MEN OF AFFAIRS
Almost from the first years of her existence America has been known
chiefly as a commercial nation, as a nation noted for her men of
affairs, rather than for her artists and men of letters. Which is to say
that the life of the Republic has been practical rather than artistic,
and it is only of late years, except for a sporadic instance here and
there, that any genuine artistic impulse has made itself felt.
This is not a cause of reproach. Given the circumstances, it was
inevitable that America should develop first on her commercial side.
Here was a great continent, stretching thousands of miles to the
westward, waiting for man's occupancy. Millions of acres of plain and
woodland awaited development. There were cities to found and rivers to
bridge and roads to make and soil to till and gold to dig before America
could think of writing poetry or painting pictures. Think--it is only
three centuries since Jamestown was founded; only a century and a
quarter since we became a nation--a mere handbreadth of time when
compared with the long centuries of English or French or Italian
history. We have already said that for art historic background is
necessary; a background of achievement and tradition. Such a background
we are just achieving. Besides, during our first century, there were
such great deeds of conquest and development to be done that they
challenged our strongest men. Great fortunes were made, as a matter of
course, and Europe witnessed the unique spectacle of men, born in
poverty and obscurity, rising to be captains of the world. It is this
which has never ceased to shock the European sense of the fitness of
things--that the poor boy of yesterday may be the millionaire of
to-morrow and take his place with the greatest of the nation. It is the
story of a few such boys which will be told in this chapter.
First is the man who financed the Revolution and who to a large extent
made possible its successful termination--Robert Morris. Born in
Liverpool, England, in 1734, he came to this country with his father at
the age of thirteen, and a place was soon found for him in the
counting-house of Charles Willing, a wealthy merchant of Philadelphia.
By his diligence and activity, as well as unusual intelligence, he grew
in favor and confidence, until, upon the death of the elder Willing, he
was taken into partnership by the latter's son, and by the opening of
the Revolution, the firm of Willing & Morris was one of the largest and
most prosperous in Philadelphia.
Of English birth, and bound to England by the ties of business, Morris
was nevertheless opposed to the stamp-act and was one of those who, in
1765, signed an agreement to import nothing further from England until
the act was repealed. He was, however, opposed to independence, and, as
a member of the Continental Congress, voted on July 1, 1776, against the
Declaration. Three days later he declined to vote, but when the
Declaration was adopted, he signed it, and threw in his fortunes
unreservedly with his new country. His services were more than
valuable--they were indispensable. As a member of the Committee of Ways
and Means, he backed the government's credit with his own. Without his
aid, the last campaigns of the war would have been impossible. It was he
who supplied General Green with munitions of war for the great campaign
of the south, and shortly afterwards raised a million and a half on his
own notes to assist Washington in the movement which resulted in the
capture of Cornwallis at Yorktown. A year later, when the financial
situation of the government had become desperate, he organized the Bank
of North America to assist in financing it. For three years, he acted as
superintendent of finance, with complete control of the monetary affairs
of the country. He was a member of the Constitutional Convention, and
when the new government was organized, Washington asked him to accept
the treasury portfolio, but he declined, suggesting instead Alexander
Hamilton. That was not the least of his services to America, for
Hamilton was preeminently the man for the place.
It was the striking irony of fate that the man who had controlled the
finances of a nation and by his personal exertions saved it from
bankruptcy should himself die in a debtor's prison; yet such was the
case. A series of unfortunate land speculations swept away his wealth
and ruined his credit; he found himself unable to meet his obligations
and was seized by his creditors and thrown into prison, where he
remained for some years, and where death found him in 1806.
So Robert Morris was not one of the founders of great fortunes. Turn we
to the earliest and perhaps most successful of these, John Jacob Astor,
the very type of the astute, large-minded, and far-sighted financier.
Born at Waldorf, Germany, in 1763, the son of a poor butcher in whose
shop he worked until sixteen years of age, there was nothing in his life
or circumstances to indicate the future which lay before him. One of his
brothers, however, had come to America and settled at New York, and
young John Astor resolved to join him in the land of opportunity. At the
age of twenty, he was able to do so, bringing with him some musical
instruments to sell on commission, but a chance acquaintance which he
made on shipboard changed the whole course of his life.
This acquaintance was that of a furrier, who told young Astor of the
great profits to be made by buying furs from the Indians and selling
them to the large dealers. Perhaps he exaggerated the profits of the
business; at any rate, he fired the ambition of his hearer, and the
latter decided to enter the fur business without delay. Upon landing in
New York, therefore, he at once secured a position in the shop of a
Quaker furrier, and after learning all the details of the business,
opened a shop of his own.
Perhaps no one ever worked harder in establishing a business than John
Jacob Astor did. Early and late he was at his shop, except when absent
on long and arduous purchasing expeditions into the wilderness. More
than that, he possessed admirable business judgment, so that, after
fifteen years of work, he had succeeded in accumulating a fortune of a
quarter of a million dollars. With careful and sagacious management, the
business prospered so that Astor was soon able to send his furs to
Europe in his own vessels, and bring back European goods. And about this
time, he began working on a grandiose and picturesque enterprise.
The English Hudson Bay Company, established many years before, with
hundreds of trappers and traders and scores of trading-posts, controlled
the rich fur business of Canada and the northwest. We have seen how,
years after the events which we are now narrating, the agents of the
company tried to save Oregon for England and how Marcus Whitman foiled
them. Astor's plan, in outline, was to render American trade independent
of the Hudson Bay Company by establishing a chain of trading-posts from
the great lakes to the Pacific, to plant a central depot at the mouth of
the Columbia river, and to acquire one of the Sandwich Islands and
establish a line of vessels between the western coast of America and
the ports of Japan, China and India. Surely a man who could conceive a
plan like that was something more than a mere trader, and Astor
proceeded at once to carry it into effect.
Two expeditions were sent out, one by land and one by sea, to open up
intercourse with the Indians of the Pacific coast, and the settlement of
Astoria was planted at the mouth of the Columbia river. Whether Astor
would have been able to carry out the remainder of his plan is purely
problematical, for before he had it fairly under way, the war of 1812
began, and he was forced to abandon the enterprise. The story of this
far-reaching project has been told by Washington Irving in his
"Astoria." Until his death, he continued to enlarge and increase his
business, and left a fortune estimated at twenty millions of dollars.
The Astor plan of investment is one of the safest, most sagacious in the
world. Practically all of his profits were invested by John Jacob Astor
in real estate outside the compact portion of the city of New York. As
the city grew out to his holdings, he would improve them, rent or sell
them, and reinvest further out. In this way the growth of the city
marked also the growth of his fortune, and this plan of investment has
been followed by his descendants to the present day, until they have
become by far the most important owners of real estate in New York City.
His son, William B. Astor, gave his life to the preservation and growth
of the vast property he inherited, and at his death had more than
doubled it, dividing an estate of $45,000,000 between his two sons.
Not that the whole thought of these two men was money-getting, for their
public gifts were numerous and important. The most noteworthy was the
Astor library, founded by John Jacob Astor at the suggestion of
Washington Irving, and largely added to by his son, the total amount of
the Astor donations to it exceeding a million dollars. But they stand as
two types of sagacious and hard-headed business men, to whom
money-making and the still more difficult art of money-keeping was an
instinctive accomplishment.
The second great American fortune was that founded by Cornelius
Vanderbilt, as remarkable and picturesque a character as this country
ever produced. Born on Staten Island in 1794, the son of a farmer in
moderate circumstances, the boy soon developed a remarkable talent for
trade. His father owned a sail-boat, in which he conveyed his produce
across the bay to the New York markets, and the boy soon learned to
manage this and was intrusted with these daily trips. When he was
sixteen years old, he bought a boat of his own, in which he ferried
passengers across the bay, and two years later he was owner of two boats
and captain of a third. This was the beginning of the great fleet of
steamers, sloops and schooners which he built up for the navigation of
the shores of New York bay and the Hudson river, which won him the title
of "Commodore," which clung to him all his life. Before he was forty
years old, he had accumulated a fortune of half a million dollars, and
was ready for those great financial operations which marked his later
life.
The discovery of gold in California led him to establish a passenger
line by way of Lake Nicaragua which netted him ten millions in ten
years; he established a fast line of passenger steamships between New
York and Havre; and finally was attracted to railway development as a
field of enterprise destined to win large returns. In the course of a
few years he had secured control of both the Hudson River and New York
Central roads, and brought both of them to the highest state of
efficiency, and after consolidating them, extended the system to Chicago
by the purchase of the Lake Shore, the Canada Southern and Michigan
Central. He built a great terminal in New York City, and made the system
so profitable that, from it, and a series of fortunate speculations, he
accumulated a fortune of $100,000,000, practically all of which he
bequeathed to his eldest son, William Henry. One million was also given
for the establishment of Vanderbilt University at Nashville, Tennessee.
Cornelius Vanderbilt, for many years, had a very poor opinion of his
son's financial ability, and giving him a small farm on Staten Island,
left him to shift for himself. Everyone has read of the incident which
changed this opinion. William needed some fertilizer for his farm, and
asked his father to give him a load of manure from his stables. His
father told him to go ahead and take a load, and William thereupon
brought a great scow up to the pier near the stables, proceeded to load
it, and when his father protested, pointed out that he had not specified
the kind of load, but that he had meant a scow-load. This bit of sharp
practice pleased his father, and, shortly afterwards, the great success
with which he managed the Staten Island Railroad, as receiver,
established him in his father's confidence. He continued and extended
his father's policy of railway investment, and added to the great
fortune which had been left him, and which still remains one of the
greatest in America, though it has been split up among the different
branches of the Vanderbilt family. William himself distributed about two
millions in various benevolent and public enterprises, one of the
queerest of which was the removal of one of "Cleopatra's Needles" from
Egypt to Central Park, New York City, at a cost of over a hundred
thousand dollars.
In the business world of New York City, half a century ago, no name was
more prominent than that of A. T. Stewart, whose success as a merchant
was one of the most astonishing features of the time. Born near Belfast,
Ireland, in 1803, Stewart was a descendant from one of those hardy and
thrifty Scotch-Irish, whom we have had occasion to mention before. His
father was a farmer, but died while the son was still at school, and at
the age of twenty the latter came to New York, and after looking over
the field, opened a small store on lower Broadway, with a sleeping
apartment for himself in the rear. Such was the beginning of the
greatest dry-goods business this country ever saw. It increased by leaps
and bounds, for Stewart seems to have had a sort of instinctive genius
for the business. He was continually moving to larger and larger
quarters, and in 1862, built on Broadway a store which was at that time
the largest in the world, and which, even in this day of mammoth
structures, commands attention. Its cost was nearly three millions, a
colossal sum for those days; two thousand people were employed in it and
it cost a million a year to run. But it brought a tremendous return, and
its owner soon became one of the wealthiest men in New York.
He wanted more than wealth--he hungered for political and social honors
which were never fully his. He had made a large contribution to the fund
of $100,000 presented by the merchants of New York to General Grant, and
in 1869, Grant appointed him secretary of the treasury. The senate
refused to confirm the appointment, on the ground that the law excluded
from that office anyone interested in the importation of merchandise.
Grant sent to the senate a message recommending that this law be
repealed, but the senate refused; and Stewart thereupon offered to place
his business in the hands of trustees and devote its entire profits to
charity during his term of office; but still the senate refused, and the
nomination was withdrawn. It was a bitter blow to Stewart, nor was his
fight for social prominence much more fortunate. As his last stake, as
it were, he began the erection of a great marble palace on Fifth
Avenue, designed to cost a million and to be the finest private
residence in the world, but he died before it was completed.
* * * * *
One of the great industries of the country is that of sugar refining,
and it is inseparably connected with the name of Havemeyer, for to the
Havemeyers is due its development and its formation into a so-called
trust, which practically controls the market, and which has won great
wealth for its organizers. The ancestor of the Havemeyers was a thrifty
German who came to this country in the latter part of the eighteenth
century, and, after engaging in various pursuits, opened a little sugar
refinery in New York City, which soon brought him a comfortable income.
There, in 1804, William Frederick Havemeyer was born, and after a
careful education, entered the refinery, gained a thorough knowledge of
the business and, in 1828 succeeded to it, having as a partner his
cousin, Frederick Christian Havemeyer. These two men developed the
business in a wonderful manner, installing new machinery, inventing new
processes, which reduced the manufacturing cost, acquiring possession of
other plants and securing government support in the shape of a
protective tariff, which made a naturally profitable business doubly so,
and netted its owners many millions.
William Frederick Havemeyer found time, in the intervals of running his
business, to take a prominent part in New York politics. He was mayor
of the city from 1845 to 1851, and again in 1873, dying before the last
term was finished.
As far as possible removed from Havemeyer's humdrum existence was that
of Phineas Taylor Barnum, the greatest showman the world has ever seen,
the originator of the great travelling circus, the exploiter of Tom
Thumb and Jenny Lind, the owner of Jumbo, the most famous elephant that
ever lived, whose name has passed into the English language as a synonym
for bigness.
Barnum was born at Bethel, Connecticut, in 1810. His father was an
inn-keeper and died when the boy was fifteen years old, leaving no
property. He tried his hand at store-keeping, and failed; ran a
newspaper, and was imprisoned for libel, and finally reached New York at
about the end of his resources and looking around for something to do.
That was in 1834, and by accident he hit upon his real vocation.
A man by the name of R. W. Lindsay was exhibiting through the country an
old negro woman named Joice Heth, advertising her as being 161 years
old, and as having been the nurse of George Washington. Barnum went to
see her and found her an extraordinary-looking object. He has himself
told how he was impressed by her.
"Joice Heth," he says, "was certainly a remarkable curiosity, and she
looked as though she might have been far older than her age as
advertised. She was apparently in good health and spirits, but from age
or disease, or both, was unable to change her position; she could move
one arm at will, but her lower limbs could not be straightened; her left
arm lay across her breast and she could not remove it; the fingers of
her left hand were drawn down so as nearly to close it, and were fixed;
the nails on that hand were almost four inches long and extended above
her wrist; her head was covered with a thick bush of gray hair; but she
was toothless and totally blind, and her eyes had sunk so deeply in the
sockets as to have disappeared altogether. Nevertheless she was pert and
sociable and would talk as long as people would converse with her. She
was quite garrulous about 'dear little George,' at whose birth she
declared she was present, having been at the time a slave of Elizabeth
Atwood, a half-sister of Augustine Washington, the father of George
Washington. As nurse, she put the first clothes on the infant, and she
claimed to have raised him."
Barnum was so impressed by this extraordinary object, that he bought her
for a thousand dollars, putting his last cent into the venture and
borrowing what he lacked. He proceeded to advertise her with
characteristic energy, and great crowds thronged to see her, so that his
receipts sometimes ran as high as $1,500 a week. However, the old woman
died within a year, and a post-mortem examination showed that she was
really only about eighty years old.
But Barnum had found his vocation, that of showman, and after a few
unsuccessful ventures, bought Scudder's American Museum, in New York
City, and started out on a brilliant career. It is interesting to note
that the museum which Barnum purchased consisted in part of the curios
collected years before by Charles and Rembrandt Peale. Barnum added to
it, was indefatigable in securing curiosities, really created the art of
modern advertising, and it was his proudest boast that no one ever left
the museum without having got his money's worth. He was one of the first
to realize that the best possible advertisement is a pleased customer,
and he tried honestly to keep his museum supplied with every novelty.
The public soon came to appreciate this, and perhaps his greatest asset
was public confidence in his promises. People came to believe that when
Barnum advertised a thing, he really had it. But the most fortunate day
in all his life was that November day of 1842, when he discovered at
Bridgeport, Connecticut, the midget whose real name was Charles S.
Stratton, but who was to become world-famous as General Tom Thumb.
The story of Tom Thumb's success reads like a romance. He was quite
young when Barnum got him, and the showman took great pains with his
education and training, for he wanted the midget to appear a finished
man of the world. He became a great public favorite, toured America and
Europe, was introduced to kings and princes and made a great fortune for
himself and his exhibitor. Barnum struck the apogee of his fortunes when
he discovered another midget, Lavinia Warren, who achieved a success
scarcely less than Tom Thumb's. Indeed, she and the General fell in
love with each other and were married at Grace Church, and as General
and Mrs. Tom Thumb were perhaps the greatest drawing cards in the world.
Another triumph of his career was his engagement of Jenny Lind for a
series of one hundred concerts, at a salary of a thousand dollars a
night, the receipts of the tour being over seven hundred thousand
dollars.
Barnum had many ups and downs, which he met with an invincible optimism.
His museum burned down and he rebuilt it, but it soon burned down again.
It was then that the idea occurred to him to establish a travelling
museum, exhibiting under a tent, and it was this idea which developed
into "The Greatest Show on Earth." It really was the greatest and its
owner never spared money in his endeavor to keep it so. Large-hearted,
benevolent, a true entertainer, he will always occupy a bright place in
the memory of the American public.
* * * * *
Perhaps no name in the history of America was ever more closely
connected in the public mind with money-making for its own sake than
that of Russell Sage. It will be surprising news to many, who knew him
only as a money-lender on a large scale, that he started out on a public
career, as alderman, county treasurer, and finally as member of congress
for two terms, from 1853 to 1857. He was the first person to advocate,
on the floor of congress, the purchase of Mount Vernon by the
government. His career on Wall street began shortly after that, at first
in a small way; but before his death, he had developed into the
greatest individual money-lender in the world.
That was his whole life. He took no part in any political or charitable
movement; he had no interest in art, and he lived in the simplest
manner. He used his wealth, not to procure enjoyment for himself or
other people, but to procure more wealth. He was saving to the point of
miserliness; he got the utmost he could out of his money; he never took
a vacation--and dying, at the age of ninety, left a fortune of many
millions. He had no children and the whole fortune went to his wife. She
at once proceeded to bestow it in carefully-considered benevolences, so
that the Sage millions are to benefit humanity, after all. In fact, it
is doubtful if any other fortune, amassed by a single man, will, in the
end, do so much good in the world as will this of Russell Sage, for Mrs.
Sage is devoting it to what may be called scientific charity, which has
for its object the universal betterment of mankind.
Mrs. Sage, who thus becomes one of the world's great philanthropists,
was Margaret Olivia Slocum, of Syracuse, New York, and was married to
Mr. Sage in 1869. She was of a family in only moderate circumstances,
and was a school teacher previous to her marriage. The turn of the wheel
made her the wealthiest woman in the world, and she proceeded without
delay to the carrying out of the immense benevolent enterprises which
she had doubtless long meditated.
The name of Cyrus West Field is so closely associated with his supreme
achievement, the laying of the first Atlantic cable, that we are apt to
forget that he was in the beginning a manufacturer and had amassed a
considerable fortune before his attention was called to the possibility
of linking Europe to America by a telegraph line laid on the bottom of
the Atlantic. It was under A. T. Stewart that Field received his
mercantile training, having gone to New York in 1834, at the age of
fifteen, from his home in Stockbridge, Massachusetts, and entering
Stewart's employ as a clerk.
He was an apt pupil, and before he was of age, owned an establishment of
his own for the manufacture and sale of paper. In this business, in the
course of a dozen years, he had amassed a fortune so considerable that
he was able to retire from active charge of it, and to spend his time in
travel. It was in 1853 that the project of carrying a telegraph line
across the Atlantic ocean suggested itself to him during a conversation
with his brother, who was interested in building a line across
Newfoundland. The more he considered and investigated the project, the
more feasible it seemed, and he proceeded to organize the New York,
Newfoundland and London Telegraph Company, himself taking one fourth of
the capital stock, and interesting such other capitalists as Peter
Cooper, Moses Taylor, Chandler White and Marshall Roberts.
But the project which had appeared simple enough in theory and on paper,
proved extremely difficult of execution. If Field could have foreseen
the thirteen years of constant anxiety which awaited him, he would no
doubt have hesitated to undertake it. It looked, at first, as though
success would crown his efforts almost at the outset, for in 1858, the
laying of a cable was completed, and for some days, messages were sent
from one continent to the other. Then the signals began to grow fainter
and fainter, until they became imperceptible, supposedly from the water
of the ocean penetrating the cable covering.
At any rate, the work had to be done all over again, with little money
on hand, and the coming of the Civil War helped to make further progress
impossible. Field visited Europe more than twenty times in the effort to
raise money for the enterprise and to keep it before the public, but it
was not until 1865 that another effort to lay the cable could be made.
The "Great Eastern," the largest ship in the world, was secured, and
began paying out the cable; but twelve hundred miles from shore the
cable parted and could not be regained, although every effort was made
to grapple it. So the vessel had to put back to England, and Field was
confronted with the heart-breaking task of raising even more money. He
succeeded in doing so, and in 1866, another expedition started out with
a new cable. This time, it met with no serious misadventure, and on July
27, telegraphic communication was re-established between England and
America, and has never since been interrupted.
That cable was the first of the hundreds which now encircle the globe.
Congress presented the bold adventurer with a gold medal and the thanks
of the nation; John Bright pronounced him "the Columbus of modern times,
who, by his cable, has moored the New World alongside of the Old"; the
Paris exposition of 1867 gave him the grand medal, the highest prize it
had to bestow; and he received votes of thanks and medals and presents
from all parts of the world.
In 1884, two other cables were laid across the Atlantic by John W.
Mackay and James Gordon Bennett, whose private property they remained.
Mackay had had an adventurous career, and was destined to be the founder
of another of those great American fortunes which are the wonder and
admiration of Europe. He was born in Dublin, Ireland, in 1831, his
father being another of those sturdy Scotch-Irish of whom we have
already had occasion to speak. He was brought to New York at the age of
nine; but his father died a short time thereafter and the boy was thrown
practically upon his own resources.
When gold was discovered in California in 1849, Mackay joined the crowd
that rushed to the new El Dorado, and for several years, he lived a
typical miner's life, roughing it in the camps, but gaining little
except a thorough knowledge of mining. In 1860, some guiding spirit led
him eastward to Nevada; his fortunes there steadily improved, until he
became one of the leading men in the settlement, and in 1872, he made
one of the most famous and romantic discoveries in mining history, that
of the famous Comstock lode, on a ledge of rock high in the Sierras,
under which Virginia City now nestles. So rich in silver was this great
ledge of rock and its enormous production added so greatly to the
world's supply of silver that the market price fell to a point where
such countries as India and China, whose currency was on a silver basis,
were seriously embarrassed to maintain values. From one mine alone over
$150,000,000 was taken out. Mackay devoted himself personally to the
superintendence of the mines, working in the lower levels with his men,
who idolized him.
* * * * *
Let us turn for a moment to the career of another great fortune-builder,
the man who was, perhaps, the greatest freebooter the American financial
world ever saw, who made his money by destroying rather than building
up, and whose wealth finally killed him--Jay Gould. Let us see if we can
get some sort of idea of the personality of this extraordinary man.
Born in 1836, a farmer's boy, with only such education as he could pick
up, he managed to find time to study surveying, and for two or three
years was engaged in making surveys of various New York counties. While
thus engaged, he fell in with a wealthy and eccentric individual named
Zadock Pratt, who sent him to the western part of the state to select a
site for a tannery. He was soon doing a large lumbering business, first
with Pratt and then in his own name; but he sold out just before the
panic of 1857, and soon after entered upon that career of speculation
in New York City which, in the end, made him the best-hated man in
America.
Picture the man, small, only five feet six inches in height, with sallow
skin and jet black whiskers, his eyes dark and piercing, his whole
personality, as one observer put it, "reminiscent of the spider." His
reputation was that of an unscrupulous and immoral rascal, who would not
hesitate to sacrifice his best friends, if need be. His war against
Cornelius Vanderbilt for control of the Erie was one of his typical
operations--a war which, when he saw he was losing, he won by issuing
$5,000,000 worth of fraudulent stock. There was never any question about
the criminality of this proceeding, and Gould was forced to flee to New
Jersey, where he spent millions in corrupting courts and
legislatures--millions, not taken from his own pocket, but from the
treasury of the Erie, of which he had control. He was ousted, at last,
but not until he had added $62,000,000 to the indebtedness of the road,
of which amount it was asserted Gould had pocketed $12,000,000.
The culminating feature of his career was his attempt to corner gold,
which brought about the famous Black Friday panic of 1869. The scheme,
one of the most daring ever attempted by any operator, came near
success. Gould is said to have bribed the brother-in-law of President
Grant and to have persuaded the President himself not to release any of
the government supply of gold. He then succeeded in driving the price up
to 1621/2, when suddenly the bubble burst. Gould, himself, had been
warned and succeeded in getting away with his immense profits, covering
himself at the expense of his associates, an act of treachery
unprecedented even in the stock market.
These were only two of the remarkable operations which he engineered,
and which need not be given in detail here. The net result was a fortune
of some seventy million dollars, and a reputation for duplicity such as
perhaps no man in America ever had before. It is only fair to Gould to
say, however, that he accomplished merely what most stock gamblers would
like to accomplish, if they could, and that outside of finance, he seems
to have been an estimable man, faithful to his wife, devoted to his
children, and passionately fond of flowers. He made no gifts of any
consequence to charity during his life, nor did he make a single
benevolent bequest in his will; but one of his children, Helen Miller
Gould, has more than atoned for this by practically devoting her life
and her fortune to charitable work. It is doubtful if there is a
better-loved woman in America to-day than Helen Gould, who has shown so
notably how a life may be consecrated to good works.
* * * * *
[Illustration: WANAMAKER]
The great marble palace which A. T. Stewart built on Broadway, in New
York City, to house his business, and which was, at the time, the
largest building in the world devoted to a retail business, is now
occupied by another great merchant, who, starting from a beginning even
smaller than Stewart's, has built up a business many times as great.
John Wanamaker, whatever the growth of the country may be hereafter,
will always remain one of America's most representative and most
successful men of affairs--both representative and successful because
his business has rested from the first on the principle of honest
dealing, of making satisfied customers--in a word, upon the altogether
modern principle of "your money back, if you want it."
John Wanamaker was born in Philadelphia in 1838, a poor boy with his way
to make in the world. He received his education in the common schools,
and at the age of fourteen, entered upon his business career as an
errand boy in a book store. From that, he got a clerkship in a clothing
store, and for some years acted as salesman, until he could save enough
money to start a little store of his own. This he was able to do in
1861, in partnership with a man named Nathan Brown, and ten years later,
he was sole owner of a prosperous and growing business. It was at about
this time that an idea occurred to him which was destined to
revolutionize the retail business of the larger cities of the country.
The idea was simply this: In the great cities, most shoppers have to
travel a considerable distance to get to the business centre, and must
there waste time and energy going from one store to another to make
their purchases. Why not, then, combine all the representative retail
businesses into one store, so that the shopper could make all purchases
under a single roof, pay for them all at once, and have them all
delivered at the same time? Moreover, why could not one great business
be conducted more cheaply, and so undersell, the small ones, since a
single executive staff would do for it, rent, delivery cost, and a
hundred other fixed charges would be reduced, to say nothing of the
advantages of large buying, and the advertising which every department
would get from all the rest? The idea grew into a carefully-formulated
plan, and 1876 saw the start of the great Wanamaker department store,
perhaps the most famous retail business in the world.
Its tremendous success is an old story now, and it has found hundreds of
imitators. Twenty years after the opening of the Philadelphia store,
another was opened in New York in the old Stewart building, to which
another building, four times as large, has recently been added.
Wanamaker from the first firmly believed in P. T. Barnum's old adage
that "A satisfied customer is the best advertisement," and he made every
effort to see that none left the Wanamaker stores unsatisfied. He also
made it a rule that no visitor to his store should ever be urged to buy
anything; that every article of merchandise should be exactly as
represented, and that any purchase might be returned and the purchase
money would be refunded without question. As a result, Wanamaker got a
reputation for fair dealing which proved his greatest asset.
One would think that the management of such a business would fully
occupy any man, but Wanamaker found time for many public and benevolent
interests. He founded, in 1858, the Bethany Sunday School, which has
grown into perhaps the largest in the world and of which he has always
been superintendent; he has taken part in many movements for civic
reform, and from 1889 to 1893 was postmaster general of the United
States. He reorganized the service; set in motion the rural delivery
system, the greatest single improvement in its service the department
has ever made; and tried to secure a postal telegraph, a postal
savings-bank, a parcels post and one-cent letter postage. He was the
first official to regard the service as a business pure and simple, and
if the reforms he suggested had been carried out, the United States
postoffice would now be a model for the world.
* * * * *
The greatest banker and financier in America at the present day is
undoubtedly J. Pierpont Morgan, who, however, is known not so well for
the millions he has accumulated as for the other millions he has spent
in collecting rare objects of art, until he has become the possessor of
a collection surpassing any ever possessed by another private
individual. That much of this will one day be bequeathed by its owner to
the public there can be little doubt.
J. Pierpont Morgan is of a family of bankers. His father, Junius Spencer
Morgan, was for many years a partner in the great London banking house
of George Peabody & Co., and on the retirement of Mr. Peabody, succeeded
him as the head of the business. There was never any doubt of the son's
vocation. Born in 1837, and carefully educated, he entered the banking
house of Duncan, Sherman & Co. at the age of twenty, and from that time,
rose steadily, until he became the head of the greatest banking house in
the country. He has been largely concerned in the reorganization of
railways and the consolidation of industrial properties, and the
magnitude of some of his operations is fairly astounding. During the
Cleveland administration, he floated a national bond issue of
$62,000,000; he marketed the securities of the United States Steel
Corporation, with a capitalization of $1,100,000,000; he secured
American subscriptions aggregating $50,000,000 for the British war loan
of 1901; he controls over fifty thousand miles of railway, and his
interests extend into practically every great financial enterprise in
America. He has given large sums of money for public enterprises in New
York City, among them a million and a half for a great lying-in
hospital. He built the "Columbia," which twice defeated the "Shamrock"
in the races for the America's cup, and he has made many valuable gifts
to the various museums and libraries of New York City. The power he
wields is enormous, but he wields it wisely and legitimately, winning
the respect, as well as the admiration of men.
* * * * *
The greatest work of American men of affairs during the past half
century has been the upbuilding and extension of the railroad system of
the country. The railroad mileage of the United States at the present
time is over three hundred and twenty-five thousand; the total cost of
the railroad equipment of the country reaches fourteen billion dollars
and the yearly earnings average over two and a half billions. They
employ over a million and a half men, whose wages average three million
dollars a day--and, it may be added, they kill or injure nearly ninety
thousand. But that is a detail. With this vast development of the
railroad business the names of some half dozen men are so closely
connected that the great systems of the country are generally known as
the Hill lines, the Harriman lines, the Vanderbilt lines, the Gould
lines, and so on. Of these men we shall try to tell something briefly
here.
We have already related how Cornelius Vanderbilt secured control of the
New York Central and Hudson River roads, and added to these until he had
secured an entrance into Chicago; and how his son, William Henry
Vanderbilt, added to this system until it became, and still remains, one
of the strongest in the country. We have told, too, of Jay Gould's ideas
of railroad management, which seem to have been to get the most out of
it for Jay Gould. But when Jay Gould died, he was caught, as it were,
with thousands of miles of railroads on his hands. He left four sons,
George Gould, Edwin Gould, Howard Gould and Frank Gould, of whom George
is the only one that really counts. But he, with a real genius for
railroad building, has developed the Gould lines into a great system
stretching from Buffalo and Pittsburgh southwestward to Chicago, Omaha,
Kansas City, Denver, Ogden, St. Louis, New Orleans, Galveston and away
out to El Paso. These lines have played a most important part in the
development of the great Southwest, and it is said that George Gould is
already blazing a way to the Atlantic seaboard, as an outlet for the
mighty freight traffic which his lines control.
No man connected with railroad building in this country has had a more
interesting or adventurous career than James J. Hill. Born on a little
Canadian farm in 1838, descended from the hardy Scotch-Irish of whom we
have spoken so often, his father died when he was fifteen years, and he
was left to his own resources. He found work as a wood-chopper, and one
day, while he was chopping down a tree a traveler stopped at the house
to take dinner, hitching his horse to the gate. The boy noticed that it
was tired and fagged and carried it a bucket of water. This attention
pleased the traveler, and as he drove away, tossed the boy a Minnesota
newspaper, remarking, "Go out there, young man. That country needs
youngsters of your spirit."
The boy read the paper with its glowing accounts of the new country, and
the next morning, walking to the tree he had been cutting he hit it one
last lick for luck, and announced, "I've chopped my last tree." That
tree, it is said, bears to-day a great placard with the words, "The last
tree chopped by James J. Hill." It _was_ the last one, for a day or two
later the boy started for St. Paul. He brought with him to the United
States the lusty body, frugal instincts and good principles of his
Scotch-Irish ancestry, and, in addition to those, a self-confidence and
sureness of judgment destined to take him far.
He got employment as a shipping clerk in a steamboat office in St. Paul,
and so took his first lessons in transportation problems. Pretty soon he
was agent for a steamboat line, then he established a fuel and
transportation business on his own account and managed it so well that
by 1873, he had accumulated a fortune of a hundred thousand dollars.
There was in Minnesota at the time a little railroad called the St. Paul
& Pacific. It started at St. Paul, but it stopped after it had got only
a few hundred miles toward the Pacific. Hill decided to buy it. The
price was half a million, so he tramped back to Canada and persuaded the
bank of Montreal to let him have the $400,000 he needed. That was surely
one of the most wonderful feats of a wonderful career. The directors of
the bank were severely criticised; men laughed at his purchase, pointing
out that the road had never paid, and prophesying that it never would
pay.
Yet that Jim Crow road was the foundation of the Great Northern system,
the Hill line, stretching across Dakota and Montana to Puget Sound.
Every man who went into the enterprise with Hill now owns his stock in
it as a free gift, for in the intervening years, the cost has been
returned to him in the shape of dividends and bonuses. It has never
failed to pay regular dividends, and has, perhaps, won public confidence
more surely than any other in the country. For James J. Hill has kept
faith in the smallest detail with every man who ever entrusted a dollar
to his hands. The loyalty of the employes of the Great Northern has
passed into a proverb, "Once a Hill man, always a Hill man," and it is
true. He knows his road as few other men do. Before he bought the St.
Paul & Pacific, he traveled over the route in an ox-cart, studying not
only the road, but the people along the way--there weren't many--and the
resources of the country. Before he extended his line to the Pacific, he
went the whole distance on foot and horseback.
People laughed at him when he announced that he was going to extend his
line to the Pacific. No line had ever been built across the continent
without a great subsidy from the government--to secure a subsidy was
always the first step; besides, it was believed that the country through
which the Great Northern was to extend would not even grow wheat, and
the new road was promptly dubbed "Hill's Folly." But in 1893, his line
reached the Pacific. A few years later, the owners of the great Northern
Pacific were begging him to manage that road, too. For he had created
business for his road--a great market in the Orient to fill his
west-bound freight cars, and a great market in the eastern United States
for Puget Sound lumber to fill his east-bound cars. For remember no
railroad can make money unless, after it has hauled a loaded car from
one end of the line to the other, it can find another load to put in
that same car to haul back again. Hill supplied the business and his
story is the wonderful story of the development of the Great Northwest.
* * * * *
Which brings us to the Napoleon of the railroad world, E. H. Harriman.
America has never seen another quite like him. When the panic of 1901
was at its height and the financial world seemed trembling in ruins
about his head, he refused to break the corner, as he might have done,
but sat watching the tape, cool, quiet and calculating, while men
failed, banks tottered, and his own associates begged him to yield. For
the ambition of this man knew no limitation. His kingdom must stretch
from sea to sea and from the lakes to the gulf.
His kingdom lay to the south of Hill's, for he ruled the Union Pacific,
and between the two men there was ceaseless war. Physically and mentally
they were as far apart as two men could be. Hill is a large man, with
massive head and brow, and his eyes are steady and cool and brown, his
lips full and sensitive, his whole personality bespeaking force and
decision. Quite different was Harriman; a small, ordinary looking man,
with glasses and a scraggy mustache, giving the impression of nervous
force rather than of power; an irritable man, easily angered; a fighter
clear through, but fighting sometimes when peace were wiser--that was
Harriman.
Harriman was born at Hempstead, Long Island, the son of a clergyman with
a large family and a small income. The boy was renowned chiefly for his
daily fights and for his aversion to study. At the age of fourteen, he
was put to work in a broker's office in Wall street, at eighteen he had
a partnership, at twenty-two he bought a seat on the stock exchange, and
pretty soon entered the railroad field by getting control of the
Illinois Central. He at once inaugurated a new policy. Before that time,
the prevailing idea of railroad management was to run a road as cheaply
as possible and pay big dividends. Harriman's idea was that the biggest
dividends would be secured in the end by making a good road, and he
proceeded to carry the idea out by putting his road in the very pink of
condition. And it paid.
That was the beginning. His great coup was the rebuilding of the Union
Pacific. A railroad with 7,500 miles of track, a giant crushed by its
own weight, it had gone into a receivership in the panic of 1893. For
five years it stayed there, despite the utmost efforts of the giants of
finance to lift it out. Then Harriman got possession of it, and taking
an engine and a car, turned the train backward and, running in the day
time only, went over the road mile by mile. He decided that the road
must be made a good road, and he told his executive committee that he
needed for his immediate necessities one hundred millions of dollars!
Well, he got the money and he got good men and went to work. The result
was soon apparent. Earnings grew, business increased, and the company's
credit improved. Never before in the history of railroading had there
been such daring rebuilding. The line was levelled down to a maximum
grade of forty-one feet to a mile; two hundred and forty-seven feet were
scaled off the top of the Great Divide; millions of cubic yards of dirt
and stone were blasted out and moved; tunnels were drilled; and,
finally, when the Southern Pacific, too, was acquired, a trestle
twenty-three miles long was built across Great Salt Lake, through water
thirty feet deep, taking railroad trains farther from land than they had
ever yet been run, and shortening the road forty-four miles. And the
result? The gross earnings have risen to over $170,000,000 a year, and
$28,000,000 a year are distributed in dividends. Truly a transformation
from the old water-logged road which Harriman took over.
He had his reverses--he attempted to get hold of the Northern Pacific,
but it slipped through his fingers; the Burlington was cut out from
under his guns, and so was the Rock Island. James J. Hill outgeneraled
him more than once, and he was never able to "get back" at Hill
effectively.
With Harriman we shall close this chapter on men of affairs. Many others
might have been noted. In fact, none of the great industries of the
country has been built up except by inspired work. Armour and Cudahy and
Swift made the packing business; Marshall Field built up a business in
Chicago rivalling Wanamaker's; August Belmont, William C. Whitney, Levi
Leiter, Robert Goelet, Pierre Lorillard, and a hundred others, amassed
great fortunes. Yet there was nothing in their career different to
those of the men already considered in this chapter. They had a genius
for money-making. Each in some special field; but, beyond that, they did
few memorable things. And so we need not pause longer over them here,
except to remark, that it is, in the main, to such men as these, that
America owes her great material prosperity.
SUMMARY
MORRIS, ROBERT. Born at Liverpool, England, January 20, 1734; came to
America, 1747, and settled at Philadelphia; delegate to Continental
Congress, 1775-78; gave his credit to assist in financing Revolution and
elected superintendent of finance, 1781; organized Bank of North
America, 1781; member of Constitutional Convention, 1787; United States
senator, 1789-95; died in debtor's prison at Philadelphia, May 8, 1806.
ASTOR, JOHN JACOB. Born at Waldorf, Germany, July 17, 1763; came to
America, 1783, and settled at New York City; founded Astoria, at mouth
of Columbia River, 1811; died at New York City, March 29, 1848.
VANDERBILT, CORNELIUS. Born near Stapleton, Staten Island, New York, May
27, 1794; became chief owner Harlem railroad, 1863, and of Hudson River
and New York Central roads soon afterwards; died at New York City,
January 4, 1877.
STEWART, ALEXANDER TURNEY. Born near Belfast, Ireland, October 12, 1803;
came to America, 1823, and established drygoods business at New York
City; died there April 10, 1876.
BARNUM, PHINEAS TAYLOR. Born at Bethel, Connecticut, July 5, 1810;
opened Barnum's Museum in New York City, 1841; managed Jenny Lind's
concert tour, 1850-51; established "Greatest Show on Earth," 1871; died
at Bridgeport, Connecticut, April 7, 1891.
SAGE, RUSSELL. Born in Oneida County, New York, August 4, 1816; member
of Congress, 1853-57; established himself as broker and money-lender in
New York City, 1863; died there, July 22, 1906.
FIELD, CYRUS WEST. Born at Stockbridge, Massachusetts, November 30,
1819; in paper business in New York, 1840-53, retiring with a fortune;
organized New York, Newfoundland & London Telegraph Company, 1854;
Atlantic Telegraph Company, 1856; laid Atlantic cable, 1866; first
message over it, July 29; died at New York City, July 12, 1892.
MACKAY, JOHN WILLIAM. Born at Dublin, Ireland, November 28, 1831; came
with parents to America, 1840; went to California, 1850; discovered
Bonanza mines, 1872; died, July 20, 1902.
GOULD, JAY. Born at Roxbury, New York, May 27, 1836; established himself
as broker in New York City, 1859; notorious for manipulations of various
railroad and other securities, and for "Black Friday"; died at New York
City, December 2, 1892.
WANAMAKER, JOHN. Born at Philadelphia, July 11, 1838; established
clothing house of Wanamaker & Brown, 1861; established department store
in Philadelphia, 1876, and in New York City, 1896; Postmaster-General,
1889-93; founded Bethany Sunday School, 1858; president Philadelphia Y.
M. C. A., 1870-83.
MORGAN, JOHN PIERPONT. Born at Hartford, Connecticut, April 17, 1837;
entered banking business, 1857, and developed present firm of J. P.
Morgan & Co., largest private bankers of the United States.
HILL, JAMES J. Born near Guelph, Ontario, September 16, 1838; removed to
Minnesota, 1856; entered transportation business; general manager St.
Paul, Minneapolis & Manitoba Ry. Co., 1879-82; president since 1883;
built Great Northern, with steamship connection with Japan and China,
1883-93; president of Great Northern system since 1893.
HARRIMAN, EDWARD HENRY. Born at Hempstead, Long Island; entered Wall
Street as clerk at age of fourteen; entered New York Stock Exchange
eight years later; was president and chairman of the board of directors
of the Union Pacific, Oregon Short Line, Southern Pacific, Texas & New
Orleans, and many other great railway systems; died near New York City,
September 9, 1909.