In the good old days gone by Wall street did business on principles very
different from those which prevail there now. Then there was a holy
horror in all hearts of speculation. Irresponsible men might indulge in
it, and so incur the censure of the more respectable, but established
houses confined themselves to a legitimate and regular business. They
bought and sold on commission, and were satisfied with their earnings.
Even now, indeed, the best houses profess to do simply a commission
business, leaving the risk to the customer, but those who know the hidden
ways of the street hint that there is not a house in it but has its
secrets of large or small operations undertaken on account of the firm.
The practice of buying and selling on commission is unquestionably the
safest, but the mania for wealth leads many clear, cool-headed men into
the feverish whirl of speculation, and keeps them there until they have
realized their wildest hopes, or are ruined.
It has been remarked that the men who do business in Wall street have a
prematurely old look, and that they die at a comparatively early age.
This is not strange. They live too fast. Their bodies and brains are
taxed too severely to last long. They pass their days in a state of
great excitement. Every little fluctuation of the market elates or
depresses them to an extent greater than they think. At night they are
either planning the next day's campaign, or are hard at work at the
hotels. On Sundays their minds are still on their business, and some are
laboring in their offices, screened from public observation. Body and
mind are worked too hard, and are given no rest.
The chief cause of this intense strain is the uncertainty attending the
operations of Wall street. The chances there are not dependent upon the
skill or the exertions of the operator. Some powerful clique may almost
destroy the securities upon which he relies for success, or may make him
wealthy by suddenly running up their value; so that no man who does not
confine himself to a strictly legitimate or commission business--and but
few do so--can say one week whether he will be a millionaire or a beggar
the next. The chances are in favor of the latter result. Nine out of
ten who speculate in gold or stocks, lose, especially persons
unaccustomed to such operations. Like all gamblers, they are undismayed
by their losses, and venture a second time, and a third, and so on. The
fascination of stock gambling is equal to that of card gambling, and
holds its victims with an iron hand. The only safe rule for those who
wish to grow rich is to keep out of Wall street. While one man makes a
fortune by a sudden rise in stocks or gold, hundreds lose by an equally
sudden fall in the same commodities. Even old and established firms
sometimes give way with a crash under these sudden changes.
The legitimate operations of the street and the speculative ventures are
becoming more and more concentrated every year in the hands of a few
operators and capitalists. These move the market as they please, and
fill their coffers, and sweep away younger or weaker men with a
remorseless hand. It is useless to oppose them. They are masters of the
field in every respect, and when they combine for a common object, their
resources are inexhaustible and their power beyond computation. A dozen,
or even half a dozen of the great capitalists could ruin the whole street
were they so disposed, and once they came near doing so. This is the
secret of the cordial hatred that is felt by the majority of Wall street
men for Vanderbilt, Drew, and other great operators. They know and dread
the power of these men, and would readily combine to destroy them singly.
The mania for stock gambling which now sways such masses of people, may
be said to date from the war and the petroleum discoveries. Since then
it has rolled over the country in a vast flood. The telegraph is kept
busy all day and all night in sending orders for speculations from people
in other States and cities to New York brokers. Everybody who can raise
the funds, wishes to try his or her hand at a venture in stocks.
Merchants, clergymen, women, professional men, clerks, come here to tempt
fortune. Many win; more lose.
Fortunes are made quicker and lost more easily in New York than in any
place in the world. A sudden rise in stocks, or a lucky venture of some
other kind, often places a comparatively poor man in possession of great
wealth. Watch the carriages as they whirl through Fifth avenue, going
and returning from the park. They are as elegant and sumptuous as wealth
can make them. The owners, lying back amongst the soft cushions, are
clad in the height of fashion. By their dresses they might be princes
and princesses. This much is due to art. Now mark the coarse, rough
features, the ill-bred stare, the haughty rudeness which they endeavor to
palm off for dignity. Do you see any difference between them and the
footman in livery on the carriage-box? Both master and man belong to the
same class--only one is wealthy and the other is not. But that footman
may take the place of the master in a couple of years, or in less time.
Such changes may seem remarkable, but they are very common in New York.
See that gentleman driving that splendid pair of sorrels. He is a fine
specimen of mere animal beauty. How well he drives. The ease and
carelessness with which he manages his splendid steeds, excites the
admiration of every one on the road. He is used to it. Five years ago
he was the driver of a public hack. He amassed a small sum of money, and
being naturally a sharp, shrewd man, went into Wall street, and joined
the "Curb-stone Brokers." His transactions were not always open to a
rigid scrutiny, but they were profitable to him. He invested in oil
stocks, and with his usual good luck made a fortune. Now he operates
through his broker. His transactions are heavy, his speculations bold
and daring, but he is usually successful. He lives in great splendor in
one of the finest mansions in the city, and his carriages and horses are
superb. His wife and daughters are completely carried away by their good
fortune, and look with disdain upon all who are not their equals or
superiors in wealth. They are vulgar and ill-bred, but they are wealthy,
and society worships them. There will come a change some day. The
husband and father will venture once too often in his speculations, and
his magnificent fortune will go with a crash, and the family will return
to their former state, or perhaps sink lower, for there are very few men
who have the moral courage to try to rise again after such a fall, and
this man is not one of them.
In watching the crowd on Broadway, one will frequently see, in some
shabbily dressed individual, who, with his hat drawn down close over his
eyes, is evidently shrinking from the possibility of being recognized,
the man who but a few weeks ago was one of the wealthiest in the city.
Then he was surrounded with splendor. Now he hardly knows where to get
bread for his family. Then he lived in an elegant mansion. Now one or
two rooms on the upper floor of some tenement house constitute his
habitation. He shrinks from meeting his old friends, well knowing that
not one of them will recognize him, except to insult him with a scornful
stare. Families are constantly disappearing from the social circles in
which they have shone for a greater or less time. They vanish almost in
an instant, and are never seen again. You may meet them at some
brilliant ball in the evening. Pass their residence the next day, and
you will see a bill announcing the early sale of the mansion and
furniture. The worldly effects of the family are all in the hands of the
creditors of the "head," and the family themselves are either in a more
modest home in the country, or in a tenement house. You can scarcely
walk twenty blocks on Fifth avenue, without seeing one of these bills,
telling its mournful story of fallen greatness.
The best and safest way to be rich in New York, as elsewhere, is for a
man to confine himself to his legitimate business. Few men acquire
wealth suddenly. Ninety-nine fail where one succeeds. The bane of New
York commercial life, however, is that people have not the patience to
wait for fortune. Every one wants to be rich in a hurry, and as no
regular business will accomplish this, here or elsewhere, speculation is
resorted to. The sharpers and tricksters who infest Wall street know
this weakness of New York merchants. They take the pains to inform
themselves as to the character, means and credulity of merchants, and
then use every art to draw them into speculations, in which the tempter
is enriched and the tempted ruined. In nine cases out of ten a merchant
is utterly ignorant of the nature of the speculation he engages in. He
is not capable of forming a reasonable opinion as to its propriety or
chance of success, because the whole transaction is new to him, and is so
rapid that he has no time to study it. He leaves a business in which he
has acquired valuable knowledge and experience, and trusts himself to the
mercy of a man he knows little or nothing of; and undertakes a
transaction that he does not know how to manage. Dabbling in
speculations unfits men for their regular pursuits. They come to like
the excitement of such ventures, and rush on in their mad course, hoping
to make up their losses by one lucky speculation, and at length utter
ruin rouses them from their dreams.
Not only do men squander their own money in this way, but they risk and
often lose the funds of others committed to their charge. Bank officers,
having the use of the deposits in their institutions, take them for
speculation, intending of course to return them. Sometimes they are
successful, and are able to replace the money in the bank, so that no one
hears of their dishonesty. Again, and most commonly, they fail, and they
are ruined. Guardians thus misappropriate the funds of their wards.
Even the funds of churches are thus used by their trustees. The amount
of speculation engaged in by clergymen with their own money would
astonish a novice. Some prominent divines in the city are well known in
Wall street. Their brokers keep their secrets, but the habitues of the
street are adepts at putting this and that together, and these reverend
gentlemen, some of whom preach eloquently against the sins of speculation
and gambling, become known as regular customers. The street is full of
gossip concerning them, and if the stories told of them be true, some of
them have made large fortunes in this way, while others have literally
"gone to the bad."
It is not necessary that a person speculating in stocks should be master
of the entire value of the stocks. If he be known to the broker
operating for him as a responsible person, he may employ only ten per
cent., or some other proportion, of the stock to be dealt in. By
depositing $1000 with his broker, he can speculate to the extent of
$10,000. This per centage is called a _margin_, and the deposit is
designed to protect the broker from loss in case the stock should fall in
value. As the stock depreciates, the customer must either sell out and
bear the loss which is inevitable, or he must increase his margin to an
extent sufficient to protect his broker. If he fails to increase his
margin, the broker sells the stock and uses the money to save himself.