Like Brette Harte's Heathen Chinee,
"For ways that are dark
And tricks that are vain,
Wall Street is peculiar."
It takes a clear, cool head, a large amount of brains, and unaltering
nerve, to thread one's way through the intricacies of the business of
finance as carried on there. It would be interesting to know how many
come out of the ordeal untouched by the taint of corruption. Members of
the Exchanges are held by a rigid code of laws, but in questions of
morality Wall street has a code of its own. Expediency is a prominent
consideration in the dealings of the street, and men have come to regard
as honest and correct almost anything short of a regular breach of
contract. They do not spare their own flesh and blood. Friendships are
sacrificed, the ties of kinship are disregarded, if they stand in the way
of some bold operation. Every thing must give way to the desire for
gain. The great operators plunder and destroy their lesser rivals
without a feeling of remorse, and by combinations which they know cannot
be resisted blast the prospects and ruin the lives of scores whose
greatest fault is an inability to oppose them successfully. Tricks so
mean and contemptible that their perpetrator would not be tolerated in
social life, are resorted to, and if successful are applauded as
evidences of smartness. Every man's hand is against his neighbor.
Clerks are bribed to betray the secrets of their employers. The baser
their treachery, the larger their reward. We do not propose, however, to
discuss the morality of Wall street transactions, and so we drop the
subject.
It is said by the gossips of the street that the great Railroad King,
Commodore Vanderbilt, is not above using any means at hand to secure the
success of his schemes. It is said that he once tried to use his son
William in this way. He came to him one day, and advised him that he had
better sell his Hudson River stock, as 110 was too high for it. William
thanked him, and made inquiries in the market, and found that his father
was buying quietly all he could lay his hands upon.
William determined to follow suit. Up jumped the stock to 137. It was a
clear twenty-six per cent. in pocket.
When the operation was concluded, the Commodore rode round to the son's
office.
"Well, William, how much did you lose?"
"I went in at 110 on 10,000 shares. That ought to make me two hundred
and sixty thousand dollars--"
"Very bad luck, William," quoth the father, trying to look extremely
troubled,--"very bad luck, this time."
"But then I bought, and so made."
"Hey? What sent you doing that, sir?"
"O, I heard that was your line, and so concluded that you meant long
instead of short."
"Ahem!" croaked Vanderbilt _pere_, as he buttoned up his fur overcoat,
and stalked out of the open door. He has always had a high opinion of
William since that event!
Some years ago Vanderbilt wanted to consolidate the Hudson River and
Harlem Railroads, and when the scheme was presented before the
Legislature of New York, secured a sufficient number of votes in that
body to insure the passage of the bill authorizing the consolidation.
Before the bill was called upon its final passage, however, he learned
from a trustworthy source that the members of the Legislature who had
promised to vote for the bill, were determined to vote against it, with
the hope of ruining him. The stock of the Harlem road was then selling
very high, in consequence of the expected consolidation. The defeat of
the bill would, of course, cause it to fall immediately. The
unprincipled legislators at once began a shrewd game. They sold Harlem
right and left, to be delivered at a future day, and found plenty of
purchasers, every one but those in the plot expecting the consolidation
of the roads and a consequent advance in the value of the stock. They
let their friends into the secret, and there was soon a great deal of
"selling short" in this stock. Commodore Vanderbilt managed to acquaint
himself with the whole plot; but he held his peace, and resolved upon
revenge. He went into the market quietly, with all the funds he could
raise, and bought every certificate of Harlem stock that he could find.
These certificates he locked up in his safe. When the bill came before
the Legislature on its final passage, it was defeated.
The conspirators were jubilant. They were sure that the defeat of the
bill would bring "Harlem" down with a rush. To their astonishment,
however, "Harlem" did not fall. It remained stationary the first day,
and then to their dismay rose steadily. Those to whom they had sold
demanded the delivery of the stock, but the speculators found it
impossible to buy it. There was none in the market at any price. In
many of these instances Vanderbilt was the real claimant, the brokers
acting in the transactions being merely his agents. Being unable to
deliver the stock, the conspirators were forced to settle the demands
against them in money, and the result was that they were ruined. One of
the shrewdest operators in New York lost over $200,000. He refused to
pay, and his name was stricken from the list of stockholders. This
brought him to his senses, and he made good his contracts. Vanderbilt
made money enough out of this transaction to pay for all the stock he
owned in the Harlem Road.
Daniel Drew is a great operator. His gains are immense, as are also his
losses. He is not popular in the street, and the brokers are fond of
abusing him. He has handled too many of them mercilessly to have many
friends. They say that he does not hesitate to sacrifice a friend to
gain his ends, and that he is utterly without sympathy for those who go
down before his heavy blows.
Bogus stock companies appear from time to time in Wall street. An office
is rented and fitted up in magnificent style, a flaring programme is
issued, and seemingly substantial evidences of the stability and
prosperity of the company are exhibited to inquirers. The stock offered
is readily taken up by the eager to be rich crowd. A dividend, most
hopefully large, is declared and paid, to stimulate investments, and
then, when the market has been drained dry, the bubble bursts, the
directors disappear, the office is closed, and the shareholders lose
their money.
On fine afternoons visitors to the Park do not fail to notice a handsome
equipage driven by a stylish young man, with rosy cheeks and light curly
hair. His face is the perfect picture of happy innocence. He is very
wealthy, and owns a great deal of real estate in the city. The manner in
which he made his money will show how other persons enrich themselves.
A few years ago, he, in company with several others, organized a scheme
for working certain gold mines said to be located in a distant territory.
A company was made up, the country was flooded with flaming descriptions
of the valuable mine, and stock was issued which sold readily. The bonds
were soon taken up, and in a month or two the so-called company commenced
paying handsome dividends. A number of gold bars, bearing the stamp of
the mint, were on exhibition in the company's office, and were
triumphantly exhibited as amongst the first yields of the valuable mine.
For several months the dividends were paid regularly, and the company's
stock rose to a splendid premium. It could hardly be bought at any
price. No one doubted for an instant the genuineness of the affair, and
the lucky company was the envy of all Wall street.
In a few months, all the stock being disposed of, the company ceased
paying dividends. This excited the suspicion of some of the shrewdest
holders of the stock, and the affair was investigated. It was found that
the wonderful mine had no real existence. The gold bars were simply gold
coins melted into that form at the Mint, and stamped by the Government as
so much bullion. The dividends had been paid out of money advanced by
the company, who were simply half a dozen unprincipled sharpers. The
stockholders were ruined, but the company made a profit of a clear half
million of dollars out of the infamous transaction. Legal proceedings
are expensive and tedious when instituted against such parties, and the
stockholders, rather than increase their losses by the outlay necessary
for a lawsuit, suffered the swindlers to go unmolested.
A certain stock broker, anxious to increase his wealth, purchased twenty
acres of land a few years ago in one of the Western States, and commenced
boring for oil. After a few weeks spent in this work, he discovered to
his dismay that there was not the slightest trace of oil on his land. He
kept his own counsel, however, and paid the workmen to hold their
tongues. About the same time it became rumored throughout New York that
he had struck oil. He at once organized a company, and had a committee
appointed to go West and examine the well. In a few weeks the committee
returned in high glee, and reported that the well contained oil of the
very best quality, and only needed capital and improved machinery to
develop its capacity. In support of this assertion, they brought home
numerous bottles containing specimens of the oil. This report settled
the matter in Wall street, and the stock issued by the company was all
sold at a handsome premium. When the sales ceased, it was rumored that
the well had ceased to flow. This was true, for there was no oil
anywhere on the land. That in the well had been bought in Pennsylvania,
and poured into the well by the agents of the owner, and the examining
committee had been paid large sums for their favorable report. The owner
of the well was enriched, as were his confederates of the bogus company,
and the holders of the stock were swindled, many of them being ruined.
Said the New York _Herald_, at a period when speculation was rampant:
"Within the past few days we have seen the most gigantic swindling
operations carried on in Wall street that have as yet disgraced our
financial centre. A great railway, one of the two that connect the West
with the Atlantic seaboard, has been tossed about like a football, its
real stockholders have seen their property abused by men to whom they
have entrusted its interests, and who, in the betrayal of that trust,
have committed crimes which in parallel cases on a smaller scale would
have deservedly sent them to Sing Sing. If these parties go unwhipped of
justice, then are we doing injustice in confining criminals in our State
prisons for smaller crimes.
"To such a disgusting degree of depravity do we see these stock
operations carried, that members of the church of high standing offer,
when 'concerned,' to betray their brother 'pals,' and, in their
forgetfulness of the morality to which they sanctimoniously listen every
Sunday, state that 'all they care about is to look out for number one.'
A manager of a great corporation is requested to issue bonds of his
company without authority, offering 'to buy the bonds if you are caught,
or buy the bonds with the understanding not to pay for them unless you
are caught.' This attempted fiscal operation, however, did not work, and
resulted in a good proof of the old adage that it requires 'a rogue to
catch a rogue.'
"A railroad treasurer boldly states that he has without authority
over-issued stock of the company to a large amount. He offers it to a
broker for sale, with the understanding that all received over a fixed
value is to go into his (the treasurer's) pocket. From the fact that
this man is not arrested for maladministration of the company's property,
we judge this to be a legitimate operation, and that this may hereafter
serve as a model or standard of morals to all presidents, directors,
treasurers and managers of railway and other great corporations."