  nose,  which  could  only  be  acquired  at  consider- 
able .expense  or  as  the  result  of  chronic  dyspepsia.  There 
is  no  evidence,  however,  that  he  was  a  victim  of  this  natural 


420  T&AVBKS. 

malady,  so  his  highly-colored  proboscis  must  be  accoimi^d 
for  in  some  other  way. 

Mr.  Trayers  met  this  gentleman  one  morning  by  accident 
in  a  Fourth  Avenue  railroad  car  going  down  town.  Although 
formerly  acquaintedi  they  had  not  met  in  years,  and  time,  as 
indicated  by  his  white  locks,  was  beginning  to  tell  upon  Mr- 
Frost 

This  attracted  the  airfiention  of  Mr.  Trayers,  who  cordially 
shook  hands  with  the  old  gentleman,  and  after  making  a 
rapid  survey  of  his  person,  said,  "  Wh-why,  Mr.  Frost,  wh- 
wh-what  beautiful  white  hair  you  have ;  what  a  sa-su- 
superb  blue  n-n-necktie  you  wear;  what  a  m-m-mag- 
magnificent  red  nose  you  have  got.  If  I  had  s-s-seen  yon 
as  I  do  now  in  w-w-war  times,  I  should  have  taken  yon 
for  a  p-p~perf ect  p-p  -patriot,  red  white  and  blue.'' 

The  Death  of  TsAVEBa 

The  foregoing  reminiscences  of  Travers  were  written  and 
stereotyped  while  the  great  wit  and  financier  was  still  ali?e* 
I  have,  therefore,  not  deemed  it  necessary  to  recast  the 
matter,  but  consider  it  sufficient  to  add  a  few  of  the  salient 
points  in  Mr.  Travers'  character  and  career,  with  more  Inm 
moU  which  the  death  of  this  popular  man  brought  oui  He 
died  in  Bermuda,  March  19, 1887.  He  had  gone  iheiein 
the  previous  November,  where  he  had  a  residence  of  his 
own,  in  the  hope  that  the  climate  might  restore  him  to 
health,  but  the  malady,  diabetes,  had  got  too  far  ahead, 
and,  in  spite  of  the  best  medical  skill,  carried  him  over  to 
the  majority.  His  wit,  like  that  of  Tom  Hood,  did  not  fo^ 
sake  him  even  in  his  last  hours. 

While  on  his  death-bed  at  Bermuda  a  friend  called  to  see 
liim,>nd  said .  '*  What  a  nice  place  Bermuda  is  for  rest  and 
change."  Travers  replied :  "  Y-y-yes,  th-the  waiters  g-g-g^* 
th-th-the  ch-change  and  th-the  h*h-hotel  k-k-keepeii 
th-the  r-r-rest'' 


ADDI1M0NAI«  BON  MOTS.  421 

Ajnong  Travels'  famous  hits  the  following  is  one  of  the 
best :  Jim  Fisk's  zenith  of  glory  and  grandeur  was  in  the 
Ticinity  of  its  height  when  he  secured  the  control  of  the  Bos- 
f  on  &  Providence  line  of  steamboats.  He  constituted  him- 
self Commodore,  and  was  always  on  the  deck  as  they  de- 
parted each  day,  dressed  in  a  Commodore's  attire,  and  was 
evidently  very  much  elated  in  being  supreme  in  command 
in  connection  with  these  magnificent  steamboats.  Jay  Gould 
was,  financially,  equally  interested  with  him  in  the  venture, 
and  Commodore  Fisk,  in  his  usual  splurgy  manner,  had  a 
large  likeness  of  both  Gould  and  himself  hung  up  at  the 
head  of  the  stairs  leading  to  the  large  saloon  cabin  on  each 
of  these  steamboats.  Travers  and  others,  who  at  that  time 
were  leading  magnates  of  the  street,  were  invited  to  inspect 
one  of  these  large  boats  that  had  been  newly  fitted  up, 
gilded,  and  put  in  magnificent  shape,  with  a  band  of  music 
on  board,  etc.  Fisk  met  Travers  as  he  went  on  board, 
and  volunteered  to  escort  him  over  the  boat  to  show  him 
its  magnificence  and  superb  appointments.  As  they  went 
up  the  stairs  and  came  to  the  first  landing,  he  pointed  out 
the  likenesses  of  Fisk  and  Gould  that  were  hung  there, 
and  asked  Travers  if  he  didn't  think  they  were  good. 
Travers  replied :  "  I  th-think  th-th-they  are  v-v-very  good, 
b-b-b-but  t-to  m~make  th-th-them  c-c-complete,  th-there 
sh-sh-should  b-b-be  a  p-p-picture  of  our  S-S-S-Saviour 
in  th-th-the  m-middle." 

The  last  time  I  saw  Mr.  Travers  down  town  he  called  at 
my  office.  After  he  ran  his  eye  over  the  stock  quotations, 
I  said  :  "  The  market  is  pretty  stifl^  Travers."  He  said : 
"  T-yes,  it  is  th-the  st-st-stiffness  of  d-d-death ;"  and,  sure 
enough,  in  the  course  of  two  or  three  days  afterwards,  a  big 
smash  took  place." 

Kr.  Travers  once  said  to  a  friend :  '^  0-come  and  see  ma 
in  S-September.  If  y  -you  wish  I  will  give  you  a  p-point 
that  will  m-make  m-money.    He  wished  to  do  the  man  a 


422  TRAVBKS. 

favor  in  retmn  for  a  kindly  office.  Late  in  the  monXL  meof 
tioned  the  friend  dropped  into  Trayers'  office. 

"  0-come  for  that  p-point  ?"  asked  Mr.  Travera. 

'^Oertainlj,"  replied  the  friend. 

^  Well«  y-yon  are  the  luckiest  d-dog  I  know.  I  p-plajed 
that  p-point  two  weeks  ago  myself  and  lost  a  pile  of  money. 
Y-yon  stHstick  to  m-me  1-long  enough  and  o-close  enougli, 
and  Pll  l-land  y-you  in  the  p-poorhonse,  sore." 

When  "  Plunger**  Walton  was  in  the  height  of  his  prosper- 
ity on  the  turf  he  met  Travers  at  Saratoga. 

*^I  have  been  anxious  to  see  you  for  some  time,"  said 
Walton.  ^^I  think  we  can  do  business  together,"  he  added. 
*^  Fve  got  good  judgment  on  horses  and  horse  racing)  and 
you  haye  the  same  on  stocks  and  stock  speculation.  Fye 
made  $350,000  on  horse  races  in  the  last  two  years.  Now, 
you  giye  me  points  on  stocks,  and  I'll  giye  you  points  on 
races.    Is  it  a  go  t 

"Y-you've  made  three  h-hundred  and  f-fifty  fh-thoosand 
dollars  on  h-horse  racing?"  Trayers  repeated. 

"Yes." 

**And  you  want  m-me  to  g-giye  you  i)-pointB*on  st- 
etocks?" 

^'  In  exchange  for  my  points  on  horses.    Yes." 

"  Well,  I'll  give  you  a  f-first  rate  p-point.  If  you've  made 
that  much  in  two  y-years,  st-stick  to  your  b-b-bosinesB. 
It  is  a  f-first-rate  p  point." 

One  day,  many  years  ago,  Mr.  Trayers  was  standing  on 
Che  curb  of  New  street,  opposite  the  Exchange,  bnjiog 
some  stock  from  a  gentleman  whose  aspect  was  unmistak- 
ably of  the  Hebrew  stamp. 

**  Wh-wh-what  is  your  name  !"  asked  Trayers. 

**  Jacobs,"  responded  the  seller. 

•*&-b-butwh-what  is  your  Christian  name?" reiterated 
Trayers. 

The  Hebrew  was  non*^plussed,  and  the  crowd  was  oon- 
yulsed  with  laughter. 


TH9  SOCIAI«  FRIDB  OF  HIS  I<IFS.  42i 

The  first  time  Mr.  Travers  attempted  to  find  Montagae 
street,  in  Brooklyn,  he  lost  his  way,  although  he  was  near 
the  place.    Meeting  a  man  he  said : 

^'  I  desire  to  r-reach  M-montagae  st-street.  W-will  yon 
b-be  kik-kind  enongh  to  pnp-point  the  way  V 

"  Tou-y on  are  go-going  the  wrong  w-way,**  was  the  8tam> 
mering  answer.    ^^  That  is  M-montagne  stnstreet  there.'' 

^  Are  y-yon  mimick-mimicking  me^  making  fun  of  me- 
mo f '  asked  Mr.  Trayers  sharply. 

^  Knn*no,  I  assure  joxu  sir,"  the  other  replied.  ^  I-I  am 
bf^badly  af-*^flict-flioted  with  an  imp-impediment  in  my 
speech." 

"Why  do-don't  y-you  g-get   cured  J"   asked  Travers, 

solemnly.    "  G-go  to  Doctor ,  and  y-youTlget  c-cured. 

B-don't  y-you  see  how  well  I  talk  ?    H-he  cu-cured  me." 

The  fortune  left  by  Mr.  Travers  has  been  estimated  at 
(3,000,000.  He  left  three  sons,  William  B.  Travers,  John 
Travers,  and  Beverdy  Travers,  and  five  daughters,  four  of 
whom  are  married.  His  only  sister  is  Mrs.  Prince,  mother 
of  the  late  John  D.  Prince,  of  Piince  A  Whitely. 

Mr.  Travers  assisted  a  large  number  of  young  men  to  go 
into  business,  and  helped  to  give  the  start  in  life  to  several 
of  the  most  successful  men  in  Wall  Street. 

He  was  charitable,  and  his  secret  beneficences  are  said 
to  have  been  numerous.  He  enjoyed  the  wealth  he  had 
nukde  in  a  way  that  should  make  the  majority  of  mil'^ 
lionaires  blush  with  shame  at  their  parsimony.  He  was  a 
i<m  vivant  of  the  first  water.  He  maintained  five  domestic 
establishments  on  a  first-class  and  luxurious  scale,  not  like 
a  Caligula,  merely  for  his  personal  gratification  or  the 
pride  of  ostentation,  but  rather  for  the  development  of  those 
social  traits  of  character  in  which  he  had  few  equals,  and 
no  superior.  The  great  social  pride  of  his  life  was  to  make 
his  friends  feel  happy.  He  had  one  of  the  best  cellars  in 
New  York.  His  table  at  any  of  his  residences  was  not 
only  bountifnly  but  exhibited  a  menu  equal  to  that  at  Del- 


424  TRAVBRS. 

monico'a  His  favorite  wine  was  Madeira,  of  which  he  vas 
a  perfect  judge.  He  was  very  moderate,  however,  both  in 
eating  and  drink,  bnt  would  have  the  best  of  everjihiiig 
despite  the  cost. 

He  was  a  kind  and  indulgent  father,  but  was  pleased  to 
Bee  his  boys  manifest  ample  pluck  like  himself.  Apropos  of 
this  characteristic,  one  of  his  boys  came  home  one  day  with 
a  big  blackened  eye. 

**  W-w-w-where  d-d-did  you  g-g-g-get  ih-th-thatr 
inquired  the  father,  anxiously. 

'^In  a  f-f-fight,  sir,"  replied  the  8on»  who  has  a  siiDilar 
impediment  in  his  speech. 

•*  D-d-d-did  y-y-you  w-  w-w-whip  the  other  f-f-f ellow  f 

**T-y-yes,  sir," 

"QHj-q-quite  r-r-right  H-h-h-here's  a  d-d-dollar 
f-f-for  y-you.    Always  w-w-whip  the  other  f-f-fellow." 

Travers  himself  was  courageous,  tall,  and  sinewy,  and  in 
his  younger  days  a  great  athleta  He  was  68  years  of  age 
at  the  time  of  his  death.  He  was  a  member  of  twenty-seTen 
clubs,  social,  political,  and  athletic.  He  was  a  Democrat 
in  politics.  As  to  his  religious  belief,  I  expect  if  he  had 
been  questioned  on  that  he  would  have  given  the  same 
answer  as  another  eminent  man  who  cut  a  great  fignrein 
this  country:  "The  world  is  my  country;  to  do  good  is 
my  religion."  Travers  might  have  added :  "I  also  wish  to 
be  the  means  of  creating  and  diffusing  the  greatest  amount 
of  social  happiness  and  enjoyment  of  which  humanity  is 
capable.'' 

I  may  conclude  by  saying  of  Travers,  as  an  eminent 
author  observed  of  his  namesake  the  divine  William,  the 
Bard  of  Avon,  "  We  ne'er  shall  see  his  like  again." 


CHAPTER    XL. 

CHARLES  F.  WOERISHOFFER. 

The  Cabeeb  of  Chables  F.  Woebishoffeb,  akd  the  Br- 
8ULTANT  Effect  upon  SuooEEDiNa  Genebations.  -  The 
Peouliab  Poweb  of  the  Gbeat  Leabeb  of  the  Beab 
Element  in  Wall  Stbeet.— His  Methods  as  Cok- 
PABED  with  Those  Otheb  Wbeokebs  of  Values. — ^A 
BisKABOK  Idea  of  Aggbessiyeness  the  Buling  Ele- 
ment of  His  Business  Life.— His  Gband  Attack  on 
the  Yillabd  Pbopebties,  and  the  Consequence 
Thebbof.— His  Benefactions  to  Faithful  Fbiends. 

BY  the  death  of  Charles  F.  Woerishoffer,  Wall  Street 
lost  one  of  the  most  prominent  figures  which  has  ev^ 
shown  np  here.  Mr.  Woerishoffer  died  May  9,|  1886.  His 
career  is  one  worthy  of  study  by  watchers  of  the  course  of 
speculation  in  this  or  any  other  country.  The  results  of 
his  life*  work  show  what  can  be  accomplished  by  any  man 
who  sets  himself  at  work  upon  an  idea,  and  who  dcTotes 
himself  steadily  and  persistently  to  a  course  of  actfen  for 
the  development  and  perfection  of  the  principle  which  ac- 
tuates his  life.  Mr.  Woerishoffer  possessed  peculiar  per- 
sonal qualities  which  are  denied  to  most  men  and  to  all 
women.  He  had  the  magnetic  power  of  impressing  people 
with  confidence  in  the  schemes  which  he  inaugurated ;  that 
is  to  say,  he  had  the  power  of  organization — the  same 
power  has  made  other  men  great,  and  will  continue  to  make 
men  great  who  possess  it  in  all  walks  of  life.  Notable  in- 
stances may.  be  cited  in  the  cases  of  Bismarck,  Gladstone, 
Napoleon,  Grant,  and — coming  down  to  Wall  Street  proper 
—Gould,  Daniel  Drew,  old  Jacob  Little  and  the  Yanderbilts, 
especially  the  Commodore,  in  his  superior  power  of  aggres- 
siyeness. 

It  has  been  said  of  Mr.  Woerishoffer  that  he  was  fortu- 
nate.   He  was  indeed.    He  was  fortunate  in  the  possession 


426  CHAHI<]^  W09RISH0PP9R. 

of  natural  ability,  and  he  had  the  aptitude  to  take  advantage 
of  eyentSy  and  associate  circumstances  and  the  strength  of 
purpose,  and  to  direct,  instead  of  following,  the  operations 
with  which  he  became  connected.  He  was  the  leader  of  the 
bear  element  of  the  Street— at  least  he  was  such  during  the 
period  which  marks  his  successful  operations  here.  There  ia 
no  doubt  that  the  death  of  Mr.  Woerishoffer  was  hastened  be 
cause  of  the  great  strain  of  mind  growing  out  of  his  businesH 
transactions.  There  is  one  point  in  this  connection  which 
has  been  overlooked  by  his  biographers,  namely,  that  hia 
boldness  in  the  magnitude  of  his  dealings  was  resultant 
from  a  careless  or  non-calculative  mind.  I  do  not  believe 
that  Mr.  Woerishoffer  ever  undertook  a  speculation  of  any 
sort  until  he  had  carefully  calculated  all  the  chances  jpro  and 
ooriy  and  his  success,  remarkable  as  it  was,  was  largely  due 
to  the  combination  of  calculation  and  thie  natural  develop- 
ment of  business  conditions,  of  which  he  was  a  close 
student. 

Mr.  Woerishoffer's  conception  of  business  principles 
was  iconoclastic  to  an  intense  degree.  As  a  broker,  as  a 
business  man,  as  an  operator  in  stocks,  he  ^^  believed  in 
nothing ;"  that  is  to  say,  he  was  a  believer  in  the  failures  of 
men,  and  had  no  faith  in  the  corporations  and  enterprises 
which  were  organized  for  the  purpose  of  the  development  of 
the  best  interests  of  the  country  in  which  he  lived.  Theie 
is  another  view,  or  another  statement  of  this  peculiar 
feature,  of  the  iiharacter  of  this  man  which  may  be  given 
in  description,  and  this  is  illustrative  of  the  careful  study 
he  made  of  everything  passing  along  in  the  lines  of  life 
with  which  he  was  connected.  "  It  is  this :  That  Mr.  Woer- 
ishoffer, by  his  intimate  study  of  the  prospects  and  proba- 
bilities of  the  projedted  plans  of  enterprising  Americans, 
had  come  to  the  conclusion  that  the  majority  of  them  must 
fail,  and  that  the  first  flush  of  enterprise  would  be  changed 
to  a  darker  shade  as  time  progressed.  That  is  to  say,  he 
saw  and  knew  a  great  deal  of  the  organization  of  the  rail- 


HIS  SUDDBK  RIS«  ANO  AAPtD  PROGRESS.  427 

toad  schemes  whioh  have  marked  the  growth  of  our  rapid 
deyelopment  in  a  business  way,  and  he  judged  that  the  in- 
flated ideas  of  the  projectors  must  meet  with  a  check  as 
developments  were  made,  and  that  the  earning  capacity  of 
the  roads  would  not  equal  expectations.  Hence  he  sold  the 
stocks,  and  sold  them  right  and  left  from  the  start,  and  with 
his  followers  reaped  the  profits.  Woeri»hoflFer  never  in- 
dulged in  the  finesse  of  Gould  or  Henry  N.  Smith.  He  had 
the  German  ideas  of  open  fight,  and  he  attacked  everything 
indiscriminately,  losing  money  sometimes,  but  making 
money  at  other  times,  and  by  his  open  dash  and  persistency 
carried  his  point. 

There  is  no  doubt  that  the  successful  career  of  a  man  of 
this  sort  has  a  deleterious  effect  upon  those  who  follow  him 
in  succeeding  generations.  It  does  not  matter  how  success- 
ful the  development  of  the  business  industries  of  this  coun- 
try maybe  hereafter,  there  will  always  be  found  men  who 
will  speculate  upon  .the  ruination  rather  than  the  success  of 
the  best  interests  of  the  country  merely  because  Charles  F. 
Woerishoffer  lived  and  made  a  fortune  by  his  disl>elief  and 
his  disregard  of  the  growth  of  the  institutions  of  the  coun- 
try which  gave  him  a  home. 

Woerishoffer  was  a  wonderful  example  of  the  sudden  rise 
and  steady  and  rapid  progress  of  a  man  of  strong  and  tena- 
cious purpose,  who  adheres  with  firmness  to  one  line  of 
action  or  business.  He  was  born  in  Germany.  Woeri- 
Shoffar's  Wall  Street  career  was  begun  in  the  office  of  August 
Eutten,  afterwards  of  the  firm  of  Butten  &  Bond,  in  which 
Woerishoffer  subsequently  became  Cashier  He  left  this 
firm  in  1867,  and  joined  M.  C.  Klingenfeldt.  Mr.  Budge,  of 
the  firm  of  Budge,  Schutze  &  Co.,  in  1868,  bought  him  a 
seat  in  the  Stock  Exchange.  Some  time  after  he  entered  the 
Board  he  became  acquainted  with  ^r.  Plaat,  of  the  well- 
known  banking  firm  of  L.  Von  Hoffiman  &  Co.  Mr.  Woeri- 
shoffer was  entrusted  with  the  execution  of  large  orders, 
especially  in  gold  and  Government  bonds.    At  that  time 


428  ^  CHARI«KS  P.  WOKRISHOFFKR. 

the  trading  in  these  securities  was  veiy  large.  Afterwards 
Plaat  became  an  operator  himself ,  and  Woerishoffer  followed 
in  his  footsteps  as  an  apt  pupil.  Eventaallj  he  f onned  the 
firm  of  Woerishoffer  &  Co^  his  first  partners  being  Messrs. 
Schromberg  and  Schuyler,  who  made  fortunes  and  retired. 

Woerishoffer  was  connected  in  enormous  operations  with 
some  of  the  magnates  of  the  street ;  for  instance,  James  E 
Keene,  Henry  N.  Smith,  D.  P.  Morgan,  Henry  Villard, 
Charles  J.  Osborn^  S.  Y.  White,  Addison  Gammack,  and  last, 
though  not  least,  Jay  Gould.  He  was  especially  on  intimate 
terms  with  his  great  brother  bear,  Addison  Gammack,  both 
speculatively  and  socially.  Besides  being  a  bold  operator 
in  the  street,  Woerishoffer  was  associated  with  large  raihoad 
schemes,  which  gave  him  the  inside  track  in  speculation. 
He  was  connected  with  the  North  Biver  Gonstruction  Com- 
pany, the  Northern  Pacific,  Ontario  A  Western,  West  Shore, 
Denver  &  Bio  Grande,  Mexican  National,  several  of  the  SL 
Louis  Companies,  and  Oregon  Transcontinental.  He  was 
originally  a  rampant  bull  on  these  properties  until  they 
began  to  get  into  trouble,  and  then  he  became  a  farions  and 
unrelenting  bear.  He  smashed  and  hanmiered  them  down 
right  and  left.  He  soon  covered  his  losses,  and  began  to 
make  enormous  profits  on  the  short  side  of  the  market.  On 
the  bonds  and  stock  of  the  Kansas  Pacific,  when  it  became 
merged  in  the  Union  Pacific,  it  is  supposed  that  Woeri- 
^offer  cleared  over  a  million  dollars. 

Woerishoffer,  it  seems,  was  one  of  the  first  to  propose 
the  building  of  the  Denver  &  Bio  Qrande  Bailroad.  On 
this  enterprise  he  realized  immense  profits  for  himself  and 
his  friends.  The  stock  rose  until  it  reached  110,  and  was 
^* puffed"  up  for  higher  figures.  The  public  was  attracted 
by  the  brilliant  prospects  of  immense  profits  on  the, 
long  side.  Mr.  Woerishoffer  and  friends  held  hffgB 
quantities  of  long  stock,  but  sold  out,  and  afterwards  put 
out  a  large  line  of  shorts.  The  be^  campaign  had 
Woerishoffer  as  leader,  and,  it  is  said,  he  succeeded  io 


HB   "BUCHRKS'*  G0UI;D  and  SAG9.  429 

oovering  as  far  down  as  40,  and  some  even  lower.  In  1878, 
when  the  market  began  its  great  boom  on  account  of  the  re- 
smnption  of  specie  payment  and  the  general  prosperity  of 
the  country,  he  organized  a  combination  which  bought 
stocks  largely  and  sold  wheat  short.  On  this  deal  he  made 
large  profits,  and  began  to  develope  into  a  pretty  strong 
millionaire.  He  took  advantage  of  the  shooting  of  Presi- 
dent Garfield,  in  1881,  together  with  his  colleagues,  Cam- 
mack  and  Smith,  to  organize  a  bear  raid  on  a  large  scale, 
which  was  probably  one  of  the  chief,  although  somewhat 
remote,  causes  of  bringing  about  the  panic  of  1884. 

The  great  perspicacity  which  he  had  in  the  deals  en- 
umerated failed  him  in  1885.  He  thought,  as  the  wheat 
crop  was  small,  that  wheat  would  go  up  and  stocks  would  go 
down,  but  the  very  reverse  occurred.  The  disappointment 
and  depression,  very  probably,  resulting  from  this  brought 
on  the  aneurism  of  the  heart,  which  killed  the  great  bear 
operator,  and  his  death  was  a  fortunate  event  for  Wall 
Street. 

One  of  the  many  things  which  gave  Woerishoffer  great 
reputation  as  a  speculator,  both  here  and  in  Germany  and 
England,  was  the  bold  stand  he  took  in  the  fight  for  the 
control  of  Kansas  Pacific  against  Jay  Gould,  Bussell  Sage, 
and  other  capitalists,  railroad  magnates  and  financiers  in 
1879.  He  represented  the  Frankfort  investors,  and  had 
engaged  to  sell  a  large  quantity  of  Denver  estension  bonds 
at  80,  to  the  Gould-Sage  syndicate.  The  syndicate,  how- 
ever, knowing  that  they  had  the  controlling  influence, 
declared  the  contract  for  80  off,  and  ^^  came  to  the  conclusion, 
after  examining  the  road-bed,  that  the  bonds  were  not  worth 
more  than  70,"  and  they  would  not  take  them  at  a  higher 
figure.  Woerishoffer  then  made  a  grand  flank  movement  on 
the  little  Napoleon  of  finance  and  his  able  lieutenants.  He 
seemed  to  be  greatly  put  out  that  they  had  broken  their 
contract,  but  did  not  complain  very  bitterly.  He  immediately 
cabled  to  the  English  and  German  bondholders,  and  soon 


480  CHARI«^  P.   WOERISHOFPSR. 

seemed  a  majority  of  the  bonds  which  the  syndicate  wanted, 
and  deposited  them  in  the  United  States  Trost  Company. 
He  then  informed  the  syndicate  that  they  could  not  obtain 
a  single  bond  nnder  par  to  carry  out  their  great  foreclosure 
scheme.  It  was  this  circumstance  that  caused  Frankfort 
speculators  and  investors  to  come  so  lai^ly  into  the  New 
York  stock  market,  and  that  also  made  English  capital  flow 
in  fieely,  speculators  throwing  off  their  former  timidity. 
The  amount  involved  in  the  Gould-Sage  syndicate  deal  was 
about  $6,000,000  of  bonds,  thus  netting  Woerishoffer  consid- 
erably over  a  million.  This  deal  at  once  gave  him  an  interna- 
tional reputation  as  a  far-sighted  speculator,  and  this  repu- 
tation was  gained  at  the  expense  of  Gould  and  Bage,  owing 
to  their  disregard  of  the  contract  which  had  been  entered 
into. 

Woerishoffer  showed  great  sagacity  as  a  speculator  when 
Henry  Yillard  put  forward  his  immense  bubble  scheme  in 
Northern  Pacific  and  the  Oregons.  Although  invited  to  go 
into  the  big  deal  with  other  millionaire  speculators  who  had 
taken  the  Yillard  bait  so  freely,  Woerishofbr  kept  prudently 
aloof,  and  looked  on  the  players  at  the  Yillard  checkerboaid 
with  equanimity  and  at  a  safe  distance.  He  was  not  then 
considered  of  very  much  account  by  the  men  of  ample  means 
who  so  freely  subscribed  $20,000,000  to  the  Yillard  bubble. 
At  the  moment  when  these  subscribers  were  so  highly  elated 
with  the  idea  that  the  Yillard  fancies  were  going  far  up  into 
the  hundreds  and,  perhaps,  the  thousands,  like  the  bonanzaB 
during  the  California  craze,  Woerishoffer  boldly  sold  the 
whole  line  "  short."  This  was  a  similar  stroke  of  daring  to 
that  which  James  B.  Keene  had  perpetrated  on  the  bonanza 
kings  in  the  height  of  their  greatest  power  and  aniicipatioim. 
The  Yillard  syndicate  determined  to  squeeze  Woerishoffer 
out  entirely,  and  for  this  purpose  a  syndicate  was  formed  to 
buy  100,000  shares  of  stock.  There  were  various  millionaires 
and  prominent  financiers  included  in  the  syndicate.  Thaoe 
were  (he  financial  powers  with  which  Woerishoffer,  small  ip 


H^  OVERTHROWS  THE  VIUA&D  SYNDICATE.  431 

eomparison,  had  to  contend  single-handed.  The  feat  that 
Napoleon  performed  at  Lodi,  with  his  five  generals  behind 
him,  spiking  the  Austrian  gons  which  were  defended  by 
several  regiments,  was  but  a  moderate  effort  in  war  compared 
with  that  which  Woerishoffer  was  called  upon  to  achieve  in 
speculation.  He  took  things  very  coolly,  and  with  evident 
nnconcem  watched  the  actions  of  the  syndicate.  The  latter 
went  to  work  vigorously,  and  soon  obtained  20,000  shares  of 
the  stock  which  they  required.  It  still  kept  climbing  rapidly, 
and  so  elated  was  tibis  speculative  syndicate  with  the  success 
of  its  plans  that  it  clamored  for  the  additional  80,000  shares, 
according  to  the  resolution.  The  speculators  thought  they 
were  now  in  the  fair  way  of  crushing  Woerishoffer,  and  with 
a  hnzrah  obtained  the  80,000  shares  required,  but  Woerish- 
offer^s  brokers  were  the  men  who  sold  them  to  the  big  syndi- 
cate. It  was  not  long  afterwards  that  the  syndicate  felt  as 
if  it  had  been  struck  by  lightning.  In  a  short  time  the  Yil- 
lard  fancies  began  to  tumble.  The  syndicate  was  in  a 
quandary,  but  nothing  could  be  done.  It  had  tried  to  crush 
Woerishoffer.  He  owed  it  no  mercy.  The  inevitable  laws 
of  speculation  had  to  take  their  course^  and  the  great  little 
bear  netted  millions  of  dollars.  These  events  occurred  in 
1883. 

After  the  Yillard  disruption,  Mr.  Woerishoffer  became 
conservative  for  some  time,  and  was  a  bull  or  a  bear  just  as 
he  saw  the  opportunity  to  make  money.  When  the  West 
Shore  settlement  took  place  he  watched  the  course  of 
events  with  a  keen  eye,  and  was  one  of  the  most  prominent 
figures  in  pushing  the  upward  movement  upon  the  strength 
of  that  settlement.  His  profits  on  the  bull  side  then  were 
immense.  After  this  he  became  a  chronic  and  most  de- 
structive bear.  The  reason  he  assigned  for  his  conversion 
and  change  of  base  was  that  the  net  earnings  of  the  rail- 
roads were  decreasing,  and  did  not  justify  an  advance  in 
prices.  He  pushed  his  theory  to  an  extreme,  making  little 
or  no  aUowanca  for  the  recuperative  powers  of  the  country. 


482  CHARI,^  p.   WOERISHOPFH&. 

and  the  large  bear  contingent,  whicli  he  saccessMy  l6(( 
seemed  to  be  inspired  with  his  opinions.  These  opinioDfl^ 
pushed  to  the  extreme,  as  they  were,  had  a  very  demoralifr 
ing  effect  upon  the  stock  market,  and  constituted  a  potent 
factor  in  the  depreciation  of  all  values,  throwing  a  depress- 
ing influence  on  speculation,  from  which  it  did  not  recoTer 
until  many  months  after  Mr.  Woerishoffer's  death.  The 
great  bear  had  wonderful  skill  in  putting  other  operators  off 
the  track  of  his  operations  by  employing  a  large  number  of 
brokers,  and  by  changing  his  brokers  and  his  base  of  action 
so  often  that  speculators  were  all  at  sea  regarding  what  he 
was  going  to  do,  and  waiting  in  anxiety  for  the  next  move. 
It  was  considered  remarkable  at  the  time  that  his  death  bad 
not  a  greater  influence  on  the  stock  market  than  this  result 
proved.  If  he  had  died  a  week  sooner,  his  death  might 
have  created  a  panic,  for  he  was  then  short  of  200,000 
shares  of  stock.  His  short  accounts  had  all  been  covered 
before  the  announcement  of  his  death  on  the  Stock  Ex- 
change. 

Woerishoffer  was  almost  as  famous  for  his  generosity  as 
James  B.  Keene.  It  is  said  that  he  made  presents  to  faith- 
ful brokers  of  over  twenty  seats,  of  the  value  of  $25,000 
each,  in  the  Stock  Exchange.  He  made  a  present  of  a  $500 
horse  to  the  cabman  who  drove  him  daily  to  and  from  his 
office.  He  was  exceedingly  generous  with  his  employes.  A 
short  time  before  his  death,  feeling  that  the  strain  from  over, 
mental  exertion  was  beginning  to  tell  on  his  constitution,  he 
had  resolved  to  visit  Europe  for  the  purpose  of  recuperating, 
but,  like  most  of  our  great  operators,  b^  had  stretched  the 
mental  cords  too  far  before  making  this  prudent  resolve, 
and  he  died  at  the  early  age  of  43.  How  many  valuable 
lives  would  be  prolonged  if  they  would  take  needful  rest  in 
time  I  The  death  of  Woerishoffer  should  be  a  solemn  warn- 
ing to  Wall  Street  men  who  are  anxious  to  heap  up  wealth 
too  rapidly.  His  fortune  has  been  variously  estimated  at 
from  $1,000,000  to  $4^000,000.  He  left  a  widow  andtwi? 
little  daughters. 


HIS  GBNIUS  FOR  SPBCUI^ATION.  48^ 

Woerishoffer  had  simply  the  genias  for  speculation  which 
is  TmcontroUable,  irrespective  of  consequences  to  others* 
He  had  no  intention  of  hurting  anybody,  but  his  methods 
had- the  effect  of  bringing  others  to  min  all  the  same.  He 
merely  followed  the  bent  of  his  genias  by  making  money 
within  the  limits  of  the  law,  and  did  not  care  who  suffered 
through  his  operations.  All  speculation  on  the  bear  side 
inyolves  the  same  principle.  If  there  is  any  difference 
among  speculators,  it  only  consists  in  degree.  Large  trans- 
actions, like  those  in  which  Woerishoffer  was  engaged,  are 
more  severely  felt  by  those  who  have  the  misfortune  to  get 
"  squeezed ;"  but  it  all  resolves  itself  into  a  question  of  the 
surriyal  of  the  fittest. 

Woerishoffer's  success  in  this  country  seems  strange  to 
Americans,  but  how  much  stranger  it  must  have  seemed  to 
the  people  of  his  native  town  of  Henau  Hesse-Nassau,  where 
he  was  bom  in  1843,  in  comparative  poverty.  John  Jacob 
Astor  was  one  of  the  first  of  a  considerable  number  of  Ger- 
mans to  find  this  country  a  veritable  new  El  Dorado,  where 
peasants'  sons,  as  if  my  magic,  became  far  wealthier  than 
many  of  the  nobility  whom  they  had,  as  boys,  gazed  upon 
with  awe.  Who  could  have  foreseen  such  a  career  for  the 
poor  young  Gbrman,  who  came  to  New  York  in  1864  ?  He 
was  then  in  his  twenty-first  year.  He  had  had  some  experi- 
ence in  the  brokerage  business  in  Frankfort  and  Paris,  but 
he  came  here  poor.  Addison  Cammack,  who  was  to  become 
his  ally  in  many  a  gigantic  speculation,  was  then  prominent 
in  the  South,  where  he  had  favofed  the  cause  of  the  people 
of  his  State  during  the  war,  and  had  made  a  fortune.  D.  P. 
Morgan,  who  was  to  be  another  of  his  speculative  associates, 
had  already  won  a  fortune  by  speculating  in  cotton  ^n 
London.  Bussell  Sage  counted  his  wealth  by  the  millions. 
Jay  Gould  and  Henry  N.  Smith  had  gone  through  the  fever- 
ish excitement  of  a  Black  Friday,  and  either,  in  common 
parlance,  could  have  "bought  or  sold "  the  poor  young  Ger- 
man. Nevertheless,  by  strange  turns  in  the  wheel  of  fortune, 


CHA&I«BS  P.    WOBiaSHOPP^R. 

tor  he  seemed  to  be  bo  pecoliarlj  constitated  as  to  know  no 
fear,  and  would  often  tarn  apparent  defeat  tosaocessby 
possessing  that  trait  of  character.  It  will  be  a  long  time  be- 
fore another  such  determined  and  desperate  man  will  appear 
on  the  stage  to  take  his  place ;  in  the  meantime,  it  will  be 
plainer  sailing  in  Wall  Street,  besides  safer  for  operator 
Mr.  Woerishoffer,  as  an  operator^  was  fall  of  expedients.  He 
pat  his  whole  sool  into  his  operations,  and  not  onlj  would 
he  attack  the  stock  market  with  voraciousness,  bathe  would 
manipulate  every  quarter  where  it  would  aid  him ;  sometimes 
it  would  be  in  the  grain  market,  sometimes  by  shipping  gold, 
and  sometimes  by  the  manipulation  of  the  London  market 
He  had  all  the  facilities  for  operation  at  his  fingers'  enda^ 
in  fact  he  commanded  the  situation  to  such  an  extent  as  to 
make  his  power  felt.  Mr.  Cammack,  Mr.  Woerishoffer's 
associate,  while  usually  a  bear,  is  a  very  different  man  and 
not  to  be  feared,  for  that  gentleman  usually  sella  stocks 
short  only  on  reliable  information,  and  always^  to  a  limited 
extent  If  he  finds  that  the  market  does  not  go  down  by  the 
weight  of  sales,  he  soon  extricates  himself  at  the  first  loss. 
In  this  method  of  doing  business  lies  his  safety.  In  this 
way  he  will  sell  often  10,  20  or  30  thousand  shares  of  stodc 
and  make  the  turn,  but  will  not,  like  his  late  friend  Woeri* 
shoffer,  take  a  position  and  stand  by  it  through  thick  and 
thin,  and  browbeat  the  market  indefinitely  until  it  finallj 
goes  his  way.  At  the  present  time,  therefore,  the  bulls  have 
no  great  power  to  fear  whenever  they  have  meritupon  whioh 
to  predicate  their  operations.  The  future  will  be  brighter 
for  Wall  Street  speculators  and  investors  than  it  has  been  for 
alongperiod,  and  with  the  public  who  may  be  expected  to 
come  again  to  the  front,  greatly  increased  aetivi^  sbodfl 
be  the  result'' 


CHAPTEE    XLI. 

WOMEN  AS  SPECULATORS 

Wall  Street  no  Place  for  Women. — ^They  Lack  the 
Mental  Equipment. — ^False  Defenses  of  Feminine 
FiNANCiEBS.— The  Glaflin  Sistebs  and  Commodobe 
Yandebbilt.-'Fobtune  AND  Beputation  Alike  Endan- 

GEBED. 

A  8  speciilators,  women  hitherto  have  been  utter  failures. 
They  do  not  thrive  in  the  atmosphere  of  Wall  Street, 
for  they  do  not  seem  to  have  the  mental  qualities  required 
to  take  in  the  varied  points  of  the  situation  upon  which 
BucceBS  in  speculation  depends.  They  are,  by  nature,  para- 
sites as  speculators,  and,  when  thrown  upon  their  own 
resources,  are  comparatively  helpless.  Although  they  are 
able,  through  craft  and  subtlety,  to  rule  the  male  sex  to  a 
large  eztenl^  yet,  when  obliged  to  go  alone,  they  are  like  a 
ship  at  sea  in  a  heavy  gale  without  compass,  anchor  or  rud- 
der. They  have  no  ballast  apart  from  men,  and  are  liable 
to  perish  when  adversity  arises.  When  some  of  our  strong- 
minded  woman's'righters  read  this — and  I  hope  for  this 
honor  from  them — I  can  imagine  certain  of  them  launching 
epithets  of  scorn  against  my  head,  and  even  charging  me 
with  dense  ignorance  regarding  the  history  of  the  great 
women  of  the  world,  and  the  wonderful  achievements  of 
some  of  them.  They  will,  no  doubt,  cite  Joan  of  Arc  against 
me ;  Queen  Elizabeth,  Catharine  of  Bussia,  the  unfortunate 
and  beautiful  Mary,  Queen  of  Scots,  et  al.  Women,  in  gen- 
eral, rarely  summon  beautiful  women  in  their  own  cause,  but 
in  this  case  they  will  probably  do  so ;  for  it  is  a  trick  of  the 
sex  to  bring  feminine  beauty  to  play  as  a  trump  card  when 
man  is  the  game. 

The  wife  of  John    Stuart  Mill,  Mrs.  Elizabeth   Cady 
Stanton,  Julia   Ward  Howe,  and  a  host  of  other  great 


WOMEN  AS  SPKCUI^TORS. 

female  refonners  and  reyolutionists  will,  withont  doabt, 
be  quoted  against  mj  theory.  Several  of  the  strong-minded 
novelists  and  their  chief  works  will  be  cited  to  show  Low 
unfounded  is  mj  charge.  Ouida,  George  Elliot,  and  Geoige 
Sand  will  probably  be  arrayed  in  judgment  against  me. 
The  one  answer  to  all  this  must  be  that  such  women  are  t!ic 
exceptional  cases,  which  prove  the  rule  and  sustain  mj 
theory.  Besides,  these  fair  ones,  with  the  exception  of 
Ouida,  and,  to  some  extent,  Elizabeth  Gady  Stanton,  and 
possibly,  George  Sand,  have  never  tried  their  hands  at  spec- 
ulation. They  have  excelled  in  their  particular  Unes,  bat 
when  all  their  secret  history  is  known,  it  will  be  found  that 
men  were  the  source  of  their  inspiration.  I  am  aware  that 
the  opposite  theory  is  held,  through  false  gallantry ;  bnt  the 
chivalrous  knights  who  credit  the  fair  sex  with  more  spocn- 
lative  brains  than  they  possess  are  in  a  petty  minority,  and 
will  always  remain  so  as  long  as  men  have  manhood  enoagh 
to  decide  according  to  their  judgment  instead  of  their  emo- 
tions. 

Fact  is  the  best  test  on  this  question,  and  I  will  recite  a 
few  facts  in  the  history  of  some  of  the  female  speculators  of 
*\Yall  Street,  quite  aware  that  I  touch  a  very  delicate  subject. 
The  namby-pamby  ism  and  the  pseudo/*  gallantry  "now  so 
prevalent,  are  generally  opposed  to  any  fair  statement  in 
regard  to  woman's  real  financial  capacity,  and,  worse  than 
all,  woman's  true  interests  and  functions  are  greatly  aspersed 
and  prejudiced  by  these  false  sentiments.  When  carried 
away,  as  she  so  often  is,  by  the  insidious  flatteries  of  man 
and  the  showy  frivolities  of  fashion,  a  woman  is  rendered 
temporarily  blind  to  these  important  facts ;  but,  in  the  excep- 
tional instances,  where  she  reasons  calmly  and  reflects  pru- 
dently, she  pays  the  greatest  respect  to  those  of  our  sex  who 
dispense  plain  advice  and  blunt  opixaons.  Dudes  and 
designing  flatterers  may  revel  for  a  time  in  their  conquestsi 
but  the  opinions  of  men  of  judgment,  honesty  and  vir'^^ 
will  eventually  triumph  with  those  of  the  other  sex  who  are 
most  discerning. 


I^ADY  COOKB  AND  HKR  SISTER.  489 

liei  me,  then,  illustrate  m j  estimate  of  women  as  specu- 
latoTs  by  a  few  of  the  more  prominent  examples  I  have 
known  in  Wall  Street,  who  have  essayed  to  make  a  fortune 
after  the  manner  of  men.  I  shall  take  t(p  the  present  Lady 
Cooke  and  her  sister,  now  Mrs.  Martin.  Lady  Cooke  has 
now  a  virtual  '^castle  in  Spain,''  or  rather  in  Portugal, 
besides  one  of  the  most  elegant  mansions  in  London. 
My  knowledge  of  the  history  of  those  sisters  and  their 
financial  relations  and  business  connections  with  the  late 
Commodore  Yanderbilt,  go  to  illustrate  the  fact  yery  clearly 
that  the  cleverest  women  cannot  be  successful  in  Wall  Street ; 
and  if  this  is  so,  where  will  the  ordinary  female  be  found 
when  she  essays  the  role  of  an  operator  i 

The  notorious  firm  of  Woodhull,  Claflin  &  Co.,  in  their 
peculiar  combination,  included  Commodore  Yanderbilt.  I 
shall  say  something  about  their  methods  of  operation  before 
tonching  upon  the  history  and  biography  of  the  two  sisters, 
which  is  remarkable  in  the  extreme.  Very  soon  after  the 
Commodore  had  aided  to  set  these  two  women  up  as  brokers, 
in  Broad  Street,  the  firm  was  known  all  over  the  land. 
The  present  titled  Lady  Cooke  was  then  plain  Tennie  0. 
Claflin,  and  she  was  plain  in  every  sense  of  the  word,  ex- 
cepting in  face,  which  certainly  was  quite  pretty.  She  had, 
however,  less  personal  magnetism  than  her  celebrated  sister, 
Victoria  C.  Woodhull,  but  doubtless  made  more  impression 
on  a  well-known  journalist  of  this  city  and  upon  the  Com- 
modore  than  any  one  else,  until  she  met  Sir  Francis  Cooke. 
Tennie  was  rather  phlegmatic  in  temperament,  and  could 
therefore  exercise  but  little  influence  over  the  ordinary  man, 
but  she  was  cool  and  calculating,  and  had  evidently  more 
brain  than  she  seemed  to  possess.  She  could  wear  a  win- 
ning smile,  but  it  was  manifestly  put  on  for  the  occasion. 

I  recollect  her  calling  at  my  office  one  afternoon.  After  the 
usual  interchange  of  civilities,  she  told  me  she  wished  to 
deposit  a  check  for  $7,000.  The  check  was  signed  by  the 
wealthiest  man  in  Wall  Street,  and  was  promptly  accepted 


440  WOMEN  AS  SPKCUI^TORS, 

by  m J  cashier,  and  duly  credited.  A  few  days  after  this 
event,  Miss  Tennie  drove  up  to  my  office  in  a  cab.  She 
wore  a  look  of  enthusiasm  and  pleasant  surprise.  In  her 
countenance  one  could  read  at  a  glance  that  she  had  a  heayy 
thought  to  divulge.  So  she  said  she  had  a  **  point."  I 
don't  care  for  ^'  points ''  as  a  rule,  but  I  was  bound  by  all  the 
laws  of  chivalry  and  business  courtesy  to  give  the  lady  a 
respectful  hearing,  and  I  did.  The  point  had  emanated 
from  a  very  high  source,  and  for  that  reason,  also,  was  en- 
titled to  respectful  consideration.  The  charndng  Tennie 
wanted  to  buy  1,000  shares  of  New  York  Central  Thon^ 
always  on  the  alert  for  business,  I  was  not  then  atallanxions 
to  execute  the  lady's  order.  I  received  Miss  Claflin  with  all 
due  respect,  and  without  giving  her  any  intimation  that  I 
perceived,  by  my  peculiar  inspiration,  "the  gentleman  in 
the  fence,"  I  tapped  my  little  bell,  to  which  my  office  mee- 
senger  responded.  "  Tell  the  cashier,"  I  said,  "  to  make  out 
Miss  Tennie  Claflin's  account."  This  was  simply  the  work 
of  a  few  minutes,  and  Miss  Tennie  was  instantly  furniahed 
with  a  check,  including  interest  for  the  time  of  deposit 
Miss  Claflin  bowed  herself  out,  and  I  heaved  a  sigh  of  relief 
and  thought  that  everything  was  over  so  far  as  that  chedc 
was  concerned.    But  I  was  slighUy  mistaken. 

Tennie  went  to  the  Fourth  National  Bank  immediately,  and 
presented  the  check.  She  returned*  to  my  office  in  a  few 
minutes  afterwards.  P.  C.  Calhoun  was  then  President  of  the 
Fourth  National.  When  Tennie  returned,  she  said,  "Mr. 
Clews,  the  bank  wishes  to  have  me  identified."  I  called  a  boy 
and  told  him  to  accompany  Miss  Claflin  to  the  bank,  and  iden- 
tify her  as  being  entitled  to  the  amount  of  the  check.  Thifl 
sealed  her  credit  for  that  amount  at  the  bank,  owing  to  whioh 
I  obtained  the  rather  doubtful  distinction  of  having  been 
made  the  medium  of  largely  aiding  to  establish  the  firm  of 
Woodhull  &  Claflin  in  Broad  street.  Myself  and  the  Fonrth 
National  Bank  were  said  to  have  been  the  ^^ sponsors"  for 
this  consummation.    As  soon  as  I  ascertained  how  my  BAOSd 


fKNNlK'S  SCHKHK  didn't  WORK.  441 

was  being  oonnected  with  those  ladies,  I  had  a  private  in- 
terview with  the  President  of  the  Fourth  National,  which 
prevented  Tennie  from  using  my  name  to  a  great  extent 
thereafter.  I  have  never  attempted  to  take  any  credit  to  my- 
self for  this  affair,  but  there  is  one  thing  evident,  and  that  is, 
that  I  did  not  get  euchred  in  the  matter.  The  Commodore 
was  then  regarded  as  the  power  behind  the  throne,  or  behind 
the  fair  sex.  If  the  sisters  had  any  scheme  in  the  back- 
ground (and  I  have  reason  to  believe  they  had,)  I  did  not  get 
caught  in  it. 

Far  be  it  from  my  purpose  to  insinuate  that  these  cele- 
brated ^^  sisters"  are  a  sample  of  all  the  women  who  intrude 
into  speculative  circles.  These  facts,  however,  show  by 
what  sort  of  methods  two  of  the  most  notorious  female 
speculators  of  these  times  gained  their  success.  It  would 
be  an  aspersion  on  womanhood  to  suppose  that  many  women 
would  be  found  willing  to  resort  to  like  methods ;  but  it  is 
safe  to  say  that,  as  a  rule,  women  can  have  little  other  hope 
of  success  than  by  using  their  blandishments  to  win  the 
attentions  and  thd  services  of  the  other  sex.  There  are 
doubtless  exceptions  to  this  rule,  as  in  the  case  of  Mrs. 
Green,  whose  unaided  sagacity  has  placed  her  among  the 
most  successful  of  our  millionaire  speculators.  She  is,  how- 
ever, made  up  of  a  powerful  masculine  brain  in  an  otherwise 
female  constitution,  and, is  one  among  a  million  of  her  sex. 

If  women  are  fortunate  enough  to  escape  being  fleeced 
when  they  enter  Wall  Street,  it  can  only  be  from  extraor- 
dinary luck,  or  from  the  protecting  counsel  of  their  brokers, 
or  from  compassionate  indulgence  shown  to  them  when 
swamped  by  their  losses.  My  own  experience  shows  that 
when  they  lose  their  money — as  they  usually  do — they  are 
by  no  means  sparing  in  their  pleas  for  consideration ;  and 
this  fact  shows  ihat  women  who  aspire  to  this  path  to  for- 
tune are  not  usually  endowed  with  the  self-respect,  the 
modesty  and  the  independence  of  masculine  favors  which 
characteri2se  all  high-minded  women.    In  truth,  this  is  so 


442  WOHKN  AS  SPECUI^ATORS. 

well  understood  among  the  habitues  of  Wall  Btreet,  that 
while  a  woman  who  frequents  brokers'  offices  is  not  likeljto 
find  any  lack  of  attentions,  yet  she  is  sure  to  lose  cast 
among  those  who  bestow  such  gallantries.  In  a  word,  Wall 
Street  is  not  the  place  for  a  lady  to  find  either  fortane  or 
diaracter. 

The  explanation  given  by  Mrs.  Yictoria  Woodhull  Martin, 
the  wife  of  the  eminentLondon  banker.  Sir  John  B.  Martm^ 
is  somewhat  different  from  the  statement  herein  made  by  me 
in  reference  to  the  establishment  of  the  brokerage  firm,  nm 
ostensibly  by  the  famous  sisters ;  and  as  this  celebrated  lady 
shows  in  some  of  her  recent  utterances  that  she  has  done  so 
much  for  humanity,  truth,  and  financial  reform,  her  state- 
ment is  entitled  to  fair  presentation.  I  shall,  therefore, 
give  it  in  full.    It  is  as  follows  : 

^^  The  first  move  my  sister  and  I  made  in  this  direction 
was  to  establish  a  banking  and  brokerage  office  in  Broad 
street  This  step  we  were  induced  to  take  with  the  yiew  of 
proving  that  woman,  no  less  than  man,  can  qualify  herself 
for  the  more  onerous  occupations  of  life.  So  startling  was 
this  innovation  that  the  whole  city  of  New  York  was  aioused, 
and  when  we  entered  the  precincts  of  Wall  and  Broad  streets 
they  were  blocked  with  crowds  of  people  until  the  novelty 
wore  away.  But  to-day  women  can  establish  themsdyes  in 
any  business,  enter  any  avenue  of  life  that  tKey  are  qualified 
through  education  to  fill,  either  political,  financial,  scientific, 
medical  or  mechanical,  so  great  is  the  advance.  At  that 
time,  as  some  of  the  New  York  papers  said,  everything,  to 
the  external  view,  was  at  the  height  of  prosperity.  Bat  ve 
exposed,  in  our  Weekly,  one  nefarious  scheme  after  another 
when  we  realized  that  companies  were  floated  to  work  mines 
that  did  not  exist,  or  that,  if  they  did  exist,  had  nothing  Ib 
them,  and  to  make  railways  to  nowhere  in  particular,  and 
that  banks  and  insurance  societies  flourished  by  devoariAg 
their  shareholders'  capital.  The  papers  of  1872  said  that  in 
one  year  we  bad  exposed  and  destroyed  nearly  every  fraudu- 


I<ADY  MARTIN  RISES  TO  EXFI^AIN.  443 

lent  scheme  that  was  then  in  operation — ^railroad  swindles 
and  the  banking  houses  which  were  palming  them  off  on  the 
public.  Life  insurance  companies  were  reduced  from  forty 
to  nineteen  for  the  whole  country;  the  Ghreat  Southern 
bonds  and  the  Mexican  Claim  bubbles  collapsed.  More 
than  one  tried  to  buy  our  silence,  and  when  their  money  was 
refused  they  turned  and  charged  us  with  levying  blackmail, 
and,  losing  in  their,  rage  and  fear  all  sense  of  honor,  said 
that  we  were  immoral  women  or  we  would  not  have  com- 
menced such  an  undertaking.  Other  papers  took  up  the 
warfare.  It  brought  about  a  great  revolution  in  financial 
matters,  but  it  made  us  many  bitter  enemies,  for  we  were 
the  first  to  put  ourselves  into  the  breach.'' 

I  shall  make  no  attempt  to  contradict  the  bold  statement 
of  the  lady,  but  simply  quote  it  for  what  it  is  worth,  leaving 
the  inference  to  the  reader,  as  the  novelistic  phrase  goes, 
but  I  do  hold  that  the  very  result  of  the  experiment  to 
which  she  alludes  is  one  of  the  strongest  and  most  cogent 
arguments  in  favor  of  my  theory,  that  women  are  not  quali- 
fied by  nature  for  the  speculative  and  financial  operations  in 
which  so  many  men  have  made  their  mark.  Even  the  few 
apparent  exceptions  to  the  rule  have  been  sad  failures  com- 
pared with  the  achievements  of  the  male  sex  in  this  depart- 
ment of  human  enterprise.  ^^  Jennie  June,"  the  able  and 
accomplished  wife  of  Mr.  Croly,  the  well-known  journalist, 
has  essayed  the  speculative  role,  but  she  has  not  been  very 
successful.  When  women  such  as  these  have  failed  what  can 
the  ordinary  female  expect?  Well,  I  think  they  had  better 
abide  by  the  advice  of  St.  Paul  in  regard  to  women  speaking 
in  the  church.  Let  them  say  or  do  nothing  in  the  peculiar 
line  for  the  pursuit  of  which  they  are  evidently  disqualified, 
bat  if  they  want  to  know  anything,  ''  ask  their  husbands  at 
home."  Those  who  have  not  yet  obtained  husbands  may 
ask  their  fathers,  brothers  or  lovers,  and  if  they  do  so  they 
will  often  be  saved  a  world  of  trouble. 

There  has  recently  been  a  curious  craze  in  the  ranks  of 
young  ladies  as  well  as  among  married  women  for  specula- 


444  WOMEN  AS  SPKCUI^A'TOSS. 

tion,  many  of  them  thinking  ihey  could  make  a  {ortane 
in  a  few  days,  weeks  or  months,  and  it  is  nearly  time 
that  this  speculative  mania  should  be  checked  or  stopped. 
Maidens  of  uncertain  age  have  probably  been  foremost 
in  leading  this  moyement,  and  through  their  influence 
many  estimable  ladies  have  been  induced  to  bring  finan- 
cial trouble  upon  theur  husbands  and  families.  Many 
of  the  woman's  righters  think  that  it  would  be  a  glori- 
ous thing  to  follow  in  the  footsteps  of  Victoria  Woodhnll- 
Martin,  whom  they  imagine  to  have  been  a  suooeas 
in  that  line  of  business ;  whereas  she  was  a  sad  failure. 
Women  as  brokers  have  singularly  failed  in  every  known 
instance  of  experience;  Victoria  0.  has  been  much  more 
successful  as  an  investor  than  a  speculator,  and  the  best 
investment  of  her  life  was  that  of  Banker  Martin.  There  she 
made  a  decided  hit.  Perhaps^  her  Wall  Street  experienoe 
may  have  assisted  her,  in  a  great  measure,  to  accomplish 
this  feat.  Compared  with  her  two  former  marriages,  how- 
ever, her  happy  union  with  the  London  banker  is  a  decided 
success.  It  is  probably  only  in  the  matrimonial  line  that 
women  can  become  successful  speculators. 

Now,  I  shall  attempt  to  give  some  reasons,  with  all  due  re- 
spect to  the  fair  sex — and  without  trying  to  lower  them  in  the 
estimation  of  men—why  those  dear  creatures,  so  necessary  to 
our  happiness  in  many  other  respects,  are  not  by  nature,  nor 
even  by  the  best  possible  education,  qualified  to  become 
speculators.  Women  are  too  impulsive  and  impressionable. 
Although  they  often  arrive  at  correct  conclusions  in  the  or- 
dinary afiiedrs  of  life  with  amazing  rapidity,  they  don't  reason 
in  the  way  that  is  indispensable  to  a  successful  speculator. 
They  jump  to  a  conclusion  by  a  kind  of  instinct^  or  it  may 
be  a  sort  of  inspiration,  on  a  single  subject  or  part  of  a  sub* 
ject,  but  they  are  entirely  unable  to  take  that  broad  view  of 
the  whole  question  and  situation  which  the  speculator  has 
to  seize  at  a  glance,  in  the  way  that  Jacob  Little,  the  elder 
Vanderbilt,  or  Daniel  Drew  could  have  done,  as  I  hare 


IS  MRS.  GRK«N  AN  EXCEPTION  ?  445 

described  in  other  chapters.  Gould  possesses  many  of 
these  qualities,  though  he  has  never  been  a  speculator  like 
the  others,  in  the  ordinary  and  true  sense  of  the  term,  but, 
as  I  haye  clearly  shown  in  another  place,  made  his  great 
fortune  by  putting  two  or  more  wrecked  railroads  together 
and  making  others  believe  they  were  good,  and  selling  out 
on  them  afterwards,  and  not  by  legitimate  speculation  or 
iuTCstment. 

Women  who  have  hitherto  engaged  in  speculation 
haTe  not  yet  shown  that  they  are  capable  of  generaliz- 
ing the  causes  which  affect  the  market  as  these  kings  of 
finance  have  done,  nor  have  they  illustrated  .that  they  are 
possessed  of  the  ability  to  foresee  financial  events  in  the 
same  way.  Some  people  may  think  that  Mrs.  Hettie  Green 
'  may  be  an  exception  to  the  rule,  but,  without  attempting  to 
detract  from  the  abilities  of  this  eminent  and  wealthy  lady, 
I  hardly  think  she  has  the  mental  power  of  any  of  the  great 
operators  whom  I  have  named,  and  though  it  must  be  ad- 
mitted that  she  has  done  some  fine  work  in  manipulating 
Louisville  k,  Nashville,  I  am  of  the  opinion  that  she  would 
fall  very  far  short  of  leading  a  bear  attack  on  the  market 
like  any  of  those  for  which  the  late  Charles  F.  Woerishoffer 
was  famous,  and  in  organizing  a  ^^  blind  pool"  she  would 
stand  no  show  against  Gould,  Major  Selover,  Victor  New. 
comb  or  James  B.  Keene. 

Lady  Francis  Cook,  formerly  Tennie  C.  Claflin,  or 
'^Tennessee,"  as  she  was  baptized,  though  she  had  not 
the  intellectual  ability  of  her  sister  Victoria,  appeared 
to  exercise  more  influence  over  Commodore  VanderbUt 
on  account  of  her  greater  capacity  as  a  spiritualistic 
medium.  Li  his  latter  days,  as  is  well  known,  the 
Commodore  was  an  implicit  believer  in  Spiritualism,  and 
considered  it  expedient  to  consult  mediums  in  the  same  way 
that  the- ancient  Greeks  and  Bomans  went  to  their  oracles, 
before  engaging  in  any  great  enterprise.  It  is  not  generally 
known  that  the  fallacy  of  Tennie's  mediumistic  powers  was 


446  WOICKN  AS^  SPECUI«ATOSS. 

exposed  by  the  Christian  Brothers,  and  her  uBefulnees  to 
the  Commodore  considerably  impaired  thereby  m  hiB 
estimation.  This  came  about  through  the  influence  of  Mrs. 
Claflin,  the  mother  of  the  celebrated  sisters.  Her  supersti- 
tion ran  so  high  that  she  imagined  her  daughters  were  pos- 
sessed of  otH  spirits  through  the  power  of  Colonel  Blood, 
Victoria's  second  husband.  The  holy  men  received  dae 
credit  for  exorcising  the  spirits,  thus  freeing  the  sisters  from 
this  mysteriou£(  thraldom,  and  Victoria  from  Blood.  Hei 
great  prosperity  and  that  of  her  sister  began  from  this  date, 
and  at  the  beginning  of  the  celebrated  case  on  the  part  of 
^^  young  Corneel "  to  break  the  Commodore's  will  the  sisters 
suddenly  took  a  trip  to  England,  lest  they  might  be  called 
as  witnesses.  It  was  a  lucky  day  for  them,  and  their  speca* 
lative  career  is  probably  now  closed.  This  is  the  kind  of 
speculation  for  which  women  are  best  fitted  The  introdao- 
tion  to  this  great  ^^deal"  came  through  Wall  Street  indirectly, 
but  it  does  not  prove  by  any  means  that  women  can  be  suc- 
cessful operators  in  speculative  transactions  and  financiai 
investments.  It  simply  shows  that  they  are  excellent  in 
adventures  where  their  emotional  feelings  are  brought  to 
bear  upon  the  weaker  characteristics  of  men. 


CHAPTEB   XLII. 

WESTERN  MILLIONAIRES  IN  NEW  YORK. 

Eastwabd  the  Stab  of  Wealth  and  the  Tide  op  Beauty 
Take  theib  Goubbb. — Influenob  of  the  Faib  Sex  on 
This  Tendency,  and  Why.— New  Tobk  the  Obeat 
Magnet  of  the  CJountby. — ^Swinoino  Into  the  Tide 
of  Fashion.— Collis  P.  Huntington. — His  Cabeeb 
fbom  Penuby  to  the  Possessob  of  Thibty  Millions. 

— ^LeLAND    StaNFOBD. — FIBST    A    LaWYEB     IN     ALBANY. 

and  Aftebwabd  a  Speoulatob  on  the  Paoifio  Ooast. 
— Has  Bolled  Up  Neably  Fobty  Millions.— D.  O. 
Mills— AN  Astute  and  Bold  Finanoieb.  -  Coubaqe 
and  Caution  Combined — His  Bapid  Bise  in  Cam 
iFOBNiA.  —  He  Makes  a  Fobtune  by  Investing  in 
Lake  Shobb  Stock.— Pbinces  of  the  Pacific  Slope. 
— Maokay,  Flood  and  Faib. — Theib  Bise  and  Pbog- 
BE88.  V  William  Shabon. — ^A  Bbief  Account  of  His 
Obeat  Success.— Wm.  C.  Balston  and  His  Dabing 
Speculations.— Begins  a  Poob  New  Tobk  .  Boy,  and 
Makes  a  Fobtune  in  Califobnia.— John  P.  Jones. — 
His  Eventful  Cabeeb  and  Political  Pbogbess.— 
** Lucky"  Baldwin.— His  Business  Ability  and  Ad- 
vancement.—Lucky  Speculations.— Amasses  Ten  ob 
Fifteen  Millions. — William  A.  Stewabt. — Discov 
ebs  the  Eubeka  Placeb  Diggins. — His  Success  as  a 
Lawyeb  and  in  Mining  Entebpbisbs.— James  Lick.— 
One  of  the  Most  Eccentbic  of  the  Califobnia 
Magnates.— Beal  Estate  Speculations.— His  Be- 
quest    TO    THE    AuTHOB     OF    THE     ^' StAB   SpANGLED 

Banneb." — John  W.  Shaw,  Speoulatob  and  Lawyeb. 

NOT  a  few  Western  men  of  wealth  have  in  recent  years 
taken  up  their  abode  in  New  York.  This  is  partly, 
and  doubtless  largely,  due  to  the  influenoe  of  ladies.  The 
ladies  of  the  West  of  course  have  heard  of  Saratoga,  the  far* 
famed  spa  of  America,  and  as  the  fortunes  of  their  husbands 
mount  higher  and  higher  into  the  millions,  they  become 
more  and  more  anxious  to  see  this  great  summer  resort  of 


^8  WESTERN  MIIXIONAI&K  IN  NBW  YORK. 

wealth  and  fashion.  Their  influence  preyails,  and  at  the 
height  of  the  gay  season  they  may  be  seen  at  the  United 
States  or  the  Grand  Union.  They  are  in  practically  a  new 
world.  There  is  the  rustle  and  perfume,  the  glitter  and 
show,  the  pomp  and  circumstance  of  the  more  advanced 
civilization  of  the  East,  and  the  ladies,  with  innate  keennessi 
are  quick  to  perceive  a  marked  difference  between  this  gor* 
geous  panorama  and  the  more  prosaic  surroundings  to  which 
they  have  been  accustomed.  As  people  of  wealth  and  social 
position,  they  are  naturally  presented  to  some  of  the  society 
leaders  of  New  York,  whom  they  meet  at  Saratoga,  and  who 
extend  an  invitation  to  visit  them  in  their  splendid  mansionfl 
in  the  metropolis.  In  New  York  the  Western  ladies  go  to 
the  great  emporiums  of  dry  goods  and  fancy  articles  of  all 
sorts,  to  the  famous  jewelry  stores,  and  other  retail  estab- 
lishments patronized  by  the  wealthy.  They  form  a  taste 
for  all  the  elegancies  of  metropolitan  life,  and  this  is  re- 
vealed in  a  hundred  little  ways. 

They  have  been  accustomed,  for  instance,  to  wearing  two 
buttoned  gloves,  but  now,  in  emulation  of  their  New  Yoik 
sisters,  they  must  have  them  up  nearly  to  the  shoulder. 
Their  dresses  of  Western  make  do  not  bear  comparison  with 
the  superb  toilettes  of  New  York  ladies,  and  so  they  seek 
out  the  most  fashionable  modistes  in  the  city,  and  the 
change  in  their  appearance  is  as  marked  as  it  is  favorabla 
The  innate  refinement  and  love  of  elegance  which  is  so 
striking  a  characteristic  in  most  American  women  is  eiem- 
plified,  perhaps,  in  no  respect  more  strikingly  than  in  their 
taste  in  dress,  and  the  Western  ladies  soon  require  the  finest 
French  silks  for  their  dresses.  They  must  have  the  most  ex* 
pensive  real  lace ;  their  toilettes  must  be  numerous,  rich,  and 
varied,  and  the  refinements  of  other  articles  of  dress  ot 
ornament  to  which  American  women  have  attained  may  well 
astonish  and  even  awe  the  masculine  mind. 

In  a  word,  people  of  wealth  are  apt  to  be  drawn  to  New 
York  because  it  is  the  great  magnet  of  the  oountrj,  whoM 


NEW  YORK  CITY  THR  GRBAT  SOCIAL  CBNTRK.  449 

attractive  power  is  well  nigh  irresistible.  What  London  is 
to  Great  Britain,  what  Paris  is  to  the  Continent,  what  Borne 
was  in  its  imperial  day  to  the  Empire,  what  proud  old  Nin- 
eveh was  to  Assyria,  the  winged  lion  of  the  Orient ;  what 
Tyre  was  to  old  Syria,  whose  commercial  splendor  aroused 
the  eloquence  of  the  Hebrew  prophet— New  York  is  to  the 
immense  domain  of  the  American  Bepublic,  a  natural  stage, 
set  with  innumerable  villages,  towns,  and  populous  cities, 
with  mighty  rivers  and  vast  stretches  of  table-lands  and 
prairies,  and  far-reaching  harvest  fields  and  forests,  for  the 
great  drama  of  civilization  on  this  Continent.  New  York 
has  now  a  population  of  approximately  1,500,000.  By  the 
close  of  the  present  century  it  will  certainly  reach  2,000,000, 
and  the  next  century  will  see  it  increase  to  perhaps  ten  times 
that  number.  The  great  metropolis  attracts  by  its  restiess 
activity,  it  feverish  enterprise,  and  the  opportunities  which 
it  affords  to  men  of  ability,  but  in  the  connection  which  I 
am  now  considering  more  particularly  it  attracts  as  an  enor- 
mous lode-stone  by  its  imperial  wealth,  its  Parisian,  indeed 
ahnost  Sybaritic  luxmry,  and  its  social  splendor. 

New  York  city  has  more  wealth  than  thirteen  of  the  States 
and  Territories  combined.  It  is  really  the  great  social 
centre  of  the  Bepublic,  and  its  position  as  such  is  becoming 
more  and  more  assured.  It  will  yet  outshine  London  and 
Paris.  Gk>  where  we  may  throughout  the  country,  see  what 
cities  we  may,  there  is  always  something  lacking  which  New 
York  readily  affords.  There  is  emphatically  no  place  like 
New  York.  Here  are  some  of  the  finest  stores  in  the  world, 
and  mansions  of  which  a  Doge  of  Venice  or  a  Lorenzo  de 
Medici  might  have  been  proud.  Here  are  the  most  beautiful 
ladies  in  the  world,  as  well  as  the  most  refined  and  culti- 
vated; here  are  the  finest  theatres  and  art  galleries,  and 
the  true  home  of  opera  is  in  this  country  ;  here  is  the  glitter 
of  peerless  fashion,  the  ceaseless  roll  of  splendid  equipages^ 
and  the  Bois  de  Boidonge  of  America,  the  Central  Park ; 
here  there  is  a  constant  round  of  brilliant  banquets,  after- 


450  WKSTERN  MII^LIONAIRKS  IN  NEW  YORK. 

noon  teas  acd  receptions,  the  germans  of  the  elite,  the  grand 
balls,  with  their  more  formal  pomp .  and  splendid  circmn- 
stance ;  glowing  pictures  of  beautifid  women  and  brave  men 
threading  the  mazes  of  the  dance;  scenes  of  revelry  by  night 
in  an  atmosphere  loaded  with  4;he  perfume  of  rare  exoticsi 
to  the  swell  of  sensuous  music.  It  does  not  take  mnch  of 
this  new  kind  of  life  to  make  enthusiastic  New  Yorkers  of 
the  wives  of  Western  millionaires,  and  then  nothing  remains 
but  to  purchase  a  brown  stone  mansion,  and  swing  into  the 
tide  of  fashion  with  receptions,  balls,  and  kettle-dmms, 
elegant  equipages  with  coachmen  in  bright-buttoned  livery, 
footmen  in  top  boots,  maid-servants  and  man-servants,  in- 
cluding a  butler  and  all  the  other  adjuncts  of  fashionable 
life  in  the  great  metropolis.  It  is  of  interest  to  glance  at 
the  career,  by  the  way,  of  some  of  the  more  famous  financial 
powers  of  the  West,  who  have  either  settled  of  recent  years 
in  New  York  or  who  are  frequently  seen  here. 

CoLLis  P.  Huntington. 
One  of  the  financiers  who  may  be  seen  daily  entering  the 
palatial  Mills  Building  in  Broad  street,  New  York,  is  a  tall^ 
well-built  man,  with  a  full  beard  tinged  with  gray,  a  square, 
resolute  jaw,  and  keen  bluish-gray  eyes.  Though  now  in 
his  66th  year,  his  step  is  light  and  quick,  betokening  good 
habits  in  his  youth  and  duecareof  himself  in  his  later  years. 
He  is  one  of  the  best  known  of  American  financial  chief- 
tains. It  is  Collis  P.  Huntington.  He  is  a  born  leader  of 
men.  As  a  boy  of  15  he  came  to  New  York,  with  scarcely  a 
penny.  Now  he  is  worth  thirty  million  dollars.  He  was 
born  October  22d,  1821,  at  Harwinton,  in  Litchfield  countji 
Connecticut.  He  numbers  among  his  ancestors  Samnel 
Huntington,  one  of  the  signers  of  the  Declaration  of  Inde- 
pendence, who  was  also  President  of  the  Continental  (Jon- 
gress  and  Governor  and  Chief  Justice  of  Connecticut ;  and 
also  Bishop  F.  D.  Huntington  and  the  artist  Daniel  Hunt- 
ington.     C.  P.  Huntington's  father  was  a  farmer  and  small 


■i^fi.M.^..^. 


/  ( 


/ 


COLUS  P.   HUNTINGTON.  '451 

mannf actnrer.    In  his  f oimeenth  year  Huntington  left  school 
and  asked  his  father  to  give  him  his  time  on  condition  that 
he  shonld  support  himself.    He  came  to  New  York  in  the 
following  year,  1836,  and  bought  a  small  bill  of  goods,  a 
neighbor  of  his  father's  becoming  his  surety.    At  that  early 
age  he  showed  the  same  shrewdness  in  business,  the  same 
energy  and  resolution  in  carrying  through  his   projects 
as  he  did  in  later  life.      At  twenty-three  he  settled  at 
Oneonta^  Otsego  county.  New  York,  as  a  general  merchant. 
In  1844  he  married  a  Connecticut  girl,  who  proved  a  valuable 
helpmeet  in  days  when  it  was  never  supposed  he  would  ever 
attain  any  particular  financial  distinction.    In  March,  1849, 
he  sailed  for  San  Francisco,  going  by  way  of  the  Isthmus, 
and  following  a  consignment  of  goods  which  he  had  made  in 
the  previous  year.     He  was  now  in  his  28th  year,  and  a 
future  full  of  marvellous  success  awaited  him.     This  was 
not  immediately  apparent,  however.  Business  success  is  not 
usually  attained  without  long  and  persistent  efforts,  and  in 
spite  of  repeated  discouragements.    He  found  San  Francisco 
at  that  time  a  resort  merely  for  the  idle  and  the  reckless. 
It  did  not  prove  at  this  particular  juncture  a  satisfactory 
field  for  his  business ;  his  funds  ran  low,  and  he  determined 
to  go  to  Sacramento.    He  earned  his  passage  money  thither 
on  a  schooner,  by  helping  to  load  her  for  a  dollar. an  hour. 
In  Sacramento  he  started  in  business,  after  a  time,  with  a 
small  tent  as  a  store,  and' a  limited  supply  of  general  mer- 
chandise as  his  stock  in  trade ;  he  worked  hard  ;  he  labored 
early  and  late.    Here  he  met  Mark  Hopkins,  and  they 
fonned  a  business  copartnership,  which  proved  so  success- 
hi  that  by  1856  the  firm  was  known  as  one  of  the  wealthiest 
on  the  Pacific  slope.    California,  however,  was   isolated. 
It  was  a  long  trip  over  the  plains  by  wagon  trains  to  the 
nearest  point  of  commercial  importance  east  of  the  Bocky 
Hotmtains,  and  the  ocean  voyage  by  way  of  the  Isthmus  of 
Panama  was  long  and  slow.    A  railroad  to  the  East  was  im- 
peratively needed,  in  order  to  develop  the  enormous  re- 


462  WBSTBRN  MIIXIONAIRBS  m  KBW  YORK. 

Bonroes  of  the  broad  territory  lying  west  of  that  natonl 
barrier  known  as  the  Booky  Mountains.  Bat  how  to  bring 
it  about  was  the  question.  Few  were  daring  enough  to  sen* 
ously  grapple  with  the  problem.  It  was  in  the  store  o! 
Huntington  &  Hopkins  that  the  project  was  first  consideied 
with  a  resolute  purpose  to  push  it  through.  The  Ciril  War, 
however,  broke  out  just  then,  and  the  first  gun  fired  on  Fort 
Sumter  seemed  like  the  knell  of  this  great  project.  OoUis 
P.  Huntington  was  undaunted.  "  I  will,"  he  says,  "be  one 
of  the  eight  or  ten,  if  Hopkins  agrees,  to  bear  the  expense  of 
a  careful  and  thorough  survey.  The  result  was  that  seven 
gentlemen  agreed  to  defray  the  expense  of  such  a  sunrej. 
Two  subsequently  ceased  to  give  their  aid.  The  remaining 
five  organized  the  Central  Pacific  Bailroad  Company.  Mr. 
Huntington  at  once  went  to  Washington  to  secure  Goveni- 
ment  aid  in  constructing  the  first  trans-continental  railway. 
He  was  successful.  When  the  Pacific  Bailroad  bill  was 
passed  he  telegraphed  to  his  partners  with  characteristic 
humor  and  terseness :  ^'  We  have  drawn  the  elephant"  He 
at  once  came  to  New  York  to  form  a  syndicate  to  take  the 
bonds.  Many  at  such  a  time  would  have  gone  to  specula- 
tors begging  for  aid  and  pledging  his  bonds  for  railroad 
material  with  which  to  commence  the  great  line.  He  did 
nothing  of  the  kind.  The  French  saying  ^  Taujaunde 
raudacBj^  seemed  to  be  his  maxim.  He  was  always  bold. 
He  coolly  announced  that  he  would  not  dispose  of  his  bonds 
except  for  cash,  and,  strange  as  it  may  have  seemed,  he 
capped  the  climax  by  refusing  to  sell  any  at  all  unles8$l,600,- 
000  worth  were  taken.  He  was  again  successful,  but  the 
purchaser  required  more  security.  Th^eupon  Mr.  Hunt- 
ington made  himself  and  his  firm  responsible  for  the  whole 
amount.  It  was  thus  on  the  pledge  of  the  private  fortanea 
of  Mr.  Huntington  and  his  partner  that  the  first  fifty  miles 
of  the  road  were  built.  After  a  time,  however,  fands  ran 
low ;  it  seemed  inevitable  that  the  number  of  laborers  should 
be  reduced.   Certainly  more  means  were  necessary.  At  that 


couis  p.  HUNTraGTON.  453 

tiine  the  Gk>yeTiunent  held  the  first  mortgage  on  the  road, 
and  no  Qoyermnent  subsidy  bonds  were  obtainable  nntil  a 
section  of  fifty  nules  of  the  road  had  been  completed.  Hont- 
ington  and  Hopkins  stepped  into  the  breach,  and  agreed  to 
keep  five  hundred  men  at  work  for  a  year  at  their  private 
expense,  and  three  other  gentlemen  agreed  to  furnish  three 
hundred  men  for  the  same  length  of  time.  This  resolution 
ended  their  troubles ;  the  road  was  built  through  to  a 
connection  with  the  Atlantic  seaboard,  and  trans-continental 
transportation  became  a  fact  and  no  longer  a  dream.  Mr. 
Huntington  came  to  New  York  again,  and  here  he  now  re- 
sides in  a  fine  mansion  on  Park  ayenue.  He  is  still  a  hard 
worker,  but  after  business  hours  he  dismisses  as  far  as  pos- 
sible the  cares  of  his  financial  functions.  Among  the  rail- 
load  systems  controlled  and  operated  by  him  and  his  asso- 
dates,  the  executiye  conduct  of  which  is  largely  directed  by 
himself,  are  the  Central  Pacific,  the  Chesapeake  &  Ohio,  the 
Trans-Mississippi  roads,  and  the  Southern  Pacific,  making  a 
total  of  nearly  eight  thousand  miles  of  line.  He  is  also 
heayily  Interested  in  roads  in  Mexico  and  Central  America 
and  steamship  lines  plying  to  the  Chesapeake  Bay,  to 
Brazil,  China  and  Japan  and  other  parts  of  the  world. 
DirecUy  or  indirectly  he  has  thirty  thousand  men  under  him. 
In  business  he  is  an  autocrat ;  his  manner  is  quick  and  de- 
ciaiye ;  he  is  direct  in  his  speech,  and  expresses  himself  with 
force  when  he  says  anything.  He  also  knows  when  silence 
is  golden.  He  is  a  good  story  teller,  and  has  a  large  fund 
of  anecdotes ;  he  has  original  wit,  a  store  of  quaint,  homely 
sayings,  which  are  often  singularly  apt.  Sitting  in  his  office 
chair,  with  a  black  skuU  cap,  which  he  usually  wears  in  busi- 
ness hours,  pushed  back  on  his  head,  he  has  an  open,  jolly, 
unassuming  look,  and  the  stranger  would  hardly  take  him  for 
one  of  the  uncrowned  financial  kings  of  this  country.  Hd 
IB  one  of  the  few  men  in  this  country  who  haye  shown  them- 
selyes  more  than  a  match  for  Jay  Gould. 


.454  western  miujonaires  in  new  york. 

Lelakd  Stanford. 
Leland  Stanford,  one  of  Oalif omia's  United  States  Sena- 
tors, is  worth  from  thirty  to  forty  million  dollars.  He  was 
bom  in  Albany  county,  New  York,  March  9,  1824.  He 
received  an  academical  education  and  entered  a  law  office  in 
Albany  in  1846^  and,  after  three  years'  study,  was  admitted 
to  practice  law  in  the  Supreme  Court  of  the  State  of  New 
York.  He  removed  to  Port  Washington,  in  the  northern 
part  of  Wisconsin,  and  there  engaged  in  the  practice  of  his 
profession  for  four  years.  In  1862  fire  destroyed  his  bw 
library  and  other  property,  whereupon  he  went  to  Calif onia 
and  became  associated  in  business  with  his  three  brothers, 
who  had  preceded  him  in  seeking  fortune  on  the  Pacifio 
Slope.  His  first  business  yenture  was  in  Michigan  BlofSs, 
but  in  1866  he  remoyed  to  San  Francisco  to  engage  in  busi- 
ness enterprises  on  a  large  scale.  His  business  at  one  iiin^ 
it  seems,  was  in  oil,  and,  later,  in  various  manufacturing  and 
agricultural  ventures.  He  was  elected  Goyemor  of  Califomia 
in  1861.  He  insisted  upon  being  inaugurated  as  proTided 
by  the  State  constitution,  at  the  Capitol  building,  tiioogh 
the  locality  was  under  water  by  reiason  of  floods.  He  be- 
came President  of  the  Central  Pacific  Bailroad  and  superin- 
tended its  construction  oyer  the  mountains,  building  630 
miles  of  it  in  293  days.  He  was  elected  as  a  Bepublic&n  to 
the  United  States  Senate  in  1884^  and  hiif  term  does  not  ex- 
pire till  1891.  He  is  still  the  President  of  the  Central  Pacifio 
Bailroad  and  of  seyeral  of  its  associated  lines,  while  he  iB  a 
director  in  others.  He  owns  a  princely  domain  in  CalifonuBi 
known  as  Palo  Alto  ranch,  comprising  six  thousand  acres, 
which  he  has  deyoted  to  the  site  of  an  Industrial  Univeidty 
for  both  sexes,  as  a  memorial  of  his  only  son,  who  died  some 
years  ago.  He  has  richly  endowed  this  great  educational 
institution,  setting  aside  for  it  about  ten  million  doUan. 
Here  both  sexes  will  be  fitted  to  fill  a  useful  part  in  fte 
battle  of  life ;  they  will  be  instructed  in  mechanical  artfl 
and  agricultural  as  well  as  in  other  branches  of  edueatioa) 


LKI^AKD  BTAJ7FORD.  455 

wUch  will  start  the  student  fairly  in  life.  He  found,  as 
President  of  the  Central  Pacific  Bailroad  Company,  that 
many  bri^t  young  men  of  collegiate  education  were  not 
specially  fitted  for  any  particular  work  in  the  great  school 
of  Uf e,  and  those  who  are  familiar  with  great  cities  know  that 
thousands  of  men  have  really  wasted  their  years  in  obtain- 
ing a  coUegiate  education  which  never  enabled  them  to  earn 
more  than  barely  enough  to  Uye  upon.  They  become,  in 
many  cases,  ill-paid  book-keepers,  entry  clerks,  salesmen, 
car  conductors,  postmen,  and  sometimes  find  themselyes 
obliged  to  turn  their  hands  to  hard  manual  labor,  or  else 
starve.  Senator  Stanford's  beneficent  plan,  then,  of  giving 
the  young  such  a  practical  education  that  they  can  face  the 
world  with  confidence  and  with  a  ''reasonable  certainly  of 
remuneratiYe  employment,  or  with  the  requisite  knowledge 
to  guide  them  in  enterprises  of  their  own,  is  worthy  of  the 
highest  oonomendation,  and  his  example  is  likewise  worthy 
of  the  emulation  of  gentlemen  with  millions  to  spare  in  aU 
parts  of  the  country.  If  Samuel  J.  Tilden  had  endowed  a 
university  of  this  kind  he  would  have  been  a  far  greater 
benefactor  in  many  respects  than  he  has  undoubtedly  shown 
himself  in  his  will.  Governor  Stanford's  great  ranch,  which 
is  to  become  a  seat  of  learning,  is  situated  about  82  miles 
from  San  Francisco,  and  promises  to  be  the  educational 
Mecca  of  the  Pacific  Slope.  His  fortune,  notwithstanding 
this  princely  donation,  is  still  enormous,  amounting  to 
twenty-five  or  thirty  million  dollars. 

Daeius  O.  Mills. 

One  of  the  most  notable  figures  daily  seen  on  Wall  Street 
is  a  man  about  five  feet  nine  inches  in'  height,  with  hand- 
some, florid  features  and  a  firm  jaw,  indicative  of  great 
decision  of  character.  He  is  now  about  fifty  eight  years  of 
age,  and  is  as  industrious  and  energetic  as  when  he  began 
his  eventful  career.  It  is  Darius  O.  Mills.  He  is  one 
of  the  most  astute  and  one  of  the  boldest  financiers  in  this 


456  'WBSTESK  HHUONAIRBS  IN  NEW  YORK.  % 

country.  He  has  the  courage  of  aBichelien,  joined  to  that 
famous  statesman's  caution  and  conservatism  when  the 
march  of  erents  requires  it.  Of  the  California  magnates  he 
is  one  of  the  most  notable .  In  New  York  he  has  taken  the 
highest  rank,  socially  and  financially,  of  them  all.  As  I 
have  intimated,  he  is  bold,  and  yet,  on  occasion,  he  wiselj 
acts  upon  the  maxim  that  discretion  is  the  better  part  of 
valor.  He  was  bom  in  a  small  town  on  the  Hudson  £iy^, 
in  this  State.  Before  the  California  gold  excitement  broke 
out  he  and  his  brother  were  in  the  hotel  business.  He  has 
always  been  dependent  on  his  own  exertions ;  he  has  fought 
his  way  to  opulence,  such  as  a  prince  might  envy,  by  his 
own  keen  intelligence  and  undaunted  enterprise.  He  began 
in  humble  circumstances.  To-day  he  is  worth  twenty  mil- 
lions. He  is  a  permanent  resident  in  the  metropolis,  and  is 
regarded  as  one  of  New  York's  best  and  most  influential 
citizens. 

He  laid  the  foundation  of  his  vast  wealth  in  Calif ornia. 
On  the  breaking  out  of  the  gold  fever  he  and  his  brother 
left  their  native  town  for  the  fields  of  adventure,  where  men 
of  shrewd  foresight  and  determined  courage  achieved  a  sno- 
cess  stranger  than  the  wonders  of  a  Persian  tale.  The 
brothers  did  not  trust  to  luck.  They  chartered  a  saih'ng 
vessel,  loaded  it  with  commodities  likely  to  be  in  demand 
among  the  miners,  and  then  sailed  for  the  Golden  Qate  via 
Cape  Horn.  Aiter  a  narrow  escape  from  shipwreck  they 
arrived  at  San  Francisco  and  at  once  opening  a  store^  they 
sold  their  merchandise  to  the  eager  miners  at  fabtdons 
prices.  D.  O.  Mills  rapidly  accumulated  wealth,  and  when 
Wm.  C.  Balston  organized  the  Bank  of  California  he 
became  its  President.  During  the  time  that  Mr.  Mills  gave 
his  attention  to  the  Bank  of  California  it  was  the  most  suc- 
cessful institution  of  a  similar  character  in  this  country,  but 
when  he  decided  to  remove  to  New  York  his  connuotion 
with  the  great  bank  was  severed.  Disaster  came  'dnder 
Balston's  administiation.    Mr.  Mills  had  continued  tci  be  a 


/ 


DARIUS  O.   MII^W.  457 

stockholder,  and  when  a  financial  hnrrioane  strnck  the  bank, 
he  was  quick  to  go  to  the  rescue.  He  contributed  largely 
to  provide  for  the  bank's  losses  and  to  reorganize  it  with 
new  capital^  which  placed  it  again  among  the  foremost 
financial  institutions  of  the  United  States.  The  credit  of 
this  Herculean  achievement  was  due  more  to  him  perhaps 
than  to  any  other  man.  His  social  position  is  deservedly 
higL  His  son  married  the  daughter  of  a  member  of  th« 
historic  Livingston  family,  one  of  the  oldest  and  most  illus- 
trious in  this  country.  His  daughter  married  the  successor 
to  the  editorial  chair  of  Greeley,  Whitelaw  Beid,  whose  able 
management  of  the  Trihune  has  established  a  world-wide 
fame  for  that  gentleman.  These  marriages  of  his  children 
strengthened  his  already  strong  position  socially,  which  he 
soon  won  despite  the  fact  that  he  was  a  newcomer.  Mr. 
Mills  is  distinguished  for  a  princely  liberality.  He  believes 
in  distributing  his  property  generously  while  living.  He 
has  built,  therefore,  one  of  the  finest  residences  in  this  city 
for  his  son ;  he  bought  for  his  daughter,  Mrs.  Beid,  at  a 
cost  of  four  hundred  thousand  dollars,  the  Yillard  palace  on 
Madison  Avenue.  His  other  acts  of  generosity  are  number- 
less. He  himself  lives  in  fine  style.  He  paid  the  highest 
price  ever  paid  per  foot  for  a  residence  in  New  York  when 
he  bought  from  D.  P.  Morgan,  for  one  hundred  and  seventy- 
five  thousand  dollars,  that  gentleman^s  residence  directly 
opposite  St.  Patrick's  Cathedral  on  Fifth  Avenue.  This 
mansion  occupies  two  lots  on  a  Columbia  College  leasehold. 
After  purchasing  it  Mr.  Mills  gave  a  carte  llaruilie  order  to 
a  noted  decorator  of  New  York,  and  during  a  trip  to  Call- 
fornia  the  work  of  decoration  was  done.  On  his  return  he 
at  once  took  possession  of  a  mansion  of  which  a  Shah  of 
Persia  might  be  proud.  He  was  delighted  with  all  that  had 
been  wondrously  wrought  by  the  beautifying  touch  of 
splendid  art ;  with  the  richly  carved  wood  work,  the  gor- 
geously picturesque  ceilings,  the  inlaid  walls  and  floors,  and 
tbe  tovt  emembU  of  Oriental  magnificence.    His  content- 


468  WBST9RN  MILLIONAIRKS  IN  NBW  TO&K. 

ment  was  oomplete^  but  a  sarprise  awaited  him.  It  was  iiie 
decorator's  bill  for  four  hundred  and  fifty  thousand  dollars. 
This,  it  is  said,  slightly  disturbed  his  serenity.  It  caused 
him  to  look  with  a  critic's  eye  on  the  splendid  decorations 
which  constitated  a  study  in  the  fine  arts  at  such  high  rates  of 
tuition.  As  with  the  eagle  eye  of  a  connoisseur,  he  perceived 
that  the  bill  was  altogether  too  high.  He  succeeded  in  get- 
ting, however,  only  a  slight  reduction.  Moral :  Don't  giv6 
carte  blanche  orders  to  decorators  any  more  than  you  would 
hire  a  cab  without  first  making  a  bargain. 

Mr.  Mills  came  to  New  York  to  take  up  his  residence 
some  years  ago,  with  a  fortune  of  many  millions  of  dollars. 
He  is  particularly  worthy  of  a  place  in  this  book;  as  from 
the  time  of  making  his  home  here  he  has    been  prom- 
inently  identified  with  Wall  Street     Soon  after  taking  up 
his  residence  here  he  became  acquainted  with  William  H. 
Yanderbilt,  at  whose  suggestion  he  invested  very  heavily 
in  Lake  Shore.    He  made  by  this  operation  no  less  than 
$2,700,000.    This  large  sum  he  devoted  to  the  oonstrac- 
tion  of  a  palatial  building  on  Broad  Street,  which  bears 
his  name,  and  is  probably  the  finest  and  most  complete 
structure  for  office  purposes  in  the  world.   It  has  a  frontage 
of  175  feet  on  Broad  street,  30  feet  on  Wall  street,  and  150 
feet  on  Exchange  place,  and  is  nine  stories  high.    Thirteen 
buildings  were  torn  down  to  secure  its  site.     It  was  began 
in  May,  1880,  and  was  practically  finished  in  one  year,  the 
men  working  night  and  day.     It  is  built  lai^ely  of  Phila- 
delphia brick,  with  Belleville  brown  stone  trimmings.    It 
is  otherwise  ornamented  with  terra  cotta,  and  Corinthian 
and  Renaissance  capitols,  and  red  Kentucky  marble  pillar& 
On  the  first  three  floors  the  wainscoting  is  of  Italian  marble, 
and  there  is  marble  tiling  throughout  the  building;  the 
woodwork  on  the  first  two  floors  is  mahogany,  and  on  the 
upper  floors  it  is  reeded  and  panelled  cherry.    There  are 
400  offices,  and  the  tenant  population  is  1,200.    For  weeks 
at  a  time  the  total  daily  average  number  of  persons  carried 


PRINCKS  OP  THK  PACIFIC  SI^OPE.  459 

on  six  elevators  has  been  no  less  than  fifteen  thousand.  The 
working  force  necessary  to  look  after  this  magnificent  struc- 
tare  nnmbers  60  person.  The  net  annual  rental  is  about 
$200,000,  the  highest  individual  rent  paid  being  f  20,000. 

Mr.  Mills'  exceptional  skill  as  a  financier  has  won  him  a 
high  reputation  in  New  York,  and  his  counsel  on  vexed  and 
abstruse  questions  has  often  been  quoted  by  powerful  cor- 
porations. He  is  a  director  in  several  railroads,  including 
the  Erie,  and  it  is  understood  is  interested  in  mining  enter- 
prises. In  the  battle  of  life  he  has  achieved  signal  success. 
His  career  is  a  fitting  lesson  to  future  generations. 

Chables  Cboceeb. 

Charles  Crocker  is  now  about  65  years  of  age,  and  lives 
in  New  York  city.  He  was  born  in  Ohio  in  humble  circum- 
stances, and  early  in  life  followed  for  a  time  the  occupa- 
tion of  blacksmith.  He  used  to  get  up  at  four  o'clock  in 
the  morning  and  work  hard  all  day.  It  was  a  hard  life,  and 
he  engaged,  after  a  time,  in  other  occupations,  gradually,  in 
the  meantime,  by  thrift  and  industry,  amassing  a  sufficient 
sum  to  enable  him  to  go  to  California,  in  the  height  of  the 
mining  fever,  and  establish  a  general  store  in  Sacramento. 
He  met  with  considerable  success  in  trade,  and  when  the 
project  was  formed  to  build  the  Central  Pacific  Bailroad,  he 
lent  his  aid  to  the  enterprise,  and  has  ever  since  been 
identified  with  that  corporation.  He  is  now  its  Secretary 
and  Vice-President,  and  is  also  interested  in  associate  roads. 

Mabe  Hopkins. 

Mark  Hopkins  died  some  years  ago,  worth  fifteen  million 
dollars.  He  was  from  Massachusetts,  and  went  to  California 
on  the  breaking  out  of  the  mining  furore,  and  settled  in 
Sacramento,  where  he  soon  engaged  in  the  hardware  busi- 
ness with  0.  P.  Huntington,  with  whom  he  also  embarked 
in  the  ambitious  enterprise  of  building  the  Central  Pacific 
Bailroad.   He  won  a  large  fortune  in  his  railroad  operations. 


4CJ0  WESTERN  MII^UONAIRBS  m  NHW  YORBl. 

His  widow  has  a  magnificent  estate  at  Soath  Qieat  Baning- 
ton,  in  Massachusetts. 

We  come  now  to  the  famous  mining  princes  of  the  Paeifie 
Slope.  The  discovery  of  gold  in  California,  and  of  the  rich 
deposits  of  the  precious  metal  elsewhere  on  the  Pacific  Slope, 
led  not  merely  to  tlio  accumulation  of  vast  individual  for- 
tunes ;  it  sent  the  currents  of  new  life  humming  through 
the  veins,  so  to  speak,  of  the  entire  country  ;  it  stunolated 
trade ;  it  awakened  new  life ;  it  gave  a  tremendous  impulse  to 
a  thousand  industrial  enterprises ;  it  sent  the  Bepublic  forth 
as  a  conquering  hero  of  commerce,  leveling  all  obstacles  and 
laughing  at  difficulties  ;  tunneling  mountains,  building  rail- 
roads whose  very  rails  seem  to  catch  a  golden  gleam  from 
the  rich  traffic  ;  spanning  great  rivers  with  majestic  bridges ; 
building  ships  and  steamers ;  setting  vast  manufactories  to 
awake  the  solitude  of  primeval  forests  with  the  thunder  of 
machinery,  the  ringing  of  hammers  and  the  thousand  voices 
of  labor  ;  building  villages,  towns  and  cities  with  such  mar- 
velous rapidity  as  to  suggest  the  touch  of  the  magical  wand 
of  genii.  With  the  treasure  taken  from  her  bosom  nature 
herself  was  subdued ;  an  electric  thriU  stirred  the  older 
centres  of  population  as  it  led  the  new  sections,  and  the 
Bepublic  has  ever  since,  regardless  of  those  periodical 
reactions  known  as  panics,  kept  its  onward  march  in  fulfill- 
ment of  that  far-sighted  prophecy  that  the  star  of  empire 
takes  its  way  to  the  West,  and  that  on  the  broad  stage  of  the 
American  Continent  the  Anglo-Saxon  race  will  win  far  greater 
triumphs  than  it  has  ever  achieved  in  its  amazing  career 
since  it  sprang  from  the  barbarism  of  the  Northern  wilds  of 
Europe  to  take  its  proud  station  as  the  dominant  family  on 
this  globe.  The  rich  gold  mines,  and  later  the  great  silver 
mines,  have  given  this  country  a  feverish  dream  of  specula-, 
tion,  in  which  gigantic  fortunes  have  been  amassed.  The 
richest  deposit  of  silver  in  Nevada,  if  not  in  the  world,  was 
the  Comstock  lode  on  the  east  side  of  ^  Mount  Davidson,  in 
Storey  county,  and  partly  under  the  towns  of  Virginia  and 


^^2?..^^ 


JOHN  W.  MACKAY.  4Gt 

Gold  Hill.  At  one  time  its  ores  contained  one-third  in  value 
of  gold  and  two-thirds  of  silver.  The  lode  has  been  traced 
on  the  surface  some  twenty-seven  thousand  feet,  and  has 
actually  been  explored  about  twenty  thousand  feet,  within 
which  space  most  of  the  larger  mines  are  located.  The  lode 
has  been  opened  to  the  depth  of  about  twenty-two  hundred 
feet.  The  various  mines  on  this  lode  have  given  a  total 
return,  it  is  estimated,  of  some  three  hundred  millions  of 
dollars. 

One  of  the  most  famous  of  the  bonanza  magnates  is  John 
W.  Mackay.  His  rise  to  financial  power  reads  like  a 
romance,  and  yet  his  astounding  success  was  by  no  means 
attained  as  by  turning  over  a  hand.  He  believed  in  the 
richness  of  the  bonanza  field ;  he  and  a  nxunber  of  associ- 
ates purchased  the  controlling  interest  in  the  corporations 
which  owned  it.  Then  began  the  grand  hunt  for  the  ore 
body.  Others  had  tried  to  find  it,  but  had  given  it  up  in 
despair.  The  idea  that  the  property  was  worth  working 
was  laughed  to  scorn.  The  men  who  believed  in  it  per- 
sisted in  spite  of  all  discouragements,  which  were  many ; 
they  spent  about  half  a  million  in  prospecting.  They  made 
in  1875,  after  long  and  trying  efforts,  the  famous  strike 
which  astounded  the  business  world,  and  stirred  up  a  specu- 
lative fever  which  did  not  die  out  for  years.  This  plain, 
quiet,[unpretending  financier  was  bom  in  the  hxunblest  circum- 
stances in  Dublin,  Nov.  28, 1835,  and  is  consequently  in  his 
52nd  year.  He  came  to  this  country  very  early  in  life,  and 
as  a  boy  worked  for  Wm.  H.  Webb,  the  once  famous  ship- 
builder of  New  York.  In  1852  he  went  with  a  party  to  Cali- 
fornia, sailing  in  one  of  the  ships  of  his  former  employer. 
It  has  been  said  that  previous  to  this  he  kept  a  liquor  saloon 
in  Louisville.  Like  so  many  others,  however,  he  caught  the 
gold  fever,  and  on  arriving  in  California  he  immediately  en- 
gaged in  placer  mining  in  Sierra  county  of  that  State.  He 
met  with  the  usual  vicissitudes  of  f ortime,  but  at  last  a  fair 
degree  of  success  rewarded  his  untiring  efforts,  and  he  there- 


462  WESTERN  MIXUONAIRES  IN  NEW  YORK. 

upon  went  to  Virginia  City,  Nevada,  and  started  a  tnnnel  in 
what  was  called  the  Union  ground,  north  of  the  Ophir  mine. 
The  speculation  was  disastrous.  He  lost  all  he  possessed, 
but  he  was  not  conquered.  He  secured  work  as  a  timber 
man  in  the  Mexican  mine,  and  he  engaged  also  as  a  miner, 
swinging  the  pick  and  shovel,  and  little  dreaming  that  this 
would  be  told  as  an  interesting  circumstance  in  a  career 
which  was  to  be  successful  beyond  his  wildest  hopes.  He 
labored  industriously ;  he  saved  his  money,  and  he  watched 
his  opportunities,  which  very  few  people  do.  He  got  his 
first  important  start  in  connection  with  the  Kentuck  mine  in 
Gbld  Hill,  but  he  had  frequent  fluctuations  of  fortune  until 
finally,  in  1863,  he  formed  a  mining  co-partnership  with  J. 
M.  Walker,  a  brother  of  a  former  Governor  of  Virginia,  and 
subsequently  the  firm  was  strengthened  by  the  addition  of 
Messrs.  Flood,  O'Brien,  and  Fair.  The  firm  struck  their 
first  great  success  in  1865-67  during  their  control  of  the 
Hale  &  Norcross  mine.  Later  came  the  celebrated  California 
and  Consolidated  Virginia  mines,  the  wonders  of  the  mining 
world.  He  was  married  in  1867  to  the  daughter  of  Daniel 
Hungerf ord.  Hungerf ord,  by  the  way,  was  a  Canadian, 
who  came  to  New  York  many  years  ago  and  lived  in  West 
Broadway,  where  he  followed  the  occupation  of  a  barber. 
When  the  Mexican  war  broke  out  he  enlisted,  and  at  the 
close  of  that  war  he  returned  to  his  family  and  his  previous 
occupation.  When  the  famous  Colonel  Walker  raised  a 
force  in  New  York  for  the  invasion  of  Nicaraugua,  Hunger- 
ford,  who  seems  to  have  been  of  an  adventurous  spirit, 
enlisted,  and  barely  escaped  the  fate  of  Walker  and  those 
of  his  force  who  were  captured  and  shot  by  the  Nicaraugua 
authorities.  He  escaped  by  fleet  running,  and  again  re- 
turned to  his  family  and  tonsorial  profession,  dying  soon 
after  his  return.  His  daughter  married  a  physician,  with 
whom  she  went  to  Nevada.  He  died  and  left  her  in  reduced 
circumstances.  With  the  open-handed  generosity  character- 
istic of  the  financiers  of  the  Pacific  Slope,  a  number  of 


JAMES    C     FLOOD 


JAMKS  C.   FIXX)D.  46S 

wealthj  gentlemen,  learning  of  the  circumstances,  started  a 
subscription,  to  which  Mr.  Mackaj  made  a  large  contribu- 
tion. She  called  to  thank  him,  and  the  acquaintance  thus 
begun  ripened  into  mutual  attachment,  whose  happy  consum- 
mation was  their  marriage  a  few  years  later.  Mrs.  Mackay , 
during  the  last  few  years,  has  resided  for  the  most  part  in 
Paris  and  London,  where  she  has  lived  on  a  scale  of  mag- 
nificence which  has  dazzled  and  astounded  foreigners.  Mr. 
Mackay  himself  has  apparently  little  inclination  for  social 
triumphs ;  he  is  well  liked  wherever  he  is  known  for  his 
quick,  genial  manners,  but  seems  to  avoid  publicity.  He 
alternates,  for  the  most  part,  between  New  York  and  San 
Francisco.  In  New  York  his  office  is  at  the  Nevada  Bank, 
in  which  he  is  a  large  stockholder,  owning,  in  fact,  half  of 
the  stock.  In  recent  years  he  has  become  largely  interested 
in  a  cable  line  to  Europe,  started  in  opposition  to  other 
well-known  lines.  His  fortune  is  estimated  at  twenty  mil- 
lions. Mr.  Mackay's  step-daughter  was  married  a  few  years 
»go  to  the  Prince  of  Colonna,  who  belongs  to  one  of  the 
most  ancient  and  wealthy  families  of  the  nobility  of  Italy. 

James  0.  Flood  was  once  a  poor  boy  of  New  York  city, 
now  he  is  worth  more  millions  than  can  exactly  be  told.  He 
Vent  to  San  Francisco  in  1849,  poor  and  friendless,  and  in 
company  with  the  late  W.  S.  O'Brien,  opened  a  liquor  saloon, 
where  he  sold  whiskey  at  12^  cents  a  glass.  He  drew  the 
liquor  from  casks  piled  one  upon  another.  In  those  early 
days  of  the  future  queen  of  the  Pacific  Slope  there  were  no 
gorgeous  saloons  with  tesselated  marble  floors,  a  dazzling 
stretch  of  costly  mirrors,  and  a  gallery  of  rare  pictures. 
Such  resorts  as  Flood's^  in  the  slang  of  the  day,  were  termed 
^^  gin  mills,''  and  in  the  man  who  drew  whiskey  from  the  casks 
rather  than  tendering  a  heavy  cut  glass  decanter,  it  would 
have  been  difficult  for  the  most  fanciful  to  have  recognized 
the  future  famous  man  of  millions.  He  made  money  and 
went  into  mining  stocks.  The  first  great  mining  speculation 
in  which  Flood,  with  his  partner,  O'Brien,  embarked  was  in 


464  WBSTBRN  MH.UONAIRES  IN  NBW  YORK. 

1862,  in  Kentuck  and  the  stocks  of  other  mines  on  the 
Comstock  lode.  Then  thej  went  heavily  into  Hale  &  Nor- 
cross,  one  of  the  old  time  fayorites.  They  were  generally 
successful  in  these  operations,  but  a  crowning  aud  dazzling 
triumph  awaited  them.  In  February  of  1874  there  were 
whispers  that  the  Consolidated  Virginia,  which  had  caused 
a  furore  some  ten  years  previous,  but  had  fallen  off  materi- 
ally, and  the  newer  mine,  the  California,  would  soon  develop 
rich  bodies  of  ore.  Flood  and  his  partners,  who  owned 
these  mines,  became  certain  of  this  prospective  bonanza  in 
the  following  winter,  and  early  in  1875  came  the  announce- 
ment of  the  discovery  of  the  fabulous  ore  bodies  which  made 
the  name  of  the  Comstock  lode  known  round  the  world,  and 
lifted  the  owners  of  the  celebrated  mines  at  once  into  wealth 
so  enormous  as  to  make  the  extravagances  of  the  Arabian 
Nights  seem  tame.  The  establishment  of  the  Nevada  Bank 
was  the  idea  of  Mr.  Flood,  who  is  said  to  possess  a  natural 
aptitude  for  finance.  He  became  president  of  the  bank  and 
a  large  stockholder  in  it.  He  is  a  man  of  compact^  robust 
build,  five  feet  nine  inches  in  height,  with  quiet,  courteous 
manners,  and  of  an  energetic,  self-reliant  and  industrious 
disposition.  He  has  had  a  remarkable  rise,  but  has  shown 
himself  equal  to  the  surprising  good  fortune  which  has 
attended  his  strange  career. 

It  is  of  interest  to  recall  the  fact  that  the  original  Com- 
stock syndicate,  most  of  whom  derived  such  enormous  wealth 
from  the  Comstock  lode,  was  composed  of  Messrs.  Mackay, 
Flood,  O^Brien,  Fair  and  Walker.  Soon  after  these  gentle- 
men became  associated  in  their  great  enterprises,  Walker 
sold  out  his  share  of  one-fifth  to  Mackay,  for  a  very  small 
consideration,  and  this  consequently  gave  that  gentleman  an 
interest  of  two-fifths,  against  the  one-fifth  share  held  by  each 
of  the  three  others  in  the  firm,  a  fact  which  accounts  for 
Mackay's  greater  wealth.  Walker,  one  of  the  original  parties 
in  interest,  afterward  not  only  lost  in  mining  and  other  specu- 
lations the  amount  which  Mackay  had  paid  him  for  his  share^ 


JAMES   G.    FAIR. 


DIED  WITHOUT  A  CENT.  465 

but  all  his  other  means,  and  was,  in  fact,  completely  beggared, 
and  died  in  an  asylum  for  paupers.  He  had  experienced 
dramatic  yicissitudes  of  fortune.  He  ought  to  have  been 
worth  fully  twenty  millions  of  dollars.  He  died  without  a 
penny. 

W.  S-CBbien. 

W.  S.  O'Brien  was  associated  with  Mackay,  Flood  and 
Fair  in  deyeloping  mines  on  the  Comstock,  and  died  in  1878, 
enormously  wealthy.  He  was  born  in  New  York,  went  to 
San  Francisco  in  the  early  days  of  the  gold  excitement,  and 
at  first  kept  a  liquor  saloon  with  Flood.  He  gradually 
engaged  in  mining  speculations,  and  ultimately  met  with 
such  success  that  he  died  famous  as  one  of  the  bonanza 
kings.  It  is  an  interesting  circumstance  that  four  Irishmen 
secured  the  lion's  share  of  the  bonanza  millions,  and  they 
were  all  born  poor.  The  harp  of  Tara's  halls  never  was 
struck  to  BO  strange  a  roundelay  as  this. 

James  G.  Faib. 

James  G.  Fair  is  another  of  the  bonanza  kings  who  has  had 
an  interesting  career.  He  was  born  Dec.  3d,  1831,  near  Bel* 
fast,  Ireland.  He  came  to  this  country  with  his  parents  in 
1843  and  settled  in  Illinois.  He  received  a  thorough  business 
education  in  Chicago,  and  at  the  same  time  devoted  consid- 
arable  attention  to  scientific  studies.  On  the  breaking  out 
of  the  gold  fever  in  18  i9  he  removed  to  California,  settling 
at  Long's  Bar,  Feather  Biver,  in  that  State.  He  mined  oq 
the  Bar  for  some  time  without  much  success,  and  then  turned 
his  attention  to  quartz  mining.  Placer  mining  in  those  days 
was  conducted  in  too  primitive  a  fashion  to  suit  a  man  of 
his  mechanical  ingenuity.  Placer,  by  the  way,  is  a  term  of 
Spanish  origin,  signifying  a  gravelly  place  where  gold  is 
found,  especially  by  the  side  of  a  river  or  in  the  bed  of  a 
mountain  torrent.  In  quartz  mining,  on  the  other  hand, 
the  metal  is  obtained  by  smelting  after  crushing  the  rock  of 


466  WESTERN  MIU^IONAIRBS  IN  NEW  YORK. 

which  it  forms  a  part.    Mr.  Fair  engaged  in  quartz  min- 
ing in  Calaveras  ooonty,  California,  and  later  became  saper- 
intendent  of  varions  quartz  mines  in  other  parts  of  the  State. 
In  1855  he  became  superintendent  of  the  Ophir,  and  four 
years  later  of  the  Hale  A  Norcross.    In  1860  he  removed 
to  Nevada  and  became  actively  engaged  in  developing  mines. 
In  1867  he  formed  a  partnership  with  John  W.  Mackaj, 
James  C.  Flood  and  Wm.   S.   O'Brien.     Tho  firm,  at  Mr. 
Fair's  suggestion,  obtained  control  of  the  California  and 
Bides  mine,  the  White  &  Murphy,  the  Central  Nos.  1  and  % 
and  the  tract  known  as  the  Einney  ground,  and  it  was  in  this 
rich  field  that  the  famous  California  and  Consolidated  yir- 
ginla  mines  were  developed,  the  yield  of  which,  under  Mr. 
Fair's  superintendence,  is  estimated  at  about  two  hundred 
million  dollars.    He  began  speculative  buying  of  real  estate 
in  San  Francisco  in  1858,  and  is  now  said  to  own  seventj 
acres  of  land  in  different  parts  of  that  city,  constituting  in 
itself  an  enormous  fortune.    He  was  elected  to  the  United 
States  Senate  as  a  Democrat  to  succeed  the  Hon.  William 
Sharon,  and  took  his  seat  in  1881,  his  term  expiring  March 
3d,  1387.   In  person  Mr.  Fair  is  of  aboutthe  medium  height 
of  compact,  solid  build,  has  handsome  f  eatures,  and  is  a  man 
who  would  be  likely  to  attract  attention  anywhere.     Htf 
fortune  is  estimated  at  from  ten  to  twenty  millions. 

William  Shabon. 

William  Sharon  was  one  of  the  remarkable  men  devel- 
oped by  the  mining  excitement  in  this  country,  one  of  tbe 
sagacious,  self-reliant  men  who  inevitably  come  to  the  front 
wherever  they  are  found.    He  showed  his  mettle  when  the 
Bank  of  California  was  forced  to  suspend,  and  when  a  com- 
mercial pall  hung  over  San  Francistso.     In  the  midst  of  the 
frenzied  excitement  he  was  one  of  the  few  who  kept  cool 
and  never  lost  their  courage.      The    wild  excitement  on 
the  Stock  Exchange  of  San  Francisco  was  stopped  at  his 
suggestion  that   the    sessions    be  indefinitely  poe^^^ 


VniXlAM  SHARON.  467 

Then  he  called  a  meeting  of  the  Bank  of  California  directors 
and  made  a  stirring  appeal  to  them  to  stand  by  the  bank  in 
the  hour  of  its  misfortune,  and  rescue  the  business  interests 
of  the  coast  from  the  paralysis  by  which  they  were  likely  to 
be  seized  if  they  did  not  take  a  resolute  stand,  put  their  shoul- 
ders to  the  wheel  and  acquit  themselyes  like  men.  He  pro- 
posed that  each  subscribe  liberally  to  put  the  bank  again  in 
operation,  and  set  the  example  by  a  Tery  .large  subscription 
— said  to  have  been  five  million  dollars.  Others  also  sub- 
s<n:ibed  liberally,  and  to  the  astonishment  and  joy  of  the 
city  the  bank  again  threw  open  its  doors  for  business.  He 
had  some  years  prior  to  this  become  connected  in  business 
with  the  lamented  Balston. 

William  Sharon  was  bom  in  Ohio,  and  early  in  life  began 
the  practice  of  law  in  Illinois.  He  went  to  San  Francisco, 
and  immediately  engaged  in  the  real  estate  business,  and 
ultimately  became  a  very  large  operator  in  lands,  but  failed, 
and  in  1863  went  to  Nevada  to  take  the  agency  of  the  Bank 
of  Calif omia  in  Gold  Hill  and  Virginia  City.  The  bank 
had  large  loans  out  on  mining  property,  and  as  the  produc- 
tion of  many  of  the  mines  had  seriously  declined,  Balston 
grew  uneasy,  and  was  greatly  relieved  when  Sharon  offered 
to  become  personally  responsible  for  these  loans  on 
condition  that  the  bank  advance  him  a  considerable  sum  to 
be  used  in  contemplated  mining  developments,  and  allow 
him  two  years  in  which  to  meet  the  loans.  The  terms  were 
accepted.  Sharon  ran  new  drifts  here  and  there,  and  ia 
four  months,  to  Balston's  amazement,  paid  all  the  loana,  and 
placed  on  deposit  three-quarters  of  a  million  to  his  own 
account  This  feat  drew  general  attention  to  him  ;  he  was 
consulted  in  large  operations ;  he  became  a  director  in  the 
great  bank.  He  never  forgot  Balston's  kindness  to  him. 
He  assumed  entire  charge  of  the  personal  affairs  of  Balston 
after  his  death,  and  settled  on  Mrs.  Balston  nearly  half  a 
million  of  dollars.  He  finally  entered  politics,  and  represented 
California  in  the  United  States  Senate.   He  was  a  conspicu^ 


i68  WI^STERN  MII^UONAIRKS  IN  NBW  TORE. 

ons  example  of  business  acumen  and  sorprising  energy,  as 
well  as  of  becoming  gratitude  to  the  knightlj  Balston,  ot 
whom  he  always  said :  ^^  He  was  my  benefactor.' 

Wm.  C.  Balston. 

Whl  0.  Balston  was  one  of  the  most  notable,  as  he  was 
one  of  the  most  remarkable,  of  all  the  financial  giants  of 
the  Pacific  Slope.  He  ascended  the  gilded  summits  of  finan- 
cial renown,  and  he  fell  into  a  shadowy  valley  of  stern  retri- 
bution and  utter  ruin.  No  man  could  be  more  popular,  none 
could  exhibit  greater  daring  in  his  business  enterprises.  He 
was  a  New  York  boy,  but  drifted  to  the  West,  and  became  a 
clerk  on  a  Mississippi  steamboat,  finally  became  Captain, 
and  having  amassed  some  money,  he  leaped  into  specula- 
tive waters,  like  another  Leander,  to  swim  the  Hellespont 
of  California  finance.  He  became  associated  with  Com* 
modore  Garrison  and  two  others  in  the  banking  busineiss  in 
San  Francisco  about  1853.  Finally  he  organized  the  Bank 
of  California,  and  became  first  its  Cashier  and  then  its  Presi- 
dent. His  rise  was  marvellous.  At  one  time  he  was  sup- 
posed to  be  worth  $20,000,000  or  more.  He  had  a  country 
seat  at  Belmont,  in  San  Mateo  county,  that  a  king  might  have 
been  proud  to  own,  and  here  he  entertained  in  royal  fashion. 
Every  celebrity  that  visited  California  was  received  with 
regal  hospitality  by  this  monetary  prince  of  the  golden 
State*  But  as  the  allied  armies  arrayed  against  Napoleon 
were  often  put  to  rout  from  being  too  much  spread  out,  so 
this  financial  Titan,  combining  the  genius  and  courage  of 
many  in  one,  was  finally  overthrown  by  adverse  fortune, ' 
because  his  enterprises  Were  too  much  spread  out.  He  had 
too  many  projects  on  hand  at  one  time.  He  lost  heavily  in 
mining  and  real  estate  speculations ;  he  lost  in  manufactur- 
ing enterprises.  Fate  struck  him  suddenly  as  with  the  ham- 
mer of  Thor.  In  one  fearful  storm  of  torouble  all  his  mis^ 
fortune  descended  upon  him  at  once.    All  the  waves  ilad 


DRIVEN  TO  saiciD«.  469 

billows  of  adversity  broke  oyer  him.  He  had  no  chance  to 
recover  himself.  Birnam  seemed  all  at  once  to  come  to  his 
financial  Dunsinane.  An  investigation  of  the  afiTairs  of  the 
Bank  of  California  was  made  by  the  directors  of  that  insti- 
tution. Their  suspicions  had  been  aroused  that  Balston's 
administration  of  its  affairs  was  open  to  grave  criticism.  He 
attended  the  meeting  of  the  directors,  and  was  coldly  re- 
quested to  withdraw  during  the  discussion.  He  who  had 
been  absolute  in  the  great  bank  saw  that  his  power  was 
gone ;  he  stood  on  the  brink  of  a  moral  Niagara.  He  left 
the  Directors  to  make  the  inevitable  discovery  that  he  had 
over-issued  the  stock  of  the  bank  some  $6,000,000,  and 
crazed  with  grief  and  despair,  found  a  suicide's  death  in  the 
waters  of  the  bay.  He  had  over-issued  the  stock  hoping 
and  believing  that  success  in  some  one  of  his  numerous  and 
gigantic  enterprises  would  enable  him  to  provide  for  it,  but 
dieter  stealing  on  him  suddenly,  like  a  thief  in  the  night, 
frustrated  any  plan  of  restitution,  and  he  paid  for  his  fault 
with  his  life.  He  was  a  man  about  five  feet  seven  inches  in 
height,  with  a  rather  florid  complexion,  a  full  light  brown 
beard  and  kindly  brown  eyes.  He  was  once  the  idol  of 
California,  and  his  one  great  fault  is  almost  swallowed  up 
in  the  memory  of  his  princely  generosity,  his  hearty  geni- 
ality, and  his  many  other  engaging  traits. 

John  P.  Jones. 

John  P.  Jones  has  had  an  eventful  career.  He  has  made 
and  lost  millions.  He  was  worth  at  one  time  five  or  six  mil- 
lions. He  lost  very  heavily  in  railroad  enterprises  in 
Southern  California.  He  had  been  engaged  in,  mining  and 
had  won  a  big  heap  of  treasure,  probably  as  much  wealth 
as  any  one  needs,  or  more,  but  with  the  restless  ambition  of 
one  who  would  travel  still  higher  up  the  glittering  heights 
of  financial  fame  he  sought  to  emulate  Huntington,  Stanford 
and  others  and  become  a  railroad  magnate.  It  was  a  case 
of  vaulting  ambition  o'erleaping  itself  and  falling  on  the 


470  WBSTKRK  MlttlONAIRKS  IN  NKW  YORK. 

other  side.  He  lost  almost  his  entire  fortune^  but  he  has 
now  regained  his  feet  again  and  is  once  more  wealthy.  He 
profited  by  the  reyival  of  interest  in  mines  and  mining 
stocks  in  1886,  and  secured,  moreoyer,  a  considerable  inter- 
est in  the  Alaska  mine,  in  which  D.  O.  Mills  was  interested 
He  bought  stocks  of  once  famous  mines  at  low  prices, 
and  when  the  advance  on  the  revival  of  public  in- 
terest in  mining  shares  took  place  he  was  a  large 
gainer.  John  W.  Mackaj  has  within  the  last  few 
years  shown  a  disposition  to  lend  him  assistance  in 
his  endeavors  to  recover  his  former  footing.  John  P. 
Jones  is  one  of  a  number  of  Englishmen  who  have  won 
financial  celebrity  in  this  country.  He  was  bom  in  Here- 
fordshire, England,  in  1830,  and  came  to  this  country  with 
his  parents  when  only  a  year  old,  settling  in  Ohio.  For  a 
few  years  he  attended  school  in  Cleveland.  In  the  early 
days  of  the  gold  excitement  in  California  he  emigrated  to 
that  State  and  engaged  in  farming  and  mining.  He  acquired 
a  taste  for  politics.  He  represented  his  county  in  both 
houses  of  the  State  Assembly.  In  1S67  he  went  to  Gbld 
Hill,  Nevada,  and  has  ever  since  been  engaged  to  a  greater 
or  less  extent  in  developing  the  mineral  resources  of  that 
State.  In  his  earlier  days  he  worked  hard  as  a  miner  in  one 
of  the  counties  of  California.  He  worked  in  placers  and 
tunnels ;  he  had  many  ups  and  down.  He  was  daring  and 
ambitious,  and  sometimes  seemingly  reckless.  He  spent  a 
million  dollars  trying  to  develop  some  mines  in  Mono,  Cali- 
fornia, and  then  gave  up  the  attempt.  At  one  time  he  con- 
trolled the  Ophir,  Savage  and  Crown  Point  mines  on  the 
Comstock  lode ;  he  owned  large  establishments  for  the  man- 
ufacture of  ice  in  Georgia,  Louisiana  and  Texas  and  else« 
where ;  he  made  large  purchases  of  land  in  California ;  h6 
engaged  in  a  multitude  of  ambitious  enterprises.  He  had 
too  many  irons  in  the  fire.  Misfortune  did  not  daunt  him. 
Like  the  old  hunter  of  tradition,  his  motto  was,  ^^Pick  th6 
flint  and  try  it  again."      He  may  yet  become  a  financial 


R.  J.   BALDWIN. 


47  if 


power  again.  He  has  a  certain  readiness  as  a  speaker ;  he 
is  of  large  frame  and  not  nnpleasing  aspect,  and  his  taste 
for  public  debate  and  the  excitements  of  the  political  arena 
have  led  him  into  contests  for  public  honors  which  have 
been  successfol*  He  was  elected  as  a  Bepublican  to  the 
United  States  Senate  in  1872,  and  has  twice  been  elected,  so 
that  his  term  will  not  expire  until  1891. 

B.  J.  Baldwin  has  become  widely  known  by  the  sobriquet 
of  ^*  lucky.''  He  is  69  years  old  and  was  bom  in  Ohio.  His 
father  moved  to  Indiana  and  had  a  farm  adjoining  that  of 
Schuyler  Oolfax.  There  he  worked  till  he  reached  his 
twentieth  year.  He  married  in  the  following  year  and  went 
to  a  small  place  in  Indiana  and  kept  a  country  store ;  he 
soon  built  canal  boats  to  ply  between  Ohicago  and  St.  Louis. 
He  went  to  Bacine,  Wisconsin,  in  1850,  and  engaged  in  the 
grocery  business  with  considerable  success.  He  was  kec^n 
at  a  bargain  and  always  had  an  eye  out  for  the  main  chance. 
His  so-called  ^^  luck  "  was  in  reaUty  business  skill.  He  went 
to  California  in  1853,  after  purchasing  a  number  of  horses 
and  wagons  and  an  ample  supply  of  merchandise.  He 
found  a  good  market  for  his  goods  in  Salt  Lake,  making 
nearly  four  thousand  dollars  on  the  venture,  and  further  on 
he  sold  his  wagons  and  harness  and  made  up  a  pack  train 
over  the  mountains,  and,  arriving  in  San  Francisco,  sold  his 
teams  at  good  prices.  His  trip  had  been  a  complete  success. 
He  now  went  into  the  hotel  business,  and,  after  selling  out 
twice  to  good  advantage,  he  formed  a  partnership  to  engage 
in  the  brick  trade,  which,  proving  very  successful  mainly 
throng  his  skill  in  drumming  up  business,  he  decided  to  go 
into  it  alone.  He  himself  knew  nothing  about  brick  making, 
but  he  studied  up  the  subject  and  eventually  became  an 
expert.  He  obtained  remunerative  contracts  with  the 
Qovemment ;  he  boarded  his  men  and  made  for  a  time 
about  fifteen  hundred  dollars  a  month.  He  finally  sold  out 
and  went  into  the  livery  business.  He  made  money  and 
invested  considerable  in  real  estate.    He  sold  out  and  went 


472  WESTERN  MII^WONAIRKS  IN  NEW  YORK. 

to  Yirginia  City,  Nevada,  at  iho  breaking  out  of  the  mining 
excitement  there.  At  that  point  he  started  a  lumber  jBid, 
He  speculated  in  mines  and  met  at  times  with  great  success, 
but  once  he  was  so  badly  worsted  in  this  great  game  that  he 
was  compelled  to  mortgage  all  of  his  property ;  but  the  tide 
turned  soon  and  became  a  flood  of  gold.  He  speculated  ia 
such  mines  as  the  Crown  Point,  Belcher,  Consolidated  Vir- 
ginia, California  and  Ophir.  He  acquired  at  one  time  the 
controlling  interest  in  the  Ophir.  He  has  speculated  heavily 
in  San  Francisco  real  estate,  and  with  marked  success;  He 
erected  a  building  there  that  cost,  with  all  its  appurtenance 
oyer  three  million  dollars.  Part  of  it  is  used  as  a  theatre. 
He  bought  sixty  thousand  acres  of  land  in  Los  Angelos 
county,  and  had  practically  a  town  of  his  own.  He  spent 
about  half  a  million  dollars  improTing  this  tract,  more  par- 
ticularly his  Santa  Anita  ranch  of  over  fifteen  thousand 
acres.  His  sagacity  and  industry,  rather  than  mere  ^^ucky" 
have  won  him  his  fortune  of  ten  or  fifteen  million  dollars. 

William  H.  Stewabt. 
William  H.  Stewart,  another  successful  man  of  the  Far 
West,  who  has  twice  represented  Nevada  in  the  United 
States  Senate,  was  a  New  York  boy,  bom  in  Wayne  county 
in  1827.  A  good  many  New  York  boys  have  succeeded  in 
the  West.  He  went  to  California  early  in  1850.  In  the 
fall  of  that  year,  while  prospecting,  he  discovered  the  Enreka 
placer  diggings ;  he  built  saw  mills,  worked  claims  because 
disgusted  with  mining,  went  to  Nevada  City  in  the  spring  of 
1852,  and  in  December  of  that  year  was  appointed  District 
Attorney,  was  elected  to  that  office  in'  the  following  year, 
and  in  1854  was  appointed  Attorney  General,  thereupon 
taking  up  his  residence  in  San  Francisco,  where,  by  the  way, 
he  married  a  daughter  of  ex-Governor  Foote,  of  Mississippi. 
Later  he  returned  to  Nevada  City  and  established  a  very 
lucrative  law  practice,  and  remained  in  that  county  till  the 
spring  of  1860,  when  the  furore  over  the  Comstock  mines 


AN  ECCENTRIC  B^NKFACiy>Til. 


479 


induced  him  to  go  to  Yirginia  City,  Nevada.  He  thoroughly 
understood  mining  law,  and  soon  had  a  large  practice.  The 
large  sums  which  his  legal  talents  brought  him  were  invested 
in  mines,  and  he  became  one  of  the  leading  operators  on  the 
Oomstock  lode.  He  invested  half  a  million  dollars  in  San 
Francisco  real  estate.  He  rendered  important  services  to 
mining  interests  while  in  the  United  States  Senate,  in  pre- 
venting the  passage  of  a  bill  providing  for  the  sale  of  all 
the  mineral  lands  of  the  country  at  public  auction,  a 
measure  which  it  was  supposed  would  concentrate  much  of 
the  mining  property  of  the  United  States  into  the  hands  of 
the  wealthy. 

James  Lioe. 

James  lick,  bom  in  Pennsylvania  in  1796,  was  one  of 
the  strange  characters  of  California.  He  went  ihere  in  1847, 
after  having  been  a  manufacturer  of  pianos  in  this  country 
and  different  parts  of  South  America.  He  took  $30,000 
to  San  Francisco,  which  he  invested  in  real  estate,  foresee- 
ing that  it  was  to  become  the  great  city  of  the  Pacific  Slope. 
He  bought  lots  by  the  mile.  His  profits  were  enormous. 
He  became  one  of  the  great  millionaires  of  California.  He 
set  aside  $2,000,000  in  1874,  to  be  held  by  seven  trustees, 
and  to  be  devoted  to  certain  public  and  charitable  purposes. 
In  1876  he  desired  to  make  some  changes  in  his  schedule  of 
gifts,  and  when  the  trustees  expressed  some  doubts  as  to 
their  legal  right  to  give  assent,  at  his  request  they  resigned. 
The  next  year  he  died,  and  then  followed  a  litigation  by 
his  son  and  other  heirs,  which  was  finally  so  adjusted  as  to 
leave  a  large  sum  to  be  devoted  to  various  public  and  char- 
itable projects.  He  left  $60,000  to  be  devoted  to  a  statue 
of  Francis  Scott  Key,  the  author  of  the  ^^  Star  Spangled 
Banner."  He  was  very  eccentric,  due,  it  is  said,  to  an  early 
disappointment  in  love.  He  sought  the  hand  of  a  miller's 
daughter,  but  was  dismissed  by  the  father,  because  young 
lick  did  not  own  a  mill.    When  he  became  enormously 


472  -flX/ONAIRES  IN  NEW  YORK. 

to  V  ^*'^     ,t^Uc^  hvSii  a  large  mill,  and  adorned  it  with 

ex  0t^^'^^\gdeo8dj  woods  as  a  memorial  of  his  yontlifnl 

J  ^*^^^i  Be  seemed  to  derive  almost  childish  pleasure 

^^^^^^plating  this  splendid  building,  which  would  have 

^^paisbone  any  that  could  ever  have  been  owned  by  the 

^  ffio  iad  once  spurned  him  for  his  poverty.    The  poor 

^^oBg^^^  ^^  ^^^  generation  are  often  the  millionaires  of 

^0  nexL   One  of  the  great  monuments  to  his  memory  is  the 

^j^t  lack  Observatory.  * 

John  W.  Shaw. 

John  W.  Shaw,  who  made  considerable  money  in  mines 
and  mining  stocks,  is  one  of  the  Western  millionaires  who 
reside  in  New  York.  He  was  a  superintendent  of  mines, 
and  speculated  on  his  information.  He  was  at  one  time 
prominently  identified  with  the  Eureka  Consolidated  mine. 
He  is  supposed  to  be  worth  $4,000,000  to  $5,000,000,  and  is 
now  President  of  the  Hocking  Valley  Boad.  Messrs.  Keene, 
Lent,  Dewey,  Harpending,  Verdenal  and  other  more  or  less 
successful  men  well  known  in  California,  live  here.  One 
of  the  distinguished  lawyers  of  the  West  who  have  come 
here  to  establish  a  practice  is  ex-Governor  Hoadly,  of  Ohio. 
Austin  Corbin,  though  at  one  time  a  lawyer  in  Iowa,  found 
his  true  field  in  New  York,  and  Alfred  Sully,  after  amassing 
some  means  in  the  same  State,  likewise  found  himself  drawn 
to  New  York,  and  won  unexpected  success  in  finance  here* 


CHAPTER    XLIII. 

RAILROAD  INVESTMENTa 
Vastnbss  oy  oub  Bailboad  System.— Its  Cost.— Pall  m 

THE    EaTB    of    InTEBEST. — TENDENCY  TO  A    FOUB  PeB 

Cent.  Eatb  on  Bailboad  Bonds. — Effect  op  the 
Change  on  Stocks. — Pbospectivb  Speculation.— Some 
Social  Inequities  to  be  Adjusted  thbough  Cheapeb 
Tbanspobtation. 

THERE  are,  perhaps,  few  who  distinctly  realize  the 
magnitude  of  the  amount  of  capital  inyested  in  the 
railroads  of  the  CTnited  States.  The  immense  area  over 
which  our  population  is  distributed  necessitates  a  much 
greater  length  of  railroad,  as  compared  with  inhabitants, 
than  exists  in  any  other  nation.  In  1884  we  had,  according 
to  "Poor's  Manual  of  Bailroads,"  no  less  than  125,380 
miles  of  road  within  the  United  States,  which  exceeds  the 
entire  mileage  of  Europe.  This  was  required  to  provide  for 
the  travel  and  transportation  of  about  64,000,000  of  popula- 
tion, while  Great  Britain,  France,  and  Germany,  with  their 
combined  population  of  120,000,000,  had  in  the  same  year 
about  60,000  miles,  andBussia,  with  some  85,000,000  of 
people,  had  only  about  19,000  miles. 

It  can  hardly  be  a  matter  for  boasting  that  we  have  found 
it  necessary  to  provide  such  a  disproportionate  length  of 
road  to  accommodate  the  wants  of  trade  and  travel ;  for  the 
more  capital  we  have  to  invest  in  the  facilities  for  carriage 
the  less  we  have  for  investment  in  the  means  for  production, 
and  the  more  vrh  have  to  pay  for  transportation  service  the 
worse  is  our  position  for  competing  with  other  nations.  This, 
undoubtedly,  is  a  much  more  important  factor  than  is  gen- 
erally allowed  in  the  question  of  our  ability  to  command  a 
share  in  the  world's  international  commerce  proportioned 
to  the  extent  of  our  population. 


/ 


476  RAII^ROAD  INAmSTMKNTS. 

The  cost  of  oar  railroads,  as  indicated  by  the  capitaliza- 
tion statements  of  the  Companies  in  18S4,  is  represented  by 
$3,669,116,000  in  bonds  and  $3,762,016,000  of  stock.  As 
shown  in  another  chapter  on  "Railroad  Methods,"  the 
actnal  cash  outlay  in  constmction  and  equipments  is  yery 
much  less  than  these  figures  ;  but  the  roads  aim  to  earn  an 
investment  return  on  these  enormously  inflated  amounts, 
and  do  so  as  far  as  they  may  be  able. 

Elsewhere  in  this  volume  I  have  shown  how  the  effort  to 
earn  dividends  upon  hundreds  of  millions  of  fictitioos  rail- 
road capital  is  imposing  an  unjust  tax  on  the  people,  retard' 
ing  the  growth  of  national  commerce  and  creating  a  distinct 
millionaire  class  not  without  danger  to  our  political  futore; 
and  I  wish  here  to  refer  to  one  fact  from  which  we  may 
hope  for  some  mitigation  of  this  pernicious  tendency. 

Within  recent  years  it  has  become  very  clear  that  a  large 
permanent  reduction  has  been  effected  in  the  rate  of  interest 
vOn  fixed  capital.  Perhaps,  the  principal  causes  of  tliis 
,  change  has  been  (1)  the  high  credit  of  the  Government, 
represented  by  a  3  per  cent,  rate  of  interest  on  its  loans; 
(2)  diminution  of  the  element  of  risk  in  our  corporate  enters 
prises ;  (3)  the  more  developed  and  consolidated  condition 
of  our  industry;  and  (4)  the  growth  of  the  national  earnings 
in  a  ratio  disproportionate  to  the  new  undertakings  inviting 
capital.  To  such  an  extent  has  the  loanable  resources  of 
the  country  increased  that,  whereas  ten  to  fifteen  years 
ago  we  found  it  necessary  to  borrow  in  other  countries  a 
large  portion  of  the  money  needed  to  build  our  railroads, 
we  are  now  almost  entirely  independent  of  European  lend- 
ers, and  are  beginning  to  invest  in  the  construction  of  roads 
in  Oanada  and  Mexico. 

Thus  comes  about  the  fact  that,  while  the  bulk  of  the  new 
outstanding  railroad  bonds  bear  interest  at  6  to  7  per  oenLi 
with  exceptions  at  5  and  8  per  cent.,  there  is  no  difficulty 
in  now  negotiating  the  mortgages  of  sound  railroads  at  4 
per  cent.,  and  that  may  be  safely  regarded  as  this  fatura 


THK  BURDEN  OF  FIX^D  CHARGBS.  477 

rate  for  all  meritoriotis  loans.    It  is  not  difficult  to  see  to 
what  course  of  things  this  fact  points.    If  new  roads  can  be 
built  on  a  4  per  cent,  ratio  of  interest  charges,  then  the  new 
constractions  on  that  basis  and  the  gradual  replacing  of 
matuiling  loans  at  the  same  rate  will  very  quickly  establish 
a  competition  between  roads  thus  situated  and  the  large 
mass  of  companies  burdened  with  the  old  high  rate  of 
interest  that  will  bear  very  seriously  on  the  latter.  To  a  com- 
pany with,  say,  $40,000,000  of  bonded  debt,  it  is  a  matter  of 
a  difference  of  $800,000  per  year  in  fixed  charges  whether  it 
pays  6  per  cent,  interest  or  4  per  cent.    This  difference 
will  be  so  vital  in  cases  of  competition  between  high  rate 
roads  and  low-rate  ones,  that  it  will  leave  no  choice,  with 
a  very  important  proportion  of  our  railroads,  between  facing 
financial  embarrassment  and  taking  inmxediate  steps  for  re- 
adjusting their  debts  to  the  new  and  lower  rate  of  interest. 
As  an  important  proportion  of  the  original  bonds  issued  25 
to  80  years  ago  at  6,  7,  and  8  per  cent  rate  by  the  older 
roads  are   now  beginning  to  mature  very  rapidly,  a  large 
extent  of  high-rate  debt  will  from  this  time  forward  be 
transmuted  into  4  per  cent,  bonds,  which  will  add  force  to 
the  tendency  here  indicated. 

Some  important  results  must  follow  from  this  new  drift 
in  railroad  investments.    One  of  the  effects  would  naturally 
be  a  diminution  of  the  current  high  rate  of  premium  on  the 
old  bondsy  which  has  become  so  adjusted  as  to  yield,  in 
most  caseS)  a  return  of  4  to  4^  per  cent,  on  the  market  value. 
Holders  of  this  class  of  bonds  will  perceive  that  the  com- 
panies cannot  long  sustain  the  burden  of  their  present  high 
rate  of  fixed  charges,  and  will  soon  come  to  discount  in  ad- 
vance the  inevitable  "  scaling'' 'of  their  bonds.    When  the 
railroads  begin  to  feel  the  effects  of  competition  with  the 
low-rate  companies,  they  will  not  be  slow  to  adjust  their 
finances  to  the  new  situation;  neither  will  they  be  nice 
about  their  methods  of  effecting  such  adjustments ;  and  the 
rights  of  creditors  will  be  ruthlessly  dealt  with  under  the 


478  RAJXROAD  INVBSTMSNTS. 

compulsion  of  foreclosure;  and  when  this  compulsoiy 
stage  is  reached,  it  will  not  be  yery  long  before  a  large  pro- 
portion of  the  high-rate  bonds  is  transmuted  into  long  i 
per  cent«  obligations. 

This  very  iiiiportant  transition,  upon  a  soch  large  mass  of 
investments,  is  to  be  anticipated  as  one  of  the  most  con- 
spicnons  financial  events  of  the  comparatively  near  future. 
One  of  its  first  effects  may  be  expected  to  appear  in  a  cer- 
tain tone  of  depression  among  investors,  who  will  feel  them- 
selves impoverished  through  the  fall  in  the  market  value  of 
their  bonds,  and  by  the  impending  redaction  of  one-third  in 
their  income  from  this  class  of  securities.  The  bondholders— 
and,  indeed,  investors  generally — will  be  likely  to  reason  that 
the  reduction  in  the  fixed  charges  of  the  roads  will  leave  so 
much  more  available  for  the  stockholders ;  and  there  would 
be  this  extent  of  warrant  for  such  a  conclusion,  that,  as  the 
stock  of  a  company  usually  about  equals  the  amount  of  its 
bonds  issues,  any  reduction  in  the  rate  of  interest  on  the 
latter  would  be  just  so  much  per  cent,  saved  towards  the 
dividend  on  share  capital.  Under  such  circumstances,  there 
would  naturally  be  a  marked  increase  in  the  demand  for  rail- 
road stocks,  and  a  large  advance  in  their  market  value  would 
in  all  probability  result.  To  those  who  contemplate  invest- 
ing in  railroad  shares,  this  is  a  consideration  which,  it  ap- 
pears to  me,  should  claim  their  consideration. 

It  would  seem  probable  that,  in  the  process  of  conversion 
here  foreshadowed,  there  are  the  elements  of  an  era  of  un- 
usual speculative  activity  at  a  period  not  very  remote.  That 
speculative  movement  may  be  expected  to  consummate  and 
finally  adjust  the  change.  Naturally,  such  an  excitement 
would  tend  to  produce  a  great  inflation  in  the  price  of  stocks 
(as  distinguished  from  bonds) ;  the  final  stroke  of  adjust- 
ment, however,  would  come  ultimately  through  the  construo- 
tion  of  new  competing  roads,  which  would  take  out  of  the  net 
earnings  of  the  roads  as  much  as  had  been  saved  by  the 
reduction  of  interest  on  their  debts,  thus  leaving  the  diyi- 


dend  resources  where  they  stood  before  the  change.  The 
final  issue  of  this  transition,  therefore,  would  be  to  give  the 
public  at  large  about  the  entire  benefit  of  what  the  railroads 
sayed  bj  the  amelioration  of  their  debt  charges. 

The  tendency  I  have  here  aimed  to  foreshadow  is  one 
that  must,  largely  tend  to  the  public  advantage.  In  other 
words,  the  railroads,  haying  reduced  by  30  to  40  per  ceni 
their  interest  charges,  will  be  in  a  position  to  perform  their 
services  for  correspondingly  lower  charges.  This  will  be  an 
invaluable  advantage  to  all  our  industries,  and  especially  to 
such  as  have  to  deal  with  bulky  products,  a  considerable 
portion  of  the  costs  of  which  consists  of  charges  for  trans- 
portation, and  the  working  class,  who  constitute  the  bulk  of 
our  consumers,  will  be  especially  benefited. 

In  another  chapter  I  have  shown  how  the  over-capitaliza- 
tion of  our  railroads  has  caused  a  false  and  unjust  distribu- 
tion  of  wealth,  and  burdened  our  indusijies  with  transporta- 
tion charges  which  are  a  serious  obstacle  to  our  national 
progress.  The  tendency  above  delineated  shows  how  seri- 
ously the  natural  laws  governing  the  distribution  of  wealth 
provide  an  ultimate  remedy  for  such  violations  of  these 
laws.  The  railroad  capitalists  who  have  made  their  millions 
by  providing  railroads  at  such  an  inflated  cost  are  now 
faced  with  the  certain  prospect  of  a  loss  of  one-third  of 
tlieir  income  from  their  investments ;  and  that  deduction 
will  have  to  be  distributed  among  the  conmmniiy  at  large  in 
the  form  of  cheaper  carriage. 

This  is  but  a  repetition  of  what  we  find  so  many  times  in 
the  history  of  nations,  that  when  any  important  class 
exacts,  by  some  artificial  process,  a  vast  amount  of  wealth 
that  does  not  naturally  and  justly  belong  to  it,  it  ultimately 
finds  the  earning  capacity  of  its  accumulations  declining. 
This  is  one  among  the  many  reasons  why  a  low  rate  of  in- 
terest is  apt  to  prevail  in  countries  where  privileged  or 
aristocratic  classes  have  absorbed  an  undue  proportion  of 
the  national  wealth. 


CHAPTER    XLIV. 

THE     SILVER    QUESTION. 

Ira  FXTNDAMENTAL  ImPOBTANOB. — DaNGEBS    OF    NEOLEOnNG 

rr. — Attempts  at  Evasion.— How  it  must  be  finally 

MBT. — SiLYEB    PaPEB    CuBBENOT    SoHEMES,    AND  THBIB 
FuTULlTY* 

OF  all  current  public  questions,  I   know  of   none  that 
so  vitally  affects  the  future  of  our  financial  interests 
as  this  one — what  shall  be  the  status  of  silver  among  the 
world's  currencies?     At  the  present  time,  about  one-half 
of  the  world's  metallic  money  consists  of  silver,  and  the 
other  half  of  gold.    It  is  clear  that  silver  cannot  maintain 
its  necessary  function  as  money  unless  it  is  invested  with 
stability  of  exchangeable  value.    Such  stability  it  cannot 
possess  without  the  intervention  of  a  conventional  arrange- 
ment which,  with  all  the  force  of  a  uniform  law,  makes  a 
given  weight  of  silver  virtually  exchangeable  for  a  given 
weight  of  gold.    This  principle  once  established,  and  silver 
bnllion  being  made  convertible  into  silver  coin  at  the  mints 
of  the  chief  nations  on  demand,  it  follows  that  the  bnllion 
ralne  of  silver  must  constanUy  conform  closely  to  its  value 
as  coin,  and  the  stability  of  the  value  of  silver  coin  would 
thns  be  insured. 

The  difficulty  has  been  that,  owing  to  petty  jealousies 
and  prejudices.  Governments  have  hesitated  to  act  with  the 
ananimity  that  is  necessary  to  an  efficient  conventional  ar- 
rangement. Each  one  has  preferred  that  others  should  take 
the  responsibility  of  free  coinage ;  and  the  result  has  been 
that  unrestricted  coinage  has  been  adopted  only  by  those 
joations  which  happened  to  be  most  imperatively  committed 
to  the  necessity  of  protecting  their  silver  circulation.  Those 
HAtions  were  comprised  in  the.  international  combination 
known  as  ^^  The  Latin  Union."  That  Union  was  found  com* 


482  TH«  SELVRR  QXTKSTION. 

petent  to  take  care  of  all  the  new  supplies  of  silver,  so  long 
as  the  principle  of  free  coinage  was  maintained  and  tlie 
value  of  the  metal  was  kept  unif  onn  under  its  operation.  In 
an  evil  hour,  however,  certain  German  theorists  persuaded 
Chancellor  Bismarck  to  conmiit  Germany  to  the  demonetiza- 
tion of  silver.  The  large  supply  of  the  metal  thereby  snd- 
denly  thrown  into  the  mints  of  the  Union  nations  alarmed 
that  cdmbination,  first,  into  a  limitation  of  their  coinage  of 
silver,  dnd,  finally,  into  a  suspension  of  it.  The  coinage  de- 
mand for  silver  being  thus  cut  off,  the  price  of  silver  bullion 
was  cut  loose  from  the  relative  legal  valuation  between  sil- 
ver coin  and  gold,  and  was  left  to  drift  with  the  variations 
in  the  commercial  demand,  and  to  decline  in  consequence  of 
an  excess  of  supply  over  demand.  This  is  a  brief  explani^ 
tion  of  the  causes  of  the  present  depreciation  in  the  value 
of  silver. 

I  know  of  no  way  of  repairing  the  value  of  that  metal 
other  than  by  establishing  an  international  union,  similar  in 
its  objects  and  conditions  to  the  now  virtually  defunct  Latin 
Union,  but  embracing  a  wider  range  of  Governments  than 
that  combination  did ;  the  co-operation  of  the  United  States, 
England  and  Germany  being  especially  important.  Here  I 
may  perhaps  be  permitted  to  republish  a  series  of  questions 
propounded  by  the  New  York  Daily  Commercial  BvUetiny  in 
October  last,  with  my  answers  appended,  as  briefly  ex- 
pressing the  conclusions  I  have  been  led  to  form  on  this 
question : 

Questions. 

I.  Would  the  stock  of  gold  in  the  world  afford  a  basis 
broad  enough  to  meet  the  banking  and  conunercial  opera- 
tions of  Europe  and  the  United  States,  without  the  co-ordin- 
ate use  of  a  properly  regulated  silver  legal  tender  1 

II.  Would  you  favor  an  International  Coinage  Union, 
embracing  the  United  States  and  the  leading  European  Gov. 
ernments,  based  upon  a  uniform  valuatiQu  of  silver  as  com- 
pared with  gold,  and  binding  each  member  to  coin  on  de- 
mand all  silver  presented  at  its  mints  and  to  make  such  coin 
a  legal  tender  t 


SILVER  REQUIRED  FOR  KSXAXh  BUSINESS.  488 

m.  Supposing  the  ratio  of  yalaation  adopted  by  snch  a 
Union  to  oe  the  present  most  general  one  of  15^  to  1,  do 
jon  see  any  reason  why  the  obligation  of  all  nations  in  the 
Union  to  convert  silver  bnllion  into  le^al  tender  coin  at 
that  rate  should  fail  to  restore  silver  to  its  former  value  of 
abont  60  pence  per  ounce  ? 

IV.  Would  the  suspension  of  the  coinage  of  the  Silver 
Dollar  be  judicious,  or  necessary,  or  effectual,  as  a  means  of 
inducing  European  Governments  to  join  in  an  International 
Coinage  compact ! 

V.  Are  there  any  important  reasons  connected  with  the 
finances  of  the  United  States  Government,  with  our  currency 
systein,  or  with  the  prospective  trade  of  this  country,  why 
the  coinage  of  the  Standard  Dollar  should  be  suspended? 

lY.  Do  you  favor  the  immediate  suspension  of  coinage  of 
the  Silver  DoUarl 

Beplies. 

1.  Possibly  the  existing  stocks  of  gold  in  Europe  and  Amer- 
ica might  be  sufficient  to  serve  the  purposes  of  banking 
reserves  and  for  transmission  in  the  international  exchanges; 
but  it  is  impracticable  to  use  such  a  valuable  metal  to  the 
extent  required  for  the  purposes  of  active  circulation,  and 
this  creates  a  necessity  lor  a  silver  legal  tender  coin  for  the 
retail  transactions  of  business.  For  this  reason  I  regard 
the  use  of  silver,  co-ordinately  with  gold,  as  an  indispensable 
element  in  the  world's  currency. 

2.  I  regard  .an  international  union  as  absolutely  necessary 
for  maintaining  the  joint  use  of  gold  and  silver,  if  the  rela- 
tive value  between  those  metals  is  to  be  steadily  maintained. 
If  a  uniform  value  of  silver  were  adopted  by  members  of  such 
a  union,  and  if  the  mint  of  each  nation  were  bound  to  coin 
all  silver  brought  to  it,  and  the  coins  were  made  a  legal 
tender,  it  appears  to  me  that  this  would  establish  a  uniform 
value  for  silver  bullion  the  world  over,  on  a  parity  with  the 
legal  valuation  of  silver  coin ;  and  this  conventional  value 
of  bullion  would  be  preserved  as  long  as  the  union  should  be 
continued.  Even  the  limited  international  arrangement 
knoven  as  the  Latin  Union  sufficed  to  keep  silver  at  about  60 
pence  per  ounce,  until  its  members,  taking  fright  bj^  the  de- 
monetization of  silver  by  Germany,  stopped  the  coinage  of 
silver;  when,  the  conventional  support  being  withdrawn 
and  the  coinage  demand  suspended,  bullion  f  eU  to  its  value 
as  a  mere  commodity  This  shows  how  effective  the  union 
principle  is,  and  what  becomes  of  silver  without  it. 


484  Tun  SII.VER  QUESTION. 

8.  If  an  international  union  were  to  fix  the  valae  o!  the 
two  metals  at  15  J  weights  of  silver  to  1  of  gold,  the  rate 
now  general  in  Europe,  and  the  members  of  the  union  were 
compelled  to  coin  it  on  demand  at  that  rate,  thea  the  free 
convertibility  of  bullion  into  coin  would  necessarily  make 
the  coin  and  the  bullion  of  equal  value,  except  the  slight 
difference  that  might  arise  from  coinage  charges;  which  is 
tantamount  to  making  silver  worth  about  60  pence  an  onnce, 
or  its  former  value. 

4.  In  view  of  the  differences  of  opinion  in  Europe  on  the 
standard  question  and  the  strong  prejudices  in  England  in 
favor  of  the  gold  standard,  it  appears  to  me  more  than 
doubtful  whether  any  step  will  be  taken  on  this  subjecl; 
until  those  countries  are  made  to  carry  the  burthen  of  the 
large  surplus  of  silver  that  we  are  now  coining.  Hut  with 
25  to  30  millions  of  bullion  of  our  silver  going  thither  every 
year,  the  effect  would  be  so  serious  upon  Asiatic  trade  and 
upon  the  iomiense  silver  circulation  of  the  Latin  nations, 
that  it  seems  certain  they  would  soon  become  willing  to  as- 
sume their  share  in  restoring  silver.  At  any  rate,  it  is 
a  proper  and  necessary  compulsion  for  us  to  apply. 

6.  The  Government  is  very  closely  threatened  with  a  sus- 
pension of  gold  payments,  if  the  coinage  is  continued.  We 
nave  already  seen  a  point  at  which  the  Treasury  had  to  nego- 
tiate with  the  banks  for  six  millions  of  gold  to  avert  that 
catastrophe ;  and  it  is  only  a  thin  margin  of  a  very  few  mil- 
lions that  separates  us  from  such  a  condition  all  the  time. 
Of  course,  if  the  Government  suspended  coin  payments,  gold 
would  be  apt  to  go  to  an  indefipite  premium  ;  with  the  con- 
sequence of  a  rush  of  greenbacks  into  the  Treasury  for  re- 
demption and  a  depreciation  of  such  paper  as  is  re^leemable 
in  silver  to  the  purchasing  power  of  tnat  coin.  In  my  view, 
these  dangers  are  much  nearer  than  is  generally  supposed ; 
and  it  is  a  most  unjustifiable  policy  that  needlessly  perpeta- 
ates  this  state  of  things. 

6.  For  the  reasons  assigned  in  my  other  answers  to  vonr 
inquiries,  I  regard  the  suspension  of  the  coinage  of  the 
the  silver  dollars  as  to  the  last  degree  imperative.  And  the 
suspension  should  be  both  total  and  unconditional.  Either 
a  partial  or  a  temporary  suspension  would  fail  equally  to 
avert  the  home  dangers  with  which  we  are  threatened,  and 
to  bring  about  that  European  action  which^is  indispensable 
to  a  sound  and  permanent  settlement  of  the  question. 


TOO  MUCH  SII^VSR  COIN.  485 

So  long  as  there  was  no  efficient  oonyentional  arrange- 
ment for  maintaining  the  value  of  silver,  no  nation  can 
safely  continue  its  coinage,  because,  in  so  doing,  it  was  in- 
creasing its  stock  of  currency,  the  future  value  of  which 
could  not  be  depended  upon,  and  which  might  easily  be- 
come a  source  of  embarrassment  and  injustice  between 
citizen  and  citizen,  between  debtor  and  creditor.     In  our 
country,  however,  such  was  the  political  influence  of  the  silver- 
producing  States  that  they  easily  induced  Congress  to  order 
the  coinage  of  not  less  than  $24,000,000  per  annum  of  standard 
silyer  dollars.     The  effect  of  this  has  been,  undoubtedly,  to 
somewhat  check  the  decline  in  silver  bullion  ;  but  at  the  ' 
expense  of  the  artificial  addition  already  of  $230,000,000  of 
badly  depreciated  legal  tender  to  our  circulating  medium. 
Our  whole  currency  system  has  thus  been  vitiated ;  for  our 
$680,000,000  of  paper  money  may  be  redeemed  in  silver  ^ 
and  we  are  thus  exposed  to  the  very  gravest  dangers,  in  the 
event  of  anything  causing  an  important  drain  of  gold  to 
Europe.     That  the  coin  thus  issued  was  not  really  needed 
for  the  purposes  of  circulation  is  demonstrated  by  the  fact^ 
that  it  has  been  found  impossible  to  get  more  than  one- third 
of  it  into  circulation.     In  order  to  obviate  this  difficulty, 
various  devices  have  been  introduced  for  keeping  the  coin 
in  the  Treasury  and  issuing  against  it  paper  certificates  of 
small  denominations.     The  most  ingenious  of  these  contri- 
vances was  the  one  proposed  by  Hon.  A.  J.  Warner,  of 
Oliio,  and  pressed  on  the  Government  for  its  indorsement. 
In  September  last  I  took  occasion  to  publish  certain  objec- 
tions to  Mr.  Warner's  scheme,  which  was  finally  rejected  by 
the  Silver  party;  and,  with  that  rejection,  there  is  probably 
an  end  to  all  proposals  for  creating  a  purely  silver  paper 
currency.     As  c  brief  exposition  of  one  phase  of  this  con- 
troversy, it  may  perhaps  be  permissible  to  reproduce  here 
Jbe  views  then  expressed: 

Mr.  Warner's  measure  virtually  concedes  that  the  coinage 
of  fhe  silver  dollar  has  already  been  carried  to  a  point  that 


486  TH«  SII.VER  QTTSSl^IOK. 

ihreatens  serious  danger  to  the  cnrrency  fi^stem  of  the  conn- 
try,  and,  consequently,  to  the  just  relations  between  the 
creditor  and  debtor  classes.  This  confession  from  a  repre- 
sentative of  the  Silver  party  does  not  come  a  day  too  soon ; 
and  it  would  be  welcome,  were  it  not  accompanied  with  pro- 
posals that  would  aggravate  the  evils  which  need  to  be 
remedied.    Let  us  brieflv  examine  Mr.  Warner's  plan. 

First,  it  discontinues  the  current  monthly  coinage  of  sfl- 
ver  dollars  required  under  the  existing  "  Bland  Act."  2.  It 
provides  that,  in  lieu  of  this  current  coinage,  holders  of  sil- 
ver bullion  may  deposit  any  amount  thereof  in  the  United 
States  Treasury.  3.  It  requires  that,  against  such  unre- 
stricted deposits  of  bullion,  the  Government  shall  issae  to 
the  depositors  "bullion  certificates,"  expressing  an  amount 
of  mone^  equal  to  the  market  value  of  the  bullion  at  the 
time  of  its  deposit.  4.  These  certificates  are  to  act  as  a 
new  form  of  currency.  The  Ck)vernment  could  use  them  in 
liquidation  of  all  its  debts  not  made  expressly  payable  in 
gold  ;  and  it  would  be  required  to  accept  them  in  payment 
of  customs  duties,  taxes  and  public  dues  generally.  The 
national  banks  would  be  required  to  accept  them  in  payments 
between  themselves.  And,  5,  the  certificates  are  made  re- 
deemable in  lawful  money,  (i.  e.,  either  gold,  silver  or  U.  S. 
Biotes),  or  at  the  option  of  the  Treasury  in  silver  bullion  at 
its  current  value  at  the  time  of  redemption.  These  are  the 
more  vital  provisions  of  the  scheme.  Let  us  see  what  they 
involve. 

Against  the  whole  plan  there  lies  a  very  positive  doubt 
of  its  constitutionality.  The  Constitution  empowers  Con- 
gress to  authorize  the  coinage  of  gold  and  silver,  and  to 
make  such  coins  a  legal  tender  ;  but  there  is  nothing  in  the 
powers  thus  conferred,  nor  in  any  powers  conveyed  by  that 
instrument,  that  can  be  construed  into  a  right  of  the  Gov- 
ernmeat  to  receive  silver  bullion  on  deposit.  The  Govcam- 
ment  can  have  no  interest,  duty  or  function  in  connection 
with  bullion,  except  so  far  as  it  may  be  procured  for  the 
express  purpose  of  coinage.  It  can  have  no  more  power  to 
assume  the  custody  of  bullion  for  the  accommodation  of  its 
producers  than  it  has  to  store  cotton,  iron  or  wheat  for  the 
convenience  of  the  dealers  in  those  commodities.  And 
when,  in  addition  to  assuming  the  grave  responsibilities  of 
custodian,  the  Government  undertakes  to  issue  receipts  en- 
dowed with  special  privileges  and  attributes,  calculated  to 


t—  PROPERTY  OF  . — 

NEW  YORK  CHART  CR; 

American  Institute  nf  B?ifil<it^t. 

TENDENCY    TO  SUPPRESS  GOI^D  PAYMENTS.  48T 

inooiporate  those  receipts  as  an  important  part  of  the  cur* 
rency  system,  it  conmiits  a  breach  of  the  true  functions  of 

Evemment  and  of  the  true  Constitutional  limitations  of 
leral  authority,  which,  it  would  seem,  the  Supreme  Court 
should  unqualifiedly  prohibit. 

The  provision  made  for  the  redemption  of  these  proposed 
certificates  would  be  to  the  last  degree  objectionable.  They 
are  payable  in  legal  tender  money,  or,  at  the  option  of  the 
Government,  in  an  equivalent  value  of  silver  bullion  at  its 
current  market  price.  If  the  Government  chooses  to  redeem 
them  in  lawful  money,  it  exposes  itself  to  a  new  and  im- 
portant demand  upon  its  legal  tender  notes  or  its  gold : 
and  as  the  amount  of  greenbacks  owned  by  the  Treasury 
now  runs  so  low  as  to  prohibit  those  notes  being  used  for 
the  purpose,  it  follows  that  the  redemption  of  the  certifi- 
cates would  have  to  be  made  from  the  Treasury  stock  of 
gold.  Thus  the  operation  of  the  scheme  would  be  to  ex- 
diange  the  Government  gold  for  silver  bullion.  What  could 
the  silver  men  desire  better  ?  What  could  all  other  interests 
dread  more?  It  would  be  a  direct  step  towards  incapacitat- 
ing the  Government  for  maintaining  gold  payments ;  and,  as 
such,  would  so  far  towards  dissipating  that  oroad  substratum 
of  gold  which  is  the  sole  means  of  preventing  our  entire 

Eaper  currency  from  depreciating  to  a  level  with  the  bul- 
on  value  of  the  silver  dollar. 

It  is  thus  clear  that  the  Government  would  be  ultimately 
driven  to  redeem  the  certificates  in  silver  bullion.  What 
does  that  imply?  First,  that  the  Treasury  would  have  to 
stand  the  loss  upon  the  deposits  of  bullion  that  might  arise 
from  a  fall  in  its  value.  Take  a  case  for  illustration.  A 
deposit  is  made  of  1,000,000  ounces  of  gold  at  the  current 
price  of  $1.10  per  ounce,  the  Treasury  being  required  to 
issue  against  it  $1,100,000  of  certificates.  Later,  when  the 
price  of  silver  has  fallen  to  say  $1.05,  the  $1,100,000  of  cer- 
tificates is  presented  for  redemption,  and  1,047,619  ounces 
of  silver  have  to  be  delivered,  as  the  bullion  equivalent  at 
the  current  market  value.  The  Government  thus  loses  47,- 
619  ounces  of  silver  by  the,  transaction.  Now,  seeing  what 
a  handsome  profit  can  be  made  by  thus  depositing  bullion 
at  a  higher  price  and  withdrawing  it  at  a  lower,  are  men  so 
virtuous  that  we  can  depend  on  their  not  working  this  Treas- 
ury silver  mine  to  the  utmost  possible  advantage  ?  With  the 
hands  of  the  Government  thus  tied,  it  would  be  at  the  mercy 


488  run  sii^v^R  question. 

of  unprincipled  speculators  and  could  not  escape  being 
mnlcted  to  the  extent  of  millions  of  dollars.  The  moment 
such  a  bill  was  signed  by  the  President,  speculative  combi- 
nations would  be  formed  with  London  bullion  dealers ;  the 
European  stocks  would  be  secured,  and,  after  advancing  the 
price,  would  be  sent  to  the  United  States  Treasury.  The 
next  step  would  be  to  force  down  the  price ;  and  then  the 
certificates  would  be  presented  to  be  redeemed  by  a  much 
larger  quantity  of  silver  than  had  been  deposited  against 
them..  And  tnus  the  game  would  go  on  continuously,  the 
Government  being  the  loser  in  every  transaction.  A  finer 
scheme  for  the  benefit  of  speculators  could  not  have  been 
conceived ;  but  for  legitimate  interests,  in  many  ways  de- 
pendent on  the  value  of  silver,  nothing  could  be  more 
serious. 

There  is  nothing  in  Mr.  Warner's  measure  to  prevent  the 
United  States  Treasury  from  being  saddled  with  as  much 
of  the  European  stocks  of  silver  as  speculators  find  it  to 
their  interest  to  send  here,  in  addition  to  the  product  of  our 
own  mines ;  and  for  such  deposits  the  Treasury  would  be 
compelled  to  pay  whatever  artificial  price  it  suited  the 
operators  to  determine.  And  what  does  such  a  transfer  in- 
volve ?  First,  that  we  should  have  to  ship  so  much  more 
gold  to  Europe,  making  the  operation  a  virtual  exchange 
of  Europe's  silver  for  America  s  goH ;  next,  that  the  United 
States  Government  would  thus  be  made  to  bear  the  sole 
weight  and  responsibility  of  carrying  the  world's  surplus 
of  silver  ;  next,  that,  as  a  consequence,  England,  Germany, 
and  other  nations  would  become  still  more  reluctant  than 
they  now  are  to  negotiate  for  an  international  settlement  of 
the  silver  question ;  next,  that  the  Government  would  be  so 
handicapped  with  its  enormous  load  of  silver  as  to  place  it 
at  an  utter  disadvantage  in  such  negotiations  ;  next,  that  the 
Government  would  be  exposed  to  immense  losses  in  assum- 
ing such  vast  responsibilities ;  and,  next,  that  the  large  issues 
of  certificates  to  be  made  against  this  mass  of  bullion  would 
be  a  forcible  and  artificial  inflation  of  the  currency,  which 
could  not  fail  to  produce  disaster  to  all  the  material  inter- 
ests of  the  country. 

Of  course,  such  an  arrangement  would  be  all  that  the  sU* 
ver  interests  could  desire.  For  them,  indeed,  it  would  be  a 
far  better  protection  than  the  Bland  Act.  But  this  advan- 
tage would  be  only  temporary  ;  for  when  the  scheme  broke 


RKPSAI,  OF  THB  COINAGK  ACT  NBCESSARY.  489 

down  of  its  own  weight,  as  sooner  or  later  it  must,  the 
miners  would  be  exposed  to  ruin  from  the  consequent  de- 
rangements. 

The  only  wholesome  treatment  of  this  question  is  to 
repeal  the  Silver  Coinage  Act.  That  done,  we  should  add 
$26,000,000  to  our  yearly  exports,  instead  of  locking  up  so 
much  of  our  national  product  as  dead  capital  in  the  Treas- 
ury ;  while  that  increase  of  exports  would  give  us  a  greater 
command  of  European  gold  and  thereby  strengthen  our  in- 
ternational position  in  this  question.  Europe,  and  especial- 
ly England,  would  then  be  compelled  to  earnestly  consider 
measures  for  placing  the  double  standard  upon  a  broad  and 
lasting  internationalbasis  ;  and  as  such  a  cUsposition  began 
to  manifest  itself,  the  silver  market  would  so  far  sympathize 
as  to  amply  compensate  producers  for  any  losses  they  might 
sujSer  from  a  temporary  fall  in  bullion. 

Henbt  Clews. 

Bad  as  the  situation  is,  in  respect  to  this  vast  mass  of  the 
world's  circulating  medium,  yet  it  is  far  from  being  a  hope- 
less one.  The  more  serious  it  becomes,  the  nearer  will  be 
the  remedy.  The  derangements  to  commerce  and  to  immense 
vested  interests  must  ultimately  become  so  serious,  that  the 
nations  which  now  obstruct  the  application  of  a  remedy  will 
be  compelled  to  submit  to  the  necessities  of  an  imperative 
danger,  and  the  end  will  probably  be  that  a  coinage  union 
will  be  established  between  the  great  nations,  on  a  basis 
broad  enough  to  give  stability  to  this  form  of  money  beyond 
all  possibility  of  future  disturbance. 


OHAPTEB    XLV. 

THE  UBOR  QUESTION. 

Habxont  Between  the  Bepbesentatives  of  Oapital  akd 
Labob  Necessaby  fob  Business  Pbospebity.— If  Man- 
ufactubebs  should  (Combine  to  Begulate  Wages, 
THE  Abbangement  Gould  onlt  be  Tempobabt.— The 
Wobeingmen  ABE  Taken  Cabe  of  by  the  Natubal 
Laws  of  Tbadb.— Competition  Among  the  Capital- 
ists Sustains  the  Bate  of  Wages  — Opinion  of  John 
Stuabt  Mill  on  this  Subject. — Compelling  a  Uni* 
FOBM  Bate  of  Pat  is  a  Gboss  Injustice  to  the  Most 
Skilful  Wobkmen.— The  Tendency  of  the  Tbades 
Unions  to  Debab  the  Wobkingman  fbom  Social  Ele 
vation.— The  Poweb  of  the  Unions  Bbought  to  a 
Test. — The  Uniyebsal  Pailube  op  the  Stbikes. — 
Bevolutionaby  Demands  of  the  Knights  of  Labob. — 

Gk)X7LD  AND  THE    StBIEES    ON    THE    MiSSOUBI    PaCIFIO, 

THEBE  is  no  influence  to  which  business  circles  are 
more  sensitive  than  the  disruption  of  harmony  be- 
tween capital  and  labor.  Whatever  afifects  the  productive- 
ness of  labor  affects,  more  directly  than  any  other  cause, 
the  national  prosperity  and  the  welfare  of  all  classes  of 
socieiy.  The  value  of  the  vast  aggregate  of  corporate  prop- 
erty represented  on  the  Stock  Exchange  is  vitally  depend- 
ent on  the  maintenance  of  such  relations  between  the  em- 
ployed and  employing  classes  as  contribute  to  the  highest 
welfare  of  both  and  to  the  largest  possible  national  produc- 
tion ;  and;  theref ore,  whatever  tends  to  imperil  such  rela- 
tions becomes  a  source  of  serious  disturbance  to  the  stock 
market,  to  financial  interests  at  large^  and  to  the  best  inter- 
6Bt8  of  labor  itself. 

There  appears  to  be  an  idea,  in  certain  quarters,  that  the 
modem  concentration  of  capital  into  large  masses  has  made 
it  necessary  for  workmen  also  to  organize  themselves  into 


492  TH^  LABOR  QUKTION. 

large  bodies,  sinking  their  indiyidaal  rights  and  liberties 
and  selling  their  labor  en  masse.  For  mj  part,  I  am  nnable 
to  see  the  force  of  this  reasoning,  although  I  cannot  bat 
respect  the  ability  of  some  authorities  by  which  it  is  sanc- 
tioned. It  seems  to  assume  that  large  employers  .of  labor 
have  more  power  to  depress  wages  than  smaller  ones ;  and 
from  this  it  is  inferred  that  it  is  necessary  for  workmen  to 
combine  to  protect  themselves  against  this  supposed  in- 
creased exposure  to  aggression  from  capital.  But  is  either . 
the  premise  or  the  conclusion  sound  ?  In  order  to  concede 
the  assumption  we  must  suppose  that  large  employers  can 
cease  to  be  competitors  for  labor ;  for  in  no  other  way  can 
they  depress  wages.  But  this  can  never  happen ;  for  capi- 
talists will  always  produce  to  the  fullest  extent  compatible 
with  an  average  rate  of  profit,  and  this  ensures  the  largest 
possible  demand  for  labor  and,  therefore,  the  highest  pos- 
sible rate  of  wages.  If  employers  combined  to  force  the 
rate  of  wages  down,  as  workmen  do  to  force  it  up,  they  would 
undoubtedly  be  able  to  compel  a  temporary  reduction  in  the 
remuneration  of  labor. 

But,  of  necessity,  such  an  artificial  depression  of  wages 
could  only  be  temporary ;  for  what  was  thus  taken  by  force 
from  labor  would  make  manufacturing  so  unusually  profit- 
able thatjiew  capital  would  be  immediately  attracted  to  it, 
and  the  consequent  additional  demand  for  labor  would 
necessitate  an  advance  in  wages,  which  the  combiued  manu- 
facturers would  be  compelled  to  pay.  As  a  matter  of  fact, 
manufacturers  do  not  combine  to  regulate  wages,  not  only 
because  of  the  reasons  just  stated,  but  also  because  they 
know  that  no  such  combination  could  be  maintained  in  the 
face  of  the  jealousies  and  conflicting  interests  that  always 
exist  among  them.  If,  then,  it  is  true  that  manufacturers 
are  compelled  by  the  necessities  of  competition  to  pay  as 
much  for  labor  as  it  is  for  the  time-being  worth,  and,  if  they 
do  not  and  cannot  combine  to  depress  wages,  I  am  nna1}le 
to  see  where  arises  the  necessity  for  the  workmen  to  com- 


FAI^K  NOTIONS  ABOUT  COMPKTITION.  493 

bine  for  the  purpose  of  protecting  themselves  against  cap- 
ital. 

The  workingmen  are  taken  care  of  by  the  natural  laws  of 
trade  far  more  perfectly  than  they  can  be  by  any  artificial 
arrangement ;  and  trades  unions  are  simply  an  intrusion 
upon  the  domain  of  those  laws,  without  the  power  to  sup- 
plement or  perfect  their  operation,  and  with  a  certainty  of 
obstructing  and  perverting  their  tendency,  with  the  inevit- 
able result  of  mischief  to  all  parties.  If  the  unions  do  occa- 
sionally get  an  advance  in  wages,  it  would  have  come  by 
the  natural  laws  of  competition  among  the  capitalists.  It 
might  be  delayed  for  a  time,  but  if  you  calculate  the  loss  of 
wages  and  suffering  entailed  by  the  strike,  I  think  the 
workmen  would  be  safer  in  the  end  to  wait  for  the  natural 
advance.  I  am  clearly  borne  out  in  this  view  of  the  case 
of  the  capitalist  by  that  great  political  economist,  philoso- 
pher and  thinker,  John  Stuart  Mill,  who  was  ce'rtaicly  no 
enthusiastic  friend  of  the  capitalist,  and  is  an  acknowledged 
friend  of  labor  as  widely  as  his  writings  are  known,  which 
is  almost  as  extensive  as  civilization  itself. 
After  laying  down  the  principles  of  Socialism,  Mill  says : 
"  Next,  it  must  be  observed  that  Socialists  generally,  and 
even  tiie  most  enlightened  of  them,  have  a  very  imperfect 
and  one  sided  notion  of  the  operation  of  competition.  They 
see  half  its  effects,  and  overlook  the  other  half ;  they  regard 
it  as  an  agency  for  grinding  down  every  one's  remuneration 
— for  obliging  every  one  to  accept  less  wages  for  his  labor, 
or  a  less  price  for  his  commodities,  which  would  be  true 
only  if  every  one  had  to  dispose  of  his  labor  or  his  commodi' 
ties  to  some  great  monopolist^  and  the  competition  were  all  on  one 
side.  They  forget  that  competition  is  the  cause  of  high 
prices  and  values  as  well  as  of  low;  that  the  buyers  of  labor 
and  of  commodities  compete  with  one  another  as  well  as  the 
sellers ;  and  that  if  it  is  competition  which  keeps  the  prices 
of  labor  and  commodities  as  low  as  they  arcy  it  is  competition 
which  prevents  them  from  falling  still  lower.  In  truti^ 
when  competition  is  perfectly  free  on  both  sides,  its  tendency 
is  not  specially  either  to  raise  or  to  lower  the  price  of  ar- 
ticles, but  to  equalize  it ;  to  level  inequalities  of  remuner* 


494  mvi  i,abOr  question. 

atioD,  and  to  reduce  all  to  a  general  average,  a  result  wluoh, 
in  so  far  as  realized  (no  doubt  very  imperfectly),  is,  on 
Socialistic  principles,  desirable.  But  if,  disregarding  for 
the  time  that  part  of  the  effects  of  competition  which  consists 
in  keeping  up  prices,  we  fix  our  attention  on  its  effect  in 
keeping  them  down,  and  contemplate  this  effect  in  reference 
solely  to  the  interest  of  the  laboring  classes,  it  -would  seem 
that  if  competition  keeps  down  wages,  and  so  gives  a  motive 
to  the  laboring  classes  to  withdraw  the  labor  market  from 
the  full  influence  of  competition,  if  they  can,  it  must  on  the 
other  hand  have  credit  for  keeping  down  the  prices  of  the 
articles  on  which  wages  are  expended,  to  the  ^preat  advantage 
of  those  who  depend  on  wages.  To  meet  this  consideration 
Socialists,  as  we  said  in  our  quotation  from  M.  Louis  Blanc, 
are  reduced  to  affirm  that  the  low  prices  of  commodities 
produced  by  competition  are  delusive,  and  lead  in  the  end 
to  higher  prices  than  before,  because  when  the  richest 
competitor  has  got  rid  of  all  his  rivals,  he  commands  the 
market  and  can  demand  any  price  he  pleases.  Now,  the 
commonest  experience  shows  that  this  state  of  things,  under 
really  free  competition,  is  wholly  imaginary.  The  richest 
competitor  neither  does  nor  can  get  rid  of  all  his  rivals,  and 
estaolish  himself  in  the  exclusive  possession  of  the  market ; 
and  it  is  not  the  fact  that  any  important  branch  of  industry 
or  commerce  formerly  divided  among  many  has  become,  or 
shows  any  tendency  to  become,  the  monopoly  of  a  few. 

The  kind  of  policy  described  is  sometimes  possible  where, 
as  in  the  case  of  railways,  the  only  competition  possible  is 
between  two  or  three  great  companies,  the  operations  being 
on  too  vast  a  scale  to  be  within  the  reach  of  individuiu 
capitalists ;  and  this  is  one  of  the  reasons  why  businesses 
which  require  to  be  carried  on  by  great  joint-stock  enterpri- 
ses cannot  be  trusted  to  competition,  but,  when  not  reserved 
by  the  State  to  itself,  ought  to  be  carried  onunderxonditions 
prescribed,  and  from  time  to  time,  varied  by  the  Statc^  for 
the  purpose  of  insuring  to  the  public  a  cheaper  supply  of 
its  wants  than  would  be  afforded  by  private  interest  m  the 
absence  of  sufficient  competition.  But  in  the  ordinary 
branches  of  industry  no  one  rich  competitor  has  it  in  his 
power  to  drive  out  all  the  smaller  t)nes.  Some  businesses 
show  a  tendency  to  pass  out  of  the  hands  of  many  small 
producers  and  dealers  into  a  smaller  number  of  larger  ones ; 
but  the  cases  in  which  this  happens  are  those  in  which  the 


INJUSTICE  OF  UNIFORM  RAtn  OF  WAGKS.  495 

possession  of  a  larger  capital  permits  the  adoption  of  more 
powerful  machinery,  more  efficient,  by  more  expensive  pro- 
cesses, or  a  better  organized  and  more  economical  mode  of 
carrying  on  business,  and  thus  enables  the  large  dealer 
legitimately  and  permanently  to  supply  the  commodity 
cheaper  than  can  be  done  on  tne  small  scale ;  to  the  great 
advantage  of  the  consumers,  and  therefore  of  the  laboring 
classes,  and  diminishing,  t^ro  tanto^tiie  waste  of  the  resources 
of  the  conmiunity  so  mucn  complained  of  by  Socialists,  the 
unnecessary  multiplication  of  mere  distributors,  and  of  the 
various  other  classes  whom  Fourier  calls  the  parasites  of 
industry.  When  this  change  is  effected,  the  larger  capital- 
ists, either  individual  or  joint-stock,  among  which  the 
business  is  divided,  are  seldom,  if  ever,  in  any  considerable 
branch  of  commerce,  so  few  as  that  competition  shall  not 
continue  to  act  between  them  ;  so  that  the  saving  in  cost, 
which  enabled  them  to  undersell  the  small  dealers,  continues 
afterwards,  as  at  first,  to  be  passed  on,  in  lower  priceSi  to 
their  customers.  The  operation,  therefore,  of  competition 
in  keeping  down  the  prices  of  commodities,  including  those 
on  which  wa^es  are  expended,  is  not  illusive  but  real,  and 
we  may  add,  is  a  growing,  not  a  declining  fact.'' 

One  principle  of  the  unions  is  exceedingly  unjust  to  the 
workingmen  to  the  last  degree.  It  starts  with  the  assump- 
tion that  all  workmen  are  equal  in  their  capacity  as  to  the 
quality  of  service  or  work  and  the  quantity  of  production ; 
and  upon  this  false  assumption  is  based  the  injustice  of 
compelling  all  members  to  bind  themselves  to  a  uniform 
rate  of  pay.  A  greater  injustice  and  a  more  flagrant  in- 
equity cannot  be  found  in  the  whole  range  of  the  world's 
social  institutions  ;  nor  is  the  wrong  the  less  culpable  be- 
cause the  members  voluntarily  inflict  it  upon  themselves ; 
for  as  ^^  no  man  liveth  unto  himself "  but  has  dependents 
for  whom  he  is  bound  to  do  the  best  in  his  power,  so  no 
man  is  free  to  throw  away  to  the  less  industrious  or  less 
competent  what  his  superior  abilities  and  industry  have 
earned  for  himself. 

This  levelling  system  is  not  only  in  defiance  of  the  law  of 
varied  endowment  which  the  Creator  has  incorporated  into 


496  THK  I^ABOR  QUESTION. 

the  constitution  of  liamanitj,  but  it  tends  to  bind  into  one 
oast-iron  man  the  entire  working  community,  debarring  them 
from  all  chances  of  progress  and  consigning  them  to  a  de- 
grading condition  of  semi-slavery  or  serfdom.     Time  was 
when  the  way  was  clear  to  any  workingman  in  this  cousixv 
to  the  highest  positions  of  wealth,  or  of  social  standing  or 
political  influence.     As  a  matter  of  fact,  a  large  proportion 
of  our  present  successful  merchants,  and  not  a  few  even  of 
our  millionaires,  are  men  who  have  risen  from  the  ranks  of 
labor.     The  first  steps  in  their  progress  were  won  by  the 
superiority  of  their  skill  or  faithfulness  as  workmen,  which 
qualified  them  to  rise  step  by  step  to  higher  achievements. 
Then,  the  workman  was  free  to  rise  according  to  his  abil- 
ities and  his  character ;  he  was  the  free  ruler  of  his  own 
destiny.    Now,  it  seems  the  tendency  of  the  trades  unions 
is  to  obliterate  all  such  distinctions  and  virtually  debar  the 
workman  from  the  possibility  of  earning  a  rank  among  his 
fellowmen  proportioned  to  his  merits  ;  and  on  this  plan  the 
American  workman  woidd  be  as  completely  cut  off  from  the 
chances  of  social  elevation,  as  was  the  American  slave 
twenty-five  years  ago.    This  would  be  a  terrible  degrada- 
tion, of  which  every  man  who  enjoys  the  rights  of  American 
citizenship  should  deem  himself  incapable  and  feel  ashamed. 
However  much  political  leaders,  and  even  some  who  re- 
joice in  the  reputation  of  economists,  may  feel  disposed  to 
regard  these  combinations  as  a  social  necessity  of  the  time, 
and  an  institution  that  has  come  to  stay,  I  cannot  resist  the 
conviction  that  the  trades-union  movement  has  already  seen 
its  culmination  and  is  destined  to  a  steady  disintegration, 
unless  the  system  is  greatly  modified.    The  principle  of 
combination  is  useless  unless  it  can  be  successfolly  em- 
ployed to  compel  employers  to  accept  the  terms  of  the 
employees.    In  fact,  it  has  been  almost  the  sole  object  of 
the  unions  to  employ  it,  through  the  agency  of  strikes,  to 
compel  the  acquiescence  of  capital      Up  to  a  recent  period, 
it  has  been  largely  successful  in  this  sense.    So  long  as  em- 


BRINGING  TRADES-UNIONS  TO  A  TEST.  ^^^ 

plojers  conid  at  all  afford  to  comply  with  the  demands  of 
labori  they  would  make  considerable  sacrifices  to  avoid  the 
inconvenience  and  loss  connected  with  the  interruption  of 
their  operations  involved  in  a  strike.  At  last,  however,  the 
workingmen  advanced  their  demands  to  a  pitch  so  seriously 
threatening  to  industry  and  so  vitally  dangerous  to  the  ma- 
terial interests  of  the  country  at  large,  that  employers  saw, 
with  common  consent,  that  the  time  had  come  when  a 
square  issue  must  be  made  with  this  modern  invasion  on 
their  rights. 

The  spring  of  1886  will  always  be  memorable,  for  its 
having  brought  to  a  fair  test  the  power  and  principles  of 
trades -unionism.  Strikes  were  suddenly  initiated  on  a 
stupendous  scale,  upon  the  railroads,  among  the  western 
factories,  and  among  the  larger  employers  in  the  Middle 
States,  partly  to  enforce  demands  for  higher  wages,  partly 
to  shorten  the  time  of  work  to  eight  hours  a  day,  and  above 
all,  to  compel  employers  to  recognize  the  leaders  of  the 
unions  in  determining  the  conditions  of  employment  and 
to  submit  all  disputes  between  the  two  parties  to  arbitration. 
Employers,  simultaneously,  but  without  any  concert  of 
action,  met  the  challenge  squarely.  They  refused  to  con- 
cede the  demands  made ;  they  in  many  instances  declined 
to  recognize  the  officers  of  the  unions;  they  proceeded 
promptly  to  fill  the  places  of  the  strikers  with  non-union 
men,  and  refused  to  make  formal  conditions  with  returning 
strikers ;  they  brought  to  bear  upon  the  leaders  of '  the 
strikes  the  laws  against  conspiracy ;  and  they  took  the 
"boycotters"  before  the  courts.  The  result  of  this  treat- 
ment was  an  almost  universal  failure  of  the  strikers ;  the 
declaration  by  the  courts  that  the  compulsory  methods  of 
the  unions  are  illegal,  and  in  the  nature  of  conspiracies ; 
the  throwing  out  of  employment  of  tens  of  thousands  of 
union  employees,  and  the  exhaustion  of  the  funds  raised 
by  tijo  unions  for  enforcing  their  coercive  tactics. 

The  result  of  the  contest  was  that  within  one  brief  month, 


498  THS  I<ABOR  QUKSl^ION. 

the  power  of  tlie  unions  was  shown  to  be  weakness  itself; 
employers  everywhere  discovered  the  intrinsic  importance 
of  the  combinations  they  had  so  much  before  dreaded,  and 
very  many  respectable  and  reflecting  members  of  the  unions 
felt  themselves  discredited  in  the  eyes  of  the  public,  while 
their  faith  in  the  efficiency  of  their  system  of  supposed  pro- 
te<;tion  was  seriously  shaken.  After  this,  if  I  am  not 
seriously  mistaken,  employers  will  find  that  they  have  much 
less  to  fear  from  trades-unions  than  they  had  once  supposed. 
A  defeat  so  fundamental  as  this,  is  likely  to  be  followed  bj 
the  gradual  dispersion  of  the  formidable  array  of  united 
workmen.  Such  a  result  is  no  more  than  is  to  be  reasonablj 
expected  from  an  organization  based  upon  no  great  truth 
and  no  sound  principle,  but  resting  upon  popular  ignorance 
and  misconception  of  the  natural  laws  governing  society. 

During  the  progress  of  the  recent  strikes,  I  had  occasion 
to  make  frequent  allusions  to  the  course  of  events,  from 
which  I  may  be  permitted  to  make  the  following  quota- 
tions : 

(The  following  appeared  on  the  3d  of  May.) 

^'  The  £nights  of  Labor  have  undertaken  to  test,  upon  a 
large  scale,  the  application  of  compulsion  as  a  means  of 
en^^rcing  their  demands.  The  point  to  be  determined  is, 
whether  capital  or  labor  shall,  in  future,  determine  the 
terms  upon  which  the  invested  resources  of  the  nation  are 
to  be  employed. 

"  To  the  employer  it  is  a  question  whether  his  individual 
rights  as  to  the  control  of  his  property  shall  be  so  far  ove^ 
borne  as  not  only  to  deprive  him  of  his  freedom,  but  also 
expose  him  to  interference  seriously  impairing  the  value  of 
his  capital.  To  the  employees,  it  is  a  question  whether,  by 
the  force  of  coercion,  tney  can  vnrest,  to  their  own  profit^ 
powers  and  control,  which,  in  every  civilized  community, 
are  secured  as  the  most  sacred  and  inalienable  rights  of  the 
employer. 

"  This  issue  is  so  absolutely  revolutionary  of  the  moral 
relations  between  labor  and  capital,  that  it  has  naturally 
produced  a  partial  paralysis  of  business,  especially  among 
industries  whose  operations  involve  contracts  extending  into 


THJ$   KNIGHTS  AND  TH^IR   FRIENDS. 


499 


iiie  fotnre.  There  has  been  at  no  time  any  serious  appre- 
hensions that  such  an  anarchical  movement  could  succeed,  so 
long  as  American  citizens  have  a  clear  perception  of  their 
rights  and  their  true  interests ;  but  it  has  been  distinctly 
perceived  that  this  war  could  not  fail  to  create  a  divided,  if 
not  a  hostile  feeling,  between  the  two  great  classes  of  society; 
that  it  must  hold  in  check  not  only  a  large  extent  of  ordin- 
ary business  operations,  but  tAso  the  undertaking  of  those 
new  enterprises  which  contribute  to  our  national  progress, 
and  that  the  commercial  markets  must  be  subjected  to 
serious  embarrassments. 

'*  From  the  nature  of  the  case,  however,  this  labor  disease 
most  soon  end  one  way  or  another ;  and  there  is  not  much 
difficulty  in  foreseeing  what  its  termination  will  be.  The 
demands  of  the  Kniglits  and  their  sympathizers,  whether 
openly  expressed  or  temporarily  concealed,  are  so  utterly 
revolutionary  of  the  inalienable  rights  of  the  citizen,  and  so 
completely  subversive  of  social  order,  that  the  whole  com- 
munity has  come  to  a  firm  conclusion  that  those  pretensions 
must  be  resisted  to  the  last  extremity  of  endurance  and 
authority  ;  and  that  the  present  is  the  best  opportunity  for 
meeting  the  issue  firmly  and  upon  its  merits.  The  organi- 
zations have  sacrificed  the  sympathy  which  lately  was 
entertained  for  them,  on  account  of  inecjuities  existing  in 
certain  employments  ;  they  stand  discredited  and  distrusted 
before  the  community  at  large  as  .impracticable,  unjust  and 
reckless ;  and,  occupying  this  attitude  before  the  public, 
their  cause  is  gone  and  their  organization  doomed  to  failure. 
They  have  opened  the  flood  gates  to  the  immigration  of  for- 
eign labor,  which  is  already  pouring  in  hj  tens  of  thousands; 
and  they  have  set  a  premium  on  non-union  labor,  which  will 
be  more  sought  after  than  ever,  and  will  not  be  slow  to  secure 
superior  earnings  by  making  arrangements  with  employers 
upon  such  terms  and  for  such  hours  as  may  best  suit  their 
interests.  Thus,  one  great  advantage  will  incidentally 
come  out  of  this  crisis  beneficial  to  the  workingman,  who, 
by  standing  aloof  from  the  deadVlevel  system  of  the  unions, 
will  be  able  to  earn  according  to  his  capacity,  and  thereby 
maintain  his  chances  for  rising  from  the  rank  of  the  em- 
ployee to  that  of  the  employer.  This  result  cannot  be  long 
delayed,  because  not  only  is  loss  and  suffering  following 
close  upon  the  heels  of  the  strikers^  but  the  imprudences  of 
their  leaders  are  breeding  dissatisfaction  among  the  rank 


600  ^HB  LABOR  QUESTION. 

and  file  of  the  organizations,  which  if  much  further  pro- 
tracted, will  gravely  threaten  their  cohesion.     It  is  by  no 
means  certain  that  we  may  not  see  a  further  spread  o! 
strikes,  and  possibly  with  even  worse  forms  of  violencethai 
we  have  yet  witnessed  ;  but,  so  long  as  a  way  to  the  end  h, 
seen,  with  a   chance  of  that  end  demonstrating  to  thf 
organizations  that  their  aspirations  to  control  capital  aw 
impossible  dreams,  the  temporary  evils  will  be  borne  with 
equanimity.  The  coolness  with  which  the  past  phases  of 
the  strikes  have   been   endured,  shows  that    the  steady 
judgment  of  our  people  may  be  trusted  to  keep  them  calm 
under  any  farther  disturbance  that  may  arise. 

'*  Prior  to  the  strike  in  the  Missouri  Pacific,  Jay  Gould  was 
one  of  the  most  hated  men  in  the  people.  He  was  anxioos 
to  have  public  respect  and  sympathy.  He  had  made  all  the 
money  he  wanted,  and  was  willing  to  spend  part  of  it  in 
gaining  the  respect  and  honor  of  the  country.  What  his 
money  could  not  do  for  him  this  strike  on  the  Missouri 
Pacific  has  done.  The  sympathy  and  good-will  which  pre- 
viously were  with  the  strikers  have  been  shifted  from  them  to 
him.  There  is  no  doubt  that  the  strikers  selected  the  Mis- 
souri Pacific  because  it  was  a  property  with  which  Gould 
was  known  to  be  most  largely  identified,  and  because  they 
thought  that  general  execration  would  be  poured  out  on  him 
in  any  event.  But,  instead  of  injuring  Mr.  Gould,  Uiey  have 
done  him  inestimable  service. 

'^The  timely  and  forcible  action  of  Mayor  Harrison,  of 
Chicago,  will  put  dynamiters  and  rioters  where  theybelonft 
and  thus  divide  the  sheep  from  the  goats  in  a  very  short 
time.     If  ofiicials  would  sink  political   bias,  the  country 
would  soon  be  rid  of  law-breaters  and  disturbers  of  the 
peace.    As  this  plan  of  treatment  has  now  been  adopted,  it 
will  be  far  reaching  in  its  effect,  and  stop  mob  (^therinK?) 
riotous  speech-making,  and  other  such  bad  incentives,  which 
recently  have  been  so  conspicuous  in  Chicago,  Milwaukee, , 
St.  Louis,  and  elsewhere.     The  laboring  classes,  who  ^ 
parties  to  the  strike,  will  now  have  an  opportunitv  to  retii® 
to  their  homes,  where  there  will  be  more  safety  than  in  the 
streets,  which  will  bring  to  them  reflection.    They  will  then 
soon  become  satisfied  that  they  are  the  aggrieved  P*^®^ 
and  the  not  unlikely  result,  will  be  their  turning  upon  ^"^ 
leaders,  who  have  deceived  them.  .• 

"  There  have  been  numerous  vacancies  created  by  the  str^' 


PKACJS^UI.  STRIKE  HARMI,«SS.  601 

era  voluntarily  resigning.  There  has  been  no  difficulty  in 
filling  these  vacancies  by  those  who  are  equally  capable,  if 
not  more  so,  from  other  countries  flocking  to  our  shores. 
The  steam  ferry  between  this  country  and  Europe  has  de- 
monstrated this  by  the  steamer  just  arrived  in  six  days  and 
ten  hours  from  European  shores  to  our  own.  As  the  separa- 
tion between  the  oppressed  operatives  of  the  Old  World  and 
America  is  thus  reduced  to  hours,  Europe  will  quickly 
send  to  us  all  the  labor  we  need  to  meet  all  such  emergen- 
cies. 

*'  The  laboring  man  in  this  bounteous  and  hospitable 
country  has  no  ground  for  complaint.  His  vote  is  poten- 
tial, and  he  is  elevated  thereby  to  the  position  of  man. 
Under  the  government  of  this  nation,  the  effect  is  to  ele- 
vate the  standard  of  the  human  race  and  not  to  degrade  it. 
In  too  many  other  nations  it  is  the  reverse.  What,  there- 
fore, has  the  laborer  to  complain  of  in  America  ?  By  excit- 
ing strikes  and  encouraging  discontent  he  stands  in  the  way 
of  the  elevation  of  his  class  and  of  mankind. 

"  The  tide  of  emigration  to  this  country,  now  so  large, 
makes  peaceful  strikes  perfectly  harmless  in  themselves,  be- 
cause the  places  of  those  who  vacate  good  situations  are 
easily  filled  by  new-comers.  When  disturbances  occur 
under  the  cloak  of  strikes  it  is  a  different  matter,  as  law  and 
order  are  then  s^^t  at  defiance.  The  recent  outbreaks  in 
Chicago,  which  resulted  in  the  assassination  of  a  number  of 
vaUant  policemen  through  a  few  cowardly  Polish  Nihilists 
firing  a  bomb  of  dynamite  in  their  midst,  was  the  worst 
thing  that  could  have  been  done  for  the  cause  of  the  pres- 
ent hbor  agitation,  as  it  alienates  all  sympathy  from  them. 
It  is  much  to  the  credit,  however,  of  Americans  and  Irish- 
men that,  during  the  recent  uprisings,  none  of  them  have 
taken  part  in  any  violent  measures  whatsoever,  nor  have 
they  shown  any  sympathy  with  such  conduct. 

'^  If  the  labor  troubles  are  to  be  regarded  as  only  a  tran- 
sient interruption  of  the  course  of  events,  it  is  next  to  be 
asked,  what  may  be  anticipated  when  those  obstructions  dis- 
appear? We  have  still  our  magnificent  country,  with  all 
the  resources  that  have  made  it  so  prosperous  and  so  pro- 
gressive beyond  the  record  of  all  nations.  There  is  no 
abatement  of  our  past  ratio  of  increase  of  population ;  no 
limitation  of  the  new  sources  of  wealth  awaiting  develop- 
ment ;  no  diminution  of  the  means  necessary  to  me  utilizar 


602  THB  LABOR  QUESTION. 

tion  of  the  nnbonnded  riches  of  the  soil,  the  mine,  and  the 
forest.  Oar  inventive  genius  has  suffered  no  eclipse.  In 
the  practical  application  of  what  may  be  called  thecomme^ 
cial  sciences,  we  retain  our  lead  of  the  world.  As  pioneers 
of  new  sources  of  wealth,  we  are  producing  greater  results 
than  all  the  combined  new  coloni2sing  efforte  which  have  re- 
oentlj  excited  the  aspirations  of  Europeangovernments.  To 
the  over-crowded  populations  of  the  Old  World  the  United 
'  States  still  presents  attractions  superior  to  those  of  any 
other  country,  as  is  demonstrated  by  the  recent  sudden  re- 
vival of  emigration  from  Qreat  Britain  and  the  continent  to 
our  shores.** 


CHAPTEB    XLVI. 

AN  IMPORTANT  SYNOPSIS. 

A  Besuicb  in  Brief  of  the  Leadinq  EvEins  Oonneoted 
wiTB  Wall  Street  Affairs  for  SETEirnr-asvEN  Ybar& 

December  J 1816.— The  first  savings  banks  in  the  United 
States  went  into  operation. 

Jufyy  1820. — Ghreat  financial  distress  throughout  Amerioa. 
The  causes  were  excessive  importations  and  a  deranged  our* 
rency. 

Aufftut^  1833. — There  was  great  commercial  distress, 
caused  by  contraction  by  the  United  States  Bank.  The 
bank  defended  its  course  on  the  ground  of  the  evident  hos« 
tilities  of  the  Administration,  the  public  deposits,  amount- 
ing to  $10,000,000,  having  been  withdrawn  by  order  of  the 
President. 

May,  1837.— In  this  year  commercial  distress  prevailed 
throughout  the  United  States.  On  May  10th  all  the  banks 
in  New  York  city,  by  common  consent,  suspended  specie 
payments,  banks  throughout  the  country  following  the  ex- 
ample. In  New  York  about  300  large  failures  took  place. 
In  Boston  168  failures  were  reported.  In  New  Orleans 
houses  stopped  payment  owing  an  aggregate  of  $27,000,000. 

J%,  1838.— The  banks  of  New  York  and  New  England 
resumed  payment  after  the  suspension  due  to  the  panic  of 
1837.  The  Philadelphia  banks  resumed  in  August,  1838, 
and  in  January,  1839,  there  was  nominal  resumption 
throughout  the  country. 

Jult/j  1840.— The  biU  organizing  the  United  States  Sub- 
Treasury  became  a  law.  The  act  was  repealed  in  1841,  but 
was  re-enacted  in  1846. 


604  AN  IMPORTANT  SYNOPSIS. 

October,  1842. — ^The  first  submaxine  telegraph  cable,  the 
invention  of  Prof.  Morse,  was  laid  between  Goyernois' 
Island  and  the  Battery,  New  York,  October  18th. 

January y  1844. — The  first  telegraph  line  in  the  United 
States  was  erected.  The  telegraph  was  invented  bj  Morse 
in  1837. 

August^  1851. — The  depression  of  this  year  reached  its 
height  on  the  13th.  A  bad  credit  system  had  beeninTOgoe, 
trade  with  California  had  not  met  expectations,  imports  had 
been  large,  exports  of  gold  heavy,  cotton  declined  in  Europe^ 
the  banks  contracted,  property  was  sacrificed  to  raise  ready 
money,  mercantile  credit  was  disturbed  everywhere^  and  dis- 
tress was  general  in  all  the  cities.  In  Wall  street  large 
blocks  of  stock  were  unloaded  and  the  market  was  broken. 
Erie  went  from  90  to  68}.  Later  in  the  month  money  be- 
came easier,  prices  advanced,  and  the  market  resumed  ita 
ordinary  aspect. 

October,  1851. — ^Panic  regarding  the  value  of  State  money. 
The  Metropolitan  Bank  made  war  on  the  country  banks  to 
compel  them  to  deposit  with  it  against  their  notes,  which 
were  extensively  circulated  in  the  city.  After  receiving 
their  bills  the  Metropolitan  Bank  demanded  their  redemp* 
tion  in  specie.  This  led  to  many  suspensions.  The  bills 
were  well  secured  by  State  stocks,  and  the  Metropolitan 
continued  to  receive  them  As  brokers  refused  to  take 
State  moneys  of  any  kind  there  was  a  rush  to  the  Metropol- 
itan, and  a  panic  prevailed.  Ultimately  the  brokers  bought 
the  bills  at  a  discount  and  made  large  profits.  Their  pv- 
chases  gradually  restored  confidence,  but  not  before  four 
country  bemks  had  failed. 

July,  1853. — A  panic  in  the  stock  market  in  consequence 
of  bank  contraction.  The  State  Legislature  enacted  that 
the  banks  should  publish  weekly,  in  the  New  York  Tme$, 
statements  of  their  condition.  In  preparing  for  this  state- 
ment the  banks  called  in  a  large  portion  of  their  loans,  and 


TH^  HUNTINGTON  FORGl^RIiCS,  505 

ran  after  each  other  for  specie.     The  panic  was  of  short 
duration. 

October,  1853. — Simeon  Draper^  a  railroad  banker,  failed. 

Stocks  were  depressed  on  the  19th,  in  consequence  of 

bank  contraction.    There  were  several  failures. 

January  J 1854. — California  defaulted  in  its  interest  on  the 
Ist,  and  there  was  much  alarm  in  financial  circles  in  conse- 
quence. 

Februcay^  1854.— Heavy  failures  in  California. 

Jfd^,  1854. — The  New  York,  Newfoundland  &  London 
Telegraph  Company  was  organized,  and  was  the  first  com- 
pany to  attempt  Atlantic  cable  telegraphy. 

Juljf,  1854.— Bobert  Schuyler,  President  of  the  New  York 
&  New  Haven  Railroad  Company,  fraudulently  issued  nearly 
$2,000,000  stock  of  the  company.  About  the  same  time 
fraudulent  entries,  made  by  Secretary  Kyle,  were  discovered 
in  the  stock  ledger  of  the  Harlem  Company,  amounting  to 
about  $470,000.  Frauds  were  also  discovered  in  the  affairs  of 
the  Parker  Vein  and  the  Vermont  Central  railway  companies. 
In  consequence  there  was  a  rapid  decline  in  the  stock  mar- 
ket, and  many  suspensions  occurred  in  New  York,  Boston 
and  Philadelphia. 

September,  1854.— A  severe  twist  in  Erie  stock  on  the  13th. 

October,  1854. — ^Frauds  on  the  Ocean,  American  Exchange 
and  National  banks  were  discovered. 

DeeembcTj  1854  — There  was  a  severe  run  on  the  savings 
banks  of  the  city  of  NeW  York  on  the  9tb. 

Septefmher^  1855.  —A  financial  panic  in  San  Francisco  and 
many  failures  of  prominent  bankers. 

Septernber^  1856. — Charles  B.  Huntington  committed  for- 
geries amounting  to  $15,000,000  or  $20,000,000.  The  forger- 
ies  were  used  as  collateral  secui-ity  for  raising  money,  and 
for  a  time  were  taken  up  before  maturity. 


606  AN  IMPOR'TANT  SYNOPSIS. 

Aprily  1867. — ^Frei^lit- train  men  on  the  Baltimore  &  Ohio 
stmck.  Trains  were  molested  and  many  fights  occaned 
The  military  were  called  out  and  a  desperate  fight  ansued, 
in  which  many  were  killed  and  wounded. 

Augusty  1867.— The  financial  panic  of  this  year  began  on 
the  failure  of  the  Ohio  Trust  Company,  with  liabilities  about 
$7,000,000.  Banks  either  failed  or  suspended  specie  pay- 
ments everywhere.  The  New  York  banks  resumed  in  D^ 
cember.  Business  was  generally  prostrated  until  the 
following  spring,  when  improvement  became  perceptible. 


Jvly^  1860. — Congress  authorized  a  war  loan  of  \ 
000.    The  National  debt  was  $64,640,838.11     It  reached 
$2,756,431,571,  its  greatest  point,  in  1885. 

Aiigust,  I860.— Treasury  notes  to  the  amount  of  $50,000,- 

000  were  authorized  by  Congress. The  first  well  ever  sunk 

for  oil,  and  the  first  petroleum  ever  obtained  by  boring. 
The  well  was  at  Titusville,  Oil  Creek,  Pa.  It  gave  1,000 
barrels  a  day.  This  was  the  beginning  of  the  petroleum 
business. 

December,  I860.— The  Southern  banks  suspended  Bpecie 
payment  on  the  12th. 

Apnh  1861.— The  lowest  price  at  which  United  Stotoj 
bonds  sold  during  the  war  was  76  for  the  5s  of  Vi%^'^ 
in  this  month. 

December,  1861.— The  National  Bank  system  was  ^^^ 

mended  by  Secretary  Chase. A  premium  for  g^^^  ^ 

quoted  at  the  New  York  Stock  Exchange  for  the  firs*  *^^ 
on  the  30th. 

AprU,  1862.— Gold  was  first  quoted  at  a  premiQ0&  ^ 
12th,  and  by  October  1  it  had  advanced  to  123. 

February,  1864.— Speculation  in  stocks  was  "r^^^P  . 
and  "wild.** 


GOLD  SP^CUI^ATION  AND  PANICS.  607 

Mareh^  1864. — There  was  a  panic  in  theooal  stocks  on  the 
10th. The  month  was  noted  for  a  rapid  rise  in  gold. 

AprUj  1864— A  semi-panic  in  Wall  street  on  the  18th. 

Junsj  1864. — ^National  currency  to  the  amount  of  $300,- 
000,000  was  authorized  by  Congress.  The  full  amotmt  was 
issued  before  the  close  of  1867. 

August^  1864. — Gold  touched  261|,  its  highest  point. 

July^  1865.— The  Stock  Exchange  made  a  rule  inflicting  a 
penalty  on  members  who  attended  Gallaher's  up-town  night 
Exchange. 

August^  1865. — ^Edward  B.  Eetchum,  a  junior  partner  In  a 
prominent  banking  house  in  New  York,  forged  gold  certifi* 
cates  to  the  extent  of  $1,500,000,  and  they  were  negotiated 
at  the  banks.  In  addition  he  abstracted  more  than  $8,000,- 
000  from  the  vaults  of  the  firm.    The  firm  failed. 

October^  1865. — Call  loans  were  made  as  high  a  per 
cent,  and  a  heavy  commission  added.  Tight  money  checked 
a  rise  in  stocks.  Money  was  wanted  in  the  West  for  the 
moving  of  crops.  Belief  came  on  the  demand  from  the  West 
subsiding,  and  by  temporary  loans  from  the  Sub-Treasury 
to  the  banks. 

November^  1865. — ^Prairie  du  Chien  common  stock  was  cor- 
nered. On  the  6th  29,000  shares  were  bought  at  about  40. 
The  trap  being  sprung  200  and  more  was  demanded,  and  the 
shorts  settled  at  rates  ranging  from  110  to  210.  There  were 
several  failures.  It  opened  on  a  Monday  at  96 ;  on  Tues- 
day it  ranged  between  160  and  225,  and  closed  on  Saturday 
at  110.        - 

DeeembeTj  1865. — The  new  Stock  Exchange  building  was 
opened  for  business  on  the  9th. 

Febrwry^  1866.— Toward  the  close,  on  February  20th, 
everybody  seemed  to  want  to  borrow  money,  and  no  one  was 
willing  to  lend.    The  market  verged  on  panic.  People  were 


008  ^^  IMPORTANT  SYNOPSIS. 

afraid  of  the  oonrse  of  the  (Joyenunent  in  seUing  upmidi 
of  $12,000,000  gold. 

Aprily  1866. — ^Michigan  Southern  was  cornered.  The  price 
roee  from  84  to  104.  The  pool  closed  oat  and  the  price 
dropped  to  80  within  24  hours.  Other  corners  veie  made 
in  the  same  month  in  Beading,  Bock  Island,  Hndsou  Sitei, 
Cleyeland  &  Pittsbnrg  and  Northwestern  preferred.  Money 
was  plentiful  and  speculation  was  rampant. 

tfojfj  1866.— The  marketing  of  Erie  stock  by  Daniel  l^w 
caused  a  drop  in  its  price  from  74i  on  May  18th  to  60^  on 
May  31st.  The  movement  had  very  little  effeet  on  the  re- 
mainder of  the  markei 

July,  1866. — A  panic  in  stocks  followed  the  failme  o( 
Overond,  Ghimey  &  Co.,  London  bankers. 

Augu»%  1866.-— London  markets  were  first  quoted  by  At- 
lantic cable  in  New  York. 

Nmoember,  1866. — ^There  was  heavy  speculation  in  etocb) 
produce,  dry  goods  and  real  estate.  Poor  men  became 
rich  by  a  single  turn  of  the  wheel.  Unexpectedly  the  Tieae- 
ury  drew  about  $15,000,000  for  its  own  purposes,  money 
became  tight  and  the  bears  became  very  active.  Prices  de- 
clined about  10  points,  and  outsiders  lost  upwards  of  $25,- 
000,000. 

JDeeembery  1866.— Northwestern  preferred  and  Camberiand 
Coal  were  cornered. 

Janaary^  1867.— Prices  broke  on  the  18th  with  a  m^ 
Cumberland  Coal  declined  65  points,  and  the  general  list 
went  off  in  sympathy.    There  were  several  failures.  Money 

was  tied  up  by  bear  operators. President  Telyerton,  of 

the.  Bank  of  North  America,  on  learning  of  the  failure  of 
A.  J.  Meyer  A  Co.,  the  firm  having  overdrawn  its  aooowt 
$219,000,  was  seized  with  apoplexy  and  died. 


FAMOUS  POOI^S  AND  CORNJSRS 


509 


May^  1867.— A  pool  in  Erie  was  broken  bj  the  sale  of  a 
large  block  of  English  stock. 

October^  1867. — Daniel  Drew  was  tamed  out  of  Erie,  and 
the  stock  advanced  10  points. 

December,  1867.— Vanderbilt  secured  control  of  New  York 
Oentral. 

Januan/y  1868.-^A  corner  in  Bock  Island  was  broken, 
owing  to  the  company  throwing  49,000  shares  on  the  mar- 
ket.    The  stock  declined  heavily. 

February^  1868. — ^The  contest  between  Drew,  Vanderbilt 
and  Frank  Worth  was  at  its  height. 

AprU,  1868* — There  was  a  break  in  Atlantic  Mail,  with 
subsequent  complications. 

Juney  1868.— An  unsuccessful  attempt  to  comer  Pacific 
Mail  was  made. 

Jtdi/,  1868.— Jay  Gould  became  president  of  Erie. 

October^  1868. — Money  became  stringent,  owing  to  the 
withdrawal  of  funds  from  New  York  for  the  West.  The 
associated  banks  lost  $20,000,000  in  deposits  and  $12,000,000 
in  legal  tenders,  with  a  reduction  of  only  $9,000,000  in  loans. 
Special  efforts  were  made  to  break  the  stock  market,  but 
the  bull  leaders  had  provided  themselves  with  time  loans, 
running  to  the  end  of  the  year,  and  were  thus  enabled  to 
hold  prices. 

November  1 1868. — Erie  was  cornered,  and  a  panic  extend- 
ing through  the  whole  list  occurred.  It  was  helped  by  the 
inability  of  a  leading  operator,  a  director  of  St.  Paul,  to 
meet  puts  on  that  stock.  The  common  and  preferred  fell 
about  20  points.  Erid  made  an  extraordinary  issue  of 
shares.  Later  on  money  became  more  plentiful,  prices 
advanced  and  the  market  became  very  etrong. 

PROPERTY  OP 

NEW  YORK  CHAPTER 

American  Institute  of  Bankingi 


510  AN  IMPORTANT  SYNOPSIS. 

Apra,  1869.— A  biU  to  consolidate  the  New  Tork  Central 
and  the  Hudson  'Birer  railroad  companies  passed  the  Legis- 
latore. 

Ma^y  1869.— The  New  York  Stock  Exchange  and  the 
Open  Board  of  Brokers  were  amalgamated  under  one  man- 
agement. The  new  Exchange  b^an  business  with  1,030 
members  and  $750,000  in  its  treasury. The  era  of  con- 
solidations. Active  stocks  advanced  to  prices  never  before 
reached.  New  York  Central  sold  at  1921-  A  movement  to 
depress  prices  at  the  close  of  the  monUi  met  with  some 

success. ^The  last  rails  of  the  Union  Pacific  and  Central 

Pacific  railroads  were  laid*  Trains  began  running  across  the 
continent  on  the  15th. 

Juncj  1869. — Many  brokers  failed,  the  result  of  a  suooess- 
f  ul  bear  attack  on  the  market. 

JtUy^  1869. — ^Heavy  speculation  in  the  Yanderbilt  stocks. 
New  York  Central  advanced  to  217}.    Money  was  stringent 

SeptemheTy  1869. — ^New  Tork  Central  dropped  25  points 

on  the  22df  and  a  panicky  feeling  was  developed. Qold 

reached  165  on  Friday,  the  24  th— Black  Friday.  Transactions 
ran  up  into  hundreds  of  millions,  and  business  was  conducted 
with  so  much  confusion  that  bids  running  from  135  to  160 
were  made  at  one  and  the  same  time  in  different  parts  of 
the  room.  Between  11  and  12  o'clock  the  shorts  settled  on 
a  basis  of  148@158,  the  market  price  being  5^15  higher. 
At  noon  it  was  officially  announced  that  the  Qovemment 
would  sell  gold  next  day  and  buy  bonds,  and  within  15 
minutes  the  price  had  fallen  to  135,  and  the  great  specula- 
tion had  collapsed. 

Aprily  1870.— The  cliques  who  had  bought  stocks  on  the 
decline  after  Black  Friday,  started  an  upward  movement  in 
the  last  week  of  the  month.  Th6  public  came  in  and  top 
figures  were  reached  about  May  10.  The  cliques  unloaded 
turned  bears,  depressed  prices  until  margins  were  wiped 


BPPBCTS  OP  tHM  CHICAGO  PIRB.  611 

oaiy  bought  in  again  at  the  decline  and  were  ready  for 
another  advance. 

May,  1870.— The  process  of  '^ shearing  the  lambs"  was 
repeated  in  this  month. 

June,  1870. — James  Boyd,  carrying  40,000  shares  of  stock 
and  $5,000,000  gold,  failed.  The  market  showed  signs  of 
breaking,  but  was  sustained  by  the  cliques. 

July,  1870. — Congress  authorized  an  addition  of  $54,000,- 
000  to  the  national  currency. 

January,  1871. — ^A  prominent  operator  repudiated  his 
orders  to  buy  Beading.  Several  brokers  failed  in  conse- 
quence.   The  market  was  only  slightly  depressed. 

April,  1871. — ^There  was  much  speculative  excitement  in 
the  stock  market. 

June,  1871. — Bock  Island  was  cornered.  The  pool  began 
buying  at  114|  and  advanced  it  to  130}.  On  liquidation 
the  stock  declined  to  110.  Many  failures  occurred  and  bad 
faith  was  charged. 

Otober,  1871.~The  week  beginning  October  9, 1871,  was 
one  of  the  most  eventful  in  the  history  of  the  Stock  Ex- 
change. The  banks  had  expanded  beyond  precedent  and 
were  compelled  to  contract  loans  to  raise  money  for  crop 
purposes.  The  payment  by  France  to  Germany  in  settle- 
ment of  war  claims  caused  the  Bank  of  England  rate  to 
advance  from  3  to  5  per  cent.,  and  produced  a  feeling  border- 
ing on  panic  in  London.  The  New  York  market  was  very 
sensitive  when  news  of  the  Chicago  fire  came.  Prices 
broke  4@10  points.  On  Tuesday  there  was  great  excite- 
ment ;  sales*  were  enormous  and  fluctuations  wide.  On 
Wednesday  there  was  a  rally  on  the  belief  that  the  Govern- 
ment would  purchase  5-20s.  The  lowest  prices,  however, 
were  made  on  Thursday.    On  Friday  there  was  more  steadi- 


512  AN  IHPORXANT  SYNOPSIS. 

ixess   and  prices  were  higher.    The  bank  statement  yru 
favorable  and  matters  quieted  down. 

December^  1871.— The  Ocean  National  Bank,  the  Union 
Square  and  the  Eighth  National  Bank  failed.  Monej  was 
scarce,  bat  stocks  were  firmly  held.  Operators  and  broken 
were  loaded  up  with  stocks  and  they  sustained  prioea, 
awaiting  an  opportunity  to  get  out. 

March^  1872.— The  Erie  revolution  occurred.  The  Board 
of  Directors  was  overthrown,  and  Jay  Gould  resigned  the 
presidency.  Gten.  Dix  became  his  successor.  The  opera- 
tion caused  great  activity  in  the  stock  market,  and  money 
became  tight. 

Jtene,  1872.— Stock  dividends  on  Lake  Shore  and  Miohi* 
gan  Central  were  declared. 

August^  1872. — Gold  was  cliqued. 

September^  1872. — ^Erie  was  cornered.  The  Gbuld-Smith 
clique  was  short  of  it.  The  stock  first  became  scarce  on 
purchases  by  German  brokers  for  foreign  account.  Then 
Drew  became  a  heavy  purchaser.  At  the  same  time  the 
German  brokers  were  long  of  gold,  and  with  the  double  idea 
of  punishing  them  and  compelling  those  carrying  Erie  to  sell 
out  the  Gt>uld*Smith  clique  endeavored  to  lock  up  money. 
This  plan  was  defeated  by  the  refusal  of  two  banks  to  pftj 
out  legal  tenders  on  certified  checks.  Just  then,  too,  the 
Government  bought  $5,000,000  bonds  and  sold  the  same 
amount  of  gold.  This  completely  broke  the  specuIatiTe 
manipulation  of  money,  and  a  panic  was  averted.  Poring 
the  height  of  the  panic  there  were  no  quotations  for  monej. 
Among  the  failures  of  the  week  were  Northrup,  Chick  ^ 
Go.,  bankers,  the  Glenham  Woolen  Manufacturing  Co.,  F*' 
ton  &  Co.,  dry  goods,  George  Bird,  Grinnell  &  Co.,  stock  bro. 
kers,  Hoyt,  Sprague  &  Co.  and  A.  &  W.  Spragu.  The  banks 
suspended  their  weekly  statements,  and  they  were  not  t9r 
sumed  until  late  in  November. 


PANIC  OP   1873,  -NUMEROUS  TAXIMKHS.  618 

Kinfeinhery  1872. — Jay  Gould  was  arrested  on  criminal 
eharges  based  on  bis  management  of  the  Erie  Baiboad.  He 
surrendered  securities,  tbe  face  value  of  which  was  more 
than  $9,000,000,  in  December. ^Northwestern  was  cor- 
nered. It  opened  Nov.  20  at  83^  and  closed  at  95.  On 
Thursday  it  sold  at  100,  and  at  the  close  on  Friday  200  was 
bid.  On  Saturday  buying  in  under  the  rule  ran  the  price 
up  to  230.  The  settlement  was  made  on  the  following  Tues- 
day, when  the  price  declined  to  par,  the  highest  bid  made 
being  85.  Jay  Gould,  Horace  F.  Clark  and  Augustus  Schell 
conducted  the  corner,  while  the  cornered  were  Drew  and 
Henry  N.  Smith.  It  was  one  of  the  most  profitable  corners 
eyer  made  in  Wall  street. 

FdMruary^  1873.^  There  was  a  noted  corner  in  North- 
western. 

Aprils  1873.— The  preliminary  panic  of  the  year  occurred 
in  this  month.  The  stock  market  was  uneasy.  The  failure 
of  a  firm  of  silk  importers  was  followed  by  that  of  Barker  & 
Allen,  the  members  of  which  were  related  to  Yanderbilt. 
Three  other  firms  also  failed.  Confidence  returned  and 
quiet  prevailed  until  the  26th,  when  the  Atlantic  Bank 
fiuled.  This  brought  about  another  depression,  which  was 
followed  by  a  quick  rally. 

Mc^y  1873.— Heavy  break  in  Pacific  Mail.  The  further 
retirement  of  greenbacks  was  prohibited  by  Congress. 

AuguMty  1873. — Fraud  was  discovered  in  the  issue  of  cer- 
tain bonds  of  the  New  York  Central  &  Hudson  Biver  Bail- 
xoad. 

Septmbery  1873.— The  New  York  Warehouse  &  Security 
Company  failed  on  the  8th ;  Kenyon,  Cox  &  Co.,  in  which 
Daniel  Drew  was  a  special  partner,  on  the  13th  j  Jay  Cpoke 
&  Co.  on  the  18th,  and  Fisk  &  Hatch  on  the  19th.  Innu- 
merable brokers  failed.     There  were  runs  on  the  Fourth 


614  AN  IMPORTANT  SYNOPSIS. 

National  Bank  and  the  Union  Trust  C5ompany.  The  secre- 
tary of  the  company  was  a  defaulter  to  the  extent  of  $500,. 
009,  and  its  doors  were  closed.  The  Bank  of  the  Common* 
wealth  failed.  There  was  a  panic  in  the  stock  market^ 
and  the  excitement  ran  so  high  that  the  Gbyerning  Com* 
mittee  closed  the  Exchange  at  11  o'clock  on  jSaturday, 
the  20th.  The  Gold  Exchange  Bank  was  unable  to  effect  all 
the  clearances,  and  dealers  were  unable  to  get  their  balances- 
The  result  was  the  temporary  suspension  of  some  dozen 
firms.  The  Gold  Exchange  Bank  haying  been  enjoined  by 
the  courts  from  making  the  clearances,  the  Bank  of  New 
York  undertook  the  job  and  failed  in  it.  Next  a  committee 
of  20  was  appointed  to  do  the  work,  but  it  failed  also,  be- 
cause Smith,  Gould  &  Martin  refused  to  render  a  state- 
ment to  it.  The  final  settlements  were  made  between  mem- 
bers themselves.  Smith,  Gould  &  Martin,  with  contracte 
amounting  to  $9,000,000,  settled  on  a  basis  of  135.  Busi- 
ness was  resumed  on  Sept.  30. 

December,  1873.— The  Credit  Mobilier  was  organized  for 
the  construction  of  the  Union  Pacific  Bailroad.  It  was  com- 
posed of  stockholders  of  the  railway  company,  and  bad  a 
capital  of  $3,760,000.  Profits  were  large,  and  the  stock  was 
quoted  at  400.  Certain  Congressmen  were  giyen  stock  at 
par  on  their  personal  notes,  the  object  being  to  gain  their 
favor  in  case  adverse  legislation  was  proposed.  Oakes 
Ames,  of  Massachusetts,  was  expelled  from  the  Hoose  lot 
his  connection  with  the  bribery,  and  James  Brooks,  of  ^^^ 
York,  for  accepting  bribes.  Other  Congressmen  were  cen- 
sured. A  proposition  to  impeach  Vice-President  Colfax  ^*^ 
ret>orted  against  by  the  Judiciary  Committee. 

January,  1874.— The  value  of  the  pound  sterling  wasfced 
by  Congress  at  $4.86.65. 

^ehrmry,  1874.— Two  letters,  purporting  to  come  fr^^ 
the  Wabash  and  Western  Union  companies,  were 


THS  RESUMPTION  ACT.  61B 

hj  the  Stock  Exchange,  annooncing  an  increase  of  stock  by 
the  directors.  The  market  went  off  three  points  before  it 
was  discoTered  that  the  letters  were  forgeries. 

April,  1874— The  President's  veto  of  the  inflation  bill 
unsettled  prices  and  caused  depression.  The  bpars  raided 
the  market,  causing  a  heayy  decline,  but  a  quick  reoovery 
followed. 

February  J 1875.— Wabash  went  in  the  hands  of  a  reoeiyen 

Ma^j  1876. — ^A  receiver  for  Erie  was  appointed. 

Jufyj  1876. — ^Duncan,  Sherman  &  Go.  failed* 

August^  1875. — The  Bank  of  California  failed.  Oashier 
Ralston  committed  suicide. 

Mdrchj  1876. — Jay  Gh>uld  made  his  famous  attack  on 
Western  Union. 

April,  1876.— The  National  Bank  of  the  State  of  New  York 
failed. 

November,  1876.— Many  savings  banks  failed. 

Jamtary,  1877. — Commodore  Yanderbilt  died  on  the  4th. 

Februaryy  1877. — Jersey  Central  went  into  the  hands  of  a 
receiver. 

Julyy  1877.— Qreat  railway  strikes ;  rioting  and  incendiar- 
ism in  Baltimore  and  Pittsburgh ;  losses  $10,000,000.  Over 
100^000  laboring  men  took  part  in  the  movement. 

Jantwiy,  1878.— The  Yanderbilt  combination,  including 
Michigan  Central,  Lake  Shore  [and  Canada  Southern,  was 
made  in  this  month. 

February,  1878. — ^The  purchase  of  silver  bullion  by  the 
Gbvemment  to  the  amount  of  $2,000,000  to  $4,000,000  per 
month,  and  its  coinage  into  legal  tender  dollars^  was  ordered 
by  Congress  on  the  28th. 

Mayy  1878. — Congress  passed  the  Besumption  Act 


(15  AN  IMPOR'TAN'r  SYNOPSIS. 

January^  1879. — Spede  paTments  were  resumed  after  the 
easpension  which  took  place  soon  after  the  opening  of  the 
war  of  the  rebellion.- 

Aprils  1879. — Gonld  and  Field  combined,  and  under  their 
auspices  the  St.  Louis,  Kansas  City  &  Northern  and  Wabash 
Railways  were'consolidated.  Gbidd  already  had  control  of 
Union  Pacific  and  Kansas  Pacific,  and  afterward  secured 
control  of  Missouri  Pacific  and  Denver  &  Bio  Grande. 

JwMy  1879. — ^Western  Union  declared  a  scrip  diridend  of 
17  per  cent. 

Augusty  1879. — ^There  was  a  serious  tumble  in  piioee  in 
this  month. 

October^  1879.— The  stock  market  was  yery  actiye  in 
October  and  Noyember.  The  bull  moyement  of  the  jetf 
was  at  its  height  and  transactions  were  so  numerous  that  it 
was  impossible  to  record  them  all.  The  drop  oame  in 
November. 

November,  1879.— William  EL  Vanderbilt  sold  260,000 
shares  of  New  York  Central  &  Hudson  Biver  stock  at  130 
to  a  syndicate  headed  by  J.  S.  Morgan  &  Go.,  of  London. 
Early  in  the  following  year  the  same  syndicate  took  100,- 

000  shares  on  the  same  terms. 

May,  1880.— Philadelphia  &  Seading  Bail  way  and  Goal 
and  Iron  Company  failed.  There  was  a  flurry  in  the  stock 
market  in  consequence. 

Jvm,  1880.— A  scrip  dividend  of  100  per  cent,  to  the  hold- 
ers of  Bock  Island  stock  on  the  purchase  and  cousolidation 
of  the  Iowa  Southern  and  the  Missouri  Northern  with  Bock 

Island. A.  leading  German  Wall  street  banking  hoose,  in 

view  of  the  large  exports  of  gold,  offered  a  premitim  of  \  of 

1  per  cent  for  a  call  on  $1,000,000  gold,  the  privilege  to 
extend  for  one  year. 

N&t>ember,  1880. —The  Louisville  &  Nashville  declared  a 
100  per  cent  stock  dividend. — ^Western  Union  declined  from 


'rSI.BGRAPH  UNION.— CAJtl^lBtD  SHOT.  517 

1M|,  on  November  22d,  to  77^  on  December  17ih. Jay 

Gould  purchased  most  of  the  stock  of  the  Denver,  South 
Park  &  Pacific  Bailroad,  in  the  iFoUowing  month  a  large 
block  of  Iron  Mountain  and  a  majority  of  the  International 
&  Great  Northern. 

DeotmbeTy  1880. — Seats  in  the  New  York  Stock  Exchange 
sold  at  $25,000.  A  great  ntunber  of  new  securities  were  listed. 
So  numerous  were  the  combinations,  consolidations  and 
extensions  of  railways  that  in  many  cases  the  analogy  with 
former  periods  was  lost,  and  comparisons  as  to  earnings 
were  of  little  value.  In  1886  seats  in  the  Exchange  sold  at 
$36,000.  In  December,  1870,  when  speculation  was  stagnant 
and  the  market  was  clear  of  all  outsiders,  seats  sold  at 

$3,000. B.  G.  Arnold  &  Co.,  the  largest  coffee  importing 

house  of  New  York,  suspended.  They  were  the  principals 
in  a  combination  to  comer  Java  coffee,  and  met  disaster  in 
the  attempt. 

January^  1881. — ^Western  Union,  American  Union  and 
Atlantic  &  Pacific  consolidated.  The  former  company  de- 
clared a  stock  dividend  of  38^  per  cent.  The  capital  stock 
was  made  $80,000,000. 

February,  1881. — Call  leant  were  made  at  1  per  cent,  per 
day  on  the  25th. 

Mckyj  1881  —The  Gk)uld  southwestern  railway  Efystem  was 
consolidated. 

Jtdy,  1881.— President  (Garfield  was  shot  by  Ghiiteau. 
The  stock  market  broke  on  the  news  of  the  shooting,  and  a 
panic  was  only  prevented  by  the  intervention  of  Sunday 

and  the  National  holiday  on  Monday. ^The  Oregon  war 

debt  was  paid. 

Augtuty  1881. — There  was  heavy  speculation  in  wheat  and 
com  in  Chicago  and  New  York.  Money  became  scarce^  and 
call  loans  were  made  at  interest  and  commission* 


X 


518  AN  DCPO&TAirr  SYNOPSIS. 

Septmber,  1881.— The  Hannibal  <fe  St.  Joseph  oomer. 

Januaryy  1882. — ^The  trunk  line  railway  war  of  rates  wsa 
settled.— --<}oald  and  Huntington  purchased  a  controlling 
interest  in  the  St.  Louis  &  San  Francisco  Bailway  and  half 
the  ownership  of  the  Atlantic  &  Pacific  Bailway. 

Ffbruaryy  1882. — ^The  market  showed  some  animation 
early  in  1882,  but  it  soon  collapsed  and  became  very  weak 
Bottom  was  touched  on  the  23d9  the  recovery  being  based 
on  talk  of  a  settlement  of  tbe  then  existing  trunk  line  rate 

war. Bichmond  &  Danville  plunged  from  219  to  130  and 

a  semi-panic  ensued  on  the  Stock  Exchange. 

March,  1882. — To  allay  reports  that  he  was  in  finanouil 
straits,  Mr.  Gould,  on  the  13th,  displayed  his  wealtL  He 
took  from  a  tin  box  $23,000,000  Western  Union,  $12,000,000 
Missouri  Pacific,  $6,000,000  Manhattan  Elevated,  $2,000^000 
Wabash  common,  and  $10,000,000  bonds  of  MetaropoUfam, 
New  York  Elevated  and  Wabash  preferred.  He  offered  to 
show  $30,000,000  additional  railway  stocks,  but  his  mtors 
had  seen  enough. 

October^  1882.— A  syndicate  headed  by  the  late  W.  H.  Van- 
bilt  purchased  124,800  shares  of  the  common  and  140,500 
shares  of  the  preferred  stock  of  the  New  York,  Chicago  4 
St.  Louis  Railway  at  13  and  37  respectively.  This  stock 
afterwards  became  the  property  of  the  Lake  8hore  k  Mich- 
igan Southern  Bailway. 

Decemh&r,  1882.— The  Municipal  Bank  of  Shopin,  Biissia, 

railed  with  liabilities  of  $60,000,000. The  railway  war 

in  the  Northwest  lasted  from  September  untU  Deoember 
15.  On  the  announcement  of  the  settlement  the  market  im- 
proved and  the  year  closed  with  a  better  feeling  all  around* 

Ftbrucm/^  1883.— Western  Union  absorbed  Mutaal  Union 
by  lease,  the  rental  being  interest  at  6  per  cent  on  $6,000/ 
000  bonds  and  6  per  cent,  on  $2,500,000  stock. 


IMMENSE  FI.UCTUATION  IN  STOCKS. 

Marchj  1883.— A  block  of  Hannibal  &  St.  Joseph  stock 
was  sold  to  Chicago,  Borlington  &  Qoincj.    At  the  same 

time  Wabash  was  leased  to  Iron  Mountain. From  the 

]9th  nntil  the  close  of  the  month  there  was  great  depression. 
Money  on  call  loaned  at  4@25  per  cent.  The  pnblic  was 
heayily  loaded  with  stocks. 

Mayy  1883. — Jersey  Central  was  leased  to  Beading. 

Juney  1883.— The  National  Petroleum  Exchange  and  the 
New  York  Mining  Stock  Exchange  consolidated.^^- 
MoGeochy  Everingham  &  Co.,  of  Chicago,  failed  in  conse- 
quence of  an  unsuccessful  attempt  to  comer  the  lard  market 

The  firm  lost  $6,000,000. The   movement  against  the 

circulation  of  trade  dollars  at  par  was  begun  in  Philadelphia 
and  extended  throughout  the  country. 

Jvly,  1883. — Western  Union  Telegraph  operators  struck 
for  increased  pay.  The  strike  lasted  a  month  and  ended  in 
failure. 

October^  1833. — ^A  notable  feature  of  1883  was  the  gigantic 
losses  made  in  speculative  operations.  The  failures  of 
McGeoch,  of  Chicago,  and  Banger,  of  Liverpool,  were 
notorious  instances^  but  thousands  of  private  individuals 

were  squeezed  out  by  the  pressure. In  the  summer  and 

fall  of  this  year  there  had  been  a  shrinkage  in  prices  of 
stocks,  when,  in  October,  the  Northern  Pacific  Company 
announced  a  proposed  issue  of  $20,000,000  new  bonds.  Thib 
precipitated  a  heavy  decline  in  nearly  the  whole  list.  The 
market  became  largely  oversold,  when  a  sharp  twist  was 
made  in  a  number  of  stocks,  and  prices  advanced  with  great 
rapidity.  Northern  Pacific  preferred  jumped  from  56  to  78i 
within  a  few  days,  and  Oregon  &  Transcontinental  went 
from  84|  to  61.  Then  Yanderbilt  came  into  the  market  and 
put  up  Michigan  Central  from  77  to  96i,  and  the  other 
Yanderbilt  stocks  to  a  less  extent  Great  depression  fol- 
lowed this  manipulation. 


520  AN  IMPORTANT  SYNOPSIS. 

Deoembevy  1883. — The  meroantUe  f ailores  in  1883  amounted 

to  $173,000,000,  against  $81,000,000  in  1881. The  triple 

alliance  between  Union  Padfic,  Bock  Island  and  St.  Paul 

was  made. Villard  resigned  from  Oregon  A  Transoonti- 

nentaland  Oregon  Bailway  &  Navigation. 

Jcmuary^  1884. — ^Firmness  in  the  market  on  the  amiounce- 
ment  that  a  syndicate  had  made  a  large  loan  to  Oregon  & 
Transcontinental  on  the  pledge  of  its  stocks.  A  quick  moye 

against  the  shorts  caused  a  sharp  advance. Henry  Vil* 

lard  resigned  the  presidency  of  the  Northern  Pacific  Bail- 
road. John  J.  Cisco  &  Co.,  New  York  bankers,  failed. — 

The  snrplns  reserve  of  the  New  York  National  banks  was 
wiped  out. James  B.  Keene,  operator  in  wheat,  failed. 

March^  1884. — There  was  a  squeeze  in  New  York  Central. 
It  sold  up  to  122.^— Delaware,  Lackawanna  &  Western  was 
cornered,  and  its  price  was  run  up  to  133i  regular  and  139^ 
cash.  S.  y.  White  managed  the  pool.  Another  move  in 
the  same  stock  was  made  later  in  the  year.  The  pool  dosed 
out  at  an  average  of  102.    Then  the  stock  dropped  to  86}. 

May  6, 1884.— The  Marine  Bank  failed  May  6th,  wrecked 
by  Grant  &  Ward.  Grant  &  Ward  suspended  two  days 
later 

Maj/y  1884.— During  the  panic  the  New  York  banks  issued 
Clearing  House  certificates  to  the  extent  of  $24,916,000,  of 
which  $7,000,000  went  to  the  Metropolitan  Bank.  Similar 
certificates,  to  the  amount  of  $26,565,000,  were  issned  in  tiie 

panic  of  1873. ^The  height  of  the  panic  was  reaohed  on 

the  14th.  The  storm  had  been  brewing  for  nearly  three 
years,  but  it  was  in  no  sense  a  commercial  panic.  Stoct 
Exchange  values  had  shrunk  to  an  imparalleled  degree,  as  J 
the  crash  was  precipitated  by  the  developments  regarding 
Grant  &  Ward,  John  0.  Eno,  Fish,  of  the  Marine  Bank,  and 
a  few  others.  The  disturbance  was  over  by  July  !• — 
The  Metropolitan  Bank  failed.    Eno's  frauds  on  the  Second 


PANIC  IN  1884.— DKPRKSSION  R«SUI,TS.  621 

Kational  Bank  discovered.  Oeorge  I.  Seney  failed.  The 
Atlantic  Bank  failed. 

Jvsne^  1884. — The  greatest  depression  following  the  Maj 
panic  was  reached.    Large  overselling  led  to  a  sharp  rally. 

Charles  Francis  Adams,  Jr.,  became  president  of  the 

Union  Pacific. 

Augmt^  1881— The  Wall  Street  Bank  failed. 

NcvemheTy  1884. — The  Metropolitan  Bank,  on  May  15th 
had  $11,294,000  in  deposits ;  on  October  1st  $1,338,000,  and 
in  Kovember  it  went  into  liquidation  and  retired  from  busi- 
ness. 

December,  1884 — The  Lackawanna  pool  of  1884  closed 
out  its  holdings  on  the  12th,  and  there  being  no  fufther 
support  to  the  market  prices  declined,  and  the  year  closed 

with  much  depression. ^The  largest  com  crop  ever  grown 

in  the  United  States  was  that  of  1884.  It  was  estimated  at 
1,800,000,000  bushels. 

Jofukny,  1885. — Henry  N.  Smith,  a  noted  bear  operator, 
failed,  and  carried  down  with  him  the  brokerage  firm  of 
William  Heath  &  Co. 

NovembeTy  1885. — ^The  trunk  lines  came  to  an  agreement 
and  advanced  rates.  This  gave  confidence,  and  an  upward 
movement  was  started.    The  Yanderbilts  and  the  Grangers 

were  the  features  of  the  market. 

r 
December^  1886.— Texas  Pacific  stock  collapsed.  A  receiver 
was  appointed  for  the  property  on  the  suit  of  the  Missouri 

Pacific,  a  large  holder  of  its  floating  debt. William  H. 

Yanderbilt  died  suddenly  on  the  8th.  The  fact  was  not 
known  down  town  until  after  business  hours,  but  it  had  a 
very  unsettling  influence.  The  next  morning  the  market 
opened  1@3  points  lower,  but  the  bulls  had  combined  to 
support  prices,  and  bought  freely.  In  many  instances 
prices  were  higher  at  the  close  than  on  the  previous  day. 


^22  AN  IMPORTANT  SYNOPSIS. 

February y  1886. — ^The  transoontmental  pool  was  ruptured. 
The  railroads  declined  to  continue  to  pay  the  sabsidy  de- 
manded bj  Pacific  MaiL 

Marchy  1886. — ^Western  Union  declared  a  scrip  diyidend 
of  li  per  cent,  for  the  quarter.  The  scrip  was  made  con« 
yertible  into  stock,  and  carried  the  same  rate  of  interest  as 

the  stock. ^The  representatives  of  the  coal  companies 

met  at  a  dinner  party  and  reached  '^an  agreement  among 
gentlemen  "  that  the  anthracite  coal  production  for  the  year 

should  not  exceed  33,250,000  tons. ^P.  B.  Qowen  joined 

the  Drezel-Morgan  syndicate  for  the  reorganization  of 
Beading.    The  announcement  caused  a  rapid  advanoe  in  all 

coal  stocks. ^The  great  strike  on  the  Gould  system  of 

raUroads,  inaugurated  on  the  7th,  failed. Heavy  engage- 
ments of  gold  for  shipment  abroad  were  made. 

April,  1886.— Wabash,  St.  Louis  &  Pacific  were  sold  in 

foreclosure. ^Labor  strikes  at  their  height.    The  bike 

Shore  switchmen  struck  in  Chicago,  and  the  Third  Avenue 
horse  car  driyers  in  New  York.  The  troubles  had  a  de- 
pressing influence  on  the  stock  market 

ifay,  1836. — Charles  Woerishoflfer,  bear  opemtor,  died 
May  9.^— Chicago  anarchists  attacked  the  police  with 
bombs,  killing  and  wounding  many.  Police  used  reTohers 
freely  and  many  rioters  fell.    Anarchists  were  sentenced 

to  death. The  strike  on  the  Southwestern  system  was 

officially  declared  off  on  the  1st.    The  men  were  completely 

beaten  after  a  contest  of  six  weeks. ^Tasker  Marvin,  bull 

operator,  failed.  Marketing  of  long  stock  caused  decline. 
The  depression  was  aided  by  existing  labor  troubles. 

June^  1886. — ^Western  Union  passed  its  diyidend. 

NovembeTy  1886. — ^The  managers  of  the  trunk  lines  re- 
affirmed the  presidents'  agreement  of  the  previous  year  to 

maintain  rates. ^Bichmond  &  West  Point  Terminal  became 

very  active  and  strong  on  the  purchase  by  the  company  of  tbo 


TH«  INTBR-SfAT^  COMMERCE  BII,!,.  623 

oon&ol  of  Bichmond  &  Danrille.^^ ^There  were  extraordin- 
ary buoyancj  and  specnlatdye  activity  in  stocks.  Low 
priced  non-dividend  payers  were  largely  dealt  in.  One 
specialty  after  another  was  '^boomed,"  and  in  some  in- 
stances large  profits  were  made. 

Deeembery  1886.— About  $10  J40,000  in  gold  was  imported 

at  New  York  during  the  month. ^Prices  toppled  over  on 

the  15th.  All  kinds  of  cheap  stocks  had  been  boomed  by 
cliques,  when,  on  money  becoming  tight,  there  was  a  rush 
to  realize.  Sales  reached  the  unprecedented  figure  of 
1,095,159  shares.  The  most  conspicuous  stocks  in  the  de- 
cline were  Philadelphia  &  Beading  and  New  York  &  New 
England.  No  financial  disaster  or  failure  of  importance 
occurred.  There  was  much  uneasiness  for  several  days,  but 
a  better  feeling  soon  set  in,  although   speculation   was 

checked  by  the  prevailing  high  rate  for  money. The 

Inter-State  Commerce  bill  was  introduced  in  Congress. 

January y  1887.— On  a  report  that  Hocking  Yalley  had  suf- 
fered by  irregularities  of  former  directors,  stock  broke  \\ 
points.  The  consumption  of  iron  in  the  United  States  ex- 
ceeded that  of  Great  Britain  for  the  first  time  in  1886. 
The  Inter-State  Commerce  Bill  was  passed  by  the  House 
Jan.  21,  by  a  vote  of  6  to  1.  European  war  rumors  caused 
foreign  selling  and  a  break  in  the  market  of  2  to  5  points. 
There  was  8  complete  recovery  on  the  following  day. , 


J 


1 


CHAPTER    XLVII. 

INTERNATIONAL    SIGNIFICANCE    OF    THE     BARTHOLUl 

STATUE, 

Gbeat  as  an  Aohieyement  of  Abt,  but  Gbeateb  as  thb 
Embodiment  of  the  Idea   of  (Jntvebsal  Fbeedom 

THE  WOBLD  OVEB.— ^It  IS  A  POETIO  IdEA  OF  A  UnITBB- 

SAL  Bepubuo.— Enlightenment  of  the  Wobld  Must 
Besult  in  the  Fbeedom  of  Man. 

THE  following  was  sent  by  me  to  the  New  York  TforW,  as 
briefly  embodyiiig  my  views  on  Bartholdi's  great  work, 
a  few  days  prior  to  the  dedication  of  the  Statue  of  Liberty : 

^^  When,  several  years  ago,  the  gigantic  forearm,  with  the 
torch  in  its  hand,  of  the  Statue  of  Liberty  was  exhib- 
ited in  Madison  square,  the  people  who  gazed  at  it  with 
idle  curiosity  had  little  idea  that  the  mammoth  structure  of 
which  it  was  a  part  would  so  soon  be  completed,  or  that  it 
would  be  so  great  an  achievement  as  it  now  stands.  Thanks 
to  the  New  York  Warldf  which  gave  the  impetus  to  the  sub- 
scription fund  movement,  which  enabled  the  great  sculptor 
to  realize  the  greatest  artistic  dream  of  his  life  within  a 
reasonable  period.  Some  people  may  imagine  that  the 
time  has  been  long,  but  many  people  who  understood  the 
magnitude  of  the  work,  and  observed  the  slowness  of  the 
sul^scriptions,  had  no  hope  of  seeing  it  finished  in  this 
generation  prior  to  the  time  the 'subscription  for  the  pedestal 
was  under  way. 

^'  Until  Ihe  last  few  days,  when  this  colossal  goddess  arose 
on  Bedloe's  Island  in  all^er  full,  finished  and  magnificent 
proportions  and  artistic  splendor,  like  the  aucient  divinity 
emerging  from  the  foam  of  the  sea,  the  people  did  not  begin 
to  realize  the  magnitude  of  Bartholdi's  idea*  In  mere 
mechanical  size  the  statue  ^with  its  appurtenances  excel 
anything  and  everything  of  the  same  character  in  the  world. 


526lNT«RNATlONAI,  SIGNIFICANCE  OF  BARTHOI4)I  STATUB. 

It  is  the  biggest  thing  of  its  kind  either  ancient  or  modera, 
and  is,  therefore,  the  most  appropriate  emblem  to  show  forth 
the  evolution  and  the  international  and  historic  associations 
of  the  two  greatest  Bepnblics  that  the  world  has  yet  seen. 
The  ColoBsns  of  Bhodes,  the  great  Sphinx  and  other  colossal 
statues  sink  into  insignificance  when  compared  with  the 
latest  production  of  Bartholdi's  brain. 

^^  But  great  as  the  statue  is  as  a  work  of  art,  the  international 
idea  which  it  embodies  is  greater  still.  When  taken  in  con. 
nection  with  that  earlier  and  comparativelj  insignificant 
effort  of  the  same  eminent  artist,  the  Statue  of  Lafayette 
in  Union  square,  the  Colossus  of  Liberty  suggests  a  whole 
century  of  history,  replete  with  greater  events  than  the 
thousand  years  which  preceded  it.  In  these  two  stataes 
the  interdependence  of  the  two  great  nations  is  clearly 
portrayed,  and  their  destiny  as  the  pioneers  of  univeisal 
Bepublicanism  brought  out  in  bold  relief.  If  Tennyson's 
poetic  dream  of  a  universal  Bepublic  is  ever  to  be  realized 
it  will  come  through  the  idea  which  the  chisel  of  Bartholdi 
has  immortalized,  and  which  the  World  has  been  chiefly 
instrumental  in  providing  with  a  local  habitation  and  a  name 
on  Bedloe's  Island.  European  monarchs  are  now  trembling 
on  their  thrones,  which  are  doomed  to  crumble  into  ruins  at 
no  distant  day,  through  the  very  idea  which  ^The  Statue  of 
Liberty  Enlightening  the  World '  is  destined  to  propagate 
from  this  day  forward  in  its  imposing  position  in  our  spacious 
harbor.  The  Israelites  of  old  were  cured  of  their  bodily 
maladies  by  gazing  at  a  serpent  erected  on  a  pole.  In  a 
similar  way  the  politiqally  afflicted  and  oppressed  of  all 
nations,  as  soon  as  they  emerge  through  the  narrows  of  onr 
magnificent  bay,  either  by  day  or  night,  wHl  find  a  panacea 
for  all  their  iUs  in  the  sight  of  that  wonderful  statue,  with 
all  that  its  name  implies. 

^'  And  one  word  as  to  what  is  in  that  name  which  has  been  so 
severely  criticised.  On  account  of  it  Americans  have  been 
charged  with  egotism,  but  those  who  talk  in  this  way  seem 


BARTnOI^Dl'S  INTKRNATIOWAI,  ID«A.  B27 

to  forget  tliat  Bartholdi  himself,  as  the  representative  of  the 
French  naion,  is  the  author  of  the  name.  So,  as  it  comes 
from  him  in  his  representative  capacity,  we  can  receive  it 
with  good  grace,  and  without  being  amenable  to  any  such 
charge  as  that  referred  to.  Taken,  with  all  its  broad,  his* 
torical  associations,  I  don't  think  the  name  is  at  all  too  pre- 
tentious. I  have  no  hesitation  in  predicting  that,  ere  the 
present  century  draws  to  a  close,  results  will  fully  justify 
the  assumption. 

''The  magnificent  gift  of  the  French  people,  and  the  years 
of  toil  and  study  which  Bartholdi  has  devoted,  gratis,  to 
his  unprecedented  labor  of  love,  cannot  fail  of  the  great 
and  only  reward  which  both  have  so  earnestly  and  mag^ 
nanimously  sought^  namely— to  enlighten  the  world." 


CHAPTER    XLVIII 

URGE  FORTUNES  AND  THEIR  DISPOSITION. 

How  THE  FOBTUNES  OF  THE   ASTOBS   WEBE   MaDE. — GeOBGE 

Peabody  AND  HIS  Philanthbopio  Sohemes. — Johns  Hop- 
kins AND  HIS  Peoulubities.— A.  T.  Stewabt  and  his 
Abobtiye  Plans.— a  Soulptob's  Opinion  op  his  Head. 
— ^EooENTBicrriEs  op  Stephen  Gibabd,  and  How  he 
Tbeatbd  his  Poob  Sisteb.— His  Pbnubious  Habits 
AND  Gbeat  Donations. — James  Lenox  and  the  Li- 
bbabt  which  he  Left.—How  I^teb  Coopeb  Made  his 
Fobtune,  and  his  Libebal  Gifts  to  the  Cause  of  Ed- 
ucation.—Samuel  J.  Tildbn's  Munificent  Bequests. 
—The  Vandebbilt  Clinic— Lick,  Oobooban,  Stbybns 

AND  OaTHABINE  WoLF. 

I  SHALL  take  a  short  review  in  this  chapter  of  some  of 
the  most  prominent  wealthy  men  who  have  been  the 
architects  of  their  own  fortunes,  and  comment  briefly  on 
their  methods  of  disposing  of  their  estates. 

In  the  United  States,  John  Jacob  Astor  was  one  of  the 
first  to  arrest  public  attention  in  the  matter  of  large  for- 
tunes. Before  his  day  there  were  few,  if  any,  millionaires 
on  this  side  of  the  Atlantic.  Now  there  are  thousands  of 
these  lucky  individuals.  It  is  true,  George  Washington, 
the  Father  of  our  country,  was  very  comfortably  fixed,  and 
supported  aristocratic  style  in  his .  domestic  Uf e,  but  he 
probably  never  was  worth  more,  all  told,  than  $200,000.  It 
is  singular  that  none  of  his  successors  have  ever  been  worth 
even  this  amount.  It  was  believed  at  one  time  that  Grant 
had  accumulated  a  large  amount  of  money  and  value,  and 
was  fast  approaching  the  financial  status  of  a  millionaire, 
bat  this  popular  delusion  was  suddenly  dispelled  when  he 
and  his  family  were  victimized  by  the  first  young  Napoleon 
of  finance,  Ferdinand  Ward, 

The  founder  of  the  now  wealthy  house  of  Astor  and  of 
the  Astor  Library  died  in  1848,  at  the  age  of  86.    He  left 


630  I^ARGB  FORTUNES  AND  THBIR  DISPOSITION. 

the  greater  bnlk  of  his  estate  to  his  son,  William  B.  Astor. 
He  bequeathed  $400,000  to  the  Astor  Library,  also  a  lew 
legacies,  amounting  in  all,  the  library  inclusive,  to  about 
$500,000.  His  wealth,  at  the  time  of  his  deafli,  was  esti- 
mated at  twenty  millions,  a  very  large  fortune  at  that  time. 

William  B.  Astor,  who  died  in  1875,  left  $260,000  to  the 
library,  and  the  lai^e  balance  of  his  estate  to  his  sons  and 
widow. 

The  Astors  hare  been  characteristic  for  their  benef aetionBr 
in  a  quiet  way,  to  a  large  number  of  public  objects 
Their  estate  is  remarkable  for  the  way  it  has  been  kept  in- 
tact, and  for  its  steady  and  considerably  rapid  improvement, 
and  they  are  popular  as  landlords. 

The  elder  Astor  who  came  to  this  country  from  Waldorf 
in  Germany,  near  Heidelberg,  before  he  was  20  years  of 
age,  and  who  started  in  life  dealing  in  furs,  had  a  gruui 
scheme  on  foot  at  one  time  for  monopolizing  the  for  trade 
of  the  whole  world,  which  he  had  calculated  wonld  then 
have  brought  him  a  million  dollars  a  year.  He  was  diverted 
from  this  purpose  by  the  large  profits  which  he  f onnd  in 
real  estate,  by  dealing  in  which  he  made  most  of  his  monej; 
and  the  family  has  steadily  adhered  to  this  line  of  specois' 
tion  and  investment  throng  two  generations. 

The  native  American  who,  perhaps,  ranks  above  all  (^^ 
in  the  munificence  of  his  gif  ts^  and  the  beneficence  of  his 
purpose  was  George  Peabody.  He  was  a  poor  Massachn- 
setts  boy,  who,  by  hard  industry,  arose  to  be  one  of  tte 
largest  mUlionaires  of  his  day.  He  was  also  a  pUlfti^' 
thropist  in  the  highest  sense  of  the  term.  His  forbme  at 
one  time  probably  exceeded  ten  millions.  His  well-knowft 
benefactions,  during  his  life,  exceeded  seven  million  dollar 
and  it  is  supposed  that  he  gave  away  vast  amounts  in  ohtfi''7 
of  which  no  definite  account  was  kept. 

Shortly  before  his  death,  in  1869,  he  bequeathed  <^o  and 
a  half  millions  as  a  building  fund  for  lodging  houses  tor  the 
poor  of  London,  and  devised  foi  a  Southern  Education  Fw 


PKABODY,  HOPKINS  AND  STBWART.  631 

two  million  one  hundred  thousand.  In  addition  to  these  he 
left  five  millions  to  various  relatives.  J.  8.  Morgan,  who 
was  Mr.  Peabody's  partner  in  the  banking  business,  became, 
at  his  death,  his  successor,  and  is  now  supposed  to  be  a 
richer  man  than  Mr.  Peabody  ever  was. 

Johns  Hopkins,  who  died  at  Baltimore  in  1873,  at  the  age 
of  78,  was  one  of  the  most  eccentric  millionaires  and  philan- 
thropists. Very  few  expected  that  he  would  bequeath  the 
great  university  and  the  hospital  which  are  called  by  his 
name.  He  was  so  wretchedly  penurious  that  he  hardly 
afforded  himself  the  means  of  subsistence.  His  benefactions 
to  these  two  institutions,  however,  exceed  eight  million 
dollars. 

Alexander  T.  Stewart,  the  great  dry  goods  merchant,  who 
was  reputed  to  be  one  of  the  three  wealthiest  men  in  the 
United  States,  Commodore  Yanderbilt  and  John  Jacob 
Astor  being  Hie  other  two,  died  in  1876.  He  had  no 
legitimate  heirs,  and  his  estate,  estimated  at  one  time  be- 
tween twenty  and  thirty  millions,  was  left  to  his  wife,  with 
the  exception  of  a  million  to  Judge  Hilton  and  $325,000  to 
his  employes. 

Mr.  Stewart's  two  great  benefactions  were  failures,  as  he 
left  nobody  able  and  willing  to  carry  out  his  intentions  in 
regard  to  their  arrangement. 

They  would  probably  have  been  failures  in  any  event,  as 
they  seemed  to  the  majority  of  people  to  be  in  a  large 
measure  Utopian.  One  was  Garden  Oity  on  Long  Island, 
intended  to  be  homes  for  industrious  mechanics  on  a  higher 
and  more  comfortable  scale  than  the  majority  of  the  dwell- 
ing of  these  sons  of  physical  and  intellectual  toil.  A  grand 
cathedral  was  built  there  in  memory  of  JJie  merchant  prince, 
and  a  beautiful  crypt  for  his  mortal  remains,  which  were 
stolen,  from  St.  Mark's  churchyard  shortly  after  the  inter- 
ment. 

The  mechanics  and  laborers  were  not  attracted  to  Garden 
City,  and  it  is  now  making  slow  progress  with  tenants  whose 
avocations  are  generally  in  the  higher  walks  of  life. 


632  I^AKGE  FORTUNES  AND  THEIR  DISPOSITION. 

The  other  great  enterprise  was  a  home  for  girls  and  wo- 
men at  moderate  expense.  This  was  in  the  shape  of  a  hotel 
on  a  large  scale  at  Park  Avenue  and  Thirty-third  street  The 
restrictions  and  the  prices  were  such  that  the  home  also 
failed  to  attract  the  class  it  was  intended  for.  The  public 
gift,  therefore,  reverted  to  the  Stewart  estate,  or  rather  was 
taken  forcible  pessession  of  by  the  trustees  and  transformed 
into  the  Park  Avenue  Hotel.  To  carry  out  the  rather 
indefinite  terms  of  the  bequest  would  probably  have  involved 
the  expenditure  of  a  very  large  amount  of  the  Stewart 
estate,  and,  perhaps,  the  enterprise  would  even  then  have 
been  a  failure.  It  is  more  than  probable  that  if  Mr.  Stew- 
art had  lived  a  few  years  longer,  he  himself  would  have 
been  satisfied  with  the  impracticability  of  both  his  semi- 
philanthropic  schemes. 

There  were  great  things  expected  in  the  shape  of  bene- 
factions from  Mr.  Stewart  at  the  time  of  his  death.  He 
had  done  so  little  in  that  respect  while  living  that  the  pub- 
lic indulged  the  hope  that  he  woidd  make  up  for  his  charit- 
able short-comings  when  he  found  that  his  worldly  accumu- 
lations  could  no  longer  be  of  any  service  or  gratification  to 
him,  and  that  he  could  not  take  any  of  them  away  with 
him. 

Hence,  it  was  a  considerable  disappointment  to  the  pubUc 
when  the  will  revealed  the  fact  that  nothing  had  been  devised, 
out  of  the  immense  hoard  of  nearly  half  a  century's  savings, 
to  charitable  purposes. 

On  the  day  of  his  death  I  had  an  engagement  with  my 
dentist,  Mr.  Dwinell,  in  Thirty-fourth  street,  and  while  I 
was  seated  in  the  chair  Mr.  Wilson  MacDonald,  the  well 
known  sculptor,  came  in  to  pay  a  visit  to  the  dentist,  with 
whom  he  was  well  acquainted.  Having  been  introduced  by 
the  sculptor,  we  immediately  entered  into  conversation  on 
the  prominent  local  topic  of  the  day,  the  death  of  Mr. 
Stewart  and  the  probable  distribution  of  his  wealth. 


A  SCUI^PTOR'S  opinion  of  STEWART'S  HKAD.  683 

Mr.  MacDonald  invited  me  to  go  to  his  stadio  to  see  a 
bust  in  day  of  Mr.  Stewart  that  he  had  just  about  finished* 
He  said,  ^'  I  knew  Mr.  Stewart's  aversion  to  having  any  por- 
traits  or  photographs  taken  of  himself  during  his  lifetime, 
80 1  provided  for  the  emergency  some  time  ago  by  taking 
close  observation  of  him  at  various  intervals.  During  the  past 
two  years  I  have  frequently  come  in  contact  with  him,  going 
into  his  store  and  getting  a  good  look  at  him  from  various 
points  of  view,  so  as  to  impress  his  likeness  upon  my  mind. 
I  have  thus  succeeded  in  getting  a  pretty  good  bust  of  him 
in  day." 

Mr.  MacDonald  was  very  anxious  that  I  should  call  and 
see  this  bust,  because,  as  I  knew  Mr.  Stewart  so  well,  he  in. 
f  erred  that  my  judgment  would  be  worth  something,  and  he 
expressed  a  desire  that  I  should  criticise  his  work.  I  pro- 
mised him  I  would  call  and  see  the  bust  as  soon  as  I  could 
spare  the  time. 

On  leaving  the  dentist's  office  I  made  another  engagement 
to  go  back  the  following  week,  and  in  the  meantime  I  had 
been  unable  to  call  at  the  studio  of  the  artist,  but  the  latter 
happened  to  be  in  the  office  of  the  dentist  when  I  called 
Qiere  again.  The  will  of  Mr.  Stewart  had  been  published 
in  the  interim,  and  in  it  all  reference  to  charities  and  benevo- 
lent institutions  had  been  carefully  omitted. 

Mr.  MacDonald  reminded  me  that  I  had  not  called  to  see 
the  bust,  and  added,  '^  If  you  had  called  that  time  you  would 
hardly  recognize  any  resemblance  between  what  it  is  now 
and  what  it  was  then."  ''  How  is  that  ?''  I.  inquired.  "  Be- 
cause,"  he  replied  (facetiously),  ^^as  soon  as  I  saw  the  will 
published  in  the  newspapers  and  none  of  that  immense  pile 
left  to  the  public,  from  whom  it  had  been  collected,  I  set  to 
work  and  toned  down  the  bumps  of  benevolence,  conscien- 
tiousness, sublimity,  veneration  and  ideality,  making  those  of 
acquisitiveness,  inhabitiveness,  amativeness  and  all  the  sel- 
fish and  animal  propensities  prominent.  I  naturally  con- 
cluded, if  phrenology  is  not  a  fraud,  that  Stewart's  iriJX  was 


634  I^ARGE  FORTUNES  AND  THEIR  DISPOSITION. 

a  manifestation  of  the  non-existence  of  the  higher  and  more 
humane  organs  in  his  cranium.  There  certainly  could  be 
nothing  there  indicative  of  any  generous  emotions." 

I  think  everybody  who  knew  the  great  dry  goods  merchant 
will  be  inclined  to  say  that  the  judgment  of  the  sculptor 
was  neither  rash  nor  uncharitable. 

Stephen  Gieabd. 

Stephen  Girard  was  another  of  the  great  millionaires  who 
arose  from  penury,  and  whose  eccentricity  took  a  philan- 
throphic  turn.  Mr.  Girard  was  a  Frenchman*  bom  near 
Bordeaux  in  1760,  who  made  his  home  in  later  years  in 
Philadelphia.  He  bequeated  over  two  million  dollars  to 
found  and  endow  Girard  College  in  that  city. 

There  is  a  good  story  told,  which  seems  to  be  well  authen- 
ticated, of  &e  manner  in  which  Mr.  Girard  rewarded  the 
ingratitude  of  a  sister.  When  he  was  a  boy  about  ten  he 
manifested  very  little  disposition  for  hard  work,  and  his 
family  treated  him  harshly.  One  morning  a  rumpus  arose 
about  his  idlenesi^  and  having  said  something  that  aroused 
the  ire  of  his  sister,  she  clutched  the  broom  and  flew  at  him 
in  a  rage.  He  retreated,  receiving  a  few  hard  blows  over 
the  shoulders  as  he  passed  for  the  last  time  over  the  thres- 
hold of  his  paternal  home.  He  went  to  sea,  his  father  hav- 
ing been  a  seaman,  and  through  various  vicissitudes  of  for- 
tune eventually  turned  up  as  a  millionaire  in  Philadelphia. 

After  young  Girard  had  gone  through  the  preliminary 
course  as  cabin  boy,  trading  between  France,  the  West 
Indies  and  New  York,  he  had  saved  up  some  money  and 
became  part  owner  of  a  small  trading  vessel.  This  wasin 
1776,  the  year  of  the  Declaration  of  Independence.  His 
trading  was  suspended  by  the  war  with  Great  Britain.  He 
then  speculated  in  the  renting  of  a  number  of  stores  in  Phila- 
delphia, and  sub-let  them  at  a  large  profit.  Afterward  he 
purchased  a  controlling  interest  in  the  stock  of  the  old  U. 
S.  Bank  in  1812,  and  became  a  private  banker  with  a  capital 


SHB  MKATS  HAR  LONG  I.OST  BROTHER.  ^35 

of  more  than  a  million.    Subsequently  he  loaned  five  mil- 
lions to  the  Government  to  help  defray  war  expenses. 

In  the  meantime  f ortune,  however,  had  not  favored  his 
irate  sister,  who  had  chastised  him  with  the  broom  She 
remained  poor.  She  had  heard  of  her  brother's  wealth, 
however,  but  did  not  have  money  enough  to  pay  her  pas^ago 
to  this  country.  In  this  extremity  she  went  to  the  captain 
of  a  Philadelphia  vessel  in  a  French  port  and  told  him  that 
she  was  a  sister  of  Stephen  Girard,  without  money,  atd 
desired  to  go  and  see  her  brother,  who  was  well  known  to 
the  captain.  She  received  the  best  accommodation  that  the 
vessel  could  afford.  Having  arrived  in  Philailelpliia  the 
gallant  captain  escorted  her  to  the  house  of  her  wealthy 
brother.  Leaving  her  in  the  hallway  he  went  in  to  see  Mr 
Girard  and  told  him  that  a  lady  outside  wished  to  see  him. 
The  benevolent  captain  was  prepared  to  behold  a  demon- 
stration of  joy,  which  he  thought  would  be  exhibited  as  soon 
as  the  long  lost  brother  and  sister  should  recognise  each 
other.  He  was  not  kept  long  in  suspense.  Mr.  Girard  knew 
his  sister  instantly.  "  0\8t  voiw."  **  It  is  you,"  he  said. 
"  Qui,"  she  replied.  These  were  all  the  words  that  passed. 
There  was  no  rushing  into  each  others  arms^  but  on  the  con- 
trary, Mr.  Girard  plunged  at  the  captain  in  a  lively  mood. 
"What  authority  had  you  to  bring  that  woman  here?"  he 
Said.  The  captain  was  dumbfounded  and  hardly  knew  what 
to  answer.  "  Take  her  back  again  at  your  own  expense,"  he 
added. 

The  captain  did  not  stand  a  minute  on  the  order  of  his 
going,  and  the  millionaire's  sister,  without  receiving  one 
kind  adieu,  was  conducted  from  the  palatial  mansion  of  her 
brother  to  the  vessel,  and  thence  to  her  pauper  home  in 
France. 

This  shows  that  the  great  philanthropist  had  a  good 
memory  and  was  resentful  of  injuries,  yet  it  also  betrays  a 
narrowness  from  some  taint  of  which  the  greatest  minds  are 
not  entirely  free.    The  Girard  sister  was  unable  to  compre- 


636  LARG^  FORTuRSfe  ASfT^umR  DISPOSITION. 

Lend  the  higher  aspirations  of  her  jouDg  brother  and  his  in- 
telligent conyictions,  which  had,  no  doubt,  taken  fonn  attbt 
early  period  of  his  life,  that  a  man  can  never  become  wealthy 
by  hard  manual  labor.  He  was  wrong,  however,  in  giving 
her  the  cold  shoulder.  She  was  correct  in  one  sense,  from  her 
point  of  view,  although  a  narrow  view,  and  his  large  charity 
should  have  condoned  an  error  arising  from  her  sapeifidal 
conception  of  his  early  designs. 

Ilis  narrow-mindedness,  with  all  his  genuine  greatness,  and 
his  eccentricity  were  exhibited  in  a  remarkable  degree  in 
some  of  the  restrictions  of  his  will  regarding  the  coll^. 
Although  he  was  exceedingly  generous  in  his  gifts  to  religi- 
ous denominations,  without  distinction,  as  well  as  to  chari- 
table institutions  generally,  he  was,  though  illiterate,  a  free 
thinker  of  the  school  of  Yoltaire  and  Bousseau.  He,  there- 
fore, had  inserted  in  his  will  a  prohibitory  clause  to  the 
effect  that  no  clergyman  should  be  permitted  to  have  any- 
thing  to  do  with  Girard  College,  nor  even  be  admitted  as  a 
visitor.  The  college  is  for  orphans  between  six  and  ten 
years  of  age,  who  are  put  to  a  trade  when  they  are  sixteen, 
all  expenses  being  defrayed  until  they  are  able  to  earn  a 
living.  There  are  now  over  500  beneficiaries.  Girard  died 
in  1831,  at  the  ripe  age  of  four  score  and  one.  He  was 
worth  nine  million  dollars,  of  which  but  a  very  small  pit- 
tance went  to  a  few  of  his  relatives,  the  great  bulk  of  ^^ 
estate  having  been  distributed  among  charitable  institatioDfl' 
This  great  philanthropist  was  exceedingly  close  in  money 
matters  with  men  generally,  and  it  is  said  that  he  never  had 
a  friend,  except  the  friend  in  the  pocket,  which  is  by  all  odoa 
the  most  genuine. 

The  late  James  Lenox  takes  rank  with  the  great  philAQ' 
thropists  of  the  age,  in  attempting  to  devote  a  large  porbon 
of  his  surplus  wealth  to  the  good  of  humanity.  "W^^^  '^^ 
died,  in  1880,  at  the  age  of  eighty,  he  was  supposed  to  be 
one  of  the  five  wealthiest  men  in  New  York.  He  sp^i^'* 
million  dollars  to  found  and  endow  the  Presbyterian  Ho0p'^ 


JAM^S  I.KNOX  AND  HIS  S«I,«OT  UBRARY.  687 

ial  at  Seyentieth  street  and  Madison  avenue,  and  orer  a  half 
million  in  building  the  Lenox  library  at  Seventieth  street 
and  Fifth  avenue. 

The  building  and  the  library  are  both  immense  gifts,  but 
admission  to  the  latter  is  so  hampered  by  red  tape,  forms 
and  ceremonies  that  it  is  of  little  or  no  earthly  use  to  the 
general  public  As  a  piece  of  architecture  the  building  may, 
according  to  the  ideas  of  the  famous  John  Buskin,  help  to 
educate  the  people^  but  in  other  respects  they  derive  no 
benefit  from  it*  The  library,  which  is  built  on  ten  city  lots, 
contains  the  choicest  selection  of  books  in  the  world,  out- 
side of  the  British  Museum,  besides  valuable  manuscripts 
and  works  of  art^  and  its  collection  of  American  works  is 
unsurpassed  anywhere.  That  part  of  the  collection,  consist- 
ing of  Mr.  Lenox's  own  private  library  of  15,000  volumes} 
contains  books  of  rare  value,  many  of  which  could  not  be 
duplicated.  This  is  one  reason  why  the  general  public  are 
excluded. 

In  fact,  there  is  a  good  deal  to  be  said  in  favor  of  the 
fastidious  care  that  is  taken  of  some  libraries  and  picture 
galleries^  as  a  large  portion  of  the  general  public  don't  know 
how  to  appreciate  their  privileges,  and  therefore  abuse  them^ 
some  through  the  relic  monomania  and  others  actuated  by 
pnre  mischief.  Thus  it  was  that  Mr.  William  H.  Yanderbilt 
was  very  reluctantly  obliged  to  exclude  the  general  public 
from  his  fine  picture  gallery,  as  certain  visitors  scratched  the 
etchings  with  their  canes  and  put  their  fingers  on  the  pic. 
tores,  while  others  were  incessantly  on  the  relic  hunt  and 
had  to  be  carefully  watched  during  their  visit 

Pbtsb  Ooopeb. 

Peter  Oooper  was  another  of  the  philanthropists,  with 
large  means,  who  sought  to  distribute  a  considerable  part  of 
it  where  it  would  do  the  most  good  to  humanity,  especially 
to  that  portion  of  it  who  are  in  pursuit  of  knowledge  under 
difficulties.   Mr.  Oooper  had  a  hard  time  of  it  himself  getting 


638  I«A&GK  FORTUNES  AND  THEIR  DISPOSITION. 

a  fair  education,  and  he  knew  how  to  appreciate  the  boon. 
He  was  born  in  New  York  in  1791,  and  at  the  age  of  seyen* 
teen  was  apprenticed  to  a  coachmaker.  He  tried  his  hand 
at  several  other  occupations,  was  an  inventor  by  natuie^aDd 
the  designer  and  builder  of  the  first  locomotive  in  this  coun- 
try, which  had  its  trial  trip  on  a  part  of  the  Baltimore  & 
Ohio  Bailroad. 

Mr.  Cooper  experienced  his  great  success  in  fortune  build- 
ing in  the  manufacture  of  glue.  He  afterwards  erected  ex- 
tensive ironworks  at  Baltimore,  Maryland,  and  subsequently 
in  Trenton,  New  Jersey.  During  his  life  he  built  the  Cooper 
Institute,  at  a  cost  of  $650,000,  with  a  subsequent  donatioii 
of  $150,000.  This  institution  is  devoted  to  the  instruction  and 
elevation  of  the  working  classes.  It  consists  of  a  Ift^ 
reading  room  and  library  and  a  public  lecture  hall*  1^^ 
building  occupies  a  small  block  at  the  junction  of  Third  wd 
Fourth  avenues  and  Eighth  street.  It  has  evening  schoobi 
attended  by  2,000  pupils ;  a  school  of  design  for  females,  w 
which  there  are  200 ;  also,  a  school  of  telegraphy  for  women, 
?rom  which,  in  two  years,  over  300  operators  have  been  sent 
out. 

The  rents  from  the  building  on  the  lower  floor  and  tb^ 
offices  defray  the  greater  portion  of  the  expenses.  Ampl® 
provision  was  made  in  Mr.  Cooper's  will  for  the  permanence 
of  the  institution.  During  his  life  he  was  a  general  donor  to 
all  kinds  of  charitable  institutions,  and  almost  every  Tarietf 
of  labor  organization.  He  ran  for  President  in  1876  on  tb^ 
Greenback  and  Labor  ticket,  and  was  defeated  by  an  or&^ 
whelming  majority.'  He  had  an  idea  that  a  large  issQ^  ^^ 
greenbacks  would  create  universal  prosperity  and  m^^ 
everybody  happy.  He  died  in  1883,  at  the  age  of  ninety- 
two,  leaving  five  or  six  million  dollars,  the  greater  portion 
of  which  fell  to  his  son  and  daughter,  the  latter  being  ^^ 
wife  of  Mayor  Hewitt. 

One  of  the  greatest  of  American  philanthropists,  ^^ 
dally  as  his  princely  bequest  was  rather  unexpected,  ^ 


SAMUBI*  J.  TUiDZlf  AND  OTHER  PHII^ANTHROPISTS.    539 

the  Hon.  Samuel  Jones  Tilden,  whose  financial  and  politioal 
career  I  have  referred  to  in  another  chapter.  He  was  about 
serenty-three  years  of  age  at  the  time  of  his  death,  in 
August,  1886. 

Mr.  Tilden  died  worth  about  five  millions,  four  of  which 
he  left  to  be  donated  to  public  and  beneficent  objects.  The 
greater  part  of  this  is  to  be  spent  in  the  erection  and  endow- 
ment of  a  grand  free  library,  which,  if  the  terms'  of  the 
bequest  are  properly  administered,  will  be  the  greatest  in- 
stitution of  its  kind  in  this  country. 

The  disposition  of  the  YanderbUt  fortune,  up  to  the  pres« 
ent  time,  has  been  briefly  described  in  the  lives  of  the 
various  members  of  the  family  in  another  chapter.  The 
Clinic  of  the  College  of  Physicians,  however,  which  has 
recently  been  opened  at  Sixtieth  street  and  Fourth  avenue, 
is  entitled  to  greater  detail,  as  it  is,  perhaps,  destined  at 
some  future  day  to  become  a  great  medical  centre.  Mrs-  W. 
D.  Sloane,  daughter  of  Wm.  H.  Yanderbilt,  subscribed  9250,- 
000  to  build  the  Ma£ernity  Hospital,  in  connection  with  this 
institution,  her  father  having,  prior  to  that,  donated  the  bal- 
ance of  the  million  necessary  to  finish  the  entire  structure^ 
which  consists  of  the  Clinic,  the  Maternity  Hospital  and  the 
College  Hospital  It  is  said  that  in  all  their  appointments 
the  different  departments  of  this  institution  are  superior  to 
anything  of  a  similar  description  in  the  world. 

Among  the  men  who  disposed  of  great  fortunes  I  may 
mention  James  Lick,  of  California,  who  devoted  millions  to 
charitable  purposes ;  William  W.  Corcoran  of  Washington, 
who  gave  two  millions  for  an  art  gallery  and  a  home  for  old, 
decrepit  and  superannuated  women ;  also,  Mr.  Stevens,  of 
Hoboken,  who  devised  two  millions,  one  for  the  Stevens 
Battery  and  the  other  for  the  Stevens  Institute  at  Hoboken 
Miss  Catharine  Wolf,  who  died  last  year  worth  twelve 
millions,  bequeathed  largely  of  her  estate  to  charitable  pur- 
poses, and  donated  her  magnificent  art  gallery  to  the  Metro- 
politan Museum  of  Art. 


540  I^ARGB  FORTX7NBS  AND  THBIB.  DISPOSITION. 

What  a  lesson  is  taught  in  these  examples  of  phihi^ 
ihropio  celebrities  to  our  fellow-beings — I  was  going  to  say 
fellow  citizens,  bnt  that  wonld  not  be  appropriate  in  many 
instances — ^the  Socialists.  Those  millionaires^  who  haT6  ail 
more  or  less  been  denounced  as  hard-hearted  monopoliste, 
have  been  among  the  hardest  workers  and  thinkers  aJl  their 
liyeSy  many  of  them  denying  themselves  the  Inxmies  and 
some  of  them  even  the  full  necessities  of  lifa  For  what 
purpose!  Simply  to  be 'the  hard  worked  and  poorly  fed 
mediums  of  accumulatiDg  wealth  to  relieve  the  necessitias 
and  minister  to  the  comfort  of  the  less  fortunate,  the  idlO| 
the  dissipated,  the  poor  and  the  needy,  and  in  general  those 
who  misunderstood  and  abused  them  on  account  of  their 
good  work. 

It  was  good  for  those  benefactors  of  humanity  that  viita^ 
is  its  own  reward. 


CHAPTER    XLIX. 
SOUTHERN  AFFAIRS  IN   SPECULATION. 

The  Pbebebtation  op  the  Union  a  Gbeat  Blessino. — To 
Let  them  "Secesh"  would  have  been  National 
Suicide. — How  Immigbation  has  Assisted  National 
Pbospebitt. — Eescued  fbom  the  Dynastic  Oppbes- 
8i0n  of  eubopean  govebnments. — showing  good 
Fellowship  towabds  the  Southebn  People  and  Aid- 
ing   THEM    IN    THEIB    InTEBNAL     ImPBOVEMENTS.  —  ThB 

South,  Immediately  Afteb  the  Wab,  had  Qbeateb 
Advantages  than  the  Nobth  fob  Making  Matebial 
Pbogbess. — The  Business  op  the  North  was  In- 
plated.—The  States  op  Geobgia  and  Alabama  Op- 

FEBED     InYITING     FiELDS     FOB    INVESTMENT.— ISSUING 

State  Secubitibs,  Cheating  and  Eepudiating. — Pres- 
ident Johnson  Chiefly  to  Blame  fob  the  Bbeach 
OF  Faith  with  Investobs  who  webe  Swindled  out 
of  theib  Money.— Revenge  and  Avabice  Unite  in 
Financial  Repudution. 

DURING  the  war  I  did  all  that  lay  in  my  humble  power 
to  further  the  cause  of  the  Union,  believing  that  it  was 
a  righteous  one,  and  that  the  North  went  into  Uie  struggle 
to  maintain,  uphold  and  preserve  the  best  form  of  govern- 
ment known  to  man,  and  certainly  the  only  one  suitable  to 
America. 

View  it  as  we  may,  the  wisdom  of  man  has  yet  evolved 
nothing  to  surpass  the  Constitution  of  the  United  States. 
Whether  Thomas  Jefferson  or  Thomas  Paine  was  the  author 
of  its  leading  features,  is  a  matter  that  I  shall  not  stop  to 
discuss,  but  suffice  it  to  say,  that  upon  it  has  been  estab- 
lished the  best  government  in  the  world.  There  is  no  other 
system  in  ancient  or  modem  history  that  could  weld  to- 
gether and  bring  into  the  social  and  political  affinity  of  one 
great  integral  harmony  the  immense  variety  and  diversity  of 
human  elements  that  are  dwelling  as  one  large  and  compar- 
atively happy  family  in  the  United  States. 


542  SOUTHERN  AFFAIRS  IK  SPKCUI«ATION. 

What  other  system  caald  combine  so  many  nationalities, 
creeds,  passions  and  prejudices,  modifying  all  of  them  aud 
uniting  all  for  the  general  good  and  the  perfection  of  a 
higher  deyelopment  of  human  nature  in  political  and  social 
lifet 

There  is  none.  We  must  go  to  the  pleasanter  pages  of 
political  fiction  to  find  a  comparison. 

This  country  has  made  greater  strides  in  each  decade 
towards  the  possible  approach  of  More's  Utopia  or  Plato's 
Bepublic  than  any  other  country  has  done  in  the  same  num- 
ber of  centuries. 

It  must  be  admitted  that  we  are  a  considerable  distance 
from  the  happy  goal  contemplated  by  the  writers  named, 
but  we  are  moying  in  the  direction  to  show  that  its  attain- 
ment is  possible.  We  shall  yet  accomplish  what  the  world 
has  hitherto  considered  a  pleasant  fiction  overworked  through 
the  highest  ideal  of  Greek  art. 

This  high  state  of  deyelopment  is  what  we  are  coming  to 
in  spite  of  the  fact  that  the  ayerage  ward  politician  has  im- 
mense chasms  to  cross  before  the  hill  tops  of  his  evolution 
shall  appear  in  sight.  When  he  begins  to  climb,  however, 
his  ascent  will  be  marvellously  rapid  and  he  will  leave  that 
vehement  youth  of  Longfellow's,  whose  watchword  was  Ex- 
celsior, far  in  the'  distance.  Moreover,  his  steps  will  be 
steady  and  prudent,  and  not  liable  to  unfortunate  reaction 
or  fatal  mishap. 

It  has  been  said  that  revolutions  never  go  backward.  With 
much  stronger  emphasis  it  may  be  asserted  that  evolutions 
in  a  Eepublio  like  those  I  am  now  contemplating  never  re- 
cede, but  still  press  forward  and  upward  towards  the  mark 
of  a  higher  ideaL 

A  large  proportion  of  the  people  who  come  here  do  so  for 
the  chief  purpose  of  getting  away  from  other  forms  of  gof- 
erimient  that  are  despotic  in  their  rule  and  oppressive  to 
their  subjects. 

These  people  who  come  to  us  are  saved  and  redeemed 


GOOD  RBSUI^TS  OF  IMMIGRATION.  643 

Their  lives  would  have  been  wasted  if  they  had  remained 
in  the  land  of  their  birth.  In  this  country,  they  not 
only  add  to  the  wealth  of  the  nation^  but  they  become  use- 
ful members  of  the  social  fabric,  with  few  exceptions,  enjoy- 
ing happiness  themselves  and  bringing  up  children,  whom 
they  teach  to  admire,  honor  and  revere  the  institutions  of 
this  country  in  contrast  with  the  land  of  their  own  nativity. 

This  country  has  thus  become  the  asylum  for  the  down- 
trodden of  every  nation,  and  it  is  a  great  gainer  by  the  con- 
trast thus  constantly  presented  to  the  minds  of  those  who 
come  here.  Oar  own  people  are  also  in  this  way  taught  to 
appreciate  their  privileges  and  set  a  higher  value  upon  the 
advantages  they  enjoy. 

If  it  were  not  for  the  constant  stream  of  immigration  to 
these  shores,  the  people  of  this  country  might  begin  to  think 
that  Bepublicanism  was  the  birthright  of  all,  and  forget  that 
they  enjoyed  especial  privileges  by  birth,  and  came  into 
this  world  with  a  very  important  start  of  other  nations.  I 
fear  that  some  of  them  are  prone  to  imagine,  especially  some 
of  the  fair  sex,  that  we  suffer  here  from  that  long  felt  want 
of  a  hereditary  and  native  nobility.  Some  of  these  fair  ones 
have  had  sad  experience,  that  should  have  disabused  their 
young  minds  of  these  notions  not  very  long  ago.  The  force 
of  these  examples  will  have  some  effect,  at  least,  in  mod- 
erating the  folly  of  their  mothers.  It  can  hardly  be  expect- 
ed that  many  of  the  young  ladies  will  learn  much  them- 
selves, except  by  a  repetition  of  the  same  sad  experience, 
but  the  persuasive  powers  of  the  mammas  may  exercise  a 
deterring  effect  in  many  instances  where  hasty  matrimonial 
alliances  to  catch  the  bauble  of  a  foreign  title  would  be  the 
forerunner  of  much  misery  and  sometimes  shame. 

I  might  cite  many  instances  of  these  from  our  own  dty, 
but  the  sensational  papers  will  deal  with  them  ad  nauseam. 
I  don't  aspire  to  be  sensational  in  this  book.  I  only  attempt 
to  state  in  matters  of  this  kind  what  may  suffice  to  point  the 
moral|  leaving  the  sensational  story-teller  to  adorn  the  tale 


Ci4  SOUTHHRN  AFFAIRS  IN  SPBCUI.ATION. 

Nor  do  I  mean  to  cast  any  reflection  on  snch  happy  mar^ 
riages  as  that  of  Miss  Jerome  to  Lord  Bandolph  Churchill, 
and  others  I  could  mention. 

Our  expansive  territory  has  enabled  the  adventurous  and 
energetic  of  all  nations  of  the  world  to  come  here  and  make 
homes  for  themselves,  instead  of  remaining  im  the  land  of 
their  birth,  where  many  of  them  were  existing  in  a  modified 
condition  of  slavery  under  other  names. 

The  idea  of  encouraging  this  large  exodus  fiom  other 
lands,  and  this  freedom  of  assimilation  with  our  people,  has 
been  one  of  the  great  bulwarks  of  our  prosperity, 

I  realized  this  fact  very  clearly  at  the  commencement 
of  the  war  of  the  Bebellion,  and  have  cherished  it  ever 
since. 

I  therefore  felt  deeply  earnest  in  my  sympathy  with  the 
North  against  the  South,  whose  great  effort  was  to  break  up 
the  present  form  of  government,  attempting  to  destroy  its 
autonomy  and  powerful  cohesiveness. 

The  nation  would  have  been  split  in  twain  to  start  with, 
if  Horace  Greeley's  advice  had  been  taken,  "Let  them 
secesh.'^  Mr.  Greeley's  counsel  was  well  meant,  as  he 
thought  the  Southern  people  would  soon  be  glad  to  return 
to  the  Union,  but  it  would  have  been  national  suicide  to 
follow  it 

"  The  two  parts  of  the  dissevered  nation  would  have  been 
constantly  menacing  each  other,  and  kept  on  a  war  footing, 
with  occasionally  recurring  hostilities  across  the  border  ojjl 
every  slight  provocation.  The  result  would  have  been  that 
some  or  all  of  the  European  powers  would  have  taken  ad- 
vantage of  this  state  of  affairs  to  plant  the  standard  of  des- 
potism once  more  on  these  shores,  making  this  fair  land  a 
battle  ground  for  Imperial  and  kingly  ambition. 

These  designs  were  foreshadowed  by  Napoleon  III.,  whose 
actions  I  have  dealt  with  more  fully  in  another  place,  and 
Great  Britain  was  only  awaiting  the  opportunity  ^o  avenge 
Bunker  Hill*  Saratoga  and  Yorktown. 


ESCAPED  FROM  DYNASTIC  0PPR:ESSI0N.  645 

In  fact,  all  tlie  powers  of  Europe  would  haye  taken  ad« 
Tantage  of  the  chance  of  acquiring  a  slice  of  such  a  fine  do' 
main,  where  in  the  eyent  of  successful  secession  only  feeble 
resistance  could  haye  been  offered  to  foreign  aggression. 

In  the  event  of  a  decisiye  victory  for  the  Cod  federate 
arms,  faction  fights  would  have  always  been  springing  up, 
and  the  tendency  would  still  have  been  increasing  to  create 
a  greater  number  of  separate  and  independent  governments. 

Napoleon  had  been  looking  at  matters  in  this  probable 
light,  when  he  resolved  to  make  Mexico  a  backdoor,  with 
Maximillian  as  its  keeper,  to  enable  him  to  gain  an  entrance 
to  this  country  when  a  favorable  opportunity  for  the  com- 
pletion of  his  purposes  should  arise. 

Having  myself  been  born  in  a  foreign  land,  wLere  I  passed 
my  boyhood's  days,  I  have  a  vivid  recollection  of  the  work- 
ings of  the  harsh  system  of  a  European  government,  although 
by  the  accident  of  birth  I  was  placed  in  circumstances  where 
the  pressure  on  myself  was  not  very  galling. 

I  saw  enough,  however,  to  make  a  durable  impression  on 
my  mind,  to  arouse  my  sympathies  for  others  and  to  excite 
my  lasting  indignation  against  dynastic  oppression. 

I  lost  no  opportunity  during  the  dark  days  of  the  rebel- 
lion in  this  country,  to  be  outspoken  iu  favor  of  the  cause 
which  I  had  espoused  from  a  firm  conviction  that  it  was 
right.  I  did  all  I  could  to  help  to  promote  ways  and' 
means  for  aiding  the  North  in  carrying  on  the  war.  I  went 
into  the  contest  with  my  whole  heart,  and  gave  my  entire 
and  undivided  attention  to  the  sale  of  Government  securi- 
ties to  raise  the  sinews  of  war. 

In  this  way,  I  believe,  I  rendered  more  valuable  assist- 
ance to  the  cause  than  if  I  had  been  performing  deeds  of 
valor  amid  the  roar  of  cannon  and  the  rattle  of  musketry. 

I  became  pronounced  in  my  opinions  and  made  myself 
active  in  organizing  meetings  to  celebrate  every  victory  of 
the  Union  army,  thus  inspiring  the  men  in  the  field  and  the 
jreciittt«  on  iboir  "Mraj  tbitberi  and  sustaining  the  hearts  of 


646  SOUTHERN  AFFAIRS  IN  SP:eCXJM.TlON. 

our  busiuess  men  to  place  implicit  confidence  in  the  falore 
triurKpli  of  Iho  nation. 

It  required  more  courage  than  many  people  now  imagine 
to  take  this  stand  at  that  time,  for  opinion  was  largely  divi- 
ded in  this  city  on  the  prospects  of  the  issue,  and  a  strong 
sentiment  in  favor  of  the  enemy  threatened  at  one  time  to 
become  predominant. 

Many  people  were  eyed  with  very  strong  suspicion  during 
the  greater  part  of  the  struggle  in  regard  to  their  loyalty, 
who  had  followed  the  course  of  extreme  prudence  in  keeping 
their  counsel,  being  doubtful  of  the  result.  I  took  the  ground 
that  citizenship  would  not  be  worth  much  in  the  event  of 
final  disaster  to  the  Union  cause.  I  was  also  of  the  opinion, 
when  the  war  was  ended  to  the  glory  of  the  country  and  the 
maintenance  of  the  Government  on  a  substantial  basis,  that 
the  time  had  come  to  bury  the  hatchet. 

I  believed  not  only  in  bringing  back  the  South  nnder  the 
old  flag,  but  also  in  extending  the  right  hand  of  fellowship 
to  the  people,  who,  whatever  may  have  been  their  faults,  had 
been  ten*ibly  punished. 

I  believed  that  no  good  could  come  out  of  a  policy  that 
persisted  in  trampling  upon  a  fallen  foe,  especially  as  that 
foe  had,  after  all,  only  been  an  erring  brother,  and  could  be 
brought  back  again  into  the  family  fold  to  share  its  mutual 
sympathy  and  material  prosperity . 

I  felt,  therefore,  that  I  could  afford  to  be  prominent  in  » 
movement  that"  had  this  great  and  harmonious  endinvie'^) 
the  more  especially  as  my  loyalty  had  never  been  questioiJ^ 
in  the  hour  of  our  greatest  peril. 

I  not  only  extended  the  right  hand  of  fellowship  ^ 
Southern  men,  but  gave  aid  and  comfort  to  them  vhero^^ 
they  appeared  in  our  midst. 

My  office,  therefore,  after  having  been  the  headqua^'* 
of  loyal  Northern  men,  and  for  every  project  in  tho  iater®^ 
of  the  Union  cause,  became  notorious  as  the  rendezvous  en 
Southern  generals  and  Southern  people  generally,  alm^**^ 
soon  as  the  war  was  over. 


B^AURKGARD^S  VISIT  TO  N^W  YORK.  647 

General  Beauregard  was  one  of  the  prominent  leaders  of 
the  Confederacy  to  whom  I  exercised  the  liberty  of  extend- 
ing hospitalities  on  his  first  visit  here.  I  relaxed  no  effort 
to  make  his  visit  agreeable,  and  show  him  the  sights  around 
the  city.  I  recollect  escorting  him  as  my  guest  to  the  Gold 
Boom,  which  was  then  quite  an  institution  in  Wall  Street. 
At  this  time  gold  was  selling  at  a  premium  of  about  50. 

On  our  entrance  to  the  Boom  it  was  at  once  whispered 
around  that  my  distinguished  guest  was  General  Beaure- 
gard. The  President  of  the  Board  was  at  that  time  out* 
spoken  and  bitter  in  his  opinions  against  everything 
Southern,  and  had  not  the  good  sense  and  common  man- 
ners to  conceal  his  animus  on  this  occasion.  Others  took 
a  similar  attitude,  and  the  feeling  manifested  became  as  bel- 
ligerent as  if  the  war  had  been  actually  raging. 

This  exhibition  of  bad  blood  and  bad  manners  was  very 
distasteful  to  me.  I  was  a  member  of  this  Exchange,  and  I 
thought  I  knew  my  rights,  and  I  was  disposed  to  maintain 
them.  I  regarded  the  insult  to  Beauregard  as  offered  to 
myself,  and  was  prepared  to  resent  it  accordingly.  He  was 
my  guest,  and  I  had  determined  to  stand  by  him  at  all 
hazards.  I  informed  those  who  were  foremost  in  manifest- 
ing these  unworthy  feelings  of  resentment  that  I  should  pro- 
tect my  friend  no  matter  what  course  they  should  take,  as 
long  as  he  desired  to  remain  in  the  room.  This  had  some 
effect  in  smoothing  down  the  asperities  of  the  most  hostile, 
and  we  were  permitted  to  depart  in  peace.  I  escorted 
General  Beatu'egard  afterwards  to  the  New  York  Stock 
Exchange,  where  he  was  kindly  received,  and  without  a 
murmur  of  feeling.  I  introduced  him  to  many  of  the  mem- 
bers individually,  who  shook  hands  with  him  and  inter- 
changed civilities  in  the  warmest  manner,  giving  him  a 
hearty  welcome  to  our  city.  Beauregard  was  delighted  with 
this  reception  at  the  Stock  Exchange,  but  was  greatly 
chagrined  at  the  conduct  of  the  people  in  the  Gold  Boom. 

After  this,  many  other  Southern  notabilities  from  time  t^ 


61»  SOUTHERN  AF^PAIRS  IN  SPKCULATION. 

time  oame  to  the  Street,  and  received  at  mj  hands  simihtT 
treatment.  Among  others,  General  Forrest,  of  Fort  Pillow 
carnage  notoriety,  paid  me  a  visit. 

I  could  relate  a  great  many  other  instances,  if  time  and 
space  would  permit,  showing  very  explicitly  the  efforts  I 
have  made  to  help  along  harmony  and  reconstraction.  I 
was  anxious,  in  the  interest  of  general  prosperity,  to  assist 
the  South  to  recover  from  the  dreadful  blow  inflicted  upon 
her  by  a  fratricidal  war  as  soon  as  possible. 

So,  as  the  work  of  reconstruction  progressed,  I  became 
interested  in  the  internal  improvements  of  that  section  of 
our  country,  as  my  subsequent  investments  there  will  fnllj 
attest.  I  thought  that  the  South  had  experienced  fighting 
enough,  as  the  North  had,  and  that  the  people  of  that 
section  would  gratefully  accept  the  terms  in  the  main 
agreed  upon  under  the  appletree  at  Appomattox,  between 
General  Grant  and  General  Lee.  I  had  hoped  that  the  peace 
would  be  such  as  to  conserve  all  the  interests  of  the  coun- 
try, including  every  man,  from  the  boldest  and  bravest  Con- 
federate general  down  to  the  lowest  of  the  negro  race,  with- 
out any  invidious  distinction.  I  had  the  hopeful  impression 
that  all  would  go  to  work  and  do  all  in  their  power  to  till 
the  soil,  or  do  anything  elso  that  would  add  to  the  material 
wealth  of  the  country  and  the  individual  happiness  of  its 
recreated  citizens;  that  they  would  apply  themselves  to 
every  form  of  industry  that  would  help  in  any  degree  to  a 
recovery  from  the  disasters  growing  out  of  the  war,  and 
the  lamentable  destruction  of  property  attending  it. 

The  South  immediately  after  the  war  had  greater  advan- 
tages than  most  people  imagine,  if  it  had  only  taken  hold 
of  them  in  the  right  spirit.  It  had  various  sources  of  pros* 
perity,  which  under  prudent  management  would  have  ena' 
bled  it  to  leave  the  North  far  behind  iq  the  race  for 
wealth.  Its  leading  staples,  cotton,  tobacco,  and  rice,  had 
all  a  gold  value  in  the  markets  of  the  world. 

This  opportunity  of  going  in  to  produce  at  hard-pan  prices 


SPBCUI.A'IMVB  ADVANTAGES  O^  THI5  SOUTH.  649^* 

on  a  gold  basis  invested  it  with  an  immense  leverage  against 
the  North,  with  its  inflated  currency  and  war  prices,  growing 
out  of  the  large  issue  of  paper  money  necessary  to  carry  on 
the  war,  and  consequent  over-speculation  as  a  natural  result 
or  sequence. 

It  seemed  to  me,  then,  that,  while  the  South  had  a  grand 
opening  for  growth  in  prosperity  on  a  solid  basis  to  begin 
with,  the  business  of  the  North  was,  in  comparison,  in  an  in- 
flated position,  that  must  burst  before  it  could  get  a  fair  start 
on  a  solid  foundation.  It  appeared  as  if  it  would  sooner  or 
later  sufler  a  temporary  collapse,  while  the  South  had  only 
to  begin  and  build  without  fear  of  any  such  interruption. 

I,  therefore,  selected  for  my  investments  as  the  best  fields 
in  the  South  the  two  States  that  stood  the  highest  in  their 
financial  credit,  in  their  character  for  integrity  and  enter- 
prise, and  that  then  had  the  brightest  outlook,  namely 
G^rgia  and  Alabama. 

These  States  took  my  money  freely,  issued  their  State 
secnrities,  their  County  securities,  sold  me  their  bonds,  and 
got  me  thoroughly  interested,  and  that  to  a  very  large  ex- 
tent, and  then  keated  me  with  the  basest  ingratitude,  repu- 
diating their  bonds,  and  cheating  me  out  of  my  money  and 
property  in  every  way  conceivable. 

I  attribute  the  cause  of  this  unjust  treatment,  however,  to 
Andrew  Johnson,  who,  by  accident,  through  the  assassination 
of  President  Abraham  Lincoln,  became  President  of  the 
United  States. 

Mr.  Johnson  was  a  Tennesseean,  loyal  during  the  war  to 
all  api)earance8,  and  for  all  practical  purposes  of  the  Union 
cause,  and  he  would  doubtless  have  so  remained  had  it  not 
been  for  the  unfortunate  circumstance  of  Abraham  Lincoln's 
death. 

This  made  him  Executive  of  the  nation,  for  which  by 
ability  he  was  amply  fit  and  qualified,  but  through  bias  and 
temperament,  entirely  unfit  to  fill  creditably  this  eminent 
position  for  the  best  interests  of  the  country  at  large. 


56i;  SOUTHERN  AFFAIRS  IN  SPECULATION. 

The  position  I  took,  as  above  stated,  was,  that  since  the 
war  was  over,  it  was  a  thing  to  be  forgotten  as  speedily  as 
possible.  The  finality  was  seriously  delayed  owing  to  the 
hostility  that  President  Johnson  did  his  best  to  excite  and 
prolong  amongst  the  people  of  the  South. 

Congress,  it  will  be  remembered,  was  leniently  disposed 
in  the  passing  of  measures  and  framing  of  laws  to  bring  the 
traitorous  States  of  the  South  back  again  into  the  Union. 
The  members  of  Congress  biost  cautiously  and  delicately 
worked  to  patch  up  old  sores  that  were  supposed  to  exist 
between  the  victors  and  the  vanquished,  but  when  their  bills 
went  to  the  President  they  were  unmercifully  subjected  to  a 
wholesale  process  of  vetoing,  almost  indiscriminately.  This 
produced  a  condition  of  clu'onic  hostility  between  the  legis- 
lative and  executive  branches  of  the  Government,  and  the 
wider  the  breach  became  the  stronger  and  more  vindictive 
grew  the  spirit  which  it  naturally  aroused  in  the  Southern 
people. 

These  people  were  sadly  misled  by  the  President,  whom 
they  trusted,  and  his  hobbies  were  humored  at  the  expense 
of  their  prosperity. 

Johnson  made  tiie  people  of  the  South  believe  that  his 
vetoes  would  only  delay  legislation  until  Congress  should  be 
forced  to  find  them  something  better.  They,  accordingly, 
reposed  faith  in  him,  and  were  badly  deceived. 

The  feeling  of  animosity  excited  by  this  condition  of 
things  so  worked  on  the  minds  of  the  people,  causing  the 
South  to  wax  bitter  and  revengeful,  that  it  appeared  to 
people  on  this  side  of  Mason  and  Dixon's  line  that  their 
Southern  brethren  had  become  even  more  implacable  thau 
during  the  hottest  scenes  of  the  war. 

It  was  for  the  reasons  above  stated  that  bonds  which  had 
been  issued  by  the  South  for  money  invested  by  the  North 
were,  in  a  large  measure,  repudiated.  As  soon  as  it  was 
discovered  that  most  of  the  vested  interests  were  owned  bj 
Northern  people,  the  spirit  of  revenge  and  avaiioe  oombiMcl 


BAHBOOZI«KD  BY  POUTICIANS.  651 

was  aroused  to  the  point  of  repudiation.  And,  unlike  the 
courage  of  Macbeth,  it  did  not  require  any  stimulant  to 
make  that  the  sticking  point*  Eyery  method  that  ingenuity 
could  devise  to  strike  a  blow  at  the  North  was  employed. 
No  opportunity  was  allowed  to  slip  that  afforded  any  ad- 
vantage, either  material  or  moral. 

Thus,  instead  of  accepting  the  situation  as  General  Lee 
had  done,  they  were  led  astray  by  every  one  who  had  a 
political  axe  to  grind.  They  took  an  active  part  in  politics 
instead  of  looking  after  the  various  industries  of  the  country 
and  developing  its  resources.  They  engaged  in  political 
discussions  and  their  attendant  broils,  to  the  neglect  of 
necessary  enterprises  that  would  have  brought  them  material 
prosperity. 

Thus  they  became  poorer  and  poorer.  Many  years  were 
lost  in  these  political  turmoils,  and  the  people  became  more 
and  more  embarrassed. 

From  these  circumstances  there  were  many  financial 
victims,  but  few,  if  any,  suffered  more  in  that  respect  than 
myself. 

I  had  over  two  and  a  half  millions  of  dollars  invested  in 
the  State  of  Georgia  securities,  and  in  other  ways,  a  million 
more  at  least  in  Alabama  and  North  Carolina  together,  all 
of  which  was  perfectly  annihilated,  the  entire  disastrous 
result  growing  out  of  the  factious  spirit  that  was  created 
and  fostered  by  the  vile  and  narrow  prejudices  of  President 
Andrew  Johnsosi  of  whom  I  have  still  more  to  sajfin  another 
chapter. 


CHAPTEB    L. 

WESTERN  AND  SOUTHERN  FINANCIAL  LEADERS. 

AliFBBD  SUIXT,  HIS  QbIGIN  AND  .SU00ES8|1TL  CaBEEB.— ^CaL- 

YIN  S.  Bbioe,  a  Finanoieb  op  Ability.— Gbnbbal  Sam- 
uel Thomas,  Pbominent  in  the  Southebn  Bailboad 
System.— Genebal  Thomas  M.  Logan,  a  Successful 
Man  in  Eailboading  and  Mining.— Finanoul  Chief- 
tains op  Baltimobe.— The  Gabbetts.— Theib  Gbeat 
SuooEss  AS  Bailboad  Managebs.— Fobtbait  op  Bobebt 
Gabbett. 

ALFBED  STILLY,  who  has  become  so  prominent  in  the 
financial  world  within  a  year,  is  tall,  rather  slightly 
built,  nerrons,  and  energetic.  His  face,  by  its  long,  square 
oontoor  and  thooghtfol  lines,  suggests  that  of  Senator  Wm. 
M.  Eyarts  ;  the  eyes  are  keen  and  penetrating  but  kindly. 
At  heart  his  tastes  are  those  of  a  genial  literary  recluse. 
Circumstances  and  unquestioned  ability  have  made  him  a 
financial  leader.  He  was  born  about  46  years  ago  in 
Ottawa,  Canada,  where  he  received  a  good  academical  edu* 
cation.  He  tried  his  fortune  in  the  West.  He  went  to  Cin- 
cinnati, studied  law,  and  was  graduated  from  one  of  its  best 
schools,  whereupon  he  went  to  Davenport,  Iowa,  and  formed 
a  copartnership  which  became  known  as  the  leading  law 
firm  of  the  city.  He  acquired  some  means,  and  in  1872 
came  to  New  York,  the  proper  place  for  men  of  ability.  It 
is  understood  that  at  this  time  he  had  some  idea  of  indulg- 
ing his  tastes  for  authorship,  but  Austin  Corbin  put  a  veto 
on  that.  The  two  had  become  acquainted  in  Davenport, 
whore  Mr.  Corbin  was  formerly  a  banker,  and  the  latter,  on 
meeting  Mr.  Sully  in  New  York,  tendered  him  the  position 
of  General  Manager  of  the  Corbin  Banking  Company, 
which  he  had  established  here.  He  accepted  it.  But  this 
post,  responsible  as  it  was,  could  not  long  hold  a  born  finan* 
cier,  and  we  soon  find  him  obtaining  control  of  the  Indiana, 

/ 


554       WKSTKRN  AND  SOUTHBRN  PINANCIAI,  I^QADSSS. 

Bloomington  &  Western  Boad.  He  next  bonght  the  Ohio 
Southern,  of  which  he  is  still  President,  a  transaction  in 
which  he  and  his  friend  nearly  doubled  their  money.  Then 
he  made  a  great  deal  of  money  in  the  Central  Iowa  and 
other  roads  in  Illinois.  He  and  Austin  Corbin  secured  con- 
trol of  the  Long  Island  Boad,  and  he  gave  much  time  and 
labor  to  the  Manhattan  Beach  Boad  and  associated  inter- 
ests at  Coney  Island.  Then  he  went  into  the  scheme  of 
restoring  the  financial  health  of  that  enfeebled  giant  among 
railroads,  the  Beading,  and  was  one  of  the  prime  moyers  in 
the  reorganizing  and  consolidation  of  the  Biohmond  Ter- 
minal, the  Bichmond  &  Danville,  the  East  Tennessee,  Vir- 
ginia &  Georgia,  and  numerous  other  Southern  roads,  which 
now  form  one  vast  system;  which  will  probably  yet  obtain 
an  entrance  into  New  York. 

Calyin  S.  Bbioe. 

Calvin  S.  Brice  was  Vice-President  of  the  East  Tennessee 
Virginia  &  (Georgia  Boad,  and  is  a  Director  in  the  Bich- 
mond Terminal  and  numerous  other  Southern  roads.  He 
is  now  connected  with  the  United  States  Express  Company, 
in  the  management  of  which  he  will  take  an  active  part  He 
was  born  in  Lima,  Ohio,  about  48  years  ago,  and  was  eda- 
cated  as  a  lawyer.  He  is  below  the  medium  height^  and 
rather  slightly  built,  but  has  broad  shoulders,  a  fitting 
pedestal  for  a  good  head,  with  firm  square  features  and  keen 
bluish  gray  eyes.  He  wears  a  sandy  beard,  closely  trimmed, 
which  tends  to  heighten  the  effect  of  decision  of  character. 
He  is  a  financier  of  ability. 

Gen.  Samuel  Thomas. 

(General  Samuel  Thomas,  who  is  prominent  in  the  South- 
ern railroad  system,  is  now  about  50  years  of  age^  is  & 
Western  man,  and  before  the  war  was  a  civil  engineer  in 
the  service  of  an  Ohio  railroad.  After  the  war  he  again 
became  a  civil  engineer,  but,  drifting  after  a  time  to  Neir 


]?INANCIAI.  CHIEFTAINS  OF  BAI^TIMORB-  655" 

York,  engaged  in  railroad  enterprises,  and  ultimately  se. 
cured  a  large  interest  in  Soa!Jiern  railroads.  He  is  now 
President  of  the  East  Tennessee,  Virginia  &  Georgia,  and 
is  largely  interested  in  the  Biohmond  &  West  Point  Termi- 
nal, the  Bichmond  &  Danville,  the  Memphis  &  Charleston, 
and  other  Southern  roads.  He  is  tall,  well-built,  energetic, 
and  affable.  He  lires  in  fine  style,  and  is  a  member  of  the 
Union  League.    He  is  worth  several  millions. 

Gen.  Thomas  M.  Logan  is  President  of  the  Virginia  Mid^ 
land  Bailroad,  Vice-President  of  the  Bichmond  &  Danville 
and  Bichmond  Terminal,  and  a  Director  in  all  the  roads  in 
this  system.  He  was  bom  in  Charleston,  S.  C,  about  ^ 
years  ago.  He  served  with  distinction  in  the  Confederate 
Army,  and  rose  to  be  a  Brigadier-Generali  being  one  of  the 
youngest  in  the  service.  He  is  a  graduate  of  the  Univer- 
sity of  South  Carolina,  and  formerly  practiced  law  in  Bich- 
mond, Vir^biia,  where  he  is  also  engaged  in  extensive  man- 
ufacturing and  mining  enterprises.  He  resides  in  Bich- 
mond, and  is. a  member  of  the  Westmoreland  Club,  but  often 
comes  to  New  York  on  railroad  business,  in  which  he  has 
amassed  a  comfortable  fortune. 

John  W.  Garrett's  name  will  always  be  associated  with 
that  great  property,  the  Baltimore  &  Ohio,  which  he  rescued 
from  the  verge  of  bankruptcy.  He  was  a  man  of  great  force 
of  character,  and  inherited  an  aptitude  for  business.  He 
was  a  graduate  of  Layfayette  College  in  Pennsylvania,  and 
engaged  in  business  in  Baltimore.  He  became  a  Director 
of  the  Baltimore  &  Ohio  Bailroad,  and  in  1858  was  elected 
its  President.  He  was  a  staunch  supporter  of  the  Union  in 
the  civil  war.  Despite  a  disloyal  sentiment  plainly  notice- 
able in  Baltimore  and  elsewhere  in  Maryland,  he  lent  the 
Government  all  the  assistance  in  his  power  in  the  transporta- 
tion of  hundreds  of  thousands  of  Federal  soldiers.  He  was 
quick  to  repair  burned  bridges,  and  to  do  anything  to  facilitate 
tiie  military  operations  of  the  Federal  Government.  Presi- 
dent Lincoln  and  Secretary  Stanton  thanked  him  warmly. 


556       W9STBKN  AND  SOn'rH]SRN  FINAKClAi;  I^AD^RS. 

His  salary  as  President  was  $10,000  a  year.  The  Directon 
repeatedly  offered  to  increase  the  remuneration,  but  he  de- 
elined  to  accept  it.  He  often  refused  offers  as  high  m 
$50,000  a  year  to  become  the  President  of  other  roads.  He 
was  autocratic  in  his  administration.  His  will  was  law.  He 
found  the  Baltimore  &  Ohio  Bailroad  a  weak  and  straggling 
underline  in  the  railroad  worlds  and  he  left  it  a  giant  in  the 
American  system  of  railroad  transportation. 

Bobert  Garrett,  the  son  of  the  preceding,  and  now  tiie 
President  of  the  Baltimore  &  Ohio  Boad,  is  one  of  the  rail- 
road kings  of  the  United  States.  He  became  the  President 
of  the  Baltimore  &  Ohio  in  his  thirty-seyenth  year,  after 
having  served  as  Third  Vice-President  and  First  Yiee- 
President  xmder  his  father's  administration.  He  is  a  grad- 
uate of  Princeton,  a  man  of  genial  characteristics,  and  a 
favorite  in  society.  He  has  made  a  study  of  railroad  ad- 
ministration, but  is  now  understood  to  seek  some  relief 
from  the  burdens  unavoidably  incident  to  his  position  as 
the  head  of  a  great  railroad.  And  he  is  wise.  He  is  many 
times  a  millionaire.  Why  should  he  devote  his  life  to  un- 
necessary care  and  labor?  Bich  men  in  this  country  are 
apt  to  work  too  hard.  They  do  not  enjoy  life  as  men  of  far 
less  wealth  do  in  Europe.  Under  almost  any  administration 
the  Baltimore  &  Ohio  Boad  has  a  great  future  before  it  The 
road  was  built  to  draw  the  Western  trade  to  Baltimore.  This 
trade  had  been  diverted  from  that  city  by  the  building  of 
the  great  canals.  New  York  &  Philadelphia  were  receiving 
the  lion's  share  of  the  traffic.  The  first  stone  on  the  Balti- 
more &  Ohio  Boad  was  laid  by  Charles  Carroll,  one  of  the 
signers  of  the  Declaration  of  Independence,  in  1828.  The 
road  was  opened  to  Wheeling  in  1863.  The  firm  of  Bobert 
Garrett  &  Sons  was  established  in  1849,  and  was  originally 
-engaged  in  the  wholesale  grocery  trade.  When  the  road 
reached  Wheeling  its  finances  were  at  the  lowest  ebb.  Vhe 
house  founded  by  the  grandfather  of  the  present  head  of 
the  road  bought  largely  of  its  bonds  at  a  very  low  fign^ 


JOHN  H.   INMAN.  557 

and  thig  marked  the  first  connection  of  tEe  Gkurrett  family 
with  this  great  property.  The  house  of  Garrett  A  Sons 
still  exists  as  a  banking  establishment  under  the  manage- 
ment of  T.  Harrison  Ghurett.  In  1868  Baltimore  &  Ohio 
stock  could  be  bought  for  a  song.  Since  then  it  has  sold 
at  as  high  as  $226  a  share.  The  improvement  in  the  prop- 
erty was  very  largely  due  to  the  efforts  of  John  W.  and 
Bobert  Garrett. 

The  recent  embarrassing  complications  of  Mr.  Garrett  in 
connection  with  the  management  of  his  railroad  and  tele- 
graph companies,  it  is  hoped,  will  only  be  temporary,  and 
I  expect  to  see  him  again,  at  no  distant  day,  reinstated  at 
the  head  of  the  great  corporation  over  which  he  and  his 
father  presided.  His  present  difficulties  are  matters  of  cur- 
rent newspaper  record  and  comment^  and  I  need  not,  there- 
fore, enlarge  upon  them  here.  As  shown  by  the  latest  re* 
port,  the  Baltimore  &  Ohio  Bailroad  isTirtmdly  in  a  good,^ 
prosperous  and  solvable  condition,  and  I  have  no  doubt  that 
the  Drezel-Morgan  syndicate  which  has  undertaken  to  put 
the  property  on  a  still  more  solid  and  durable  basis  with  the 
ten  million  loan  which  it  has  negotiated,  will  uprightly  do 
its  whole  duty,  and  in  due  lime  return  the  trust  considerably 
enhanced  in  value  to  Mr.  (Barrett,  his  heirs  and  assigns. 

John  H.  Inman,  another  member  of  the  Southern  railroad 
circle,  was  born  in  Tennessee.  He  is  tall,  fine  looking 
and  soldierly  in  appearance.  He  is  one  of  the  shrewdest  of 
the  capitalists  who  have  invested  large  amounts  in  Southern 
enterprises.  He  came  to  New  York  from  Atlanta,  quite 
poor,  after  the  civil  wur.  In  the  war  he  was  a  quartermas- 
ter's derk,  and  his  old  quartermaster  afterwards  became  one 
of  his  brokers  on  the  Cotton  Exchange.  Young  Inman 
went  into  the  office  of  an  uncle  on  arriving  in  New  York, 
and  learned  the  business  of  a  cotton  broker.  He  was  dear- 
headed  and  successful  After  he  became  a  partner  in  the 
firm  he  added  very  materially  to  his  wealth  by  carrying 
cotton  for  the  premiums  on  the  options.    He  is  recognized 


653      ^TKSTBRK  AND  SOtTTH^RN  FINA1TCIAI«  I^SADBSB. 

as  one  of  the  leaders  of  the  Cotton  Exchange.  In  leoent 
years  he  has  become  a  financier,  has  made  large  loans 
to  railroads  in  the  South,  and  has  inyested  heayily  in 
Atlanta  real  estate,  and  in  iron  enterprises  in  Birmin^am, 
the  rising  Southern  market.  He  was  prominent  in  the 
reorganization  of  the  Bichmond  k  Danville  railroad  system, 
in  which  he  is  largely  interested.  He  is  a  director  in  the 
Bichmond  Terminal  and  associate  lines,  as  well  as  the 
Louisville  &  Nashville  and  other  Southern  roads.  He 
invested  nearly  two  millions  in  the  Tennessee  Goal  &  Iron 
Company.  He  is  now  about  60  years  of  age.  He  seems 
to  be  a  man  of  destiny.  He  is  a  man  of  great  force  of 
character  and  exceptional  business  skilL  He  resides  in 
Kew  York,  and  is  possessed  of  a  large  fortune. 

AirOBSTBT  IK  EkGLAND— BbAINS  IN  AXBBIOA* 

In  this  country  no  one  cares  about  ancestry.  The  spec- 
tacle of  Mark  Twain  weeping  at  the  tomb  of  Adam  is  a 
humorous  expression  of  American  opinions  on  this  general 
subject  of  ancestry.  To  save  time  he  paid  his  devoirs  to 
the  fountain  head  without  stopping  at  the  Guelphs,  the 
Tudors,  the  Bourbons,  the  HohenzoUems,  the  HapsbnigB^ 
or  the  Bomanofis.  There  is  no  time,  if  there  was  any  wiEth 
in  this  great  country — shaking  to  the  tread  of  gigantic 
business — to  inquire,  "  Who  was  his  father  1"  There  is  only 
time  for  such  questions  as,  "  What  do  you  know  \^  ^  What 
can  you  do?''  "  How  have  you  succeeded  1"  Int^ty  and 
ability  stand  a  man  in  better  stead  in  America  than  show  of 
purple  veins  of  Norman  blood.  Even  in  the  aristocracy  (so 
to  speak)  of  brains,  ancestry  in  one  sense,  so  far  from  beuig 
an  advantage,  is  apt  to  be  precisely  the  reverse.  A  son  of 
Henry  Clay  or  Daniel  Webster  can  never  hope  to  attain 
the  lofty  pre-eminence  of  the  sire,  and  suffer  by  compar- 
ison. Great  men  do  not  always  have  great  sons.  For 
one  Pitt,  the  son  of  a  great  Chatham,  there  are  hun- 
dreds of  sons  who  intellectually  dishonor  great  fathers* 


SURVIVAI<  OF  rCHM  FITTltST.  C59 

Brains,  intelligence,  industry,  energy,  and  pluck ;  these  are 
the  talismanic  words  which  stand  for  success  in  America, 
where  no  ghost  of  a  dead  feudalism  hovers  over  the  land, 
darkening  it  by  its  blighting  presence.  In  England  the 
first  question,  a  silly  echo  of  centuries,  is,  ^^  Who  is  his 
father?"  But  who  are  the  nobility?  Haye  they  any  title 
as  such  to  the  respect  of  right-thinking  persons!  The 
nobility  is  running  to  seed,  or  rather  the  once  noble  tree  is 
withering  and  dying ;  it  has  borne  its  fruit  and  its  time  has 
passed  away.  In  Scriptural  language.  Why  cumbereth  it 
the  ground?  How  many  of  the  nobility  are  now  worthless 
roues,  habitual  seducers,  dried  up  or  half  consumed  by  the 
fires  of  passion  and  debauchery!  They  are  dying  as  the 
fool  dieth,  with  a  drunken  leer  on  their  shrunken  faces  and 
the  stain  of  dishonor  on  their  escutcheons.  The  Commons 
of  England  will  yet  redeem  the  nation  from  the  thraldom  of 
a  worthless  aristocracy.  America  is  the  true  field  for  the 
human  race.  It  is  the  hope  and  the  asylum  for  the  oppressed 
and  down-trodden  of  every  clime.  It  is  the  inspiring  example 
of  America — ^peerless  among  the  nations  of  the  earth,  the 
brightest  star  in  the  political  firmament— that  is  leavening 
the  hard  lump  of  aristocracy  and  promoting  a  democratic 
spirit  throughout  the  world.  It  is  indeed  the  gem  of  the 
ocean  to  which  the  world  may  well  offer  homage.  Here 
merit  is  the  sole  test.  Birth  is  nothing.  The  fittest  sur- 
vive. Merit  is  the  supreme  and  only  qilalification  essential 
to  success.  Intelligence  rules  worlds  and  systems  of 
worlds.  It  is  the  dread  monarch  of  illimitable  space,  and 
in  human  society,  especially  in  America,  it  shines  as  a 
diadem  on  the  foreheads  of  those  who  stand  in  the  foremost 
ranks  of  human  enterprise.  Here  only  a  natural  order  of 
nobility  is  recognized,  and  its  motto,  without  coat  of  arms 
or  boast  of  heraldry,  is  "  Intelligence  and  integrity .*' 


OHAPTEB    LI. 

ARBITRATION. 
How  THE  System  op  Settlino  Disputes  and  Misttndeb 

STANDINGS  BY  AbBITBATION  HAS  WOBKED   IN    THE    BtOCK 

Exchange.— Why  not  Extend  the  System  to  Business 
Mattebs  Genebally  ? — Its  Gbeat  Advantages  oyeb 
'  Going  to  Law. — It  is  Cheap  and  has  no  Vexatious  De- 
lays.—Tbial    BY    JUBY    A   PaBTIAL    FaILUBE.— SoMB 

Pbominent  Cases  in  Point.— Juby  "Fixing"  and  its 
Consequences.  —  How  Jubies  abe  Swayed  by  theib 
Sympathies.— A  Cubious  Miscabbiage  of  Justic  befobe 
a  Befebee. — The  Little  Game  of  the  Diamond  Bbo- 
keb. 

WALL  Street  has  derived  great  prestige  and  character 
from  the  New  York  Stock  Exchange.  In  fact,  the 
Stock  Exchange  is  Wall  Street,  so  to  speak,  so  much  so  that 
if  the  Exchi^ge  moved  to  any  other  locality,  the  latter  would 
become  the  new  Wall  Street,  to  the  utter  oblivion  of  the  old, 
which  would  soon  be  eclipsed  and  regarded  as  a  thing  of 
the  past. 

The  New  York  Stock  Exchange  has  distinguished  itself 
in  many  respects,  but  there  is  probably  nothing  for  which  it 
is  likely  to  become  more  famous  in  history  than  its  solution 
of  the  great  problem  of  settling  disputes  aud  misunder-. 
standings  by  arbitration.  Other  financial  bodies  have  tried 
the  same  substitute  for  ordinary  law  proceedings,  but  it 
would  appear  that  greater  success  has  crowned  the  efforts 
of  the  Stock  Exchange  in  this  particular  experiment  than 
any  other  corporate  body. 

The  large  number  of  cases  on  record  that  have  been 
amicably  settled  by  arbitration  within  the  past  few  years, 
in  which  law  would  have  been  formerly  considered  indispen- 
sable, seem  to  point  to  a  period,  probably  not  far  distant, 
when  arbitration  will  be  the  great  and  ultimate  court  of  ap- 


6G2  ARBITRATION. 

peal  in  the  large  majority  of  civil  cases.  Several  oonfiide^ 
ations  will  make  it  the  most  popular.  It  is  cheaper,  less 
complicated,  not  subject  to  vexatious  delay ;  it  is  more 
equitable,  and  the  members  composing  the  Arbitration  Com- 
mittees are  business  men,  who  are  quick  to  discern,  accurate 
in  perception,  souad  in  judgment  and  decisive  in  drawing 
their  conclusions  on  business  principles. 

The  expense  of  arbitration  is  a  mere  trifle  compared  with 
the  enormous  sums  swallowed  up  in  litigation. 

Transactions  involving  millions  of  dollars  annually  in  the 
Stock  Exchange  are  made  subject  to  settlement  by  this 
method  of  arbitration  in  the  event  of  any  difference  of 
opinion  arising  in  any  particular  case.  Very  few  instances 
occur  in  which  there  is  any  necessity  to  carry  the  case  be- 
yond the  jurisdiction  of  the  Arbitration  Conmiittee. 

The  number  of  cases  actually  settled  in  this  way  would 
probably  cost  half  a  million  dollars  annually  if  they  had  to 
be  brought  into  court,  to  say  nothing  of  the  incidental  ex- 
penses, which  would  amount  to  as  much  more,  arising 
from  delay,  on  the  scale  of  present  charges  by  the  legal  pro- 
fession, even  leaving  out  our  own  Evarts,  who  is  probably 
the  Boss  charger  of  the  Bar. 

The  success^  attending  the  system  at  the  Stock  Exchango, 
I  think,  goes  far  to  prove  that  the  method  might  be  aniTe^ 
sally  extended  to  the  great  pecuniary  interest  and  personal 
comfort  of  business  men  throughout  the  country,  for  the 
adjustment  of  their  misunderstandings  and  grievances  among 
one  another.        « 

My  object  in  writing  upon  this  subject  has  for  its  basis 
the  hope  that  this  chapter  may  catch  the  eye  of  some  of  otu* 
great  merchants  in  this  and  other  large  cities,  and  that  i» 
may  suggest  to  those  of  them  who  have  not  contemplate 
the  subject  already,  the  advisability  and  necessity  of  ©8^ 
lishing  for  themselves  a  similar  method  of  arbitration  to 
that  which  has  been  so  successful  in  the  Stock  Exchange»^ 
be  final  and  without  appeal,  in  their  respective  bosis^ 
affairs. 


PREJUDICES  OF  JURORS.  6C3 

Experience  has  fully  demonstrated  that  trial  by  jury  is  in 
innnmerable  instances  a  signal  failure ;  especially  has  this 
been  so  since  what  is  known  as  ^^  jury  fixing"  has  become 
BO  common  in  the  courts.  The  practice  of  bribing  jurors 
has  now  become  a  secret  profession,  and  is  so  ably  con- 
ducted that  it  is  almost  impossible,  except  in  rare  instances, 
to  expose  it. 

But  apart  from  this  vicious  and  criminal  practice  of  tam- 
pering with  juries,  there  are  many  other  reasons  why  it  is 
next  to  impossible,  in  a  large  variety  of  instances,  to  obtain 
justice  from  an  ordinary  jury. 

Human  sympathy  plays  a  very  important  part  in  the  ver- 
dicts of  juries  generally.  I  mean  by  this,  class  sympathy. 
A  business  man  who  is  regarded  by  the  community  as  rich 
and  powerful,  can  hardly  expect  justice  from  a  common  jury 
unless  the  party  opposed  to  him  occupies  a  similar  station 
in  society.  Where  the  position  of  either  the  plaintiff  or  de- 
fendant calls  forth  sympathy  with  regard  to  worldly  means, 
in  the  large  majority  of  cases  the  ordinary  jurors  will  bring  in 
a  verdict  in  favor  of  the  man  of  small  or  moderate  means, 
believing  that  they  are  in  duty  bound  to  sympathize  with 
the  oppressed.  In  a  case  where  a  clerk  or  a  woman,  for  in- 
instance,  is  a  party  to  the  suit,  it  is  next  to  impossible  for  a 
man  of  means  to  receive  equity  at  the  hands  of  th6  great 
palladium  of  our  liberty.  I  am  sorry  it  is  so,  but  I  speak 
feelingly  in  this  matter,  as  I  have  myself  been  a  victim  of 
this  unworthy  class  prejudice,  in  a  country  where  all  men 
are  theoretically  equal. 

Counsel  usually  make  a  great  display  over  the  cases  of 
impecunious  clients,  out  of  all  proportion  to  their  magni- 
tude. Mole  hills  become  ostensibly  transformed  into  moun- 
tains in  the  eye  of  the  highly  imaginative  lawyer,  who  works 
himself  up  into  such  a  dramatic  pitch  of  enthusiasm  about 
the  yrrongs  of  his  client,  that  he  appears  to  be  in  dead  earn- 
est. He  infuses  the  same  feeling  into  the  jury,  who  are 
beguiled  into  solemnity  by  the  force  of  forensic  oratory,  and 


664  ARBITRATION. 

£ail  to  appreciate  the  farcical  side  of  the  oase^  bnt  an 
totally  swayed  by  sentiment  and  prejudice,  to  the  utter  ex- 
clusion of  ^e  evidence. 

There  are  many  objections,  also,  to  trial  or  partial  trial| 
by  referee,  although  it  is  in  many  instances  an  ifiiprove- 
ment  on  the  jury  systenu  It  is,  however,  amenable  to  num- 
erous and  flagrant  abuses. 

As  an  instance  of  this,  I  shall  briefly  relate  a  case  which 
some  time  ago  came  within  the  sphere  of  my  own  observa- 
tion. 

A  gentleman  of  my  acquaintance  had  a  claim  for  a  very 
large  amount  against  a  financial  man  in  good  circumstances, 
and  it  was  sent  to  a  referee,  who,  after  a  long,  tedious  and 
exhaustive  investigation  of  all  the  facts,  gave  a  decisioQ  in 
favor  of  the  plaintiff  for  several  hundred  thousand  dollaiB. 

Soon  after  the  decision,  the  defendant  saw  the  plaintit^ 
and  made  him  an  offer  of  thirty  thousand  dollars  to  settle 
the  matter,  at  the  same  time  stating  that  if  he  did  not  ac- 
cept the  offer,  he  would  either  appeal  the  case  or  hunt  vf 
fresh  evidence  for  a  new  trial. 

This  offer  of  settlement,  which  was  but  a  smallpaitof 
the  amount  awarded  by  the  judgment,  was  naturally  de- 
clined by  the  plaintiff,  and  application  was  made  to  the 
court  under  the  pretense  of  newly  discovered  evidence,  for  a 
new  trial,  which  was  granted.  Thereupon,  after  another 
tedious  trial,  the  old  beaten  track  having  been  gone  care- 
fully over  again,  without  omitting  any  of  the  aforesaid 
^'  whereases,  neverthelesses  and  notwithstandings,"  or  anj 
of  the  monotonous  flummery  connected  therewith,  the  case 
was  again  sent  to  the  same  referee,  before  whom  the  same 
wearisome  inquiry  was  repeated.  This  time,  howevei^tbo 
referee  relieved  the  monotony,  at  the  close,  by  renderings 
decision  in  favor  of  the  defendant,  for  a  lai^e  sum,  instead 
of  the  plaintiff,  as  on  the  former  occasio|i. 

This  decision  was  a  genuine  surprise  to  the  plainiiil^  ^^ 
then  called  upon  the  defendant  and  expressed  in  sereie 


A  CORRUPT  KHBmcm.  065 

terms  his  indignation  at  the  change  that  had  been  unwar- 
rantably'  made  in  the  decision  of  the  referee,  saying  he 
wonld  not  snbmit  to  it.  He  was  extremely  firm  in  his 
manner  and  said :  ^'  I  positively  assure  you  that  if  the  judg- 
ment is  enforced  this  town  will  not  be  large  enough  to  hold 
you  and  myself." 

The  successful  defendant  then  said,  ^'What  do  you  want 
me  to  do  f" 

"Well/*  replied  the  plaintifl^  magnanimously,  "I  simply 
desire  to  be  released  of  that  judgment.'' 

''  Will  that  satisfy  youf"  asked  the  other  litigant. 

"Tes,"  he  replied,  "under  the  circumstances.  I  have  had 
enough  of  such  law,  and  want  to  get  rid  of  it." 

"Well,"  said  the  defendant,  "I  will  do  it,  and  give  you  a 
receipt  in  full  in  satisfaction  of  all  claims." 

After  this  cordial  termination  of  the  trouble,  the  defend- 
ant turned  to  the  plaintiff  and  said  confidentially,  "  I  am 
sorry  you  did  not  take  the  thirty  thousand  dollars  which  I 
offered  you.  I  would  sooner  you  had  it  than  anyone  else, 
'  as  I  had  to  pay  it  all  the  same." 

The  profound  lesson  of  humility  taught  in  Scripture,  that 
"  the  first  shall  be  last  and  the  last  first,"  was  fully  verified 
in  this  instance. 

As  litigation  is  now  carried  on  either  before  a  jury  or  a 
referee,  it  has  a  tendency  to  stir  up  bad  blood,  which  grows 
worse  as  the  case  progresses  through  its  various  and  lengthy 
stages,  leaving  relations  more  strained  and  matters  for  both 
parties  much  worse  at  the  end  than  at  the  beginning.  As 
the  case  drags  its  slow  length  along  criminations  and  recrimi- 
nations between  plaintiff  and  defendant  are  constantly  elic- 
ited, and  family  matters  that  should  be  regarded  as  sacred 
are  dragged  before  the  eyes  of  the  public,  subjected  to  un- 
friendly criticism,  and  innocent  parties  who  have  no  inter- 
est in  tiie  case  are  subject  to  have  their  private  affairs  made 
known,  to  their  great  mortification,  and  often  to  their  great 
detriment,  having  a  cloud  thrown  over  their  reputation  long 
after  the  litigants  have  passed  away. 


666  ARBITRAIMON. 

Thus  the  eTils  of  litigation  are  far  reacIuBg  in  their 
conseqaences,  and  freqaentlj  exercise  a  most  deleterious  in- 
fluence over  the  character  and  prosperity  of  those  who  have 
nothing  to  do  with  the  original  parties  to  the  contest,  and 
have  no  interest  in  the  suit 

The  ^expense  is  also  another  important  consideration  in 
going  to  law,  and  is  only  to  be  measured  by  the  bank  bal- 
ances of  the  contending  parties. 

The  time  lost  in  the  methods  of  procedure  now  generally 
adopted  is  of  the  utmost  importance,  especially  to  people  the 
success  of  whose  business  in  a  large  measure  may  depend 
on  their  personal  attention  thereto.  It  is  perfectly  as- 
tounding to  reflect  on  the  important  portion  of  a  per- 
son's existence  that  may  be  lost  in  one  case,  which,  from  its 
inception  in  the  lower  court  up  through  the  regular  grada- 
tions of  the  Supreme  Ciourt  and  Court  of  Appeals  when  a 
new  trial  is  had,  probably  thus  going  over  the  entire  ground 
twice,  may  consume  all  the  way  from  five  to  ten  years  under 
the  perpetual  pressure  of  mental  anxiety  and  torture  before 
the  end  is  reached,  when  at  least  one,  and  sometimes  both 
parties,  are  financially  ruined. 

The  worry,  wear  and  tear  of  attending  to  a  lawsuit  in  the 
capacity  of  either  plaintiff  or  defendant  is  perfectly  incom- 
prehensible to  those  who  have  never  passed  through  the  try- 
ing ordeal.  A  person  in  either  capacity,  with  his  train  of 
witnesses,  is  obliged  to  dance  attendance  on  court  every 
day,  no  matter  how  pressing  the  necessities  of  his  own  busi- 
ness may  be.  Books  must  be  carried  thither,  and  all  his 
establishment  must  be  upset  for  the  convenience  of  the 
court  and  to  gratify  the  whims  and  caprices  of  the  opposing 
litigant.  The  business  places  of  the  two  contending  parties 
are  entirely  disarranged,  and  the  help  thrown  into  a  state  of 
partial  disorganization.  Each  party  to  the  suit  seeks  to 
give  the  other  all  the  trouble  he  possibly  can,  and  to  subject 
him  to  all  the  sources  of  annoyance  his  imagination  can 
devise.    Such  is  the  spirit  imbued  by  going  to  law. 


HOW  TO  EXTEND  THK  SYSTEM.  667 

A  lawyer,  therefore,  who  has  about  half  a  dozen  mod- 
erate cases  has  thus  his  entire  time  occupied,  and  while  his 
clients  keep  out  of  bankruptcy  his  income  is  as  good  as  the 
annuity  of  a  life  insurance  company,  and  frequently  the 
security  is  better. 

The  effect  of  the  change  which  I  propose,  in  the  majorily 
of  cases  where  merchants  and  business  men  find  it  necessary 
now  to  resort  to  legal  methods,  would  perhaps  not  render 
ihe  life  of  the  ordinary  lawyer  so  happy  as  it  is  under  the 
present  system,  but  the  merchants  would  gain  ten-fold  more 
than  the  lawyers  would  lose,  so  the  effect  upon  the  entire 
community  would  be  incalculably  beneficial. 

The  system  of  arbitration  which  I  contemplate  could  be 
extended  in  every  line  of  business  throughout  the  entire 
country,  with  a  Central  Association  in  New  York  or  any 
other  city  that  might  be  agreed  upon.  In  fact,  there  might 
be  several  business  centres,  one  in  each  important  city, 
with  its  ramifications  extending  throughout  the  section  in 
which  its  commercial  interests  more  immediately  clustered. 
Branch  associations  could  be  organized  in  the  smaller  cities 
and  towns,  enjoying  all  the  facilities  of  direct  communica- 
tion with  the  central  body,  and  availing  themselves  of  all 
the  information  and  statistics  there  collected,  and  the  nature 
of  decisions  in  special  and  leading  cases  of  settlement 

Each  association  in  its  own  city  or  town  should  be  con- 
sidered fully  competent  to  deal  with  its  own  affairs,  th^  Cen- 
tral Association  being  only  consulted  as  an  advisory  body. 
I  should  recommend  also  that  each  association  shoiQd  have 
a  governing  committee,  which  should  constitute  its  Court  of 
Appeal,  whose  decision  should  be  deemed  final. 

It  would  hardly  be  necessary  to  prescribe  penalties  for 
the  few  isolated  cases  that  would  kick  against  the  arbitra- 
tion system,  and  resort  to  law,  as  their  legal  experience 
before  they  got  through  would  be  punishment  sufficient 
without  the  association  taking  any  further  action.  Disci* 
pline,    however,   of  a  mild  character,  would  have  to  be 


6G8  ARBITRATION. 

enforced  in  these  and  other  special  cases,  for  the  better  eft 
oiencj  of  organization. 

It  might  be  well  to  have  a  rule  whereby  the  parties  sab- 
mitting  their  cases  to  arbitration  should  recognize  the  neces- 
sity^ after  having  the  methods  of  procedure  thoroughly 
explained  to  them,  of  putting  themselves  under  obUgations 
to  abide  by  the  decision. 

In  carrying  out  a  national  idea  of  this  kind  of  associatioo, 
business  could  be  greatly  facilitated  and  much  expense 
saved  by  the  various  committees  having  due  regard  to  their 
places  of  meeting,  so  as  to  be  as  near  as  possible  to  the  een- 
tre  of  the  greater  number  of  the  witnesses  in  each  particular 
case. 

The  courts,  which  are  now  greatly  overworked,  would  be 
immensely  relieved  by  this  system,  and  they  would  have 
more  time  to  sift  important  and  exceptional  cases  which,  in 
their  nature,  could  not  possibly  be  made  subjects  of  arbi- 
tration. There  are  quite  enough  of  such  cases  to  occupy 
the  time  of  the  various  courts. 

One  of  the  most  vexatious  and  irritating  things  connected 
with  court  trials  is  the  constant  attendance  required,  eren 
when  no  progress  is  being  made  in  the  case.  The  expenses, 
too,  are  always  accumulating. 

Though  nothing  is  accomplished  the  attendance  of  the 
lawyers  is  far  from  being  a  labor  of  love.  Their  sendees 
must  be  handsomely  rewarded  by  the  litigants. 

Such  a  process  of  settlement  as  I  suggest  would  not^  after 
all,  be  any  great  hardship  to  the  best  of  the  legal  fraternity) 
as  there  would  be  enough  work  left  for  them,  but  it  would 
afford  immense  relief  to  the  now  overworked  judges,  while 
it  would  facilitate  and  forward  the  ends  of  justice  to  an  ex- 
tent that  can  hardly  be  imagined  by  those  who  have  been 
always  accustomed  to  the  slow  and  monotonous  machiu^iy 
of  .the  law  courts,  and  it  would  help  to  weed  out  the  ]Bifi 
oamp  following  of  pettifoggers,  whose  occupation  would  be 
piurtially  gone. 


Sim^lKS  AND  MHN  OP  STRAW.  ^69 

There  is  a  great  deal  of  time  lost  in  regalar  coart  busi- 
ness, causing  much  exasperation  to  the  parties  to  a  suit,  in 
settling  mere  technicalities  and  side  issues  of  law,  before  the 
real  merits  of  the  case  can  be  reached.  Many  of  these  tech- 
nical delays  could  be  easily  disposed  of  by  business  men, 
on  business  principles,  and  by  taking  a  simple  and  common- 
sense  view  of  the  matter,  by  the  usual  methods  pursued  in 
arbitration. 

This  new  method  of  settling  disputes  would  do  away  with 
the  farce  of  giving  bonds  in  many  cases,  which  is  another 
great  source  of  annoyance,  and  which,  after  all,  only  amounts 
to  a  mere  formality  in  a  large  number  of  cases,  and  in  many 
others  a  very  hollow  and  fraudulent  pretense,  as  many  of 
the  bondsmen  are  only  men  of  straw,  and  though  technically 
qualified,  are  not  in  reality  responsible  for  the  obligations 
undertaken  by  them. 

When  good,  reliable  sureties  are  offered,  in  many  in- 
stances they  are  put  through  an  irritating  course  of  exami- 
nation in,relation  to  their  private  affairs,  much  of  which  is 
entirely  unnecessary,  and  only  designed  to  perplex  and  annoy 
them.  They  are  thus  obliged  to  expose  matters  relating  to 
their  private  business,  about  which  the  public  have  no  right 
to  know  anything,  aud  they  are  often  examined  in  such  a 
way,  as  if  they  themselves  were  on  trial,  and  were  attempt- 
ing criminal  concealment  of  something  that  they  had  aright 
to  disclose.  A  good  deal  of  this  arises  from  the  impudent, 
unmannerly  style  of  certain  lawyers,  who  treat  a  man  as  a 
criminal  suspect^  when  he  has  no  interest  in  the  case  what- 
ever, but  has  simply  come  voluntarily  forward  to  assist  a 
friend  in  trouble. 

This  is  all,  however,  in  the  present  method  of  procedure, 
connected  with  the  machinery  of  so  called  justice,  and  this 
kind  of  abuse  has  been  carried  to  such  an  extent  in  some  of 
the  instances  just  referred  to,  that  very  few  responsible  par* 
ties,  who  know  anything  about  the  modtM  operandi  of  quali*. 
tying  as  a  surety,  are  willing  to  respond  to  such  calls  of 


670  ARBITRATION. 

friendship.  Hence,  one  of  the  difficnlties  in  obtaining  good 
bondsmen,  and  an  additional  reason  why  the  profesdonal 
straw  men  are  so  plentifaL 

It  probably  helps  the  business  of  the  latter,  between 
^hom  and  the  abusive  lawyers  there  may  be  an  under- 
standing on  "  boodle  ^  principles. 

I  shall  relate  an  instance  which  I  consider  worthy  of  per- 
manent record  illustrative  of  the  matters  to  which  I  here 
refer,  in  which  my  firm  was  victimized. 

On  the  occasion  referred  to,  my  firm  sued  a  client  for 
a  just  debt  of  sixteen  thousand  dollars.  The  case  was  sent 
to  a  referee,  whose  standing,  in  his  particular  line,  was  un- 
questioned at  the  time,  and  very  few  men,  in  his  circle,  had 
better  family  connections.  He  stood  high  in  his  profession 
and  both  side  were  satisfied  with  the  choice.  The  case  was 
very  long  and  tedious,  having  been  drawn  out  to  a  most  pro- 
voking extent  by  encumbering  the  record  with  immense 
piles  of  irrelevant  matter.  The  renewed  calls  for  legal  fees 
on  both  sides  were  numerous  and  vexatious,  yet  there  was 
no  help  but  graceful  submission  to  the  payment  of  this 
tribute. 

After  a  number  of  years  it  was  reluctantly  conceded  bj 
the  lawyers  that  the  evidence  was  all  in  on  both  sides.  The 
litigants  breathed  heavy  and  responsive  sighs  of  relief,  each 
side  being  confident  of  victory. 

A  short  time  prior  to  the  close  of  the  case,  the  referee 
spoke  to  me,  gratuitously  offering  his  advice  to  settle  the 
case,  as  he  said  he  intended  to  give  a  decision  adverse  to  my 
firm.  To  this  I  demurred,  and  expressed  my  determination 
to  fight  the  case  to  the  bitter  end. 

The  result  was,  however,  that  my  firm  not  only  did  not 
get  a  decision  in  its  favor  for  the  $16,000  to  which  it  was 
justly  entitled,  but  this  claim  was  wiped  out  by  this  Darnel 
come  to  judgment,  who  gave  a  decision  in  favor  of  th®  d^ 
fendant  for  $132,000. 

I  regarded  this  award  as  such  a  terrible  outrage  upon  ja» 


A  R^ERBK  DISGRAO^D.  571 

lice  that  I  obtained  a  stay  of  proceedings,  and  made  an  ap- 
peal, setting  forth  therein  the  advice  given  to  me  bj  the 
referee  to  settle  before  the  case  was  closed. 

Judge  Fancher,  who  wrote  the  opinion  on  behalf  of  the 
bench,  consigned  that  referee  to  everlasting  disgrace,  and 
set  aside  his  opinion.     There  the  case  ended. 

Another  instance  in  my  experience  will  illustrate  the  point 
which  I  have  made  in  regard  to  the  sympathy  exhibited  by 
juries  with  those  whom  they  regard,  rightly  or  wrongly,  as 
oppressed.  At  one  time  I  had  employed  a  clerk  at  the  rate 
of  $2,000  per  annum.  He  was  a  great  disappointment  to 
me  in  regard  to  competency,  for  the  work  for  which  I  had 
engaged  him,  and  for  his  entire  lack  of  application  to,  as 
well  as  deficiency  in,  the  department  to  which  he  was  as- 
signed. At  the  end  of  the  first  year,  therefore,  I  gave  him 
notice,  in  presence  of  two  competent  witnesses,  that  I  should 
not  require  him  after  his  year  had  expired,  and  advised  him 
to  look  out  at  once  for  another  situation.  On  the  last  day 
of  the  year  he  came  to  me  with  tears  in  his  eyes  and  said 
that  he  had  been  unable  to  obtain  another  place,  owing  to 
the  bad  times  prevailing,  ai^d  begged  me,  in  the  name  of  his 
family,  who  was  solely  dependent  upon  him,  to  keep  him  in 
my  services  still  longer,  until  he  could  get  another  situation. 
Purely  out  of  sympathy  for  his  condition,  and  believing  hiia 
story,  which  was  very  plausible  and  pathetic,  I  told  him 
that  he  might  remain  a  short  time  longer  on  the  same  salary, 
but  that  I  should  require  him  to  use  all  his  exertions  to  get 
another  place  as  Speedily  as  possible. 

When  he  entered  on  the  second  term  his  services  were  no 
more  use  to  me  than  a  fifth  wheel  is  to  a  coach.  After  the 
expiration  of  a  few  weeks,  I  sent  for  him  and  inquired  if  he 
had  got  another  situation ;  I  said  I  had  given  him  ample  time 
to  obtain  one,  and  that  I  could  not  consent  to  keep  him  any 
longer.  %I  therefore  requested  my  cashier  to  draw  a  check 
to  his  order  for  the  balance  of  his  wages,  up  to  date,  filled 
in  as  a  part  of  the  body  thereof  with  the  words  '^  payment  in 
full  for  all  claims  and  demands." 


672  ARBITRATION. 

Thereupon  he  left  mj  employment,  but  called  repeatedly 
at  the  office  afterward.  I  assumed  that  his  visits  were  sim- 
plj  f or  the  purpose  of  paying  his  respects.  At  the  expira- 
tion of  the  second  year  I  received  a  notice  of  suit  whidi  he 
bad  commenced  in  Brooklyn  for  the  balance  of  salary  due 
him  for  the  year,  being  at  the  rate  of  12,000  a  year  for  ten 
months. 

The  case  came  up  duly  in  the  Brooklyn  court,  his  only 
witness  being  his  father,  who  had  made  several  calls  upon 
me  after  the  discharge  of  his  son,  on  the  strength  of  which 
he  set  forth,  in  his  evidence,  certain  conferences  that  should 
have  taken  place  between  him  and  myself,  the  greater  part 
of  which  were  purely  fictitious.  He  was  the  only  witness 
called  on  the  side  of  the  plaintiff,  while  I  had  five  or  more 
witnesses  to  substantiate  the  facts,  as  I  have  related  tliem,  iu 
relation  to  the  young  man's  discharge,  aU  of  them  being  of 
most  excellent  character. 

Strange  to  say,  the  jury  entirely  ignored  the  overwhelm- 
ing testimony  on  my  side,  and  seemed  to  be  altogether  in* 
fluenced  by  the  ^^  spread  eagle''  address  of  the  defendant's 
counsel,  which  I  am  free  to  say  was  both  able  and  ingenious. 
He  drew  a  harassing  picture  of  the  poverty  of  the  young 
man,  and  presented  the  imminent  destitution  of  his  family 
in  a  most  pitiable  light,  brought  about  solely  by  the  rath- 
less  treatment  of  this  hard-hearted  millionaire  and  bloated 
bondholder.  Hence  the  verdict  was  made,  through  the  ioT^ 
of  counsel's  oratory,  to  depend  exclusively  on  the  sjmf^^J 
of  the  jury,  irrespective  of  the  evidence. 

The  case  occupied  several  days,  with  five  or  six  employ^ 
from  my  office  in  constant  attendance,  who  were  obliged  to 
carry  to  and  from  court,  every  day,  huge  books  and  h^B^ 
quantities  of  papers,  disturbing  the  r^^ar  business  of  thd 
office  in  a  very  disagreeable  manner. 

After  counsel  had  gone  over  the  ordinary  rigmarole  i»J^ 
viewing  the  testimony,  the  jury  went  through  the  formaBv 
of  retiring,  to  keep  up  appearances,  and  after  a  brief  inta^^ 


A  JURY  IGNORING  KVIDENC«.  678 

of  absence  retarned  to  court  with  a  verdict  for  the  deeply 
injured  clerk  for  back  pay,  together  with  interest  for  the  ten 
months  during  which  he  had  not  rendered  me  an  hour's 
service. 

My  lawyer  was  easily  able  to  obtain  fresh  evidence  from 
other  sources,  but  he  had  not  considered  it  necessary  to  put 
any  more  witnesses  on  the  stand,  as  he  had  regarded  the 
testimony  already  produced  more  than  ample,  so  sanguine 
was  he  of  success,  and  so  fully  satisfied  of  the  plainness  of 
his  case,  which  he  considered  had  only  one  side,  and  that  in 
my  favor. 

The  jury,  however,  put  the  boot  on  the  other  foot,  upset 
all  my  counsel's  calculations  and  showed  him  that  his 
law  went  for  nothing  where  the  famous  twelve  had  the  right 
to  judge  and  legislate  at  the  same  time  in  accordance  with 
their  sympathies  and  prejudices.  Still  he  went  through  the 
formality  of  going  before  the  judge  with  new  evidence,  and 
applied  for  a  new  trial,  which  was  ordered  on  the  ground  that 
the  verdict  was  not  in  accordance  with  the  weight  of  evi- 
dence. 

The  new  case  was  called  after  the  customary  delays,  and 
the  same  ground  was  duly  traversed  again,  with  my  addi- 
tional witnesses,  before  another  highly  intelligent  jury, 
whose  prejudices  were  all  on  the  side  of  the  greatly  injured 
young  man,  who  sought  twelve  months'  pay  for  two  months' 
useless  services.  The  only  witness  that  appeared  again  for 
the  defendant  was  his  faittif ul  and  veracious  f9.ther,  whose 
memory  was  marvellously  correct  in  relation  to  his  former 
statements  on  the  first  trial. 

There  is  an  old  proverb  which  says  that  it  requires  such 
men  to  have  good  memories.  I  need  not  quote  it,  as  almost 
everyone  knows  it. 

To  make  a  long  story  short,  however,  that  forensic  orator 
appeared  again  for  his  poverty-stricken  client,  armed  with 
all  the  old  enthusiasm  exhibited  on  the  former  triaL  He 
liad  not  much  new  matter  to  present,  but  his  dramatic  attri^ 


J 


674  ARBIT&AIMOK. 

bates,  by  dint  of  longer  practice,  and  more  familiariiywift 
bis  side  of  the  case  (it  was  only  necessary  for  him  to  studj 
the  one  side)  had  become  considerably  improved  sinoe  Ids 
former  effort,  and  it  is  needless  to  say  that  he  carried  the 
jury  with  him. 

By  that  intelligent  safegoard  of  onr  liberties,  thejnijjihe 
second  trial  was  only  regarded  as  an  aggravated  caseof  per- 
secution, on  my  part,  and  the  verdict  was  given  more  cheer- 
fully  in  favor  of  the  plaintiff  than  on  the  former  occasion. 

Although  it  would  have  been  much  better  for  me,  from  a 
financial  point  of  view,  to  have  paid  the  amount  of  the  exac- 
tion, with  all  the  legal  and  ille^  fees  and  impositions  con- 
nected therewith,  yet  I  felt  disdined  to  be  bamboozled  in  that 
way. 

When  the  court  was  applied  to  for  another  new  trial,  the 
judge  said,  "  I  have  already  given  you  one  new  trial,  taking 
ihe  responsibility.  The  relief  you  now  ask  has  already  been 
before  two  juries,  and  I  am  not  willing  to  take  upon  me  anj 
additional  responsibility  in  the  matter.  You  must  there- 
fore look  for  any  further  rights  or  redress  to  which  yon  may 
consider  yourself  entitled,  to  the  Court  of  Appeals." 

The  case  is  now,  therefore,  awaiting  the  good  time  and 
discretion  of  the  Court  of  Appeals,  where  it  will,  in  all  prob- 
ability, be  heard  and  adjudicated  upon  sometime  within  the 
next  ten  years.  In  the  meantime  the  young  man  is  happy 
in  the  reflection  that  his  judgment  is  a  good  investment) 
drawing  six  per  cent,  interest. 

There  is  still  another  case  illustrative  of  some  of  thep^ 
culiar  points  referred  to,  and  showing  the  truth  of  the  maxim 
among  lawyers  that,  "You  never  know  what  a  jury  will  do, 
in  which  I  had  the  honor,  or  the  misfortune  to  be  joined. 

A  well-known  outside  broker  in  Wall  Street,  who  had» 
large  experience  in  transacting  btisiness  for  Mr.  Sage  ana 
other  notabiUties  of  the  street,  in  "  puts,"  "  calls,"  and  other 
exterior  securities,  came  to  me  one  afternoon  and  asked  00 
if  I  didn't  want  to  buy  a  pair  of  diamond  earrings. 


SHARP  DIAMOND  DBAURS.  675 

At  that  time  I  had  not  began  my  career  as  a  dealer  in  dia- 
monds, except  in  one  solitary  instance,  and  that  was  when  I 
pnrchased  the  wedding  ring,  which  is  one  of  the  requisites 
in  a  matrimonial  contract  for  a  long  term.  I  was,  therefore, 
comparatively  a  tyro  in  the  business,  and  the  party  with 
whom  I  was  dealing  did  not  fail  to  take  advantage  of 
my  inexperience.  I  made  some  inquiry  about  the  diamonds 
from  this  broker,  to  which  I  received  apparently  satisfactory 
answers,  and  I  concluded  they  would  suit  my  wife,  and  as  I 
had  had  a  good  day's  business  I  made  him  an  offer  of  a 
thousand  dollars  for  the  precious  ornaments,  which  he 
quickly  accepted,  and  I  paid  him  the  money. 

In  the  course  of  a  few  weeks  after  I  was  waited  upon  by  a 
diamond  dealer  and  his  lawyer,  with  neither  of  whom  I  had 
the  honor  of  any  previous  acquaintance,  and  they  accord- 
ingly introduced  each  other.  The  diamond  dealer  intro- 
duced the  lawyer  and  viee  versa.  I  immediately  concluded 
I  was  going  to  get  a  good  stock  order  from  both  of  them, 
but  I  was  soon  disappointed  as  well  as  surprised  to  find  that 
these  gentlemen  had  called  on  an  entirely  different  kind  of 
business,  which  was  totally  devoid  of  commissions  on  any 
stock  transactions. 

They  said  I  had  a  pair  of  earrings  belonging  to  them,  and 
I  declined  to  give  them  up  except  on  return  of  my  thousand 
dollars. 

These  two  gentlemen  bade  me  good  day,  and  in  the  course 
of  time  I  was  served  with  the  usual  legal  papers  in  a  suit 
which  reached  the  calendar  after  some  time.  The  young 
man  who  sold  me  the  diamonds  was  put  on  the  stand.  He 
testified  that  he  had  received  them  from  a  certain  diamond 
broker,  but  not  the  dealer  in  question,  with  whom  he  had 
had  no  connection  whatever. 

The  diamond  broker,  it  appeared,  had  long  been  agent  for 
this  dealer,  selling  diamonds  and  had,  as  set  forth  in  the 
evidence,  sold  over  ten  thousand  dollars'  worth  in  a  few 
years. 


J 


576  A&BIlMtAlMON. 

Dtiring  the  trial  a  paper  was  produced  to  prove  that  thift 
broker  had  received  these  diamonds  to  show  them  to  a  cos- 
tomer,  and  as  it  tamed  out  I  happened  to  be  the  costomer. 
The  money  which  I  had -paid  him  for  them  he  had  failed  to 
turn  over  to  his  employer,  of  whom  I  had  no  knowledge, 
nor  had  I  any  chance  of  knowing  him  in  the  transaction. 

All  the  facts  were  presented,  as  above  related,  to  the  juxjf 
whO)  after  due  deliberation,  decided  that  I  must  give  up  the 
diamonds  and  suffer  to  be  cheated  out  of  my  thousand  dol- 
lars. 

This  case  is  now  on  appeal.  I  have  since  offered  to  re- 
linquish  the  diamonds  and  lose  my  money,  rather  than  suffer 
the  expense  and  trouble  of  continuing  the  litigation,  but 
plaintiff  wants  to  bleed  me  further  to  the  tune  of  $300  to 
cover  his  law  expenses.  To  this  illegal  tribute  I  have  not 
firet  submitted,  and  have  resolved  to  see  what  virtue  there 
ps  in  further  defense  before  a  higher  tribunal. 

<<  Millions  of  dollars  for  defence,  but  not  a  dollar  for 
tribute,"  is  a  maxim  which  it  is  expensive  to  follow,  but 
after  all,  the  result  of  such  a  course,  if  one  can  afford  iii| 
may  be  morally  healthy. 

I  consider  that  these  cases,  in  which  I  acted  a  rather  un- 
enviable part,  ar(B  only  samples  of  many  which  oonstitate 
one  of  the  best  arguments  for  a  general  system  of  arbitra- 
tion,  such  as  I  have  briefly  and  imperfectly  outlined. 


CHAPTER    LII. 

NEW  YORK  AS  A  FINANCIAL  CENTRE. 

Its  Past,  Its  Pbesent,  Its  Future.  -Banking  Deoadbnob. 
— Qbowth  of  Intebiob  Centbes.— Obstbuction  fbom 
the  National  Bank  Laws. — Belief  Demanded.— Be- 
quibekents  of  the  Futube. 

WHAT  New  York  has  been  as  a  centre  for  the  settle- 
ment of  financial  transactions  is  a  matter  of  history ; 
what  it  is  destined  to  be,  in  that  respect,  may  not  be  so  en* 
tirelj  certain  as  some  people  hastily  assume.  There  are  some 
facts  which  seem  to  suggest  the  question  whether  our  city 
may  prove  able  to  retain  its  past  proportion  of  the  vast  set- 
tlements of  this  ever-growing  continent ;  and,  although  there 
is  nothing  to  warrant  very  positive  opinions  about  the 
future,  it  must  be  conceded  as  an  unquestionable  historic 
fact  that  in  late  years  there  have  been  symptoms  of  positive 
decadence  in  the  status  of  our  financial  metropolis. 

In  the  past  there  have  been  three  separate  successive  sets 
of  conditions  directly  affecting  the  financial  standing  of  New 
York.  First,  there  was  the  period  when  this  city  was  the 
distributing  point  for  nearly  all  the  importations,  and  for  the 
bulk  of  our  domestic  manufactures  through  all  parts  of  the 
country.  Equally,  New  York  was  the  almost  sole  port  of 
export  for  Western  products,  and  although  the  exports  for 
the  cotton  States  were  made  direct  from  their  local  ports, 
yet  the  financial  transactions  connected  with  those  shipments 
were  effected  through  this  city.  Then  New  York  had  vir- 
tually no  competitor  as  an  exchange  centre. 

Next  came  a  period  during  which  the  larger  Western 
cities,  especially  Chicago  and  St.  Louis,  aspired  to  become 
distributors  of  foreign  and  Eastern  merchandise ;  a  change 
very  naturally  following  the  rapid  growth  of  population  in 
the  West  and  Southwest   Thus  a  vast  jobbing  trade  became 


678  NEW  YORK  AS  A  PINANCIAI^  C^NTRB. 

rapidly  established  at  these  interior  centres,  and  NewTork's 
share  in  the  distribntion  of  goods  to  the  retail  trade  became, 
in  a  large  measure,  confined  to  the  Middle  and  nearer  West- 
ern States,  and  to  a  portion  of  the  South.  The  jobbers  of  these 
new  interior  centres,  however,  had  still  to  get  their  supplies 
of  merchandise  from  or  through  the  Eastern  metropolis;  so 
that,  whilst  we  lost  much  of  our  jobbing  business,  we 
retained,  with  some  limited  exceptions,  the  importing  and 
commission  branches,  together  with  their  ordinary  rate  of 
increase.  ^ 

We  are  now  in  the  beginning  of  a  third  and  still  more 
important  era,  during  which  both  the  importing  and  com- 
mission branches  of  our  trade  are  threatened  with  invasion. 
The  Western  jobbing  houses  have  attained  a  standing 
which  warrants  their  importing  direct  from  the  countries 
of  production,  instead  of  through  New  York.  Another 
Western  and  Southwestern  consumption  has  risen  to  such  a 
magnitude  as  to  encourage  the  creation  of  manufactaring 
establishments  in  the  yicinitj  of  the  markets.  The  West  is 
rapidly  becoming  a  competitor  in  the  leading  branches  of 
manufacture  with  the  East,  and  is  evidently  destined  to 
supply  itself,  at  no  distant  day,  with  a  very  large  portion  of 
the  domestic  merchandise  hitherto  contributed  through  New 
York  merchants,  and  with  the  facilities  of  New  York  banks. 
Nor  is  this  all.  Chicago  and  some  other  Western  cities  are 
throwing  off  their  dependence  on  New  York  intermediaries 
for  the  exportation  of  grain  and  provisions,  selling  them 
direct  to  Europe,  and  shipping  the  goods  on  through  bills  of 
lading. 

These  changes  are  not  the  result  of  any  mere  spirit  of 
blind  recklessness  grasping  after  business.  They  are  the 
product  of  actual  natural  economies,  and  appear  to  be  so 
decidedly  in  the  interest  of  the  Western  merchants  that  it 
can  hardly  be  doubted  that  the  new  methods  have  come  '^to 
8tay.'^ 

Clearly,  then,  the  natural  development  of  national  prodno- 


RIS13  AND  DECUNB  OP  TH]ft  CI^BARING  HOUS]$.        579 

tion  of  commerce  is  to  bnild  up  independent  financial  cen- 
tres at  the  interior,  the  effect  of  vhich  can  only  be  to  check 
in  some  measure  the  growing  ascendancy  of  New  York. 
Perhaps  few  among  my  readers  will  be  prepared  for  the 
following  statistical  facts  bearing  on  this  question ;  the 
conclusions  to  be  drawn  from  which  are  not  very  flattering 
to  the  pride  of  the  ^'  Gothamites." 

The  transactions  at  the  New  York  Clearing  House  are  the 
surest  indication  of  the  standing  and  progress  of  this  city 
as  a  financial  centre.  The  records  of  that  institution  show 
that  its  annual  exchanges  rose  step  by  step  from  6,750  mil- 
lion dollars  in  1854  to  48,566  in  1881,  an  increase  of  744  per 
cent,  in  27  years,  or  at  the  average  rate  of  1,585  millions 
per  year.  From  1881  there  has  been  the  following  remark- 
able  rate  of  decline : 

In  1881,  the  exchanges  were  48,566  millions  of  dollars. 
«  1882,    "  "  "     46,553        "  " 

•*  1883,    *'  "  "     40,293        "  *• 

«  1884,    "         «  "     34,092        «  «• 

•*  1885,    «         «  ''     25,251        «  « 

Thus  it  will  be  seen  that  there  has  been  a  decline  in  the 
transactions  of  the  Clearing  House  banks  of  23,315  millions, 
or  at  the  rate  of  48.4  per  cent.,  within  the  last  four  years. 
Last  year  the  exchanges  fell  below  even  those  of  twenty 
years  preylous,  when  the  amount  was  26,032  millions.  Of 
course,  this  very  remarkable  decrease  in  the  volume  of  trans- 
actions is,  in  part^  attributable  to  the  great  falling  off  in  the 
amount  of  speculative  transactions  in  1885,  as  compared 
with  1881.  This,  however,  can  only  account  to  a  compara- 
tively small  extent  for  such  a  vast  change.  Something  is 
also  to  be  attributed  to  the  general  decline  in  the  prices  of 
merchandise  and  investments  during  the  period ;  but  this  ex- 
planation is  also  entirely  inadequate,  for  the  average  fall  in 
prices  did  certainly  not  exceeded  20  per  cent.,^while  the  de- 
crease in  the  exchanges,  as  already  shown,  had  been  48.4  per 
cent.    Moreover,  on  the  other  side,  some  offset  against  the  do- 


580  NBW  YORE  AS  A  FINANCIAI«  CKNTRB. 

eline  in  spectilatioQ  and  in  prices  must  be  allowed  on  accoont 
of  an  increase  of  five  to  six  millions  in  the  popalation  of  the 
country  daring  the  interral ;  which  alone  should  call  for  an 
increase  of  10  per  cent,  within  this  period.  It  is  still  more 
significant  that,  since  the  year  1872,  the  capital  of  the  hunks 
in  the  New  York  Clearing  House  has  been  reduced  from 
$84,400,000  to  $58,600,000,  a  decline  of  30  per  cent. ;  which 
at  least  implies  that  banking  has  become  less  profitable 
than  it  formerly  was,  and  which  could  scarcely  have 
happened  if  New  York  had  retained  its  wonted  share  of  the 
increase  of  financial  operations  arising  from  the  growth  of 
population  and  commerce  in  the  nation  at  large. 

Some  light  may  be  thrown  on  these  changes  by  a  com- 
parison between  the  ratio  of  progress  in  the  transactions  of 
the  Clearing  Houses  of  New  York  and  Chicago  respectively. 

In  1866,  the  first  complete  year  of  the  Chicago  Clearing 
House,  the  clearings  amounted  to  $453,^00,000,  while  in 
1885  the  figures  reached  $2,318,500,000— an  increase  of  410 
per  cent.  At  New  York,  in  1866,  the  clearings  were  $28,- 
717,000,000,  and  in  1885  they  had  faUen  to  $25,250,000,000 
— ^a  decrease  of  12}  per  cent,  within  two  decades  of  great 
national  progress,  and  while  the  population  tributary  to  this 
city  had  increased  over  twenty  millions. 

In  the  year  1879— the  period  of  the  resumption  of  specie 
payments  and  of  the  beginning  of  a  great  reviyal  of  com- 
merce and  of  financial  enterprise — the  Chicago  Clearings 
were  $1,257,700,000,  and  last  year  they  were  $2,318,600,000, 
showing  an  increase  of  84.3  per  cent.  The  clearings  at  New 
York,  within  the  same  period,  show  an  increase  of  about  i 
of  one  per  ceni 

It  has  already  been  shown  that  the  capital  of  the  banks 
in  the  New  York  Clearing  House  (exclusive  of  surplus)  fell 
30  per  cent,  below  1872  and  1886 ;  on  the  other  hanci  the 
capital  of  the  banks  in  the  Chicago  Clearing  House  rose* 
from  $9,845,000  in  1872  to  $16,928  000  in  the  present  yMC 
an  increase  of  72  per  cent.  , 


BANKING  ^AClWriBS  INADEQUATE.  681 

The  foref;;oing  comparisons  show  that  although  the  clear- 
ings at  Chicago  are  only  about  one-tenth  those  of  New  York, 
yet  the  former  city  is  making  very  rapid  strides,  while  here 
we  are  virtually  retrograding,  and  confirm  the  conclusion 
above  expressed,  that  the  importance  of  New  York  as  a  fi- 
nancial centre  is  sufiering  from  diversion  of  settlements  and 
of  banking  facilities  to  the  larger  cities  of  the  interior,  and 
especially  to  Chicago. 

So  far  as  this  tendency  is  the  result  of  natural  changes  in 
conditions,  it  is  inevitable  and  must  be  permanent,  if,  in- 
deed, it  be  not  destined  to  gain  in  force  and' extent.  But  so 
far  as  the  change  is  due  to  artificial  obstructions  to  banking 
operations,  it  is  susceptible  of  modification. 

And  here  I  may  be  permitted  to  venture  certain  suggest- 
ions which  may  quite  possibly  encounter  objections  from 
men  more  than  my  peers  in  banking  experience  and  wisdom. 
It  has  long  been  my  conviction  that  the  banking  arrange- 
ments existing  at  New  York  are  far  from  satisfying  the  re- 
quirements of  a  city  that  not  only  aspires  to  be,  but  also 
possesses  many  adaptations  for  ocoapying  the  position  of 
the  great  financial  centre,  not  only  for  domestic  settlements, 
but  also  for  international  exchanges. 

The  bulk  of  our  banking  transactions  are  done  by  banks 
incorporated  under  either  national  or  State  laws.  Admirably 
as  the  national  banking  system,  taken  as  a  whole,  is  construc- 
ted, yet  it  includes  some  important  positive  disqualifications 
for  its  institutions  pei*forming  an  important  class  of  opera- 
tions essential  to  a  great  centre  of  exchanges.  It  was,  per- 
haps, not  to  be  expected  that  a  system  designed  mainly  for 
provincial  cities  and  for  rural  populations  should  adequately 
provide  for  these  broader  wants.  Nor  could  any  uniform 
and  homogeneous  system  be  expected  to  be  very  perfect 
and  satisfy  at  the  same  time  both  classes  of  requirements. 
Interior  banks,  whose  management  must  be  expected  to  be 
more  or  less  lacking  in  experience  and  competency,  may 
need  to  be  placed  under  legal  restraints,  which,  in  the  case 


KEW  YORK  AS  A  PINANCIAI,  CBNTRK. 

of  a  thoroughly  conducted  metropolitan  bank,  would  be  not 
only  needless,  but  positivelj  injurious.  Unfortunatelv,  this 
discrimination  has  received  little  recognition  in  our  national 
bank  legislation ;  on  the  contrary,  that  larger  discretion 
which  should  have  been  conceded  to  the  higher  traimngand 
more  select  ability  that  administer  the  metropolitan  banks, 
has  been  ignored,  and  heavier  restrictions  have  been  placed 
upon  the  New  York  national  banks  than  upon  those  of  any 
other  part  of  the  national  systenu 

The  "  reserve"  laws  are  oppressive  to  no  better  purpose 
than  that  of  positive  injury.  All  other  banks  than  tiiose  of 
New  York  are  permitted  to  count  in  their  reserves  any  funds 
resting  with  their  ^^ redemption  agents;"  and  this  item 
Tisually  constitutes,  in  the  case  of  banks  of  the  "other  re- 
serve cities,"  41  per  cent  of  the  total  reserves  held,  and  in 
the  case  of  all  other  banks  about  60  per  cent.  The  New 
|York  banks,  on  the  contrary  are  compelled  to  hold  their 
entire  reserve  (25  per  cent,  of  their  deposits)  in  the  form  of 
lawful  money.  Nor  is  this  the  heaviest  embargo.  The  re- 
serves are  not  permitted  to  be  used  when  the  occasion  arises 
for  which  a  bank  reserve  is  always  presumed  to  be  provided. 
The  moment  a  bank  allows  its  reserve  to  fall  below  the  re 
quired  25  per  cent,  it  becomes  the  duty  of  the  Comptroller 
of  the  Currency  to  close  its  doorstind  put  it  into  liquidation 
if  the  deficiency  be  not  immediately  made  good*  If  panic 
occurs,  and  depositors  want  their  money,  there  is  nowhere 
any  power  to  relax  the  crushing  force  of  this  law,  and  the 
banks  are  therefore  compelled  to  suspend  payment  to  de- 
positors and  in  order  to  avert  general  ruin  at  such  times 
they  have  to  resort  to  the  expedient  of  making  their  cash 
assets  available  in  common,  thereby  saving  themselves  and 
their  customers  outside  of  and  in  spite  of  the  destractire 
tendency  of  the  law.  Of  course,  the  danger  of  ruiming  into 
such  a  crisis  as  this  creates  a  feverish  dread  in  all  times  of 
special  stringency  in  the  money  market.  All  eyes  are  at 
such  times  fixed  upon  the  reserve  ''dead  linej''and|as 


REORGANIZATION  UNDER  Sl^Al^E  I#AWS. 

that  limit  is  approached,  loans  are  artificially  contracted, 
depositors  draw  their  money,  and  the  very  reserve  that 
should  be  osed  for  elasticity  and  to  relieye  periods  of 
special  tension  become  the  certain  cause  of  panic  and  ruin. 
A  banking  centre  whose  banks  are  periodicallyexposed  to 
dangers  of  this  serious  character,  and  where  the  law  unites 
with  adverse  circumstances  to  foster  panics,  is  hampered 
with  the  worst  possible  disqualification  for  performing  those 
higher  and  broader  functions  of  banking  which  demand 
freedom  of  discretion  and  elasticity  of  resource. 

This  evil  appears  all  the  greater  when  it  is  considered 
that  the  amount  required  to  be  set  apart  as  so  much  idle 
reserve  ordinarily  exceeds  the  entire  capital  of  the  banks.  It 
might  be  supposed  to  be  serious  enough  that  such  a  large 
proportion  of  the  resources  of  the  bank  should  be  held  per- 
petually idle  and  earning  no  interest ;  but  when  this  sacri- 
fice of  earning  capacity  is  made  for  a  purpose  that  brings  no 
advantages,  but  rather  a  very  serious  danger,  the  effect  can 
be  nothing  less  than  an  unwholesome  and  very  injurious 
restriction  upon  banking  operations,  and  it  is  not  surprising, 
therefore,  that  the  national  banks  of  New  York  city  exhibit 
decadence  instead  of  progress. 

What  is  needed  to  enable  this  metropolis  to  reach  the 
financial  status  to  which  it  is  entitled  is  a  class  of  banking 
institutions  possessing  facilities  and  functions  much  broader 
and  freer  than  those  conferred  by  the  national  charters.  It 
is  out  of  the  question  to  hope  that  these  facilities  may  be 
provided  through  modifications  of  the  national  bank  sys- 
tem. The  banks,  and  especially  those  of  New  York,  have 
to  encounter  so  much  prejudice  and  ignorant  demagogism 
from  Congress,  in  seeking  any  modification  of  the  national 
system,  that  they  would  sooner  endure  almost  any  wrong 
than  demand  changes  in  the  law.  Their  only  redress  is  in 
reorganizing  under  the  State  laws,  which  many  of  them  have 
already  done,  whilst  new  institutions  almost  uniformly  pre- 
fer the  State  system.  To  meet  the  wants  here  contemplated, 


684  NEW  YORK  AS  A  FINANCIAI.  CENTR]^. 

it  would  probably  be  necessary  to  get  from  the  State  Legis- 
latare  special  authorization  for  forms  and  functions  of  bank* 
ing  not  now  distinctly  proyided  for  under  either  Federal  or 
State  laws. 

The  special  business  to  be  done  by  such  a  class  of  basis 
scarcely  needs  enumeration,  much  of  it  being  so  self-eTident 
In  the  present  stage  of  our  national  deyelopment,  it  is  be- 
coming a  graye  r^ection  upon  our  men  of  capital  that  we 
should  remain  almost  entirely  dependent  on  foreign  bankers 
for  the  facilites  for  transacting  our  immense  external  com- 
merce. The  necessity  that  formerly  existed  for  this  depend- 
ence can  no  longer  be  urged  as  an  excuse.  All  the  capital 
and  the  banking  experience  necessary  to  found  and  to  ad* 
minister  large  credit  and  exchange  institutions  are  ready  to 
hand.  A  business  of  $1,200,000,000  per  annum  connected 
with  our  imports  and  exports  would  be  ayailable  for  this 
form  of  enterprise.  Our  export  trade  is  crippled  in  many 
branches  of  business  simply  because  it  is  found  impossible 
to  get  the  liberal  credits  necessary  to  facilitate  consign- 
ments to  distant  markets.  Manchester  defeats  us  on  cottcm 
goods,  not  so  much  on  the  ground  of  prices  or  superiority 
of  fabrics,  but  because  her  merchants  can  get  any  time  or 
amount  of  credit  required,  whilst  we  haye  to  market  oar 
goods  on  restricted  credits  and  through  Manchester  agents, 
who  at  the  same  time  are  selling  English  products  in  com- 
petition with  ours.  The  English  exporter  has  the  ad- 
yantage  of  being  able  to  get  his  credits  from  the  bank 
with  which  he  keeps  his  account,  while  the  American  has  to 
go  to  a  foreign  banker,  who  has  no  inducement  to  consider 
his  conyenience  or  to  moderate  his  charges.  The  natural 
place  for  an  export  merchant  to  keep  his  account  is  with  the 
bank  that  grants  him  his  credits ;  and  this  fact  suggests  the 
facility  with  which  banks  of  the  kind  here  suggested  could 
build  up  a  large  business. 

Eyery  year  we  find  it  necessary  to  largely  pledge  our  cotton 
crop  in  adyance  to  provide  the  means  for  gathering  aud  mAi> 


can't  dkpknd  on  foreign  bankers.  685 

keting  it.  Why  should  this  money  have  to  be  drawn  from 
England,  especially  as  the  crop  is  thereby  subjected  to 
the  control  of  the  foreign  buyers,  and  we  are  unable  to  pro- 
tect our  own  products  ?  These  advances  afford  an  illustra- 
tion of  another  class  of  important  operations  in  which  the 
existing  banks  cannot  directly  participate,  but  which  ought 
properly  to  be  undertaken  by  domestic  banks. 

With  respect  to  our  importations,  what  suflBcient  reason 
can  be  urged  why  the  importer  should  have  to  get  his  credit 
from  the  agent  of  a'  London  banker,  instead  of  receiving  it 
from  an  American  bank  through  which  he  chose  to  transact 
his  entire  business,  and  which,  therefore,  would  be  the  fittest 
source  for  procuring  his  credits  ?  It  cannot  be  to  the  advan- 
tage  of  the  importer  to  be  exposed  to  the  vicissitudes  of  the 
European  money  markets,  nor  can  the  London  banker  grant 
credits  to  merchants  3,000  miles  distant,  whose  position  he 
imperfectly  knows,  without  compensation  for  the  extra  risk. 
The  business  is,  therefore,  done  at  a  disadvantage  to  both 
parties.  The  credit  should  be  issued  directly  from  the  point 
where  the  importer  does  his  business  ;  and  this  would  soon 
become  the  fact  were  banks  to  be  provided  possessing  spe* 
cial  adaptations  for  doing  such  a  business. 

Other  functions  proper  to  institutions  of  the  character 
here  suggested  would  be  the  negotiation  of  corporate  loans, 
temporary  advances  to  corporations,  the  receiving  of  cor- 
porate accounts,  and  the  facilitation  of  corporate  recon- 
struction. Banking  for  the  larger  corporations  presents 
many  possibilities  of  advantage  to  both  banks  and  companies 
of  which  our  existing  banks  cannot,  as  at  present  restricted, 
avail  themselves. 

It  is  needless  to  say  that'  these  suggested  institutions, 
whilst  undertaking  operations  of  the  special  character  above 
indicated,  should  also  aim  to  secure  the  best  class  of  depos- 
its and  to  discount  the  higher  class  of  paper.  As  the  nation-; 
al  bank  laws  would  prohibit  to  them  the  profits  of  circulation^ 
it  might  well  merit  consideration  whether  they  should  not 


686  NKW  YORK  AS  A  FINANCIAL  CBNTltK. 

issae  to  customers  of  high  standing  their  own  acceptanoei, 
within  certain  safe  limits.  These  credits,  yielding  the  car- 
rent  rate  of  interest,  wotdd  be  a  highly  profitable,  as  wellas 
an  entirely  legitimate  branch  of  business ;  and  they  haye  the 
sanction  of  successful  usage  among  the  best  banks  of  London. 
I  am  unable  to  see  what  objection  there  should  be  to  farther 
following  London  precedent  by  allowing  on  deposits  a  rate  of 
interest  below  that  current  in  the  market  for  the  time  being. 
Such  a  course  would  attract  accounts  and  would  immensely 
increase  the  power  and  the  earning  resources  of  the  banks. 
Moreoyer,  as  such  institutions,  being  exempt  from  emba^ 
rassing  reserve  restrictions  and  other  needless  limitations^ 
would  be  less  subject  to  the  oscillations  of  the  money  ma^ 
kets  than  are  the  present  banks,  they  would  afford  better 
advantages  to  members  of  the  Stock  Exchange  in  the  foim 
of  loans  upon  securities  than  they  now  are  able  to  get.  The 
importance  of  this  business  may  be  inferred  from  the  fact 
that  the  yearly  transactions  in  stocks  at  the  Exchange  have 
average^,  for  the  last  six  years,  102,000,000  shares,  which,  at 
an  estimated  average  of  $60  per  share,  represents  an  annual 
business  of  $6,120,000,000,  to  say  nothing  of  the  business  in 
bonds,  which  also  is  very  large. 

Banks  of  this  character  would  naturally  attract  a  large 
portion  of  the  Stock  Exchange  houses,  which  experience 
has  shown  to  be  exceptionally  safe  and  profitable.  The 
single  fact  that  these  banks  would  not  be  obligated  to  con- 
form their  loans  to  arbitrary  25  per  cent  reserve  would  be 
a  decisive  reason  for  Wall  Street  firms  doing  their  business 
with  such  institutions. 

To  some  extent  the  wants  here  alluded  to  have  been  met 
by  our  loan  and  trust  companies.  As  institutions  of  loaa 
and  deposit  these  institutions  are  doing  important  public 
service,  and  the  deficiencies  in  the  functions  allowed  to  the 
national  banks  are  diverting  to  them  a  large  and  valuable 
business.  The  companies  of  this  character  in  New  York 
and  Brooklyn    have    nearly    $14,000,000  of   capital  and 


Busnmss  banks  urgknti^y  nsbd^d.  587 

115,000,000  of  sorpliis  and  profits.  Their  resources  aggre- 
gate (175,000,000,  and  their  deposits  $137,000,000.  Their 
rapid  progress  is  indicated  by  the  fact  that,  since  1883,  their 
resources  have  increased  $32,000,000,  or  at  the  rate  of  27 
per  cent,  during  three  years  of  depression  in  business.  But 
while  this  success  demonstrates  the  gi'eat  necessity  for  en* 
larged  local  banking  facilities,  the  facilities  afforded  by  the 
trust  companies  are  entirely  too  limited  to  satisfy  the  large 
special  requirements  of  a  great  financial  centre  above  re- 
ferred to,  and  only  add  to  the  necessity  for  a  class  of  banks 
which  shall  do  for  New  York  what  the  great  joint  stock 
banks  and  the  manmioth  private  discount  houses  of  London 
are  doing  for  the  business  of  that  cosmopolitan  centre. 

These  suggestions  are  offered  for  what  the  men  of  Wall 
Street  may  deem  them  worth.  They  demonstrate  that  there 
is  ample  scope  and  urgent  need  for  a  new  element  in  our 
banking  arrangements  to  accommodate  the  larger  operations 
of  finance  and  commerce ;  and  it  would  not  be  difficult  to 
prove  that  the  country  is  suffering  seriously  from  lack  of 
such  facilities.  It  will  not  be  pretended  that  there  is  any 
lack  of  either  the  capital  or  the  managerial  talent  requisite 
for  such  enterprise.  Nor,  since  the  rate  of  interest  has 
come  to  rule  as  low  in  this  country  as  it  is  in  Europe,  have 
we  any  longer  anything  to  fear  on  that  ground  from  the 
competition  of  foreign  bankers.  At  any  rate,  if  New  York 
aspires  to  a  position  of  financial  independence  and  to  be- 
come, in  the  broadest  possible  sense,  the  financial  centre  of 
the  vast  and  growing  exchanges  of  this  continent  and  of  its 
transactions  with  other  nations,  there  should  be  no  delay  in 
giving  this  greater  breadth  and  scope  to  its  banking  institu- 
tions. Our  merchants,  I  am  satisfied,  are  ready  to  respond  to 
a  movement  of  this  character;  are  the  bankers  and  the  eap' 
italists  equally  prepared  to  provide  the  facilities  t 


CHAPTEK    LIII. 

EARTHQUAKE  THEORIES  AND  WALL  STREET  AFFAIRS. 

The  Shook  of  Eyert  Oalamitt  felt  m  Wall  Stbeet.— 
Eabthquaebs  the  only  Disastebs  whioh  seem  to 
Defy  the  Poweb  op  Pbeoaution.— Bbgomtng  a  Sub- 
ject OF  Sebious  Thought  fob  Wall  Stbeet  Men  and 
Business   Men.— The    Volcano    Theoby  of  Eabth- 

QUAKES. — OtHEB    CaUSES    AT   WoBK    PbODUCING    THESE 

Tebbipic   Uphbatals.— Why    Ghableston  was  more 
Seyebely  Shaken  Up  than   New  Tobk. — Why  the 

SOUTHEBN  E^BTHQUAEE  DID  NOT  StBIKE  WaLL  StBEET 

with  Gbeat  Fobce.— Eabthquakes  Likely  to  Become 
THE  Gbeat  Disastebs  of  the'Futube. 

WALL  STBEET  is  the  financial  centre  of  this  country 
as  mnch  so  as  London  is  recognized  to  be  the 
financial  centre  of  the  world  at  the  present  time.  Hence  it 
is  really  the  heart  of  the  nation,  through  which  its  financial 
blood  flows  to  invigorate  and  impart  new  life  to  every  sec- 
tion of  the  land.  Hence,  also,  every  section  and  city  have  an 
influence  on  Wall  Street.  When  the  Chicago  fire  occurred 
it  immediately  created  a  panic.  When  a  calamity  occurs  at 
any  part  of  the  country  the  shock  is  first  felt  in  Wall  Street. 
When  a  large  failure  happens,  such  as  that  of  a  bank  or 
important  railway,  in  any  other  locality,  the  influence  is  at 
once  imparted  to  Wall  Street.  This  is  owing  to  the  fact  that 
Wall  Street  is  the  recognized  and  only  market  for  securities 
of  every  description.  All  sections  are  dependent  upon  it^  be- 
cause it  controls  the  money  market.  It  is  the  great  con- 
necting link  of  the  financial  transactions  of  the  whole 
country.  A  probable  disaster  through  fire,  like  that  which 
occurred  at  Chicago,  is  now  no  longer  a  terror  to  the  Street 
or  to  the  country,  as  was  the  case  for  a  long  time  after  that 
terrible  calamity,  for  the  reason  that  methods  have  been  ad- 
opted for  the  purpose  of  restricting  the  conflagration  and 


BAKTHQUAXB  THBORIBS. 

oonfining  it  within  narrow  limits.  Fires  which  ooear  now 
are  soon  extinguished,  and  it  is  unlikely  that  they  can  ever 
play  such  havoc  as  they  have  done  in  the  past.  The  poe- 
sibility,  with  our  enlarged  experience,  of  taking  precaution 
against  those  various  calamities  has  robbed  fires  of  most  of 
their  former  terrors.  Science  and  machinery  have  famished 
us  with  the  means  of  grappling  with  them. 

But  the  one  great^  and  now   very  alarming  exception, 
which  seems  to  defy  the  power  of  science  and  every  hmnai) 
precaution,  is  an  earthquake.  This  remarkable  phenomenon 
has  awakened  great  interest  and  inspired  terror  in  the  minds 
of  the  people  at  the  present  time,  because  the  exhibition  of 
its  destructive  powers  is  fresh  in  our  memories  on  account 
of  its  terrific  visitation  at  Charleston.    Hence,  many  people 
are  in  great  fear  that  some  other  section  of  the  country 
may  be  stricken  at  any  moment  with  a  similar  overwhelming 
disaster.     It  is  the  insidious  and  uncertain  nature  of  the 
calamity  that  strikes  the  mind  with  awe.     There  is  no  pos- 
sibility of  anticipating  it  or  making  the  least  provision  to 
avoid  its  dreadful  consequences.     The  Charleston  earth- 
quake wiped  out  over  ten  millions  of  property.    It  came, 
like  a  thief  in  the  night,  and  before  morning  the  greater 
portion  of  the  city  was  a  mass  of  ruins.     When  we  reflect 
on  the  extent  of  the  destruction  of  property,  it  is  marrel- 
lous  how  few  people  were  killed— only  about  one  hundred, 
and  oiJy  two  or  three  hundred  were  wounded.     One  of  tho 
greatest  wonders  why  this  calamity  should  have  oocan^ 
in  Charleston  is,  that  part  of  the  city  has  stood  for  nearly 
two  centuries,  and  the  recent  earthquake  has  been  the  flnt 
it  has  experienced.     Another  curious  circumstance  is,  that 
the  disaster  should  have  occurred  on  so  large  a  scale  there, 
as  the  locality  is  so  far  removed  from  the  region  of  ^J 
volcano. 

This  clearly  demonstrates  that  the  old  ^^  volcano"  ^^ 
of  earthquakes  is  thoroughly  exploded,  and  we  must  9e» 
for  causes  and  the  explanations  in  other  quarters.  Altb^'^ 


THINKING  SKRIOUSIfY  ABOUT  EARTHQUAKES.  691 

Wall  street  has  not  been  governed  by  any  known  law  of 
earthquakes,  except  as  regards  theflactuations  of  the  proper*' 
ties  in  a  bear  market  dealt  in  at  the  Exchange,  yet  a  great 
number  of  Wall  street  habitues,  as  well  as  other  business' 
men,  are  beginning  to  think  seriously  on  the  subject  of 
earthquakes,  and  are  attempting  to  penetrate  their  causes. 
Beflecting  upon  the  upheayal — or  rather  the  settling 
down  of  Charleston — ^I  have  come  to  the  conclusion  that 
similar  disasters  may  be  looked  for  in  other  localities^ 
hitherto  not  subject  to  them,  and  considered  by  scientists 
absolutely  free  from  these  phenomena,  at  least  on  so  large 
a  scale.  These  peculiar  disturbances  that  now  make  life  so 
precarious  on  this  planet,  I  attribute  to  the  innumerable 
and  so  largely  increasing  excavations  going  on  in  various 
parts  of  the  country,  in  the  different  mining  operations,  which 
displace  the  underpinning  of  the  surface  and  cause  it  to  sink 
beneath  the  weight  which  it  carries.  Of  all  the  great  min- 
ing industries  which  conspire  to  produce  earthquakes,  I 
think  that  of  oil  plays  the  most  important  part,  and  is  the 
most  treacherous  in  its  operations  beneath  the  surface  of  the 
earth.  The  pumping  of  oil  from  the  bowels  of  the  earth  has 
been  going  on  for  thirty  years  in  this  country  in  several 
districts.  I  believe  it  is  not  too  large  an  estimate  to  state 
that  in  that  time  an  enormous  lake  of  oil  has  been  removed, 
that  would  probably  fill  the  basin  of  Lake  Erie  or  Ontario. 
That  fluid  made  its  way,  probably,  some  of  it  from  long  dis- 
distances  in  subterraneous  rivers  before  reaching  the  place 
where  the  nature  of  the  soil  permitted  it  to  gush  through  a 
shaft  to  the  surface,  as  it  does  in  such  abimdance  in  the  oil 
regions  of  Pennsylvania.  Some  of  those  undercurrents  may 
have  come  from  other  States,  percolating  through  and  disin- 
tegrating the  soil  in  their  passage  for  hundreds  of  miles, 
until  they  found  an  outlet,  on  the  principle  that  all  fluids 
have  a  tendency  to  find  their  level.  There  may  be  a  great 
underground  reservoir  of  this  oil,  which  has  taken  many 
years  to  penetrate  through  the  earth  owing  to  the  tendency 


692  BARTHQUAKE  TH^RIICS. 

stated,  oleaying,  in  its  subterraneous  journey,  fissni^s 
through  ranges  of  mountain^",  and  thus  loosening  the  earth 
and  taking  away  the  support  from  the  surface  wherever  it 
has  penetrated.  The  fluid,  percolating  through  yarious 
strata  of  clay  and  rock,  has  displaced  these  in  its  course. 
Owing  to  this  displacement  there  must,  of  necessity,  be  a 
settling  down  of  the  land  in  the  various  regions  through 
which  the  oil  has  passed,  which  will,  of  course,  differ  in  de- 
gree owing  to  the  density  of  the  rock  or  clay.  If  the  earth 
should  be  of  a-  pulpy,  soft  nature  the  settling  will  be  greater, 
and  when  it  happens  to  be  the  foundation  of  a  town  or  city 
the  catastrophe  will  also  be  greater  in  inverse  proportion  to 
the  degree  of  consistency  of  the  earth.  It  is  presumable, 
therefore,  that  some  of  the  streets  beneath  the  foundation 
of  Charleston  is  of  this  pulpy,  yielding  character,  and  hence 
great  was  the  fall  of  that  city. 

When  New  York  was  visited  by  the  earthquake  in  1884, 
and  at  various  other  times,  there  was  only  a  moderate  shak- 
ing up,  comparatively  speaking.  Why  ?  Because  its  sub- 
structure is  solid  stone  to  an  immense  depth,  even  lower 
than  the  depths  of  the  ocean.  Of  these  subterraneous  rivers 
of  which  I  have  spoken  we  have  many  example^  be- 
sides that  of  oil,  and  also  proofs  that  they  traverse 
great  distances,  as,  for  instance,  in  the  case  of  the  Sara- 
toga Springs.  It  is  clearly  demonstrated  that  in  the 
case  of  these  and  other  springs  the  waters  must  come 
from  yarious  sources,  and  pass  through  many  yarieties 
of  minerals  before  they  arrive  at  their  destination,  and  thus 
receive  the  combination  of  elements  which  impart  to  them 
their  medicinal  qualities.  Then  there  are  numerous  instan- 
ces of  this  remarkable  power  of  water  in  the  case  of  these 
monstrous  land  slides  in  mountainous  regions,  such  as  the 
Alps.  In  the  act  of  attempting  to  find  its  level,  too,  water 
sometimes  exerts  its  influence,  in  breaking  up  rocks,  equal 
in  its  manifestation  to  a  powerful  explosive.  Thus  we  see 
the  great  influences  that  are  at  work  eveiy where  capable  of 


WHY  IT  DID  NOT  STRIKE  WAIJ,  STR«W.  W* 

producing  earthquakes  without  the  ueeessit j  of  resorting  to 
the  volcanic  theory  and  without  the  aid  of  fire. 

In  further  illustration  of  this  theory  of  earthquakes,  l^t 
us  suppose  that  one  of  these  immense  oil  lakes  which  must 
exist  in  the  bowels  of  the  earth  should  be  situated  beneath 
a  mountain,  where  it  has  been  undisturbed  for  ages,  but 
through  some  recent  disturbing  cause--most  likely  that  of 
excavating,  to  which  I  have  referred — it  begins  to  find  an 
outlet  through  various  fissures.  When  once  started,  this 
great  mass  of  fluid  matter  begins  to  go  with  a  rush,  forcing 
innumerable  outlets,  until  the  internal  lake  is  in  a  measure 
exhausted.  This  creates  an  immense  vacuum,  which  deprives 
the  mountain  of  a  large  portion  of  its  support ;  hence  there 
is  a  settling  down  of  several  inches  or  several  feet,  accord- 
ing to  the  nature  and  the  solidity  of  the  support.  It  is 
this  process  of  settling  down  and  the  struggle  of  the  large 
masses  of  fluid  to  force  their  way  out,  that  create  the  rumbling 
noise  resembling  that  of  distant  thunder,  and  which  also 
cause  the  tremulous  and  quivering  motion  felt  at  the  surface 
of  the  earth,  and  still  more  distinctly  in  the  houses, 
and  most  distinctly  of  all  in  the  upper  stories  thereof. 
These  effects  may  be  produced  at  a  great  distance  from  the 
original  cause  of  action,  varying,  of  course,  in  their 
intensity  according  to  that  distance.  Several  of  these  effects 
have  been  distinctly  experienced  in  Charleston  since  the 
first  great  catastrophe,  but  showing  that  the  cause  is  weaker 
and  further  removed  from  the  scene  of  the  disaster  than  it 
was  during  the  first  fearful  shock. 

The  Charleston  earthquake  did  not  strike  Wall  Street  with 
very  great  force.  The  very  fact  of  its  weak  effect  upon  the 
great  financial  centre  of  gravity  created  about  as  much  sur- 
prise in  the  Street  as  the  frightful  shock  itself  did  in  a  very 
different  and  opposite  manner  upon  the  people  of  Charleston. 
The  reason  that  the  great  catastrophe  which  overwhelmed 
Charleston  had  so  little  effect  on  Wall  Street  was  chiefly 
owing  to  the  fact  that  comparatively  little  loss  fell  upon  the 


694  BAJ^THQUAKK  TH^RIES. 

corporations  or  the  people  connected  with  Wall  Street 
interests.  The  loss  of  ten  millions  fell  mainly  upon  the 
people  of  the  doomed  city  alone.  Only  a  small  portion  fell 
upon  people  located  elsewhere  either  in  the  North  or  the 
South.  Had  such  a  disaster  happened  in  any  of  the  large 
cities  North,  East  or  West,  owing  to  their  intertwining  con- 
nections with  Wall  Street,  a  panic  would  have  been  the 
result  not  unlike  the  one  which  followed  the  Chicago  fire« 

Earthquakes  are  likely  to  become  the  great  disasters  of 
the  future  most  to  be  dreaded.  Our  population  now  com- 
prises sixty  millions,  which,  at  the  present  rate  of  increase^ 
will  soon  reach  one  hundred  millions.  Among  these  is  a 
large  proportion  of  go-ahead,  driying  men,  who  are  constantly 
diving  into  the  bowels  of  the  earth  to  dig  up  the  vast  trea- 
sures which  are  there  concealed.  Through  this  laudable 
enterprise  the  underpinning  of  the  surface  of  our  globe  is 
being  constantly  disturbed ;  and  though  it  is  far  from  a  con- 
soling reflection,  the  time  may  come,  and  may  not  be  far 
distant,  when  such  calamities  as  that  of  Charleston  may  be 
as  conmion  as  railroad  accidents  are  now. 


OHAPTEB    LIV. 

AUGUST  BELMONT. 

ThB  AxEBICAK    BePBESENTATIVB    07   THB   BOTHBOHILDfi.^ 

Bboihs  Lifb  in  the  Bothsoohilds'  House  in  Fbank- 

VOBT. — CiONSnL  OeNEBAL  to  AuSTBU  and  MmiBTEB  TO 

THE  Haoue.— A  Oreat  Finanoieb  and  a  Connoibseub 

IN  AbT. 

AUGUST  BELMONT  has  achieved  the  highest  credit  of 
any  banker  in  the  United  States.  His  bills  are  always 
in  demand  and  command  a  little  more  than  those  of  any  one 
else.  He  came  to  New  York  comparatively  poor,  but  is  now 
worth  millions.  As  a  representative  of  the  Bothschilds  in 
this  coontry  he  has  for  many  years  held  a  high  position  in 
the  financial  world.  He  has  managed  the  business  of  that 
historic  honse  with  prudence  and  exceptional  acnteness  and 
sagacity.  Contrast  his  success  in  this  country  with  the 
experience  of  Americans  abroad.  George  Peabody,  and 
J.  8.  Morgan,  the  successor  of  that  philanthropist,  may  seem 
to  be  exceptions  to  the  rule,  but  they  did  not  win  such  social 
and  business  success  as  has  been  achieved  by  Mr.  Belmont 
in  this  country,  and  the  fact  remains  that  no  American  could 
have  been  so  successful  abroad  as  he  has  been  in  the  United 
States.  Europe  does  not  afford  the  opportunities  that  so 
often  arise  here.  This  is  the  country  of  great  and  frequent 
opportunities ;  there  is  a  large  and  inviting  field  for  enter- 
prise and  business  skill,  although,  of  course,  all  cannot  win 
such  a  position  in  the  financial  world  as  that  occupied  by 
Mr.  Belmont,  who  is  reckoned  among  the  wealthiest  as  well 
as  the  most  honored  of  America's  adopted  citizens. 

He  was  bom  in  the  Bhenish  Palatinate  sixty-eight  years 
ago.  His  father  was  a  man  in  well-to-do  circumstances,  who 
sent  him,  when  he  was  thirteen  years  old,  to  become  an 
apprenticed  clerk  to  the  Bothschilds  in  their  Frankfort 


696  AUGUST  BniMONT. 

house.  Aocording  to  the  German  custom,  he  received  no 
pay ;  he  was  compensated  by  the  opportunity  of  learning 
the  banking  business.  He  made  rapid  progress.  Before  he 
was  twenty-one  he  was  selected  to  accompany  one  of  the 
Bothschilds  to  Italy  and  Prance  as  his  secretary.  In  1837 
the  famous  house,  recognizing  the  promising  field  in 'this 
country  for  profitable  investments,  sent  young  Belmont  to 
New  York  as  their  agent,  a  position  which  he  held  till  1868, 
when  he  became  their  American  correspondent  and  general 
representative,  and  this  responsible  post  he  has  held  ever 
since.  In  1844  he  was  appointed  Gonsul-Oeneral  for  Aus* 
tria»  and  held  the  position  for  five  years,  when  he  relinquiriied 
it  because  of  his  personal  friendship  for  Louis  Eossvth  aad 
his  sympathy  with  Hxmgary  in  the  quarrel  with  Austria. 
In  1849  Mr.  Belmont  married  the  niece  of  Oommodore  Perry, 
the  hero  of  Lake  Erie,  a  beautiful  and  accomplished  la^, 
who  did  much  to  strengthen  his  social  position.  In  1863 
he  was  appointed  Minister  to  the  Hague  by  President  Pieroei 
and  served  four  years.  He  has  always  been  a  staundi 
Democrat,  and  was  for  several  years  chairman  of  the  Demo- 
oratic  National  Committee.  He  has  generally  refused  to 
accept  public  office,  but  his  eldest  son,  Perry,  hsB  served 
several  terms  in  Congress. 

Mr.  Belmont  is  under  the  medium  height,  rather  stout, 
with  iron-gray  side  whiskers,  round  German  features  and 
keen  dark  eyes,  and  among  the  strong  chaaracteristicB  of  the 
man  is  his  marked  chivalrio  courtesy  and  knightly  courage; 
As  a  financier  he  has  few  equals  and  no  superior,  and  to^his 
politic  and  conservative  management,  as  well  as  his  foresight 
and  intimate  knowledge  of  a&irs,  is  due  the  AoMrioan  ^ 
prestige  and  success  of  the  Bothschilds.  Mr.  Belmont's 
house  on  Fifth  Avenue,  with  its  splendid  art  treasuires,  is 
worth  a  large  fortune  in  itself.  He  is  a  connoisseur  in  works 
of  art,  and  has  one  of  the  finest  private  collections  of  pio*^ 
tnres  in  the  world.  For  many  years  he  has  also  had  ia 
princely  residence  at  Newport  and  a  stock  f atm  At  Babyloa^ 


ONH  OF  TBH  FOUNDBKS  OF  TH^  HAHHATTAN  CZ«UB.  597 

Long  Island.  Though  not,  striotly  speaking,  a  olub  man, 
he  was  one  of  the  founders  of  the  Manhattan  Club.  His 
sQocessfol  career  is  an  illostration  of  the  fact  that  this 
country  affords  a  fine  opportunity  for  the  intelligence,  thrift 
and  industry  not  only  of  native  Americans  bat  of  thft 
Bepublio's  adopted  citizens. 


OHAPTEB    LV. 

THE  SOCIALIST  OBJECTIONS  TO  THE  PRESENT  ORDER 
OF  SOCIETY  EXAMINED. 

Ikobbasb  of  Population  and  the  Obowinq  Pbbssube  upon 
THE  Means  of  Subsistence.— Education  and  Mobal 
Impboyement  the  Tbue  Bemedy  fob  Existing  ob 
Thbeatened  Eyils.— Ebbobs  of  Communism  and  So- 
cialism;— How  Socialistic  Leadebs  and  Philosophebs 
.Becognize  the  Tbuth.— Gbowth  of  Population  Dobs 
NOT  Mean  Povbbty. 

MB.  Mill  sajs :  ^^  It  is  impossible  to  deny  that  the  consid- 
erations brought  to  notice  in  the  preceding  chapter  make 
out  a  frightful  case  either  against  the  existing  order  of  society 
or  against  the  position  of  man  himself  in  this  world*"  How 
mneh  of  the  eyils  should  be  referred  to  the  one,  and  how  much 
to  the  other,  is  the  principal  theoretic  question  which  has  to 
be  resolved.  But  the  strongest  case  is  susceptible  of  ex- 
aggeration ;  and  it  will  be  eyident  to  many  readers,  eyen 
from  the  passages  I  have  quoted,  that  such  exaggeration  is 
not  wanting  in  the  representations  of  the  ablest  and  most 
candid  Socialists.  Though  much  of  their  allegations  is  un- 
answerable, not  a  little  is  the  result  of  errors  in  political 
economy ;  by  which,  let  me  say  once  for  all,  I  do  not  mean 
the  rejection  of  any  practical  rules  of  policy  which  have 
been  laid  down  by  political  economists—I  mean  ignorance 
of  economic  facts,  and  of  the  causes  by  which  the  economic 
phenomena  of  society  as  it  is  are  actually  determined. 

In  the  first  place,  it  is  unhappily  true  that  the  wages  of 
ordinary  labor,  in  all  the  countries  of  Europe,  are  wretched- 
ly insufficient  to  supply  the  physical  and  moral  necessities 
of  the  population  in  any  tolerable  measure.  But,  when  it  is 
further  alleged  that  even  this  insufficient  remuneration  has 
a  tendency  to  diminish ;   that  there  is,  in  the  words  of  M. 


600    TH«  SOCIAU8T  OBJTOTIONS  TO  PRM^NT  SOCIWT. 

Lonis  Blanc,  wfie  basse  eantinue  des  9alaire%  (a  continual  de- 
cline of  wages) ;  the  assertion  is  in  opposition  to  all  aoca- 
rate  infonnation,  and  to  many  notorious  facts.  It  has  yet 
to  be  proTen  that  there  is  anj  country  in  the  civilized  world 
where  the  ordinary  wages  of  labor,  estimated  either  in 
money  or  in  articles  of  consumption,  are  declining ;  while 
in  many  they  are,  on  the  whole,  on  the  increase — and  an 
increase  which  is  becoming,  not  slower,  but  more  rapid 
There  are,  occasionally,  branches  of  industry  which  are 
being  gradually  superseded  by  something  else,  and  in  those, 
until  production  accommodates  itself  to  demand,  wages  are 
depressed ;  which  is  an  evil,  but  a  temporary  one,  and  would 
admit  of  great  alleviation  even  in  the  present  system  of  so- 
cial economy.  A  diminution  thus  produced  of  the  reward 
of  labor  in  some  particular  employment  is  the  effect  and  the 
evidence  of  increased  remuneration,  or  of  a  new  source  of 
remuneration,  in  some  other ;  the  total  and  the  avenge  re- 
muneration being  undiminished,  or  even  increased.  To 
make  out  an  appearance  of  diminution  in  the  rate  of  wages 
in  any  leading  branch  of  industry,  it  is  always  found  aeoes- 
sary  to  compare  some  month  or  year  of  special  and  tempo- 
rary depression  at  the  present  time,  with  the  average  late, 
or  even  some  exceptionally  high  rate,  at  an  earlier  tune. 
The  vicissitudes  are  no  doubt  a  great  evil,  but  they  were  as 
frequent  and  as  severe  in  their  former  periods  of  economical 
history  as  now.  The  greater  scale  of  the  transactions,  and 
the  greater  number  of  persons  involved  in  each  fluctoation, 
may  make  the  change  appear  greater,  but  though  a  large 
population  affords  more  sufferers,  the  evil  does  not  weigh 
heavier  on  each  of  them  individually.  There  is  much  evi- 
dence of  improvement,  and  none  that  is  at  all  trustworthy, 
of  deterioration,  in  the  mode  of  living  of  the  laboring  pop- 
ulation of  the  countries  of  Europe.  When  there  is  any  ap- 
pearance to  the  contrary  it  is  local  or  partial,  and  can 
always  be  traced  either  to  the  pressure  of  some  tempoiaiy 
calamity,  or  to  some  bad  law  or  unwise  act  of  govenuneot 


ANAl^YZINa  COMMUNISM.  601 

wUch  admits  of  beiDg  corrected,  while  the  penmanent  canses 
all  operate  in  the  direction  of  improvement. 

M.  Lonis  Blanc,  therefore,  while  showing  himself  much 
more  enlightend  than  the  old  school  of  leyellers  and  demo- 
erats — ^inasmnch  as  he  recognizes  the  connection  between  low 
wages  and  the  over-rapid  increase  of  population— appears 
to  have  fallen  into  the  same  error  which  was  at  first  com- 
mitted by  Malthns  and  his  followers,  that  of  supposing  that 
because  population  has  a  greater  power  of  increase  than  sub- 
sistence, its  pressure  upon  subsistence  must  be  always  grow- 
ing more  severe.  The  difference  is  that  the  early  Malthu- 
sians  thought  this  an  irrepressible  tendency,  while  M.  Louis 
Blanc  thinks  that  it  can  be  repressed,  but  only  through  a  sys- 
tem of  Communism.  It  is  a  great  point  gained  for  truth 
when  it  is  recognized  that  the  tendency  to  over-popula- 
tion is  a  fact  which  Communism,  as  well  as  the  existing 
order  of  society,  would  have  to  deal  with.  .  And  it  is  en. 
couraging  that  this  necessity  is  admitted  by  the  more 
considerable  chiefs  of  all  existing  schools  of  Socialism. 
Owen^  and  Fourier,  as  well  as  M.  Louis  Blanc,  admitted 
it,  and  claimed  for  their  respective  systems  a  pre-eminent 
power  of  dealing  with  this  difficulty.  However  this  may  be, 
eiq>erience  shows  that  in  the  existing  state  of  society  the 
pressure  of  population  on  subsistence,  which  is  the  princi- 
pal cause  of  low  wages,  though  a  great  is  not  an  increasing 
evil ;  on  the  contrary,  the  progress  of  all  that  is  called  civil- 
ization has  a  tendency  to  diminish  it,  parUy  by  the  more 
rapid  increase  of  the  means  of  employing  and  maintaining 
labor,  partly  by  the  increased  facilities  opened  to  labor  for 
transporting  iteelf  to  new  countries  and  unoccupied  fields  of 
employment,  and  partly  by  a  general  improvement  in  the 
intelligence  and  prudence  of  the  population.  This  progress, 
no  doubt,  is  slow ;  but  it  is  much  that  such  progress  should 
take  place  at  all,  while  we  are  still  only  in  the  first  stage  of 
that  public  movement  for  the  education  of  the  whole  people 
whicht  when  more  advanced,  must  add  greatiy  to  the  force 


608     '    I      SOCIAUST  OBjHCnOKS  TO  PRBSEirr  S0CIBT7. 

of  the  two  catises  of  improvement  specified  above.  It  is* 
of  ootiTse,  open  to  discussion  what  f  onn  of  society  has  the 
greatest  power  of  dealing  saccessfolly  with  the  preflsoie  of 
population  on  subsistence,  and  on  this  question  there  is 
much  to  be  said  for  Socialism ;  what  was  long  thoa^t  to 
be  its  weakest  point  will,  perhaps,  prove  to  be  one  of  its 
strongest  But  it  has  no  just  claim  to  be  considered  as  the 
sole  means  of  preventing  the  general  and  growing  degrad- 
ation of  the  mass  of  mankind  through  the  peculiar  tendency 
of  poverty  to  produce  overi>opulation.  Society  as  at 
present  constituted  is  not  descending  into  that  abyss,  bat 
gradually,  though  slowly,  rising  out  of  it,  and  this  improve- 
ment is  likely  to  be  progressive  if  bad  laws  do  not  interfere 
withiL 


CHAPTEB    LVI. 

STOCK  EXCHANGE  CELEBRITIES. 

How  Wall  Street  Bakeebs'  Nebybs  abb  Tried.— Fine 
HuMOB,  Jooulab  Dispositions^  anb  Soholably  Taste 
OF  Opebatobs.— Geoege  Gould  as  a  Futxjbe  Fikanoial 
PowEB.— Amebioan  Nobility  Compabed  with  Eubopean 
Abistocbaoy. — How  the  Ibish  can  Assist  to  Puboe 
Gbeat  Bbitain  of  heb  Bilious  Incubus  of  Nobiuty. — 
The  Natubal  Nobility  of  oub  own  C!ountby,  and 
THEiB  Destiny. 

AMONG  th^  well-known  members  of  the  Stock  Exchange 
not  elsiBwhere  mentioned  are  James  D.  Smith,  who  is 
now  in  his  second  term  as  President,  and  who  is  also  Presi- 
dent of  the  New  York  and  Exchange  clubs  and  Commodore 
of  the  New  York  Yacht  Club,  a  man  of  a  genial  nature  and 
eyeryone's  friend ;  Bray  ton  Ives,  twice  President  of  the  Stock 
Exchange,  the  colonel  of  a  cavalry  regiment  under  General 
Sheridan  in  the  civil  war,  and  later  a  Brevet-Brigadier 
General ;  a  graduate  of  Yale,  and  a  member  of  the  Union 
League,  Century,  Athletic  and  University  clubs ;  Charles 
Johnes,  the  Eang  of  board  room  traders,  once  a  clerk  for 
Henry  Clews  &  Co.,  now  worth  a  million,  and  a  Prince 
of  good  fellows,  as  bright  and  quick  as  he  is  popular ;  Louis 
Bell,  a  daring  and  successful  operator,  a  son  of  the  well- 
known  Isaac  Bell,  and  who  was  at  one  time  a  clerk  with 
Brown  Brothers  &  Co.,  the  bankers  ;  John  Earkner,  another 
plucky  operator,  keen  in  forecasting  the  market,  and 
tenacious  of  his  opinions,  whether  contrary  to  generally 
accepted  views  or  not;  Eugene  Bogert,  Wm.  B.  Wadsworth, 
William  Henriques  and  James  Baymond,  also  successful 
traders ;  John  Slayback,  Edward  Brandon,  James  Mitchell, 
Yice-Chairman  Alexander  Henriques,  ex-President  J.  Ed- 
ward Simmons,   Secretary  Geo.  W.  Ely,  Donald  Mackay, 


004  STOCK   KXCHANG]^  CSI«HBRITIK. 

Thomas  B.  Mnsgrave,  Frank  Work,  the  WormserSy  B.  P. 
Flower,  John  T.  Lester,  Frank  Savin,  Charles  Schwartz  and 
A.  E.  BatemaD,  are  all  worthy  of  special  notice.  Some  of  the 
foregoing  have  a  large  following,  more  particularly  the  large 
room  traders,  like  Messrs.  Johnes,  Bell,  Bogert,  Kirknerand 
Wadsworth.  There  are  eleven  hundred  members  of  the  Stock 
Exchange,  and  it  is  seldom  that  a  black  sheep  is  discovered 
among  them.  There  are  some  lambs,  perhaps,  who  receive  a 
spring  and  fall  shearing,  but  if  they  have  pluck  the  wool 
comes  back  again,  and  they  push  up  the  thorny  and  brambly 
path  to  wealth,  leaving,  it  is  true,  a  little  fleece  here  and  there 
in  the  struggle,  but  generally  ^^  getting  there,"  nevertheless. 
It  is,  however,  a  mistake  to  suppose  that  all  the  members  of 
the  Stock  Exchange  are  wealthy.  They  have  their  ups  and 
downs  like  everybody  else,  and  some  are  in  very  moderate 
circumstances. 

The  strain  on  a  Wall  Street  broker  is  so  great,  the  ten* 
sion  of  the  nerves,  in  one  of  the  most  trying  vocations  known 
in  the  business  world,  is  so  severe,  that  joking  and  in  fact 
boyish  pranks  constitute  a  safety  valve  for  the  relief  of 
brains  that  would  otherwise  become  disordered.  Without  the 
relief  of  joking  and  skylarking.  Nature's  own  remedy  for  the 
burdened  mind  in  such  circumstances — ^many  a  stock  broker 
would  go  mad.     ^*  There  is  nothing  so  good  as  a  laug^," 
says  the  song,  and  this  expresses  a  profounder  truth  than 
is  generally  suspected.    Charles  Darwin  relaxed  the  severe 
mental  strain  induced  by  his  inquiries  into  occult  questions 
of  biological  science  by  reading  the  humorous  extravagances 
of  Mark  Twain,  and  the  greatest  thinkers,  men  who  are  far 
out  on  the  cold  frontiers  of  thought,  seeking,  as  intellectoal 
pioneers,  the  solution  of  the  fundamental  problem  of  exist- 
ence, are  proverbially  jocular  in  their  hours  of  relaxation* 
Nature  herself  may  be  said  to  laugh,  and  why  not  orerbor- 
dened  business  men  ?     The  pranks  at  Christmas  on  the 
Stock  Exchange,  the  sound  of  hand  organs  in  the  Board 
Boom,  the  smashing  of    hats,  pushing  and  jostling;  ^^ 


PRANKS  AND  AMUSKMKNTS  OF   MEMBERS.  605 

blowing  of  tin  horns,  the  waltzes  and  landers,  the  walking 
matches,  wrestling  and  sparring — these  are  only  the  natural 
reaction  through  the  safety  yalye  of  humor  which  tend  to 
relieye  undue  tension  and  keep  the  spirits  clear  and  fresh. 
There  is  more  or  less  skylarking  on  all  dull  days,  and  the 
effect  is  mental  invigoration.  It  is  a  mistake  to  suppose  that 
only  the  younger  men  participate  in  these  amusements^ 
The  older  members  are  the  most  incorrigibla  When  a 
new  member,  for  instance,  is  receiving  his  vigorous  initia- 
tion and  being  hustled  here  and  there  like  a  chip  in  raging 
waters,  his  silk  hat  skimming  along  the  floor,  the  foot  ball 
of  hundreds  of  feet,  his  collar  at  right  angles  with  his  person 
and  his  cdat  tails  flying  like  a  Dutch  lugger  under  full  sail, 
a  group  of  older  members  may  look  on  with  apparent  disap- 
proval, but  the  moment  the  newcomer  is  driven  in  their 
direction  he  finds  that  his  last  state  is  worse  than  the  first- 
The  veterans  give  him  a  reception  that  makes  him  look 
wilder  and  gasp  more  than  ever,  and  he  is  glad  to  escape 
from  these  gray  bearded  evil-doers.  The  horse  play  is 
rough  but  it  does  no  harm,  and  the  new  member,  after  buy- 
ing a  new  hat,  is  ready  to  '^get  square"  on  the  next  unfortu- 
nate wight  to  be  initiated. 

As  to  the  Stock  Exchange  as  a  great  financial  institution, 
none  stands  higher  in  the  world.  Its  transactions  involve 
hundreds  of  millions  in  a  year,  and  nowhere  is  there  more 
regard  for  strict  equity  in  business.  Its  members  are  as 
exemplary  a  class  of  business  men  as  can  be  found  any- 
where. Its  methods  are  strictly  upright,  and  a  black  sheep 
finds  no  mercy.  Wealth  will  not  necessarily  procure  a 
membership  in  this  great  financial  emporium.  The  appli- 
cant must  be  a  person  of  good  repute.  It  numbers  men  of 
great  wealth,  men  of  a  high  order  of  talent,  men  of  scholarly 
tastes,  connoisseurs  in  art^  students  of  science,  literature  and 
philosophy,  and  men  capable  of  standing  at  the  helm  and 
giving  direction  to  vast  enterprises  in  the  domain  of  finance 
and  commerce.    There  is  not  a  more  intelligent  body  of 


J 


606  STOCK  HXCHANGB  CBI«ABRlTl])S. 

men  in  the  world.  The  yery  natoie  of  their  bosineas  oom« 
pelfl  them  to  stndy  great  public  qnefitions,  and  many  of  the 
members  are  men  of  a  distinctly  statesmanlike  caste  of 
mind,  of  whom  the  Stock  Exchange  may  well  be  proud, 
while  they  themselyes  derive  no  small  distinction  from  being 
identified  with  so  illnstrions  and  honorable  a  body. 

Washihgton  K  Oohkob. 

Washington  E.  Oonnor  was  bom  in  New  York  city  about 
87  years  ago.  He  first  appeared  in  Wall  Street  as  a  clerk 
for  WsL  Belden  &  Co.,  a  firm  in  which  the  redonbtable  Jim 
Eisk  was  once  a  partner.  Black  Friday  of  September,  1869, 
when  a  financial  hurricane  whistled  through  Wall  Street, 
brought  young  Connor  to  the  front,  and  he  has  oyer  since 
remained  there.  He  was  long  the  able  lieutenant  of  Mr. 
Gould  in  large  speculations.  He  is  a  natural  leader  in  spec- 
ulation— cool,  quick  and  adroii  From  time  to  time  he  has 
been  a  director  in  the  Western  Union,  Union  Pacific,  Mis- 
souri Pacific,  Missouri,  ELansas  &  Texas,  £ansas  Pacific  and 
Wabash  Companies.  He  was  president  of  the  Central  Ckm- 
etruddon  Company,  which  established  the  lines  of  the 
American  Union  Telegraph  Company.  He  was  a  director 
in  the  famous  Credit  Mobilier  Company,  the  Texas  A  Col- 
orado Improyement  Company,  the  Metropolitan  and  New 
York  Eleyated  roads  and  the  New  Jersey  Southern.  He  is 
a  member  of  the  Union  League  and  the  Lotus  dubs,  and 
especially  enjoys  the  society  of  artists,  writers  and  other 
persons  of  talent  and  cultiyation.  He  has  a  good  library, 
and  is  of  a  somewhat  studious  turn  of  mind.  As  a  youth  he 
studied  at  the  College  of  the  City  of  New  York. 

A  FuTUBB  Financial  Powbb. 

(George  J.  Gould  will  be  one  of  the  few  yery  rich  men  in 
this  country,  as  he  will,  of  course,  be  his  father's  successor. 
He  possesses  good  abilities,  has  an  attractiye  presence,  and 


OBO&GA  J.  G0UX«D'S  PROBABUt  PDTURK.      607 

ii  modeet  and  retiring  in  his  manners.  He  has,  ihns  far, 
made  an  exoellent  record,  and  the  Stock  Exchange  was  glad 
to  admit  him  to  membership.  He  is  connected  with  all  of 
his  father's  roads,  and  is  gradually  relieving  him  of  much  of 
the  onerous  work  connected  therewith.  If  anything  should 
happen  to  Jay  Gbuld,  George  Gould  would  stand  in  tiie  same 
financial  relation  to  his  afiEeiirs  that  Wm  H.  Yanderbilt  sus- 
tained to  his  father,  the  Commodore,  and,  like  him,  would  be 
found  equal  to  the  new  honors  and  responsibilities  deyoly- 
ing  upon  him.  This  reasonable  expectation  should  dispel 
any  apprehension  of  a  financial  shock  in  the  eyent  of  ifay 
Gould's  demise. 

George  Gbuld  is  bright  and  agreeable,  and  a  good  hus- 
band. If  Jay  Gould  has  made  enemies,  that  is  no  reason 
why  his  son  should  not  be  popular.  It  is  proyerbial 
that  the  male  descendants  of  a  family  are  more  akin  to 
the  side  of  the  mother  than  to  that  of  the  father,  and  as 
Mrs.  Jay  Gould  has  always  been  recognized  as  a  most 
exemplary  wife  and  mother,  she  may  rightfully  be  regarded 
as  the  equal  of  any  woman  in  New  York,  and  one  to  be  re- 
spected and  honored  accordingly  by  those  whom  we  ought 
to  take  as  social  exemplars.  There  should  be  no  oiher 
standard  of  social  test  than  that  of  merit ;  not  judging  indi- 
viduals by  what  they  were,  but  by  what  they  are  to-day ;  not 
judging  by  the  ridiculous  test  of  ancestry — ^a  criterion  which 
would  upset  some  of  our  social  demi-gods—but  by  the  real 
worth  of  the.living  man  or  woman.  Suppose,  for  instance, 
the  young  Vanderbilts,  who  rank  high  in  society,  and  are 
splendid  specimens  of  nature's  noblemen,  should  be  meas- 
ured by  the  standard  of  the  old  Oommodore  when  he  was  a 
boatman  on  Staten  Island.  Everybody  would  recognize 
such  a  test  of  fitness  as  to  the  last  degree  absurd.  In  the 
United  States  nature's  nobility  is  at  the  front,  as  against  the 
parchment  nobility  of  England  and.  the  Oontinent.  The 
penoneUe  of  the  English  nobility  makes  a  sorry  showing 
beside  that  of  young  George  Gould,  the  young  Vanderbilts, 
and  others  of  our  wealthy  Americans. 


60S  STOCK  KXCHANOE  C:9I^BRI1MHS. 

The  modem  nobility  spring  from  Bacoees  in  boBmess. 
Peace  has  its  lictories  in  the  formation  of  oharacter  greater 
than  those  of  war;  and  peaoe  and  republicaaism  will 
develop  the  fntore  greatness  of  the  human  f 4mil j,  and  not 
pretentions  yet  effete  monarchies,  of  which  mankind  is 
heartily  sick.  Many  of  the  so-called  noblemen  of  to-day 
shine  only  by  a  faint  reflected  glimmer  from  the  armor  of 
medisBval  ancestors ;  or  their  ancestry  may  be  mnch  more 
recent,  and  steal  slyly  off  in  the  gloom  of  forgotten  ciimes 
to  the  prison  or  the  gallows ;  or  th^r  patent  of  nolHlity 
may  be  a  thing  of  yesterday^  a  child's  bauble  solemnly  dis- 
played by  addle-pated  dotards,  ridiculous  even  to  flie  im- 
thinking.  The  English  nobility  is  coming  to  the  snctien 
block.  Not  a  few  in  former  times  laid  their  heads  there 
for  treason,  but  now  it  is  articles  of  more  value,  namely,  the 
curious,  the  antiquities,  the  bric^brac,  the  works  of  art, 
the  rare  forniture,  which  comes  to  the  block,  and  they  are 
purchased  by  the  new  nobility  raised  up  by  success  in 
finance  and  commerce.  There  is  very  little  in  Emrope  which 
is  not  obtainable  at  a  price.  Titles  in  Ei^land  may  yet  be 
sold  as  they  have  been  in  Italy.  Who  cares  for  a  title  of 
Italian  or  French  nobility  ?  To  this  low  estate  must  Eng- 
lish titles  come  at  last.  It  is  manrellous  that  they  have 
endured  so  many  centuries  after  the  downfall  of  the  feudal 
system  that  originally  gave  them  birth. 

Why  is  it  that  Gladstone  has  always  refused  a  title? 

One  reason  is  that  at  his  birth  nature  gave  him  a  higher 
title  to  nobility  than  parchment  can  ever  confer. 

Another  is  that  he  did  not  care  to  be  ennobled  and  then 
wrapped,  as  a  titled  mummy,  in  the  sweet490^ited  cerements 
of  political  death,  to  be  buried  in  that  Egyptian  tomb  of 
political  extinction,  the  Hoose  of  Lords.  And  to-day  he  is 
a  Colossus  among  statesmen,  whose  grand  figure  will  loom 
up  in  history  as  one  of  the  foremost  men  of  the  nineteenth 
centory,  a  Titan  dwarfing  the  proudest  of  a  senile  noUIi^* 
And  yet  he  is  simply  a  great  Commoner. 


THK  BILIOUS  NOBILmr  01^  ENGLAND.  603 

If  the  Lriah  wish  to  assist  nature  in  purging  Great  Britain 
of  her  bilious  inomnbns  of  nobility,  they  shonld  recognize 
the  fact  that  ridicule  is  a  good  medicine.  The  Irish  are 
proverbially  prolific.  Let  them  make  a  point  of  christen- 
ing the  rising  generation  with  titled  names.  Then  there 
would  be  myriads  bearing  the  name  of  Duke  0'Beilly,Earl 
McOarty,  Marquis  O'Brien,  Baron  SuUiyan,  Sir  Timothy 
Finnegan,  Lord  McSwynny,  and  so  on.  The  objection  to 
this  plan,  however,  is  that  it  would  brand  thousands  of  in- 
nocent and  helpless  children  of  worthy  parents  with  titles 
which  have  become  contemptible  to  all  right-thinking  per- 
sons as  the  badges  of  imbecility,  mediocrity,  or  dishonor. 
This  is  a  rather  lengthy  digression  after  beginning  with 
one  of  the  natural  nobility  which  we  have  in  this  country, 
namely,  the  nobility  founded  solely  on  merits  but  the  case 
of  a  young  man  like  George  Gould  naturally  suggests  con- 
trasts. He  is  destined  to  take  a  commanding  position  in 
the  world  of  finance  in  future  years,  and  it  is  gratifying  to 
know  that  he  is  a  man  of  high  character,  excellent  capacity, 
and  of  great  promise.  There  is  usually  a  disposition  to 
criticise  the  sons  of  very  wealthy  men,  due  to  that  envy  to 
which  poor  human  nature  is  so  prone,  but  the  fact  in  this 
oase  is  indisputable  that  young  Gould  is  held  in  high  esteem 
wherever  he  is  known.  He  is  a  graduate  of  Harvard  and 
Columbia,  and  a  member  of  the  Manhattan  and  other  dubs, 
and  he  is,  in  the  business  world,  where  he  is  most  powerful, 
simply  a  reserved  and*  quiet  associate,  always  controlling 
his  lines,  but  never  interfering  in  a  strident  way  with  those 
who  are  working  for  them. 


CHAPTER  Lm 

A  LOOK  INTO  THE  FUTURE. 

What  wb  abb— What  wb  abb  Pbepabing  tob— What  ym 
ABB  Destined  to  do  and  to  Beoomb— Wb  abb  Entbb- 
iNG  on  an  Eba  of  SEEMiNa  iMPOBSiBiLrnBa-— Ybt  thb 
Inoongeivablb  will  bb  Bealizbd. 

IN  reviewing  fhe  past,  I  am  strock  with  the  enoimous 
growth  of  New  York  as  a  city,  New  York  as  a  State, 
and  the  United  States  as  a  Nation.  The  fact  is  that  we 
hustle  through  the  business  world  so  fast  (and  this  is  espe- 
cially applicable  to  Wall  Street),  that  we  do  not  realize  how 
rapidly  we  are  going.  To  any  one  who  is  familiar  with  the 
appearance  of  the  down  town  or  business  part  of  the  city, 
as  it  was  twenty  years  ago,  ten  years  ago,  or  eyen  eight 
years  ago^  the  difference  to-day  will  give  some  intimation  of 
the  changes  which  are  going  on  around  us,  and  are  merely 
features  of  development.  Why,  even  ten  years  ago,  the  old 
Equitable  Building  was  a  stracture  to  which  attention  was. 
attracted  because  of  its  greatness  and  its  superiority  over 
any  other  building  in  New  York  city — its  height,  its  width, 
its  breadth,  its  depth,  its  elevators,  its  beauty  of  arrange- 
ment inside  and  its  artistic  aspect  outside.  UUllions  of  dol- 
lars have  been  spent  in  the  past  few  months  in  making  this 
one  building  about  four  times  as  large  as  the  original  struc- 
ture which  brought  pride  to  the  hearts  of  New  Yorkers,  and 
surprised  and  starUed  their  friends  from  the  country. 
To-day  it  is  one  of  the  greatest  buildings  on  the  Island,  and 
even  rivals  the  State  Capitol,  which  is  supposed  to  be  the 
pride  of  the  people  of  the  Empire  State.  This  is  only  one 
instance.  All  along  lower  Broadway,  the  great  business 
Iffteiy  of  the  country,  four-story  and  lELve-story  buildings 


612  A  I/>OK  INTO  TH]E(  PUTUim. 

liave  been  torn  down,  and  nine-story  buildings  put  up  in 
their  place.  Four  and  five  buildings  have  been  dog  away 
and  a  single  stmctare  put  up  in  their  place^  and  in  some  of 
the  buildings — indeed  in  scores  of  them — ^within  a  few 
blocks  of  the  Stock  Exchange,  there  are  whole  communitiee 
of  people  who  are  performing  life's  work  in  their  own  good 
way,  rather  than  interfering  with  their  neighbors  or  them- 
selves, and  wbo  know  nothing  of  what  goes  on  around  and 
about  them,  and  care  less.  Small  armies  of  retainers  and 
servants,  and  the  most  perfect  mechanism,  are  needed  to  en- 
able these  communities  to  carry  on  their  work  with  dispatch 
and  convenience.  That  is  to  say,  where  offices  are  rented  in 
the  eighth  and  ninth  stories  of  a  building,  the  occupants 
expect  to  be  shot  up  to  them,  and  down  from  them,  with  no 
trouble  to  themselves,  and  no  weariness  of  limbs — and  they 
are.  This  must  be  done,  too,  without  loss  of  tdme— and  it  is. 
AU  the  attendant  arrangements  must  have  the  elements  of 
luxuriousness  and  comfort — and  they.  do. 

This  is  a  small  feature  of  our  development,  however.  So 
far  as  the  development  of  the  city  is  concerned,  this  appeazs 
to  be  an  era  of  bridges,  and  Sapid  Transit  Elevated  roads. 
So  far  as  the  development  of  inter-State  communication  is 
concerned  this  is  an  era  of  Express  Trains,  which,  althonj^ 
they  have  reached  a  speed  of  a  mile  a  minute  in  oertaiD 
perfected  sections  of  the  roads,  do  not  at  all  indicate  what 
will  come  to  pass  in  the  future.  Electricity  is,  of  coime^ 
the  means  for  instantaneous  communication  between 
separate  points  known  to  human  intelligenoe^  prao- 
tically  annihilating  time  between  the  New  World 
and  the  Old  World,  and  between  separated  points  in 
either  world,  or  even  in  the  cities.  But  electricity  does 
not  travel  with  anything  like  the  speed  of  li^t  and 
air«  Now,  in  some  few  instances,  we  have  utilized  com- 
pressed air  as  a  means  of  locomotion.  Efforts  are  being 
made,  but  are  still  in  a  crude  state  of  development,  for  the 
utilization  of  electricity  as  a  motive  power.    Suppose  Wl 


PNEUMA'TIC  'rUBBS  SXTPlSRCSDB  SI^BAM.  61S 

look  one  hundred  jears  ahead,  and,  calenlating  npon  fhe 
factors  and  experiences  of  the  past  one  hundred  years, 
imagine  what  the  picture  will  be  of  this  town  as  a  city, 
and  this  people  as  a  nation.  I  believe  that  one  hundred 
years  hence  the  era  of  bridges  between  this  city  and  those 
which  adjoin  it  across  the  riyers,  will  have  passed  away,  and 
that  instead  of  one  or  two  or  fiye  bridges  across  the  East 
Biver,  we  will  have  pneumatic  tubes  at  every  pier,  and  I 
believe  the  same  will  be  true  on  either  side  and  at  the  end  of 
the  island.  These  tubes  will  spread  from  New  York,  as  the 
blood  vessels  in  the  human  body  spread  out  and  are  supplied 
from  the  heart ;  for  New  York  is  not  only  the  business  heart ' 
of  this  country,  but  it  is  destined  to  be,  so  surely  as  God  per- 
mits growth,  the  business  heart  of  the  world,  and  the  money 
centre  of  the  world.  And  the  arteries  from  this  centre  will  dis. 
tribute  the  blood  all  over,  and  in  all  directions.  Through 
these  pneumatic  tubes  I  believe  there  will  be  almost  instan- 
taneous communication  or  transportation  of  people  from  one 
point  to  another.  Nor  will  this  be  confined  to  New  York 
city  alone.  In  the  near  future  the  Trunk  Line  Bailroad  to 
leading  points,  such  as  Washington,  Philadelphia,  Boston 
and  Chicago,  will  probably  run  trains  at  the  rate  of  one  hun- 
dred miles  an  hour,  atid  even  this  will  only  be  a  beginning. 
To  admit  of  this,  steel  rails  will  be  required  of  about 
double  their  present  weight,  and  the  wheels  must  be  pro- 
portionately massive  and  strong.  The  risk  attendant  upon 
such  increased  speed  will  be  no  greater  than  the  ordinary 
speed  of  the  present  day,  say  forty  miles  an  hour.  But  the 
time  will  come,  during  the  next  five  generations,  wheiT  the 
pneumatic  tubes  will  extend  from  here  to  these  central  points 
of  the  East  and  the  West  and  the  South;  and  it  will  be  possi. 
ble  f6r  a  man  to  leave  New  York  at  seven  o'clock  and  go  to 
Chicago  for  breakfast,  transact  his  business  and  return  to 
New  York  for  lunch  or  business  appointment  by  twelve 
o'clock  noon  of  the  same  day.  Of  course,  one  of  the  prob- 
lems to  be  solved  in  connection  with  this  sort  of  meteorio 


61.4  k  tpOl^  INTO  TH«  PUTURS. 

speed  will  be  to  sapply  air  for  breathing  pnrpodea;  and  the 
same  compressed  air  which  will  shoot  the  carriage  through 
the  tabe,  will  be  in  some  form  utilized  for  the  purpose. 
This,  however,  only  for  a  period ;  for  I  think  the  time  must 
oomewhen  electricity  will  be  the  one  motive  power  of  this 
country  and  of  the  world,  so  far  as  the  transportation  of  peo- 
ple and  property  is  concerned.  Time  is  money,  and  tlie 
American  idea  is  to  save  time.  We  now  waste  little  enough 
of  it  in  all  conscience.  The  greatest  business  of  the  world, 
that  of  the  New  York  Stock  Exchange,  is  already  compressed 
into  five  hours'  time;  and  yet  it  is  a  business  in  which  the 
most  trivial  error  or  accident  because  of  haste  might 
eause  losses  of  millions.  The  obliteration  of  time  is  a 
necessity  of  American  enterprise.  When  Electricity  is 
made  the  general  propelling  power,  it  is  likely  that  a  sta- 
tionary engine  will  be  located  at  Niagara  Falls,  and  the 
force  and  power  of  those  waters  utilized  to  supply  all  the 
needed  propelling  power  for  this  State,  if  not  even  beyond, 
to  remote  and  far-off  sections  of  our  country.  I 
heard  it  once  said  by  an  intelligent  authority,  that 
it  had  been  predicted  that  instead  of  the  coal  mines  of  this 
country  sending  their  products  hundreds  and  thousands  of 
miles  away,  for  transportation-powei^  at  a  great  expense, 
that  a  stationary  engine  would  be  located  at  the  mouth  of 
the  mine,  and  the  power  derived  from  the  coal  transmitted 
therefrom  over  an  electric  wire.  This  would,  indeed,  be  a 
great  transformation,  and  a  great  improvement  and  a  great 
economy.  But  a  greater  change,  one  quite  as  likely  in 
the  future,  and  perhaps  possible  within  the  life-time  of 
some  oi  our  children,  will  be  the  abolition  of  railroads  hj 
the  pneumatic  tube  process,  and  the  transmission  of  power 
as  I  have  suggested. 

A  hundred  years  hence  the  people  who  then  occupy  oor 
places  will  look  upon  us  as  primitive  and  crude,  or,  in 
accordance  with  the  Darwinian  theory,  as  the  monkeys  from 
which  their  perfected  race  has  been  developed.    In  fao^ 


rwH  FUTURE  GIANTS  OI^  «NT«RPRISI{.  618 

there  is  a  good  deal  of  Darwinism  in  oar  deyelopmenti  in  a 
business  sense,  if  not  in  a  human  sense.  As  the  snrroond- 
ings  grow,  so  does  the  intellect  of  the  human  race,  and  there 
IS  no  telling  what  we  may  do  or  what  we  may  become — ^pro- 
Tided  we  live  long  enough.  We  have  plenty  of  room,  plenty 
of  power,  plenty  of  natural  ability,  and  we  make  our  own 
opportunities ;  all  we  lack  in  this  world  is  time  and  perfect 
science,  and  if  time  is  giyen  us  we  may  be  able  to  show  what 
giants  of  enterprise  a  free  people  may  become ;  that^  as  the 
first  choice  of  God's  creation,  we  lack  nothing. 

We  are  proud  now  of  our  Brooklyn  Bridge.  But  when 
the  Bridge  was  opened,  and  the  foot  passenger  rate  was 
made  one  ctot  per  person,  and  the  car  rates  three  cents,  it 
wasagraye  question  of  consideration  for  the  men  upon 
whom  devolyed  the  responsibility  of  the  conduct  of  the 
Bridge,  whether  or  not  the  cities  would  supply  passengers 
enough  to  make  the  Bridge  self-supporting.  It  was  not 
expected  that  they  could  or  would.  But  to-day,  the  rate  for 
foot  passengers  is  one-fifth  of  one  cent,  and  the  car  passen* 
gers  are  transported  for  two  and  one-half  cents.  The  time 
is  not  far  distant  when  these  rates  will  be  made  much  less, 
if  not  abolished  entirely.  They  certainly  will  be  abolished 
so  far  as  the  promenade  is  concerned ;  and,  at  the  rate  of 
one  cent  per  passenger  now,  the  Bridge  would  earn  divi- 
dends for  each  of  the  two  cities  which  issued  bonds  for  its 
construction;  while  the  taxable  value  of  the  property  in 
both  has  been  so  largely  enhanced,  that  the  Bridge  has  paid 
for  itself  already,  and  ^yet  it  has  been  open  less  than  five 
years.  More  than  a  year  ago  the  experience  of  the  Direc- 
tors was  that  the  facilities  of  this  Bridge  were  perfectly 
inadequate;  and,  while  everything  has  been  done  to  increase 
them  and  extensions  and  improvements  have  been  made, 
the  Bridge  is  still  too  slow,  and  its  power  facilities  too 
limited  for  the  proper  accommodation  of  the  people  who 
cross  it  from  city  to  city. 

This  is  only  one  evidence  of  the  growth  of  New  York ;  it 


616  A  I/X>S:  INTO  THK  FUTXTR^ 

IB  merely  an  inoident.    There  ia  anoiiher  incident^  which,  in 
oonneetion  with  what  I  have  said  about  the  differeaoe  in 
Miistniotioii  of  buildings  daring  the  past  few  years,  I  think 
I  will  mention  right  here.    The  city  of  New  York  donated 
to  the  Goyemment  the  site  in  the  City  Hall  Park  where  the 
New  York  post-office  now  stands.    It  was  Hie  original  in- 
tention that  the  bmlding  shoald  be  only  three  stories  in 
height    The  capping  was  already  on,  and  the  roof  was  ia 
the  primitive  stages  of  oonstmction,  when,  walking  down 
Broadway  one  morning,  as  I  passed  the  stmctore,  the 
thought  occurred  to  me  that,  for  a  building  of  its  size  and 
heavy  granite  exterior,  its  height  was  disproportionate,  and 
gave  it  a  dwarfed  appearance,  and  a  lack  of  symmetry.  Be 
sides  that^  whatever  space  could  be  added  to  it  by  the  increase 
in  its  height,  even  though  the  additional  room  might  be  a 
surplus  for  the  time  being,  the  time  would  soon  come  when 
even  more  would  be  needed.    I  wrote  to  Architect  Mnllet, 
calling  his  attention  to  these  facts,  and  insisting  that,  in 
confining  the  building  to  three  stories,  he  was  making  a  mis- 
take ;  that  it  was  not  in  keeping  with  the  magnificence  of 
the  structure ;  that  it  should  have  one  or  more  additional 
stories,  with  a  mansard  addition  besides,  and  that  the  busi- 
ness experience  of  the  past  most  certainly  demonstrated 
that  the  room  would  soon  be  needed  by  the  Government  for 
the  proper  conduct  of  its  affairs  in  this  the  greatest  business 
center  of  the  country.  Within  a  week  Mr.  Mxdlet  called  to  see 
me,  and  I  convinced  him  that  I  was  correct  in  my  criticism 
and  predictions.    He  said,  in  reply :    *^  But  there  is  no  &p* 
propriation ;  the  money  appropriated  is  exhausted,  and  the 
building  cannot  be  enlarged."    I  asked  him :   "  Well,  what 
is  necessary  to  be  done  in  the  matter!    Suppose  I  write  to 
Mr.  Boutwell^  the  Secretary  of  the  Treasury,  about  ii^  and 
,  urge  that  the  building  be  enlarged  as  I  suggest"  Mr.  Mullet 
approved  of  the  suggestion,  and  I  added  :  **  I  will  write  to 
several  members  of  Congress  to  the  same  effect."    This  I 
€id,  and  it  was  not  long  afterward  that  Mr.  Mullet  informed 


KVIDBNCB  OI^  GROWTH.  617 

me  that  my  efforts  in  tbe  matter  had  been  snccessfol,  and  he 
had  received  orders  to  go  ahead  and  make  the  building  four 
stories  in  height,  with  a  mansard  roof  story  besides.  This 
additional  room  was  not  needed  at  the  time,  but  it  has  al- 
ready become  inadequate  for  the  accommodation  of  the  Qoy- 
ernment  postal  employees,  and  a  few  others  who  have  been 
granted  quarters  there.  And  now  there  is  a  proposition 
under  consideration  for  the  construction  of  an  additional 
Gbyemment  building  in  this  city  which  will  cover  two 
blocks  of  ground  or  more,  and  in  which  may  be  centered 
the  various  departments  of  Government,  which  are  now 
scattered  in  a  half  dozen  or  more  places.  Is  not  this  evi- 
dence of  growth?  Is  not  this  evidence  of  development 
which  justifies  what  has  been  said  as  to  our  prospective 
growth  ?  Yet  this  is  merely  incidental  to  the  strides  of  pro- 
gress going  on ;  and,  if  we  are  walking  at  this  pace,  will  not 
our  children's  children  be  racing  at  the  different  paces  Bug- 
gested  by  some  of  the  predictions  I  have  made  ? 


CHAPTER    LVIII. 

JAY  GOULD. 
HiB  BiBTH  AND  EABLT  EdUOATION.— ClEBK  IK    A    GOUNTBT 

Store.— Hb  Invents  a  Mouse  Tbap.— Becomes  a  Crni. 
Engineer  and  Suryexs  Delaware  County.  —Writes  a 
Book  and  Sells  It.— Gets  a  Partnership  in  a  Penn- 
siLYANiA  Tannery  and  Soon  Buys  his  Partner  Out  — 
He  Comes  to  New  York  to  Sell  his  Leather,  Falls 
in  Love  with  a  Leather  Merohant's  Dauohter  and 
Marrtkb  her. — Settles  in  the  Metropolis  and  Begins 
to  Deal  in  Railroads. — ^Burs  a  Bankrupt  Boad  prom 
his  Father- in-Law,  Beorganizes  it  and  Sells  it  at  a 
Considerable  Profit. —Henoeforth  he  Makes  his 
Money  Dealing  in  Bailroad&— His  Method  of  Buy- 
ing, Beorganizing  and  Selling  Out  at  a  Large 
Profit.— How  he  Managed  Erie  in  Connection  with 
FisK  AND  Drew.— His  Operations  on  Black  Friday. — 
Checkmated  by  Commodore  Yanderbilt  and  Obliged 
to  Settle.— He  Makes  Millions  out  of  Wabash  and 
Kansas  &  Texas.— His  Venture  in  Union  Pacific. — 
His  Construction  Companies.— Organization  of  Amer- 
ican Union  Telegraph,  and  His  Method  of  Absorbing 
AND  Getting  Controlof  Western  Union.— The  Strike 
OF  THE  Telegraphers  and  his  Great  Encounter  with 
the  Knights  of  Labor  and  Trades  Unionists.— 
Gould's  First  Yachting  Expedition.— An  Exceed 
INGLY  Humorous  Story  of  his  Early  Experience  on 
THE  Water.— His  Status  as  a  Factor  in  Bailroad 
Management. — His  Acquisition  of  Baltimore  &  Ohio 
Telegraph,  <&c. 

IP  Fonimore  Cooper,  Sir  Walter  Scott,  Charles  Dickens  or 
Dnmas,  in  the  height  of  the  popularity  of  any  of  these 
great  writers  of  fiotion,  had  eyolyed  from  his  inner  conscious, 
ness  a  Jay  Gould  as  the  hero  of  a  novel,  its  readers  would  have 
found  serious  fault  with  the  author  for  attempting  to  trans- 
oend  the  rational  probability  allowed  to  the  latitude  of  fie- 
tloiL  Few  novel  readers,  in  fact,  would  have  patiently  sub- 
miited  to  such  a  strain  on  their  credulity  prior  to  the  era  in 


CZO  JAY  GOTTU>. 

the  finanoial  deyelopment  of  this  countij  which  produced 
some  of  the  leading  oharacters  which  Wall  Street  has  broos^t 
to  the  front,  as  stern  realities  of  erery  day  life,  since  mj 
advent  in  the  great  arena  of  speculation. 

Among  these  Jaj  Gould  is  conspicuous,  and  of  all  the 
self  made  men  of  W^xU  Street  he  had  probably  the  most 
difficulty  in  making  the  first  thousand  dollars  of  the  amas- 
ing  pile  which  he  now  controls. 

Jay  Gould  was  bom  at  Stratton  Falls,  Delaware  oouiitj, 
New  York,  about  the  year  1836.  He  was  the  son  of  John 
B.  Gould,  a  farmer,  who  kept  a  grocery  store.  At  the 
age  of  sixteen  young  Gould  became  a  clerk  in  a  variety  store 
belonging  to  Squire  Burnham,  about  two  miles  from  the 
Falls.  Here,  in  his  leisure  hours^  he  assiduously  improyed 
the  little  learning  he  had  received  at  the  village  schoo]^  by 
applying  himself  to  the  study  of  book-keeping  in  the  eyen- 
ings. 

It  was  when  he  was  at  this  store,  according  to  the  most 
xeliable  accounts,  that  he  manifested  his  natural  aptitude 
for  making  sharp  and  profitable  bargains.  His  employer,  the 
Squire,  had  his  eye  on  a  piece  of  land  in  Albany,  which  he 
expected  to  obtain  cheap  and  so  make  a  profit.  He 
whispered  his  intention  to  some  friend  in  the  store  and  his 
young  assistant  overheard  him.  When  he  went  to  pat  his 
design  of  purchasing  the  land  in  execution  he  f oond  that 
young  Mr.  €K>uld  had  been  there  before  him,  and  had  seooied 
the  title. 

About  this  time  there  was  a  firm  which  had  undertaken  to 
survey  the  county  and  make  office  maps  of  it,  and  joong 
Gould  was  employed  to  assist  them.  Having  mastered  the 
elementary  principles  of  geometry,  and  being  naturally  quick 
and  correct  at  figures,  he  soon  became  a  fair  expert  in  com- 
mon land  surveying,  and  made  himself  exceedingly  nsefol 
to  his  employers.  But  the  idea  of  not  only  being  his  own 
boss  but  an  employer  of  other  people's  brains  and  moscles 
was  one  of  his  ruling  propensities,  and  he  used  every  effort 


THB  RUINING  PASSION  OF  HIS  UP1$.  ^^l 

to  attain  this  object.  In  a  short  time  he  bought  out  the 
firm,  wrote  a  history  of  the  county  to  accompany  the  maps 
and  peddled  his  book  among  the  residents. 

This  natural  inclination  to  bay  out  every  concern  with 
which  he  has  been  connected  has  been  the  nding  passion  of 
his  life,  and  still  tenaciously  adheres  to  him.  Prior  to  his 
negotiations  with  the  firm  of  surveyors,  he  had  invented  a 
mouse  trap  in  his  intervals  of  leisure  in  the  store,  and  with 
the  proceeds  of  this  and  the  bargain  in  the  land,  out  of 
which  he  had  outwitted  his  employer,  he  was  enabled  to 
make  himself  master  of  the  situation  with  the  surveyors. 
Shortly  after  this  Gould  became  interested  in  a  Pennsyl* 
vania  tannery  with  Zadoc  Pratt,  who  was  the  capitalist. 
Through  the  advice  of  Israel  Corse,  the  Commission  Mer- 
chant of  the  firm,  Col.  Pratt  proposed  to  dissolve  the  part-  ^ 
uership.  Gould  induced  Charles  M.  Leupp  <&Co.  to  purchase 
Pratt' s  interest  for  $160,000.  The  business  did  not  meet  the 
expectations  of  Leupp,  who  in  a  fit  of  despondency  commit- 
ted suicide.  After  his  death  Gould  failed  lo  retain  posses- 
sion of  the  property,  which  was  sold  to  H.  D.  H.  Snyder, 
thus  terminating  Mr.  Gould's  career  as  a  Pennsylvania  tanner. 

On  his  visits  to  New  York  Mr.  Gould  was  attracted  by  the 
greater  advantages  which  the  Empire  City  afforded  for  ex- 
tending his  business,  and  came  here  to  reside.  He  had  in- 
gratiated himself  in  the  favorable  esteem  of  one  of  the  grocery 
merchants  with  whom  he  had  done  business.  The  merchant 
took  him  to  his  house  to  board  and  Mr  Gould  fell  in  love 
with  his  handsome  daughter.  It  was  a  mutual  affair  of  the 
heart,  like  that  of  his  son  George  and  Miss  Edith  Eingdon, 
and  a  speedy  marriage  was  the  result.  The  results  of  the 
happy  union  seem  to  have  been  all  that  could  be  desired, 
and  the  domestic  felicity  of  Mr.  and  Mrs.  Gould,  so  far  as 
the  public  have  been  able  to  ascertain,  has  never  suffered 
the  slighest  jar  or  interruption. 

The  father-in-law  owned  shares  in  a  railroad  which  was  in 
a  bad  financial  condition.  He  employed  his  new  son-ln  law 
to  see  what  he  could  do  to  extricate  him  from  a  position  in 


622  JAT  GOUIJ>. 

which  he  was  likely  to  become  embarrassed,  and  he  wanted 
to  sell  his  shares.  Mr.  Gh)ald  examined  the  road,  (with  the 
locality  of  which  he  had  been  well  acquainted  in  his  boy- 
hood,) saw  the  favorable  possibilities  of  its  fatore,  under 
good  management,  and  instead  of  selling  his  father-in-law's 
shares  to  a  stranger,  he  took  them  at  their  market  Talne  him- 
self, purchased  more,  finally  obtained  control  of  the  entiie 
property,  and  sold  it  to  a  rival  company  at  a  large  profit. 

This,  I  believe,  was  Mr.  Gould's  first  transaction  in  rail- 
road matters,  and  from  that  day  to  this  his  great  specalati?e 
forte  has  been  buying  and  selling  railroads.  It  was  in  that 
kind  of  business,  and  not  in  the  stock  market,  as  is  popularly 
supposed,  that  he  made  the  great  bulk  of  his  enoimons  io^ 
tune. 

On  his  entrance  to  Wall  Street  he  began  business  alone. 
Afterwards  he  formed  a  partnership  with  Henry  K.  Smith 

and  Martin,  the  firm  taking  the   name   of  Smith, 

Gbuld  &  Martin.  Martin  is  now  in  a  lunatic  asylum,  and 
Henry  N.  Smith,  who  was  the  chief  cause  of  the  failure  of 
Wm.  Heath  &  Go.  for  a  million  dollars,  is  now  a  poor  pen* 
sioner  on  the  bounty  of  his  wife.  But  Mr.  Gould  still 
towers  aloft,  in  the  full  enjoyment  and  the  continued  pro- 
gress of  his  speculative  prosperity,  without  being  dis- 
mayed by  any  competitor,  however  powerful,  and  0Ye^ 
coming  all  obstacles,  no  matter  how  gigantic. 

As  I  have  noticed  pretty  fully  some  of  Mr.  Gould's  greatest 
speculative  transactions,  mostly  behind  the  scenes  in  the 
chapter  on  Black  Friday  and  also  in  the  account  of  the 
'*  Oonmiodore's  Corners,"  it  will  be  unnecessary  to  repea* 
them  here. 

There  was  one  clever  transaction  in  the  Black  Friday 
affair  that  should  be  put  on  record  to  the  credit  of  the  able 
management  of  that  great  deal  One  prominent  individoftl 
connected  therewith  was  personally  responsible  for  $4,6^,- 
000.  This  was  a  pretty  heavy  load  at  that  time  eyen  for 
him    to  carry,   but  it  did    not  weigh  very  heavily  open 


PITYING  POSSUM  TO  FRIGHTEN  HIM.  62J 

him  for  any  appreciable  length  of  time.  He  adroitly 
managed  to  shift  it  over  on  to  the  shoolJers  of  that  broad* 
backed,  soulless  creature  called  the  Erie  Corporation,  mak* 
ing  it  responsible  by  simply  signing  himself  "  T.  E,"  instead 
of  "  J.  G.,''  the  large  letters  representing  the  ordinary  con- 
traction **Tr.''  for  Treasurer.  By  this  simple  and  ingenious 
device  this  shrewd  gentleman  got  rid  of  the  burthensome 
legacy  on  the  negative  side,  bequeathed  to  him  by  the 
"  Black  Friday  corner.'* 

There  is  a  story  told,  with  several  variations,  in  regard  to 
a  sensational  interview  between  Mr.  Gould  and  Commodore 
Yanderbilt.  The  scene  is  laid  in  the  parlor  of  the  Commo- 
dore's house.  It  was  about  the  time  that  the  latter  was 
making  desperate  efforts  to  get  a  corner  in  Erie,  and  at  that 
particular  juncture  when,  having  been  defeated  in  his  pur- 
pose by  the  astute  policy  of  the  able  triumvirate  of  Erie— ^ 
Gould,  Fisk  and  Drew — he  had  applied  to  the  courts  as  a 
last  resort  to  get  even  with  them. 

They  had  used  the  Erie  paper  mill  to  the  best  advantage, 
in  turning  out  new  securities  of  Erie  to  supply  the  Vander- 
bilt  brokers,  who  vainly  imagined  that  they  were  getting  a 
comer  in  the  inexhaustible  stock.  Mr.  Yanderbilt  was  wild 
when  he  discovered  the  ruse  and  had  no  remedy  but  law 
against  the  perpetrators  of  this  costly  prank.  These  adroit 
financiers  usually  placed  the  law  at  defiance,  or  used  it  to 
their  own  advantage,  but  this  time  {hey  were  so  badly  caught 
in  their  own  net  that  they  had  to  fly  from  the  State  and  take 
refuge  at  Taylor's  Hotel  in  Jersey  City. 

It  seems  that  during  their  temporary  exile  beyond  the 
State  Gould  sought  a  private  interview  one  night  with  the 
Commodore,  in  the  hope  of  bringing  about  conciliatory 
measures. 

The  Commodore  conversed  freely  for  some  time,  but  in 
the  midst  of  his  conversation  he  seemed  to  be  suddenly 
seized  with  a  fainting  spell,  and  rolled  from  his  seat  unto  the 
carpet,  where  he  lay  motionless  and  apparently  breathless. 


624  JAY  Gomj}. 

Mr.  Gould's  first  impulse  was  to  go  to  the  door  and  sum- 
mon  aid,  but  he  found  it  looked  and  no  key  in  it  This  in- 
creased his  alarm  and  he  became  greallj  agitated  He 
shook  the  prostrate  form  of  the  Commodore,  but  the  latter 
was  Hmp  and  motionless.  Once  there  was  a  hearj  sigh  and 
a  half  suffocated  breathing,  as  if  it  were  the  last  act  of  respi- 
ration. Immediately  afterward  the  Commodore  was  still 
and  remained  in  this  condition  for  nearly  half  an  honr. 
Doubtless  this  was  one  of  the  most  anxious  half  hours  that 
ever  Mr.  Qovld,  has  experienced. 

If  I  were  permitted  to  indulge  in  the  latitude  of  the  ordi- 
nary story  teller,  I  might  here  draw  a  harassing  pictare  of 
Mr.  Gould's  internal  emotions,  gloomy  prospects  in  a  crimi* 
nal  court  and  dark  ^forebodings.  His  prolific  brain  would 
naturally  be  racked  to  find  a  plausible  explanation  in  the 
event  of  the  Conmiodore's  death,  which  had  occurred  while 
they  were  the  sole  occupants  of  the  room ;  and  at  that  timi^ 
in  the  eyes  of  the  public,  they  were  bitter  enemies. 

I  can  imagine  that,  in  the  height  of  his  anxiety,  he  would 
have  been  ready  to  make  very  easy  terms  with  his  great 
riyal,  on  condition  of  being  reUeved  from  his  periloos  posi' 
tion.  It  would  have  been  a  great  opportunity,  if  each  had 
been  possible,  for  a  third  party  to  have  come  in  as  a  phjsi< 
cian,  pronouncing  it  a  case  of  heart  disease.  No  doubt  Mr. 
Gould  would  have  been  willing  to  pay  an  enormous  fee  to 
be  relieved  of  such  an  oppressive  suspicion. 

The  object  of  the  Conunodore's  feint  was  evidently  to  try 
the  courage  and  soften  the  heart  of  Mr.  Gould,  who  neyer 
seemed  to  suspect  that  it  was  a  mere  hoax.  His  piesenoe 
of  mind,  however,  was  equal  to  the  occasion,  as  he  bore  the 
ordeal  with  fortitude  until  the  practical  joker  was  pleased 
to  assume  his  normal  condition  and  usual  vivacity.  U  Mr* 
(}ould  had  been  a  man  of  common  excitability  he  wiff^ 
have  acted  very  foolishly  under  these  trying  oircomstanM 
and  this  doubtless  would  have  pleased  his  tonneafav^ 
tensely. 


HIS  ASTUTK  KAILROAD  MANAGBM^NT.  ^ 

The  modus  operandi  of  Mr.  Gt>nld,  in  the  purchase  and 
sale  of  railroads,  has  been  to  buy  up  two  or  more  bad  roads, 
pat  them  together,  give  the  united  roads  a  new  name,  call  it 
a  good,  prosperous  line,  with  immense  prospects  in  the  imme- 
diate future,  get  a  great  number  of  people  to  believe  all 
this,  then  make  large  issues  of  bonds  and  sell  them  at  a 
good  price,  for  the  purpose  of  further  improving  and  en 
hancing  the  value  of  the  property.  After  these  prelimina- 
ries  had  been  gone  through,  if  profitable  purchasers  came 
along,  they  could  have  the  road  at  a  price  that  would  amply 
compensate  Mr.  Gould  for  all  his  labor  and  acute  manage- 
ment If  these  purchasers  should  be  unable  to  run  the  road 
profitably  and  were  obliged  to  go  into  liquidation  after  a  year 
or  two,  as  frequently  happens,  then  Mr.  Gould  or  his  agents 
would  very  likely  be  found  on  hand  at  the  sale  to  take  back 
the  road  at  a  greatly  reduced  price.  Mr.  Gould  would  then 
get  a  fresh  opportunity  of  showing  the  superiority  of  his 
management.  He  would  be  able  to  demonstrate  that  the 
road  had  left  his  possession  in  excellent  and  progressive 
condition,  but  through  loose  management  had  been  run 
down.  He  would  then  set  about  the  work  of  reorgan2dtion 
again  and  go  through  the  same  role  substantially,  with  slight 
variations,  as  before,  realizing  a  handsome  profit  on  each 
successive  reorganization. 

It  would  take  too  much  time,  and  swell  this  volume  far 
beyond  the  space  which  I  have  laid  out  for  it,  to  go  minutely 
into  the  history  of  all  Mr.  Gould's  great  enterprises.  In 
faci^  it  would  take  a  large  volume  in  itself  to  do  justice  to 
the  various  schemes  which  have  been  put  under  way  by  him 
directly  and  indirectly  and  carried  to  a  successful  issue  dur- 
ing his  busy  life  of  a  quarter  of  a  century  in  Wall  Street. 
This  seems  a  long  time  for  a  man  who  is  still  so  young, 
although  he  is  a  grandfather,  and  enjoying  the  use  of  his 
mental  faculties  more  vigorously  than  ever. 

Owing  to  my  own  busy  life  I  have  only  time  to  sketch  the 
most  salient  points  of  Mr.  Gbuld's  prosperous  career.   Some 


JAY  GOXTU). 

fatnre  historian  of  Wall  Street  is  destined  to  make  a  big 
^spread''  upon  him,  as  the  newspaper  reporter  would  saj. 
He  will  have  ample  material  if  he  only  begins  his  work  soon ; 
bat  whoever  undertakes  the  job  should  not  f  oi^et  the  maxim 
of  that  great  veteran  of  literatnre,  old  Dr.  Samuel  John- 
son, about  material  for  biography  having  a  general  tendency 
to  become  scarce,  and,  in  some  instances,  eventoallj  to 
vanish.  While  the  reliable  material  for  Mr.  Gould's  bio- 
graphy may  be  subject  to  the  conmion  fate  of  growing  less, 
as  time  advances,  there  is  no  danger  of  utter  oblivion  in  his 
ease.  He  has  impressed  his  footprints  on  the  sands  of 
time  too  firmly  for  that. 

I  don't  for  a  moment  mean  to  insinuate  the  reason  for  Om, 
which  is  given  by  Shakespeare  as  applicable  to  similar  cases, 
although  some  ill-natured  and  envious  people  might  nse  the 
well-known  quotation  in  this  connection : 

'*  The  erU  that  men  do  lives  after  them. 
The  good  is  often  interred  with  their  bones.** 

I  have  no  hesitation  in  saying  that  Mr.  Gbuld  will  leave 
a  large  amount  of  good  after  him,  and,  indeed,  it  seems  now 
as  if  the  Shakespearian  adage  was  to  be  reversed  in  his 
case.  The  evil  that  he  may  have  done  is  likely  to  be  fo^ 
gotten.  He  bids  fair  to  outlive  most  of  it^  if  he  only  goes 
on  to  the  end  as  he  has  been  doing  for  the  past  few  years. 
He  is  now  showing  a  decided  disposition  to  become  moieof 
a  builder  up  than  a  wrecker  of  values. 

Through  his  great  executive  ability  in  railroad  manage- 
ment and  construction  he  has  been  instrumental  in  making 
many  blades  of  grass  grow  where  none  had  grown  befoie» 
causing  the  desert  to  blossom  like  the  rose,  assisting  thooB- 
ands  who  had  formerly  been  poor  and  almost  destitotSi 
pent  up  either  in  European  hovels  or  New  York  tenement 
houses,  to  find  happy  homes  in  the  West  and  Sontb-  B^ 
has  been  a  great  factor  in  improving  the  value  of  tiie  lanfl* 
and  thus^  while  he  was  enriching  himself,  adding  matorialV 


HIS  WICKKD  PARTimRS  TO  BI^AMB.  62T 

lo  the  wealth  and  prestige  of  the  nation  and  thereby  elevat- 
ing it  in  the  appreciation  of  the  world  at  large. 

The  correspondent  of  the  London  Times  recently  sent 
oyer  here  to  write  up  a  description  of  the  country,  dwells 
emphatically  on  this  characteristic  of  Mr.  Gonld  and  other 
great  millionaires  and  railroad  magnates,  who  contribute  so 
largely  to  the  general  prosperity  of  which  they  seem  to  be 
the  indispensable  mediums. 

It  was  as  the  managing  power  in  the  Erie  Bailroad  that 
Mr.  Gould  laid  the  broad  foundation  of  his  fortune.  His 
speculatire  connections  with  Erie  are  more  fully  dealt  with 
in  the  lives  of  Daniel  Drew  and  Commodore  Yanderbilt. 
The  money  and  influence  which  he  gained,  in  connection 
with  the  Erie  corporation,  enabled  him  to  extend  his  opera- 
.  tdons  in  the  acquisition  of  railroad  property  until,  through 
Union  Pacific  and  its  various  connections,  Wabash  and  a 
number  of  Southwestern  roads,  it  seemed  probable,  at  one 
time,  that  he  was  in  a  fair  way  of  grasping  the  entire  control 
of  the  trans-continental  business  in  railroad  matters.  And 
this  was  prior  to  the  time  when  he  obtained  his  present  hold 
on  telegraph  facilities. 

Some  of  the  able  schemes  in  which  Mr.  Gould  has  had 
credit  for  playing  an  important  part^  and  sometimes  a  role 
that  was  considered  rather  reprehensible,  were  managed,  so 
far  as  the  outside  business  was  concerned,  chiefly  by  one  or 
more  of  his  wicked  partners.  In  one  of  the  most  note- 
worthy of  those  projects,  namely,  the  attempt  to  capture  the 
Albany  &  Susquehanna  Bailroad,  Mr.  Gould  seldom  or  never 
appeared  in  person  before  the  public.  His  partner,  James 
Fisk,  Jr.,  was  cast  in  that  role  and  played  it  with  great 
ability.  With  the  essential  aid  of  those  two  shining  lights 
of  the  New  York  bar,  David  Dudley  Field  and  Thomas  G. 
Shearman,  the  Prince  of  Erie,  (as  Jim  Fisk  was  called,)  c^me 
pretty  near  snatching  possession  of  142  miles  of  a  very  im- 
portant railroad,  with  the  control  of  only  6,500  out  of  80,000 
shares  of  the  stock,  and  8,003  shares  of  ihese  6,500  had  been 
illegally  obtained,  as  was  eventually  decreed  by  the  court. 


628  JAY  GOXH4>. 

Mr.  Fisk,  thou^  the  silont  member  of  the  Erie  firm,  bid 
also  control  of  Judge  Barnard,  of  the  Supreme  Court  of  the 
City  and  County  of  New  York. 

The  Albany  &  Susquehanna  road  would  have  been  a 
valuable  prize  for  Erie.  It  runs  from  the  eastern  eztrenuty 
of  the  New  Tork  Central  at  Albany  to  a  junction  with  Erie 
at  Binghamton.  At  that  time  Erie  aspired  to  be  a  sacceBsfol 
competitor  with  Central  for  New  England  business^  and  hid 
determined  to  monopolize  the  coal  trade  between  that  sec- 
tion and  Pennsylvania.  This  connecting  link  of  142  miles 
was  therefore  regarded  as  a  very  valuable  acquisition  bjr 
both  the  large  roads.  Honce  it  was  worth  a  desperate  effort, 
and  Jim  Fisk  showed  that  he  had  a  true  appreciation  of  its 
value,  for  he  organized  a  company  of  New  York  rou^ 
placed  himself  at  their  head,  and  being  armed  with  bludg- 
eons and  pistols  and  an  injunction  from  Judge  Barnaid, 
obtained  from  him  in  New  York  city — ^while  he  was  leallj 
in  Poughkeepsie  at  the  time— went  to  Albany  and  took 
forcible  possession  of  the  oi&ces  of  the  railroad.  He  had 
the  President,  Sectetary,  counsel  and  receiver  of  the  roid 
arrested  and  put  under  $25,000  bonds  each.  Mr.  Fisk  went 
through  the  farce  of  an  election  of  Erie  candidates  for  the 
offices  which  he  had  forcibly  made  vacant  in  the  Albanj  t 
Susquehanna,  bringing  his  roughs  up  to  vote  as  stook- 
holders. 

The  President  of  the  road,  Mr.  Joseph  H.  Bamsey^fooj^t 
stoutly  for  his  rights  and  ousted  the  intruders.  He  had 
spent  eighteen  years  building  the  road,  and  was  natozallj 
attached  to  it.  He  also  found  a  Judge  to  aid  him.  Joetiee 
E.  Darwin  Smith,  of  Bochester,  eventually  rendered  a  deci- 
sion in  favor  of  the  Bamsey  party,  with  the  opinion  that 
^^  Mr.  Fisk's  attempt  to  carry  the  election  by  his  oontingeBt 
of  \toughs'  was  a  gross  perversion  and  abuse  of  the  ligbt 
to  vote  by  proxy,  tending  to  convert  corporation  meetings 
into  places  of  disorder,  lawlessness  and  riot"  Coste  woe 
decreed  to  the  Bamsoy  directors^  and  a  reference  mad^  ^ 


TH«  AKT  OF  GETTING  OTHKR  P«OPW$'S  PROPERTY. 

ex' Jadge  Samuel  L.  Selden,  of  the  Court  of  Appeals^  who 
fixed  the  allowance  to  be  paid  by  the  Fisk  board  to  the  Bam- 
sey  board  at  $92,000.  It  is  worthy  of  note  that  the  Fisk 
board  consisted  of  the  unlucky  number  of  thirteen. 

The  Erie  party  appealed,  but  long  before  the  appeal  could 
be  heard  the  Albany  &  Susquehanna  was  leased  in  perpe- 
tuity to  the  Delaware  &  Hudson  Canal  Company,  against 
whom  the  Erie  party  was  not  strong  enough  to  go  to  law. 
Thus  ended  the  struggle  for  this  great  connecting  Unk. 

It  is  worthy  of  remark  that  this  was  one  of  the  few  cases 
in  which,  where  Mr.  Gbuld  made  up  his  mind  to  obtain  the 
control,  possession  or  ownership  of  property,  he  did  not 
succeed. 

The  methods  of  acquiring  the  control  and  the  possession 
of  other  people's  property  have  been  raised  to  the  dignity 
of  a  fine  art  by  Mr.  Gould.  This  art  has  been  prosecuted, 
too,  through  ^'legitimate''  means.  He  has  had  the  law  at  his 
back  every  time,  and  been  supported  in  his  marvellous  acqui- 
tions  by  the  highest  Court  authority. 

The  manner  in  which  he  managed  to  get  Western  Union 
into  his  hands  affords  a  very  striking  illustration  of  his 
methods  and  the  great  secret  of  his  success. 

When  first  laying  his  schemes  to  obtain  the  control  of 
the  telegraph  property  he  got  up  a  construction  company  to 
build  a  telegraph  line.  This  was  a  company  of  exceedingly 
modest  pretensions.  It  had  a  capital  of  only  $6,0G0.  It 
built  the  lines  of  the  Western  Union  Telegraph  Company, 
with  which  Mr.  (}ould  paralleled  most  of  the  important  lines 
of  Western  Union,  and  cut  the  rates  until  the  older  and  larger 
corporation  found  that  its  profits  were  being  reduced  towards 
the  vanishing  point.  Then  it  was  glad  to  make  terms  with  its 
competitor;  a  union  of  interests  was  the  result,  and  Mr. 
Gould  obt^ed  control  of  the  united  concern. 

**  Impossible,"  said  Norvin  Green,  in  high  dudgeon,  when 
the  insidious  intentions  of  Mr.  Gould  were  broached  to  him 
a  few  months  before  the  settlement  took  place.    ^'  It  if oulcl 


680  JAY  GOUU>. 

bankrupt  Gould  and  all  his  connections  to  parallel  onr  lines, 
and  to  talk  of  hannony  between  him  and  ns  is  the  wildest 
kind  of  speculation."  The  genial  Doctor  was  then  master 
of  the  situation  in  Western  Union,  or  imagined  himself  so 
at  that  time,  and  regarded  with  contempt  the  efforts  of 
€k>uld  and  his  colleagues  to  bring  the  company  to  terms. 
In  a  few  months  afterward  the  Doctor  tamely  submitted  to 
play  second  fiddle  to  the  little  man  whom  he  had  formerly 
despised. 

The  arrangement  in  reference  to  the  cable  companies  fol- 
lowed the  capture  of  Western  Union.  The  struggle  is  still 
pending  for  the  entire  monopoly  in  the  cable  business,  and 
it  now  seems  only  a  question  of  time  when  the  Bennett* 
Mackay  party  will  have  to  succumb,  leaving  Qovli  in  the 
supreme  control  of  the  news  of  the  world.  If  this  should 
happen  he  would  become  an  immense  power  for  either  good 
or  evil  both  in  speculation  and  politics.  In  fact  it  would 
be  too  great  a  monopoly  to  be  entrusted  to  the  will  of  one 
man.  Although  it  might  be  judiciously  managed,  as  the 
cup  of  his  ambition  would  then  be  surely  full,  yet  the  exper- 
iment would  be  extremely  hazardous. 

The  controlling  interest  in  the  Elevated  Bailroads  of  this- 
city,  recently  achieved  by  Mr.  Oould  through  his  business 
and  speculative  relations  with  Mr.  Cyrus  W.  Field,  are  of 
too  recent  date  to  require  any  special  notice  or  comment 
here.  Suffice  it  to  say,  that  I  fear  my  friend  Mr.  Field  has 
not  come  out  at  the  big  end  of  the  horn,  although  eveiything 
has  no  doubt  been  in  conformity  with  the  most  approved 
business  principles  and  in  strict  adherence  to  the  most  hon- 
orable methods  of  dealing  in  railroad  securities.  B  is 
significant^  however,  that  Mr.  Field  has  preserved  a  pmdent 
reticence  on  the  subject. 

Mr.  Gould,  from  my  point  of  view,  has  been  a  public 
benefactor  in  the  bold  and  successful  stand  which  he  has 
maintained  against  strikers.  Though  Western  Union  lost 
over  half  a  million  dollars  by  the  strike  of  the  telegrapher^ 


GOUI.D  VANQUISH^  THK  KNIGHTS.  ^l 

which  greatly  alarmed  the  stockholders,  yet  Mr.  Gould  held 
out  nntil  the  strikers  were  obliged  to  give  in.  He  pursued 
the  same  policy,  with  a  similar  result,  in  the  case  of  the 
Knights  of  Labor.  During  the  strike  of  the  latter  I 
explained  my  views  on  the  subject  in  a  circular  to  my  cus- 
tomers as  f oUows : 

^^  The  Knights  of  Labor  have  undertaken  to  test,  upon  a 
large  scale,  the  application  of  compulsion  as  a  means  of 
enforcing  their  now  enlarged  demands.  This  has  necessi- 
tated a  crisis  of  a  very  serious  kind.  The  point  to  be  de- 
termined has  been,  whether  capital  or  labor  shall  in  future 
determine  the  terms  upon  which  the  invested  resources  of 
the  nation  are  to  be  employed.  To  the  employer,  it  is  a 
question  whether  his  individual  rights  as  to  me  control  of 
his  property  shall  be  so  far  overborne,  as  to  not  only 
deprive  nim  of  his  freedom,  but  also  expose  him  to  inter* 
f erences  seriously  impairing  the  value  of  his  capital.  To 
the  employes,  it  is  a  question  whether,  by  the  force  of 
coercion,  they  can  wrest  to.  their  own  profit  powers  and  con* 
trol  which,  in  every  civilized  community,  are  secured  as  the 
most  sacred  and  inalienable  rights  of  the  emplover.  This 
issue  is  so  absolutely  revolutionary  of  the  normal  relations 
between  capital  and  labor,  that  it  has  naturally  produced  a 
partial  paralysis  of  business,  especially  among  industries 
whose  operations  involve  contracts  extending  into  the  future. 
There  has  been  at  no  time  any  serious  apprehension  that 
such  an  utterly  anarchial  movement  could  succeed,  so  long 
as  American  citizens  have  a  clear  perception  of  their  rights 
and  their  true  interests ;  but  it  has  been  distinctly  perceived 
that  this  war  could  not  fail  to  create  a  divided  if  not  a  hostile 
feelins  between  the  two  great  classes  of  societf ;  that  it 
must  hold  in  check,  not  onlv  a  large  extent  of  ordinary 
business  operations  but  also  tne  undertaking  of  those  new 
enterprises  which  contribute  to  our  national  progress,  and 
that  the  commercial  markets  must  be  subjected  to  serious 
embarrassments.  *****  From  the  nature  of  the 
case,  however,  this  labor  disease  must  soon  end  one  way  or 
another ;  and  there  is  not  much  difficulty  in  foreseeing  what 
its-termination  will  be.  The  demands  of  the  Knights  and 
their  sympathizers,  whether  openly  expressed  or  tempor- 
arily concealed,  are  so  utterly  revolutionary  of  the  inauen* 


682 


JAY  GOUI.D. 


able  rights  of  the  citizen,  and  so  completely  subveiaye  of 
social  order,  that  the  whole  communitj  has  come  to  a  firm 
conclusion  that  these  pretensions  must  be  resisted  to  ibe 
last  extremity  of  endurance  and  authority." 

The  manner  in  which  Mr.  Gould  acquiredhis  great  control 
in  some  of  the  Western  and  Southwestern  railroads  was 
pretty  fully  dereloped  in  the  recent  investigation  held  in 
this  city,  Boston  and  San  Francisco  by  the  Pacific  Bailway 
Commissioners.  Mr.  Gould's  testimony,  as  reported  in  the 
daily  papers  of  May,  1887,  probably  contains  almost  as  oo^ 
rect  and  succinct  an  account  of  his  pooling  arrangemeniB 
and  schemes  in  connection  with  certain  railroads  and  his 
methods  of  making  money  out  of  them  as  can  be  obtained 
anywhere.  His  testimony,  on  the  whole,  was  exceedingly 
affable,  comprehensive  and  precisely  to  the  point,  and  has 
not  been  contradicted  in  any  material  points  by  any  of  the 
succeeding  witnesses  that  have  yet  been  examined  on  this 
widely  interesting  subject.    Its  substance  was  as  follows: 

[From  the  Herald,  May  18,  1887.] 

A  dapper  little  man  in  plain  pepper  and  salt  (the  penper 
predominating)  business  suit  ent^i^d  the  Pacific  Baiiway 
Commissioners'  offices  yesterday  morning  and  sat  down 
quietly  with  his  not  over  shiny  silk  hat  on  his  knee. 

The  natty  gentleman,  unobtrusive  possessor  of  the  sniall 
dark  and  briUiant  eyes,  was  the  man  of  millions. 

He  had  lots  of  information  for  the  Commission,  and  he 
gave  them  more  of  the  inside  facts  of  the  early  consolidation 
aeals  of  the  Union  Pacific  than  they  hoped  to  get. 

It  had  been  expected  that  Mr.  Gould.would  prove  a  wily 
witness,  hard  to  corral  and  liable  to  shy  over  the  fence  at 
the  slightest  provocation,  but  at  the  very  outset  his  maofx 
was  a  complete  surprise.  He  told  the  Commission  that  he 
was  suffering  from  neuralgia,  and  said  that  he  conld  not 
speak  very  loud  in  consequence.  There  were  times  dunnff 
his  examination  that  his  tone  was  faint,  and  it  was  only  loif^ 
two  or  three  times,  when  he  became  very  much  interested  in 
some  explanation.  At  all  times,  however,  it  was  well  Dodo- 
lated,  and  now  and  again  had  a  musical  cadence  about  it 


I 

GETTING  CONTROI,  OF  UNION  PACIFIC.  ^^3 

that  was  verj  pleasing.  He  first  became  interested  iu 
Pacific  roads  m  1873.  He  bought  Union  Pacific  stock  in  the 
market,  bat  it  went  down  to  fourteen  cents  on  the  dollar. 
He  held  about  100,000  shares.  He  had  a  consultation  with 
Sidney  Dillon,  and  finally  made  a  proposition  to  fund  the 
floating  debt  in  bonds,  of  which  he  took  a  million  dollars' 
worth  at  above  their  par  value.  In  1874  he  became  a  direc- 
tor and  served  on  the  executive  committee.  He  continued 
in  the  direction  during  1874, 1875  and  1876,  and  went  over 
the  road  twice  a  year.  He  had  no  interest  in  the  Fisk  suit, 
but  knew  it  was  brought.  He  had  no  contingent  interest 
whatever  in  the  suit. 

He  became  interested  in  the  Kansas  Pacific  in  1878,  but 
thought  he  knew  the  road  in  1874.  He  remembered  a  prop- 
osition looking  toward  a  unity  of  interest  between  the  Den- 
ver Pacific  and  the  Colorado  Central. 

Being  examined  as  to  the  positions  of  the  roads,  and  as 
things  Sid  not  ai>pear  to  be  very  clear,  Mr.  Gk>uld,  putting 
his  hand  to  his  inside  |>ocket,  said  :  ^'  I  have  a  little  map 
here  if  you  are  not  familiar  with  the  location." 

The  little  map  was  brought  out  and  all  hands  gathered 
around  it,  while  Mr.  Gould's  index  finger  went  on  an  excur- 
sion over  States  and  Territories  in  absolute  defiance  of  the 
Inter-State  Commerce  Law.  He  recalled  the  fact  that  the 
plan  of  consolidation  was  considered  as  early  as  1876,  after 
Mr.  Anderson  read  some  extract  from  a  paper,  but  he  said 
it  was  not  carried  out  then.  He  mi^ht  even  have  had  a  talk 
with  Scott  about  it  on  further  consideration. 

The  little  road  connecting  with  the  Colorado  Central  was- 
built  by  him,  and  was  the  result  partly  of  the  contest  be- 
tween the  Union  Pacific  and  the  Kansas  Pacific.  Prior  to 
1878  he  could  not  recollect  having  owned  ajij  stock  or  se- 
curities of  the  Kansas  Pacific.  His  interest  in  the  Union 
Pacific  has  increased  to  200,000  shares,  the  total  issue  of 
stocks  being367,000  shares.  \  He  kept  books  of  his  transac- 
tions.   Mr.  Morosini  kept  them  a  part  of  the  time. 

Q.  Where  are  the  books  t    A.  i  have  them. 

Q.  Where  ?    A.  In  my  possession. 

Q.  Are  they  at  the  service  of  the  Commission  f  A.  If  they 
desire  them,  with  the  greatest  of  pleasure. 

This  was  the  first  sensation  of  the  day,  and  the  witness 
smiled  blandly  as  he  felt  the  full  force  of  it. 

Up  to  this  time  he  had  answered  every  question  promptly. 


JAY  60X7LD. 

There  appeared  to  be  iio  hesitation  on  his  part,  and,  indeed, 
there  was  none  during  the  entire  day's  session.  Almost 
every  preceding  witness  had  taken  refuge  behind  ''I  don't 
know,"  or  *'  1  cannot  remember,"  or  "  Beally  I  am  not  sure," 
but  there  was  none  of  this  from  Gould.  And  the  apparently 
full  and  free  offer  of  his  books  capped  the  climax. 

After  this  whenever  his  memory  was  in  any  way  at  fault 
the  witness  fell  back  on  the  books.  In  asking  him  what  be 
had  bought  certain  stocks  for  he  said  the  books  woald 
show. 

"  Will  your  books  also  show  who  the  broker  was  J" 

*'  Oh,  yes  ;  certainly,  certainly,  certainly." 

In  the  matter  of  the  St.  Louis  pool  he  had  conversed  with 
a  number  of  persons. 

Q.  With  wnom  did  you  converse  1  A.  I  presume  with  all 
the  signers  of  the  agreement. 

Q.  Will  you  tell  us  all  about  the  preliminarv  measures 
leading  up  to  this?.  A.  I  would  have  the  neuralgia  a  ffood 
deal  worse  than  I  have  if  I  undertook  to  tell  you  all  of  the 
details. 

This  was  the  original  proposition  of  consolidation,  which 
was  a  stock  instead  of  a  bond  agreement,  and  it  was  soon 
demonstrated  that  it  would  not  work. 

Q.  How  soon  after  this  was  the  new  arrangement  entered 
into  t  A.  Almost  immediately  afterward,  I  think.  The  ob- 
ject  was  the  funding  of  a  heterogeneous  mass  of  secnritiet 
into  one  class  of  securities. 

Q.  Did  you  confer  with  others  ?  A.  I  conferred  with  my* 
self  as  well  as  others.  What  I  thought  was  a  fair  price  for 
me  was  a  fair  price  for  the  others. 

Q,  To  whom  did  you  deliver  your  bonds  ?  A.  I  suppose 
to  the  committee,  but  I  do  not  know. 

Q.  But  you  would  not  deliver  $2,000,000  to  a  man  in 
whom  you  did  not  have  confidence  ?    A.  Probably  not. 

Q.  Who  kept  the  accounts  (    A.  I  don't  know. 

Q.  You  doirt  remember  (  A.  I  don't  charge  my  memory 
with  these  things  after  they  are  over,  but  my  books  will 
show,  and  they  are  at  the  sorvice  of  the  Commission. 

Mr.  Gould's  manner  in  saying  this  was  unusually  snare 
and  polite,  and  the  lines  of  has  mouth  relaxed  just  enough  to 
suggest  a  smile. 

in  speaking  a  few  moments  later  of  the  securities  bought 
by  Mr.  Gould  from  the  "  St  Louis  parties  "  he  was  asked 
of  whom  he  bought  thenu 


THB  books  WII.I.  SHOW.  CJ5* 

**I  cannot  tell  about  that  off-hand,  but  my  books  will  show 
it" 

"  Which  of  the  St.  Louis  people  did  you  confer  with  ?" 

^*  I  think  they  came  on  here  to  see  me.  Thej  were  tired 
out  and  wanted  to  sell,  and  came  oyer  to  do  it." 

'^  Then  you  bought  all  the  securities  first  and  tried  to  get 
some  other  gentlemen  to  go  in  with  you  afterward?" 

"  Tes,  seyeral  gentlemen  whom  I  thought  would  be  of  ser- 
yice  to  the  road.  There  ought  to  be  some  books.  Some- 
body must  haye  kept  accounts  of  the  transactions.  My  rec- 
ollection is  that  these  people  came  on  and  told  me  they 
wanted  to  sell.  I  asked  them  how  much  they  thought  they 
ought  to  haye  and  they  gaye  me  the  price  quoted  in  the 
agreement." 

^'  I  simply  said,  ^  I  will  take  them,'  and  that  was  all  there 
was  to  it.  That  is  my  recollection.  In  1879  I  owned  about 
$4,000,000  worth." 

The  examination  led  into  the  stamped  income  bonds  of 
the  Kansas  Pacific,  and  Mr.  Gould  was  asked  as  to  the  condi- 
tion of  the  road.  He  thought  it  was  poor.  The  road  had  a 
large  intrinsic  yalue,  but  it  nad  been  oadly  financed  and  its 
securities  were  way  down. 

Q.  Did  you  not  buy  some  of  your  securities  abroad  ?  A. 
I  bought  two  millions  of  Denyer  Pacific  at  seyenty-four 
cents,  1  think,  from  some  Amsterdam  people.  I  was  in  Lon- 
don and  heard  that  they  wanted  to  sell.  I  was  afraid  to  go 
oyer,  because  I  hadyery  little  time,  and  thought  they  womd 
probably  take  a  couple  of  days  to  smoke  beiore  finding  out 
whether  they  would  sell  or  not.  But  I  was  mistaken.  I 
went  oyer  and  got  to  Amsterdam  in  the  morning ;  washed 
and  had  my  breakfast  I  saw  them  at  eleyen,  bought  them 
out  at  twelve,  and  started  back  in  the  afternoon. 

When  Mr.  Qould  was  asked  as  to  the  prices  he  had  paid 
for  the  securities  with  which  he  had  acquired  the  Kansas 
Pacific  bonds  he  took  out  his  papers  and  handed  the  Com- 
mission a  series  of  neatly  written  reports  on  these  purchases 
and  sales. 

He  purchased  in  1879  St.  Jo.  and  Denyer  first  mortgage 
bonds,  $1,562,886.69,  for  $603,204.78. 

Of  these,  $617,000  worth  he  sold  to  Bussell  Sage,  F.  L. 
Ames,  Sidney  Dillon,  S.  H.  H.  Clark,  Ezra  H.  Baker,  F.  G. 
Dexter  and  Elisha  Atkins  for  $246,800. 

Oa  January  24, 1880,  he  surrendered  $956,779.76  in  these 


JAY  GOUUD. 

bonds  and  scrip  in  exchange  for  9,668  shares  of  Union  Pa- 
cific at  par. 

For  St  Jo.  and  Denver  Pacific  receiver^  certificates  totiie 
number  of  fifty-nine  he  paid  $60,695,  and  on  January  H,  1880, 
he  surrendered  them  for  690  shares  of  Union  Pacific  at  par, 
or  $59,000. 

Of  St.  J.  and  Denyer  stock  during  1879  he  acquired  8>819 
shares,  and  sold  3,806  shares  to  the  same  persons  porchas* 
ing  the  bonds.  On  January  24  he  surrendered  the  5,013 
shares  he  had  remaining  on  hand  at  par  for  $100,200. 

I>uring  the  same  time  he  bought  $7dl,000  worth  of  the  St. 
Joseph  Bridge  bonds  for  $586,940,  of  which  he  sold  to  Sage 
and  Dillon  150,000  worth  for  $112,500. 

He  also  bought  4,000  shares  of  stock  for  $6,000,  making 
Uie  total  cost  of  $834,000  bonds  and  4,000  shares  of  stock 
$480,440.  Beceived  in  exchange  for  the  whole  bnsineBS, 
6,340  shares  of  Union  Pacific  stock  at  par,  making  $634^- 
000. 

The  gentlemen  to  whom  Gould  sold  the  securities  were  all 
directors  of  the  Union  Pacific.  These  gentlemen,  the  wit- 
ness thought,  retained  their  bonds  until  the  consolidatioD, 
as  they  were  bought  with  a  purpose.  **  The  Denver  stoA 
was  called  trinmiings,"  said  Mr.  Gould,  smiling,  '^  and  went 
with  the  bonds." 

On  the  consolidation  of  the  company  he  transferred  27,- 
000  shares  of  Union  Pacific  Bailroad  stock  for  new  siodL 

He  had  transferred  his  Union  Pacific  stock  at  one  time  to 
some  other  parties  on  account  of  a  peculiar  law  in  Massa- 
chusetts, which  enables  an  attachment  of  stock  on  a  smt, 
whether  there  was  anything  in  it  or  not. 

^'  I  found  out  about  that  law,"  said  Mr.  Gould,  ^  and  pnt 
the  stock  in  somebody's  else^s  name.  '^  You  can't  tell  any- 
thing," he  continued,  sharply,  ^^  about  any  stock  list  There 
are  many  shares  of  stock  held  by  brokers  for  years." 

After  the  consolidation  he  had  begun  to  distribute  his 
stock  among  other  holders. 

"I  made  up  my  mind,"  he  said,  **  it  would  be  better  to 
have  four  or  five  stockholders  do  a  little  of  the  walking  in- 
stead of  one." 

Q.  That  idea  was  very  much  stimulated  by  the  rise  in  the 
stock  after  the  consolidation,  was  it  not !  A.  Yes,  beoaase 
the  stock  went  up  then  So  much  that  there  wasn't  enough  to 
go  round. 


DJSAI^ING    IN  RAII^ROADS  AIX  HIS  lylFK.  687 

The  witness  told  the  story  of  the  employing  of  Genera] 
Dodge  and  Solon  Humphreys  to  recommend  the  consolida- 
tion.  They  were  fair  men,  he  thought,  and  would  make  a 
fair  report. 

He  had  not  talked  to  them  after  they  went  West  to  make 
their  report. 

Q.  flow  is  that  ?  A.  Well,  he  naively  replied,  while  they 
were  making  their  examination  my  interests  had  changed. 

Q.  They  had  changed ?  A.  Tes,  I  had  bought  the  Mis- 
souri Pacific. 

Q.  Did  General  Dodge  and  Mr.  Humphreys  look  into  the 
past  history  of  the  road  ?  A.  I  consider  the  future  of  a  road 
more  important  than  its  past. 

Q.  Yes,  but  what  1  want A.  The  past  was  no  criterion 

as  to  the  Union  Pacific  road. 

Q.  But  don't  you  think  that  General  Dodge  and  Mr.  Hum- 
phreys   ?    A.  "  All  my  life,"  said  Mr.  Gould,  warming  up ; 

^^all  my  life  I  have  been  dealing  in  railroads — that  is,  sm6e  I 
have  been  of  age,  and  I  have  always  considered  their  future 
and  not  their  past." 

**  That  is  the  way  I  have  m^de  my  money,"  said  he.  **  The 
very  first  railroad  I  ever  bought  had  a  most  deplorable  past, 
but  its  future  was  fair.  I  paid  ten  cents  on  the  dollar  for  its 
bonds,  and  finally  sold  the  stock  for  $1.25.  ^  It  was  the  fu- 
ture of  the  Union  Pacific  that  drew  me  into  it.  I  went  into 
it  to  make  money." 

'^  You  were  not  in  favor  of  the  consolidation  at  the  time  it 
was  made  ?  " 

^^No,  my  interests  had  changed." 

*'  Did  you  try  to  stop  it  ? " 

**  Well,''  said  Mr.  Gould,  slowly,  "my  opposition  to  it  was 
known  and  they  were  greatly  alarmed.^' 

"Whof* 

'f  Ames,  Dexter,  Atkins  and  Dillon.  They  came  on  from 
Boston  to  see  me  about  it.  They  had  heard  that  I  was  go- 
ing to  build  an  extension  to  the  JDenver  Pacific  and  connect 
the  Missouri  Pacific.  They  said  I  was  committed  to  the 
consolidation  and  laid  right  down  on  me.  I  offered  my 
check  for  $1,000,000  to  let  me  out,  and  I  have  offered  it 
since. 

^'  I  will  pay  it  now,"  said  the  witness,  with  a  strong  rising 
inflection  of  the  voice  and  looking  hard  at  the  Union  Pacific 
people  in  the  room. 


J 


ess  JAY  GOUI4>* 

^  I  offered  them  a  million,  but  they  would  not  let  me  oat 
of  the  room  until  I  had  signed  an  agreement  to  carry  ont  the 
ooneolidation." 

"  Where  is  that  paper  ?  " 

^  I  suppose  it  is  in  Boston.  If  I  oonld  have  earned  oat 
mj  Missouri  Pacific  plan  I  would  have  a  property  now  that 
would  be  worth  par. 

^  I  don't  think  you  have  any  reason  to  complain  of  your 
profits  in  the  matter,"  replied  Mr.  Anderson,  at  which 
Mr.  Cbuld  partly  closed  his  eyes  to  hid^  their  twinkle,  and 
said  nothing. 

The  paper  which  he  signed  was  an  agreement  to  cany  oat 
the  consolidation  on  certoin  terms.  Tne  consolidation  was 
an  assured  fact  after  January  16,  because  the  witness  held 
the  controlling  interest. 

^  But  I  haye  now  ceased  to  be  the  tower  of  the  Union  Far 
cific,''heBaid. 

In  askins  Mr.  Gould  about  his  connection  with  Lawyer 
Holmes  at  tne  time  of  the  consolidation,  Mr.  Anderson  asked 
him  whether  he  was  sure  about  a  certain  conyersation. 

^^  Yes,"  he  said,  ^  for  I  had  it  impressed  on  my  mind.'' 

^How  was  that!" 

**  Well,  I  remember  parting  with  a  lot  of  stock  at  ten  cents 
for  whitoh  I  could  naye  got  par  a  few  days  afterward. 
Wouldn't  that  impress  the  occasion  on  your  memorj,  Mr. 
Anderson)" 

Eyerybody  laughed  at  this,  and  the  witness,  althoogfa  he 
had  lost  a  nullion  or  two,  laughed  as  heartily  as  the  londest 

As  far  as  the  Denyer  Pacific  stock  was  oonceinedlb* 
Gbuld  said  it  was  worth  practically  nothing  unless  the  oon- 
solidation  was  made.  It  was  the  signature  of  the  Onion  Pa- 
cific that  made  it  good. 

<<  Do  you  consider  that  the  trustees  fulfilled  their  doty  in 
letting  this  stock  out  of  trust ) "  he  was  asked. 

^^  I  consider  that  it  was  the  only  thing  to  do^  and  I  stand 
on  what  was  done.    I  am  ready  to  take  the  responsibility 
for  it  that  day,  or  this  day,  or  any  other  day." 
[From  the  Ifm  York  Times,  May  19,;i887.] 

Jay  Qould  gaye  another  day  to  the  Pacific  Bailway  Con^ 
mission  yesterday.  His  manner  was,  as  usual,  cooltf^d 
collected,  and  he  was  apparently  full  of  a  patient  desire  to 
tell  eyerything  he  knew.  Yet  Mr.  Gould  told  yeiy  Utfl^ 
although  he  answered  hundreds  of  questions,  some  of  them 


HIS  ANXn^TY  ro  PKOTJSCT  tBM  GOVWLmOOST. 

puzzling  enoupix  to  diite  a  less  long-headed  financier  into  a 
corner.  The  Denver  Pacific  stock  and  the  way  it  got  out  of 
the  tmst  were  first  taken  up.  Mr.  Gbnld  said  he  thonglit 
the  course  taken  was  best  for  everybody.  Naturally  ne 
wanted  the  Denver  Pacific  to  go  into  the  consolidation, 
holding  as  he  did,  $1,000,000  m  the  securities,  and  being 
trustee  of  over  $3,000,000  more.  At  first  it  was  doubtful  u 
the  Union  Pacific  would  take  it,  but  it  did  for  the  franchises. 
•*  I  want  to  say  again,''  declared  Mr.  Gould,  "that  no  direc- 
tor or  person  connected  with  the  Union  Pacific  ever  made  a 
dollar  out  of  Denver  Pacific.  I  am  glad  to  put  a  final  nail 
in  that  coffin." 

His  plan  at  one  time  was  to  build  a  line  from  Denver  to 
Ogden,  via  Salt  Lake  and  Loveland  Pass.  It  would  have 
been  shorter  than  the  Union  Pacific  and  obtained  more  local 
business,  for  the  Union  Pacific  ran  north  of  the  mineral  belt 
and  the  Uouthern  Pacific  south  of  it.  After  he  obtained  the 
Missouri  Pacific  he  saw  what  a  good  thing  he  had  in  it,  but 
he  was  persua'ded  to  give  his  pledge  to  go  on  with  the  con- 
solidation of  the  other  roads.  The  Boston  folk  became 
agitated  within  a  month  after  he  bought  the  Missouri 
Pacific,  and  got  the  pledge  from  him.  If  the  Missouri  Pa- 
cific had  been  put  tmrou^  it  would  have  injured  the  Union 
Pacific  a  great  deal. 

'^  According  to  the  ethics  of  Wall  street,"  Mr.  Gould  was 
asked,  do  you  consider  it  absolutely  within  the  limits  of 
your  duty,  while  a  director  of  the  Union  Pacific,  to  purchase 
another  propertv  and  to  design  an  extension  of  the  road 
which  would!^perhaps  ruin  the  Union  Pacific?" 

^'  I  don't  think  it  would  have  been  proper.  That's  vhe 
reason  I  let  it  go.'' 

"  Did  you  consider  jour  duty  to  the  Government  I " 

^  I  had  considered  it." 

'^  How  would  the  Government  claim  have  been  affected  by 
building  a  parallel  line  ?  " 

**  It  would  have  been  wiped  out." 

After  the  Thunnan  bill  had  been  sustained  by  the  Supreme 
Court  Mr.  Gould  had  a  plan  to  build  a  road  nom  Omaha  to 
Ogden,  just  outside  tibie  right  of  way  of  the  Union  Pacific, 
and  give  that  road  back  to  the  Government.  It  would  give 
others  *^a  chance  to  walk."  The  Government  tried  to 
squeeze  more  out  of  the  turnip  than  was  in  it.  For 
$16,000,000  a  road  could  be  buUt  where  it  had  cost  tho 
Union  Pacific  $75,000,000. 


640  JAY  GOULD. 

^^  Yon  wore  not  devoted  to  the  interests  of  the  Gorent' 
ment?** 

^  I  wanted  to  protect  them.  Their  legislative  action  hnrt 
their  own  interests  and  put  those  of  tiie  stockholders  in 
jeopardy.  The  Government  repudiated  their  own  contracts. 
Caw  was  offered  to  pay  the  Government  the  Union  Pacific 
debt.  I  had  the  debt  reckoned  up  and  offered  to  pay  it.  In 
1877  or  1878 1  made  the  offer  to  the  Judiciary  Committee^ 
of  which  Mr.  Edmunds  was  Chairman.  I  made  the  offer 
myself.  The  debt  was  estimated  at  $16,000,000  or  $17,- 
000,000.  But  the  Government  would  not  concede  that 
interest  terminated  with  the  bonds.  No  action  was  taken  on 
the  proposition.'' 

Mr.  Gould  thouffht  he  wrote  his  own  resignation  as  Direc- 
tor of  the  Union  Pacific.  He  resigned  because  he  oug^t 
not  to  deal  with  the  company  while  one  of  its  directors. 
He  put  it  in  President  Dillon's  office.  Mx.  Dillon  knew 
what  it  meant 

"What  did  it  mean  ?'* 

^^That  if  the  consolidation  went  through  it  involved  larse 
transactions  with  Jay  Gbuld,  and  if  I  had  staid  in  it  would 
have  complicated  things.  Before  January  10, 1880,  no  bar- 
gain was  made  to  pay  par  for  St.  Jo.  and  Western  bonds, 
nor  Blansas  Central,  nor  239  for  Central  Branch  stocL 
That  came  afterward." 

The  Colorado  Central  lease  was  canceled  on  account  of  a 
State  law  against  consolidating  competing  lines.  Mr.  Ooold 
did  not  know  that  the  Dodge  and  Humphreys  letter  was  to 
be  presented  to  the  meeting  of  January  24.  He  was  proba- 
bly informed  of  the  consohdation  on  the  day  it  took  place. 
He  was  also  probably  present  at  the  first  meeting  of  the 
new  company  on  January  24.  Mr.  Qould's  resignation  from 
the  Kansas  Pacific  Board  was  gone  over,  and  in  summarizing 
his  reasons  for  resigning  Mr.  Gould  said  he  did  not  want  to 
be  mixed  up  with  trusteeships  and  directorships.  When  he 
was  not  a  Union  Pacific  director  he  felt  at  hberty  to  take 
care  of  himself.  There  was  a  chance  that  the  properties 
might  be  made  hostile  to  him,  and  then  it  would  nave  been 
improper  for  him  to  be  a  director.  He  did  not  know 
that  Eussell  Sage  was  to  move  the  acceptance  of  his  resig* 
nation. 

^^  At  the  Kansas  Pacific  meeting  a  list  of  the  branch  lines 


YOU  PAY  MORK  POR  RUBIES  THAN  DIAMOin>S.         641 

obtained  from  jou  was  read.  President  Dillon  said  the 
oompanj  had  bought  them.     What  did  he  mean  ?  " 

'*  Possibly  he  referred  to  the  directors'  agreement  with 
me." 

^^Bnt  we  can  find  no  record  of  this  in  the  books.  Don't 
you  think  he  referred  to  the  agreement  with  the  Boston  gen- 
tlemen?" 

"Very  likely,  but  it  had  no  authority  until  it  was  accepted 
or  rejected." 

Mr.  Gould  was  set  to  explaining  some  discrepancies  be- 
tween the  accounts  of  his  dealings  in  branch  securities, 
handed  in  on  Tuesday,  and  the  list  submitted- by  Controller 
Mink.  Mr.  Mink  gare  15,1G2  shares  of  St.  Jo.  and  Western 
stock,  and  Mr.  Gould  8,119.  The  difference  was  ^plained 
by  Mr.  Gould's  getting  some  stock  for  building  the  Hastings 
and  Grand  Island.  He  retained  control  of  the  $160,000  St. 
Jo.  Bridge  bonds  he  sold  Dillon  and  Bage  and  turned  them 
over  with  his  own.  His  $47^),000  Kansas  Central  bonds  and 
B,621  shares  of  the  stock  cost  him  $431,820.25  at  the  time  he 
bought  the  Missouri  Pacific.  They  all  went  intq  the  con- 
Bolidatioii  for  $479,000.  Mr.  Gould  bought  the  Central 
Branch  of  the  Union  Pacific  from  Oliyer  Ames  and  Presi- 
dent Pomeroy,  who  came  to  New  York  and  induced  him  to 
go  and  look  at  the  property. 

**  I  thought  it  was  doinff  a  big  business,"  said  he.  "  Af- 
terward I  learned  they  had  kept  the  freight  back  for  a  week 
to  impress  me.  So  I  saw  a  freight  train  at  every  station 
when  1  got  there.  I  bought  the  road  anyway."  Its  total 
cost  to  Mr.  Gould  was  $  1 ,826,600.  Over  the  Central  Branch, 
whose  stock  was  disposed  of  by  Mr.  Gould  for  239,  there 
was  a  little  stir  in  the  hearing,  but  the  witness  tranquilly 
explained  that  the  road  was  practically  stocked  at  only 
$2,600  a  mile,  and  therefore  the  stock  ought  to  range  way 
above  par. 

'*  Has  the  road  earned  dividends  ?  "  he  was  asked. 

"I  don't  think  so." 

'^Have  the  aggregate  earnings  exceeded  the  fixed  and 
Government  charges  ?  " 

^'I  never  figured  it  out.  Stock  doesn't  always  depend 
upon  dividend  altogether.  I  paid  760  for  my  Missouri  Pa- 
cific—4,000  shares  at  that  figure.  You  pay  more  for  rubies 
than  for  diamonds  and  more  for  mamonds  than  for 
glass," 


642  JAT  <30T7IJ>. 

Then  the  examination  tamed  to  the  days  just  after  the 
oonsolidation,  and  the  witness  was  asked  if  there  was  any 
corporate  action  of  the  new  company  before  the  stock  was 
tamed  oyer  to  him. 

^'All  I  know,''  he  said,  '^is  that  the  stock  of  tkenew 
company  was  delivered.'- 

^^  W  as  the  new  company  boand  t6  carry  oat  the  Kansas 
Pacific  obligations  of  this  sort  1 " 

^' Well,  I  suppose  it  assumed  the  Kansas  Pacific  obliga- 
tions.*' 

'^  Why  were  you  not  paid  in  Kansas  Pacific  consols  msteftd 
of  stockl" 

"I  suppose  they  preferred  stock  to  bonds.  I  was  deyer 
to  them  and  took  stock." 

Another  turn  carried  questions  and  answers  to  other  differ- 
ences in  the  accounts,  but  the  commission  got  little  light 
^'If  s  safe  to  say  the  lawyers  got  the  difference,"  chuckled 
Mr.  Gould,  at  tne  end  of  the  s^  of  questions.  He  had  made 
large  cash  adyances,  at  different  times,  to  the  Kansas  Pacific 
to  meet  the  floating  debt,  and  yery  likely  these  would  have 
to  be  counted  in  to  explain  matters  in  all  cases.  There  was 
one  point  upon  which  the  witness  strongly  insisted,  and  that 
was  that  all  through  the  negotiations  and  transactions  no 
class  of  people  nor  any  particular  holders  of  securities  ex- 
periencea  any  discrimination  in  their  fayor,  as  compared 
with  the  treabnent  giyen  eyerybody  else. 

After  the  consolidation  Mr.  Qould  said  he  had  few  trans- 
actions in  Onion  Pacific  branch  lines.  He  had  an  interest  in 
the  Denver  &  South  Park,  howeyer,  a  minority  interest  at  fiist^ 
but  subsequently  he  bought  the  whole  road  from  Goyemor 
Eyans.  "I'm  showing  you  my  whole  hand,''  he  said,  chee^ 
fully,  at  the  end  of  the  catalogue  of  the  branches.  Of  the 
Union  Pacific's  legal  expenses  ne  knew  of  none  which  were 
not  perfectly  legaL 

"Who  were  the  road's  counsel  in  Washington?" 

"Messrs.  Shellabarger  &  Wilson  were  t£e  only  ones,  as 
far  as  I  knew." 

"Haye  you  oyer  been  to  Washington  on  business  of  the 
company  r ' 

"  1  es.    And  I  paid  my  own  hotel  bills." 

"Do  you  recall  persons  sent  to  Washington  from  other 
places  in  the  interest  of  the  road  ?" 

"Judge  Usher  and  Mr.  Poppleton." 


''  I  AM  SHOWIKO  YOU  KY  WHOM  HAND.**  643 

""Who  represented  the  Kansas  Pacific?'' 

^^  Jndge  Usher.  I  don't  know  that  they  iiad  anybody  in 
Washington." 

"How  often  did  you  go  to  Washington  for  the  road?" 

^  I  was  there  wnile  tne  Thurman  bill  was  pending.  It 
passed,  and  I  haven't  been  there  since.  No,  I  take  that 
back.  I  was  down  before  the  Labor  Committee.  I  got 
rather  disgosted." 

"Do  yon  know  whether  anything  was  spent  to  influence 
legislation  ?" 

'*No,  sir.    I  know  of  no  such  expenditure." 

'^  Where  could  we  find  records  of  such  transactions  t" 

"I  don't  think  such  transactions  exist." 

"  Do  you  remember  advising,  at  a  meeting;,  that  Mr.  Ord- 
way,  of  Washington,  be  employed  in  the  interests  of  the 
Kansas  Pacific?" 

"No,  sir." 

Mr.  Anderson  read  from  the  minutes  of  a  Kansas  Pacific 
meeting,  in  1876.  and  Mr.  Qould  remembered  that  Senator 
SoUins,  a  great  friend  of  Mr.  Ordway,  asked  him  to  write  a 
letter  about  it    He  knew  of  nothing  coming  from  the  letter. 

"Do  you  remember  any  talk  of  fighting  the  Credit  Mobi- 
Ker»" 

"I  saw  some  of  their  stockholders  and  they  said  they 
woidd  turn  in  their  stock  to  us.  Others  wouldn't  The 
Credit  stockholders  alleged  that  the  Union  Padflo  owed  their 
company  a  great  deal  oi  money.  I  succeeded  in  getting  ihe 
great  bulk  of  the  stock  turned  over  before  a  judgment  was 
obtained." 

"You  remember  your  address  to  the  Union  Pacific  preai* 
dent  and  directors.^ 

"  I  wanted  to  put  myself  in  a  position  to  bring  a  suit." 

"  Who  opposed  this  proposed  action  of  yours  r'  asked  Mr. 
Anderson,  reading  from  the  minutes  of  a  directors'  meeting 
that  Mr.  Dexter  moved  "to  decline  to  bring  suit,  as  request- 
ed by  Mr.  Gould." 

"  I  think  the  directors  declined,  and  I  brought  the  suits  in- 
dividually." 

"  There  is  another  letter  of  yours  to  the  directors,  request- 
ing them  to  begin  suit  against  the  Credit  for  a  full  accomifc- 
ing  of  all  profits,  under  certain  alleged  contracts,"  etc 

"I  think  that  was  on  a  different  set  of  contracts," 


644  JAY  GOUU>. 

Mr.  Frederick  L.  Ames,  the  first  witness  called,  testified 
that  he  was  formerly  a  stockholder  in  the  Union  Padfio 
Baihx)ad,  and  is  a  cousin  of  the  Hon.  Oliver  Ames,  Governor 
of  the  Commonwealth.  He  was  familiar  with  the  relations 
of  this  road  and  the  Kansas  Pacific  Boad  prior  to  1877. 
^  I  personalljT  attended,"  he  said,  ^^  to  the  affairs  of  the  road 
under  the  direction  of  my  father,  Oliver  Ames.  The  first 
dividend  of  the  road  was  paid  in  1875  or  1876.  I  do  not 
remember  the  rate  paid.  I  was  somewhat  familiar  with  the 
condition  of  the  Kansas  Pacific.  I  did  not  think  the  stock 
of  much  value  in  1877.  Mr.  Jay  Gould  was  instramental 
in  buying  up  the  Kansas  Pacific  securities  in  1876.  I  un- 
derstood that  he  owned  a  large  amount  of  the  funding  bonds 
and  unstamped  incomes.  I  never  knew  what  the  respective 
interests  of  any  of  the  gentlemen  interested  were.  I  owned 
no  securities  that  entered  into  that  pool.  I  received  two 
certificates  for  $50,000  each.  I  have  not  these  in  my  posses- 
sion now.  They  were  turned  over  to  somebodv.  These 
certificates  were  probably  issued  to  every  member  of  the 
pool.  I  think  I  paid  $100,000  to  the  Farmers'  Loan  and 
Trust  Company." 

Mr.  Anderson— Have  you  been  able  to  find  those  certifi- 
cates, Mr.  Mink  f 

Controller  Mink — ^They  are  not  in  our  possession,  sir. 

Mr.  Anderson — It  is  very  strange  that  we  cannot  get  any 
clue  to  these  certificates. 

Continuing,  Mr.  Ames  testified  as  to  the  manner  in  which 
the  business  of  the  pool  was  conducted,  a  copy  of  the  con- 
solidated mortgage  being  introduced  in  evidence. 

^^  I  do  not  remember,'  he  said,  ^'  that  I  ever  contribated 
the  1383,000  funding  bonds  named  in  this  mortgage.  Mj 
connection  with  this  pool  was  limited  to  the  advancement 
or  the  $100,000.  The  pooling  rates  and  mortgage  rates 
were  identical.  I  was  a  director  in  the  Kansas  Pacifio 
Boad  in  1879.  I  cannot  explain  why  bonds  were  issaedio 
persons  having  claims  against  the  road  at  a  rate  which 
would  exaggerate  its  indebtedness  more  than  $1,000,000.  I 
exchanged  my  bonds  for  Kansas  Pacific  bonds.  I  do  not 
remember  that,  in  1880,  $2,950,000  of  preferred  stock  was 
issued  to  Jay  Gould  at  75  when  the  bonds  were  worth  9L 
I  do  not  know  of  any  other  transaction  of  the  kind.  I  do 
not  know  how  the  Kansas  Pacific  Boad  came  to  be  indebted 
to  Jay  Gould  for  $2,000,000  at  this  time.    All  the  directoa 


WHAT  MR.  AM^  SAYS  ABOVT  HIM.  646 

-were  in  favor  of  the  consolidation  except  Jaj  Qonld.  He 
was  unwilling  to  accede  to  any  such  terms  as  we  thought  we 
were  entitled  to,  and  seemed  very  much  agitated  at  the 
course  we  had  taken.  The  final  consummation  was  reached 
at  Mr.  Gould's  house.  I  do  not  remember  that  we  would 
not  let  Mr.  Gould  leave  the  room  until  he  had  signed  the 
paper.'  The  paper  was  signed  by  all  present.  The  basis 
of  the  consolidation  was  $50,000,000." 

When  asked  how  he  explained  the  payment  of  dividends 
by  the  XJnion  Pacific  with  a  condition  of  affairs  which  re- 
quires a  sale  of  stock  for  the  extinction  of  a  floating  debt^ 
Mr.  Ames  said  that  the  declaration  of  the  dividend  was 
made  upon  the  statement  of  the  net  earnings,  and  the  road 
might  very  well  have  earned  the  dividends  several  times 
over  and  at  the  same  time  have  been  buildiDg  roads  and 
borrowing  money  and  using  its  funds  for  other  purposes, 
in  addition  to  the  property,  which  would  not  interfere  with 
the  right  to  declare  dividends.  Mr.  Ames  also  said  that  the 
directors  of  the  Union  Pacific  were  largely  controlled  in 
signing  the  agreement  read  at  the  forenoon  session  bj  the 
fact  that  thev  were  cornered  by  Jay  Gould.  "  I  think  it 
has  resulted  favorably  for  the  Union  Pacific,"  he  contiiiued, 
^  and  I  would  not  take  back  the  action  if  I  could.  I  made 
nothing  by  the  consolidation,  as  I  did  not  sell  my  Kansas 
Pacific  stock,  but  hold  it  now.  Mr.  Gould  made  about 
$3,500,000.^^ 

Judge  Dillon  cross-examined  Mr.  Ames,  and  showed  from 
his  evidence  that  he  had  no  personal  ends  served  by  the 
consolidation.  He  said  that  his  interest  in  the  Union  Pa- 
cific is  larger  now  than  it  was  in  1880,  and  that  he  is  one  of 
the  largest  stockholders. 

JAY  GOULD  AND  HIS  SYSTEM. 

The  following  from  the  New  York  Times  of  April  27, 
1887,  contains  a  graphic  account  of  Mr.  Gould's  mode  of 
reviewing  his  system  of  railroads  : 

On  first  thought  it  seems  almost  impossible  that  Jay 
Gould  has  only  oeen  a  railroad  magnate  of  the  first  class 
little  more  than  half  a  decade,  yet  such  is  the  fact.  In  1879 
he  owned  only  the  nucleus  of  his  present  Southwestern 
system  of  railroads,  and  as  the  rival  of  the  Wabash  through 
.considerable  territory  was  the  Missouri  Pacific,  he  felt  by  no 
means  at  ease  regarding  the  ultimate  fate  of  his  venture. 


646  JAY  GOUIJ>. 

Oommodbre  Gtarrison  owned  a  conirolling  interest  in  IGs- 
Bouri  Pacific,  which  was  managed  bj  his  brother  Oliver. 
Commodore  Qarrison  did  not  like  Mr.  Gonld,  and  would  not 
have  objected  to  make  Gould's  purchase  of  Wabash  a  dear 
bargain.  He  probably  would  have  done  so  had  it  not  been 
for  Oliver  Garrison.  The  latter  and  Ben  W.  Lewis,  Gould's 
manager  of  the  Wabash,  were  close  friends,  and  Garrison, 
as  cmef  executive  of  the  Missouri  Pacific,  did  nothing  to 
injure  Gould's  property.  But  when  Mr.  Lewis  called  upon 
Mr.  Gould  in  New  xork  one  day  toward  the  close  of  1879, 
and  tendered  his  resignation  on  the  ^ound  of  other  inieresiv 
which  claimed  his  attention,  Gould  immediately  saw  break' 
ers  ahead,  and  said  so.  Lewis  suggested.that  be  remove 
the  breakers  by  buying  the  control  of  Missouri  Pacific 
The  suggestion  was  not  allowed  to  get  moldy.  Gould 
called  upon  Oliver  Garrison  and  offered  $1,500,000  for  the 
Garrison  interest  in  the  road.  Garrison  was  much  surprised, 
and  said  it  would  be  necessary  to  consult  with  the  Commo- 
dore. He  said,  however,  that  $1,500,000  was  at  least 
$500,000  too  low.  When  the  Commodore  heard  of  Gould's 
offer  he  rubbed  his  hands,  laughed,  and  put  the  price  at 
$2,800,000.  Gould  retorted  that  he  could  have  bought  it  on 
the  previous  day  for  $2,000,000.  The  Conmiodore  ex- 
plained that  the  difference  between  yesterday  and  to-day 
was  i8()0,000.  Gould  said  nothing  and  retired.  He  made 
another  effort  on  the  following  day.  The  Commodore  had 
been  thinking.  His  ttioughte  cost  Mr.  Gould  $1,000,000^ 
for  his  price  on  the  third  day  of  the  negotiations  was 
$3,800,000.  Mr.  Gould  did  not  express  his  thoughts,  butbis 
speech  demonstrated  that  he  appreciated  the  danger  and 
expense  of  delay.  He  said,  ^Vl'll  take  ii^"  and  he  did. 
Thus  from  a  beginning  of  less  than  1,000  miles  hesecared 
control  of  a  system  of  over  6,000,  forming  the  Missouri 
Pacific,  Iron  Mountain,  and  International  and  Great  Noriih- 
ern  and  their  branches  into  one  compact  system.  The  ba^ 
gain,  in  comparison  with  the  present  value  of  the  property, 
was  as  close  a  one  as  Mr.  Gould  ever  managed  to  make,  and 
from  the  day  it  was  closed  he  has  lost  no  opportunity  of 
extending  his  railroad  property,  which,  with  lines  tiiiat  are 
yet  on  paper,  but^Are  almost  certain  to  be  built^  is  soon 
likely  to  enibrace  'at  least  6,000  miles  of  rail. 

Though  the  General  Manager's  office  is  at  Si  Louis,  and 
none  of  the  Gould  roads— for  the  Wabash  is  not  considered 


HOW  H^  TRAVKIfS  ON  HIS  &OADS.  647 

in  the  system — ran  east  of  the  Mississippi,  nothing  of  im- 
portance IS  transacted  there  without  the  knowleage  and 
sanction  of  Mr.  Gould.  Private  wires  ran  from  the  St. 
Loois  office  to  the  Western  Union  Building,  in  which  is  Mr. 
GU)ald's  private  office,  where  he  spends  some  hours  each 
day  sitting  at  a  desk  that  never  ought  to  have  cost  more 
than  $25. 

He  has  traveled  many  times  over  every  mile  'of  his  rail- 
roads. There  is  an  immensity  of  interest  in  such  a  trip 
when  made  for  the  first  time,  or  even  the  second  or  thira, 
but  it  has  been  made  so  often  by  Mr.  Gould  that  he  has 
thoroughly  absorbed  all  the  pleasure  to  be  obtained  from  it 
except  that  which  smacks  of  dollars  and  power.  His  trips 
occupy  about  three  weeks  from  the  time  his  special  car,  the 
Convoy,  leaves  St.  Louis  until  it  returns  to  that  hot  and 
dnsW  city  of  pageants  and  conventions. 

When  word  is  flashed  to  St.  Louis  that  Mr.  Gould  is  on 
his  way,  every  official  on  the  system  packs  his  head  full  of 
information,  and  there  is  unwonted  activity  from  Omaha  to 
Gkdveston  and  from  Fort  Worth  to  San  Antonio.  All  of 
the  system's  executive  force  was  selected  either  by  Mr. 
Gould  or  by  trusted  officials  in  whom  he  had  implicit  faitl^ 
and  the  heads  of  divisions  who  work  for  Jay  Gould  could 
not  work  harder  for  anybody  else,  although  in  some  instances 
their  bank  accounts  do  not  show  it. 

Mr.  Gould  lately  was  in  the  Southwest  on  a  tour  of  inspec- 
tion. On  his  trips  he  is  always  accompanied  by  General 
Superintendent  Kerrigan,  a  New  Yorker  oy  birth,  a  South- 
westerner  bv  education.  Physically  they  are  in  marked 
contrast.  The  clfeanly  shaven,  fair-complexioned  Superin- 
tendent would  make  two  of  his  employer.  In  manner  they 
are  much  alike,  though  Kerrigan  has  a  spice  of  bluffness 
that  is  lacking  in  the  other.  He  has  the  composed,  unex- 
citable  manner  of  Gotdd  to  perfection,  and  is  never  known, 
no  matter  how  great  the  provocation  may  be,  to  speak  ex- 
cept in  a  low-pitched  tone.  He  is  a  walking  railroad  ency- 
clopedia, and  nas  the  topographical  features  of  the  South- 
west— every  corner  of  it-  at  his  fingers'  ends.  He  has 
been  einployed  on  railroads  of  the  system  for  over  thirty 
years.  From  his  Sui)erintendent  Mr.  Goidd  obtains  such 
details  as  the  latter  gathers  from  the  Division  Superintend- 
ents and  odier  officials,  but  in  making  a  trip  Mr.  Gould 
insists  upon  stopping  at  every  point  included  in  one  of  Mr. 


648  JAY  Gonij>. 

Kerrigan's  regular  trips  of  superyision.  He  is  alwajs 
aooompanied  hj  a  stenographer,  who  is  also  a  typewriter, 
and  the  Superintendent  ana  the  heads  of  divisions  follow 
the  same  plan. 

Upon  arriying  at  a  station  at  which  it  has  been  decided  to 
make  an  inspection,  Mr.  Qould  asks  how  long  a  stop  will  be 
made.  The  answer  maj  be  '^  an  hour."  mx.  Gould  looks 
at  his  watch.  He  then  accompanies  the  Superintendent  on 
a  part  of  his  rounds,  listens  quietly  to  his  talk  with  the 
rauroad  officials  of  the  place,  and  having  heard  aU  he  cares 
to  listen  to,  wanders  around  by  himself  while  the  Superin- 
tendent picks  up  the  information  which  later  he  will  giYeto 
his  employer.  Mr.  Gould  manifests  no  impatience  until 
the  hour  has  been  exhausted.  But  if  the  engineer  is  not 
ready  to  start  on  the  minute,  and  all  hands  are  not  in  theii 

E laces  on  the  car,  he  begins  to  fidget,  and  is  restless  until  a 
resh  start  is  made. 

He  is  a  strong  advocate  of  method.  The  da^r's  work  is 
laid  out  in  the  morning  and  almost  before  the  train  starts  in 
the  morning  he  has  settied  how  many  stops  can  be  made 
during  the  day  and  where  the  night  can  be  spent.  He  dines 
and  sleeps  on  board  his  car  from  the  start  to  the  finish  of  a 
three  weeks'  trip.  At  night  the  Convoy  is  run  to  the  qoiet- 
est  part  of  the  yard,  as  the  owner  objects  to  more  noise  than 
he  can  avoid  at  night,  though  he  can  apparently  stand  as 
much  as  any  one  else  in  daylisht.  His  car  is  idways  a  cnii- 
osity  along  the  line,  and  people  come  from  far  and  near  to 
look  at  it  as  it  stands  in  the  evening  in  a  secluded  spot,  se- 
cure in  its  loneliness.  In  some  parts  of  the  country  throagh 
which  his  roads  run  he  is  quite  as  much  of  a  curiosity  in  the 
eyes  of  the  country  folk  as  a  circus,  and  were  he  to  stand  on 
the  platform  after  the  manner  of  James  G.  Blaine,  woold  at- 
tract quite  as  big  a  crowd  as  that  gentleman.  He  is  nerer 
apparently  anxious  to  achieve  notoriety  in  that  wav.  and  is 
quite  as  modest  in  his  demeanor  while  on  one  of  his  tears 
as  he  is  in  his  office  or  his  Fifth  Avenue  mansion.  In  the 
latter,  as  a  few  newspaper  reporters  know,  he  is  more  unas- 
suming and  far  more  polite  than  a  majority  of  his  thousand- 
dollar  employes. 

Mr.  Gould  meets  some  odd  as  well  as  prominent  people  on 
his  trips  and  occasionally  has  a  peculiar  experience.  On  his 
first  visit  to  Galveston,  Texas,  he  discovered  that  it  was  on 
an  island.    Like  a  good  many  others  he  imagined  it  was  on 


PKRPKTRATKS  A  JOK^  IN  TJ^XAS.  649 

the  mainland.  On  this  occasion  a  number  of  citizens  had 
been  appointed  to  do  him  honor  and  he  had  promised  to  take 
up  his  quarters  at  a  hotel.  The  committee  had  neglected  to 
secure  carriages  for  the  part^,  and  made  a  desperate  effort 
just  before  the  arrival  of  his  car  to  repair  the  omission. 
This  it  was  unable  to  do.  There  was  an  election  at  Galves* 
ton  on  that  particular  day.  It  was  a  hot  one,  both  the  day 
and  the  election,  and  eyerjthing  on  wheels  had  been  bought 
up  by  the  contending  parties.  Twenty  dollars  was  offered 
for  a  hack  and  refused.  The  committee  felt  forlorn  until 
Mr.  Gould  laughed  at  its  dilemma  and  remarked  that  he  saw 
no  hills  that  ne  couldn't  climb.  This  is  the  only  joke 
charged  against  Mr.  Gould  by  the  people  who  live  on  the 
line  of  his  roads,  for  the  highest  point  of  Galveston  is  only 
three  feet  above  the  sea  level.  The  inhabitants  claim  four 
feet,  and  denounce  as  a  libel  the  statement  made  by  people 
who  live  inland  to  the  effect  that  tide  water  is  tliree  feet 
higher  than  Galveston, 

W  hile  skimming  along  over  the  International  and  Great 
Northern,  between  Houston  and  Galveston,  Mr.  Gould  can- 
not look  on  either  side  of  him  without  lookingat  land  owned 
by  A.  A.  Talmage,  manager  of  the  Wabash  Ilailroad.  Mr* 
Talmage  owns  a  tract  or  ranch — though  there  are  but  few 
cattle  on  it — of  160,000  acres.  For  tlus  land  Mr.  Talmage 
paid  12^  cents  per  acre.  He  would  probably  refuse  to  sell 
it  to-day  for  $6  an  acre.  If  Mr.  Talmage  owned  nothing 
else  besides  this  ranch  he  might  be  considered  above  want 
Mr.  Gould  owns  some  land  in  different  parts  of  the  country 
also,  but  as  a  proprietor  of  the  soil  ne  occupies  a  much 
lower  grade  than  Manager  Talmage.  George  Gould  proba- 
bly owns  as  much  land — railroad  land  grants  not  considered 
— in  the  Southwest  as  his  father,  and  is  always  on  the  look- 
out for  bargains.  These  are  always  to  be  had  at  the  close 
of  a  disastrous  agricultural  or  cattle  season.  Newcomers  in 
Texas  are  liable  to  forget  that  disastrous  years  only  occur 
occasionally,  and  that  in  three  favorable  seasons  the  profits 
will  be  large  enough  to  stand  one  bad  season  in  three.  Thej 
may  hear  of  all  this  after  they  sell  out,  but  the  old  settler  is 
not  offering  information  that  can  only  be  bought  with  ex- 
perience until  it  is  valuable  as  a  mournful  reflection. 

The  Iron  Mountain  Bailroad  has  a  station  called  Malvern. 
It  is  44  miles  south  of  Little  Bock.  As  his  car  pulls  into  Mal- 
vern Mr*  Gould  sees  on  a  narrow  gauge  railroad  that  also  has 


660  JAY  GOUI^D. 

a  Btation  there  an  engine  with  a  diamond-shaped  head-ligbL 
The  narrow  gange  road  runs  from  Malyem  to  Hot  Sprixig& 
Mr.  Gould  has  no  interest  in  it,  bnt  he  knows  it  was  bmlt 
and  is  owned — every  spike  in  it— by  a  man  who  received  his 
first  start  in  life  fr  -m  the  same  man  who  placed  him  on  his 
feet.  The  Hot  Springs  railroad  is  owned  by  "Diamond 
Joe  ^  iieynolds,  who  was  started  in  business  many  years  ago 
by  Ztdock  Pratt,  of  the  town  of  Prattsville,  Greene  county, 
if.  Y.,  when  the  young  man  lived  in  Sullivan  county,  right 
across  the  line  of  Delaware  county,  Penn.,  where  Jay  Gould 
was  enabled  by  Mr.  Pratt  to  tan  hides  with  oak  and  hemlock 
bark,  not  after  the  fashion  of  Wall  Street.  Beynolds  and 
Gould  were  assisted  by  Mr.  Pratt  about  the  same  time. 
Beynolds  is  not  as  wealthy  to-day  as  Mr.  Gould,  but  he  owns 
all  the  money  he  wants,  and  Mr.  Gould  has  often  said  it  did 
not  need  fifty  millions  to  secure  contentment.  ^  Diamond 
Joe "  Beynolds  |s  a  rich  man  and  he  spends  much  of  his 
time  between  Chicago  and  Hot  Springs.  On  his  first  visit 
to  Hot  Springs  he  was  compelled  to  stage  it  from  Malvein. 
The  ride  disgusted  him  as  much  as  the  Springs  delighted 
him.  He  found  a  man  who  had  obtained  a  charter  for  a 
railroad  from  Malvern  to  the  Springs  and  who  had  no  money. 
The  charter  and  some  money  changed  hands.  Beynolds 
built  the  railroad  and  owns  it,  rolling  stock  and  all.  The 
road  is  24  miles  long.  He  made  his  money  in  wheat,  bat 
not  in  Sullivan  county.  After  getting  a  start  there  he  went 
West  and  shipped  wheat  from  Wisconsin  to  Chicago.  He 
shipped  it  in  sacks  and  marked  the  sacks  with  a  diamond  and 
inclosed  in  it  the  letters  "  J.  O."  It  was  from  this  circum- 
stance, because  the  sacks  and  trade  mark  became  widely 
known,  that  he  obtained  the  sobriquet  of  "  Diamond  Joe,'' 
and  not  as  those  who  have  only  heard  of  him  think  for  a 
penchant  for  gems,  and  Mr.  Beynolds  is  modest  as  well  as 
rich. 

Mr.  Gould  travels  like  a  rocket  while  inspecting  his  roada 
In  this  way  be  gets  a  certain  amount  of  exercise,  for,  as  tray- 
elers  know,  a  heavy  train  drawn  at  the  rate  of  50  miles  an  hoar 
will  make  little  fuss  in  comparison  with  the  antics  of  a  single 
car  tacked  to  an  engine  making  the  same  rate.  Mr.  Gbmd 
often  travels  in  the  Convoy  at  a  50-mile  gait,  and  during 
such  a  trip  he  has  been  known  to  change  seats — from  one 
side  of  the  car  to  the  other — ^not  of  his  own  volition,  but 
without  changing  countenance.    So  long  as  SuperintendeAt 


H]$  VSJNG3  AN  BNGINKBR  TO  TIMK.  651 

Keirigan  keeps  his  hand  off  the  bell  rope  Mr.  Gould  makes 
no  remonstrance,  but  accepts  his  shaking  without  a  grumble. 
He  changed  engineers  on  one  of  his  recent  trips  without 
knowing  it.  The  engineer  had  been  running  slowly,  for  rea- 
sons of  his  own,  in  sjpite  of  numerous  pulls  at  the  bell  cord. 
When,  however,  he  (uscoyered  that  dinner  was  imder  way 
he  pidled  the  throttle  open,  and  the  locomotive  darted 
ahead  suddenly  as  it  going  through  space.  The  jar  cleaned 
the  table  like  a  flash.  At  the  next  station  the  engineer  was 
promoted  to  a  freight  train. 

A  HEMINISOEKGE  OF  KANSAS  PAOIFIO. 

There  is  an  interesting  piece  of  information  regarding  the 
deal  in  Kansas  Pacific  in  the  testimony  of  Mr.  Artemus  H. 
Holmes,  formerly  the  attorney  of  that  company,  showing 
how  the  stock  made  a  marvelous  leap  from  two  or  three 
dollars  to  par  in  seven  days.  Mr.  Holmes  testified  as  fol* 
lows : 

From  1873  to  1877  the  market  value  of  all  the  Kansas  Pa- 
cific securities  was  extremely  low.  The  Kansas  Pacific  stock 
was  $2  to  $3  a  share  and  practically  valueless.  Land  grant 
bonds  were  worth  10  cents  on  the  dollar,  and  Denver  exten- 
sion about  40,  but  ranged  from  50  to  70  in  1876  to  1878.  The 
,  first  mortgage  bonds  w^e  below  par,  the  company's  credit 
was  gone  and  the  stock  unmarketable.  Sidney  Dillon,  who 
was  then  President  of  the  Kansas  Pacific  Company,  was  anx- 
ious to  have  the  matter  settled  as  quickly  as  possible.  At 
the  former's  suggestion  a  f riendlv  suit  was  brought  on  Janu- 
ary 17, 1880,  before  Judge  Donohue,  in  ihe  Supreme  Court, 
'in  this  citv,  to  settle  the  ownership  of  the  Denver  Pacific 
stock.  Tne  trustees  said  they  could  not  do  anything  wiib 
the  stock  that  would  injure  it.  On  January  20, 1880,  Hor- 
ace M.  Buggies,  as  referee,  heard  argument,  the  case  was 
closed  in  two  days,  the  decision  was  made  January  23  and 
the  decree  signed  by  Judge  Donohue  on  January  24,  giving 
the  stock  to  the  Qould  party.  Mr.  Holmes  stated :  ^^  AU 
the  time  this  was  pending  the  articles  of  consolidation  were 
being  drawn  up»  but  I  did  not  know  anything  about  it  until 
they  were  signed  on  January  24."  Beferee  £uggles  decided' 
that  29,000  wares  of  Denver  Pacific  stock  free  from  mort-1 

ages  ^ould  pass  to  the  Kansas  Pacific.  This  was  put  into 
iie  Union  Pacific  and  29,000  shares  of  the  consolidated 


662  JAY  GOUU). 

company's  stock  given  in  exchange,  whicli  sold  at  par.  The 
witness  was  sharply  questioned  as  to  what  he  knew  aboat 
Bef eree  Buggies  report.  He  was  asked  if  he  knew  who 
wrote  the  report,  or  had  any  knowledge  as  to  who  did. 

Q.  In  order  to  prepare  the  decree  which  was  signed  on 
Jan.  2ij  you  must  have  had  the  finding  before  you,  did  yoa 
not?    A.  No. 

Q.  How  could  you  prepare  it  without  knowing  what  the 
finding  was,  for  the  decree  was  presented  the  very  next  day? 
A.  I  must  withdraw  that  answer,  and  change  it  to  yes. 

Gov.  Pattison — Do  I  understand  you  to  say  that  the  stock 
which  was  exchanged  had  risen  in  a  few  days  from  $2  to  $3 
a  share  to  par.  Mr.  Holmes  said  that  was  a  fact,  and  then 
this  question  was  put  to  him  : 

Q.  In  other  words,  Mr.  Dillon  had  sworn  on  Jan.  17, 1880, 
that  the  stock  had  no  financial  value,  and  yet  on  Jan.  24  it 
was  worth  par.    A.  Yes. 

This  discloses  another  of  Mr.  Gould's  valuable  secrets  of 
the  way  to  make  money  rapidly. 

Gould's  fibst  yaohtino  expebience. 

There  is  a  humorous  story  told  of  Mr.  Gould's  first 
yachting  experience,  which  was  recently  published  in  the 
Philadelphia  Prew,  and  its  veracity  vouched  for  by  a  Uving 
witness  to  the  event.  It  is  characteristic  of  Mr.  Gtonldin 
some  special  respects,  and  runs  as  follows  : 

At  the  residence  of  a  club  man,  whose  reputation  as  a 
raconteur  is  nearly  as  great  as  that  of  his  Burgundy,  I 
noticed  a  pretty  model  of  a  jib  and  mainsail  yacht  Bepljing 
to  my  admiring  inquiry  the  club  man  explained  : 

"  That  is  the  model  of  a  boat  upon  which  were  passed 
some  of  the  sunniest  hours  of  my  life.  She  was  owned  by 
one  of  the  Cruger  family,  of  Cruger-on-the-Hudson,  and  has 
an  added  interest  from  the  fact  that  upon  her  Jay  Gould 
acquired  his  first  yachting  experience,  and  so  eventral  a  one 
that  I'll  bet  he  remembers  it  to  this  day. 

"  Crugers— one  of  the  oldest  and  best  known  families  in 
the  State,  intermarried  as  they  are  with  other  Knickerbock- 
ers like  the  Schuylers,  Livingstons  and  Van  Eensselaere— 
owned  all  the  land  in  the  neighborhood  of  the  station  sub- 
sequently named  after  them.     A  portion  of  this  property 


STORY  O?  TH«  JKAN  OV^RAIXS.  653 

oonfiisted  of  a  brick  yard,  which  was  rented  to  the  Bon  of 
old  Schuyler  Liyingston.  It  was  in  1853  or  1854,  and  Jay 
Oould  had  jnst  f aUed  in  the  tannery  business  in  Pennsyl- 
vania. 

^^  Young  Liyingston's  leased  brick  yard  wasn't  paying, 
and  he  concluded  that  it  needed  a  shrewd  business  man  at 
its  head.  He  advertised  for  a  partner,  and  one  day  there  ap- 
peared in  response  a  small,  dark  gentieman,  looking  scrupu- 
lously neat  in  his  black  broadcloth.  He  gaye  his  name  as 
Jay  &ould.  Pending  negotiations,  Mr.  Gould  became  the 
guest  of  the  Crugers  at  the  old  mansion  on  the  hiU.  Every 
effort  was  put  forth  to  entertain  him  during  his  stay,  the 
more  as  he  seemed  to  regard  favorably  a  partnership  with 
their  young  friend. 

"One  day  Mr.  Cruger  invited  Gk>uld  to  a  sail  to  New- 
burgh,  and  got  ready  his  yacht,  of  which  that  model  is  the 
reduction.  Several  of  us  youngsters  were  taken  along  to 
help  work  the  boat.  Eugene  Cruger,  a  nephew  of  the 
yacnt's  owner,  was  one  of  us.  Peekskill  was  reached  and 
the  whole  party  went  up  to  the  hotel. 

*^  All  the  way  up  the  river  we  had  noticed  that  Mr.  Oould 
was  uneasy,  smf  tmg  about  constantly  on  the  deck,  where  he 
sat,  and  squirming  and  twisting  as  if  seeking  to  find  a  softer 
spot.  Nothing  was  said  about  it,  of  course,  but  when  we 
landed  Mr.  Gould  himself  furnished  the  explanation.  From 
the  heat  of  the  sun  the  vellow  paint  on  the  boat's  deck  had 
become  baked  and  chalky,  and  it  was  not  long  before  the 
little  man  discovered  that  the  dry  powder  was  coming  o£F 
on  his  trousers.  Hence  his  uneasiness.  He  concluded  by 
saying  he  was  afraid  his  broadcloth  nether  garments  would 
be,  if  they  were  not  already,  ruined,  and  was  determined  to 
abandon  the  trip  and  return  by  raU.  This  Mr.  Oruger 
would  not  hear  of,  and  promised  to  obviate  the  difficulty- 
We  all  adjourned  to  a  general  store  and  Cruger  bought,  for 
two  shillings  and  a  half,  a  pair  of  jean  overalls.  These 
Mr.  Gould  put  on  when  we  went  aboard  the  boat  and  ex- 
pressed his  unqualified  satisfaction  at  the  result. 

**On  our  trip  back  from  Newburgh  we  again  called  ai 
Peekskill,  and  once  more  the  party  started  for  the  hotel 
This  time  Mr.  Gould  declined  the  invitation  to  take  some* 
thing  and  preferred  to  remain  on  board.  About  an  hour 
was  spent  in  the  hotel,  when  suddenly  Mr.  Cruger  remem- 
bered that  he  wanted  some  white  lead,  and  young  Eugene 


664  JAY  GOXTI«D. 

Onu^er  and  I  went  with  him  to  the  store  to  carry  it  down  to 
the  boat. 

•*  *  How'd  the  overalls  work,  Mr.  Cmger  ? '  was  the  salnta- 
tion  of  the  storekeeper.  Then  before  answer  conld  be 
returned,  he  added  admiringly :  ^  That  friend  o'  yonrn  is 
party  shrewd.' 

*^' Who,  Mr.  Gould?  Yes,  he  appears  [to  be  a  thorough 
business  man.' 

'*  ^  Well,  I  sh'd  say  so  !  He  can  drive  a  mighty  sharp  bar- 
gain.' 

^^ '  Drive  a  sharp  bargain  ? '  repeated  Croger,  all  at  sea. 
*  What  do  you  mean  ? ' 

« *  Why,  don't  you  know  he  was  in  here  'bout  three  quar- 
ters of  an  hour  ago,  and  sold  me  back  the  overalls  you 
bought  for  him.' 

^'  ^  Thunder,  no  I '  roared  Gruger  in  astonishment 

*^  *  Well,  sir,  he  jest  did  that  He  kem  in  here,  tole  me 
he'd  no  fu'ther  use  for  'em,  that  they  was  as  good  as  when  I 
sold  'em,  an'  after  we'd  haggled  awhile  he  Agreed  ter  take 
two  shillin'  fur  'em,  which  I  paid  him.    Here's  the  overalls.' 

"  I  can  shut  my  eyes  now,'*  went  on  the  jolly  club  man, 
with  a  hearty  laugh,  suiting  the  action  te  the  words,  "and 
call  up  Mr.  Gruger's  face  with  its  mingled  expression  of 
amazement  and  incredulity.  He  left  the  store  in  silence.  Kot 
until  we  had  nearly  reached  the  boat  did  he  spesd^  Then 
he  only  said,  *Boys,  I'll  fix  him  for  thatt'  we  reached 
home  without  any  reference  to  the  incident  On  the  way 
back  Mr.  Gould  sat  upon  his  pocket-handkerchief. 

^^The  same  night  Mr.  Gruger  perfected  his  plan.  NeQ[t 
day  Mr.  Grufi;er  proposed  a  fishmg  party.  Mr.  Gk>uld  declined 
to  go.  He  had  concluded,  he  said,  not  to  take  an  interest 
in  young  Livingston's  brickyard,  and  would  return  to  the 
city  on  uie  afternoon  train.  A  business  engagement,  involT- 
ing  quite  a  sum  of  money,  had  to  be  kept.  His  host  argaed 
with  him,  but  for  a  time  to  no  purpose.  The  satoniine 
little  man  had  a  tremendous  amount  of  determination  in  his 
'  composition.  Finally  a  compromise  was  effected,  it  being 
agreed  that  he  should  put  Gould  off  at  a  station  in  time 
to  catch  the  train.  That  he  must  catch  it  without  fail,  be 
most  emphatically  declared. 

**  The  day  passed  on  and  we  were  off  Sing  Sing,  when  we 
saw  the  smoke  of  the  coming  train.  We  had  been  running 
free  before  the  wind,  but  immediately  Mr.  Gruger,  who  was 


OBUGSD  TO  WAD^  OR  SWIM.  655 

at  the  stick,  Bhoved  it  down ;  we  hauled  in  on  the  sheets 
and  headed  for  the  Eastern  shore.  Mr.  Gould  was  by  this 
time  on  his  feet,  clinging  to  the  windward  coaming,  the 
deepest  anxiety  pictured  on  his  face.  Just  there  the  water 
shoals  rapidly.  "We  were  within  fifty  feet  of  the  shore, 
opposite  the  railroad  depot.  The  time  had  now  come  for 
Mr.  Qruger's  reyenge. 

^' '  Let  go  the  main  and  jib  sheets  I '  he  shouted.  ^  Down 
with  your  board  I' 

**  Never  was  order  more  eagerly  obeyed.  The  sheets 
whizzed  through  the  blocks,  ready  hands  slipped  out  the 
pin  and  jammra  down  the  centre-board,  and  in  a  second  the 
yacht,  with  a  grating  shock  and  shaking  sails,  came  to  a 
stand,  fast  on  the  sandy  bottom.  There  she  was  bound  to 
stay  until  the  obstructing  board  was  lifted  again. 

"'What's  the  matter?'  exclaimed  Mr.  Gould,  anxiously. 
Of  course  he  had  not  detected  the  ruse,  for  he  knew  no 
more  about  the  working  of  a  yacht  than  a  sea  cow  does  about 
differential  calculus." 

"  *  Vm  afraid  we're  aground,'  replied  Mr.  Cruger,  with  a  fine 
assumption  of  sadness.  '  Boys,  get  out  the  sweeps  and  push 
her  off.' 

"  We  struggled  with  the  long  oars  in  a  gr'='a'  show  of  ardor, 
while  Gould  watched  us  in  breathless  suspense,  between 
hope  and  fear.  But  as  we  had  taken  care  to  put  the  sweeps 
overboard  astern,  the  harder  we  shoved  the  faster  we  stuck. 
The  little  man's  suspicions  were  not  in  the  slightest  degree 
aroused  and  he  turned  in  despair  to  Mr.  Cruger. 

" '  What  shall  I  do  I '  he  almost  wailed.  '  I  ve  got  to  catch 
that  train ! ' 

"  *  Then,'  replied  the  joker,  solemnly,  *  you'll  have  to  wade 
or  swim.' 

"Already  the  train  was  in  sight,  two  miles  away,  and 
whatever  was  to  be  done  had  to  be  done  quickly.  As  I  have 
said,  there  was  plenty  of  grit  in  the  embryo  railroad  king, 
and  quick  as  a  wink  he  was  out  of  his  sable  clothes  and 
standing  before  us  clad  only  in  his  aggressively  scarlet  un- 
dergarments. Holding  his  precious  broadcloth  suit  above 
his  head,  he  stepped  into  the  water,  which,  shallow  as  it  was, 
reached  to  the  armpits  of  the  little  gentleman.  Then  he 
started  for  the  shore,  his  short,  thin  legs  working  back  and 
forth  in  a  most  comical  fashion  as  he  strove  to  quicken  his 
pace.    The  station  platform  was  crowded  with  people,  and 


666  jAT  Qoxn<D. 

very  soon  the  strange  figure  approarching  them  was  descried. 
A  peal  of  laughter  from  500  throats  rolled  over  the  waierto 
as,  the  ladies  hiding  their  blushes  behind  parasols  and  fans. 
The  men  shouted  with  laughter.  Finally  the  wader  reached 
the  base  of  the  stone  wall,  and  for  a  moment  coyered  with 
confusion — ^and  but  little  else — ^stood  upon  the  rock,  olo 
scarlet  leg  uplifted,  looking  for  all  the  world  like  a  flamingo 
on  the  shore  of  a  Florida  bavou,  while  the  air  was  split  mih 
shrieks  of  laughter,  in  which  we  now  unreservedly  joined 
Then  came  the  climax  of  the  joke,  which  nearly  parialyze  J 
the  unfortunate  victim. 

^^  Haul  on  your  sheets,  boys,  and  up  with  the  board  I^  was 
Cruger's  order.  As  the  yacht  gathered  headway  and  swept 
by  within  ten  feet  of  the  astonished  Mr.  Qoul4  ^«  lau^h- 
iagly  bade  him  good-bye,  advising  a  warm  mustard  bath 
when  he  got  home. 

^  "Then  his  quick  mind  took  in  the  full  force  of  the  prac- 
tical joke  we  had  worked  upon  him  and  his  dark  face  was  a 
study  for  a  painter.  But  the  train  had  already  reached  the 
station,  taken  on  its  passengers  and  the  wheels  were  begin- 
nine  to  turn  again  for  its  run  to  the  city.  As  Gould  scram- 
bled up  the  wall,  his  glossy  black  suit  still  pressed  affection- 
ately to  his  bosom,  the  ^  All  aboard  1'  had  sounded  and  the 
cars  were  moving.  Every  window  was  filled  with  laughing 
faces  as  he  raced  over  the  sand  and  stones  and  was  dragged 
by  two  brakemen  on  to  the  rear  platform,  panting  and  dnp- 
ping.  The  last  glimpse  we  caught  of  him  was  as  the  train 
entered  the  prison  tunnel.  Then,  supported  on  either  side 
by  the  railroad  men,  he  was  making  frantic  plunges  in  his 
efforts  to  thrust  his  streaming  legs  mto  his  trousers  as  the 
platform  reeled  and  rocked  beneath  him.'' 

'^Did  he  ever  return  Mr.  Oruger  the  two  shillings?"  the 
writer  inquired. 

*'  Keturn  the  two  shillings  I"  echoed  the  club  man.  For  a 
moment  he  was  silent.  Then,  as  a  retrospective  gleam  crept 
into  his  eyes,  he  slowly  shook  his  head  and,  wiUx  seeming 
irrelevancy,  said : 

**  I — ^guess —  you — are — not  —  very — well — acquainted— 
with— Mr.— Jay— Gould." 

The  above  story  was  submitted  to  Mr.  Eugene  Cmger  ftt 
his  residence.  No.  1211  LivingstonAvenue,  together  with  the 
inquiry  as  to  its  accuracy.  Mr.  Cruger  made  the  following 
reply :  ^^  I  must  say  that  I  can't  imagine  who  can  have  for- 


RBCKNT  SPECUI,ATIVI{  EXPU)ITS.  667 

Dished  these  particnlars,  for  most  of  those  who  took  part  in 
the  incidents  related  have  gone  forever.  Whoever  the  in- 
formant may  be,  howeyer,  it  cannot  be  denied  that  jou  have 
received  a  true  account  of  what  occurred.  I  enjoyed  the  af- 
fair at  that  period,  but  time  has  softened  things  and  Ihe 
recollection  is  not  without  its  unpleasant  side." 

The  success  of  Mr.  Gould  in  securing  the  Baltimore  and 
Ohio  Telegraph  to  be  consolidated  with  Western  Union,  has 
placed  him  at  the  head  of  the  greatest  telegraph  monopoly 
in  the  world,  practically  beyond  competition.  It  remains  to 
be  seen  whether  or  not  Congress  will  take  any  action  to- 
wards the  creation  of  a  Ooyemment  telegraph  that  will 
afford  a  guarantee  of  protection  against  extortionate  rates. 
It  is  true  that  Western  Union  has  lowered  its  rates,  but 
this  is  generally  regarded  as  a  conciliatory  move  of  a  tem- 
porary character  on  the  part  of  Mr.  Oould  for  the  pur- 
pose of  showing  that  Government  telegraphy  is  noi  i^ 
necessity,  and  that  as  soon  as  the  attention  of  Congress  is 
turned  away  from  the  question  rates  will  go  up  agaiu. 

While  I  should  not  approve  of  the  Government  going  so 
far  as  to  condemn  Western  Union  property,  and  making  9k 
purchase  thereof  on  an  appraised  valuation,  still  I  do  be* 
lieve  that  proper  Congressional  action  should  be  teken  to 
provide  supervision  and  protective  control  over  the  tele* 
graphic  communication  throughout  the  country.  My  idea 
is  that  the  Government  should  interfere  rather  as  a  regulator 
than  an  owner,  being  careful  to  avoid  everything  that  could 
be  construed  into  monopoly  on  ite  own  part,  any  more  than 
in  connection  with  our  railroad  system. 

Mr.  Gould  went  to  Europe  late  in  the  fall,  and  visited 
several  places  there  ostensibly  for  health,  pleasure,  and  re- 
creation. What  his  secret  and  ultimate  designs  may  be  has 
not  yet  transpired,  although  they  have  been  a  leading  topic 
of  much  conjecture  among  financiers  and  Wall  Street  mag- 
nates since  his  arrival  on  the  other  side.  One  of  the  best 
things  got  off  on  this  subject  was,  that  when  Mr.  €kuld  sent 
in  his  card  to  one  of  the  Bothschilds,  the  latter  requested 


658  JAY  GOXJI^D. 

{he  messenger  to  inform  the  gentleman  that  Europe  was  not 
for  sale. 

He  returned  abont  the  end  of  March  to  find  some  of  his 
railroads,  especially  in  Missouri  Pacific  system,  in  a  some- 
what crippled  oon<Ution« 

With  a  feeling  of  deep  humility  that  I  have  made  many 
important  omissions  in  Mr.  Oould's  yariegated  career, 
although  I  have  surrendered  all  the  space  to  him  that  I  caA 
Yery  well  afford,  I  now  beg  to  take  my  leave  of  him,  at  least 
so  far  as  the  present  edition  is  concerned* 


MmsiJuj. 


CHAPTER    LIX. 

MEN  OF  MARK. 

OiBUs  W.  Field— Hon.  Stephen  V.  White— Austin  Oobbin 
—Philip  D.  Abmoub— Hon.LetiP.  Mobton— John  A. 
Stewabt— Anthony  J.  Dbbxel— The  JebomeBbothebs 
— ^Addison  Oammaok— Eussell  Sage— Ohauncey  M. 
Depew— James  M.  Bbown— Stedman  the  poet— Viotob 
H.  Newcombe— Moses  Taylob— Eobmeb  Giants 
OF  the  Stbest— Hbnby  Keep— A^tthony  W.  Mobse. 

Cybus  W.  Field. 

CTBUS  W.  FIELD  has  been  termed  a  looomotive  in 
ironsers.  The  simile  illustrates  the  indefatigable  energy 
of  the  man.  His  indomitable  resolution  and  his  energy  of 
oharaoter  hare  placed  him  high  among  the  distinguished 
men  of  the  age.  He  was  bom  at  Stockbridge,  Mass.,  in  1819. 
His  father  was  a  clergyman.  At  fifteen  years  of  age,  Gyrus 
W.  Field  came  to  New  York  with  a  trifling  sum  in  his 
pocket.  For  three  years  he  was  in  the  employ  of  A.  T. 
Stewart,  the  dry  goods  merchant^  and  then  went  to  Lee, 
Mass.,  to  work  in  his  brother's  paper  mill.  Two  years  later 
he  became  a  partner  in  the  paper  firm  of  E.  Boot  &  Co.,  iti 
Maiden  Lane,  but  the  co-partnership  was  hot  successful. 
Later  on  he  again  went  into  the  paper  business,  and  by  1853 
had  acquired  a  competence,  whereupon  he  partially  with- 
drew from  mercantile  pursuits,  and  Ids  health  having  failed 
he  took  a  trip  to  South  America.  He  was  about  to  with- 
draw entirely  from  business,  when  he  was  induced,  with 
considerable  difficulty,  to  look  into  a  project  for  laying  a 
telegraphic  cable  to  England.  Frederick  N  Gisboume  had 
interested  Matthew  D.  Field,  a  civil  engineer,  and  a  brother 
of  Cyrus  W.  Field,  in  a  project  for  establishing  a  telegraph 
line  between  NewTork  and  St.  John's,  Newfoundland,  partly 
on  poles,  partly  under  ground,  and  partly  under  water.    At 


J 


660  MKN  OP  MARK. 

St.  John's,  the  fastest  steamers  ever  built  were  to  sail  to 
Ireland,  and  the  time  between  the  two  countries  was  to  be 
shortened  to  six  days  or  less.  A  company  had  attempted 
to  carry  out  this  project,  and  had  become  bankrupt.  The 
idea  was  un-American ;  it  was  unsatisfactory ;  much  quicker 
communication  was  needed.  It  was  not  till  Mr.  Field  con* 
ceived  the  idea  of  laying  a  cable  direct  from  Newfoundland 
to  Ireland,  that  he  became  really  interested  in  the  enter- 
prise. He  was  assured  by  high  scientific  authority  that  the 
idea  could  be  carried  out.  In  March,  1854,  Mr.  Field  went 
to  St  John's,  Newfoundland,  and  obtained  from  the  legis- 
lature a  charter,  granting  an  exclusive  right  for  fifty  years, 
to  establish  a  telegraph  line  from  the  Continent  of  America 
to  Newfoundland  and  thence  to  Europe.  Then,  with  con- 
siderable difficulty,  he  obtained  in  New  York  subscriptionB 
amounting  to  $1,500,000,  which  he  thought  would  be  suffi- 
cient. The  line  really  cost  $1,834,500,  being  more  than 
2,600  miles  long.  His  first  attempt  failed  in  1857.  Se 
succeeded  in  the  following  year,  and  then  the  cable  became 
silent,  and  the  incredulous  public  thought  that  this  would 
end  all  attempts  to  do  something  that  seemed  miraoolous. 
For  seven  years  no  attempt  was  made  to  lay  a  cable,  as  the 
Civil  War  intervened,  but  in  1865  Mr.  Field  again  took  up 
the  enterprise,  in  which  he  had  never  lost  faith.  By  this  time 
sub- marine  telegraphy  had  been  greatly  improved,  a  better 
cable  was  constructed*  and  a  better  machine  for  laying  it 
was  invented*  The  famous  steamer  Cheat  JEoMtem  took  the 
cable,  but  after  going  some  1,200  miles,  the  great  vessel 
gave  a  lurch  that  broke  the  cable  and  an  attempt  to  gnqpple 
it  was  unsuccessful.  In  1866,  however,  a  cable  was  success- 
fully laid.  A  private  citizen  seldom  receives  such  honors 
as  was  showered  on  Mr.  Field,  in  1866,  when  Europe  and 
America  realized  that  largely  through  the  exertions  of  one 
man,  they  were  joined  by  the  Atlantic  cable.  He  had 
pushed  a  vast  project  to  a  successful  consummation  in  spite 
of  incredulity,  ridicule,  indifference  and  strenuous  opposd- 


^iMUtl^^     V         )r%^i^^^t^S-<yt\^- 


CONNECTING  TWO  CONTINENTS.  661 

tion.  Peter  the  Hermit  did  not  preach  the  crasade  with 
more  fervor  and  enthusiasm  than  this  priest  of  commerce,  so 
to  speak,  advocated  the  great  work  with  which  history  will 
always  link  his  name.  If  any  one  had,  a  few  centaries 
ago,  ventured  to  predict  that  the  day  would  come  when 
there  would  be  six  or  seven  cable  telegraphs  stretched 
along  the  ocean  bed  between  America  and  Europe — 
along  dim  prehistoric  valleys,  four  miles  under  water  and 
over  great  sub-marine  mountains — by  means  of  which  a 
message  could  be  sent  nearly  three  thousand  miles  and  an 
answer  received  in  thirty  seconds  j  he  would  have  been  in 
danger  of  incarceration  as  a  lunatic,  or  even  of  death  on  the 
scaffold  or  at  the  stake.  This  daring  utilitarian  age,  how- 
ever, has  grown  accustomed  to  startling  exhibitions  of  human 
ingenuity.  Mr.  Field  owns  considerable  Western  Union 
stock,  and  is  interested  in  a  number  of  railroads,  including 
the  Manhattan  Elevated.  He  owns  one-fifth  of  the  stock  of 
the  Acadia  Coal  Co.,  is  a  special  partner  in  the  grain  firm  of 
Field,  lindley  &  Co.,  and  owns  the  Mail  andUxpressy  one  of 
the  great  papers  of  the  metropolis.  He  has  a  house  in 
Gramercy  Park  and  a  fine  mansion  at  Irvington  on  an  es- 
tate of  about  600  acres.  He  is  a  large  owner  of  real  estate 
in  that  very  pleasant  section,  owning  some  56  houses  be- 
sides considerable  land.  He  is  fully  six  feet  in  height,  of 
light  complexion,  with  penetrating,  bluish-gray  eyes,  which 
peer  sharply  into  those  of  an  interlocutor.  The  nose  is 
prominent,  tiie  brows  knit  with  years  of  thought,  the  mouth 
and  jaw  indicate  great  decision  of  character.  He  is  a  man 
of  courtly  manners  and  exceptional  abilities. 

Hon.  Stephen  V.  White. 

Hon.  Stephen  Y.  White  is  a  short,  compactly  built,  dark- 
complexioned  man  of  64.  In  manners  he  is  courteous  and 
unassuming ;  in  business  methods  he  is  quick  and  straightf  or  - 
ward.  He  is  a  Director  in  the  Western  Union  and  the  Lack- 
awanna road.   He  is  a  bold,  dashing  operator  in  stocks,  and 


662  ^  MSN  OF  MARK. 

in  Wall  street  has  met  with  considerable  success.  One  of 
his  greatest  fayorites  is  Lackawanna.  He  expects  to  see  it 
some  day  go  to  200.  He  has  several  times  badlj  squeezed 
theshorte  in  that  stock,  and,  now  that  he  has  practically  de- 
monstrated what  they  ought  to  have  known  before,  namely, 
that  the  stock  can  easily  be  cornered,  the  bears  are  apt  to 
fight  shy  of  it.  He  has  a  large  eUefUelej  and,  being  a  natural 
leader,  he  has  plenty  of  followers  in  his  speculative  cam- 
paigns. He  was  born  in  North  Carolina.  He  was  gradu- 
ated from  Enox  College  at  Galesburg,  Illinois.  He  studied 
law  in  the  office  of  the  Hon.  John  J.  Kasson,  afterward 
United  States  Minister  to  Germany.  He  drifted  to  St.  Louis, 
and  there  became  a  reporter  for  the  Missouri  Democrat  He 
went  to  Des  Moines,  practised  law  for  nine  years,  and  was 
elected  a  Judge.  He  came  to  New  York,  and  for  a  time 
practised  law,  but  soon  became  a  stock  broker  as  well.  He 
still  occasionally  appears  as  counsel  in  the  Federal  Courts, 
and  sometimes  in  the  Supreme  Court  of  the  United  States. 
He  is  a  ready  and  forcible  speaker,  full  of  vim  and  fire.  He 
was  a  warm  personal  friend  of  the  late  Henry  Ward  Beecher, 
the  grand  old  Chrysostom  of  the  nineteenth  century,  who 
has  left  the  world  brighter  for  his  memory  and  darker  for 
his  absence.  In  the  frank,  keen,  practical  financier  and 
lawyer,  and  the  great,  warm  hearted  preacher,  glowing  with 
fervid  idealism  and  generous  enthusiasm  and  high  aspira- 
tions for  the  human  race,  there  were  kindred  qualities  that 
made  them  friends.  Mr.  White,  in  1886,  was  elected  to  Con- 
gress from  Brooklyn,  where  he  resides.  He  is  scholarly  in 
his  tastes,  well  versed  in  the  classics,  and  is  especially  fond 
of  astronomy,  for  the  study  of  which  he  has  a  fine  observa- 
vatory  in  his  palatial  home.    He  is  popular  in  Wall  street 

Austin  Corbin. 

Within  a  year  Austin  Corbin  has  become  a  prominent 
figure  in  the  financial  world,  winning  wide  business  celebrity 
by  his  identification  with  the  reorganization  of  the  Beading 


'  A  HIGBaY  PROSPEROUS  CARBBR.  663 

Bailroad.  He  is  by  nature  the  reyerse  of  an  iconoclast, 
namely,  a  builder  up.  He  would  construct  rather  than  de- 
stroy. He  would  saye  a  property  if  it  were  at  all  possible, 
and  in  pulling  that  poor,  tired,  financial  pilgrim  Beading 
out  of  the  slough  of  despond,  and  in  directing  its  way  tow- 
ard a  primrose  pa);h  of  prosperity,  he  is  engaged  in  a  con- 
genial task.  He  is  about  58  years  of  age,  and  was  born  in 
Newport,  New  Hampshire.  He  studied  law,  and  was  gradu- 
ated from  the  Hayard  Law  School.  For  a  time  he  practised 
law  in  his  natiye  town  as  a  partner  of  Ez-Goyernor  Metcalf, 
of  New  Hampshire,  but  in  1851  he  went  toDayenport,  Iowa. 
There  he  really  organized  the  first  national  bank  under 
the  new  system,  which  was  to  proye  of  such  incalculable 
financial  benefit  to  the  nation.  Mr.  Corbin  made  the  first 
application  under  the  new  law,  but  it  happened  to  be  faulty 
in  some  minor  technicalities,  and  before  their  triyialities 
could  be  corrected  four  other  national  banks  were  organized, 
so  that  his  bank  became  number  fiye  under  the  new  system. 
He  came  to  New  York  in  1865,  and  established  a  banking- 
house  here.  He  is  President  of  the  Beading,  Long  Island, 
Indiana,  Bloomington  &  Western,  Elmira,  Oortland  & 
Northern,  and  Manhattan  Beach  Bailroads.  He  is  a  mem 
ber  of  the  Union  League,  Manhattan  and  Saturday  Night 
Clubs  of  New  York,  the  Somerset  Club  of  Boston,  and  the 
Conseryatiye  Club  of  London  He  is  a  man  of  strict  prob- 
ity, genial  in  his  manners,  and  deseryedly  held  in  high 
esteem. 

Philip  D.  Abmottb. 

Philip  D.  Armour  was  bom  in  a  little  yillage  near  Water- 
town  in  the  interior  of  New  York  State,  in  1832.  He  is 
powerfully- built,  with  broad  shoulders,  a  large  head  and 
firm,  square  features  and  light  gray  eyes,  that  neyer  seem 
excited  or  disturbed.  His  manners  are  quiet,  composed  and 
courteous.  In  1849,  leaying  his  natiye  yillage,  he  went  to 
California.    He  crossed  the  plains  with  a  six-mule  team 


_  j3.ii  1853  went  to 

-2=.  aai  warehouse 

z  tjb^HLj.     Then  he 

■ij^-    at  bought  an  in- 

j-i:  II liyton&  Plank- 

^  j^:  i*  vas  worth  half 

^:ai.ioId.    In  the  war, 

'ifsnt  %ras  dosing 

that  cotild  onlr 

Armoor   saw  that 

He  came  at 

ehmt     He  began 

and  netted,  it  is 

now    enlarged  his 

in  Chicago  aod 

_  J  world.     He  has 

^  podocta  in  a  year, 

^^  pij  roll.     He  has 

years,  and  in  1860 

bears  who  tried 

against  tho  bears  in 

5^ijlais,    Those  cellars 

^^Idba  bas  Uie  pass-word 

^  teasmber  of  cinnamoas 

i^beA  their  paws  in  nie- 

.aotalw-    He  has  made 

He  iDTested  foiir 

a«feright    He  is  now 

^  ol  the  coontry,  as 

^^5j^r  time  and  cattdoafi 

.^Awoid  of  wisiom.    He 

IwiDe  ID  Chiu^go,  md  is 

He  woiks  fr*''*J  ^ 


664  2(BN  OF  MARK. 

which  he  drove  himself.  He  worked  for  a  few  years  in  the 
gold  fields,  accamalated  a  little  capital,  and  in  1855  went  to 
Milwaukee  and  engaged  in  the  grain  and  warehouse 
business.  He  prospered  moderately  but  steadily.  Then  he 
thought  of  going  into  the  lumber  business,  but  bought  an  in- 
terest in  the  pork  packing  establishmoDt  of  Lay  ton  &  Plank- 
ington,  the  former  retiring.  At  this  time  he  was  worth  half 
a  million.  He  soon  increased  this  three- fold.  In  the  war, 
provisions  were  very  high,  but  when  Gen.  Grant  was  closing 
in  on  the  Conrederacy  for  the  final  struggle  that  coidd  only 
end  in  the  triumph  of  the  North,  Mr.  Armour  saw  that 
prices  must  come  down  with  the  Confederacy.  He  came  at 
once  to  New  York  and  began  to  sell  pork  short  He  began 
te  sell  at  $40  a  barrel.  He  covered  at  $18  and  netted,  it  is 
said,  nearly  two  million  dollars.  He  now  enlarged  his 
business,  established  new  packing  houses  in  Chicago  and 
Kansas  City  as  well  as  agencies  all  over  the  world.  He  has 
sold  sixty  million  dollars*  worth  of  food  products  in  a  year. 
He  has  five  thousand  names  on  his  pay  roll.  He  has 
cornered  pork  three  times  within  recent  years,  and  in  1880 
made,  it  is  said,  three  millions  in  punishing  bears  who  tried 
to  sell  the  market  down .  A  campaign  against  the  bears  in 
pork  or  meats  he  calls  protecting  his  cellars.  Those  cellars 
are  well  protected.  No  bearish  Ali  Baba  has  the  pass-word 
to  go  in  and  plunder  them,  and  the  number  of  cinnamons 
and  grizzlies,  big  and  little,  who  have  licked  their  paws  in  rue- 
ful remembrance  of  the  attempt  are  not  a  few.  He  has  made 
millions  in  successful  grain  speculations.  He  invested  four 
millions  in  St.  Paul  sto*ck,  buying  it  outright.  He  is  now 
one  of  the  recognized  financial  leaders  of  the  country,  as 
aggressive  as  a  Wellington  at  the  proper  time  and  cautious 
as  a  Fabius  when  caution  is  the  watchword  of  wisdom.  He 
lives  in  a  plain  house  on  Prairie  Avenue  in  Chicago,  and  is 
himself  a  man  devoid  of  ostentation.  He  works  from  7  A. 
M.  till  6  P.  M.  Sis  fortune  is  estimated  at  fifteen  millions 
of  dollars. 


HON.  J^SVI  P.  MORTON.  ^ 

Hon.  Levi  F.  Morton  receiyed  his  business  training  in  tbe 
dry  goods  trade.  Then  he  became  a  banker.  He  has  a 
national  reputation  as  a  financier.  He  is  shrewd,  genial 
and  successful.  President  Garfield  made  him  Minister  to 
France.  He  had  previously  done  good  service  as  a  member 
of  Oongress.  He  is  now  in  his  sixty-third  year.  He  is 
a  lineal' descendant  of  George  Morton,  one  of  the  Pil- 
grim Fathers  who  came  to  this  country  in  1623.  Mr. 
Morton  was  born  in  the  State  of  New  Hampshire.  At  20 
he  became  a  clerk  in  a  country  store.  He  had  to  shift 
for  himself.  Necessity  is  the  stimulus  that  men  of  real 
ability  require.  He  stayed  five  years  in  the  obscure  New 
Hamshire  village  and  then  went  to  Boston,  where  he  ulti* 
mately  engaged  in  business.  But  New  York  attracted  himu 
He  embarked  in  the  dry  goods  business  here  and  went  into 
banking  afterwards,  and  soon  laid  the  broad  foundations  for 
the  successful  firms  of  Morton,  Bliss  &  Co.,  of  New  York,^d 
Morton,  Bose  &  Co.,  of  London.  His  Congressional  and 
diplomatic  laurels  followed.  He  filled  the  French  Mission 
with  great  satisfaction  to  the  French  people  as  well  as  those 
of  the  American  traveling  public,  as  he  was  a  free  and  gen- 
erous  entertainer.  His  large  fortune  has  been  amassed 
since  he  came  to  Wall  Street.  He  has  a  fine  villa  at  New- 
port and  also  one  on  the  Hudson. 

John  A.  Stewabt. 

John  A.  Stewart  is  President  of  the  United  States  Trust 
Company,  one  of  the  largest  banking  and  trust  corporations 
in  America.  Its  deposits  are  over  forty  millions  of  dollars. 
Its  great  success  is  largely  due  to  the  able  management  of 
President  Stewart,  who  has  in  fact  shown  marvellous  ability 
in  the  management  of  large  financial  interests.  Mr.  Stewart 
during  the  war  period  was  urged  by  Secretary  Chase  to 
become  Sub-Treasurer  of  the  United  States  in  this  city,  and 
he  finally  consented  to  take  the  position,  although  at  a  great 


666  MEN  OF  MARK. 

personal  Bacrifice,  being  actuated  solely  by  a  patriotic  spirit. 
He  is  one  of  the  financial  lights  of  the  metropolis,  and  is 
respected  for  his  financial  acumen  and  his  sterling  qualities 
asaman. 

Anthont  J.  Dbsxel. 
Anthony  J.  Drezel  is  the  head  of  the  house  of  Drexel  & 
Go.  in  Philadelphia  and  Drexel,  Morgan  &  Co.  in  New  York. 
The  house  was  founded  by  Joseph  Drezel,  who  emigrated  to 
this  country  from  Germany  early  in  the  present  century,  and 
began  business  in  Philadelphia  in  a  small  way  as  a  sort  of 
exchange  broker.  When  the  California  gold  fever  broke 
out  he  made  connections  with  parties  in  San  Francisco  and 
received  large  amounts  of  gold.  In  these  transactions  he 
got  his  first  great  start.  The  returns  from  the  exchange 
were  lai^e.  As  his  means  increased  he  gradually  extended 
his  business,  and  finally,  by  thrift  and  diligent  attention  to 
business,  he  accumulated  quite  a  snug  fortune.  In  the  end 
he  built  up  a  successful  banking  business,  in  which  his  sons 
became  interested,  and  at  his  death  inherited  his  wealth  and 
the  business.  The  elder  brother  died  a  few  years  ago,  leav- 
ing ten  million  dollars  to  his  family  and  to  various  chari- 
ties. Anthony  Drexel,  the  present  head  of  this  signally 
successful  firm,  is  55  years  of  age,  and  is  a  man  of  excellent 
business  capacity.  He  is  one  of  the  successful  business 
men  of  the  United  States. 

The  Jebome  Bbothebs. 

Addison  Jerome,  who  died  some  years  ago,  was  a  gigantic 
operator  in  his  day,  and  displayed  great  ability  in  the  con- 
duct of  speculative  campaigns,  but  he  went  beyond  his 
depth  and  disaster  followed.  Like  many  others  in  Wall 
Street,  he  gained  his  business  education  in  the  dry  goods 
trade.  He  met  with  one  of  his  greatest  reverses  in  his 
attempt  to  corner  Lake  Shore.  Others  followed,  one  after 
another,  and  the  end  was  financial  shipwrecks 


ANTHONY   J.    DREXEL 


A  GR^AT  SPICCUI^TIVB  CAR«BR.  66l 

At  this  time  his  brother,  Leonard  W.  Jerome,  was  one  of 
the  foremost  men  of  Wall  street  and  was  a  partner  of  Wm. 
B.  Travers,  the  firm  name  being  Travers  &  Jerome.  Leonard 
Jerome  is  splendidly  built  and  nearly  six  feet  in  height.  His 
ancestors  were  Huguenots.  He  was  born  in  Fompej,  Onon- 
daga county,  New  York.  His  grandfather  was  a  Presby- 
terian clergyman.  At  14  Leonard  was  sent  to  Princeton 
College  and  was  graduated  with  credit.  He  then  spent 
three  years  reading  law  in  Albany,  and  at  22  was  admitted 
to  the  bar.  He  practiced  law  with  his  uncle,  Judge  Jerome,  of 
Bochester.  Afterward  with  his  brother  Lawrence  he  estab- 
lished a  newspaper,  called  the  Rochester  Native  American^  and 
he  made  a  good  editor.  President  Filmore  appointed  him 
Consul  at  Trieste.  He  came  to  Wall  Street  in  1851.  His 
first  operation  was  in  putting  up  all  he  could  spare,  about 
two  thousand  dollars,  as  margin  on  five  hundred  shares  of 
Cleveland  and  Toledo  stock,  one  of  the  old-time  speculative 
favorites.  He  bought  it  on  a  sure  point  from  the  treasurer 
of  the  road.  He  bought.  The  treasurer  sold.  Result: 
The  stock  fell,  and  Jerome  lost  all  his  spare  funds.  He  was 
not  discouraged.  He  studied  Wall  Street  tactics,  and  in 
the  end  he  made  the  treasurer  pay  dearly  for  his  former 
success  in  spearing  a  lamb.  He  invested  $600  in  buying 
calls  and  made  $6,000  within  thirty  days.  He  became  a 
partner  of  William  R.  Travers.  They  were  very  successful 
on  the  short  side  of  the  market.  He  was  to  meet  with  some 
reverses,  however.  In  1862  the  agent  of  the  State  of  Indi- 
ana, in  a  manner  that  would  have  deceived  the  very  elect, 
through  an  unauthorized  issue  of  Indiana  6  per  cent,  bonds, 
swindled  him  out  of  $600,000  by  the  hypothecation  of  the 
bonds.  The  State  repudiated  the  acts  of  its  agent,  and  as 
an  individual  is  not  allowed  to  sue  a  State,  Mr.  Jerome  was 
robbed  of  the  money.    Still  another  reverse  was  m^t  in 

Pacific  Mail.    When  the  capital  stock  wp^  * ^«d  to 

$20,000,000  he  took  50,000  shares  at  200  ad- 

vanced soon  thereafter  to  243,  and  he  e  us 


668  M^N  OF  MARK. 

stock,  bat  kept  a  large  block  of  it  on  account  of  his  faith  in 
its  Talae.  At  the  next  quarterly  meeting  of  the  Board  of 
Directors,  however,  it  was  decided  by  a  majority  of  one,  five 
directors  being  present,  to  reduce  the  dividend  from  five  to 
three  per  cent.  The  street  was  thunderstruck  at  the  audac* 
ity  of  this  move ;  the  market  broke,  and  in  two  hours  Mr. 
Jerome's  stock  depreciated  $800,000.  Still  he  made  large 
gains  in  Pacific  Mail  as  well  as  big  losses.  He  left  WaU 
Street  years  ago  with  an  ample  fortune.  He  went  there 
with  next  to  nothing,  and  in  spite  of  reverses,  came  out  a 
substantial  victor  in  the  financial  tourney.  In  the  war  he 
was  always  enthusiastic  in  his  devotion  to  the  cause  of  the 
North,  and  subscribed  with  princely  liberality  to  aid  patri- 
otic movements.  When  the  first  great  Union  meeting  was 
held  at  the  Academy  of  Music  he  paid  all  the  expenses.  He 
wa^  Treasurer  of  the  Union  Defense  Committee,  and  he 
likewise  paid  all  of  its  incidental  expenses.  He  was  the 
most  liberal  in  his  contributions  and  the  most  devoted  in 
his  allegiance  to  the  Gbvemment  in  its  darkest  and  gloom- 
iest hours.  He  was  the  f oimder  of  the  fund  for  the  benefit 
of  the  families  of  those  who  were  killed  or  wounded  in  the 
New  York  riots  of  1863,  growing  out  of  the  draft.  His 
checks  for  $10,000  and  more  to  aid  the  Union  arms  were 
frequent ;  he  contributed  $35,000  toward  the  construction  of 
the  "Meteor,"  a  war  vessel  built  to  destroy  the  famous 
"Alabama"  of  the  Confederacy.  During  the  war  Mr. 
Jerome  purchased  and  held  for  some  years  the  largest  inter- 
est in  the  New  York  TimcSy  then  edited  by  the  great  war 
editor,  Henry  J.  Baymond,  an  old  friend  of  Mr.  Jerome's, 
like  Mr.  Travers,  his  early  partner,  Mr.  Jerome  has  done 
much  to  encourage  all  out-of-door  sports,  especially  on  the 
race  course.  He  established  the  Jerome  Park  Jockey  Club^ 
and  became  half  owner  in  a  famous  speed  horse  which  cost 
$40,000.  No  one  has  done  more  to  improve  the  breed  of 
blooded  horses  in  this  country  than  Mr.  Jerome.  He  has 
also  been  prominent  in  yachting.     He  first  owned  the 


A  PATRON  Olf  ART  AND  TH^  TURF. 

"Undine";  then,  with  Commodore  McVickar,  he  bought  tlio 
"Eestless,"  and  still  laler,  with  Commodore  James  Gordon 
Bennett,  the  '^Dauntless.''  He  paid  $125,000  for  the  steam 
yacht  **  Clara  Clarita,"  which  proved  a  failure,  and  since 
then  he  has  not  been  so  enthusiastic  a  yachtsman  as  for- 
merly. He  made  $45  000  on  the  great  ocean  yacht  race  of 
1866.  He  had  much  to  do  with  introducing  the  taste  for 
f our-in'-hands  in  this  country.  He  has  been  a  Uberal  patron 
of  American  art  in  all  its  branches.  He  paid  for  the  musi- 
cal education  of  a  number  of  well-known  singers,  whose 
voices  were  trained  in  the  best  Italian  schools.  His  social 
position  has  always  been  high,  but  it  has  been  still  further 
promoted  by  the  marriages  of  his  beautiful  daughters.  The 
elder,  Clara,  is  married  to  Mr,  Morton  Frewen,  a  member  of 
an  old  English  family  which  long  represented  their  shire  in 
Parliament.  Another,  Leoni,  married  Mr.  John  Leslie  of 
the  Guards,  and  son  and  heir  of  Sir  John  Leslie ;  while 
Jennie  married  Lord  Randolph  Churchill,  the  notable  but 
erratic  statesman.  Leonard  W.  Jerome,  whose  history  I 
have  followed  somewhat  minutely,  is  one  of  the  best-hearted 
men  that  Wall  Street  ever  knew.  The  more  he  made  the 
more  he  gave.  He  was  liberal  to  a  fault.  He  was  never 
happy  but  when  making  others  happy.  He  was  a  Sir  Philip 
Sidney  of  chivalry  and  peerless  generosity — a  man  in  whom 
the  warmest  and  most  ingratiating  traits  of  human  nature 
were  as  natural  as  the  winning  sunniness  of  his  disposition 
and  the  courage  which  once  made  him  one  of  the  great  glad- 
iators in  the  arena  of  Wall  Street.  Both  he  and  his  brother 
La^vxence  are  old  members  of  the  Union  Club.  Lawrence 
was  formerly  a  stock  broker.  He  had  his  ups  and  downs, 
and  withdrew  from  Wall  Street  several  years  ago.  He  sold 
his  seat  in  the  Stock  Exchange  and  placed  the  proceeds 
about  $30,000,  in  an  annuity  which  insures  him  about  $^,000 
a  year  for  the  remainder  of  his  life.  This,  with  his  other 
income,  places  him  in  easy  circumstances  and  preserves  his 
naturally  cheerful  disposition,  rendering  him  one  of  the 


670  M0N  OF  MARK. 

most  companionable  men  in  the  city.  He  is  about  five  feet 
ten  inches  in  height,  stout  and  of  light  complexion.  Since 
the  death  of  his  old  friend,  Wm.  B.  Travers,  to  whom  he 
was  as  Damon  to  Pjthias,  he  stands  pre-eminent  among  the 
wits  of  New  York.  He  is  the  prince  of  metropolitan  wags 
and  wits.  His  friends  are  legion.  The  great,  genial,  warm 
hearted,  boyish  Larry  Jerome,  as  his  friends  love  to  call 
him,  is  literally  a  man  without  an  enemy,  and  long  may  he 
liye  to  brighten  society  with  his  happy  exuberance  of  spirits, 
his  scintillating  humor  and  his  brilliant  wit. 

Addison  Oaicicaok. 

Addison  Cammack  is  about  sixty  years  of  age  and  was 
bom  in  HopkinsTille,  Kentucky.  He  was  reared  in  com- 
fortable but  humble  circumstances.  Early  in  life  he  began 
his  business  career  as  a  clerk  in  the  house  of  J.  P.  Whitney 
k  Co.,  then  the  largest  ship  brokers  in  New  Orleans.  He 
showed  decided  business  talent,  and  ultimately  became  a 
partner  in  the  firm.  In  the  early  part  of  the  Civil  War  he 
was  located  in  Havana,  but  in  1863  he  went  to  London  and 
and  engaged  in  business  and  speculation  there.  He  returned 
to  this  country  in  two  years,  and  in  1866  embarked  in  the 
wholesale  liquor  business  in  New  York  with  J.  W.  George, 
the  firm  being  J.  W.  George  &  Co.  In  about  two  years  the 
firm  was  dissolved  and  Mr.  Cammack  became  a  member  of 
the  Stock  Exchange,  having  previously  formed  a  co-partner- 
ship with  the  late  Chas.  J.  Osbom,  under  the  name  of 
Osborn  &  Cammack.  This  co-partnership,  after  some  years 
of  great  prosperity,  was  dissolved,  and  since  then  Mr.  Cam- 
mack has  been  an  operator  on  his  own  account.  In  this 
capacity  he  has  become  widely  known.  He  is  a  shrewd 
operator,  and  quickly  changes  his  mind  if  he  thinks  he  has 
been  wrong.  He  jumps  from  one  side  of  the  market  to  the 
other  with  the  greatest  celerity  when  occasion  demands  it, 
but  in  the  main  he  seems  most  at  home  on  the  bear  side.  In 
bear  operations  he  has  met  with  some  reversecu  while  in  this 


{y^'ia 


TH^  KING  OF  "puts"   AND   "  CAI,M."  671 

direction  he  has  also  made  millions.  He  seems  to  place 
great  faith  in  Benner's  book  of  ^^  Financial  Prophecies."  At 
times  he  operates  on  a  very  large  scale,  and  he  has  been 
known  to  cover  fifty  thousand  shares  of  stock  in  a  single 
day.  He  is  taU,  well  built^  and  has  strong  features,  with 
keen,  gray  eyes.  In  manners  he  is  very  democratic  and 
candid,  and  occasionally  somewhat^bluff ;  but  he  is  a  man  of 
generous  impulses,  very  charitable,  and  has  plenty  of  friends, 
both  for  his  financial  acumen  and  for  his  qualities  as  a  man 
who  never  deserts  his  friends,  and  who  has  not  a  few  of  the 
characteristics  of  mediaeval  chivalry  joined  to  the  shrewd 
practicality  of  a  great  stock  operator  of  this  practical  epoch. 

BussELL  Sage. 
Bussell  Sage  is  one  of  the  best  known  of  Wall  Street 
celebrities.  He  was  bom  seventy  years  ago  in  Oneida 
county,  of  this  State.  As  a  boy,  he  was  employed  in  a 
country  general  store,  beginning  life  in  this  fashion  at  14. 
His  business  aptitude  early  manifested  itself,  and  at  20  he 
bought  out  his  employer  in  Troy,  to  which  he  had  in  the 
meantime  removed.  He  became  later  on  a  member  of  the 
Troy  Board  of  Aldermen,  served  seven  years,  and  was  then 
elected  Treasurer.  Still  later  he  was  elected  to  Congrfess, 
serving  from  1853  to  1867.  He  started  the  project  of  pur- 
chasing Mount  Vernon  and  making  it  a  national  domain, 
and  took  great  pride  in  the  success  which  attended  his 
efforts  in  this  direction.  While  in  Congress  he  became  con- 
nected with  the  Pacific  Mail  Steamship  Company,  and  later 
Vice-President  of  the  Chicago,  Milwaukee  &  St.  Paul,  also 
for  a  time  its  acting  president.  He  is  now  a  director  in  the 
Gould  telegraph  and  railroad  systems,  is  interested  in  a 
number  of  trust  companies  and  is  also  said  to  own  a  large 
amount  of  stock  in  the  Importers'  and  Traders'  Bank.  He 
is  the  king  of  puts  and  calls.  He  has  usually  been  success- 
ful in  writing  privileges,  but  in  the  summer  of  1884,  when 
the  market  broke  so  badly  as  to  produce  a  panic,  Mr.  Sage 


€72  MEN  OP  MARK. 

met  with  a  decided  reverse.  He  liad  sold  a  large  number  of 
puts,  and  the  loss  was  several  million  dollars.  He  is  known 
as,  in  one  sense,  the  largest  capitalist  of  Wall  Street,  inas- 
much as  he  keeps  the  largest  cash  balance.  It  runs  far  up 
in  the  millions,  giving  him  quick  resources  with  which  to 
carry  out  any  project  that  may  seem  desirable.  He  is  quiet 
and  simple  in  his  habits,  making  no  display.  He  lives  on 
Fifth  Avenue,  and  also  has  a  place  at  Babylon,  Long  Island. 
He  is  worth  about  twenty  millions.  He  is  tall,  light  com- 
plexioned,  with  keen,  gray  eyes,  and  in  Wall  Street  might  be 
taken  for  a  country  gentleman  seeing  the  sights. 

Chauncet  M.  Dhpsw. 

Ohauncey  M.  Depew  owes  his  rise  to  native  abilities  and 
the  friendship  of  the  Yanderbilt  family,  which  he  has  thor- 
oughly merited.  He  made  the  acquaintance  of  Wm.  BL 
Yanderbilt  about  the  year  1866  and  became  the  attorney  of 
the  New  York  and  Harlem  Bailroad.  On  the  union  of  the 
New  York  Central  and  Harlem  roads,  in  1869,  he  was  ap- 
pointed attorney  of  the  consolidated  company,  and  in  1875 
he  was  made  general  counsel.  A  few  years  previous  he  had 
been  elected  director  of  the  New  York  Central  road,  and 
subsequently  became  a  director  in  the  Chicago  and  North- 
western, Michigan  Central,  St.  Paul  and  Omaha,  the  Lake 
Shore  and  the  Nickel  Plate.  In  1882  he  was  elected  second 
vice-president  of  the  New  York  Central,  and  in  1886  suc- 
ceeded Mr.  Butter  as  president  of  that  great  railroad.  He 
was  born  in  Peekskill  in  1834,  and  comes  of  an  old  French 
Huguenot  family.  He  still  owns  the  homestead  purchased 
two  hundred  years  ago  by  his  ancestors  His  mother  is  a 
descendant  of  the  brother  of  Boger  Sherman,  of  revolution- 
ary fame.  Mr.  Depew  was  graduated  from  Yale  College  in 
1856,  and  three  years  later  was  admitted  to  the  bar.  In 
1862  he  was  elected  to  the  New  York  Assembly  and  acted  as 
Chairman  of  the  Committee  of  Ways  and  Means  and  part 
of  the  time  as  Speaker.    In  1863^  the  year  after  (Governor 


STAT^ESMAN,   Wlt,"SCHOI,AR  AND  FINANCIER.  678 

Seymour's  election,  Mr.  Depew  was  a  candidate  for  Secretary 
of  State  on  the  Bepublican  ticket,  oyercame  the  Democratic 
ascendancy,  and  was  elected  by  about  thirty  thousand  yotes. 
He  declined  reelection  and  was  appointed  Minister  to  Japan 
by  Secretary  Seward.  He  held  the  post  several  years,  and 
resigned  it  to  resume  business.  His  commission  as  Collector 
of  the  Port  of  New  York  was  once  made  out  by  President 
Johnson,  but  in  consequence  of  Senator  E.  D.  Morgan's  re- 
fusal to  sustain  Mr.  Johnson's  veto  of  the  Civil  Bights  bill 
the  President  never  sent  the  nomination  to  the  Senate,  but 
tore  it  up  in  a  rage.  In  1872  Mr.  Depew  was  a  candidate 
for  Lieutenant-Governor  of  New  York  on  the  Liberal- 
Bepublican  ticket,  and  was  defeated.  Two  years  later  the 
Legislature  elected  him  Begent  of  the  State  University. 
He  served  one  year  as  one  of  the  Commissioners  to  build 
the  new  Capitol  at  Albany.  In  the  memorable  contest  for 
the  United  States  Senatorship  in  1881,  Mr.  Depew  for 
eighty-two  days  received  the  votes  of  three  fourths  of  the 
Bepublican  members,  retiring  then  to  ensure  the  election 
of  Warner  Miller.  Mr.  Depew  is  President  of  the  Union 
League  and  a  member  of  many  other  clubs  and  societies, 
and  is  very  popular  wherever  he  is  known.  He  is  one  of 
the  wittiest  and  readiest  after-dinner  speakers  in  this  coun- 
try, and  when  occasion  requires,  rises  to  the  height  of  a  born 
orator.  His  tastes  seem  to  be  those  of  a  statesman  and  a 
scholar  rather  than  those  of  a  financier  in  the  ordinary 
acceptation  of  the  term,  but  his  conservative  and  able  ad- 
ministration of  his  office  as  President  of  one  of  the  greatest 
trunk  lines  in  this  country,  reveals  a  thorough  apprehension 
of  railroad  problems  and  a  natural  capacity  for  whatever 
duties  may  be  imposed  upon  him.  His  great  versatility  is 
exemplified  by  the  fact  that  he  has  succeeded  in  law,  poli- 
iicts  and  railroad  management. 

James  M.  Bbown. 
James  M.  Brown,  the  banker,  was  born  in  New  York  city, 
and  is  about  65  years  of  age.  He  is  ex-President  of  the  Cham- 


C74  MEN  OF  MAR£. 

ber  of  Commerce,  and  is  held  in  general  esteem  and  respect 
The  house  of  Brown  Bros.  &  Co.,  in  which  he  is  now  the 
senior  member,  has  an  interesting  history.  Early  in  the 
present  century  Alexander  Brown  came  from  Belfast.  Ire 
land,  to  this  country,  and  settled  in  Baltimore,  where  he  en* 
gaged  in  the  dry  goods  business  under  the  firm  name  of 
Alexander  Brown  &  Sons.  Subsequently  the  firm  comprised 
five  sons  of  Alexander  Brown.  The  business  of  the  dry 
goods  firm  prospered,  and  branch  houses  were  established 
in  Philadelphia,  New  York  and  Liverpool,  a  son  going  to 
each  of  these  cities  to  represent  the  parent  house  in  Balti- 
more.  In  New  York  and  Philadelphia  the  style  of  the  firm 
was  Brown  Brothers  &  Co.,  as  the  father  had  died  in  the 
kneantime.  In  Liverpool  they  associated  with  them  Mr. 
Shipley,  and  the  firm  there  was  Brown,  Shipley  &  Co. 
Another  house  was  established  in  London  later  on  under  the 
same  title  as  the  Liverpool  firm.  All  the  houses  were  still 
engaged  in  the  dry  goods  trade.  Here  in  New  York»  in 
which  we  are  more  particularly  interested,  the  firm  made  ad- 
vances on  cotton,  and  received  linens  from  abroad,  and  also 
orders  to  buy  cotton  for  Liverpool.  Gradually  the  house 
began  (o  make  larger  advances  to  planters  and  others  en- 
gaged in  the  cotton  trade,  and  finally  the  banking  business 
became  so  large  as  to  swallow  up  the  dry  goods  trade  and 
the  house  thereupon  dropped  merchandise  and  became 
bankers.  Later  on  a  branch  house  was  established  in  Bos- 
ton, and  at  times  it  has  had  branch  houses  in  New  Orleans, 
Mobile,  Galveston,  Savannah  and  Charleston  conducted 
under  the  name  of  the  parent  firm.  At  present  it  has 
houses  in  London,  Liverpool,  New  York,  Philadelphia, 
Boston,  Baltimore  and  New  Orleans.  All  of  the  original 
Brown  brothers  are  dead.  James  M.  Brown  is  a  near  rela- 
tive of  James  Brown,  whose  picture  appears,  and  who  was 
the  original  head  of  the  house  in  New  York.  James  M. 
Brown  did  not  enter  the  house  in  his  youth.  He  was  for 
years  the  senior  member  of  the  dry  goods  house  of  Brown, 


L_. 


A  VKRSATII,«  GBNIUS. 

Seaver  &  Dunbar.  On  the  dissolution  of  this  firm  James  M. 
]^rawn  became  a  partner  in  the  house  of  which,  by  reason  of 
V\&  years  and  large  experience,  he  may  be  considered  the 
>ead.  The  other  partners  here  are  Howard  Potter,  John 
(Vosby  Brown,  Charles  D.  Dickey,  Waldron  Post  Brown,  a 
9on  of  James  M.  Brown,  and  W.  F.  Halsey.  The  New  York 
partners  are  interested  in  the  branch  houses  in  this  country 
and  abroad.  James  M.  Brown  was  a  member  of  the  famous 
Committee  of  Seventy  which  contributed  to  the  downfall  of 
the  Tweed  Bing  in  this  city.  He  is  of  the  medium  height 
and  florid  complexion,  well  preserved,  genial  in  manners, 
and  is  a  man  of  high  character. 

Stedkan,  the  Poet  akd  Finanoieb. 

A  small,  slightly  built  gentleman  with  iron  gray  side 
whiskers,  a  refined  face  and  expressive  gray  eyes,  is  one  of 
the  notable  figures  in  Wall  street.  It  is  Edmund  Clarence 
Stedman,  the  banker  poet.  He  was  born  in  a  small  town  in 
Connecticut  in  1833,  studied  at  Yale,  entered  journalism  in 
1852,  came  to  New  York  in  1855,  and  soon  began  to  contri- 
bute poems  to  the  New  York  Tribune.  He  became  a  war 
correspondent  for  the  World  on  the  outbreak  of  the  rebellion, 
and  continued  in  this  capacity  till « 1863.  In  that  year  he 
became  private  secretary  to  Attorney-General  Bates  at 
Washington.  Meantime  he  studied  law,  and  contributed  to 
the  Atlantic  Monthly  and  other  leading  magazines.  As  a 
poet,  he  holds  high  rank  ;  as  a  writer  of  polished,  graceful 
prose  he  has  few  equals ;  as  a  thorough  gentleman  and  a 
scrupulous  man  of  business  he  is  held  in  the  highest  respect. 
Through  the  imprudence  of  another  he  has  within  a  few 
years  met  with  some  financial  reverses,  which  he  met 
courageously  and  honorably,  and  he  is  now  well  on  his  way 
towards,  his  former  position  of  financial  ease.  Although  a 
poet,  he  understands  Wall  street  business  thoroughly,  and  is 
considered  a  keen  judge  of  financial  opportunities. 


876  MEN  OP  HARK. 

Victor  H.  Newoomb  was  bom  in  LouisyiUe,  Eentacky, 
about  48  years  ago.  His  father  was  President  of  the  Louis- 
Tille  &  Nashville  Bailroad,  and  the  son  succeeded  the 
father  in  that  position.  The  elder  Newcombe  was  a  financial 
power  in  Kentucky.  He  was  sagacious  and  far-seeing.  In 
every  respect,  he  was  an  excellent  business  man.  Victor 
Newcomb  has  fallen  heir  to  his  father's  laurels  and  is  a  sac- 
cessful  operator  in  Wall  Street.  He  has  achieved  signal 
success  in  most  of  the  campaigns  in  which  he  has  engaged^ 
whether  on  the  bull  or  the  bear  side  of  the  market  He  is 
cautious,  and  turns  quickly  when  he  thinks  there  is  occasion- 
He  seems  to  act  on  the  French  sayings  Ihat  ^'  only  a  fool 
never  changes  his  mind.''  He  lives  in  fine  style  on  Fifth 
avenue,  and  also  has  a  beautiful  residence  at  iSberon.  Et 
is  one  of  a  number  of  prominent  gentlemen  from  the  Soath 
who  have  enrolled  themselves  among  the  citizens  and  tax- 
payers of  New  York.  He  is  an  ex-director  in  the  Nov 
York  &  New  England  road,  and  a  prominent  member  of  the 
Union  and  Tuxedo  Park  Clubs. 

Moses  Taylob. 

Moses  Taylor,  now  deceased,  was  one  of  the  notable 
figures  in  Wall  Street  life  for  many  years.  He  started  as  a 
South  street  merchant,  after  having  been  a  clerk  with  0.  0- 
&  S.  Howland.  Wm.  H.  AspinwaU  was  also  a  clerk  with 
that  house  at  the  same  time.  When  Mr.  Taylor  gave  up  his 
situation  to  embark  in  business  for  himself,  Mr.  AspinwaU 
was  admitted  into  the  Howland  firm  as  a  junior  partner. 
Moses  Taylor  was  a  man  governed  largely  by  intuition. 
There  was  little  argument ;  with  him,  so  to  speak,  it  jfU  a 
word  and  a  blow.  Having  formed  his  impression  and  takenhia 
quick  resolution,  there  was  no  length  to  which  he  would  not 
go  in  the  transaction,  either  in  buying  or  selling  or  advanc- 
ing money.  He  was  President  of  the  City  Bank  and  owned 
a  large  amount  of  its  stock.  Under  his  administration  the 
bank  was  wonderfully  successful.    His  son-in-law  Percy  B, 


H^  MAKK3  MILWONS    IN  I.ACKAWANKA.  677 

Pyne,  is  now  its  President.    Moses  Taylor  was  a  valaable 
aid  to  the  Union  cause  daring  the  war.    He  was  a  close 
friend  of  Secretary  Ohase,  and  wheneyer  the  Goyernment 
needed  the  assistance  of  the  banks,  the  Secretary's  influence 
with  the  great  merchant  speedily  brought  about  the  desired 
result.    Moses  Taylor  realized  the  fact  that  the  support  of 
the  Qoyemment  by  the  entire  banking  system  was  an  im- 
perative necessity.    The  presidents  of  the  banks  would  be 
called  together  on  one  of  these  appeals  from  the  Secretary . 
of  the  Treasury,  and  whatever  action  Mr.  Taylor  favored 
would  be  adopted,  so  strong  was  his  influence,  and  so  high 
his  standing  as  a  merchant  and  financier.    He  accumulated 
wealth  very  fast  in  connection  with  the  sugar  branch  of  his 
business.    Most  of  the  large  sugar  planters  consigned  their 
product  to  his  firm,  and  they  were  also  governed  by  his 
superior  judgment  in  investing  their  money,  so  that  he 
always  had  important  connections  with  Wall  Street,  a  fact 
that  entitles  him  to  a  place  in  this  book.     While  investing 
millions  for  Cuban  capitalists,  he  also  invested  very  largely 
for  himself.    Moses  Taylor  was  the  first  to  discover  the 
value  of  the  Delaware,  Lackawanna  &  Western  Coal  pro- 
perty, and  while  the  stock  was  kicked  about  Wall  Street,  be- 
cause the  company  was  bankrupt,  he  picked  it  up  at  a  few 
cents  on  the  dollar,  and  made  millions  of  doUars  from  this 
investment  alone.    At  his  death  he  was  one  of  the  largest 
owners  of  the  stock,  as  his  faith  in  it  was  so  strong  that  he 
had  refused  to  sell  it,  even  though  the  price  had  risen  above 
140.    He  died  worth  at  least  forty  millions  of  dollars.    He 
had  no  social  aspirations,  and  no  interest  in  anything  but 
business.    It  was  his  idol.    Few  men  have  been  harder 
workers  from  early  in  life  up  to  their  last  days.    He  never 
felt  that  he  could  spare  time  for  recreation,  and  was  seldom 
known  during  his  long  business  career  to  leave  the  city 
over  night,  summer  or  winter,  except  on  business.    Moses 
Taylor  had  for  partners   in  his   business  his  son-in-law 
Percy  B.  Pyne  and  Lawrence  Tumure,  both  excellent  business 


678  KBN  OP  HARK. , 

mejif  ftnd  Mr.  Taylor  owed  much  of  his  success  to  the 
3elGction  of  these  gentlemen  to  aid  in  the  management  of 
bis  affairs.  Mr.  Taylor  placed  in  the  hands  of  these  tvo 
gentlemen,  especially  daring  the  last  ten  years  of  his  life^ 
the  laboring  oar  of  his  vast  business,  and  the  successful  le- 
solts  are  the  eyidenoe  of  their  sagaoiiry  and  manrelloQs 
ability. 

Anthony  W.  Mobsb. 

Anthony  W.  Morse  was  once  one  of  the  remarkable  men 
of  Wall  Street  He  made  $150,000  in  speculation,  bought  a 
yacht  and  went  to  Europe  daring  the  war.  While  in  Eng- 
land, he  mingled  with  the  aristocracy,  and  became  strong^/ 
imbued  with  the  idea  that  the  North  would  not  be  successM 
in  the  war,  and  that  the  National  currency  would  beoome 
almost  yalueless.  He  thought  that  the  more  the  National  cor- 
rency  depreciated,  the  more  railroad  stocks  and  bonds  would 
advance  ;  in  short,  that  whatever  the  currency  would  bnj 
would  advance,  while  the  currency  itself  wouldbecome  nearly 
worthless.  He  therefore  became  a  rampant  bull  on  stocks.  He 
boughtalmost  the  whole  list,  and  also  did  a  large  business  in 
buying  for  others  whom  he  succeeded  in  impressing  with  his 
own  ideas.  He  had  many  followers  and  made  a  tremendous 
inflation.  Secretary  of  the  Treasury  Chase  was  advised 
of  this  Morse  specidation,  which  might  prove  prejudicial  to 
the  National  credit,  and  he  announced  that  if  the  inflation 
was  carried  any  further,  he  would  prick  the  bubble  by  sell- 
ing gold.  Anthony  W.  Morse  thereupon  personally  sent 
Secretary  Chase  a  di^atch  saying  that  he  would  take  aU 
the  gold  that  the  United  States  Gk>vemment  had  ioselL 
Mr.  Chase  immediately  ordered  Assistant  Treasurer  John 
J.  Cisco  to  sell  |10»000,000  of  gold  to  the  highest  biddera 
The  usual  notice  appeared  in  the  morning  newspapers,  and 
a  panic  at  once  followed.  At  12  o'clock,  or  two  hours  after 
the  opening  of  the  Exchange,  it  was  announced  from  the 
rostrum  that  Anthony  W.  Morse  had  failed.   This  tenmoatod 


'^tJ&^l^^A^ 


A  VICTIM  OF   DISW)YAI,TY,  679 

ttie  career  of  Mr.  Morse  as  a  large  operator  and  manipula- 
tor, and  with  his  downfall  the  death  knell  was  sounded  to 
his  imported  theories.  He  struggled  manfully  for  several 
years  to  regain  his  footing,  but  his  prestige  was  gone,  and 
he  failed  in  every  effort  to  posh  his  way  again  to  the  front 
His  ill-success  soured  him.  His  health  failed,  and  he  went 
to  Havana  to  recuperate.  There  he  died  with  profanity  on 
his  lips,  enraged  at  the  failure  of  all  his  hopes.  He  paid 
the  penalty  of  disloyalty.  '  His  friends  of  the  English 
nobility  were  largely  to  blame  for  all  his  misfortunes. 
Their  predictions  of  the  success  of  the  South  led  him  on  to 
irretrievable  ruin.  He  did  not  see  that  their  wish  was 
father  to  the  thought 

FOBKEB  GlAKTS  OF  THB  StBEET. 

Heiuy  Eeepi  once  President  of  the  Lake  Shore  road,  and 
also  of  the  New  York  Central,  was  in  his  day  a  power  in 
Wall  Street  He  was  the  first  to  discover  the  intrinsic  value 
of  railroad  property  in  the  Northwest,  and  manipulated 
Ohicago  &  Northwestern  stock,  both  common  and  preferred, 
very  successfully,  making  a  great  deal  of  money  for  himself 
and  friends.  He  died  very  wealthy.  He  came  to  New 
York  city  from  Watertown,  in  the  interior  of  New  York, 
and  at  first  was  an  exchange  broker,  dealing  mainly  in  un- 
current  money.  He  had  previously  served  in  some  humble 
position  on  a  railroad.  By  careful  and  economical  habits 
he  was  able  to  leave  a  fortune  of  several  million  dollars, 
largely  in  common  and  preferred  Northwestern  stock.  The 
plot  of  ground  on  whichWilliam  H.yanderbilt  built  his  pala- 
tial  Fifth  Avenue  home  was  once  the  property  of  Mr.  Keep, 
who  originally  bought  it  for  about  $250,000  for  the  purpose 
of  building  a  charitable  institution,  but  changed  his  mind 
when  the  property  quadrupled  in  value.  Then  he  concluded 
that  charity  dipuld  begin  at  home.  He  sold  the  plot,  ex- 
tending for  one  block  along  Fifth  Avenue,  to  Mr.  Yander* 
bilt  for  one  million  dollars.    Still  his  original  intentions 


680  MEN  OF  HARK. 

were  good,  and  it  was  only  after  the  real  estate  market,  as 
with  Satanic  maUoe,  had  in  that  locality  advanced  400  per 
cent,  and  taken  him  up  into  a  hi^  mountain  of  temptatioD| 
that  his  philanthropical  project  turned  awry  and  lost  the 
name  of  action.  While  Mr.  Keep  made  a  signally  good  Pree- 
ident  of  the  Lake  Shore  road  and  was  a  great  manipulator  of 
stocks,  he  was  a  failure  as  President  of  the  New  York  Cen- 
tral, and  he  resigned  that  post  having  no  confidence  in  the 
future  of  the  property.  Commodore  Vanderbilt,  who  believed 
in  the  property  became  his  sucoessor,  and  in  a  preyionB 
chapter  I  have  given  the  story  of  the  rise  of  that  remarka- 
ble man.  It  is  of  interest  to  recall,  by  the  way,  that  while 
President  of  the  Lake  Shore  road  Mr.  Keep  went  largely 
short  of  the  stock.  As  the  President  he  naturally  had  in- 
side  information.  Addison  Jerome,  a  brother  of  Leonard 
Jerome,  was  a  big  operator  of  the  day,  and  undertook  to 
comer  President  Keep.  In  those  days  a  great  deal  of  stock 
was  sold  on  seller's  option  for  thirty  and  sixty  days.  1& 
Keep  had  sold  largely  in  this  way,  and  Addison  Jerome  and 
his  cUque  had  bought  heavily,  expecting  that  the  comer 
would  be  complete  when  the  options  should  mature.  A  s^^ 
prise  awaited  them.  Mr.  Keep  made  deliveries  promptly  in 
brand  new  shares.  They  were  really  an  over-issue  by  the 
Oompany.  It  was  a  Waterloo  in  a  double  sense  for  Jerome 
and  his  fellow  bulls.  They  were  in  over  their  heads.  It 
had  such  a  dampening  effect  that  they  immediately  threw 
up  the  sponge  and  the  stock  came  down  with  a  crash.  The 
issue  of  this  new  stock  was  smoothed  over  by  turning  the 
avails  into  the  treasury  of  the  Oompany,  a  fact,  however, 
which  did  not  prevent  Mr.  Keep  from  making  a  pretty  good 
turn  on  his  shorts. 

J.  PiEBPONT  Morgan. 

J,  Pierpont  Morgan,  known  as  the  ^^Bailroad  Beorgao- 
izer,"  and  who  lias  won  a  place  in  the  front  rank  among 
American  fixianciers,  is  a  son  of  the  well-known  Junius  & 


^ 


Jf^l^f^  ly/Zi.'-^..^'^'^ 


A  PRACTICAI,  STUDDSNT  OF  rtNANC«.  681 

Morgan,  the  head  of  the  firm  of  J.  S.  Morgan  &,  Co.,  of  Lon- 
don, and  the  suocessor  of  George  Feabody,  the  great  philan- 
ihropLt  in  the  banking  business  there.  George  Peabodj, 
some  years  before  his  death,  yisited  this  country,  and,  desir- 
ing a  partner  in  his  great  banking  house,  made  inquiry  in 
Boston  for  a  suitable  person.  Junius  S.  Morgan  was  re- 
commended as  a  young  man  of  exceptional  business  talents 
and  he  was  selected  for  the  responsible  post,  the  firm  being 
known  as  George  Peabody  &  Co.  On  the  death  of  the 
celebrated  head  of  the  firm,  the  name  was  changed  to  J.  S. 
Morgan  &  Co.  The  success  of  the  father  has  been  repeated 
in  the  signally  successful  career  of  the  son.  During  the 
palmy  days  of  the  firm  of  Duncan,  Sherman  &  Co.,  once  re- 
nowned among  the  financial  strongholds  of  the  country,  J. 
Pierpont  Morgan  was  one  of  the  clerks.  It  was  there  he 
graduated  as  a  practical  student  of  financial  achieyements ; 
it  was  there  he  won  his  spurs  for  the  monetary  campaigns  that 
awaited  him.  Leaving  the  house  that  was  then  it  synonyme 
for  inyincible  solidity,  Mr.  Morgan  established  the  firm  of 
Dabney,  Morgan  &  Co.  Mr.  Dabney  was  formerly  one  of 
the  firm  of  Duncan,  Sherman  &  Co.  After  a  few  years  the 
firm  in  which  Mr.  Morgan  ha  dthus  first  engaged  in  business 
on  his  own  account  was  dissolyed.  But  the  check,  if  it  may  - 
so  be  termed,  was  only  momentary,  and  colossal  feats  of 
financiering  were  to  deck  his  career  with  triumphs.  He 
formed  a  connection  with  the  wealthy  Drexels,  qf  Philadel- 
phia^ and  a  New  York  branch  of  their  banking  house  was 
established,  under  the  name  of  Drexel,  Morgan  &  Co., 
which  has  for  some  years  been  largely  engaged  in  the  re- 
organization of  crippled  railroads  like  the  "West  Shore^ 
Beading  and  many  others.  And  they  have  been  very  suc- 
cessful. They  have  been  financial  physicians,  healing  sick 
corporate  bodies ;  monetary  surgeons,  amputating  needless 
expenditures  and  reckless  methods ;  or,  in  perhaps  more 
happy  figure,  skilful  pruners  of  the  vine,  that  the  ultimate 
vintage  might  be  more  abundant 


682  MEN  OP  mass:. 

Mr.  Morgan  is  endowed  with  very  positive  traits  of  ohar- 
aoter.  He  has  the  driving  powers  of  a  locomotive.  He 
cares  nothing  for  show ;  he  is  a  plain  man  of  action.  He 
strikes  hard  blows ;  he  is  natoraUj  aggressive.  In  speech 
he  is  candid  to  the  verge  of  binntness ;  in  action  he  is  short, 
sharp  and  decisive.  Like  a  tnie  soldier,  he  is  a  man  of  acts 
rather  than  words.  Bngged  as  a  Spartan  in  his  nature, 
hating  circmnlncation,  bombast  and  palaver,  going  straight 
to  the  mark,  jet  with  due  caution  and  prudence,  he  exhibits 
many  of  the  best  traits  of  the  practical  financier. 

I  have  asked  Mr.  Morgan  for  his  picture  for  publication 
in  this  book,  but  with  natural  personal  modesty,  he  has  re* 
oommended  that  his  handsome  partner,  Anthony  Drexel,  of 
Philadelphia,  be  selected  in  his  place,  and  with  a  view  to 
encouragement  in  Wall  Street  of  blueliing  modesty— that 
century  flower  of  the  financial  conservatory — I  have  com- 
plied with  his  request 

Thokas  L.  James, 

President  of  the  Lincoln  National  Bank,  has  had  a  career  in 
New  York  brilliant  in  the  service  of  the  public,  and  marked 
in  the  practical  skill  with  which  confidences  and  enterpriaeB 
have  been  directed  by  hinu  His  training  has  contributed 
^geij  to  his  success  as  a  financier.  He  came  from  Utica 
in  1861  and  entered  the  Custom  House  as  Deputy,  and 
finally  attained  the  position  of  Postmaster-General  after  a 
long  and  successful  term  as  Postmaster  of  the  City  of  New 
York.  Mr.  James  directed  the  affairs  of  the  Lincoln  Bank 
so  successfully  that  what  promised  to  be  a  small  up-town 
bank  has  developed  into  a  National  bank  of  considerable 
importance.  He  is  one  of  the  men  of  the  times,  one  who 
feels  the  tide  of  local  affairs,  a  man  of  the  people  who  acts 
from  wholly  conscientious  motives,  and  whose  ambition  has 
never  exceeded  his  sense  of  duty. 


CHAPTER  LX. 

JAMES  B.  AND  JOHN  H.  CLEWS. 

The  subjects  of  this  sketch,  whose  portraits  adorn  these 
pages,  are  both  members  of  my  firm  and  I  think  this  book 
would  be  incomplete  without  putting  in  a  few  words  in 
reference  to  them.  As  will  be  seen  by  the  sketches  which 
follow,  they  both  commenced  their  business  careers  in  a 
modest  w^j  and  through  perseverance  and  industry  have 
attained  positions  in  the  financial  world  which  are  in  every 
way  creditable  to  them.  I  have  made  it  a  rule  never  to 
introduce  a  blood  relative  into  my  office  for  a  position  of 
trust  unless  I  believed  him  worthy  of  confidence  and  cap- 
able of  performing  the  duties  assigned  to  him  in  an  intelli- 
gent manner.  To  do  so  would  be  an  act  of  injustice,  not 
only  to  him  but  to  his  associates  in  the  office,  and  gener- 
ally causes  ill  feeling  and  bad  results  in  the  end.  Happily 
with  my  nephews  I  have  had  no  such  cause  or  ground  for 
oomplaini  On  the  score  of  merit  alone  they  have  suc- 
ceeded in  advancing  themselves  to  their  present  positions. 

James  Blanchard  Clews  was  bom  in  Dunkirk,  N.  Y., 
August  4,  1859.  After  graduating  from  Chamberlain  Col- 
lege, in  this  State,  he  entered  the  general  office  of  the  Bed 
lane  Transit  Company,  in  Buffalo,  N.  Y.,  where  he  spent 
two  years.  He  then  accepted  a  position  of  responsibility 
in  the  General  Manager's  office  of  the  Union  Steamboat 
Company,  also  located  in  Buffalo.  Here  his  ability  and 
his  growing  capacity  for  making  a  good  business  man  were 
further  satisfactorily  illustrated  and  recognized  by  those 
officially  over  him.  Realizing,  however,  that  Wall  Street 
offered  better  opportunities  for  advancement,  he  resigned 
his  position  and  obtained  one  in  my  banking  office  as  book* 


684  JAMES  B.  AND   JOHK  H.  CLEW& 

keeper.  Commenoing  at  the  bottom  of  the  clerical  staff, 
he  displayed  so  much  ability,  coupled  with  imtiriiig  energy 
in  tbe  performance  of  his  duties,  it  was  a  pleasure  to  pro- 
mote him  from  time  to  time,  whenever  an  opportunity  offered, 
with  the  result  that  after  eight  years  of  vigorous  train- 
ing through  the  successive  grades  of  Book-keeper,  Cashier, 
and  General  Manager,  he  was  rewarded  in  1890  by  being 
made  a  member  of  my  firm.  It  will  thus  be  seen  that  my 
nephew  possesses  a  thorough  and  practical  knowledge  of 
the  inside  workings  of  a  banking  house  which  is  so  essen- 
tial to  a  successful  Wall  Street  business  man.  Being  be- 
sides a  student  of  nature,  he  has  also  improved  every 
opportunity  to  learn  the  value  of  railroad  and  other  invesi- 
ments  and  to-day  is  a  recognized  authority  on  all  such 
matters.  He  has  served  as  President  of  an  important  rail- 
road and  is  a  Director  in  a  number  of  large  corporations. 
John  H.  Olews,  junior  member  of  the  firm  of  Henry 
Clews  &  Co.,  was  bom  October  28,  1856.  In  beginning 
his  business  career  he  entered  the  service,  of  the  Erie 
Bailroad  Company,  in  the  transportation  department,  where 
he  gained  a  general  knowledge  of  railroad  management 
and  its  affairs.  After  a  few  years  with  that  company  he 
was  offered  a  position  with  the  Western  Transportation 
Company,  the  water  line  of  the  New  York  Central  Bail- 
road.  Here  he  had  the  opportunity  of  completing  his 
education  in  all  the  branches  of  transportation.  He  was 
then  appointed  Agent  of  the  New  York,  Chicago  &  St 
Louis  Bail  way  at  East  Buffalo,  N.  Y.,  the  distributing 
point  for  all  freight  between  the  East  and  the  Wesi  From 
this  place  he  entered  Wall  Street,  where  he  evinced  tbe 
same  progressive  spirit  In  1890  he  became  a  member  of 
the  New  York  Stock  Exchange,  acting  as  one  of  the  chief 
brokers  for  Henry  Clews  &  Co.,  and  January  1,  1898,  he 
obtained  an  interest  in  the  firm. 


A  REMARKABLE  CHAPTER  OF  HISTORY.  685 


CHAPTER  LXL 

A  BQMABEABLB  GHAPTBB  OF  HISTORY. 

Any  review  of  the  advance  of  this  country  during  the 
past  fifteen  years,  forms  a  record  of  the  most  wonderful 
progress  ever  made  by  any  nation  in  such  a  short  period. 
A  record  of  the  development  of  the  country's  resources 
through  a  resistless  energy  that  seems  destined  to  con- 
trol the  markets  of  the  world,  reads  almost  like  one  of 
Grimm's  famous  tales,  for  after  numerous  trials,  and 
the  surmounting  of  many  obstacles,  the  fairy  wand  is 
turning  what  we  will  into  gold. 

One  of  the  effects  of  the  Vanderbilt  boom  of  1885  is 
to  be  found  in  the  enormous  mileage  of  new  railroad 
construction  in  1887,  namely  12,000  miles.  It  may  have 
looked  at  the  time  excessive,  but  it  has  turned  out  to 
be  a  fortunate  anticipation  of  the  great  business  strides 
made  since  that  time.  As  far  back  as  that  year,  our 
exports  of  manufactured  articles  began  to  show  an  ap- 
preciable increase. 

The  year  following  will  always  be  memorable  as  the 
time  of  the  great  blizzard  which  tied  New  York  up  so 
effectually  for  several  days.  As  a  direct  result  of  the 
exposure  to  its  severity,  the  country  lost  in  Roscoe 
Conkling  one  of  the  most  picturesque  figures  in  Ameri- 
can politics  and  a  man  of  unblemished  reputation.  He 
was  taken  from  the  arena  of  affairs  too  soon  to  allow  his 
participation  in  the  presidential  campaign  of  that  year. 


686  A  REMARKABLE  CHAPTER  OF   HISTORY. 

My  own  experience  at  the  time  has  impressed  the 
memory  of  the  great  storm  strongly  upon  my  mind. 
I  had  gone  to  Newi)ort  accompanied  by  Mrs.  Clews  to 
inspect  some  improvements  then  being  made  at  my 
summer  home,  and  in,  returning  we  came  across  the 
bay  in  the  regular  boat  for  the  purpose  of  taking  the 
noon-day  train  which  ran  from  Boston  to  New  York. 
When  we  were  about  half  way  over  the  bay,  a  vicious 
squall  struck  us  and  we  began  to  doubt  if  we  should 
ever  reach  the  shore  again.  Finally,  however,  we  did 
manage  to  land,  and  connected  with  the  belated  train. 
Progress  of  course  was  slow,  so  slow  in  fact  that  the 
next  morning  saw  us  only  as  far  as  New  London,  whence 
further  movement  was  out  of  the  question.  Many  of 
my  readers  will  recall  the  railroad  ferry  over  the  bay 
from  New  London.  The  last  train  previous  to  ours 
had  been  started  across,  but  the  violence  of  the  tempest 
had  compelled  the  pilot  to  give  up  the  task  and  return. 
With  more  incoming  trains,  New  London  was  soon  con- 
gested by  the  sudden  increase  in  population,  and  accom- 
modations of  any  sort  were  at  a  premium.  We  were  for 
a  time  at  a  loss  as  to  where  we  could  go,  but  fortunately 
succeeded  in  inducing  the  manager  of  the  hotd  there^ 
to  install  us  in  the  private  apartments  of  the  proprietor, 
who  had  the  day  before  started  with  his  family  tor 
Florida.  He  spent  the  ensuing  four  days  upon  the 
railroad,  between  New  London  and  New  Haven, 
banked  in  by  a  snow  drift  six  feet  high,  while 
we  enjoyed  the  hospitality  of  his  apartments  diiring 
that  time.  I  am  sure  that  we  could  not  conscientiously 
complain  of  the  exchange.  Telegraphic  communication 
with  New  York  was  completely  shut  off.  As  our  chil- 
dren had  remained  in  the  city,  we  were  naturally 
anxious  to  know  of  their  welfare  and  relieve  any  anxiety 


A  REMARKABLE  CHAPTER  OF  HISTORY.  687 

they  might  have  as  to  our  safety.  There  remained  but 
one  means  of  communication,  and  that  a  wire  to  Boston, 
whence  messages  could  be  cabled  to  Liverpool,  and  back 
to  New  York,  and  that  is  the  way  we  got  word  to  and 
from  the  metropolis.  That  was  a  rather  circuitous  way, 
but  it  was  effective. 

Mr.  Cleveland's  renomination  and  accompanying  free 
trade  talk,  disturbed  the  markets  more  or  less  from  the 
date  of  his  nomination  in  1888  up  to  the  time  of  General 
Harrison's  election.  The  latter's  entrance  into  the 
White  House  started  the  entire  business  of  the  country 
going,  and  through  his  wise  management,  we  were 
brought  to  a  very  high  point  of  prosperity,  the  last  year 
of  his  term  being,  -up  to  that  time,  one  of  the  most  pros- 
perous in  our  history.  One  of  General  Harrison's  most 
signal  achievements  was  in  the  exchange  of  reciprocity 
treaties,  which  was  managed  in  such  a  masterly  manner 
by  his  resourceful  Secretary  of  State,  Mr.  Blaine. 

In  the  middle  of  General  Harrison's  term,  occurred 
the  greatest  financial  shock  the  world  had  experienced 
in  the  last  quarter  century,  or  since  the  panic  of  1873. 

The  suspension  of  the  great  firm  of  Baring  Bros,  of 
London  in  the  fall  of  1890  proved  a  demoralizing  force 
from  the  effects  of  which  finances  did  not  thoroughly 
recover  for  several  years.  The  direct  cause  of  the  fail- 
ure, as  is  now  well  known,  was  over-commitment  in 
Argentine  enterprises.  Through  the  representations  of 
an  agent  of  theirs  who  had  visited  the  country,  every- 
thing bearing  the  name  of  Argentine  was  colored  a  most 
rosy  hue,  and  the  investments  of  that  great  house  and 
its  following  were  enormous.  The  inevitable  reaction 
from  such  inflation  found  them  with  an  Immense  load 
of  these  securities  unmarketable,  and  they  were  forced 
to  suspend.    The  assistance  rendered  in  rehahiliating 


688  A  REMARKABLE  CHAPTER  OF  HISTORY. 

the  firm  has  been  signally  successful.  Through  the  ef- 
forts of  Mr.  Lidderdale,  Governor  of  the  Bank  of  Eng- 
landy  that  institution  took  over  some  seven  million 
pounds  sterling  of  the  congested  obligations  of  the  firm. 
By  the  wise,  patient^  and  sagacious  management  of  these 
former  unmarketable  properties  the  bank  was  finally 
enabled  to  realize  enough  therefrom  to  pay  up  all  the 
arrears  of  the  firm. 

The  liquidation  of  American  securities  by  British 
holderlt  which  was  consequent  upon  their  failure  was 
enormous  in  volume  and  jextended  over  several  years. 

The  year  1890  was  further  noteworthy  as  marking  the 
birth  of  that  unfortunate  compromise  of  the  silver  agi- 
tation known  as  the  Sherman  silver-purchase  law,  which 
was  to  bring  about  such  direful  results  within  a  brief 
three  years.  After  the  shock  of  the  Baring  i)anic  had 
subsided,  the  beneficial  effects  of  the  McKinley  tariff 
law  began  to  be  felt  and  with  increased  exports,  largely 
of  grain,  in  the  succeeding  year,  together  with  ample 
protection  for  home  industries,  we  were  ushered  into 
1892  under  very  auspicious  circumstances. 

Bountiful  crops  again  provided  a  basis  tot  what  de- 
veloped into  a  wonderfully  prosperous  year.  During 
the  year,  Jay  Gould  (largely  through  the  aid  of  his  son 
George),  by  one  of  his  characteristic  strokes,  succeeded 
in  obtaining  control  of  the  Union  Pacific  system,  while 
Mr.  Huntington  was  thinking  the  matter  over;  but  his 
personal  control  was  not  to  last  very  long,  for  in  De- 
cember of  that  year,  Mr.  Gould  died,  after  a  career  of 
great  activity  and  venturesomeness,  which  has  elsewhere 
been  reviewed  in  this  book. 

The  Democratic  party  still  clung  to  their  idol,  and 
Mr.  Cleveland  was  renominated  for  the  presidency  in 
1892,  and  by  one  of  thoa^  inexplicable  turns  of  pubftc 


A  REMARKABLE  CHAPTER  OF   HISTORY.  689 

opinion  which  foolishly  wished  a  change  of  administra- 
tion in  the  midst  of  prosperous  times,  he  was  elected,  and 
returned  to  Washington  the  following  March,  be  it  said, 
enjoying  the  confidence  of  the  great  majority  of  the 
people.  Almost  from  the  time  of  that  election,  the  Wall 
Street  markets  were  depressed,  the  fear  of  free  trade 
measures  being  the  basis  of  distrust.  Late  in  the  year, 
the  Treasury's  stock  of  gold  began  to  show  signs  of  di- 
minishing, and  with  the  exception  of  a  few  rallies,  one 
notably  in  the  following  January,  prices  continued  on 
the  downward  course.  Co-incident,  with  the  decrease  of 
gold  reserves  arose  reports  of  a  disposition  on 
the  part  of  the  Secretary  of  the.  Treasury  to  inter- 
pret the  word  "coin"  in  our  Government  obliga- 
tions as  allowing  the  redemption  of  the  bonds  in 
either  gold  or  silver  at  the  option  of  the  Govern- 
ment. The  effect  of  any  doubt  or  question  upon 
this  most  important  subject  could  only  result  in  un- 
settling confidence;  of  which  Addison  speaks  as  the 
*Tiigh  priest  in  the  temple  of  trade."  For  the  first  time 
in  very  many  years,  our  Treasury  operations  showed  a 
deficit,  and  things  were  going  from  bad  to  worse.  The 
first  great  smash  in  prices  occurred  in  May,  when  the 
famous  Cordage  Trust  went  to  pieces.  At  the  same 
time.  Sugar  stock  and  the  remainder  of  the  then  few 
industrial  shares  took  part  in  the  sharp  decline.  The 
gold  reserve  had  by  the  middle  of  the  year  reached 
alarmingly  low  figures,  so  that  the  pressure  of  public 
opinion  compelled  the  calling  of  an  extra  session  of 
Congress  for  the  purpose  of  repealing  the  silver  pur- 
chase clause  of  the  Sherman  law, — which  had  proved  to 
be  a  veritable  "Old  Man  of  the  Sea"  upon  the  back  of 
the  country,  threatening  to  throttle  business  interests 
everywhere. 


690  A  REMARKABLE  CHAPTER  OF  HISTORY. 

The  Congressional  procrastination^  and  obstrnctiye 
tactics  in  the  Senate  worked  havoc  with  trade  and 
finance,  and  when  relief  finally  came  in  the  repeal  of 
the  silver  purchase  clause,  the  vitality  of  the  patient 
had  sunk  so  low,  that  it  was  a  matter  of  years  before 
returning  health,  in  the  form  of  confidence,  brought  back 
our  native  buoyancy  and  push.  It  became  necessary 
early  in  the  following  year  to  issue  f50,000,000  worth  of 
bonds  in  order  to  keep  the  gold  reserve  from  getting  too 
near  the  vanishing  point.  Tariff  agitation,  which  had 
been  started  by  President  Cleveland's  message  to  Con- 
gress in  December,,  1893,  upset  all  the  calculations  of 
business  men,  who  hoped,  after  a  disastrous  summer, 
that  the  tide  had  turned.  But,  no  sooner  was  the  fear 
of  a  silver  deluge  quieted,  than  revenue  reform  brought 
on  another  period  of  anxiety  and  delay.  Fortunately 
when  that  distorted  measure  (with  its  640  Senate 
amendments)  which  bore  the  name  of  the  late  William 
L.  Wilson,  a  man  of  deep  thought  and  the  highest  in- 
tegrity, did  become  a  law  in  the  following  year,  it  was 
not  burdened  with  an  income  tax. 

There  are  those  who  argue,  probably  to  their  own 
satisfaction,  that  this  latter  is  an  equitable  form  of 
taxation,  but  it  has  always  api>eared  to  me  as  putting 
a  premium  on  idleness  by  taxing  thrift. 

Another  issue  of  (50,000,000  bonds  was  necessary 
before  the  year  was  out,  and  in  spite  of  this  replenish- 
ment, gold  exports  to  pay  our  debts  to  Europe  for  seen* 
rities  sent  back  to  us  by  the  ream,  continued  in  such 
volume  as  to  render  a  further  issue  imperative  in  the 
following  February.  This  will  be  remembered  as  some- 
what unique  in  our  Treasury  operations,  being  in  the 
form  of  a  purchase  of  3,500,000  oz.  of  gold,  which  cost 
the  Government  f62,500,000.    The  famous  syndicate 


ROSWELL    P    FLOWER. 


A  REMARKABLE   CHAPTER  OF  HISTORY.  691 

which  undertook  the  delivery  of  the  precious  metal, 
agreed  tp  do  all  in  its  power  by  the  further  deposit  of 
gold  in  the  Treasury  and  as  far  as  possible,  a  control 
of  foreign  exchange  rates  to  keep  the  reserve  intact. 
Its  powerful  aid  unquestionably  saved  the  people  from 
many  more  business  disasters,  by  a  bolstering  up  of  con- 
fidence in  the  power  of  the  Government  to  pay  its  debts. 
The  syndicate  lived  up  to  its  agreement  fully,  depositing 
in  the  month  of  August  some  seven  and  a  half  millions 
of  gold. 

One  scarcely  hears  mentioned  nowadays  the  name  of 
that  poor  fellow  whose  fabulous  fortune  (on  paper) 
finally  proved  too  burdensome  for  his  uneducated  mind. 
Barney  Barnato  was  in  his  way  a  picturesque  charac- 
ter, and  a  most  vivid  illustration  of  the  overthrow  of 
mind  by  matter,  when  the  former  is  not  in  control. 

The  sharp  break  in  South  African  shares  in  the  Lon- 
don market  during  October,  of  course  exerted  a  sym- 
pathetic infiuence  here;  but  worse  things  were  yet  in 
store  for  us.  Our  President's  famous  Venezuela  mes- 
sage to  Congress  in  December,  1895,  acted  like  an  earth- 
quake— ^which  shook  the  markets  to  their  very  founda^ 
tions  and  engulfed  hundreds  of  millions  of  values  before 
it  subsided.  The  final  outcome  of  the  dispute  between 
England  and  Venezuela  has  to  a  very  great  extent  vin- 
dicated the  former's  claims.  Let  us,  however,  look  upon 
the  whole  matter  as  a  step  forward  for  civilization  in  the 
advancement  of  the  principle  of  arbitration,  the  true 
solution  of  all  international  difficulties.  In  1896,  we  did 
finally  reach  the  end  of  our  troubles,  though  not  with- 
out much  worriment.  A  further  bond  issue  of  ^100,- 
000,000  to  meet  deficits,  brought  that  total  up  to  f  262,- 
500,000  issued  in  two  years.    A  rather  expensive  ad- 


692  A  REMARKABLE  CHAPTER  OF   HISTORY. 

ministration,  but  ^^troubles  come  not  singly,  but  in  bat- 
talions." 

The  Presidential  Campaign  just  past,  with  the  same 
nominees  at  the  head  of  the  respective  parties,  recalls 
the  wild  free  silver  talk  of  four  years  ago.  Panic  and 
depression  succeeding  each  other  had  left  the  people 
almost  hysterical.  After  Bryan's  nomination  in  July, 
gold  hoarding  was  the  order  of  the  day.  Of  course  the 
effect  of  this  on  the  money  and  security  markets  meant, 
under  the  circumstances,  another  downward  plunge  in 
prices.  New  York  Central  sold  at  88,  the  lowest  price 
in  the  past  fifteen  years,  and  C,  B.  &  Q.  at  53,  the  low- 
est price  in  nearly  forty  years,  and  all  other  stocks  sold 
down  in  the  same  proportion. 

I  have  said  that  we  reached  the  end  of  our  troubles  in 
1896,  but  the  end  did  not  come  till  the  November  election, 
which  showed  that  William  McKSnley,  *^he  advance 
agent  of  prosperity,"  had  been  elected  President.  The 
nomination  of  William  J,  Bryan,  hitherto  a  compara- 
tively unknown  man,  but  who  electrified  the  Democratic 
National  Convention  by  his  specious  eloquence,  the  elo- 
quence of  a  political  Belial,  able,  in  the  Miltonic  phrase, 
"to  make  the  worst  appear  the  better  reason,"  whose 
famous  phrase,  "you  shall  not  press  down  upon  the 
brow  of  labor  this  crown  of  thorns,  you  shall  not  crucify 
labor  upon  a  cross  of  gold,"  swept  the  convention  off  its 
feet  and  made  him.  the  nominee  for  president,  was  a  blow 
that  for  a  time  seriously  disturbed  Wall  Street  and  com- 
mercial circles  everywhere.  Mr.  Bryan  called  for  the 
free  coinage  of  silver  at  the  ratio  of  16  to  1,  and  by 
his  tireless  activity  in  stumping  the  country  created  a 
feeling  of  depression  that  reached  the  pitch  of  panic  and 
left  the  people  almost  hysterical  with  fear.  But  as 
Martin  Van  Buren  said  on  one  ocasion,  "the  Boheif 


J.  PIERPONT   MORGAN 


PROPERTY  Of 

NEW  YORK  CHAPTER 

American  Institute  of  Banlcing. 


A  REMARKABLE  CHAPTER  OF   HISTORY.  693 

second  thought  of  the  people  is  never  wrong  and  is 
always  eflBicient,"  The  sober  second  thought  of  the  peo- 
ple carried  the  day.  Crowds  might  flock  to  hear  the  ora- 
tor, but  they  voted  with  the  party  of  prosperity  and 
honor.  The  carefully  written  speech  of  Mr.  Bryan,  a 
speech  which,  for  once,  he  read  from  his  manuscript  in 
the  great  Madison  Square  Garden  meeting,  did  not  de- 
ceive the  people;  it  fell  flat. 

With  Bryan's  fiasco  in  this  city,  the  clouds  finally  be- 
gan to  break.  How  plainly  the  record  of  these  four  years 
shows  the  absolute  domination  of  the  markets  by  Wash- 
ington. And  not  of  the  financial  markets  alone  by  any 
means,  but  of  the  whole  business  interests  of  the  coun- 
try, which  finally  were  well-nigh  paralyzed  by  four  years 
of  increasing  anxiety  and  wonder  as  to  what  might  hap- 
pen next. 

It  is  gratifying  to  turn  away  from  that  period  of 
distress  to  the  succeeding  years  of  prosperity.  The  vin- 
dication of  the  good  sense  of  the  people  in  the  election 
of  William  McKinley  did,  at  last,  turn  the  tide;  and  for 
good  and  all,  let  us  hope.  With  an  unquestioned  cur- 
rency basis,  improvement  became  possible.  We  were 
greatly  favored  too,  in  the  first  year  of  Mr.  McKinley's 
administration,  by  bountiful  crops  at  a  time  of  shortage 
in  Russia,  France,  and  the  Danubian  Provinces.  It  was 
a  great  year  of  prosperity  for  our  farmers,  who,  through 
good  prices,  and  the  exportation  of  some  120,000,000 
bushels  of  wheat,  were  enabled  to  pay  oflf  mortgages  in 
wholesale  fashion,  and  herein  we  see  the  beginning  of 
presient  good  times.  Furthermore  our  export  trade 
showed  great  increase.  As  was  to  be  expected,  there 
was  a  great  rush  of  importations  just  prior  to  the  pafr 
sage  of  the  Dingley  Tariff  Bill  in  July,  and  a  consequent 
decline  in  revenues  imni^iately  thereafter;  b\it  the 


(idi  A   kEMARKABLE   CHAPTER  OF   HISTORY. 

cotKipleted  record  of  its  operation  up  to  the  present 
time  is  a  splendid  tribute  to  the  wisdom  of  its  author. 
The  Supreme  Court  decision  in  1897  in  what  was  known 
as  the  Trans-Missouri  Gase^  declaring  all  railroad  pool- 
ing illegal,  proved  somewhat  of  a  shock  to  the  market, 
but  with  improvement  in  business,  our  roads  soon  found 
enough  traffic  before  them  to  more  than  go  'round,  with- 
out worrying  about  its  division. 

The  year  1898  began  very  favorably  with  large  gold 
imports  and  easy  money.  Cuban  affairs,  which  had 
begun  to  threaten  late  in  the  previous  year,  finally  cul- 
minated in  the  outbreak  of  war  with  Spain  in  April. 

The  condition  of  things  in  Cuba  having  become  a  re- 
proach to  the  civilized  world,  this  Government,  acting 
for  the  conscience  of  Christendom,  directed  that  the  war 
which  Spain  was  waging  against  the  Cuban  revolution- 
ists should  cease,  with  all  its  indescribable  horrors,  its 
barbarous  cruelties  to  women  and  children,  and  as 
Spain  did  not  heed  the  warning,  our  Government  inter- 
vened in  the  interest  of  common  humanity,  an  event 
which  marked  a  distinct  advance  in  the  history  of  the 
human  race,  for  history  makes  no  mention  of  any  war 
waged  on  such  a  scale  in  behalf  of  the  cause  of  human- 
ity. Certainly  never  was  a  war  more  clearly  justified 
or  one  which  showed  greater  courage  on  the  part  of  the 
intervening  nation,  for  there  can  be  no  doubt  that  more 
than  one  of  the  Continental  powers  of  Europe  would 
have  been  glad  to  side  with  Spain  and  would  have  done 
so,  but  for  the  emphatic  n^ative  of  Great  Britain. 

Naturally  there  ensued  a  period  of  depression,  but 
it  was  shortrlived.  The  ensuing  months  of  activity  and 
buoyancy  surpassed  anything  of  the  kind  in  our  history. 
After  the  apprehension  as  to  how  the  business  world 
wpuJd  adjust  itself  to  war  conditions  had  passed  away, 


STANDARD   OIL   MAGNATES. 

JOHN  D.  ROCKEFELLER  WILLIAM  ROCKEFELLER. 

HENRY  H.  ROGERS.  JOHN  D.  ARCHBOLD 


A  REMARKABLE  CHAPTER  OF   HISTORY.  695 

business  began  to  boom  all  over  the  country.  We  were 
on  our  feet  again  with  financial  health  restored.  That 
wonderful  boom  in  the  stock  market,  begun  in  the  sum- 
mer of  1898  and  lasting  until  the  spring  of  1899,  will 
not  soon  be  forgotten. 

It  seems  more  like  a  dream  than  a  fact  that  trade  and 
commerce  and  financial  operations  could  swell  to  such 
well-nigh  inconceivable  figures,  revealing  a  degree  of 
prosperity  almost  past  belief,  like  some  marvelous  good 
fortune  of  an  individual  ina  Persian  tale,  favored  by  good 
Genii,-  actual  fact  rivalling  fancy  or  throwing  it  far  into 
the  shade.  In  other  words  the  oldest  and  most  ex- 
perienced merchants  and  financiers  in  this  country  were 
astounded  at  the  degree  of  solid  prosperity  attained  by 
the  great  Republic,  the  lion^s  whelp,  rivalling  or  sur- 
passing the  strength  of  the  old  lion,  the  mother  country 
across  the  sea. 

To  the  late  Ex-Governor  Flower  belongs  the  credit  of 
fearlessly  taking  the  initiative  in  that  marvelous  rise  in 
values  to  which  I  shall  revert  later  on. 

The  formal  close  of  the  Spanish  war  gave  fresh  im- 
petus to  trading  and  prices  kept  soaring  well  on  into  the 
spring  of  1899.  The  year  1898  has  the  distinction  of 
marking  the  beginning  of  the  greatest  era  of  trade  com- 
binations, those  gigantic  commercial  engines,  that  the 
world  has  ever  seen.  The  capitalization  of  those  inau- 
gurated during  1898  and  1899  reached  the  fabulous  ag- 
gregate of  f  3,500,000,000.  The  mind  is  staggered  by  the 
possibilities  of  enterprise  which  such  a  sum  suggests. 

The  tendency  towards  centralization  in  the  railroad 
world  was  first  shown  in  the  merger  of  the  Lake  Shore 
road  with  the  New  York  Central. 

The  year  1899  was  one  of  great  prosperity,  the  great- 
est since  we  have  been  a  nation,  albeit  its  close  was 


696  A  REMARKABLE  CHAPtER  OP   HISTORY. 

marked  by  one  of  the  worst  semi-panics  the  Street  has 
ever  experienced.  In  order  to  account  for  some  of  the 
most  important  features  of  the  panic  of  December,  1899, 
it  is  necessary  to  take  a  glance  backward  at  certain 
great  financial  events  of  the  year  even  as  early  as  April. 

In  that  month  was  formed  the  famous  Amalgamated 
Copper  Corporation,  a  creation  of  the  Standard  Oil 
magnates. 

The  capital  stock  of  the  company  was  $75,000,000. 
The  shares  were  said  to  be  subscribed  five  times  ov«r. 
Owing  to  its  parentage,  the  stock  became  popular,  and 
was  sustained  at  par  for  some  time,  but  scarcely  two 
months  had  elapsed  before  a  break  of  25  per  cent  in 
the  price  occurred, 

This  break  was  regarded  as  a  rather  suspicious  cir- 
cumstance, and  was  supposed  by  the  ^'knowing  ones"  to 
be  a  part  of  the  deal.  The  Amalgamated  Company  was 
a  mammoth  combination,  comprised  of  large  share  in- 
terests in  over  30  companies,  the  famous  Anaconda  of 
Montana  heading  the  list,  and  being  the  most  promin^it 

The  panic  fell  most  severely  upon  the  copper  com- 
panies, the  shrinkage  on  the  share  capital  of  which  for 
the  year  is  alone  estimated  at  nearly  |200,000,000. 

Besides  this,  the  currency  movement  to  the  South  and 
West  had  been  unusually  large  and  prolonged,  and 
finally  tightness  of  money  brought  about  an  immense 
drop  in  the  entire  stock  market.  But  with  general  condi- 
tions prosperous  all  over  the  country,  such  panics  hap- 
pily do  not  leave  lasting  scars. 

The  last  year  of  the  wonderful  nineteenth  century 
has  been  a  remarkable  one  in  our  history.  Since  the  first 
defeat  of  the  silver  agitators  in  1896,  our  financial 
strides  have  been  so  rapid  that  it  seems  now  a  question 
of  but  a  short  time  when  New  York  will  be  the  financial 


A  REMARKABLE  CHAPTER  OF   filSTORY.  697 

centre  of  the  world.  What  a  contrast  between  our  posi^ 
tion  in  1900,  and  that  in  1895,  when  we  were  knocking  at 
the  door  of  Europe  with  bonds  for  sale  to  provide  run- 
ning expenses  for  our  Government.  To-day  England 
finds  it  to  her  interest  to  place  $25,000,000  of  her  war 
loan  with  us,  Germany  asks  for  120,000,000  of  American 
gold,  Bussia  is  seeking  to  borrow  from  us  and  Sweden 
has  not  gone  empty-handed  away.  And  these  accom- 
modations have  been  accorded  without  causing  so  much 
as  a  ripple  in  our  money  markets.  The  source  of  such 
plenty  is  of  course  found  in  our  wonderful  increase  of 
exports.  For  ten  months  of  this  present  calendar  year, 
the  trade  balance  in  our  favor  approximates  $500,000,- 
000,  making,  in  the  past  three  years,  the  vast  total  of 
fifteen  hundred  million  dollars  balance  to  our  credit. 
There  we  see  both  the  lever  and  the  fulcrum  with  which 
to  move  the  financial  world. 

A  little  over  a  year  ago  occurred  the  death  of  Cor- 
nelius Yanderbilt,  the  grandson  and  namesake  of  the 
Commodore.  Here  was  a  gentleman  whose  char- 
ities were  almost  boundless.  His  gifts  to  the  people 
through  art  and  in  many  other  ways  were  princely,  but 
perhaps  his  memory  is  greener  in  the  minds  of  those 
who,  through  his  great  private  charity,  were  lifted  above 
want. 

These  great  latter  day  fortunes  have  not  often  failed, 
in  this  country,  in  being  administered  by  men  whose 
conception  qf  life,  and  of  duty  toward  their  fellow  men 
has  turned  the  duty  into  a  pleasure.  This  is  a  very 
great  tribute  to  American  citizenship  and  should  not 
be  forgotten  or  lost  sight  of  by  our  sometime  critics. 

The  passage  of  the  Currency  bill  in  March,  1900,  un- 
doubtedly did  much  to  increase  Europe's  faith  in  our 
monetary  stability  and,  furthermore,  the  result  of  the 


698  A  REMARKABLE  CHAPTER  OF  HIStORY. 

Presidential  election  of  1900,  the  triumph  of  the  paS^ty 
of  sound  money  seems  to  preclude  the  recurrence  of  any 
attacks  upon  the  financial  honor  of  this  country.  There 
has  been  a  campaign  of  education  going  on  in  this  coun- 
try ever  since  the  advocate  of  the  free  and  unlimited 
coinage  of  silver  at  the  ratio  of  16  to  1  first  promulgated 
his  doctrines.  The  benefit  to  the  people  of  this  knowl- 
edge of  public  affairs  is  clearly  apparent.  They  will 
have  none  of  false  theories  and  suicidal  experiments, 
they  will  not  go  after  false  financial  gods,  they  will  not 
bow  the  knee  to  the  Baal  of  repudiation  and  confisca- 
tion. 

While  the  modern  method  of  commercial  development 
is  open  to  criticism  in  some  respects,  still  I  take  it  that 
the  evils  complained  of  are  not  those  of  very  existence 
but  are  rather  those  of  circumstance,  and  are  open  to 
correction  by  the  will  of  the  people.  How  often  have 
we  heard  that  these  combinations  stifle  competition — 
but  for  how  long?  Does  not  their  existence  excite  com- 
petition? Furthermore,  their  management  calls  for 
the  very  highest  ability  and  creates  a  keen  intellectual 
competition  which  cannot  fail  to  be  of  educational 
value  at  large.  It  remains  for  ensuing  years  to  provide 
correction  for  those  defects  which  are  bound  to  appear 
in  any  new  and  untried  system. 

We  end  the  century  that  almost  covers  our  national 
existence  with  a  past  record  and  prospects  unparalleled. 
We  enter  the  new  century  full  of  faith  in  our  institu- 
tions, that  have  stood  severe  tests  even  in  our  short  life, 
and  full  of  hope  for  even  greater  national  achievements. 
We  are  fast  taking  the  lead  in  the  affairs  of  nations  as, 
well  as  in  the  affairs  of  commerce  and  flnancei^  and  have 
need  of  great  steadiness  of  character,  and  fixity  of  na- 
tional honor,  which  now  seems  assured  for  all  time.    It 


A  REMARKABLE   CHAPTER  OF   HISTORY.  699 

augurs  well  that  we  begin  the  twentieth  century^  which 
displays  such  vistas  of  greatness,  at  peace  with  all  the 
world. 


70Q  BOOMS  IN   WALL  STREET. 


CHAPTER  LXIL 

BOOMS  IN   WALL  STBEBT. 

Wall  Stbeett  has  lately  been  enjoying  quite  a  boom 
in  some  respects  differing  from  any  in  its  previous  his- 
tory. Probably  the  most  interesting  feature  about  this 
boom  is  that  it  is  not  in  any  sense  spectacular.  In  that 
respect  it  is  unique.  Prices  of  many  stocks  are  higher 
and  intrinsic  values  greater  than  they  have  ever  been 
before.  The  market  has  all  the  qualities  that  normally 
would  cause  intensest  excitement  and  focus  the  atten- 
tion of  the  entire  country  on  the  Stock  Exchange.  Yet 
in  spite  of  these  conditions,  the  Street  is  in  a  normal 
state  of  mind,  and  it  is  doubtful  if  the  general  mass  of 
the  people,  who  get  their  information  from  the  news- 
papers are  fully  aware  that  there  is  even  an  ordinary 
boom  in  Wall  Street.  This  unusual  condition  is  due,  I 
believe,  to  the  fact  that  the  boom  we  are  enjoying  is 
built  on  a  foundation  that  reaches  clear  to  the  bowels  of 
the  earth.  There  is  nothing  unnatural  or  artificial 
about  it.  Wall  Street  is  simply  one  of  the  centres  that 
reflects  the  general  prosperity  throughout  the  country. 
Farmers,  merchants,  mechanics,  mill  workers,  and 
miners  are  all  so  intent  in  keeping  pace  with  the  prog- 
ress in  their  own  pursuits  that  they  have  no  time  to  cast 
eyes  our  way.  The  same  conditions  that  are  booming 
stocks,  are  booming  everything  else  in  the  country  at  an 


BOOMS  IN   WALL  STREET.  701 

equal  rate,  so  that  we  are  in  nowise  singular  or  descry- 
ing of  special  attention. 

Another  factor  too,  has  developed  in  the  Street  that 
prevents  the  usual  excitement  and  hurly  burly  incident 
to  a  rising  market.  This  is  the  absence  of  a  pronounced 
central  figure,  or  controlling  force.  Usually  a  boom 
centres  about  some  one  man  who  stands  boldly  out  in 
the  open,  or  whose  hand  it  is  known  is  manipulating 
values.  At  present  the  manipulation  is  being  carried 
on  in  a  method  that  is  as  quiet  as  it  is  novel  and  un- 
usual. That  the  market  is  being  manipulated,  is  ap- 
parent enough  even  to  the  most  casual  observer.  But 
the  source  of  this  manipulation  is  probably  known  only 
to  a  few;  all  others  are  but  students  in  the  Street. 
They  know  that  a  new  order  has  come,  and  that  this 
order  is  due  to  the  most  powerful  and  resistless  influ- 
ence that  has  ever  manifested  itself  in  Wall  Street. 
This  influence  is  very  largely  composed  of  the  Standard 
Oil  Combination,  who  have  introduced  in  their  Wall 
Street  operations  the  same  quiet,  unostentatious,  but 
resistless  measures  that  they  have  always  employed 
heretofore  in  the  conduct  of  their  corporate  affairs. 
Beside  this  group,  every  other  man  or  combination  of 
men  that  has  ever  operated  in  the  Street  are  materially 
belittled  by  comparison.  The  heretofore  conspicuously 
big  operators  that  have  flashed  up  and  across  the  hori- 
zon, appear  comparatively  small  beside  the  men  who 
are  running  things  for  us  now. 

At  his  best.  Jay  Gould  was  always  compelled  to  face 
the  chance  of  failure.  Commodore  Vanderbilt,  though 
he  often  had  the  Street  in  the  palm  of  his  hand,  was 
often  driven  into  a  corner  where  he  had  to  do  battle  for 
his  life,  and  so  it  has  been  with  every  great  speculator, 
or  combination  of  speculators,  until  the  men  who  con- 


703  BOOMS  IN  WALL  STREET. 

trol  tbe  S^tandard  Oil  took  hold.  With  them,  ma- 
nipulation has  ceased  to  be  speculation.  Their  resources 
are  so  vast  that  they  need  only  concentrate  on  any  giyen 
property  in  order  to  do  with  it  what  they  please.  And 
that  they  have  so  concentrated  on  a  considerable  num- 
ber of  properties  outside  of  the  stocks  in  which  they  are 
popularly  credited  with  being  exclusively  interested  is 
a  fact  well  known  to  every  one  who  has  opportunities 
of  getting  beneath  the  surface.  They  are  the  greatest 
operators  the  world  has  ever  seen,  and  the  beauty  of 
their  method  is  the  quiet  and  lack  of  ostentation  with 
which  they  carry  it  on.  There  are  no  gallery  plays, 
there  are  no  scareheads  in  the  newspapers,  there  is  no 
wild  scramble  and  excitement.  With  them  the  process 
is  gradual,  thorough  and  steady,  with  never  a  waver  or 
break.  How  much  money  this  group  of  men  have  made, 
it  is  impossible  even  to  estimate.  That  it  is  a  sum  be- 
side which  the  gains  of  the  most  daring  speculator  of 
the  past  were  a  mere  flea  bite,  is  putting  the  case  mildly, 
and  there  is  an  utter  absence  of  chance  that  is  terrible 
to  contemplate.  This  combination  controls  Wall  Street 
almost  absolutely.  Many  of  the  strongest  financial  in- 
stitutions are  at  their  service  in  supplying  accommoda- 
tions when  needed.  With  such  power  and  facilities  it 
is  scarcely  conceivable  what  these  men  must  be  making, 
what  they  can  do  on  either  side  of  the  market.  So  far, 
fortunately,  their  manipulations  have  all  been  one  way, 
upwards,  and  in  conjunction  with  the  general  prosper- 
ity it  has  resulted  in  making  large  sums  of  money  for 
nearly  everybody  in  the  Street.    ^ 

Here  and  there  we  have  heard  of  losses,  some  of  them 
fairly  large,  but  in  comparison  with  the  general  money 
making  these  are  hardly  to  be  taken  into  consideration. 

The  last  preceding  boom  that  Wall  Street  enjoyed 


BOOMS  IN  WALL  STR££T.  703 

was  as  different  from  the  present  as  it  is  possible  to 
imagine.  It  had  all  the  elements  which  this  one  has 
not.  It  centred  about  one  man  who  stood  out  in  the 
lime-light  clear  and  distinct  It  kept  the  Stock  Ex- 
change in  a  constant  state  of  ferment.  It  filled  the 
newspapers  with  column  upon  column  of  sensational 
stories.  It  made  millions  for  an  army  of  retainers,  on 
paper,  and  it  kept  the  market  jerking  up  and  down  for 
months.  Boswell  P.  Flower,  ex-governor  of  the  State 
of  New  York,  was  the  leader  of  the  boom,  and  a  more  pic- 
turesque figure  has  never  been  seen  in  Wall  Street, 
which  is  saying  a  great  deal.  Mr.  Flower  was  an  in- 
dividual of  very  plain  exterior.  He  often  used  language 
that  was  noticeable  more  for  its  force  and  directness 
and  emphasis,  than  it  was  for  polish.  He  had  an 
ambling  gait  and  looked  like  a  well-fed  farmer.  He 
was  rarely  seen  without  a  huge  quid  of  tobacco  that  al- 
most filled  the  left  side  of  his  mouth.  Spittoons  were 
an  essential  part  of  the  furnishings  of  his  office.  His 
clothing  hung  on  his  person  not  unlike  meal  sacks.  His 
hat  was  rarely  brushed,  and  for  days  at  a  time,  ap- 
parently, he  forgot  to  shave.  Altogether  he  was  the  last 
person,  in  appearance,  who  might  be  exi)ected  to  lead 
in  a  district  that  is  famous  for  its  well  groomed  men. 
His  education  was  certainly  not  collegiate;  doubtless  all 
his  peculiar  traits  the  ordinary  man  would  have  judged 
a  handicap,  still  they  were  Mr.  Flower's  strongest  aids. 
The  lack  of  artificial  polish  gave  people  confidence  in 
his  statements.  His  limited  education  enabled  him  to 
think  clearly  along  certain  lines  without  being  ham- 
pered with  mental  digressions,  which  would  probably 
have  come  with  a  higher  original  mental  culture. 

As  the  administrator  and  manager  of  the  estate  of  his 
brother-in-law,  Henry  Keep,  he  came  into  the  Street 


704  BOOMS  IN   WALL  STRBEt. 

twenty  or  twenty-five  years  ago.  He  in  that  way  cob- 
trolled  a  large  amount  of  fnnds^  which  by  conservatiye 
direction  he  increased  very  substantially.  He  scarcely 
ever  figured  in  the  speculative  field  to  any  great  extent 
until  after  he  had  completed  his  term  as  Governor  of 
New  York  State.  When  he  returned  to  the  Street  from 
Albany,  he  naturally  came  with  a  considerable  prestige. 
Ex-governors  of  the  Empire  State  are  not  very  plentiful 
in  and  about  the  Stock  Exchange.  He  also  brought 
with  him  a  large  political  following.  In  both  of  the 
great  parties  in  New  York  State  there  are  many  men 
of  standing  and  influence  who  like  to  take  a  flyer  in 
Wall  Street.  Almost  to  a  man  they  associated  them- 
selves with  Mr.  Flower,  who,  during  his  term  at  the 
capital  had  made  hosts  of  friends  with  Republicans  and 
Democrats  alike,  and  this,  though  his  party  loyalty  had 
never  been  questioned.  He  also  had  close  associations 
with  most  of  the  big  capitalists.  After  he  had  settled 
down  to  business,  on  leaving  politics  behind,  Mr.  Flower 
picked  out  several  stocks  as  his  specialties,  Chicago  Gkus, 
Federal  Steel  and  Bock  Island  being  some  of  these 
Under  his  manipulation  all  these  properties  went  up 
and  soon  began  to  show  a  big  advance,  unusual  strength 
and  great  activity.  The  beEirs  made  frequent  assaults 
on  his  position  and  now  and  then  pushed  him  towards 
the  wall,  but  he  always  fought  his  way  to  the  front 
again,  and  came  out  master  in  every  encounter.  When 
he  had  himself  pretty  well  entrenched  in  the  specialties 
he  was  handling,  he  suddenly  plunged  into  Brooklyn 
Bapid  Transit,  and  for  months  he  kept  things  stirred 
up  in  a  way  that  even  wall  Street  has  not  seen  very 
often  He  picked  up  the  stock  commencing  at  six 
'dollars  a  share,  and  in  an  Incredibly  short  time  ran  it 
up  to  over  138.    Almost  every  politician  in  the  State 


BOOMS  IN   WALL  STREET.  705 

made  a  fortune  on  paper.  Mr.  Flower  was  immensely 
popular  with  the  Wall  Street  news  reporters;  who 
helped  his  boom  along  through  the  glowing  accounts 
they  wrote  from  day  to  day. 

Under  the  impetus  of  the  swirl  in  Bapid  Transit^ 
practically  every  property  in  the  Street  went  flying  up- 
ward, until  the  end  did  not  seem  to  be  in  sight.  The 
bears  were  beaten  to  a  standstill  every  time  they  showed 
their  heads,  the  only  result"  of  their  attacks  being 
that  Flower  stocks  would  jump  up  a  notch  higher.  The 
ex-governor  preached  Americanism  and  confidence,  un- 
til everybody  believed  that  if  a  stock  was  only  grounded, 
and  the  property  located  in  America,  you  could  buy  it 
at  any  price  and  still  be  on  the  safe  sida 

That  a  terrible  panic  did  not  grow  out  of  this  boom 
was  due  only  to  one  fact:  Mr.  Flower's  sudden  death. 
Had  he  lived  thirty  days  longer,  the  bubble  must  have 
been  pricked,  and  the  result  would  have  been  disas- 
trous. Mr.  Flower  went  to  the  country  for  a  day's  rest, 
ate  freely  of  ham  and  radishes  and  washed  his  frugal 
meal  down  with  a  copious  supply  of  ice  w^ater;  he  natu- 
rally, in  consequence,  died  in  a  few  hours  afterwards 
of  an  attack  of  acute  indigestion ;  his  death  alone  saved 
the  Street. 

The  Rockefellers,  the  Vanderbilts  and  his  other 
wealthy  friends  rushed  into  the  market  with  millions 
and  sustained  values.  They  were  in  a  position  to  at- 
tribute the  threatened  reaction  to  his  death  and  pointed 
out  the  absurdity  of  letting  such  an  incident  affect  the 
value  of  stocks.  They  discounted  the  break  that  must 
have  come  in  the  natural  course  of  events  under  the  forc- 
ing process  that  was  going  on.  Reasoning  such  as  this 
spread  broadcast  through  the  papers  stopped  the  break. 
Where  the  bottom  would  have  fallen  out  entirely  there 


706  BOOMS  IN   WALL  STREET. 

was  only  virtually  a  moderate  break  all  along  the  line; 
why  it  was  not  worse  was  due  to  the  market- being 
bolstered  up  by  the  Standard  Oil  Combination  and 
others  with  them  coming  to  the  rescue  just  in  time  to 
prevent  a  big  smash.  The  small  speculators  operating 
on  moderate  margins  were  of  course  all  wiped  out 
almost  to  a  man,  but  many  of  the  big  fellows  were'saved. 
It  is  probably  the  only  instance  on  record  where  the 
death  of  a  big  operator  saved  a  general  smash.  Those 
hurt  were  numerous  politicians  and  small  fry  operators 
who  instead  of  getting  away  with  snug  fortunes  in  the 
shape  of  profits,  lost  their  all. 

An  interesting  circumstance  of  the  Flower  boom  was 
developed  involuntarily  by  young  Joe  Leiter.  Leiter 
himself,  although  he  had  gone  to  the  wall  some  time 
previously,  indirectly  had  brought  about  certain  con- 
ditions that  served  Mr.  Flower's  purpose  admirably. 
These  conditions  were  the  general  release  of  hundreds  of 
millions  of  dollars  on  mortgages  on  farm  lands.  When 
Leiter  began  to  corner  wheat,  it  was  ruling  down  in  the 
neighborhood  of  sixty  cents  a  bushel.  He  lifted  it  to  con- 
siderably over  a  dollar  before  he  went  broke.  This 
enabled  thousands  of  farmers  to  realize  on  their  crops 
at  the  dollar  figure  and  above,  which  brought  prosperity 
almost  over  night  to  the  wheat  growing  belt.  With  the 
money  realized  from  their  wheat  the  farmei:s  paid  off 
their  mortgages  to  the  extent  of  two  or  three  hundred 
million  dollars.  These  mortgages  were  generally  held 
in  the  East.  This  released  that  much  Eastern  capital, 
causing  that  vast  volufhe  of  money  to  seek  investment 
The  men  controlling  this  money  were  overjoyed  when 
Mr.  Flower  made  an  opening  for  them  through  the  Wall 
Street  boom,  and  hence  it  was  a  comparatively  easy  mat- 
ter for  a  time  to  push  up  values. 


BOOMS  IN   WALL  STREET.  707 

J.  Pierpont  Morgan,  now  a  noted  character,  was 
trained  as  a  clerk  in  the  one-time  famous  banking 
house  of  Duncan,  Sherman  &  Co.  Later  he  made  a 
connection  with  Anthony  J.  Drexel,  probably  the 
wealthiest  banker  in  his  time  in  America.  Out  of  this 
grew  the  house  of  Drexel,  Morgan  &  Co.,  with  Mr.  Mor- 
gan as  the  managing  partner  in  New  York.  When  Mr. 
Drexel  died,  Mr.  Morgan  absorbed  the  entire  business, 
and  a  few  years  later  when  his  father  died,  Mr.  Morgan 
became  the  head  of  the  London  house  of  J.  S.  Morgan 
&  Co.  as  well.  This  put  him  in  a  very  prominent  posi- 
tion. He  soon  thereafter  demonstrated  his  influence  by 
reorganizing  the  bankrupt  Bichmond  &  West  Point  Ter- 
minal Railway  &  Warehouse  Co.,  changing  its  name  to 
the  Southern  Railway  Co.  A  number  of  small  roads 
were  added  to  it,  many  of  which  were  in  financial 
straits,  and  practically  all  of  them  had  been  badly  man- 
aged. He  combined  them  into  one  system  under  the 
one  head.  This  railroad  combination  is  now  one  of  the 
great  properties  of  this  country.  Mr.  Morgan  next 
turned  his  attention  to  the  reorganization  of  the  Reading 
and  the  Erie  roads,  which  were  in  a  bad  way.  He  soon 
produced  order  out  of  chaos  there,  and  that  resulted  in 
a  boom  in  railroad  stocks  all  along  the  line.  He  had 
several  sharp  tussles,  however,  with  some  of  the  big 
stock  holders,  who  tried  to  stand  out  against  him  on  ac- 
count, as  they  thought,  of  his  plans  being  too  drastic; 
and  during  these  tussles  he  not  infrequently  resorted  to 
the  usual  methods  to  break  valu^,  buying  at  the  reduced 
prices  so  as  to  strengthen  his  control. 

The  people  who  followed  Mr.  Morgan's  lead  in  these 
transactions  generally  made  money. 

A  different  sort  of  deal  was  engineered  a  few  years 
before  by  S.  V.  White,  popularly  known  as  Deacon 


V08  BOOMS  IN   WALL  StREET. 

Whitei  because  of  his  position  as  deacon  in  Plymouth 
Church.  Mr.  White  is  one  of  the  oldest  operators  in 
the  Street,  and  one  of  the  most  striking  figures.  He  has 
made  half  a  dosen  great  fortunes  in  speculation  and  lost 
them,  but  he  is  as  undaunted  as  ever,  and  in  spite  of  the 
fact  that  he  is  now  over  seventy  years  old,  he  is  still 
active  daily  in  the  market. 

Probably  one  of  the  most  unique  stock  deals  ever 
carried  out  in  the  Street  resulted  from  the  transaction  of 
Joseph  Bannigan  when  President  of  the  Rubber  Trust 
The  history  of  this  deal  which  for  a  time  resulted  in  a 
great  boom  in  industrials,  has  never  been  told,  and  is 
known  to  but  very  few  persons,  most  of  whom,  by  the 
way,  were  its  victims. 

Bannigan  was  an  uneducated  Irishman  who  could 
hardly  read  and  write.  He  commenced  life  in  a  New 
England  rubber  factory  and  worked  for  |1.50  -per  day 
and  died  worth  five  million  dollars.  He  was  shrewd 
and  bright  and  knew  the  value  of  money.  He  saved  to 
such  good  purpose  that  when  the  Rubber  Trust  was 
formed  he  was  at  the  head  of  one  of  the  biggest  fac- 
tories in  the  country,  located  in  Providence.  His 
knowledge  of  the  trade  was  so  thorough  that  despite  the 
fact  that  he  almost  invariably  used  small  i's  in  writing 
a  letter,  he  was  made  President  of  the  Trust,  his  hold- 
ings amounting  to  about  forty  thousand  shares.  When 
matters  had  been  moving  along  for  3ome  time^  Ban- 
nigan inade  up  his  mind  that  the  other  men  in  the  trusty  ' 
the  big  fellows,  were  not  treating  him  right,  and  that 
the  best  thing  he  could  d6  was  to  get  out  So  he  jMicked 
his  stock  certificates  in  a  grip  sack,  left  Providence  on 
the  night  boat,  landed  in  New  York  bright  and  early, 
had  his  breakfast  and  then  made  a  bee  line  for  a  stock 
brokers'  office.    He  had  assured  himself  in  advance 


BOOMS  IN   WALL  STREET.  700 

that  this  stock  broker  was  to  be  relied  on  and  told  him 
frankly  what  he  intended  to  do, 

"I  want  to  sell  out  bag  and  baggage,"  he  said.  "I 
want  to  get  rid  of  eyery  one  of  my  forty  thousand 
shares.  Here  they  are,  put  them  on  the  market  and 
sell  them."  The  stock  broker  told  him  that  that  would 
never  do.  If  he  wanted  to  realize  full  value  for  his 
holdings  he  would  have  to  go  about  it  in  a  different 
way,  for  if  he  threw  his  forty  thousand  shares  into  the 
market  it  would  knock  the  bottom  out  and  he  would 
get  little  or  nothing  for  his  stock.  Mr.  Bannigan  saw  - 
the  point,  and  asked  what  he  was  to  do. 

"Buy,"  said  the  broker. 

"But  I  don't  want  to  buy;  I  have  got  more  now  than 
I  want" 

"That  is  all  right;  buy  anyway,  that  will  make  a  mar- 
iket  for  the  stock,  and  then  you  can  unload  when  the 
time  comes." 

"How  much  must  I  buy?" 

"Oh,  about  1250,000  worth." 

"But  I  have  not  got  |250,000  in  cash  to  go  and  buy 
Rubber  stock." 

."Well,  you  can  borrow  it;  a  man  in  your  position,  Mr. 
Bannigan,  would  have  no  difficulty  in  borrowing 
1250,000." 

Much  against  his  will  the  old  man  was  finally  per- 
suaded to  do  as  he  was  told.  About  two  weeks  later 
the  broker  wrote  to  him  that  he  must  buy  some  more, 
this  time,  |200,000  worth.  Mr.  Bannigan  used  rather 
strong  language,  but  finally  yielded  as  he  had  before. 
He  borrowed  |200,000,  and  turned  it  over.  With  this 
additional  capital  to  work  on,  the  brokers  continued  to 
manipulate  the  market.  The  insiders  soon  discov- 
ered  that  some  strong  party  was  buying;  but  they  did 


710  BOOMS  IN   WALL  STREET. 

not  know  who^  Bannigan  having  carefully  kept  hunseLf 
in  the  backgrouncL  Hib  brokers  operated  skilfully  in 
the  stocky  one  day  buying,  the  next,  selling  to  keep  the 
stock  active.  The  brokers  after  awhile  commenced  to 
borrow  large  amounts  of  the  stock.  This  convinced  the 
insiders  that  there  was  a  big  short  interest  somewhere, 
and  they  got  together  in  order  to  squeeze  the  shorts. 
The  inside  holders  who  held  most  of  the  stock,  who  had 
combined  to  squeeze  the  shorts  out,  as  they  thought^ 
put  the  price  up  to  61,  and  at  about  that  figure  Banni- 
gan's  was  all  unloaded.  Bannigan  now  found  himself 
full  of  money  and  the  other  fellows  had  his  stock. 
They  never  awakened  to  the  fact  that  the  President  had 
sold  out  on  them  until  his  shares  were  delivered  against 
thrfr  purchases,  as  they  thought,  of  short  stock.  Rub- 
ber soon  thereafter  did  not  stop  tumbling  until  it  had 
gone  from  61  to  16.  This  deal  had  all  the  elements  of  a 
comedy-drama  and  the  playwright  who  can  do  it  justice 
will  find  material  there  which  will  make  him  an  ever- 
lasting fortune  and  reputation.  I  have  touched  but 
lightly  on  a  few  of  the  important  incidents.  It  is  not 
often,  however,  that  newcomers  in  the  Street  fare  as 
well  as  this  in  the  end.  For  a  time  they  will  go  on  m^- 
rily  enough,  and  send  things  booming;  but  in  the  end 
many  get  the  worst  of  it.  A.  B.  Stockwell  is  a  good 
illustration  of  the  truth  of  this.  He  is  still  around  the 
Street  somewhere,  but  is  one  of  the  ^*has  beens,"  like 
numerous  other  former  conspicuoiisly  large  and  sup- 
posed to  be  brilliant  operators.  At  one  time  he  was 
worth  many  millions  of  dollars.  To-day,  he  is  upside 
down.  His  start  in  life  was  as  purser  on  a  Lake  Erie 
steamboat;  his  father,  it  is  said,  kept  a  livery  stable  in 
Cleveland.  On  one  of  his  trips,  Stockwell  was  in  a 
position  to  show  considerable  attention  to  Elias  Howe^ 


BOOMS  IN   WALL  STREET.  711 

the  inventop  of  the  eye  at  the  upper  end  of  the  sewing 
machine  needle.  Mr.  Howe  was  accompanied  by  his 
daughter.  Stockwell  made  himself  agreeable  to  Miss 
Howe  also,  and  with  such  good  effect  that  he  managed 
to  win  her  affections  and  soon  thereafter  married  the 
young  lady.  When  Mr.  Howe  died,  Mrs.  Stockwelt 
came  into  possession  of  her  father's  millions.  With 
this  nest  egg  Stockwell  started  in  Wall  Street,  and 
before  anyone  realized  what  had  happened  he  was  the 
most  talked  of  man  in  the  district.  He  put  all  his 
wife's  millions  into  Pacific  Mail  stock,  and  secured  entire 
control  of  the  Company,  He  came  into  the  Street  as 
plain  Stockwell,  then  as  the  news  of  his  liberality  and 
good  fellowship  spread,  he  became  Mr.  Stockwell ;  after 
he  got  hold  of  Pacific  Mail  he  was  Commodore  Stock- 
well,  by  common  consent.  Everybody  bowed  and 
scraped  to  him  and  no  man  was  so  high  and  mighty  that 
he  was  not  proud  to  shake  his  hand.  Stockwell  took 
hold  of  Pacific  Mail  at  about  40  and  sent  it  up  to  107^ 
It  was  at  this  period  that  he  was  worth  over  fifteen  mil- 
lion dollars;  but  he  found,  unfortunately,  when  it  was 
too  late  to  retreat,  that  while  Pacific  Mail  was  up  to 
107,  it  was  not  worth  that  figure  when  the  unloading 
commenced.  He  was  landed  high  and  dry  with  it  all 
and  the  Street  told  him  he  was  welcome  to  it.  He 
tried  to  sell,  and  found  that  there  was  no  market. 
Then  came  violent  demands  on  him  to  pay  up  his  nu- 
merous call  loans,  and  in  order  to  respond  thereto,  he 
had  to  sell  regardless  of  price  and  thus  created  a  whirl- 
pool, which  finally  sent  the  stock  down  to  the  price  at 
which  he  commenced  his  original  purchase  at  40.  In 
this  one  upset,  he  lost  all  his  paper  profits  and  his  wife's 
millions  besides.  This  catastrophe  not  only  stripped 
him  of  all  his  worldly  possessions,  but  reduced  him  to  the 


712  BOOMS  IN   WALL  STBEfit. 

position  of  being  plain  Stockwell  again,  and  there  are 
many  also  who  eyen  go  so  far  as  to  call  him  ^^hat 
little  red-headed  cnss."  That  was  the  most  famous 
boom  in  the  history  of  Pacific  Mail,  notwithstanding 
Leonard  Jerome's  preyious  brilliant  ups  and  downs  in 
that  former  erratic  property. 

Leonard  and  Addison  Jerome  had  a  good  time  with 
Pacific  Mail  for  a  while.  They  ran  it  up  to  high  figures 
seyeral  times;  but  finally  meeting  with  the  same  ex- 
perience that  Stockwell  did.  The  two  Jeromes  from 
being  among  the  wealthiest  and  most  dazzling  operators 
in  the  Street,  were  in  the  end  practically  wiped  out. 
Leonard  Jerome^  who  was  the  father  of  Lady  Randolph 
Churchill,  had  nothing  left  to  bequeath  his  daughter  ex- 
cept an  equity  in  the  house  now  occupied  by  The  Man- 
hattan Club  on  Madison  Ayenue,  which  yields  an  in- 
come of  about  115,000  a  year,  of  which  Lady  Churchill 
gets  110,000. 

These  are  a  few  of  the  booms  that  haye  stirred  up 
things  in  Wall  Street  at  one  time  or  another,  as  did  the 
Keene  booms,  of  which  there  were  seyeral,  the  Gould 
booms,  and  the  Vanderbilt  booms,  all  of  which  haye 
been  referred  to  in  preyious  chapters  in  this  book. 

The  question  of  trusts  or  trade  combinations  has,  in 
recent  years,  excited  a  good  deal  of  interest  One  ot 
the  most  interesting  figures  in  this  connection  is  John 
D.  Rockefeller,  who  will  undoubtedly  be  r^arded  by 
the  future  historian  as  a  striking  character  in  the  busi- 
ness history  of  the  nineteenth  century.  And  be  it  re- 
membered that  history  now  concerns  itself,  not  so  much 
with  the  doings  of  goyemments;  not  so  mucb  with  the 
personalities  of  emperors,  kings,  presidents  or  eyen 
with  political  parties,  as  with  the  life  of  the  people 
themselyes.    This  Is  clearly  shown  by  such  historians 


BOOMS  IN    WALL  STREET.  713 

as^Lord  Macaulay  and  John  Bach  McMaster.  And 
looking  at  history  in  this  way,  surely  John  D.  Rocke- 
feller must  be  regarded  as  one  of  the  most  interesting 
types  of  the  great  commercial  powers  of  the  day.  He 
was  a  pioneer,  a  commercial  Daniel  Boone,  striking  out 
into  a  new  and  untrodden  field  of  enterprise,  taking 
great  risks,  undergoing  grave  financial  perils  of  a  novel 
kind  and  at  length  winning  a  complete  and  lasting  suc- 
cess— a  success  which  has  filled  business  history 
with  his  achievements  and  the  world  with  his  fame. 
It  was  a  great  stride  from  the  little  farmhouse 
in  Tioga  County,  New  York,  to  the  place  which 
he  fills  to-day.  Born  in  1838  he  is  now  in  the 
prime  of  life.  Reared  by  strict,  church-going  peo- 
ple, his  word  is  as  good  as  his  bond;  he  is  the 
soul  of  business  integrity,  and  a  striking  example  of 
what  thrift,  enterprise  and  persistency  will  do  for  a 
young  man  who  starts  out  in  life  with  apparently  little 
or  no  chance  of  success.  His  old  schoolmaster,  it 
seems,  was  the  first  to  get  the  young  man  to  look  into 
the  refining  of  petroleum.  Not  so  many  years  ago,  they 
used  si>erm  oil,  and  it  cost  |1.50  a  gallon.  How  to 
refine  the  thick,  ill-smelling  oil  found  in  the  water 
courses  of  Pennsylvania  was  a  problem.  It  was  black 
slime,  and  John  D.  Rockefeller,  by  hitting  upon  a 
method  of  refining  it  and  introducing  it  in  the  home 
throughout  the  world  has  made  a  fortune  that  recalls 
the  fable  of  Midas.  Before  he  was  twenty-one  he 
formed  a  partnership  with  a  man  named  Hewitt  and 
at  first  engaged  in  the  warehouse  and  produce  business. 
Then  came  the  great  oil  craze  in  Pennsylvania.  Poor 
farmers  suddenly  became  rich;  thousands  flocked  to 
the  oil  fields.  Young  Rockefeller  kept  his  head. 
Asked  to  make  investments  in  oil  wells  for  Cleveland 


714  BOOMS  IN   WALL  STREET. 

friends  he  dissuaded  them  from  the  project  on  the 
ground  that  the  thing  was  being  overdone,  and  with 
Samuel  Andrews,  who  was  familiar  with  the  general 
processes  of  distilling,  engaged  in  the  refining  branch 
of  the  petroleum  trade.  The  firm  subsequently  became 
Rockefeller,  Flagler  &  Andrews,  which  rapidly  expanded 
its  field  of  operations,  and  in  1870  organized  the  Stand- 
ard Oil  Company  with  a  capital  of  |1,000,000.  .  It 
started  pii>e  lines  to  ship  the  oil  to  the  seaports.  It 
made  millions  in  by-products  once  considered  worthless. 
It  established  markets  all  over  the  known  world,  cheap- 
ened its  methods  of  production  and  outstripped  all  com- 
petitors. Little  wonder  then,  that  its  "extra"  dividend 
in  the  year  1899  amounted  to  |23,000,000  over  and 
above  the  regular  dividends  on  the  whole  capital  stock. 
Mr.  Rockefeller  attributes  his  success  to  early  training 
and  perseverance.  That  is,  like  other  men  who  have 
stam£>ed  their  individuality  upon  the  affairs  of  man- 
kind, he  is  what  is  termed  a  causationist ;  in  other 
words,  he  believes  that  nothing  is  got  for  nothing;  that 
effects  proceed  from  causes,  and  the  cause  of  success  he 
believes  to  be  largely  perseverance.  He  believes  that 
perseverance  overcomes  almost  everything,  even  nature 
itself,  and  in  that  opinion  this  practical  business  man 
is  at  one  with  the  philosophers  of  antiquity. 

He  and  his  associates  in  the  Standard  Oil  Company 
are  naturally  a  power  in  the  stock  market.  They  are, 
of  course,  very  large  holders  of  railroad  stocks  and 
bonds  and  at  times  their  influence  is  as  irresistible  as 
the  laws  of  gravitation.  John  D.  Rockefeller's  influ- 
ence alone  could  be  so,  as  he  is  supposed  to  be  the  rich- 
est man  in  America  and  indeed  the  richest  man  ever 
known  in  human  history.  His  is  believed  to  be  the 
greatest  fortune  ever  accumulated  by  any  man  within 


BOOMS  IN   WALL  STREET.  715 

his  own  lifetime.  That  he  feels  the  responsibilities  of 
his  great  wealth  is  obvious  from  his  munificent  gifts 
to  educational  and  charitable  institutions^  to  churches 
and  to  a  hundred  other  praiseworthy  objects.  His 
princely  donations  to  schools,  colleges  and  universities 
rival  those  of  that  other  public-spirited  citizen,  Andrew 
Carnegie.  They  are  equally  strong  in  their  belief  that 
the  greatest  charity  lies  in  helping  others  to  help  them- 
selves. 


716  A  GUMPSE  INTO  THE  FUTURE. 


CHAPTEB  LXIII. 

A   GUMPSE   INTO   THE   FUTUEB. 

I  BEUEVE  that  it  would  be  difficult  to  set  bounds  to 
the  possibilities  of  American  development  The  invent- 
ive genius  of  the  people,  their  adaptability  to  all  cir- 
cumstancesy  their  tenacity  of  purpose,  their  wonderful 
energy,  and  the  fabulous  reewurces  of  the  country  all 
make  it  certain  that  the  United  States  will  reach  a 
degree  of  power  and  prosperity  hitherto  unexampled 
in  human  history.  Carlyle's  "French  Revolution,^^  has 
been  strikingly  described  as  "history  read  by  flashes  of 
lightning,"  and  I  am  tempted  to  use  the  same  language 
in  describing  the  commercial  revolution  which  has 
taken  place  in  this  country  during  the  last  few  years- 
Great  as  it  is,  however,  I  think  it  merely  a  prelude  to 
what  is  to  come.  We  are  destined  for  one  thing  to  have 
a  great  Pacific  trade.  Fifty  years  ago,  Humboldt  said 
that  the  day  would  come  when  the  trade  of  the  Pacific 
Ocean  would  be  as  great  as  tliat  of  the  Atlantic.  And 
the  increase  within  a  year  or  two  in  this  commerce 
augurs  well  for  the  ultimate  fulfillment  of  the  great 
scientist's  prophecy.  We  readily  adapt  ourselves  to  the 
requirements  of  foreign  markets  and  that  is  a  very  im- 
portant point  Lord  Charles  Beresford  bears  testimony 
to  this  fact.  He  says  with  truth  that  Americans  find 
out  what  the  foreign  markets  want,  then  they  supply  it. 
The  English  say  in  effect,  **We  know  what  you  want 


A  GLIMPSE  INTO  THE   FUTURE.  717 

better  than  you  know  yourselves."  The  American  sends 
the  Chinese  thirty-inch-wide  calico,  which  is  what  they 
want;  the  Englishman  sticks  to  twenty-seven  inches, 
with  the  remark  expressed  or  implied,  "Take  it  or  leave 
it."  And  the  Chinese  will  leave  it  rather  than  take  it 
and  the  American  manufacturer  will  be  the  gainer 
thereby.  Minister  Wu's  recent  remarks  on  the  ne- 
cessity of  finding  out  just  what  the  ()hinese  want  and 
then  conforming  to  their  wants,  cannot  be  too  carefully 
borne  in  mind.  Furthermore,  we  are  ready  to  adopt  the 
newest  and  most  highly  perfected  machinery  regardless 
of  cost.  Mr.  Carnegie,  for  instance,  on  a  single  occa- 
sion discarded  machinery  which  had  cost  him  f2,000,- 
000,  and  replaced  it  with  the  latest  which  inventive 
genius  could  supply.  The  London  engineering  jour- 
nals, on  the  other  hand,  admit  that  the  British  manu- 
facturers will  not  change  their  machinery  no  matter 
how  apparent  it  may  be  that  they  are  being  distanced 
by  their  more  progressive  rivals  in  this  country.  They 
reason  that  they  have  put  just  so  much  money  into  the 
"plant"  and  must  get  just  so  much  out  of  it  before  they 
will  replace  it.  This  seems  a  good  deal  like  the  ostrich 
which  thrusts  its  head  into  the  sand  and  refuses  to  look 
danger  in  the  face.  In  the  meantime  the  British  are 
left  behind  in  the  race  and  Olasgow.  merchants  have  to 
try  the  puerile  and  utterly  futile  device  of  getting  up 
a  boycott  against  American  steel  and  iron  products. 
Such  a  device,  under  the  circumstances,  seems  a  good 
deal  like  the  attempt  of  the  celebrated  Dame  Parting- 
ton, as  the  famous  English  wit  Sidney  Smith  describes 
it,  to  sweep  back  the  Atlantic  Ocean.  She  trundled  her 
mop  vigorously  and  made  a  gallant  onslaught,  but  the 
Atlantic  was  aroused  and  it  is  needless  to  say  who  was 
the  victor.    And  the  American  iron  trade's  invasion  of 


718  A  GLIMPSE  INTO  THE  FUTURE. 

English  markets  mnst  result  in  a  victory,  unless  there  is 
a  radical  change  in  conditions,  which  no  one  can  now 
foresee.  We  study  the  markets ;  we  take  pains  to  ascer- 
tain their  wants,  and  it  is  an  axiom  of  trade  that  a  man 
or  nation  that  supplies  the  demand,  whatever  it  may  hap- 
pen to  be,  gets  the  trade.  This  is  a  law  as  inexorable, 
as  unchangeable  as  the  laws  of  the  Medes  and  Persians. 
We  are  now  one  of  the  five  great  world  powers,  finan- 
cial and  political,  with  a  population  second  to  none  ex- 
cept Bussia.  That  is  to  say,  we  have  a  population  of 
76,300,000,  Germany  has  55,000,000,  Austro-Hungary 
45,000,000,  the  United  Kingdom  41,000,000,  France  39,- 
000,000,  Italy  32,000,000,  Spain  20,000,000,  Russia  136,- 
000,000,  Japan,  45,000,000,  India  340,000,000,  China 
400,000,000.  The  Mongolian  race  is  numerically  power- 
ful, but  in  the  long  run  can  the  yellow  race  stand  up 
against  the  white?  I  doubt  it.  Meantime  the  popula- 
tion in  this  western  home  of  the  Caucasian  race  is  stead- 
ily increasing.  In  1800  the  United  States  had  a  popu- 
lation of  only  5,308,483.  It  is  now  76,304,799.  Then 
we  had  sixteen  states.  Now  we  have  forty-five.  Then 
our  territory  consisted  of  909,050  square  miles.  It  is 
now  3,846,595  square  miles.  We  have  practically  a  new 
race  made  up  of  an  amalgamation  of  all  branches  of 
the  Caucasian  race,  speaking  the  English  tongue,  which 
in  my  judgment  is  destined  to  be  the  one  tongue  spoken 
in  the  world.  It  is  a  people  determined  to  uphold  just 
and  equitable  principles  of  trade  and  to  have  sound 
money.  The  amount  now  in  circulation  is  12,074,687,- 
871,  or  an  increase  within  three  years  of  1400,000,000. 
Russia  has  only  26,000  miles  of  railroad ;  we  have  190,- 
000.  In  the  last  fifteen  years  we  have  made  more  prog- 
ress in  the  things  which  tend  to  increase  practically  the 
term  of  human  life  by  annihilating  time  and  space  and 


A  GLIMPSE  INTO  THE  FUTURE.  719 

supplying  necessities  and  comforts  of  one  kind  or  an- 
other than  ever  before  in  our  history.  We  are  told  that 
what  does  not  happen  in  a  year  may  happen  in  a  minute. 
Similarly  what  might  not  have  happened  in  a  thousand 
years  under  adverse  conditions,  has  happened  in  fifteen. 

What  of  the  future?  In  the  language  of  Daniel 
Webster,  "the  past  at  least  is  secure."  We  see  that  the 
bank  exchanges  which  in  1888  were  f48,750,886,813, 
have  risen  in  1900  to  approximately  192,000,000,000. 
During  four  years  of  a  sound  money  Republican  Ad- 
ministration, exchanges  in  our  clearing  houses  steadily 
increased  from  148,750,886,813  in  1888,  to  the  magnifi- 
cent total  of  $60,883,572,438  in  1892.  But  from  1892, 
during  four  years  of  Democratic  rule,  our  clearings  fell 
from  160,883,572,438  to  |51,935,651,733  in  1896,  run- 
ning as  low  as  145,000,000,000  in  1894.  From  1896, 
during  Mr.  McKinley^s  Administration,  we  gained  on 
an  average  more  than  ten  billions  each  year,  the  ex- 
changes having  gone  up  from  $51,935,651,733  in  1896,  to 
the  surprising  sum  of  192,037,588,818  in  1900.  From 
1888  to  1892  during  a  Bepublican  Administration,  we 
increased  our  exports  $317,787,505,  reaching  the  then 
gratifying  figure  of  $1,015,732,011.  From  1892  to  1896, 
during  a  Democratic  Administration,  our.  exports  de- 
creased by  $152,531,524,  falling  from  $1,015,732,011  to 
.$863,200,487.  From  1896  down  to  June  30,  1900,  with 
two  months  estimated,  during  McKinley's  Administra- 
tion, our  exports  have  gone  up  from  $863,200,487  in 
1896,  to  $1,400,000,000,  gaining  $537,000,000,  or  nearly 
doubling;  and  of  this  vast  export  of  $1,400,000,000  more 
than  $400,000,000  are  manufactured  goods,  and  would 
require  in  their  production  more  than  a  million  of  Ameri- 
can mechanics. 

From  the  fall  of  1888  to  the  fall  of  1892,  during  a 


720  A  GLIMPSE  INTO  THE  FUTURE. 

Republican  Administration,  national  banks  gained  in 
resources  |694,400,000,  going  from  |2,815,700,000  to 
13,510,100,000.  From  the  fall  of  1892  to  the  fall  of 
1896,  during  a  Democratic  Administration,  the  national 
banks  lost  in  resources  1346,500,000,  going  down  from 
13,510,100,000  to  |3,263,€00,000.  From  the  fall  of  1896 
to  April  26,  1900,  during  McKinley's  Administration, 
the  national  banks  have  gained  in  resources  |1,548,356,- 
000,  going  up  from  |3,263,600,000  to  f4,811,956,000.  The 
increase  in  both  Republican  periods  was  constant  and 
gradual  throughout,  demonstrating,  as  has  been  well 
said,  the  influence  and  power  of  far-reaching  politics 
which  alone  can  bring  about  uniform  and  universal 
prosperity  worthy  the  genius  of  the  American  people. 
The  Republican  party  turned  over  the  Government  to 
the  Democrats  in  March,  1893,  with  a  bonded  debt  of 
only  1585,029,330,  and  this  was  increased  to  f847,365,- 
130,  in  times  of  peace.  For  the  purpose  of  prosecuting 
the  war  the  debt  was  increased  in  1898  by  1200,000,000, 
and  now  stands  at  f  1,046,048,750,  less  such  an  amount  of 
the  twenty-five  millions  of  2  per  cent,  bonds  as  the 
Secretary  of  the  Treasury  may  have  already  redeemed. 
During  the  last  four  years  of  Democratic  administra- 
tion, 1201,003,808  of  gold  was  exported;  while  dur- 
ing the  first  three  years  of  the  recent  Administration, 
or  down  to  June  30,  1899,  we  imported  1201,071,000, 
making  a  difference  in  favor  of  Republican  politics  of 
1402,074,808.  Look,  too,  at  the  per  capita  circulation 
in  the  United  States.  In  1802,  it  was  |5.00;  in  1845, 
fO.OO;  in  1873,  f  15.85;  in  1892,  |24.40;  in  1900,  |26.77. 
As  President  McKinley  pointed  out  in  his  message, 
our  foreign  trade  for  the  fiscal  year  of  1900  showed  a  re- 
markable record.  The  total  of  importi^  and  exports 
for  the  first  time  in  the  history  of  the  country  exceeded 


A  GLIMPSE  INTO  THE  FUTURE.  721 

two  billions  of  dollars.  The  exports  are  greater  than 
they  have  ever  been  before,  thie  total  for  the  fiscal  year 
1900  being  |1,394,483,082,  an  increase  over  1899  of 
1167,459,780,  an  increase  over  1898  of  f  163,000,752,  over 
1897  of  1343,489,526,  and  greater  than  1896  by  f511,- 
876,144.  The  growth  of  manufactures  in  the  United 
States  is  evidenced  by  the  fact  that  exports  of  manu- 
factured products  largely  exceed  those  of  any  previous 
year,  their  value  for  1900  being  f433,851,756,  against 
1339,592,146  in  1899,  an  increase  of  28%.  Agricultural 
products  were  also  exi)orted  during  1900  in  greater  vol- 
ume than  in  1899,  the  total  for  the  year  being  |835,858,- 
123,  against  $784,776,142  in  1899. 

The  imports  for  the  year  amounted  to  1849,941,184, 
an  increase  over  1899  of  f  152,792,695.  The  increase  is 
largely  in  materials  for  manufacture,  and  is  in  response 
to  the  rapid  development  of  manufacturing  in  the 
United  States.  While  there  was  imported  for  use  in 
manufactures  in  1900  material  to  the  value  of  f 79,768,- 
972  in  excess  of  1899,  it  is  reassuring  to  observe  that 
there  is  a  tendency  toward  decrease  in  the  importation 
of  articles  manufactured  ready  for  consumption,  which 
in  1900  formed  15.17  per  cent,  of  the  total  imports 
against  15.54  per  cent,  in  1899  and  21.09  per  cent,  in 
1896. 

The  election  of  November,  1900,  stamped  out  of  the 
minds  of  the  people  all  fear  that  any  sort  of  govern- 
mental policy  in  any  way  inimical  to  the  finances  or 
business  or  prosperity  of  the  country  may  be  adopted. 
A  very  great  factor  in  our  future  development,  which 
our  people  are  soon  to  discover,  will  appear  in  the 
building  up  of  the  ports  of  trade  on  the  Pacific  Coast, 
which  will  be  so  extensive  and  rapid  in  progress  that 
the  Atlantic  "ports  will  before  long  b^n  to  feel  the  com- 


A  GLIMPSE  INTO  THE  FUTURE. 

petition  of  the  Western  coast  of  onr  conntry.  Our 
grasp  of  the  Philippine  Islands,  and  the  foothold  in 
trade  and  greater  share  of  confidence  in  our  disinter- 
estedness as  regards  territorial  encroachment  which  is 
fast  gaining  in  the  Chinese  Empire,  will  finally  consum- 
mate the  preparations  for  as  great  business  and  pros- 
perity for  the  Pacific  coast  States  as  have  heretofore 
been  enjoyed  by  those  of  the  Atlantic  coast  Soon  a 
part  of  the  trade  and  commerce  of  the  Eastern  States 
will  be  brought  into  competition  with  that  of  the  great 
Pacific  coast,  insomuch  that  it  will  api>ear  that  indeed 
"Westward  the  star  of  empire  takes  its  way.^^  It  is  the 
foresight  of  such  change  in  the  Pacific  States  that  has 
helped  produce  such  a  pronounced  electoral  result 

Our  country  is  now  passing  through  a  rapid  growth 
of  progress  and  power  and  prestige  which  will  soon 
place  her  in  the  leadership  of  the  nations,  with  every 
means  necessary  for  extending  civilization,  enlighten- 
ment, commerce  and  better  government  over  the  world. 
We  have  come  to  the  time  when  we  must  take  up  the 
mighty  work  of  further  cultivating  and  improving  the 
condition  of  mankind,  and  we  will  continue  this  great 
work  until  our  labors  shall  have  brought  to  pass  better 
conditions  of  government,  co-ordination  of  interests, 
education,  and  peace  and  good  will  among  the  nations 
of  the  earth.  In  the  progress  of  civilization  since  tht 
dawn  of  the  Christian  era,  the  momentous  task  of  lead- 
ership has  devolved  first  upon  Rome,  then  upon  Spain, 
then  upon  England.  It  seems  to  have  been  reserved  for 
the  "Young  Giant  of  the  West"  to  complete  the  tasks 
undertaken,  and  assemble  into  one  great  community  of 
interest  vast  national  forces  which  have  been  the  growth 
of  centuries.  In  due  time  we  shall  no  doubt  finish  the 
work  and  bring  peace  and  good  will  to  men  in  every 


A  GLIMPSE  INTO  THE  FUTURE.  723 

part  of  the  world  and  prepare  men  everywhere  to  turn 
the  spear  into  a  pruning  hook,  the  sword  into  a  plough- 
share and  to  give  freedom  and  protection  and  prosperity 
to  all  sorts  and  conditions  of  men,  and  put  an  end  to 
strife  between  the  nations.  We  believe  that  such  is  the 
great  office  to  which  we  have  been  called,  and  that  our 
functions  as  the  leading  nation  of  the  world  have  al- 
ready b^un. 


CONCLUSION. 

IN  oondiiBion  I  wish  to  ask  public  indulgence  on  account 
of  amiflflionw. 

THere  are  many  brilliant  financiers  and  skillfal  operators 
of  the  younger  generation  in  Wall  street  who  haye  thus  far 
shown  that  they  are  probably  destined  to  a  prosperous,  and 
in  some  instances,  an  illnstrioos  career. 

Again,  there  are  others  of  various  ages  and  long  experi- 
ence,  whose  achievements  have  been  of  a  quiet,  unostenta- 
tious character  and  whose  business  lives  and  operations 
have  been  conducted  with  great  reserve,  yet  with  marked 
success. 

Although  these  two  classes  have  not  yet  done  much  to 
make  their  existence  conspicuous  in  the  public  eje»  while 
some  of  them,  through  excess  of  modesty,  perhaps,  have 
even  shunned  publicity,  yet  their  lives  have  been  replete 
with  noteworthy  events  and  the  acquisition  of  very  useful 
knowledge  which,  if  preserved  and  recorded,  would  be 
highly  interesting  in  the  present,  and  probably  not  un« 
worthy  of  being  transmitted  to  the  future. 

I  have  a  considerable  number  of  these  clever  and  worthy 
gentlemen  in  ^^the  volume  of  my  brain,"  for  whom  I  have 
no  space  in  this  book,  as  it  has  iJready  exceeded  the  dimen- 
sions which  I  had  originally  designed,  but  in  an  additional 
volume  I  intend  that  they  shall  be  duly  remembered  ac- 
cording to  the  best  of  my  humble  ability  and  my  oppor 
tunities  of  forming  a  just  estimate  of  their  deserts. 


THE  WALL  STREET 
POINT    OF    VIEW. 

By  henry  clews. 


What  this   Book   Contains. 

lis  Remarkable  Table  qf  CotUenis. 

Wall  Street  Itself. 

Wall  Street  as  a  Gauge  of  Btisi-  *  Trusts  and  Corporations. 

ness  Prosperity.  The  Art  of  Making  and  Saving 

The  Study  of  the  Stock  Market  Money. 

Money  and  Usury.  Business  Education. 

The  Railroad  Problem.  False  Men  and  Methods  on  the 

Management  of  Industrial  Enter-  Street 

prises.  Panics  and  their  Indications. 

WaII  5treet  And  the  Qovemment. 

Washington  Domination  in  Fin-  Tariff  for  Prosperity  Only. 

anoe,  Speculation*  and  Business.  Foreign  Trade  and  Free  Trade. 

The  Chief  Magistrate.  Retrospects  and  Prospects. 

First  Cleveland  Administration.  The  Trans-Missouri  Case. 

The  Harrison  Administration.  The   Laws   Relating  to  Trusts, 
Second  Cleveland  Administration.        Corporations,  and  Railroads. 

Mr.  Cleveland  Personally  Consid-  Currency  Legislation. 

ered.  Prophetic  Views  on  Silver. 

Significance  of  Wilson  Tariff  Law.  President  McKinley's  Policy  and 
A  Batch  of  Legacies.  the  Nation's  Future. 

WaII  5treet  And  doclAl  Problems. 

The  Masses  and  the  Classes.  lahe  Physical  Force  Annihilators. 

A  Question  of  Good  Citizenship.        The  Annihilators*  Methods. 
Labor  Unions  and  Arbitration 

Wall  Street  and  International  Affairs. 

Peace  and  Prosperity.  The  Venezuela  Message  Panic 

The  Baring  Failure.  Our  Nation's  Credit 

Our  Nation's  New  Departure. 

1 


If  any  tnan  tmderstands  fully  Wall  Street  and  its  Point  of  View,  that 
man  is  Henry  Clew8  the  veteran  banker,  whose  sensible  sayings  abotit 
business  have  been  famous  for  years. 

This  book  is  a  lively  discussion  of  the  business  interests  and  the 
politics  of  the  country,  all  from  the  point  of  view  of  the  men  who  make 
Wall  Street  the  real  business  center  of  the  United  States. 

The  four  parts  of  the  book  show  its  unique  scope:  Wall  Street  Itself. 
WMStrtH  €md  the  Cw^emmeiU.  WaU  Street  and  Social  Ftoblems.  Wall 
Street  mmd  IntermatUnai  Affairs.    No  other  book  covers  that  ground. 

Wall  Street  itself  receives  a  portrayal  astonishing  to  nearly  every- 
body. Speculation  plays  but  a  trifling  part  compared  with  the  enor- 
mous amount  of  the  legitimate  business  of  the  country  which  centers 
there.  Wall  Street  is  the  hub  of  American  business,  and  the  farmer 
needs  it  as  much  as  his  plough. 

The  maxims  of  modem  success  in  business  are  crisply  told.  How  to 
get  rich  and  yet  be  honest  is  the  subject  of  one  of  the  brightest  chapters. 
The  chances  of  young  men  to  make  fortunes  are  set  forth. 

AH  the  business  problems  which  government  has  to  solve  are  dis- 
cussed. The  Trusts,  the  Tariff,  the  Banks,  Silver;  Expansion— these 
each  have  specific  attention  from  the  clear-headed  business  man's  point 
of  view. 

What  all  the  Administrations  have  done  to  business,  from  1S84  to  1900, 
is  reviewed  in  detail,  with  racy  style,  and  with  profound  good  sense. 

Mr.  Clews  discusses  all  the  problems  that  business  men  talk  about 
every  day,  and  he  gives  his  views  directly,  definitely  and  picturesquely. 

Whether  you  agree  with  him  or  not,  you  cannot  afford  to  pass  by 
his  book.    It  is  a  searchlight  on  business  in  its  present  day  relations. 

Busy  dusimess  mem  as  well  as  women  who  care  for  business  wUltake  the 
time  to  read  the  book.    Ask  your  bookseller  for  it,    Price^  $  i^S^. 

306  Pages,  with  Photogravare  Portrait. 
SILVBR,   BURDBTT  &  C0.»   Pablishers, 


What  the  Editors  Say  of  this  Book. 

Seldom  does  a  published  book  produce  so  strong  an  impression  upon 
the  newspaper  press,  and  elicit  such  a  large  number  of  favorable  remarks 
as  has  been  the  fortune  of  The  Wall  5treet  Point  of  Vic  v.  Following 
are  a  score  or  more  of  forceful  comments,  excerpts  from  long  reviews, 
and  selected  as  typical  from  a  great  array  of  ;iotices  as  hearty  as  these. 


Hie  IxhA  Meett  a  want  that  has  long  bean  Mx  vbl  our  too  meager  Utaratar>  of  finawo.  T1;e 
fitct  that  it  is  written  in  an  nnoMiaUyentaitaaBinc  style  does  not  detract  Itoib  its  ^sriooavahie. 
^Jemuml^  Cemmeixe,  M.  Y. 


T1iitabl«ftBdcxha]utiT«ecoBOttfctr»adMbylCr  CWwaisnoCooIydiapoiBtofTtewof  cbt 
baaktr  and  brokar,bat  that  of  tha  larga  whoJaaala  and  itafl  — wfaaat,  and  tha  wida  awaka 
nanofiurtiirer.  Tha  problama  discuned  in  this  book  ara  of  graat  inpoftaaoa.  Tla  book  wBl 
heip  its  readan  to  a  daarer  ondantaDding  of  tba  proUaau  of  boiiaan  and  govanunint,  and 
wOl  be  to  Bwny  alibaral  adocatioa  on  aconomic  matton.— ^m/mi  Jnumml, 

"The  WanSixaatFbintofVi0ir''iaaTa]iiablaoontribatlontothaliiaratara  of  boaiaaab-* 
Brook^BmgU, 

Tbera  ia  entartaiainent  as  wall  as  faiatniction  to  be  darirad  Iron  Ifr.  daan^s  <*Wa]l  Suaat 
Point  of  Yiew."— 7»*  Stm,  N.  Y. 

Tba  Tohnna  is  foil  of  faistroction  for  thoao  who  ara  disposed  to  tiy  their  fBttonaa  in  the  great 
canter  of  apecdkuion.~i\^rw  Haotm  PatttuHmm, 

This  book,  by  a  man  wiio  has  himself  socceadad,  is  colk»qnhi,  wise,  witty,  and  fafl  of  anio- 
dote.  Few  men  will  care  to  pass  by  die  chapter  on  "Art  of  llakiiv  and  Saviiw  ICoaay."— 
LanisvilU  CMtHir  JgmmaL 

Interesting  to  aU  u  the  chapter  fai  whfch  is  shown  that  Wall  Street  is  the  gaoga  of  borinsss 
prosperity.— ^lAesif  TSMU^Umiom, 

The  book  is  a  masterpiece  el  iu  kind,  an  attractiTe  and  takkig  discasiion  oi  what,  fai  tha 
hands  ef  another,  might  have  been  made  a  very  dry  and  nninieresting  thasM  -^Whrtuitr  4Kf. 

Mr.  Qews^  bookis  Ihll  of  valoable  information  and  good  advice,  and  yoong  men  wHI  ind 
it  amply  worth  reading  -~Mlamta  CuuHtuHam, 

Mr.  Clews  takes  brsad  American  ▼Jews  on  all  tha  qoestionscowsidared  in 'The  Wall  fltiaat 
Pbintof  View*  and  treats  them  in  a  mostintelligant  and  enteitnhdng  WjJm^^Jndiimm^ditJwmmmU 

Mr.  Henry  Clews  has  just  pablished  the  most  interesthig,  comprshensiTe, 
Tahable  book  on  Wall  street  we  have  ever  leen.— ir«Z?  Strui  JkUfy  im^tdigmUr, 

A  wen-named  book.  Mr.  Clews  is  the  incarnation  oftha  Wall  Street  spirit,  and  hie  fotcAla 
views  ara  exceptioaally  quotable  both  to  the  friends  and  to  the  enemies  of  die  ideas  ha  cham- 
pions.—TXtf  (kdU9k,  N.  Y. 

Mr.  Claws  has  added  a  romantic  vofamie  to  tha  finandsl  hlvary.—AMI^  Z«<r«''>  PU** 

Abook  that  has  crsated  a  profannd  impreiikiii  m  If ew  York,  and  b  destinad  to  Snflasaoa 
ddnUng  men  all  over  tha  country.  Mr.  Clewafs  style  is  so  rimple  and  Incid  that  he  esa  be 
understood  by  the  veriest  novioe.--CUhvw  TlMMs-ZfirroUL 

No  man  living,  perhaps,  is  better  qualifted  to  discass  tha  ways  and  methods  Iron  tha  Wall 
>  Street  financier's  point  of  view  than  Hsnry  Clews,  aadhis  book  is  eauntntly  readable.— JMm 

It  is  probably  tha  most  coaaprehansive  work  that  has  been  written  for  tha  popular  reader 
of  bttrineas  albirB  in  New  Yorli's  funous  thorooghlare.  Mr.  daws  has  the  gift  of  eaprssrioa, 
and  tha  book  to  faO  of  anacdote-aad  faddent— 6lr.  Umi*  GMt-IkmtcrM. 

Mr.  Clews  to  well  fitted  for  tha  authorship  of  such  a  work,  sad  thoee  who  ara  fataraatadia 
••Tbe  Wall  Street  Point  ofView'' win  find  thto  vohuse  highly  entertainfag  if  not  adi^rk«^— 

Mr.  Clews  writes  vary  fauaraitiBgly  of  the  Clevaland  Administratioa.  Htoapptadatioaof 
which  bemimmrly  foir,  and  may  betaken  as  anticipating  tha  wdiet  which  history  wiU  pronounce 
upon  one  of  the  most  remarkable  men  m  contemporary  pnbUc  Kfo.— sMrw  OrUmma  P9mjwm§. 

Mr.  Claws  endeavors  to  disabuse  the  popular  mind  of  soma  of  the  chaririiad  errors  it  holds 
concaraing  the  graat  financial  heart  of  country.— ZWrwtf  Prm  Pma, 

In  tha  nmtter  oftha  practical  workfaigsofaPhMsctiva  Tariff  fai  relation  to  prioea  of  eon- 
moditias,  "The  Watt  Street  Point  oiVJew"  to  also  the  ceaMwaaanss  point  of  Haw. 


HmuTf  CltwiP  book  on  Wall  Sfrc«t  ui<)  its  point  of  riew  to  the  first  hn6k  tn  ("-e^l  • 
tw^ly  mm!  iatnicthrdy  with  a  wUjftct  of  whirhiiwnyhniwiiiwca  haT>bnt»  wnierfiriil  hapwU 

TIm  cliapiar  oo  "  FalM  Men  and  False  Methods  on  the  SCTMt '' ii  weU  worth  dM  attntiaa 
of  nil  **leaibs  "  the  ooontry  over— £bvwiW^  TfU^am^  N.  Y. 

JVimr  Krt^I  Ttmet,  N0O.  mo,  rgoo, 

WHAT  WALL  STREET  THINKS. 

Pertoos  who  fanagine  that  the  history  of  Wall  Scraet  is  solely  chnmided  in  the  finaBciBl 
oolahias  of  the  daily  press  make  a  Tory  serioosnustake.  Ragardsdasaninatitntion,  WaflSneet 
crsates  and  execates  schemes  of  gigantk;  proportions  whidi  in  their  nltimaie  devdopnienthardily 
beer  a  single  tag  of  the  money  market.  Wall  Street,  too,  has  opmioos  on  all  great  national  and 
inieniatwnal  qoeedons,  opinions  that  are  neither  political,  diplomatic,  aodological,  nor  ewen 
econosMc,  hot  which  oombine  all  four  elenwnts  in  an  ideal  proportion.  Thos  it  is  that  no  one 
who  desirss  to  have  a  broad  and  thoroughly  comprehensive  idea  of  the  great  questions  of  reowt 
days  can  afford  to  ignore  the  opinion  of  Wall  Street  What  this  opinion  is  Mr.  Henry  dews 
has  told  in  an  interesting  manner  in  his  book,  *'  The  Wall  Street  Pomt  of  View." 

There  is  hardly  any  other  publication  with  which  thtovoluBM  can  be  compared.  An  anal- 
ogy might  be  oflSn«d  if  the  oorps  diplomatiqae  of  the  worid  riioald  tssoe  a  review  of  poHiacal 
•vents  from  a  point  of  view  essentially  diplomatic.  Bat  Mr.  Clews  does  not  merely  relais  what 
Wall  Street  thought  about  great  political  or  diplomatic  events— Mr.  Oevelsnd's  tuiff  n 
die  Wilson  or  Dingly  tariff,  gold  vs.  silver,  die  Veneioelan  question,  legislation  1 
and  events  showing  the  relatiotts  between  labor  and  capital,  between  the  employee  and  the 
employer— but  he  diacoees  in  its  rudimentary  form  the  qnestioa  of  finance  in  a  way  that  cannot 
but  be  of  profit  and  aid  to  the  most  humble  dtinn  and  &ther  of  a  fiunily.  Thediapteroa"The 
Art  of  Making  and  Saving  Money  "  and  **  Business  Education''  are  just  as  iatersstasg  as  the 
pages  on  great  world  topics,  and  to  some  they  are  &r  more  important.  There  to  not  a  dnllliBe 
in  the  book;  even  the  figtonss  are  eloqnsnt. 

Frpm  ikt  BaUimert  Amtriemtu 

WALL  STREET'S  FASCINATIONS. 
Wall  Street  to  one  of  the  most  fcacinating  points  of  faiterest  in  America^  I 


Its  commanding  posidon  in  the  world  of  finance  invests  it  with  an  hnportanoe  not  only  of  do> 
mestK  concern,  but  it  to  also  a  brilliant  centre  towards  which  Sorope^s  eyes  are  eageriy  tamed; 
fior  that  reason  there  to  always  a  ready  appetite  to  learn  about  its  mysteries.  Svery  attractive 
deecription  of  iu  operations  to  usually  read  with  great  popular  rslirii,  and  the  pnUic  to  always 
on  the  alert  to  devour  every  book  pertaining  to  its  workings  whidi  to  really  worth  reading 
Perhaps  the  one  which  has  enjoyed  the  best  of  eariy  and  well  deserved  soooenee  to"  The  WaM 
Street  Point  of  View, "  by  Mr.  Henry  Clews.  The  author's  name  of  itself  to  one  of  its  dasf 
recommendations  of  excellence.  Mr.  Qews  to  a  veteran  banker,  and  hto  liiewocfc  amid  Wall 
Street's  dramatic  vidssitndes  has  more  than  equipped  ham  for  the  task  he  has  aasayed.  No> 
body  to  surprised,  thersfcire.  to  note  that  the  press  umvenaSy  pronounces  hto  book  a  splendid 

Thto  book  to  a  lively  discussion  of  the  business  interests  and  the  politics  of  the  country,  all 
from  the  potot  of  vtow  of  the  mea  who  make  Wall  Street  die  real  business  center  of  the  Usited 
States.  The  four  parts  of  the  book  show  its  imique  scope  :  WaD  Street  Itself;  Well  Street 
and  the  Government ;  Wall  Street  and  Social  Problems ;  Wall  Street  and  Intemallottal  Adirs. 
No  other  book  covers  that  ground.  All  the  business  problems,  which  government  has  to  solve 
are  discussed.  The  trusts,  the  tariff,  die  banks,  silver,  expansion— these  each  have  J^edfic 
attention  from  the  clear-headed  business  man's  point  of  vtow. 

What  all  the  administrations  have  done  to  business  firom  1884  to  1900  to  reviewed  to  dels^ 
with  racy  style  and  with  profound  good  sense. 

Mr.  Clews  discusses  an  the  problems  that  busfnasBBon  talk  about  every  day,  and  he  gives 
hto  views  direcdy,  definitely  and  pictnrssqnely. 


TWENTY-EIGHT  YEARS 

IN  WALL  STREET. 

By  Henry  Clews. 

7DD    Pages.  •,•  6D    lUuBtratiana. 

Price,  $1.50.    For  Sale  at  all  Bookstores.     Orders  for  books  and  pay- 
ments therefor  may  also  be  sent  to  Messrs.  Henry  Clews  St  Co. 


[SIXTH  EDITION.] 


HcBTT'Ckwa' book  boM  of  the  moat  valnableftad  aolid  contribotiont  of  tho  print  day 
to  tho  fiBMcal  tttoratdfo  of  di«  ooontiy.— JV.  K  TMyromr. 

TU  b«ok  Ifr.  Clewi  has  wfitlM  b  o  vut  pMMnuu  of  WoU  SitoM  liik--JENi^^ 

At  0  raoord  of  the  eflUn  of  Wall  Street,  Mr.  Qewi*  book  b  to  the  fiaencial  world  what 
Jaihte  6.  Blaine's  *'Tweaty  Years  fai  Congress"  is  to  the  political  world;  though  our  own 
private  opiaioa  is  that  dio  styk  b  better  and  the  biss  less  proiioiiiioed.~GNirf  .Aw^^ 

No  book  published  in  many  years  has  esDdted  the  interest,  repaid  its  pemsal,  and  b  more 
pvofitahl«.---Ade^(MMfintf ,  ffbtffg. 

Ilr.  Clews  has  rendered  a  great  senrioe  to  die  public  by  hb  Taluable  and  trostworthy  rem- 
iiliceacei  I     Hfiiff  amd  Ex^ms, 

A  eoaqileie  treaeory  oi  iiiiiiinstifin  fininenfisi,  hbiorical,  biognphica]  and  eaecflotsl.  ■■ 
Ac/,  WaahiagtoB. 

It  b  the  best  book  00  Wall  Street  that  has  yet  appeared,  and  one  may  gft  from  it  an  ihsi|||ht 
ftsto  the  practbal  methods  of  the  specalaaTe  world  sseond  only  to  that  obtamed  through  aetaal 
eaperienoe.— ^SratfuwA  Mflwankee,  Wis. 

there  has  probably  been  no  book  published  in  thb  oooatry  that  wiU  attract  the  atwuUwi 
olbosiBesocireles  mors  than  thb  aat.'^Okia  Stait  Jmrmal. 

HAwtomakesaoneyl  How  not  to  lose  it  t  No  such  complete  sad  cooprehenshre  exposi- 
tion on  die  subject  erergiTen.— AT.  K  Wi^rU. 

One  ofthermoit  important  sad  faMBTCstbg  books  ever  written  on  the  sulject— JSwraaiL 

The  Tohmeb  written  in  easy  flowing  style,  and  its  factt  are  of  the  kmd  to  interest  die  nd- 
lioos  of  raadsrs  of  all  classes.— Ariicr-Ortiait,  Chicago. 

There  b  not  a  doU  fiae  b  the  book,  while  much  of  it  bas  thrilliBg  as  a  roaaaaoe  from  the 
pen  of  a  great  norelist.— &1  &  TVuumy  CimmUiftU  DgUet0r, 

Ifr.  Clews'roduffks  on  burinaii  training  are  ftiU  of  wisdom  and  praetbal  phikaophy.— 
Hirmid,  Boston. 

The  book  b  a  most  entartabiag  collection  of  bets,  aignments  sad  anecdotes  coverbg  mora 
than  a  quarter  of  a  century.    The  work  b  one  of  rare  interest.— /firroJIcf,  Chicago. 

The  book  should  be  b  the  hands  of  every  amn,  3roongor  old,  and  ahonU  be  read  caraAilly 
by  every  atndent  of  the  financial  hiatory  of  thb  eountry.-*/«i!K«/0r,  N.  Y. 

STeryboaineaa  sum  in  the  United  States  ought  to  haTO  a  copy  of  that  remarkable  book 
"Twenty-Eight  Years  m  Wall  Street,"  by  Henry  Clews,  the  well-known  banker.  Thb  book 
opens  many  secrets  coaneeted  with  the  busbess  and  bnabeaa  men  b  die  aaetropolb  of  the 
Uniied8la«a%  and  It  b  a  moat  valnable  hbtory  of  events  m  the  money  center  of  the  Repoblic. 
Ifr.  Clewa'wiftesfna  phBoaophic  vein,  and  hb  book  ranks  b  importance  with  die  best  financial 
wfid^aortheontory.  Pkobably  no  other  man  could  tell  aomtich,  or  tell  ao  well  about  Wall 
Street  and  its  aeenes  daring  dm  past  qoarter  of  a  century.  TlievolaaMooatabsovar  700  pages 
and  every  person  desirous  of  knowing  something  about  die  inner  workings  of  Wall  Street  can 
Isaraittadusbook.— 7Xs  Ae^«i^AM  AmAu/O^  ^?M«A#. 

itbbdaedapetfiKtiomaaea.-Ar«/i<w«/  JU^mhUemn,  Washbgioa. 


HENRY  CLEWS  &  CO., 

11,  13,  18  and  17  Broiid  StrMt  and  38  WaO  Street.  New  York* 

•i  Clb«  Wmm  Y9Th  Mm*  IBmtikmmgt^  Vmm  Yvrh  PtbOmoo 


LOCAL  MAION  SFFWES. 

I  W«t  TUnsr-lUrd  Straat  (Opporite  The  Waldorf-Astoria); 
itaa  Broadway  i    *        """* 


t  (Oppoaite  Hm  Waldorf-Astoria); 

y  and  aoa  fifth  ATanoa,  ooraar  Tweatr-Fiith  Scratt; 

kdway.  oonar  Bftwma  Scraat  (SQk  Kirliaitga  BmUiag): 


4^7  BtooadVwy,  eonnor  sfuvhiv  o«xw«  |auK  adoa 

96  Worth  Screat  and  99  Thomas  Street; 

•7  Hodaon  Street  (Mercantile  Kirchawga  BnildiDg); 

16  Cotnt  Street,  (Oppoata  City  Hall)  BrooUyD,  L.L 
(MvataTriffpavh  Wirt  to  CHICAGO  and  ochor  Poiata,  also  to  all  the  BRANCH  OFFICES.) 


A  8EIEIAL  lAHlia  iSSI8ESi  TIAMA8TE8. 

DaMMR  acoouata  received  front  oovporatioDa,  firms  and  individiials  solject  to 
damanni    latarest  allowed  on  all  dafly  halancae  and  credited  monthly. 

Car^wates  of  Deposit  iaraed,  payaUa  on  demand  or  at  a  fixed  data,  beaiQg  n  Jiheralnua 

CouacSiooa  of  notaa,  drafts  wbd  ooapons  made  la  all  parts  of  the  worid  aaa  pmnipt^  ra> 
^'fer. 


Ptetiaa  doiagbtiainass  with  as  may  telefiaph  orders  and  iastmctiops  at  oar  espeaaa. 
Oar  private  tetegraph  code,  and  blank  cheque  books,  will  be  ianiished  opoB  application. 
t  paid  orer  oar  coonter;  we  also  act  as 


iEAUEIS  !■  8.S.  i88i8  AID  SnEI  NUN  MAIE  INVESTMENT  SEeOIITIEt. 
I  aaacwtad  oa  all  tfaa  Baehaagaa  far  lava 


InTeatsMBt  ocdars  from  iuslliutiona,  trastaas  oi  eatatea  and  capitalists,  will  reooive  our  best 


Tlia  btarests  of  all  oar  clients  will  reoefve  carefid  and  confidential  protection;  and  asthrae 
■lambsri  of  oar  fina  are  members  of  the  New  York  Stock  EaEchange,  prompt  eaecatioB  of  oitian 
caa  always  be  relied  apon. 

All  orders  win  be  eiDBcated  on  the  floor  of  the  Eachaagas  of  which  wa  are  sMmbcrs,  ami  ihe 
1  of  brokers  with  whom  the  transactions  ara  made  will,  in  all  inttanrea,  be  giTca  op  to 


It  is  unpottant  that  daalars  shcold  always  exact  this  proviskm,  which  is  diefr  lesa]  and  lost 
fflfht^  fai  the  eaecatian  of  orders  wherever  placed,  as  a  matter  of  self-protection  acaiMtfictitwas 
and  other  dishooeat  transacdoBs. 


Waara  pnparad  ta  brtaif  oat  by  Mbacriptloa,  bath  la  tbto  0 
h-grada  Baods  aod  athar  flrst-daaa  Sacarltlaa,  aad  wa  lavlta  \ 
Wa  alaa  attaod  ta  tfaa  raarganisatlaa  of  4 
af  trada  canbioatlaoa  aod  athar  orapart 


The  Banking  Department  of  oar  hoaae  \m  coadacted  in  all  respects  the  aame  as  dmt  of  a 

'  National  bank.    Oor  linn  was  organised  In  1877,  and  the  firm,  also  the  individaal  memhcrsof 

it,  are  pledged  ander  imperative  co-partnership  obfigatioas  to  take  no  qMcnlative  risks  on  thsir 

own  aoooant.    This,  together  with  oar  large  capital,  assorea  oar  patroas  of  an  abaolata  aeoarity 

joUy  eqoal  to  that  of  any  banking  institotioa. 

All  baskiess  of  whatever  natare  placed  in  oar  handa  w&l  be  regarded  by  otir  firm  asa 
msteeship,  aad  will  receive  accordingly  oar  fiuthibi  protection  and  painstaking  aoaaiioa. 

TTaitid  Stfttet  OofvtmiiiHit  Bondi  (all  imai). 

Biltiih  OofvaninHit  Izohequar  8  Par  Ooit  Bondi, 

Genua  Impira  4  Par  Ooit  TrvMiiry  Votit. 

TTaltad  Ntatet  of  Kazioo  Xxtamal  6  Per  Ooit 

SwsdiBh  OavamintBt  4  Per  Owt  Baada* 
vats  of  Haw  York  Z)i  Par  Owt 
▲n  al  tha  abava  Sacaritlaa  baaght  aod  aald  aa  tfaa  aiaat  foraffaMa  tMOH. 

HENRY  CLEWS  &  CO., 

flbrrsajiaiidawaa  AivflMl*  Bmiiciat  and  Dbaudb  n  OoVBamiBar  BamOb 


m 


To  xvM  6nc,  this  book  shoald  be  returned  on 
Of  before  the  date  last  itamped  below 


tQ  l»-1 1-  tD->|if4  » 


FEB  Q 


n 


this  boo 
return, 

two  wee 
for  (tjWi 


^1- 


rower    i 
Hon  an 


i 


rioel 


ireneiti 


±t4An  tiriou* 


V 


:\\Ai 


JACKSON  BUSINESS  UBflARY  STANFOflO 

332.6  C635c1 

Clews,  Henfv 

Tiwrtty-erght  y«afs  m  Wall  Strf«t 


Stanford  University  Library 

Stanford,  California 


In  opdcp  thai  olbers  m>r  .m  iW,  fcook,  pl«,«, 
retun,  „  .,  ^^  „  po«ibte,  hat  not  ktcr  than 
tie  dale  dat>.  ^^ 


*i 


I 


Ui 


1? 


3 


i