HUMBUGGED AND BANKRUPT
I
Barnum’s interest in the future of Bridgeport, Connecticut, and its
suburbs as a manufacturing center was one of the abiding influences
of his financial life, and he did more than any other one man to make
that city such a center. In 1851 he purchased with William H. Noble, a
wealthy citizen of Bridgeport, 224 acres of land on the east side of
the Pequonnock River, where they planned a new manufacturing suburb,
with model houses for sober workmen. The new city was laid out with an
eye to beauty and convenience as well as profit; trees were planted,
and an eight-acre grove was set aside as a park. Then Barnum and his
partner began to sell lots at cost, reserving for themselves enough
property to guarantee a large profit when the new city should begin
to flourish and property should be in demand. The purchasers of lots
were constrained to build after a style of architecture approved
by Barnum and his associate--there is no record of an attempt to
make it Oriental--and they planned a city which for neatness would
be an example to other communities, and which would harbor enough
manufactories to keep its happy population out of mischief.
The two real estate operators built a large toll bridge to connect
their new city of East Bridgeport with Bridgeport proper. Soon a coach
builder set up his factory on the Barnum and Noble property, and
other buildings began to rise in the town, for Barnum advanced money
liberally, permitting purchasers who would build in East Bridgeport to
repay their debts in instalments; he had become so infatuated with East
Bridgeport that any one with a scheme for its improvement or a new
enterprise to be located there was listened to with undivided attention
that soon developed into enthusiasm.
A small clock company which manufactured its product in Litchfield,
Connecticut, had absorbed some of Barnum’s money; he became a director
in the company, which soon afterwards failed, and Barnum took over the
clocks on hand, removing the materials to East Bridgeport. At about the
same time Theodore Terry’s clock factory at Ansonia had been destroyed
by fire, and Terry approached Barnum with the proposal to build a new
clock factory in East Bridgeport. A joint stock company was formed,
known as the Terry & Barnum Manufacturing Company. Barnum’s Litchfield
clocks and Terry’s stock which had not been destroyed by the fire were
combined, and in 1852 Barnum built a factory in East Bridgeport for the
manufacture of clocks.
Several years later Barnum was approached by the Jerome Clock Company,
the largest clock manufactory in America, for financial aid. The
company’s factories were situated in New Haven, Connecticut, and Barnum
supplied extra capital on condition that the company would remove as
soon as convenient to East Bridgeport. The Jerome Company employed
more than seven hundred workmen, and Barnum saw in this number a
valuable addition to the population of East Bridgeport. He wrote in
his autobiography that Chauncey Jerome, the reputable president of
the company, visited him in Bridgeport on this business, but Chauncey
Jerome later wrote a book in which he said that he had never seen
Barnum until after the termination of their business relations.[14]
Barnum was finally persuaded to lend his name as security for $110,000
to aid the Jerome Clock Company. The cause of the need for $110,000,
as stated to Barnum, was the dull business year, and Barnum wrote that
he was impressed by the information that unless the company could
get financial aid it would be forced to dismiss many of its honest,
toiling operatives. He was also impressed by the general reputation
of the company, whose clocks were known and sold throughout the world;
they were sold even in China, where, Barnum said, the natives took
the movements out and used the cases as temples for their gods, “thus
proving,” wrote Barnum, “that faith was possible without ‘works.’”
Chauncey Jerome’s reputation was another thing that pleased Barnum. He
was a wealthy man, a pioneer clock maker, who with Seth Thomas had been
associated with the manufacture of American clocks since the industry
was established in this country. But what interested Barnum even more
was that Chauncey Jerome had built a church in New Haven and had
donated a magnificent clock to a church in Bridgeport.
When the cashier of a New Haven bank expressed the opinion in a
letter to Barnum that the Jerome Clock Company deserved the highest
confidence, Barnum gave his notes for $50,000 and promised to accept
the Jerome Clock Company’s drafts for $60,000. He was also willing that
his notes should be renewed any number of times, providing that the
stipulated sum of $110,000 was not exceeded. He was told that it was
impossible to say when his notes would be needed most, and therefore he
signed his name to notes without dates for $3,000, $5,000, and $10,000.
The Jerome Clock Company went into bankruptcy in the autumn of 1855.
From time to time Barnum had been asked for additional notes by the
agent of the company, which he refused to furnish until he had received
back his canceled notes. This was done, and he soon grew confident
enough in the Jerome Company to neglect the precaution. He was told
one day that the banks were hesitating to discount his notes, and upon
inquiry he discovered that they had not been taken up as they expired,
and that the blank date notes he had issued had been made payable for
longer terms than he had intended. He soon discovered that unwittingly
he had indorsed notes for more than half a million dollars, and that
his money had been used to pay the debts and expenses of the Jerome
Clock Company. This drain on his credit was one that Barnum’s resources
could not withstand, and he was compelled to go into bankruptcy.
The entire Jerome Clock Company transaction is both complicated and
obscure. The only sources of information concerning it are Barnum’s own
statements in his autobiography, on the one hand, and Chauncey Jerome’s
statements in his autobiography on the other. Neither deserves to be
believed, if we consider the weight of the evidence offered. Barnum
shouted fraud loudly and accused Chauncey Jerome personally. Jerome
wrote that he knew nothing about the transactions, that he was retired
at the time, although he owned stock in the company, and that all the
financial dealings with Barnum were conducted by the secretary of the
Jerome Clock Company, who was making desperate but sincere efforts
to retrieve the company’s fortunes. It is likely that both men were
either swindled or deceived by some one who thought that, eventually,
everything would be all right. And, what made Barnum even angrier, the
company had never even removed its more than seven hundred workmen to
East Bridgeport!
II
As soon as Barnum’s failure was announced, there was an almost
universal cry of “I told you so!” He was called an adventurer, a
swindler, and a fraud by persons and papers who but a short time
before had hailed him as a genius. His autobiography, which had been
published only a year before the bankruptcy, in so far as it admitted
many deceits and much humbug, did Barnum great harm in public opinion
when he went into bankruptcy. Especially were the newspapers anxious
to point the obvious moral, since it was at them Barnum had laughed
in his autobiography, for, while professing to admire newspapers and
their editors, Barnum’s book showed by the facts of his career that his
deceptions were made possible by either the innocence or the ignorance
of editors. James Gordon Bennett, especially, seized the opportunity
with avidity, and the _Herald_ for March 17, 1856, contained this
editorial:
“THE FALL OF BARNUM--The author of that book glorifying himself
as a millionaire from the arts and appliances of obtaining money
upon false pretenses, is, according to his own statements in court,
completely crushed out. All the profits of all his Fejee Mermaids,
all his woolly horses, Greenland whales, Joice Heths, negroes
turning white, Tom Thumbs, and monsters and impostures of all
kinds, including the reported $70,000 received by the copyright of
that book, are all swept away, Hindoo palace, elephants, and all,
by the late invincible showman’s remorseless assignees. It is a
case eminently adapted to ‘point a moral or adorn a tale.’”
The tale was adorned with much morality, preached against him from
the pulpit, and preached to him in private. Barnum later said that he
was able to endure all the abuse with equanimity, but that it always
made him furious to read moral strictures about himself in which were
mentioned the “instability of ill-gotten gains.”
But Barnum had many friends as well as detractors. Individuals,
corporations, hotels, actors, actresses and singers, financiers and
leading citizens, offered him loans, gifts, benefit performances, and
other forms of aid. A letter signed by more than one thousand business
organizations and citizens, including Cornelius Vanderbilt, James W.
Gerard, Simeon Draper and Robert Stuyvesant, was published in the New
York newspapers. It urged Barnum to accept a series of public benefit
performances that his wife and children might have security. Barnum
answered, declining, “because I have ever made it a point to ask
nothing of the public on personal grounds, and should prefer, while I
can possibly avoid that contingency, to accept nothing from it without
the honest conviction that I had individually given it in return a full
equivalent.” He added that he still had his health and felt competent,
while that remained with him, to earn a livelihood for himself and
his family. Bridgeport congregated in a mass meeting, headed by the
Mayor, and resolved its utmost sympathy for its distinguished citizen.
Mr. Dwight Morris said that “it was principally to him [Barnum]
that they owed their present beautiful resting-place for the dead.
(Applause.)”[15] Some citizens of Bridgeport offered him $50,000.
Barnum thanked them for their kind resolutions and declined their
generosity. He wrote to his townsfolk in part:
“No man who has not passed through similar scenes can fully
comprehend the misery which has been crowded into the last few
months of my life; but I have endeavored to preserve my integrity,
and I humbly hope and believe that I am being taught humility
and reliance upon Providence, which will yet afford a thousand
times more peace and true happiness than can be acquired in the
din, strife, and turmoil, excitements and struggles of this
money-worshiping age. The man who coins his brain and blood into
gold, who wastes all of his time and thought upon the almighty
dollar, who looks no higher than blocks of houses and tracts of
land, and whose iron chest is crammed with stocks and mortgages
tied up with his own heart-strings, may console himself with the
idea of safe investments, but he misses a pleasure which I firmly
believe this lesson was intended to secure to me, and which it will
secure if I can fully bring my mind to realize its wisdom. I think
I hear you say--
“‘When the devil was sick,
The devil a saint would be.
But when the devil got well,
The devil a saint was he.’
“Granted, but after all, the man who looks upon the loss of
money as anything compared to the loss of honor, or health,
or self-respect, or friends,--a man who can find no source of
happiness except in riches,--is to be pitied for his blindness.
I certainly feel that the loss of money, of home, and my home
comforts is dreadful,--that to be driven again to find a
resting-place away from those I love, and from where I had fondly
supposed I was to end my days, and where I had lavished time,
money, everything, to make my descent to the grave placid and
pleasant,--is, indeed, a severe lesson; but, after all, I firmly
believe it is for the best, and though my heart may break, I will
not repine.”
All is for the best, in this best of possible worlds!
Barnum paid his personal debts and sold his assets to make good some of
his notes. Though he took the public sympathy without any suggestion
that he did not need it, Barnum was not exactly penniless, a condition
which some of his pitiful public statements of the time would seem to
indicate. The lease of the American Museum, one of his most valuable
possessions, was in Mrs. Barnum’s name. The collection itself was sold
to Greenwood and Butler, two of Barnum’s former managers, for double
its original cost. This sum was used to pay clock debts, but the
lease held by Mrs. Barnum brought her $19,000 a year. “The situation
is disheartening,” Barnum had said, “but I have experience, energy,
health, and hope.” He also had money in his wife’s name, a world-wide
notoriety which developed in spite of some newspapers into sympathy,
and valuable personal friends.
Barnum’s creditors, and especially people who had bought up the
clock notes cheaply, caused him much annoyance. He was examined in
supplementary proceedings daily for a long period. The process was
called, “putting Barnum through a course of sprouts.” This heckling
won him much sympathy from the public and the newspapers. One lawyer
asked him his business. He answered, “Attending bar.” “Attending bar!
Attending bar! Why, I thought you were a teetotaler.” “So I am,”
said Barnum. “And yet, sir, you have the audacity to assert that you
peddle rum all day, and drink none yourself?” “That is not a relevant
question,” said Barnum. The judge decided that it was a relevant
question, and Barnum finally answered, “Very well, I do attend bar,
and yet never drink intoxicating liquors.” “Where do you attend bar,
and for whom?” “I attend the bar of this court nearly every day, for
the benefit of two-penny lawyers and their greedy clients,” was the
answer. When another lawyer, who had been asking him many questions,
said apologetically, “You see, Mr. Barnum, I am searching after the
small thing; I am willing to take even the crumbs that fall from the
rich man’s table,” Barnum asked, “Which are you, then, Lazarus, or one
of the dogs?”
Barnum was asked in court how he lived without any means, and he
answered: “I hired a furnished house in Eighth Street last December,
where my family resides, and where we have kept five boarders from the
first day that we took the house.” “Do you pretend to say that you
make your living by keeping boarders?” asked the lawyer. “Partly so;
my vegetables were raised last year on my land in Connecticut, and my
son-in-law at Bridgeport sends me a box of meat every week. I have also
a few friends who would not let me exactly starve this year. I have
received various letters from friends at a distance offering to send me
money, which I have declined. One wealthy gentleman, whom I scarcely
knew in Bridgeport, offered to be one of ten to raise me $100,000,
without security, if I could be relieved from clock debts and return
to Connecticut to reside. But I desired no assistance, and would not
receive it.” “What does your wardrobe consist of?” the lawyer asked. “I
am ready to answer truthfully all civil questions,” said Barnum, “but
I will not be insulted! My position is not a pleasant one, but I shall
try to meet all my troubles with patience. If you choose to trifle
unnecessarily with my feelings, however, I shall be protected by the
Court, or will protect myself.” “By advice of his counsel, Mr. Barnum
answered the question,” said the _New York Tribune_. “I have only one
suit of clothes besides the one on my back, and this you will see is
rather seedy.” “Do you own a gold watch?” Mr. Barnum was much nettled,
and appealed to his counsel, who told him he was bound to answer the
question. “Yes, sir.” “What did it cost?” “About $250.” “Where is it?”
“I believe it is in my pocket.” “Do you own any diamonds?” “Does that
look like a diamond?” asked Barnum, pointing to a plain gold pin on
his cravat. “That is not answering my question,” said the lawyer. “I
own a diamond pin and ring, which cost about $300.” “Where are they?”
“I can produce them when they are wanted.” “Do you own a pianoforte?”
“I do,” said Barnum, and added triumphantly, “but, unfortunately for
you, it is mortgaged for about its full value. I have had the money and
spent it.” “Have you any money in the bank?” “I have no money except
what is in my pocket.” “How much is that?” “I can count it for you,
but there is less than $25.” “Never mind, I don’t want it, if that is
all you have got.” “Mr. Barnum: ‘Then I shall probably spend it before
long.’”[16]
In an examination on March 20, 1856, Barnum made a significant
statement:
“Q. You stated, in your examination yesterday, that you were the
poorest kind of business man. Do you mean to convey the impression that
you are _non compos mentis_? A. I mean to say that I do not understand
the details of accounts and a credit business; my business has always
been a cash business--‘pay before you go in,’--I never knew the meaning
of the expression ‘bills payable’ until within a year.” This is one
more proof that Barnum was always a poor business man. During his
early career he understood nothing of ordinary business methods and
was not interested in them. He had also had no experience in financing
his large operations. The Museum was bought on its receipts, and the
Jenny Lind enterprise was refused financial backing. When Barnum was
approached with a financial statement as complicated as that of the
Jerome Clock Company must have been, he was undoubtedly at a loss. In
fact, whenever he turned from showmanship to the ordinary operations
with which the average small business man and clerk are occupied daily,
he was completely bewildered.
Soon after Barnum’s bankruptcy the Wheeler & Wilson Sewing Machine
Company bought property in East Bridgeport for its large factories.
This caused Barnum to renew his faith in the future of East Bridgeport,
and he repurchased some of his property from creditors with $5,000
loaned to him by Mr. Wheeler, of Wheeler & Wilson. This property
eventually brought him more money than he had lost in the Jerome Clock
Company failure.
Barnum had received one letter of sympathy which he now took advantage
of. General Tom Thumb wrote from Jones’ Hotel, Philadelphia:
“MY DEAR MR. BARNUM,--I understand your friends, and that means
‘all creation,’ intend to get up some benefits for your family.
Now, my dear sir, just be good enough to remember that I belong to
that mighty crowd, and I must have a finger (or at least a ‘thumb’)
in that pie. I am bound to appear on all such occasions in some
shape, from ‘Jack the Giant Killer,’ upstairs, to the doorkeeper
down, whichever may serve you best; and there are some feats that
I can perform as well as any other man of my inches. I have just
started out on my western tour, and have my carriage, ponies, and
assistants all here, but I am ready to go on to New York, bag and
baggage, and remain at Mrs. Barnum’s service as long as I, in my
small way, can be useful. Put me into ‘heavy’ work, if you like.
Perhaps I cannot lift as much as some other folks, but just take
your pencil in hand and you will see I can draw a tremendous load.
I drew two hundred tons at a single pull to-day, embracing two
thousand persons, whom I hauled up safely and satisfactorily to all
parties, at one exhibition. Hoping that you will be able to fix up
a lot of magnets that will attract all New York, and volunteering
to sit on any part of the loadstone, I am, as ever, your little but
sympathizing friend,
“GEN. TOM THUMB.”
Barnum did not accept this offer immediately, but early in 1857 he
arranged his affairs and left for England with General Tom Thumb and
Cordelia Howard, a small girl whose Little Eva in _Uncle Tom’s Cabin_
was very popular in this country.