FOUNDING EAST BRIDGEPORT--GROWTH OF THE CITY--THE JEROME CLOCK
BUBBLE--A RUINED MAN--PAYING HONEST DEBTS--DOWN IN THE DEPTHS.
In the year 1851 Mr. Barnum had purchased from William H. Noble,
of Bridgeport, Conn., the undivided half of his late father's
homestead--fifty acres of land on the east side of the river,
opposite the city of Bridgeport. Together they bought the one
hundred and seventy-four acres adjoining, and laid out the entire
property in regular streets, and lined them with trees. A
beautiful grove of eight acres was reserved for a park. This they
intended for a nucleus of a new city, to be known as East
Bridgeport.
They then commenced selling alternate lots, at the same price as
the land had cost them by the acre, always on condition that a
suitable dwelling-house, store or manufactory should be erected
on the ground within a year; that every building should be placed
at a certain distance from the street; that the style of
architecture should be approved by the sellers; that the grounds
be inclosed with suitable fences, and that in all respects the
locality should be kept desirable for respectable residents.
A new foot-bridge was built across the river, connecting the new
town with the city of Bridgeport, and a public toll-bridge, which
belonged to Barnum and Noble, was thrown open to the public free.
They also erected a covered drawbridge at a cost of $16,000,
which was made free to the public for several years.
They built and leased to a union company of young coach-makers a
large manufactory, which was one of the first buildings erected
in the town, and which went into operation on the first day of
the year 1852.
In addition to the inducements of low prices for the lots, the
owners advanced one-half, two-thirds, and sometimes all the funds
to erect buildings, permitting the purchasers to repay them in
small sums at their own convenience. The town, under such
favorable auspices, began to develop and to grow with great
rapidity.
No one of Barnum's schemes had ever interested him as this one
did. He was willing to listen to any one who thought they had a
project favorable to the advancement of the new city. It was the
man's weak spot, and it was this weak spot which was destined to
be touched once too often.
There was a small clock factory in the town of Litchfield, in
which Barnum was a stockholder. Thinking always of his beloved
enterprise, it occurred to him at length that if the Litchfield
clock company could be transferred to East Bridgeport, it would
necessarily bring with it numerous families to swell the
population. A new stock company was formed, under the name of the
"Terry and Barnum Manufacturing Company," and in 1852 a factory
was built in East Bridgeport.
It will be seen how recklessly the owners of the site were
spending money. They looked for their profits wholly from the
sale of the reserved lots, which they felt sure would bring high
values.
In 1855 Mr. Barnum was visited by the President of the Jerome
Clock Company, Mr. Chauncey Jerome, with a proposition that the
concern, which was reputed to be very wealthy, should be removed
to East Bridgeport. Negotiations were opened, and at last Barnum
was offered a transfer of the great manufactory with its seven
hundred to one thousand employees, if he would lend his name as
security for $110,000 in aid of the company.
He was shown an official report of the directors of the company,
exhibiting a capital of $400,000 with a surplus of $187,000. They
were in need of money to tide over a dull season and a market
glutted with goods. The company also was represented as being
extremely loth to dismiss any of their employees, who would
suffer greatly if their means of livelihood were taken from them.
The company was reputed to be rich; the President, Mr. Chauncey
Jerome, had built a church in New Haven, at a cost of $40,000,
and proposed to present it to a congregation; he had given a
clock to a church in Bridgeport, and these things showed that he,
at least, thought he was wealthy. The Jerome clocks were for sale
all over the world, even in China, where the Celestials were said
to take out the "movements," and use the cases for little temples
for their idols, "Thus proving that faith was possible without
'works,' " as Mr. Barnum said.
Further testimony came in the form of a letter from the cashier
of one of the New Haven banks, expressing the highest confidence
in the financial strength of the company. Barnum afterwards
learned that his correspondent represented a bank which was one
of the largest creditors of the concern.
Barnum finally agreed to lend the clock company his notes for a
sum not to exceed $50,000, and to accept drafts to an amount not
to exceed $60,000. He also received the written guarantee of the
President, Chauncey Jerome, that in no event should he lose by
the loan, as he would be personally responsible for the
repayment. Mr. Barnum was willing that his notes should be taken
up and renewed an indefinite number of times just so the maximum
of $110,000 was not exceeded. Upon the representation that it was
impossible to say exactly when it would be necessary to use the
notes, Barnum was induced to put his name to several notes for
$3,000, $5,000 and $10,000, leaving the date of payment blank, it
being stipulated that the blanks should be filled to make the
notes payable in five, ten, or even sixty days from date. On the
other hand, it was agreed that the Jerome Company should exchange
its stock with the Terry and Barnum stockholders, thus absorbing
that concern, and unite the whole business in East Bridgeport.
Three months later Barnum's memoranda showed that the entire
$110,000 had been used. He was then solicited by the New York
agent of the company for five additional notes for $5,000 each.
The request was refused unless they would return an equal amount
of his own cancelled notes, since the agent assured him that they
were cancelling these notes "every week." The cancelled notes
were brought him next day and he renewed them. This he did
afterwards very frequently, until at last his confidence in their
integrity became so firmly established that he ceased to ask to
see the notes that had been taken up, but furnished new paper as
often as it was desired.
But gradually the rumor that the banks were hesitating about
discounting his paper came to Barnum's ears. Wondering at this,
he made a few inquiries, which resulted in the startling
discovery that his notes had never been taken up, as represented
by the Jerome Company, and that some of the blank-date notes had
been made payable in twelve, eighteen and twenty-four months.
Further investigation revealed the fact that he had indorsed for
the company to the amount of over half a million dollars, and
that most of the notes had been exchanged for old Jerome Company
notes due to the banks and other creditors.
Barnum simply went to work, paid every debt he owed in the world,
and--failed!
The Jerome Company also failed, and in addition to absorbing
Barnum's fortune, was able to pay only about fifteen per cent. of
its own obligations. Of course it never removed to East
Bridgeport at all.
The failure was a nine-days' wonder all over the country. Never
had Barnum achieved such notoriety. As he expressed it, he was
taken to pieces, analyzed, put together again, kicked, "pitched
into," tumbled about, preached to, preached about, and made to
serve every purpose to which a sensation loving world could put
him.
Barnum declared that he could stand the abuse, the cooling of
false friends and even the loss of fortune, but it made him
furious to read and hear the moralizings over the "instability of
ill-gotten gains." His fortune, if made quickly, had been
honestly worked for and honorably acquired, though envious people
pretended not to believe it.