BARNUM'S CONNECTION WITH THE JEROME CLOCK CO.--CAUSES AND RESULTS OF ITS
FAILURE.
The connection of Barnum with the Jerome Manufacturing Company of New
Haven, and the failure of the Company have been the subject of much
speculation to the whole world, and has never been clearly understood.
Barnum claimed that he was cheated and swindled by this company, robbed
of his property and name, and reduced to poverty. But before giving any
statements, I call attention to the following article taken from the New
York Daily _Tribune_, of March 24th, 1860:
THE GREAT SHOWMAN.--P.T. Barnum, "the great American showman," as he
loves to hear himself called, who furnishes more amusement for a
quarter of a dollar than any other man in America, is, we are happy to
announce, himself again. He has disposed of the last of those
villainous clock notes, re-established his credit up on a cash basis,
and once more comes forward to cater for the public amusement at the
American museum. To day, between the acts of the play, Mr. Barnum will
appear upon his own stage, in his own costly character of the Yankee
Clockmaker, for which he qualified himself, with the most reckless
disregard of expense, and will "give a brief history of his adventures
as a clockmaker, showing how the clock ran down, and how it was wound
up; shadowing forth in the same the future of the museum." Of course,
Barnum's benefit will be a bumper. Next week the Museum will be closed
for renovation and repairs, and the week after it will reopen under
the popular P.T.B., once more.
I will now give the true statement of facts and particulars of his
connection with the Jerome Manufacturing Company--which, however, was
not his first experience in clock-making. Some time before this, he was
interested in a Company located in the town of Litchfield, Connecticut,
and, I believe, owned about ten thousand dollars worth of stock. They
made a very poor article which was called a marine clock, if I am
rightly informed. That Company failed, and Barnum took the stock as
security for endorsing and furnishing them with cash. I do not suppose
the whole of the effects were worth transporting to Bridgeport, although
estimated by him at a large amount. About this time Theodore Terry's
clock factory, at Ansonia, was destroyed by fire. A large portion of the
stock was saved, though in a damaged condition, much of which was worth
nothing--the tools and machinery being but little better than so much
old iron. Terry knowing that Barnum was largely interested in real
estate in East Bridgeport, and anxious to have it improved, thought he
could make a good arrangement with him for building a factory there for
the manufacture of clocks, and did so. Terry had a large quantity of old
clocks in a store in New York--many of them old-fashioned and
unsaleable, and thousands of these were not worth fifty cents apiece.
Terry and Barnum now proposed forming a joint-stock company, putting in
their old rubbish as stock, and estimating it, most likely, at four
times its value in cash. They built a factory in East Bridgeport, and
made preparations for manufacturing. Terry knew ten times as much about
the business as Barnum did, and knowing, also, that the old stock was
comparatively worthless, held back while Barnum was urging him to push
ahead with the manufacturing. Terry made a great bluster, saying that he
was going to hire men and do a great business, while, unknown to Barnum,
he was trying to sell the stock he held in the company. They finally
cooked up a plan to sell their New York store and the Bridgeport factory
and machinery, if they could, to the Jerome Manufacturing Company,
taking stock in that company for pay, and--the Jerome Company stock
being issued to the owners of the Terry & Barnum stock--thus merge the
two companies into one. This transaction was made and closed without my
knowledge, (I being at the time from the State,) though the "old man"
has had to bear all the blame. As I afterwards found out, Barnum told my
son, the Secretary of the Company, that Terry & Barnum owed about twenty
thousand dollars: this was the amount Terry had drawn for on the New
York store. They made a written agreement with the Jerome Manufacturing
Company, to this effect;--that our Company should assume the liabilities
of their old Company, which were stated at twenty thousand dollars, and
Barnum was to endorse to any extent for the Jerome Company. It
afterwards proved that the entire debts of Terry & Barnum amounted to
about seventy-two thousand dollars, which the Jerome Company were
obliged to assume. The great difference in the real and supposed amount
of their indebtedness and the unsaleable property turned in as stock
were enough to ruin any company. It is a positive fact that the stock of
the Jerome Company was not worth half as much, three months after Barnum
came into the concern as it was before that time. Some of the
stock-holders did not like to have Terry own stock, and Barnum to
satisfy them, bought him out, paying him twelve thousand dollars in
cash--he in the end, making a grand thing out his Ansonia remains. It is
well known that the Jerome Manufacturing Company failed in the fall of
1855, to the wonder and astonishment of myself and of every body else.
The true causes of this great failure never have been made public. I
myself did not know them at that time, but have found them out from time
to time since, and I now propose to make them public, as it has been the
general impression almost every where that Barnum and myself were
associated in defrauding the community. _I wish to have it understood
that I never saw P.T. Barnum_, while he was connected with the
Company of which I was a member, have never seen him but once since, and
that was in February after the failure. About this time law suits were
being brought against him, and as some supposed, by his friends. He was
called upon, or offered himself as a witness, and I believe testified
that he was worth nothing. The natural effect of this testimony was to
depreciate the paper which his name was on. At the time when I saw him,
he told me that the Museum was his just as much as it ever was, and that
he received the profits, which had never been less than twenty-five
thousand and were sometimes thirty thousand dollars per annum; and yet,
he was publicly stating that he was worth nothing! He also, as I
supposed, held securities of the Jerome Manufacturing Company, to a
large amount, (as I suppose about one hundred thousand dollars,) for I
know that such papers had been in his hands. There were many persons who
were interested in the revival of the business, who were in some way
flattered into the belief that Barnum would re-purchase the whole clock
establishment and put them back into the business again. Several men
were sent by some one to examine the property and estimate its value,
and those persons who were anxious for a restoration of the business
were in some way led to believe that Barnum intended to re-commence the
business of clock-making. For myself, I do not suppose that Barnum ever
seriously contemplated any such thing; but the belief that he did, made
some men quiet who might otherwise have been active and troublesome.
The manner in which this matter has been represented would reflect
dishonesty upon the Secretary, which would be untrue. No one who knows
him will, or can accuse him of dishonesty. I love truth, honesty and
religion; I do not mean, however, the religion that Barnum believes in:
(I believe that the wicked are punished in another world.) I ask the
reader to look at my situation in my old age. I think as much of a good
name, as to purity of character and honesty at heart, as any man living;
and very often reading in the New York papers of speeches that Barnum
has made, alluding to his being defrauded by the Jerome Manufacturing
Company, I wish the world to know the whole facts in the case, and what
my position was in the Company which bore my name. After many years--
years of very active business life--I had retired from active duty in
the Company, although I took a deep interest in every thing connected
with it, and also a great pride, as it was a business that I had built
up and had been many years in perfecting. The manufacturing had been
systematized in the most perfect manner and every thing looked
prosperous to me. I owned stock as others did, but did not know of its
financial standing, and was always informed that it was all right, and
that I should be perfectly safe in endorsing. I wish to have it
understood that I did not sign my name to any of this paper, it being
done by the Secretary himself, that therefore I could not know of the
amounts that were raised in that way, that I did not find out till after
the failure, and then the large amounts overwhelmed me with surprise.
It will be remembered that Barnum made two or three trips to Europe to
provide in some way for the support of his "poor and destitute" family,
which as he claimed, had been robbed and ruined by the Connecticut
clock-makers. At one time he was stopped on a pier in New York, just as
he was starting for Europe, by a suit brought against him. Thus the news
went abroad that poor Barnum was hunted and troubled on every side with
these clock notes. It was reported that he was quite sick in England and
could not live, and, at another time, that being much depressed and
discouraged on account of his many troubles, he had taken to drinking
very hard, and in all probability would live but a short time; while at
the same time, he was lecturing on temperance to the English people, and
was in fact a total-abstinence man. These stories were extensively
circulated; the value of his paper was depreciated in the market, and
was, in several instances bought for a small sum.
Since writing the foregoing with regard to his coming into the Company,
and, as he states, being ruined by it, I have ascertained to my own
satisfaction, that our connection with him was the means of ruining the
Company. A few days since I was talking with a man who has been more
familiar than myself with the whole transaction, and he told me it was
his opinion that if we had never seen Barnum we should still have been
making clocks in that factory. It was a great mystery to me, and to
every body else, how the Company could run down so rapidly during the
last year. I think I have found out, and these are my reasons. Instead
of having an amount of twenty thousand dollars to cancel of the Terry &
Barnum debts and accounts (which the Secretary foolishly agreed to do.)
it eventually proved to be about seventy thousand; (this I have found
out since the failure.) This great loss the Secretary kept to himself,
and it involved the Company so deeply that he became almost desperate;
for knowing by this time that he had been greatly embarrassed, he was
determined to raise money in any way that he could, honestly, and get
out of the difficulty if possible. He had, as he thought, got to keep
this an entire secret, because if known it would ruin the credit of the
Company. When these extra drafts and notes of Terry & Barnum were added
to the debts of the Company, he was obliged to resort to various
expedients to raise money to pay them. This led him to the exchange of
notes on a large scale, which proved to be a great loss, as many of the
parties were irresponsible. There was a loss of thirty thousand dollars
by one man, and I am sure that there must have been more than fifty
thousand dollars lost in this way. He was also obliged to issue short
drafts and notes and raise money on them at fearful rates. The Terry &
Barnum stock which was taken in at par, was not worth twenty-five per
cent, which had a tendency to reduce the value of the stock of our
Company, though I have recently heard that the Secretary bought stock at
par for the Jerome Company of some former owners in the Terry & Barnum
Company, in Bridgeport, only a short time before the failure. To show
the confidence the Secretary had in the standing of the Company, he
recommended one of his own brothers, not more than one month before the
Company failed, to buy five thousand dollars worth of the stock, which
he did. It was owned by a Bridgeport man and he paid par value for it in
good gold and silver watches at cash prices. All of these transactions
were made without my knowledge, and I have found them out by piece-meal
ever since. I do fully believe that if the Secretary had been worth half
a million of dollars, he would have sacrificed every dollar, rather than
have had the Company failed under his management as it did.
It has been publicly stated that Mr. Barnum endorsed largely on blank
notes and drafts and that he was thus rendered responsible to a far
greater extent than he was aware of; such, however, was not the case.
The troubles that have grown out of the failure of this great business,
have left me poor and broken down in spirit, constitution and health. I
was never designed by Providence to eat the bread of dependence, for it
is like poison to me, and will surely kill me in a short time. I have
now lost more than forty pounds of flesh, though my ambition has not yet
died within me.