Among Travers’ famous hits the following is one of the best: Jim Fisk’s

zenith of glory and grandeur was in the vicinity of its height when he

secured the control of the Boston & Providence line of steamboats. He

constituted himself Commodore, and was always on the deck as they

departed each day, dressed in a Commodore’s attire, and was evidently

very much elated in being supreme in command in connection with these

magnificent steamboats. Jay Gould was, financially, equally interested

with him in the venture, and Commodore Fisk, in his usual splurgy

manner, had a large likeness of both Gould and himself hung up at the

head of the stairs leading to the large saloon cabin on each of these

steamboats. Travers and others, who at that time were leading magnates

of the street, were invited to inspect one of these large boats that had

been newly fitted up, gilded, and put in magnificent shape, with a band

of music on board, etc. Fisk met Travers as he went on board, and

volunteered to escort him over the boat to show him its magnificence and

superb appointments. As they went up the stairs and came to the first

landing, he pointed out the likenesses of Fisk and Gould that were hung

there, and asked Travers if he didn’t think they were good. Travers

replied: “I th-think th-th-they are v-v-very good, b-b-b-but t-to m-make

th-th-them c-c-complete, th-there sh-sh-should b-b-be a p-p-picture of

our S-S-S-Saviour in th-th-the m-middle.”

The last time I saw Mr. Travers down town he called at my office. After

he ran his eye over the stock quotations, I said: “The market is pretty

stiff, Travers.” He said: “Y-yes, it is th-the st-st-stiffness of

d-d-death;” and, sure enough, in the course of two or three days

afterwards, a big smash took place.

Mr. Travers once said to a friend: “C-come and see me in S-September. If

y-you wish I will give you a p-point that will m-make m-money. He wished

to do the man a favor in return for a kindly office. Late in the month

mentioned the friend dropped into Travers’ office.

“C-come for that p-point?” asked Mr. Travers.

“Certainly,” replied the friend.

“Well, y-you are the luckiest d-dog I know. I p-played that p-point two

weeks ago myself and lost a pile of money. Y-you st-stick to m-me l-long

enough and c-close enough, and I’ll l-land y-you in the p-poorhouse,

sure.”

When “Plunger” Walton was in the height of his prosperity on the turf he

met Travers at Saratoga.

“I have been anxious to see you for some time,” said Walton. “I think we

can do business together,” he added. “I’ve got good judgment on horses

and horse racing, and you have the same on stocks and stock speculation.

I’ve made $350,000 on horse races in the last two years. Now, you give

me points on stocks, and I’ll give you points on races. Is it a go?”

“Y-you’ve made three h-hundred and f-fifty th-thousand dollars on

h-horse racing?” Travers repeated.

“Yes.”

“And you want m-me to g-give you p-points on st-stocks?”

“In exchange for my points on horses. Yes.”

“Well, I’ll give you a f-first rate p-point. If you’ve made that much in

two y-years, st-stick to your b-b-business. It is a f-first-rate

p-point.”

One day, many years ago, Mr. Travers was standing on the curb of New

street, opposite the Exchange, buying some stock from a gentleman whose

aspect was unmistakably of the Hebrew stamp.

“Wh-wh-what is your name?” asked Travers.

“Jacobs,” responded the seller.

“B-b-but wh-what is your Christian name?” reiterated Travers.

The Hebrew was non-plussed, and the crowd was convulsed with laughter.

The first time Mr. Travers attempted to find Montague street, in

Brooklyn, he lost his way, although he was near the place. Meeting a man

he said:

“I desire to r-reach M-montague st-street. W-will you b-be kik-kind

enough to pup-point the way?”

“You-you are go-going the wrong w-way,” was the stammering answer. “That

is M-montague st-street there.”

“Are y-you mimick-mimicking me, making fun of me-me?” asked Mr. Travers

sharply.

“Nun-no, I assure you, sir,” the other replied. “I-I am ba-badly

af-flict-flicted with an imp-impediment in my speech.”

“Why do-don’t y-you g-get cured?” asked Travers, solemnly. “G-go to

Doctor —, and y-you’ll get c-cured. D-don’t y-you see how well I talk?

H-he cu-cured me.”

The fortune left by Mr. Travers has been estimated at $3,000,000. He

left three sons, William B. Travers, John Travers, and Reverdy Travers,

and five daughters, four of whom are married. His only sister is Mrs.

Prince, mother of the late John D. Prince, of Prince & Whitely.

Mr. Travers assisted a large number of young men to go into business,

and helped to give the start in life to several of the most successful

men in Wall Street.

He was charitable, and his secret beneficences are said to have been

numerous. He enjoyed the wealth he had made in a way that should make

the majority of millionaires blush with shame at their parsimony. He was

a _bon vivant_ of the first water. He maintained five domestic

establishments on a first-class and luxurious scale, not like a

Caligula, merely for his personal gratification or the pride of

ostentation, but rather for the development of those social traits of

character in which he had few equals, and no superior. The great social

pride of his life was to make his friends feel happy. He had one of the

best cellars in New York. His table at any of his residences was not

only bountiful, but exhibited a menu equal to that at Delmonico’s. His

favorite wine was Madeira, of which he was a perfect judge. He was very

moderate, however, both in eating and drink, but would have the best of

everything despite the cost.

He was a kind and indulgent father, but was pleased to see his boys

manifest ample pluck like himself. Apropos of this characteristic, one

of his boys came home one day with a big blackened eye.

“W-w-w-where d-d-did you g-g-g-get th-th-that?” inquired the father,

anxiously.

“In a f-f-fight, sir,” replied the son, who has a similar impediment in

his speech.

“D-d-d-did y-y-you w-w-w-whip the other f-f-fellow?”

“Y-y-yes, sir.”

“Q-q-q-quite r-r-right. H-h-h-here’s a d-d-dollar f-f-for y-you. Always

w-w-whip the other f-f-fellow.”

Travers himself was courageous, tall, and sinewy, and in his younger

days a great athlete. He was 68 years of age at the time of his death.

He was a member of twenty-seven clubs, social, political, and athletic.

He was a Democrat in politics. As to his religious belief, I expect if

he had been questioned on that he would have given the same answer as

another eminent man who cut a great figure in this country: “The world

is my country; to do good is my religion.” Travers might have added: “I

also wish to be the means of creating and diffusing the greatest amount

of social happiness and enjoyment of which humanity is capable.”

I may conclude by saying of Travers, as an eminent author observed of

his namesake the divine William, the Bard of Avon, “We ne’er shall see

his like again.”

------------------------------------------------------------------------

CHAPTER XL.

CHARLES F. WOERISHOFFER.

THE CAREER OF CHARLES F. WOERISHOFFER, AND THE RESULTANT EFFECT UPON

SUCCEEDING GENERATIONS.—THE PECULIAR POWER OF THE GREAT LEADER OF

THE BEAR ELEMENT IN WALL STREET.—HIS METHODS AS COMPARED WITH THOSE

OTHER WRECKERS OF VALUES.—A BISMARCK IDEA OF AGGRESSIVENESS THE

RULING ELEMENT OF HIS BUSINESS LIFE.—HIS GRAND ATTACK ON THE VILLARD

PROPERTIES, AND THE CONSEQUENCE THEREOF.—HIS BENEFACTIONS TO

FAITHFUL FRIENDS.

By the death of Charles F. Woerishoffer, Wall Street lost one of the

most prominent figures which has ever shown up here. Mr. Woerishoffer

died May 9, 1886. His career is one worthy of study by watchers of the

course of speculation in this or any other country. The results of his

life-work show what can be accomplished by any man who sets himself at

work upon an idea, and who devotes himself steadily and persistently to

a course of action for the development and perfection of the principle

which actuates his life. Mr. Woerishoffer possessed peculiar personal

qualities which are denied to most men and to all women. He had the

magnetic power of impressing people with confidence in the schemes which

he inaugurated; that is to say, he had the power of organization—the

same power has made other men great, and will continue to make men great

who possess it in all walks of life. Notable instances may be cited in

the cases of Bismarck, Gladstone, Napoleon, Grant, and—coming down to

Wall Street proper—Gould, Daniel Drew, old Jacob Little and the

Vanderbilts, especially the Commodore, in his superior power of

aggressiveness.

It has been said of Mr. Woerishoffer that he was fortunate. He was

indeed. He was fortunate in the possession of natural ability, and he

had the aptitude to take advantage of events, and associate

circumstances and the strength of purpose, and to direct, instead of

following, the operations with which he became connected. He was the

leader of the bear element of the Street—at least he was such during the

period which marks his successful operations here. There is no doubt

that the death of Mr. Woerishoffer was hastened because of the great

strain of mind growing out of his business transactions. There is one

point in this connection which has been overlooked by his biographers,

namely, that his boldness in the magnitude of his dealings was resultant

from a careless or non-calculative mind. I do not believe that Mr.

Woerishoffer ever undertook a speculation of any sort until he had

carefully calculated all the chances _pro_ and _con_, and his success,

remarkable as it was, was largely due to the combination of calculation

and the natural development of business conditions, of which he was a

close student.

Mr. Woerishoffer’s conception of business principles was iconoclastic to

an intense degree. As a broker, as a business man, as an operator in

stocks, he “believed in nothing;” that is to say, he was a believer in

the failures of men, and had no faith in the corporations and

enterprises which were organized for the purpose of the development of

the best interests of the country in which he lived. There is another

view, or another statement of this peculiar feature, of the character of

this man which may be given in description, and this is illustrative of

the careful study he made of everything passing along in the lines of

life with which he was connected. It is this: That Mr. Woerishoffer, by

his intimate study of the prospects and probabilities of the projected

plans of enterprising Americans, had come to the conclusion that the

majority of them must fail, and that the first flush of enterprise would

be changed to a darker shade as time progressed. That is to say, he saw

and knew a great deal of the organization of the railroad schemes which

have marked the growth of our rapid development in a business way, and

he judged that the inflated ideas of the projectors must meet with a

check as developments were made, and that the earning capacity of the

roads would not equal expectations. Hence he sold the stocks, and sold

them right and left from the start, and with his followers reaped the

profits. Woerishoffer never indulged in the _finesse_ of Gould or Henry

N. Smith. He had the German ideas of open fight, and he attacked

everything indiscriminately, losing money sometimes, but making money at

other times, and by his open dash and persistency carried his point.

There is no doubt that the successful career of a man of this sort has a

deleterious effect upon those who follow him in succeeding generations.

It does not matter how successful the development of the business

industries of this country may be hereafter, there will always be found

men who will speculate upon the ruination rather than the success of the

best interests of the country merely because Charles F. Woerishoffer

lived and made a fortune by his disbelief and his disregard of the

growth of the institutions of the country which gave him a home.

Woerishoffer was a wonderful example of the sudden rise and steady and

rapid progress of a man of strong and tenacious purpose, who adheres

with firmness to one line of action or business. He was born in Germany.

Woerishoffer’s Wall Street career was begun in the office of August

Rutten, afterwards of the firm of Rutten & Bond, in which Woerishoffer

subsequently became Cashier. He left this firm in 1867, and joined M. C.

Klingenfeldt. Mr. Budge, of the firm of Budge, Schutze & Co., in 1868,

bought him a seat in the Stock Exchange. Some time after he entered the

Board he became acquainted with Mr. Plaat, of the well-known banking

firm of L. Von Hoffman & Co. Mr. Woerishoffer was entrusted with the

execution of large orders, especially in gold and Government bonds. At

that time the trading in these securities was very large. Afterwards

Plaat became an operator himself, and Woerishoffer followed in his

footsteps as an apt pupil. Eventually he formed the firm of Woerishoffer

& Co., his first partners being Messrs. Schromberg and Schuyler, who

made fortunes and retired.

Woerishoffer was connected in enormous operations with some of the

magnates of the street; for instance, James R. Keene, Henry N. Smith, D.

P. Morgan, Henry Villard, Charles J. Osborn, S. V. White, Addison

Cammack, and last, though not least, Jay Gould. He was especially on

intimate terms with his great brother bear, Addison Cammack, both

speculatively and socially. Besides being a bold operator in the street,

Woerishoffer was associated with large railroad schemes, which gave him

the inside track in speculation. He was connected with the North River

Construction Company, the Northern Pacific, Ontario & Western, West

Shore, Denver & Rio Grande, Mexican National, several of the St. Louis

Companies, and Oregon Transcontinental. He was originally a rampant bull

on these properties until they began to get into trouble, and then he

became a furious and unrelenting bear. He smashed and hammered them down

right and left. He soon covered his losses, and began to make enormous

profits on the short side of the market. On the bonds and stock of the

Kansas Pacific, when it became merged in the Union Pacific, it is

supposed that Woerishoffer cleared over a million dollars.

Woerishoffer, it seems, was one of the first to propose the building of

the Denver & Rio Grande Railroad. On this enterprise he realized immense

profits for himself and his friends. The stock rose until it reached

110, and was “puffed” up for higher figures. The public was attracted by

the brilliant prospects of immense profits on the long side. Mr.

Woerishoffer and friends held large quantities of long stock, but sold

out, and afterwards put out a large line of shorts. The bear campaign

had Woerishoffer as leader, and, it is said, he succeeded in covering as

far down as 40, and some even lower. In 1878, when the market began its

great boom on account of the resumption of specie payment and the

general prosperity of the country, he organized a combination which

bought stocks largely and sold wheat short. On this deal he made large

profits, and began to develop into a pretty strong millionaire. He took

advantage of the shooting of President Garfield, in 1881, together with

his colleagues, Cammack and Smith, to organize a bear raid on a large

scale, which was probably one of the chief, although somewhat remote,

causes of bringing about the panic of 1884.

The great perspicacity which he had in the deals enumerated failed him

in 1885. He thought, as the wheat crop was small, that wheat would go up

and stocks would go down, but the very reverse occurred. The

disappointment and depression, very probably, resulting from this

brought on the aneurism of the heart, which killed the great bear

operator, and his death was a fortunate event for Wall Street.

One of the many things which gave Woerishoffer great reputation as a

speculator, both here and in Germany and England, was the bold stand he

took in the fight for the control of Kansas Pacific against Jay Gould,

Russell Sage, and other capitalists, railroad magnates and financiers in

1879. He represented the Frankfort investors, and had engaged to sell a

large quantity of Denver extension bonds at 80, to the Gould-Sage

syndicate. The syndicate, however, knowing that they had the controlling

influence, declared the contract for 80 off, and “came to the

conclusion, after examining the road-bed, that the bonds were not worth

more than 70,” and they would not take them at a higher figure.

Woerishoffer then made a grand flank movement on the little Napoleon of

finance and his able lieutenants. He seemed to be greatly put out that

they had broken their contract, but did not complain very bitterly. He

immediately cabled to the English and German bondholders, and soon

secured a majority of the bonds which the syndicate wanted, and

deposited them in the United States Trust Company. He then informed the

syndicate that they could not obtain a single bond under par to carry

out their great foreclosure scheme. It was this circumstance that caused

Frankfort speculators and investors to come so largely into the New York

stock market, and that also made English capital flow in freely,

speculators throwing off their former timidity. The amount involved in

the Gould-Sage syndicate deal was about $6,000,000 of bonds, thus

netting Woerishoffer considerably over a million. This deal at once gave

him an international reputation as a far-sighted speculator, and this

reputation was gained at the expense of Gould and Sage, owing to their

disregard of the contract which had been entered into.

Woerishoffer showed great sagacity as a speculator when Henry Villard

put forward his immense bubble scheme in Northern Pacific and the

Oregons. Although invited to go into the big deal with other millionaire

speculators who had taken the Villard bait so freely, Woerishoffer kept

prudently aloof, and looked on the players at the Villard checkerboard

with equanimity and at a safe distance. He was not then considered of

very much account by the men of ample means who so freely subscribed

$20,000,000 to the Villard bubble. At the moment when these subscribers

were so highly elated with the idea that the Villard fancies were going

far up into the hundreds and, perhaps, the thousands, like the bonanzas

during the California craze, Woerishoffer boldly sold the whole line

“short.” This was a similar stroke of daring to that which James R.

Keene had perpetrated on the bonanza kings in the height of their

greatest power and anticipations. The Villard syndicate determined to

squeeze Woerishoffer out entirely, and for this purpose a syndicate was

formed to buy 100,000 shares of stock. There were various millionaires

and prominent financiers included in the syndicate. These were the

financial powers with which Woerishoffer, small in comparison, had to

contend single-handed. The feat that Napoleon performed at Lodi, with

his five generals behind him, spiking the Austrian guns which were

defended by several regiments, was but a moderate effort in war compared

with that which Woerishoffer was called upon to achieve in speculation.

He took things very coolly, and with evident unconcern watched the

actions of the syndicate. The latter went to work vigorously, and soon

obtained 20,000 shares of the stock which they required. It still kept

climbing rapidly, and so elated was this speculative syndicate with the

success of its plans that it clamored for the additional 80,000 shares,

according to the resolution. The speculators thought they were now in

the fair way of crushing Woerishoffer, and with a hurrah obtained the

80,000 shares required, but Woerishoffer’s brokers were the men who sold

them to the big syndicate. It was not long afterwards that the syndicate

felt as if it had been struck by lightning. In a short time the Villard

fancies began to tumble. The syndicate was in a quandary, but nothing

could be done. It had tried to crush Woerishoffer. He owed it no mercy.

The inevitable laws of speculation had to take their course, and the

great little bear netted millions of dollars. These events occurred in

1883.

After the Villard disruption, Mr. Woerishoffer became conservative for

some time, and was a bull or a bear just as he saw the opportunity to

make money. When the West Shore settlement took place he watched the

course of events with a keen eye, and was one of the most prominent

figures in pushing the upward movement upon the strength of that

settlement. His profits on the bull side then were immense. After this

he became a chronic and most destructive bear. The reason he assigned

for his conversion and change of base was that the net earnings of the

railroads were decreasing, and did not justify an advance in prices. He

pushed his theory to an extreme, making little or no allowance for the

recuperative powers of the country, and the large bear contingent, which

he successfully led, seemed to be inspired with his opinions. These

opinions, pushed to the extreme, as they were, had a very demoralizing

effect upon the stock market, and constituted a potent factor in the

depreciation of all values, throwing a depressing influence on

speculation, from which it did not recover until many months after Mr.

Woerishoffer’s death. The great bear had wonderful skill in putting

other operators off the track of his operations by employing a large

number of brokers, and by changing his brokers and his base of action so

often that speculators were all at sea regarding what he was going to

do, and waiting in anxiety for the next move. It was considered

remarkable at the time that his death had not a greater influence on the

stock market than this result proved. If he had died a week sooner, his

death might have created a panic, for he was then short of 200,000

shares of stock. His short accounts had all been covered before the

announcement of his death on the Stock Exchange.

Woerishoffer was almost as famous for his generosity as James R. Keene.

It is said that he made presents to faithful brokers of over twenty

seats, of the value of $25,000 each, in the Stock Exchange. He made a

present of a $500 horse to the cabman who drove him daily to and from

his office. He was exceedingly generous with his employes. A short time

before his death, feeling that the strain from over-mental exertion was

beginning to tell on his constitution, he had resolved to visit Europe

for the purpose of recuperating, but, like most of our great operators,

he had stretched the mental cords too far before making this prudent

resolve, and he died at the early age of 43. How many valuable lives

would be prolonged if they would take needful rest in time! The death of

Woerishoffer should be a solemn warning to Wall Street men who are

anxious to heap up wealth too rapidly. His fortune has been variously

estimated at from $1,000,000 to $4,000,000. He left a widow and two

little daughters.

Woerishoffer had simply the genius for speculation which is

uncontrollable, irrespective of consequences to others. He had no

intention of hurting anybody, but his methods had the effect of bringing

others to ruin all the same. He merely followed the bent of his genius

by making money within the limits of the law, and did not care who

suffered through his operations. All speculation on the bear side

involves the same principle. If there is any difference among

speculators, it only consists in degree. Large transactions, like those

in which Woerishoffer was engaged, are more severely felt by those who

have the misfortune to get “squeezed;” but it all resolves itself into a

question of the survival of the fittest.

Woerishoffer’s success in this country seems strange to Americans, but

how much stranger it must have seemed to the people of his native town

of Henau Hesse-Nassau, where he was born in 1843, in comparative

poverty. John Jacob Astor was one of the first of a considerable number

of Germans to find this country a veritable new El Dorado, where

peasants’ sons, as if by magic, became far wealthier than many of the

nobility whom they had, as boys, gazed upon with awe. Who could have

foreseen such a career for the poor young German, who came to New York

in 1864? He was then in his twenty-first year. He had had some

experience in the brokerage business in Frankfort and Paris, but he came

here poor. Addison Cammack, who was to become his ally in many a

gigantic speculation, was then prominent in the South, where he had

favored the cause of the people of his State during the war, and had

made a fortune. D. P. Morgan, who was to be another of his speculative

associates, had already won a fortune by speculating in cotton in

London. Russell Sage counted his wealth by the millions. Jay Gould and

Henry N. Smith had gone through the feverish excitement of a Black

Friday, and either, in common parlance, could have “bought or sold” the

poor young German. Nevertheless, by strange turns in the wheel of

fortune, he acquired a financial prestige that enabled him to beard the

lion in his den, and snap his fingers at powerful combinations that

sought to ruin him. When Henry Villard demanded his resignation as a

director in the Oregon Transcontinental Company, on the ground that he

had been selling the Villard properties short, the “Baron” (as

Woerishoffer was often called) tendered it at once, and flung down the

gage of battle in the announcement that he would ruin the head of the

Villard system.

Chas. F. Woerishoffer was slightly built, had a light complexion, was

under the medium height, and, on the street, might have been taken for a

bank clerk. He showed his inborn love of gaming in many ways. He is said

to have broken a faro bank at Long Branch twice; he would play at

roulette and poker for large stakes. He was kind-hearted and charitable.

At Christmas his benefactions to clerks and messenger boys were notable.

In the height of a great speculation he sometimes showed extreme

nervousness, but during the memorable contest with the Villard party he

exhibited the greatest coolness and composure. He was a curious compound

of German phlegm and American nervousness. One of the fortunate events

in his career was his marriage, in 1875, with Miss Annie Uhl, the

step-daughter of Oswald Ottendorfer, the editor and proprietor of the

great German organ of New York, the _Staats Zeitung_, who brought him,

it was understood, a fortune of about three hundred thousand dollars.

The following circular to my customers, which I published May 13th,

1886, with special reference to the death of Woerishoffer, and its

consequences, I think is worthy of reproduction here:

“The future of the market is going to be a natural one, and will go up

and down from natural causes; when this is fully realized there will be

no lack of the public taking a hand in it. That element has been crowded

out of Wall Street for a long time past, largely due to the fact that

its judgment to predicate operations has been sat on by brute force. It

has been, therefore, made to feel that the market was not one where it

was safe to venture. This brute force power came from Woerishoffer, who

has for a long time past been the head and front as a leader on the bear

side, and was a gigantic wrecker of values. His method was to destroy

confidence and hammer the vitality out of every stock on the list which

showed symptoms of life, and his power was the more potential, as all

the room traders were converted to believe in him and were his

followers. His decease leaves, therefore, the entire bear fraternity

without any head, and consequently in a state of demoralization, and in

a condition not unlike a ship at sea without a rudder. Mr. Woerishoffer

was a genial, hospitable man, lovely in character at his own home, true

to his friends and generous to a fault, and will, therefore, be a great

loss as a gentleman; but so far as the prosperity of the country goes,

his death will be the country’s gain. To the fact that Mr.

Woerishoffer’s power and influence are no longer felt on the market is

almost entirely due the change of front of the situation, which is now

one of hopefulness. While he lived the public and half the members of

the Board were completely terrorized by the fear of him, and were kept

in check from being buyers, however much the position of affairs

warranted going on the long side. The bull side of the market has had

for a long time past to contend with the bold and ferocious attitude of

Mr. Woerishoffer. When the bulls felt justified in making a rally and

forcing the market to go their way, when it looked most encouraging, as

a result of their efforts, Mr. Woerishoffer would strike their specialty

a sledge hammer blow on the head; he would repeat that on every attempt

that was made, which finally resulted in discouragement. If ten thousand

shares were not ample for that purpose, he would quadruple the quantity;

in fact, he has often been known to have outstanding contracts on the

short side of the market amounting to 200,000 shares of stock at least.

As an operator he seemed to be so peculiarly constituted as to know no

fear, and would often turn apparent defeat to success by possessing that

trait of character. It will be a long time before another such

determined and desperate man will appear on the stage to take his place;

in the meantime, it will be plainer sailing in Wall Street, besides

safer for operators. Mr. Woerishoffer, as an operator, was full of

expedients. He put his whole soul into his operations, and not only

would he attack the stock market with voraciousness, but he would

manipulate every quarter where it would aid him; sometimes it would be

in the grain market, sometimes by shipping gold, and sometimes by the

manipulation of the London market. He had all the facilities for

operation at his fingers’ ends, in fact he commanded the situation to

such an extent as to make his power felt. Mr. Cammack, Mr.

Woerishoffer’s associate, while usually a bear, is a very different man

and not to be feared, for that gentleman usually sells stocks short only

on reliable information, and always to a limited extent. If he finds

that the market does not go down by the weight of sales, he soon

extricates himself at the first loss. In this method of doing business

lies his safety. In this way he will sell often 10, 20 or 30 thousand

shares of stock and make the turn, but will not, like his late friend

Woerishoffer, take a position and stand by it through thick and thin,

and browbeat the market indefinitely until it finally goes his way. At

the present time, therefore, the bulls have no great power to fear

whenever they have merit upon which to predicate their operations. The

future will be brighter for Wall Street speculators and investors than

it has been for a long period, and with the public who may be expected

to come again to the front, greatly increased activity should be the

result.”

------------------------------------------------------------------------

CHAPTER XLI.

WOMEN AS SPECULATORS

WALL STREET NO PLACE FOR WOMEN.—THEY LACK THE MENTAL EQUIPMENT.—FALSE

DEFENSES OF FEMININE FINANCIERS.—THE CLAFLIN SISTERS AND COMMODORE

VANDERBILT.—FORTUNE AND REPUTATION ALIKE ENDANGERED.

As speculators, women hitherto have been utter failures. They do not

thrive in the atmosphere of Wall Street, for they do not seem to have

the mental qualities required to take in the varied points of the

situation upon which success in speculation depends. They are, by

nature, parasites as speculators, and, when thrown upon their own

resources, are comparatively helpless. Although they are able, through

craft and subtlety, to rule the male sex to a large extent, yet, when

obliged to go alone, they are like a ship at sea in a heavy gale without

compass, anchor or rudder. They have no ballast apart from men, and are

liable to perish when adversity arises. When some of our strong-minded

woman’s-righters read this—and I hope for this honor from them—I can

imagine certain of them launching epithets of scorn against my head, and

even charging me with dense ignorance regarding the history of the great

women of the world, and the wonderful achievements of some of them. They

will, no doubt, cite Joan of Arc against me; Queen Elizabeth, Catharine

of Russia, the unfortunate and beautiful Mary, Queen of Scots, _et al._

Women, in general, rarely summon beautiful women in their own cause, but

in this case they will probably do so; for it is a trick of the sex to

bring feminine beauty to play as a tramp card when man is the game.

The wife of John Stuart Mill, Mrs. Elizabeth Cady Stanton, Julia Ward

Howe, and a host of other great female reformers and revolutionists

will, without doubt, be quoted against my theory. Several of the

strong-minded novelists and their chief works will be cited to show how

unfounded is my charge. Ouida, George Elliot, and George Sand will

probably be arrayed in judgment against me. The one answer to all this

must be that such women are the exceptional cases, which prove the rule

and sustain my theory. Besides, these fair ones, with the exception of

Ouida, and, to some extent, Elizabeth Cady Stanton, and possibly, George

Sand, have never tried their hands at speculation. They have excelled in

their particular lines, but when all their secret history is known, it

will be found that men were the source of their inspiration. I am aware

that the opposite theory is held, through false gallantry; but the

chivalrous knights who credit the fair sex with more speculative brains

than they possess are in a petty minority, and will always remain so as

long as men have manhood enough to decide according to their judgment

instead of their emotions.

Fact is the best test on this question, and I will recite a few facts in

the history of some of the female speculators of Wall Street, quite

aware that I touch a very delicate subject. The namby-pambyism and the

pseudo “gallantry” now so prevalent, are generally opposed to any fair

statement in regard to woman’s real financial capacity, and, worse than

all, woman’s true interests and functions are greatly aspersed and

prejudiced by these false sentiments. When carried away, as she so often

is, by the insidious flatteries of man and the showy frivolities of

fashion, a woman is rendered temporarily blind to these important facts;

but, in the exceptional instances, where she reasons calmly and reflects

prudently, she pays the greatest respect to those of our sex who

dispense plain advice and blunt opinions. Dudes and designing flatterers

may revel for a time in their conquests, but the opinions of men of

judgment, honesty and virtue will eventually triumph with those of the

other sex who are most discerning.

Let me, then, illustrate my estimate of women as speculators by a few of

the more prominent examples I have known in Wall Street, who have

essayed to make a fortune after the manner of men. I shall take up the

present Lady Cooke and her sister, Mrs. Woodhull. Lady Cooke has now a

virtual “castle in Spain,” or rather in Portugal, besides one of the

most elegant mansions in London. My knowledge of the history of those

sisters and their financial relations and business connections with the

late Commodore Vanderbilt, go to illustrate the fact very clearly that

the cleverest women cannot be successful in Wall Street; and if this is

so, where will the ordinary female be found when she essays the role of

an operator?

The notorious firm of Woodhull, Claflin & Co., in their peculiar

combination, included Commodore Vanderbilt. I shall say something about

their methods of operation before touching upon the history and

biography of the two sisters, which is remarkable in the extreme. Very

soon after the Commodore had aided to set these two women up as brokers,

in Broad Street, the firm was known all over the land. The present

titled Lady Cooke was then plain Tennie C. Claflin, and she was plain in

every sense of the word, excepting in face, which certainly was quite

pretty. She had, however, less personal magnetism than her celebrated

sister, Victoria C. Woodhull, but doubtless made more impression on a

well-known journalist of this city and upon the Commodore than any one

else, until she met Sir — Cooke. Tennie was rather phlegmatic in

temperament, and could therefore exercise but little influence over the

ordinary man, but she was cool and calculating, and had evidently more

brain than she seemed to possess. She could wear a winning smile, but it

was manifestly put on for the occasion.

I recollect her calling at my office one afternoon. After the usual

interchange of civilities, she told me she wished to deposit a check for

$7,000. The check was signed by the wealthiest man in Wall Street, and

was promptly accepted by my cashier, and duly credited. A few days after

this event, Miss Tennie drove up to my office in a cab. She wore a look

of enthusiasm and pleasant surprise. In her countenance one could read

at a glance that she had a heavy thought to divulge. So she said she had

a “point.” I don’t care for “points” as a rule, but I was bound by all

the laws of chivalry and business courtesy to give the lady a respectful

hearing, and I did. The point had emanated from a very high source, and

for that reason, also, was entitled to respectful consideration. The

charming Tennie wanted to buy 1,000 shares of New York Central. Though

always on the alert for business, I was not then at all anxious to

execute the lady’s order. I received Miss Claflin with all due respect,

and without giving her any intimation that I perceived, by my peculiar

inspiration, “the gentleman in the fence,” I tapped my little bell, to

which my office messenger responded. “Tell the cashier,” I said, “to

make out Miss Tennie Claflin’s account.” This was simply the work of a

few minutes, and Miss Tennie was instantly furnished with a check,

including interest for the time of deposit. Miss Claflin bowed herself

out, and I heaved a sigh of relief, and thought that everything was over

so far as that check was concerned. But I was slightly mistaken.

Tennie went to the Fourth National Bank immediately, and presented the

check. She returned to my office in a few minutes afterwards. P. C.

Calhoun was then President of the Fourth National. When Tennie returned,

she said, “Mr. Clews, the bank wishes to have me identified.” I called a

boy and told him to accompany Miss Claflin to the bank, and identify her

as being entitled to the amount of the check. This sealed her credit for

that amount at the bank, owing to which I obtained the rather doubtful

distinction of having been made the medium of largely aiding to

establish the firm of Woodhull & Claflin in Broad street. Myself and the

Fourth National Bank were said to have been the “sponsors” for this

consummation. As soon as I ascertained how my name was being connected

with those ladies, I had a private interview with the President of the

Fourth National, which prevented Tennie from using my name to a great

extent thereafter. I have never attempted to take any credit to myself

for this affair, but there is one thing evident, and that is, that I did

not get euchred in the matter. The Commodore was then regarded as the

power behind the throne, or behind the fair sex. If the sisters had any

scheme in the background (and I have reason to believe they had,) I did

not get caught in it.

Far be it from my purpose to insinuate that these celebrated “sisters”

are a sample of all the women who intrude into speculative circles.

These facts, however, show by what sort of methods two of the most

notorious female speculators of these times gained their success. It

would be an aspersion on womanhood to suppose that many women would be

found willing to resort to like methods; but it is safe to say that, as

a rule, women can have little other hope of success than by using their

blandishments to win the attentions and the services of the other sex.

There are doubtless exceptions to this rule, as in the case of Mrs.

Green, whose unaided sagacity has placed her among the most successful

of our millionaire speculators. She is, however, made up of a powerful

masculine brain in an otherwise female constitution, and is one among a

million of her sex.

If women are fortunate enough to escape being fleeced when they enter

Wall Street, it can only be from extraordinary luck, or from the

protecting counsel of their brokers, or from compassionate indulgence

shown to them when swamped by their losses. My own experience shows that

when they lose their money—as they usually do—they are by no means

sparing in their pleas for consideration; and this fact shows that women

who aspire to this path to fortune are not usually endowed with the

self-respect, the modesty and the independence of masculine favors which

characterize all high-minded women. In truth, this is so well understood

among the habitués of Wall Street, that while a woman who frequents

brokers’ offices is not likely to find any lack of attentions, yet she

is sure to lose caste among those who bestow such gallantries. In a

word, Wall Street is not the place for a lady to find either fortune or

character.

The explanation given by Mrs. Victoria Woodhull —— is somewhat different

from the statement herein made by me in reference to the establishment

of the brokerage firm, run ostensibly by the famous sisters; and as this

celebrated lady shows in some of her recent utterances that she has done

so much for humanity, truth, and financial reform, her statement is

entitled to fair presentation. I shall, therefore, give it in full. It

is as follows:

“The first move my sister and I made in this direction was to establish

a banking and brokerage office in Broad street. This step we were

induced to take with the view of proving that woman, no less than man,

can qualify herself for the more onerous occupations of life. So

startling was this innovation that the whole city of New York was

aroused, and when we entered the precincts of Wall and Broad streets

they were blocked with crowds of people until the novelty wore away. But

to-day women can establish themselves in any business, enter any avenue

of life that they are qualified through education to fill, either

political, financial, scientific, medical or mechanical, so great is the

advance. At that time, as some of the New York papers said, everything,

to the external view, was at the height of prosperity. But we exposed,

in our _Weekly_, one nefarious scheme after another when we realized

that companies were floated to work mines that did not exist, or that,

if they did exist, had nothing in them, and to make railways to nowhere

in particular, and that banks and insurance societies flourished by

devouring their shareholders’ capital. The papers of 1872 said that in

one year we had exposed and destroyed nearly every fraudulent scheme

that was then in operation—railroad swindles and the banking houses

which were palming them off on the public. Life insurance companies were

reduced from forty to nineteen for the whole country; the Great Southern

bonds and the Mexican Claim bubbles collapsed. More than one tried to

buy our silence, and when their money was refused they turned and

charged us with levying blackmail, and, losing in their rage and fear

all sense of honor, said that we were immoral women or we would not have

commenced such an undertaking. Other papers took up the warfare. It

brought about a great revolution in financial matters, but it made us

many bitter enemies, for we were the first to put ourselves into the

breach.”

I shall make no attempt to contradict the bold statement of the lady,

but simply quote it for what it is worth, leaving the inference to the

reader, as the novelistic phrase goes, but I do hold that the very

result of the experiment to which she alludes is one of the strongest

and most cogent arguments in favor of my theory, that women are not

qualified by nature for the speculative and financial operations in

which so many men have made their mark. Even the few apparent exceptions

to the rule have been sad failures compared with the achievements of the

male sex in this department of human enterprise. “Jennie June,” the able

and accomplished wife of Mr. Croly, the well-known journalist, has

essayed the speculative role, but she has not been very successful. When

women such as these have failed what can the ordinary female expect?

Well, I think they had better abide by the advice of St. Paul in regard

to women speaking in the church. Let them say or do nothing in the

peculiar line for the pursuit of which they are evidently disqualified,

but if they want to know anything, “ask their husbands at home.” Those

who have not yet obtained husbands may ask their fathers, brothers or

lovers, and if they do so they will often be saved a world of trouble.

There has recently been a curious craze in the ranks of young ladies as

well as among married women for speculation, many of them thinking they

could make a fortune in a few days, weeks or months, and it is nearly

time that this speculative mania should be checked or stopped. Maidens

of uncertain age have probably been foremost in leading this movement,

and through their influence many estimable ladies have been induced to

bring financial trouble upon their husbands and families. Many of the

woman’s righters think that it would be a glorious thing to follow in

the footsteps of Victoria Woodhull ——, whom they imagine to have been a

success in that line of business; whereas she was a sad failure. Women

as brokers have singularly failed in every known instance of experience.

Victoria W. has been much more successful as an investor than a

speculator, and the best investment of her life was that of her last

marriage. There she made a decided hit. Perhaps, her Wall Street

experience may have assisted her, in a great measure, to accomplish this

feat. Compared with her two former marriages, however, her happy union

with the foreign banker is a decided success. It is probably only in the

matrimonial line that women can become successful speculators.

Now, I shall attempt to give some reasons, with all due respect to the

fair sex—and without trying to lower them in the estimation of men—why

those dear creatures, so necessary to our happiness in many other

respects, are not by nature, nor even by the best possible education,

qualified to become speculators. Women are too impulsive and

impressionable. Although they often arrive at correct conclusions in the

ordinary affairs of life with amazing rapidity, they don’t reason in the

way that is indispensable to a successful speculator. They jump to a

conclusion by a kind of instinct, or it may be a sort of inspiration, on

a single subject or part of a subject, but they are entirely unable to

take that broad view of the whole question and situation which the

speculator has to seize at a glance, in the way that Jacob Little, the

elder Vanderbilt, or Daniel Drew could have done, as I have described in

other chapters. Gould possesses many of these qualities, though he has

never been a speculator like the others, in the ordinary and true sense

of the term, but, as I have clearly shown in another place, made his

great fortune by putting two or more wrecked railroads together and

making others believe they were good, and selling out on them

afterwards, and not by legitimate speculation or investment.

Women who have hitherto engaged in speculation have not yet shown that

they are capable of generalizing the causes which affect the market as

these kings of finance have done, nor have they illustrated that they

are possessed of the ability to foresee financial events in the same

way. Some people may think that Mrs. Hettie Green may be an exception to

the rule, but, without attempting to detract from the abilities of this

eminent and wealthy lady, I hardly think she has the mental power of any

of the great operators whom I have named, and though it must be admitted

that she has done some fine work in manipulating Louisville & Nashville,

I am of the opinion that she would fall very far short of leading a bear

attack on the market like any of those for which the late Charles F.

Woerishoffer was famous, and in organizing a “blind pool” she would

stand no show against Gould, Major Selover, Addison Cammack or James R.

Keene.

Lady Claflin Cook, formerly Tennie C. Claflin, or “Tennessee,” as she

was baptized, though she had not the intellectual ability of her sister

Victoria, appeared to exercise more influence over Commodore Vanderbilt

on account of her greater capacity as a spiritualistic medium. In his

latter days, as is well known, the Commodore was an implicit believer in

Spiritualism, and considered it expedient to consult mediums in the same

way that the ancient Greeks and Romans went to their oracles, before

engaging in any great enterprise. It is not generally known that the

fallacy of Tennie’s mediumistic powers was exposed by the Christian

Brothers, and her usefulness to the Commodore considerably impaired

thereby in his estimation. This came about through the influence of Mrs.

Claflin, the mother of the celebrated sisters. Her superstition ran so

high that she imagined her daughters were possessed of evil spirits

through the power of Colonel Blood, Victoria’s second husband. The holy

men received due credit for exorcising the spirits, thus freeing the

sisters from this mysterious thraldom, and Victoria from Blood. Her

great prosperity and that of her sister began from this date, and at the

beginning of the celebrated case on the part of “young Corneel” to break

the Commodore’s will the sisters suddenly took a trip to England, lest

they might be called as witnesses. It was a lucky day for them, and

their speculative career is probably now closed. This is the kind of

speculation for which women are best fitted. The introduction to this

great “deal” came through Wall Street indirectly, but it does not prove

by any means that women can be successful operators in speculative

transactions and financial investments. It simply shows that they are

excellent in adventures where their emotional feelings are brought to

bear upon the weaker characteristics of men.

------------------------------------------------------------------------

CHAPTER XLII.

WESTERN MILLIONAIRES IN NEW YORK.

EASTWARD THE STAR OF WEALTH AND THE TIDE OF BEAUTY TAKE THEIR

COURSE.—INFLUENCE OF THE FAIR SEX ON THIS TENDENCY, AND WHY.—NEW

YORK THE GREAT MAGNET OF THE COUNTRY.—SWINGING INTO THE TIDE OF

FASHION.—COLLIS P. HUNTINGTON.—HIS CAREER FROM PENURY TO THE

POSSESSOR OF THIRTY MILLIONS.—LELAND STANFORD.—FIRST A LAWYER IN

ALBANY, AND AFTERWARD A SPECULATOR ON THE PACIFIC COAST.—HAS ROLLED

UP NEARLY FORTY MILLIONS.—D. O. MILLS.—AN[**AN?] ASTUTE AND BOLD

FINANCIER.—COURAGE AND CAUTION COMBINED.—HIS RAPID RISE IN

CALIFORNIA.—HE MAKES A FORTUNE BY INVESTING IN LAKE SHORE

STOCK.—PRINCES OF THE PACIFIC SLOPE.—MACKAY, FLOOD AND FAIR.—THEIR

RISE AND PROGRESS.—WILLIAM SHARON.—A BRIEF ACCOUNT OF HIS GREAT

SUCCESS.—WM. C. RALSTON AND HIS DARING SPECULATIONS.—BEGINS A POOR

NEW YORK BOY, AND MAKES A FORTUNE IN CALIFORNIA.—JOHN P. JONES.—HIS

EVENTFUL CAREER AND POLITICAL PROGRESS.-“LUCKY” BALDWIN.—HIS

BUSINESS ABILITY AND ADVANCEMENT.—LUCKY SPECULATIONS.—AMASSES TEN OR

FIFTEEN MILLIONS.—WILLIAM A. STEWART.—DISCOVERS THE EUREKA PLACER

DIGGINS.—HIS SUCCESS AS A LAWYER AND IN MINING ENTERPRISES.—JAMES

LICK.—ONE OF THE MOST ECCENTRIC OF THE CALIFORNIA MAGNATES.—REAL

ESTATE SPECULATIONS.—HIS BEQUEST TO THE AUTHOR OF THE “STAR SPANGLED

BANNER.”—JOHN W. SHAW, SPECULATOR AND LAWYER.

Not a few Western men of wealth have in recent years taken up their

abode in New York. This is partly, and doubtless largely, due to the

influence of ladies. The ladies of the West of course have heard of

Saratoga, the far-famed spa of America, and as the fortunes of their

husbands mount higher and higher into the millions, they become more and

more anxious to see this great summer resort of wealth and fashion.

Their influence prevails, and at the height of the gay season they may

be seen at the United States or the Grand Union. They are in practically

a new world. There is the rustle and perfume, the glitter and show, the

pomp and circumstance of the more advanced civilization of the East, and

the ladies, with innate keenness, are quick to perceive a marked

difference between this gorgeous panorama and the more prosaic

surroundings to which they have been accustomed. As people of wealth and

social position, they are naturally presented to some of the society

leaders of New York, whom they meet at Saratoga, and who extend an

invitation to visit them in their splendid mansions in the metropolis.

In New York the Western ladies go to the great emporiums of dry goods

and fancy articles of all sorts, to the famous jewelry stores, and other

retail establishments patronized by the wealthy. They form a taste for

all the elegancies of metropolitan life, and this is revealed in a

hundred little ways.

They have been accustomed, for instance, to wearing two buttoned gloves,

but now, in emulation of their New York sisters, they must have them up

nearly to the shoulder. Their dresses of Western make do not bear

comparison with the superb toilettes of New York ladies, and so they

seek out the most fashionable modistes in the city, and the change in

their appearance is as marked as it is favorable. The innate refinement

and love of elegance which is so striking a characteristic in most

American women is exemplified, perhaps, in no respect more strikingly

than in their taste in dress, and the Western ladies soon require the

finest French silks for their dresses. They must have the most expensive

real lace; their toilettes must be numerous, rich, and varied, and the

refinements of other articles of dress or ornament to which American

women have attained may well astonish and even awe the masculine mind.

In a word, people of wealth are apt to be drawn to New York because it

is the great magnet of the country, whose attractive power is well nigh

irresistible. What London is to Great Britain, what Paris is to the

Continent, what Rome was in its imperial day to the Empire, what proud

old Nineveh was to Assyria, the winged lion of the Orient; what Tyre was

to old Syria, whose commercial splendor aroused the eloquence of the

Hebrew prophet—New York is to the immense domain of the American

Republic, a natural stage, set with innumerable villages, towns, and

populous cities, with mighty rivers and vast stretches of table-lands

and prairies, and far-reaching harvest fields and forests, for the great

drama of civilization on this Continent. New York has now a population

of approximately 1,500,000. By the close of the present century it will

certainly reach 2,000,000, and the next century will see it increase to

perhaps ten times that number. The great metropolis attracts by its

restless activity, its feverish enterprise, and the opportunities which

it affords to men of ability, but in the connection which I am now

considering more particularly it attracts as an enormous lode-stone by

its imperial wealth, its Parisian, indeed almost Sybaritic luxury, and

its social splendor.

New York city has more wealth than thirteen of the States and

Territories combined. It is really the great social centre of the

Republic, and its position as such is becoming more and more assured. It

will yet outshine London and Paris. Go where we may throughout the

country, see what cities we may, there is always something lacking which

New York readily affords. There is emphatically no place like New York.

Here are some of the finest stores in the world, and mansions of which a

Doge of Venice or a Lorenzo de Medici might have been proud. Here are

the most beautiful ladies in the world, as well as the most refined and

cultivated; here are the finest theatres and art galleries, and the true

home of opera is in this country; here is the glitter of peerless

fashion, the ceaseless roll of splendid equipages, and the Bois de

Boulogne of America, the Central Park; here there is a constant round of

brilliant banquets, afternoon teas and receptions, the germans of the

elite, the grand balls, with their more formal pomp and splendid

circumstance; glowing pictures of beautiful women and brave men

threading the mazes of the dance; scenes of revelry by night in an

atmosphere loaded with the perfume of rare exotics, to the swell of

sensuous music. It does not take much of this new kind of life to make

enthusiastic New Yorkers of the wives of Western millionaires, and then

nothing remains but to purchase a brown stone mansion, and swing into

the tide of fashion with receptions, balls, and kettle-drums, elegant

equipages with coachmen in bright-buttoned livery, footmen in top boots,

maid-servants and man-servants, including a butler and all the other

adjuncts of fashionable life in the great metropolis. It is of interest

to glance at the career, by the way, of some of the more famous

financial powers of the West, who have either settled of recent years in

New York or who are frequently seen here.

[Illustration:

_C P. Huntington_

]

COLLIS P. HUNTINGTON.

One of the financiers who may be seen daily entering the palatial Mills

Building in Broad street, New York, is a tall, well-built man, with a

full beard tinged with gray, a square, resolute jaw, and keen

bluish-gray eyes. Though now in his 66th year, his step is light and

quick, betokening good habits in his youth and due care of himself in

his later years. He is one of the best known of American financial

chieftains. It is Collis P. Huntington. He is a born leader of men. As a

boy of 15 he came to New York, with scarcely a penny. Now he is worth

thirty million dollars. He was born October 22d, 1821, at Harwinton, in

Litchfield county, Connecticut. He numbers among his ancestors Samuel

Huntington, one of the signers of the Declaration of Independence, who

was also President of the Continental Congress and Governor and Chief

Justice of Connecticut; and also Bishop F. D. Huntington and the artist

Daniel Huntington. C. P. Huntington’s father was a farmer and small

manufacturer, in his fourteenth year Huntington left school and asked

his father to give him his time on condition that he should support

himself. He came to New York in the following year, 1836, and bought a

small bill of goods, a neighbor of his father’s becoming his surety. At

that early age he showed the same shrewdness in business, the same

energy and resolution in carrying through his projects as he did in

later life. At twenty-three he settled at Oneonta, Otsego county, New

York, as a general merchant. In 1844 he married a Connecticut girl, who

proved a valuable helpmeet in days when it was never supposed he would

ever attain any particular financial distinction. In March, 1849, he

sailed for San Francisco, going by way of the Isthmus, and following a

consignment of goods which he had made in the previous year. He was now

in his 28th year, and a future full of marvellous success awaited him.

This was not immediately apparent, however. Business success is not

usually attained without long and persistent efforts, and in spite of

repeated discouragements. He found San Francisco at that time a resort

merely for the idle and the reckless. It did not prove at this

particular juncture a satisfactory field for his business; his funds ran

low, and he determined to go to Sacramento. He earned his passage money

thither on a schooner, by helping to load her for a dollar an hour. In

Sacramento he started in business, after a time, with a small tent as a

store, and a limited supply of general merchandise as his stock in

trade; he worked hard; he labored early and late. Here he met Mark

Hopkins, and they formed a business co-partnership, which proved so

successful that by 1856 the firm was known as one of the wealthiest on

the Pacific slope. California, however, was isolated. It was a long trip

over the plains by wagon trains to the nearest point of commercial

importance east of the Rocky Mountains, and the ocean voyage by way of

the Isthmus of Panama was long and slow. A railroad to the East was

imperatively needed, in order to develop the enormous resources of the

broad territory lying west of that natural barrier known as the Rocky

Mountains. But how to bring it about was the question. Few were daring

enough to seriously grapple with the problem. It was in the store of

Huntington & Hopkins that the project was first considered with a

resolute purpose to push it through. The Civil War, however, broke out

just then, and the first gun fired on Fort Sumter seemed like the knell

of this great project. Collis P. Huntington was undaunted. “I will,” he

says, “be one of the eight or ten, if Hopkins agrees, to bear the

expense of a careful and thorough survey.” The result was that seven

gentlemen agreed to defray the expense of such a survey. Two

subsequently ceased to give their aid. The remaining five organized the

Central Pacific Railroad Company. Mr. Huntington at once went to

Washington to secure Government aid in constructing the first

trans-continental railway. He was successful. When the Pacific Railroad

bill was passed he telegraphed to his partners with characteristic humor

and terseness: “We have drawn the elephant.” He at once came to New York

to form a syndicate to take the bonds. Many at such a time would have

gone to speculators begging for aid and pledging his bonds for railroad

material with which to commence the great line. He did nothing of the

kind. The French saying, “_Toujours de l’audace_,” seemed to be his

maxim. He was always bold. He coolly announced that he would not dispose

of his bonds except for cash, and, strange as it may have seemed, he

capped the climax by refusing to sell any at all unless $1,500,000 worth

were taken. He was again successful, but the purchaser required more

security. Thereupon Mr. Huntington made himself and his firm responsible

for the whole amount. It was thus on the pledge of the private fortunes

of Mr. Huntington and his partner that the first fifty miles of the road

were built. After a time, however, funds ran low; it seemed inevitable

that the number of laborers should be reduced. Certainly more means were

necessary. At that time the Government held the first mortgage on the

road, and no Government subsidy bonds were obtainable until a section of

fifty miles of the road had been completed. Huntington and Hopkins

stepped into the breach, and agreed to keep five hundred men at work for

a year at their private expense, and three other gentlemen agreed to

furnish three hundred men for the same length of time. This resolution

ended their troubles; the road was built through to a connection with

the Atlantic seaboard, and trans-continental transportation became a

fact and no longer a dream. Mr. Huntington came to New York again, and

here he now resides in a fine mansion on Park avenue. He is still a hard

worker, but after business hours he dismisses as far as possible the

cares of his financial functions. Among the railroad systems controlled

and operated by him and his associates, the executive conduct of which

is largely directed by himself, are the Central Pacific, the Chesapeake

& Ohio, the Trans-Mississippi roads, and the Southern Pacific, making a

total of nearly eight thousand miles of line. He is also heavily

interested in roads in Mexico and Central America and steamship lines

plying to the Chesapeake Bay, to Brazil, China and Japan and other parts

of the world. Directly or indirectly he has thirty thousand men under

him. In business he is an autocrat; his manner is quick and decisive; he

is direct in his speech, and expresses himself with force when he says

anything. He also knows when silence is golden. He is a good story

teller, and has a large fund of anecdotes; he has original wit, a store

of quaint, homely sayings, which are often singularly apt. Sitting in

his office chair, with a black skull cap, which he usually wears in

business hours, pushed back on his head, he has an open, jolly,

unassuming look, and the stranger would hardly take him for one of the

uncrowned financial kings of this country. He is one of the few men in

this country who have shown themselves more than a match for Jay Gould.

[Illustration:

_Leland Stanford._

]

LELAND STANFORD.

Leland Stanford, one of California’s United States Senators, is worth

from thirty to forty million dollars. He was born in Albany county, New

York, March 9, 1824. He received an academical education and entered a

law office in Albany in 1846, and, after three years’ study, was

admitted to practice law in the Supreme Court of the State of New York.

He removed to Port Washington, in the northern part of Wisconsin, and

there engaged in the practice of his profession for four years. In 1852

fire destroyed his law library and other property, whereupon he went to

California and became associated in business with his three brothers,

who had preceded him in seeking fortune on the Pacific Slope. His first

business venture was in Michigan Bluffs, but in 1856 he removed to San

Francisco to engage in business enterprises on a large scale. His

business at one time, it seems, was in oil, and, later, in various

manufacturing and agricultural ventures. He was elected Governor of

California in 1861. He insisted upon being inaugurated as provided by

the State constitution, at the Capitol building, though the locality was

under water by reason of floods. He became President of the Central

Pacific Railroad and superintended its construction over the mountains,

building 530 miles of it in 293 days. He was elected as a Republican to

the United States Senate in 1884, and his term does not expire till

1891. He is still the President of the Central Pacific Railroad and of

several of its associated lines, while he is a director in others. He

owns a princely domain in California, known as Palo Alto ranch,

comprising six thousand acres, which he has devoted to the site of an

Industrial University for both sexes, as a memorial of his only son, who

died some years ago. He has richly endowed this great educational

institution, setting aside for it about ten million dollars. Here both

sexes will be fitted to fill a useful part in the battle of life; they

will be instructed in mechanical arts and agricultural as well as in

other branches of education, which will start the student fairly in

life. He found, as President of the Central Pacific Railroad Company,

that many bright young men of collegiate education were not specially

fitted for any particular work in the great school of life, and those

who are familiar with great cities know that thousands of men have

really wasted their years in obtaining a collegiate education which

never enabled them to earn more than barely enough to live upon. They

become, in many cases, ill-paid book-keepers, entry clerks, salesmen,

car conductors, postmen, and sometimes find themselves obliged to turn

their hands to hard manual labor, or else starve. Senator Stanford’s

beneficent plan, then, of giving the young such a practical education

that they can face the world with confidence and with a reasonable

certainty of remunerative employment, or with the requisite knowledge to

guide them in enterprises of their own, is worthy of the highest

commendation, and his example is likewise worthy of the emulation of

gentlemen with millions to spare in all parts of the country. If Samuel

J. Tilden had endowed a university of this kind he would have been a far

greater benefactor in many respects than he has undoubtedly shown

himself in his will. Governor Stanford’s great ranch, which is to become

a seat of learning, is situated about 32 miles from San Francisco, and

promises to be the educational Mecca of the Pacific Slope. His fortune,

notwithstanding this princely donation, is still enormous, amounting to

twenty-five or thirty million dollars.

DARIUS O. MILLS.

One of the most notable figures daily seen on Wall Street is a man about

five feet nine inches in height, with handsome, florid features and a

firm jaw, indicative of great decision of character. He is now about

fifty eight years of age, and is as industrious and energetic as when he

began his eventful career. It is Darius O. Mills. He is one of the most

astute and one of the boldest financiers in this country. He has the

courage of a Richelieu, joined to that famous statesman’s caution and

conservatism when the march of events requires it. Of the California

magnates he is one of the most notable. In New York he has taken the

highest rank, socially and financially, of them all. As I have

intimated, he is bold, and yet, on occasion, he wisely acts upon the

maxim that discretion is the better part of valor. He was born in a

small town on the Hudson River, in this State. Before the California

gold excitement broke out he and his brother were in the hotel business.

He has always been dependent on his own exertions; he has fought his way

to opulence, such as a prince might envy, by his own keen intelligence

and undaunted enterprise. He began in humble circumstances. To-day he is

worth twenty millions. He is a permanent resident in the metropolis, and

is regarded as one of New York’s best and most influential citizens.

[Illustration:

_D. O. Mills_

]

He laid the foundation of his vast wealth in California. On the breaking

out of the gold fever he and his brother left their native town for the

fields of adventure, where men of shrewd foresight and determined

courage achieved a success stranger than the wonders of a Persian tale.

The brothers did not trust to luck. They chartered a sailing vessel,

loaded it with commodities likely to be in demand among the miners, and

then sailed for the Golden Gate _via_ Cape Horn. After a narrow escape

from shipwreck they arrived at San Francisco and at once opening a

store, they sold their merchandise to the eager miners at fabulous

prices. D. O. Mills rapidly accumulated wealth, and when Wm. C. Ralston

organized the Bank of California, he became its President. During the

time that Mr. Mills gave his attention to the Bank of California it was

the most successful institution of a similar character in this country,

but when he decided to remove to New York his connection with the great

bank was severed. Disaster came under Ralston’s administration. Mr.

Mills had continued to be a stockholder, and when a financial hurricane

struck the bank, he was quick to go to the rescue. He contributed

largely to provide for the bank’s losses and to reorganize it with new

capital, which placed it again among the foremost financial institutions

of the United States. The credit of this Herculean achievement was due

more to him perhaps than to any other man. His social position is

deservedly high. His son married the daughter of a member of the

historic Livingston family, one of the oldest and most illustrious in

this country. His daughter married the successor to the editorial chair

of Greeley, Whitelaw Reid, whose able management of the _Tribune_ has

established a world-wide fame for that gentleman. These marriages of his

children strengthened his already strong position socially, which he

soon won despite the fact that he was a newcomer. Mr. Mills is

distinguished for a princely liberality. He believes in distributing his

property generously while living. He has built, therefore, one of the

finest residences in this city for his son; he bought for his daughter,

Mrs. Reid, at a cost of four hundred thousand dollars, the Villard

palace on Madison Avenue. His other acts of generosity are numberless.

He himself lives in fine style. He paid the highest price ever paid per

foot for a residence in New York when he bought from D. P. Morgan, for

one hundred and seventy-five thousand dollars, that gentleman’s

residence directly opposite St. Patrick’s Cathedral on Fifth Avenue.

This mansion occupies two lots on a Columbia College leasehold. After

purchasing it Mr. Mills gave a _carte blanche_ order to a noted

decorator of New York, and during a trip to California the work of

decoration was done. On his return he at once took possession of a

mansion of which a Shah of Persia might be proud. He was delighted with

all that had been wondrously wrought by the beautifying touch of

splendid art; with the richly carved wood work, the gorgeously

picturesque ceilings, the inlaid walls and floors, and the _tout

ensemble_ of Oriental magnificence. His contentment was complete, but a

surprise awaited him. It was the decorator’s bill for four hundred and

fifty thousand dollars. This, it is said, slightly disturbed his

serenity. It caused him to look with a critic’s eye on the splendid

decorations which constituted a study in the fine arts at such high

rates of tuition. As with the eagle eye of a connoisseur, he perceived

that the bill was altogether too high. He succeeded in getting, however,

only a slight reduction. Moral: Don’t give carte blanche orders to

decorators any more than you would hire a cab without first making a

bargain.

Mr. Mills came to New York to take up his residence some years ago, with

a fortune of many millions of dollars. He is particularly worthy of a

place in this book, as from the time of making his home here he has been

prominently identified with Wall Street. Soon after taking up his

residence here he became acquainted with William H. Vanderbilt, at whose

suggestion he invested very heavily in Lake Shore. He made by this

operation no less than $2,700,000. This large sum he devoted to the

construction of a palatial building on Broad Street, which bears his

name, and is probably the finest and most complete structure for office

purposes in the world. It has a frontage of 175 feet on Broad street, 30

feet on Wall Street, and 150 feet on Exchange place, and is nine stories

high. Thirteen buildings were torn down to secure its site. It was begun

in May, 1880, and was practically finished in one year, the men working

night and day. It is built largely of Philadelphia brick, with

Belleville brown stone trimmings. It is otherwise ornamented with terra

cotta, and Corinthian and Renaissance capitols, and red Kentucky marble

pillars. On the first three floors the wainscoting is of Italian marble,

and there is marble tiling throughout the building; the woodwork on the

first two floors is mahogany, and on the upper floors it is reeded and

panelled cherry. There are 400 offices, and the tenant population is

1,200. For weeks at a time the total daily average number of persons

carried on six elevators has been no less than fifteen thousand. The

working force necessary to look after this magnificent structure numbers

60 person. The net annual rental is about $200,000, the highest

individual rent paid being $20,000.

Mr. Mills’ exceptional skill as a financier has won him a high

reputation in New York, and his counsel on vexed and abstruse questions

has often been quoted by powerful corporations. He is a director in

several railroads, including the Erie, and it is understood is

interested in mining enterprises. In the battle of life he has achieved

signal success. His career is a fitting lesson to future generations.

[Illustration:

_Chas Crocker_

]

CHARLES CROCKER.

Charles Crocker is now about 65 years of age, and lives in New York

city. He was born in Ohio in humble circumstances, and early in life

followed for a time the occupation of blacksmith. He used to get up at

four o’clock in the morning and work hard all day. It was a hard life,

and he engaged, after a time, in other occupations, gradually, in the

meantime, by thrift and industry, amassing a sufficient sum to enable

him to go to California, in the height of the mining fever, and

establish a general store in Sacramento. He met with considerable

success in trade, and when the project was formed to build the Central

Pacific Railroad, he lent his aid to the enterprise, and has ever since

been identified with that corporation. He is now its Secretary and

Vice-President, and is also interested in associate roads.

MARK HOPKINS.

Mark Hopkins died some years ago, worth fifteen million dollars. He was

from Massachusetts, and went to California on the breaking out of the

mining furore, and settled in Sacramento, where he soon engaged in the

hardware business with C. P. Huntington, with whom he also embarked in

the ambitious enterprise of building the Central Pacific Railroad. He

won a large fortune in his railroad operations. His widow has a

magnificent estate at South Great Barrington, in Massachusetts.

We come now to the famous mining princes of the Pacific Slope. The

discovery of gold in California, and of the rich deposits of the

precious metal elsewhere on the Pacific Slope, led not merely to the

accumulation of vast individual fortunes; it sent the currents of new

life humming through the veins, so to speak, of the entire country; it

stimulated trade; it awakened new life; it gave a tremendous impulse to

a thousand industrial enterprises; it sent the Republic forth as a

conquering hero of commerce, leveling all obstacles and laughing at

difficulties; tunneling mountains, building railroads whose very rails

seem to catch a golden gleam from the rich traffic; spanning great

rivers with majestic bridges, building ships and steamers; setting vast

manufactories to awake the solitude of primeval forests with the thunder

of machinery, the ringing of hammers and the thousand voices of labor;

building villages, towns and cities with such marvelous rapidity as to

suggest the touch of the magical wand of genii. With the treasure taken

from her bosom nature herself was subdued; an electric thrill stirred

the older centres of population as it led the new sections, and the

Republic has ever since, regardless of those periodical reactions known

as panics, kept its onward march in fulfillment of that far-sighted

prophecy that the star of empire takes its way to the West, and that on

the broad stage of the American Continent the Anglo-Saxon race will win

far greater triumphs than it has ever achieved in its amazing career

since it sprang from the barbarism of the Northern wilds of Europe to

take its proud station as the dominant family on this globe. The rich

gold mines, and later the great silver mines, have given this country a

feverish dream of speculation, in which gigantic fortunes have been

amassed. The richest deposit of silver in Nevada, if not in the world,

was the Comstock lode on the east side of Mount Davidson, in Storey

county, and partly under the towns of Virginia and Gold Hill. At one

time its ores contained one-third in value of gold and two-thirds of

silver. The lode has been traced on the surface some twenty-seven

thousand feet, and has actually been explored about twenty thousand

feet, within which space most of the larger mines are located. The lode

has been opened to the depth of about twenty-two hundred feet. The

various mines on this lode have given a total return, it is estimated,

of some three hundred millions of dollars.

[Illustration:

_J W. Mackay_

]

One of the most famous of the bonanza magnates is John W. Mackay. His

rise to financial power reads like a romance, and yet his astounding

success was by no means attained as by turning over a hand. He believed

in the richness of the bonanza field; he and a number of associates

purchased the controlling interest in the corporations which owned it.

Then began the grand hunt for the ore body. Others had tried to find it,

but had given it up in despair. The idea that the property was worth

working was laughed to scorn. The men who believed in it persisted in

spite of all discouragements, which were many; they spent about half a

million in prospecting. They made in 1875, after long and trying

efforts, the famous strike which astounded the business world, and

stirred up a speculative fever which did not die out for years. This

plain, quiet, unpretending financier was born in the humblest

circumstances in Dublin, Nov. 28, 1835, and is consequently in his 52nd

year. He came to this country very early in life, and as a boy worked

for Wm. H. Webb, the once famous shipbuilder of New York. In 1852 he

went with a party to California, sailing in one of the ships of his

former employer. It has been said that previous to this he kept a liquor

saloon in Louisville. Like so many others, however, he caught the gold

fever, and on arriving in California he immediately engaged in placer

mining in Sierra county of that State. He met with the usual

vicissitudes of fortune, but at last a fair degree of success rewarded

his untiring efforts, and he thereupon went to Virginia City, Nevada,

and started a tunnel in what was called the Union ground, north of the

Ophir mine. The speculation was disastrous. He lost all he possessed,

but he was not conquered. He secured work as a timber man in the Mexican

mine, and he engaged also as a miner, swinging the pick and shovel, and

little dreaming that this would be told as an interesting circumstance

in a career which was to be successful beyond his wildest hopes. He

labored industriously; he saved his money, and he watched his

opportunities, which very few people do. He got his first important

start in connection with the Kentuck mine in Gold Hill, but he had

frequent fluctuations of fortune until finally, in 1863, he formed a

mining co-partnership with J. M. Walker, a brother of a former Governor

of Virginia, and subsequently the firm was strengthened by the addition

of Messrs. Flood, O’Brien, and Fair. The firm struck their first great

success in 1865-67 during their control of the Hale & Norcross mine.

Later came the celebrated California and Consolidated Virginia mines,

the wonders of the mining world. He was married in 1867 to the daughter

of Daniel Hungerford. Hungerford, by the way, was a Canadian, who came

to New York many years ago and lived in West Broadway, where he followed

the occupation of a barber. When the Mexican war broke out he enlisted,

and at the close of that war he returned to his family and his previous

occupation. When the famous Colonel Walker raised a force in New York

for the invasion of Nicaragua, Hungerford, who seems to have been of an

adventurous spirit, enlisted, and barely escaped the fate of Walker and

those of his force who were captured and shot by the Nicaragua

authorities. He escaped by fleet running, and again returned to his

family and tonsorial profession, dying soon after his return. His

daughter married a physician, with whom she went to Nevada. He died and

left her in reduced circumstances. With the open-handed generosity

characteristic of the financiers of the Pacific Slope, a number of

wealthy gentlemen, learning of the circumstances, started a

subscription, to which Mr. Mackay made a large contribution. She called

to thank him, and the acquaintance thus begun ripened into mutual

attachment, whose happy consummation was their marriage a few years

later. Mrs. Mackay, during the last few years, has resided for the most

part in Paris and London, where she has lived on a scale of magnificence

which has dazzled and astounded foreigners. Mr. Mackay himself has

apparently little inclination for social triumphs; he is well liked

wherever he is known for his quick, genial manners, but seems to avoid

publicity. He alternates, for the most part, between New York and San

Francisco. In New York his office is at the Nevada Bank, in which he is

a large stockholder, owning, in fact, half of the stock. In recent years

he has become largely interested in a cable line to Europe, started in

opposition to other well-known lines. His fortune is estimated at twenty

millions. Mr. Mackay’s step-daughter was married a few years ago to the

Prince of Colonna, who belongs to one of the most ancient and wealthy

families of the nobility of Italy.

[Illustration:

JAMES C. FLOOD.

]

James C. Flood was once a poor boy of New York city, now he is worth

more millions than can exactly be told. He went to San Francisco in

1849, poor and friendless, and in company with the late W. S. O’Brien,

opened a liquor saloon, where he sold whiskey at 12½ cents a glass. He

drew the liquor from casks piled one upon another. In those early days

of the future queen of the Pacific Slope there were no gorgeous saloons

with tesselated marble floors, a dazzling stretch of costly mirrors, and

a gallery of rare pictures. Such resorts as Flood’s, in the slang of the

day, were termed “gin mills,” and in the man who drew whiskey from the

casks rather than tendering a heavy cut glass decanter, it would have

been difficult for the most fanciful to have recognized the future

famous man of millions. He made money and went into mining stocks. The

first great mining speculation in which Flood, with his partner,

O’Brien, embarked was in 1862, in Kentuck and the stocks of other mines

on the Comstock lode. Then they went heavily into Hale & Norcross, one

of the old time favorites. They were generally successful in these

operations, but a crowning and dazzling triumph awaited them. In

February of 1874 there were whispers that the Consolidated Virginia,

which had caused a furore some ten years previous, but had fallen off

materially, and the newer mine, the California, would soon develop rich

bodies of ore. Flood and his partners, who owned these mines, became

certain of this prospective bonanza in the following winter, and early

in 1875 came the announcement of the discovery of the fabulous ore

bodies which made the name of the Comstock lode known round the world,

and lifted the owners of the celebrated mines at once into wealth so

enormous as to make the extravagances of the Arabian Nights seem tame.

The establishment of the Nevada Bank was the idea of Mr. Flood, who is

said to possess a natural aptitude for finance. He became president of

the bank and a large stockholder in it. He is a man of compact robust

build, five feet nine inches in height, with quiet, courteous manners,

and of an energetic, self-reliant and industrious disposition. He has

had a remarkable rise, but has shown himself equal to the surprising

good fortune which has attended his strange career.

[Illustration:

JAMES G. FAIR.

]

It is of interest to recall the fact that the original Comstock

syndicate, most of whom derived such enormous wealth from the Comstock

lode, was composed of Messrs. Mackay, Flood, O’Brien, Fair and Walker.

Soon after these gentlemen became associated in their great enterprises,

Walker sold out his share of one-fifth to Mackay, for a very small

consideration, and this consequently gave that gentleman an interest of

two-fifths, against the one-fifth share held by each of the three others

in the firm, a fact which accounts for Mackay’s greater wealth. Walker,

one of the original parties in interest, afterward not only lost in

mining and other speculations the amount which Mackay had paid him for

his share, but all his other means, and was, in fact, completely

beggared, and died in an asylum for paupers. He had experienced dramatic

vicissitudes of fortune. He ought to have been worth fully twenty

millions of dollars. He died without a penny.

W. S. O’BRIEN.

W. S. O’Brien was associated with Mackay, Flood and Fair in developing

mines on the Comstock, and died in 1878, enormously wealthy. He was born

in New York, went to San Francisco in the early days of the gold

excitement, and at first kept a liquor saloon with Flood. He gradually

engaged in mining speculations, and ultimately met with such success

that he died famous as one of the bonanza kings. It is an interesting

circumstance that four Irishmen secured the lion’s share of the bonanza

millions, and they were all born poor. The harp of Tara’s halls never

was struck to so strange a roundelay as this.

JAMES G. FAIR.

James G. Fair is another of the bonanza kings who has had an interesting

career. He was born Dec. 3d, 1831, near Belfast, Ireland. He came to

this country with his parents in 1843 and settled in Illinois. He

received a thorough business education in Chicago, and at the same time

devoted considerable attention to scientific studies. On the breaking

out of the gold fever in 1849 he removed to California, settling at

Long’s Bar, Feather River, in that State. He mined on the Bar for some

time without much success, and then turned his attention to quartz

mining. Placer mining in those days was conducted in too primitive a

fashion to suit a man of his mechanical ingenuity. Placer, by the way,

is a term of Spanish origin, signifying a gravelly place where gold is

found, especially by the side of a river or in the bed of a mountain

torrent. In quartz mining, on the other hand, the metal is obtained by

smelting after crushing the rock of which it forms a part. Mr. Fair

engaged in quartz mining in Calaveras county, California, and later

became superintendent of various quartz mines in other parts of the

State. In 1855 he became superintendent of the Ophir, and four years

later of the Hale & Norcross. In 1860 he removed to Nevada and became

actively engaged in developing mines. In 1867 he formed a partnership

with John W. Mackay, James C. Flood and Wm. S. O’Brien. The firm, at Mr.

Fair’s suggestion, obtained control of the California and Sides mine,

the White & Murphy, the Central Nos. 1 and 2, and the tract known as the

Kinney ground, and it was in this rich field that the famous California

and Consolidated Virginia mines were developed, the yield of which,

under Mr. Fair’s superintendence, is estimated at about two hundred

million dollars. He began speculative buying of real estate in San

Francisco in 1858, and is now said to own seventy acres of land in

different parts of that city, constituting in itself an enormous

fortune. He was elected to the United States Senate as a Democrat to

succeed the Hon. William Sharon, and took his seat in 1881, his term

expiring March 3d, 1887. In person Mr. Fair is of about the medium

height, of compact, solid build, has handsome features, and is a man who

would be likely to attract attention anywhere. His fortune is estimated

at from ten to twenty millions.

WILLIAM SHARON.

William Sharon was one of the remarkable men developed by the mining

excitement in this country, one of the sagacious, self-reliant men who

inevitably come to the front wherever they are found. He showed his

mettle when the Bank of California was forced to suspend, and when a

commercial pall hung over San Francisco. In the midst of the frenzied

excitement he was one of the few who kept cool and never lost their

courage. The wild excitement on the Stock Exchange of San Francisco was

stopped at his suggestion that the sessions be indefinitely postponed.

Then he called a meeting of the Bank of California directors and made a

stirring appeal to them to stand by the bank in the hour of its

misfortune, and rescue the business interests of the coast from the

paralysis by which they were likely to be seized if they did not take a

resolute stand, put their shoulders to the wheel and acquit themselves

like men. He proposed that each subscribe liberally to put the bank

again in operation, and set the example by a very large

subscription—said to have been five million dollars. Others also

subscribed liberally, and to the astonishment and joy of the city the

bank again threw open its doors for business. He had some years prior to

this become connected in business with the lamented Ralston.

William Sharon was born in Ohio, and early in life began the practice of

law in Illinois. He went to San Francisco, and immediately engaged in

the real estate business, and ultimately became a very large operator in

lands, but failed, and in 1863 went to Nevada to take the agency of the

Bank of California in Gold Hill and Virginia City. The bank had large

loans out on mining property, and as the production of many of the mines

had seriously declined, Ralston grew uneasy, and was greatly relieved

when Sharon offered to become personally responsible for these loans on

condition that the bank advance him a considerable sum to be used in

contemplated mining developments, and allow him two years in which to

meet the loans. The terms were accepted. Sharon ran new drifts here and

there, and in four months, to Ralston’s amazement, paid all the loans,

and placed on deposit three-quarters of a million to his own account.

This feat drew general attention to him; he was consulted in large

operations; he became a director in the great bank. He never forgot

Ralston’s kindness to him. He assumed entire charge of the personal

affairs of Ralston after his death, and settled on Mrs. Ralston nearly

half a million of dollars. He finally entered politics, and represented

California in the United States Senate. He was a conspicuous example of

business acumen and surprising energy, as well as of becoming gratitude

to the knightly Ralston, of whom he always said: “He was my benefactor.”

WM. C. RALSTON.

Wm. C. Ralston was one of the most notable, as he was one of the most

remarkable, of all the financial giants of the Pacific Slope. He

ascended the gilded summits of financial renown, and he fell into a

shadowy valley of stern retribution and utter ruin. No man could be more

popular, none could exhibit greater daring in his business enterprises.

He was a New York boy, but drifted to the West, and became a clerk on a

Mississippi steamboat, finally became Captain, and having amassed some

money, he leaped into speculative waters, like another Leander, to swim

the Hellespont of California finance. He became associated with

Commodore Garrison and two others in the banking business in San

Francisco about 1853. Finally he organized the Bank of California, and

became first its Cashier and then its President. His rise was

marvellous. At one time he was supposed to be worth $20,000,000 or more.

He had a country seat at Belmont, in San Mateo county, that a king might

have been proud to own, and here he entertained in royal fashion. Every

celebrity that visited California was received with regal hospitality by

this monetary prince of the golden State. But as the allied armies

arrayed against Napoleon were often put to rout from being too much

spread out, so this financial Titan, combining the genius and courage of

many in one, was finally overthrown by adverse fortune, because his

enterprises were too much spread out. He had too many projects on hand

at one time. He lost heavily in mining and real estate speculations; he

lost in manufacturing enterprises. Fate struck him suddenly as with the

hammer of Thor. In one fearful storm of trouble all his misfortune

descended upon him at once. All the waves and billows of adversity broke

over him. He had no chance to recover himself. Birnam seemed all at once

to come to his financial Dunsinane. An investigation of the affairs of

the Bank of California was made by the directors of that institution.

Their suspicions had been aroused that Ralston’s administration of its

affairs was open to grave criticism. He attended the meeting of the

directors, and was coldly requested to withdraw during the discussion.

He who had been absolute in the great bank saw that his power was gone;

he stood on the brink of a moral Niagara. He left the Directors to make

the inevitable discovery that he had over-issued the stock of the bank

some $6,000,000, and crazed with grief and despair, found a suicide’s

death in the waters of the bay. He had over-issued the stock hoping and

believing that success in some one of his numerous and gigantic

enterprises would enable him to provide for it, but disaster stealing on

him suddenly, like a thief in the night, frustrated any plan of

restitution, and he paid for his fault with his life. He was a man about

five feet seven inches in height, with a rather florid complexion, a

full light brown beard and kindly brown eyes. He was once the idol of

California, and his one great fault is almost swallowed up in the memory

of his princely generosity, his hearty geniality, and his many other

engaging traits.

JOHN P. JONES.

John P. Jones has had an eventful career. He has made and lost millions.

He was worth at one time five or six millions. He lost very heavily in

railroad enterprises in Southern California. He had been engaged in

mining and had won a big heap of treasure, probably as much wealth as

any one needs, or more, but with the restless ambition of one who would

travel still higher up the glittering heights of financial fame he

sought to emulate Huntington, Stanford and others and become a railroad

magnate. It was a case of vaulting ambition o’erleaping itself and

falling on the other side. He lost almost his entire fortune, but he has

now regained his feet again and is once more wealthy. He profited by the

revival of interest in mines and mining stocks in 1886, and secured,

moreover, a considerable interest in the Alaska mine, in which D. O.

Mills was interested. He bought stocks of once famous mines at low

prices, and when the advance on the revival of public interest in mining

shares took place he was a large gainer. John W. Mackay has within the

last few years shown a disposition to lend him assistance in his

endeavors to recover his former footing. John P. Jones is one of a

number of Englishmen who have won financial celebrity in this country.

He was born in Herefordshire, England, in 1830, and came to this country

with his parents when only a year old, settling in Ohio. For a few years

he attended school in Cleveland. In the early days of the gold

excitement in California he emigrated to that State and engaged in

farming and mining. He acquired a taste for politics. He represented his

county in both houses of the State Assembly. In 1867 he went to Gold

Hill, Nevada, and has ever since been engaged to a greater or less

extent in developing the mineral resources of that State. In his earlier

days he worked hard as a miner in one of the counties of California. He

worked in placers and tunnels; he had many ups and down. He was daring

and ambitious, and sometimes seemingly reckless. He spent a million

dollars trying to develop some mines in Mono, California, and then gave

up the attempt. At one time he controlled the Ophir, Savage and Crown

Point mines on the Comstock lode; he owned large establishments for the

manufacture of ice in Georgia, Louisiana and Texas and elsewhere; he

made large purchases of land in California; he engaged in a multitude of

ambitious enterprises. He had too many irons in the fire. Misfortune did

not daunt him. Like the old hunter of tradition, his motto was, “Pick

the flint and try it again.” He may yet become a financial power again.

He has a certain readiness as a speaker; he is of large frame and not

unpleasing aspect, and his taste for public debate and the excitements

of the political arena have led him into contests for public honors

which have been successful. He was elected as a Republican to the United

States Senate in 1872, and has twice been elected, so that his term will

not expire until 1891.

R. J. Baldwin has become widely known by the sobriquet of “lucky.” He is

59 years old and was born in Ohio. His father moved to Indiana and had a

farm adjoining that of Schuyler Colfax. There he worked till he reached

his twentieth year. He married in the following year and went to a small

place in Indiana and kept a country store; he soon built canal boats to

ply between Chicago and St. Louis. He went to Racine, Wisconsin, in

1850, and engaged in the grocery business with considerable success. He

was keen at a bargain and always had an eye out for the main chance. His

so-called “luck” was in reality business skill. He went to California in

1853, after purchasing a number of horses and wagons and an ample supply

of merchandise. He found a good market for his goods in Salt Lake,

making nearly four thousand dollars on the venture, and further on he

sold his wagons and harness and made up a pack train over the mountains,

and, arriving in San Francisco, sold his teams at good prices. His trip

had been a complete success. He now went into the hotel business, and,

after selling out twice to good advantage, he formed a partnership to

engage in the brick trade, which, proving very successful mainly through

his skill in drumming up business, he decided to go into it alone. He

himself knew nothing about brick making, but he studied up the subject

and eventually became an expert. He obtained remunerative contracts with

the Government; he boarded his men and made for a time about fifteen

hundred dollars a month. He finally sold out and went into the livery

business. He made money and invested considerable in real estate. He

sold out and went to Virginia City, Nevada, at the breaking out of the

mining excitement there. At that point he started a lumber yard. He

speculated in mines and met at times with great success, but once he was

so badly worsted in this great game that he was compelled to mortgage

all of his property; but the tide turned soon and became a flood of

gold. He speculated in such mines as the Crown Point, Belcher,

Consolidated Virginia, California and Ophir. He acquired at one time the

controlling interest in the Ophir. He has speculated heavily in San

Francisco real estate, and with marked success. He erected a building

there that cost, with all its appurtenances, over three million dollars.

Part of it is used as a theatre. He bought sixty thousand acres of land

in Los Angeles county, and had practically a town of his own. He spent

about half a million dollars improving this tract, more particularly his

Santa Anita ranch of over fifteen thousand acres. His sagacity and

industry, rather than mere “luck,” have won him his fortune of ten or

fifteen million dollars.

WILLIAM H. STEWART.

William H. Stewart, another successful man of the Far West, who has

twice represented Nevada in the United States Senate, was a New York

boy, born in Wayne county in 1827. A good many New York boys have

succeeded in the West. He went to California early in 1850. In the fall

of that year, while prospecting, he discovered the Eureka placer

diggings; he built saw mills, worked claims because disgusted with

mining, went to Nevada City in the spring of 1852, and in December of

that year was appointed District Attorney, was elected to that office in

the following year, and in 1854 was appointed Attorney General,

thereupon taking up his residence in San Francisco, where, by the way,

he married a daughter of ex-Governor Foote, of Mississippi. Later he

returned to Nevada City and established a very lucrative law practice,

and remained in that county till the spring of 1860, when the furore

over the Comstock mines induced him to go to Virginia City, Nevada. He

thoroughly understood mining law, and soon had a large practice. The

large sums which his legal talents brought him were invested in mines,

and he became one of the leading operators on the Comstock lode. He

invested half a million dollars in San Francisco real estate. He

rendered important services to mining interests while in the United

States Senate, in preventing the passage of a bill providing for the

sale of all the mineral lands of the country at public auction, a

measure which it was supposed would concentrate much of the mining

property of the United States into the hands of the wealthy.

JAMES LICK.

James Lick, born in Pennsylvania in 1796, was one of the strange

characters of California. He went there in 1847, after having been a

manufacturer of pianos in this country and different parts of South

America. He took $30,000 to San Francisco, which he invested in real

estate, foreseeing that it was to become the great city of the Pacific

Slope. He bought lots by the mile. His profits were enormous. He became

one of the great millionaires of California. He set aside $2,000,000 in

1874, to be held by seven trustees, and to be devoted to certain public

and charitable purposes. In 1875 he desired to make some changes in his

schedule of gifts, and when the trustees expressed some doubts as to

their legal right to give assent, at his request they resigned. The next

year he died, and then followed a litigation by his son and other heirs,

which was finally so adjusted as to leave a large sum to be devoted to

various public and charitable projects. He left $60,000 to be devoted to

a statue of Francis Scott Key, the author of the “Star Spangled Banner.”

He was very eccentric, due, it is said, to an early disappointment in

love. He sought the hand of a miller’s daughter, but was dismissed by

the father, because young Lick did not own a mill. When he became

enormously wealthy, James Lick built a large mill, and adorned it with

mahogany and costly woods as a memorial of his youthful attachment. He

seemed to derive almost childish pleasure in contemplating this splendid

building, which would have so far outshone any that could ever have been

owned by the man who had once spurned him for his poverty. The poor

young men of one generation are often the millionaires of the next. One

of the great monuments to his memory is the great Lick Observatory.

JOHN W. SHAW.

John W. Shaw, who made considerable money in mines and mining stocks, is

one of the Western millionaires who reside in New York. He was a

superintendent of mines, and speculated on his information. He was at

one time prominently identified with the Eureka Consolidated mine. He is

supposed to be worth $4,000,000 to $5,000,000, and is now President of

the Hocking Valley Road. Messrs. Keene, Lent, Dewey, Harpending,

Verdenal and other more or less successful men well known in California,

live here. One of the distinguished lawyers of the West who have come

here to establish a practice is ex-Governor Hoadly, of Ohio. Austin

Corbin, though at one time a lawyer in Iowa, found his true field in New

York, and Alfred Sully, after amassing some means in the same State,

likewise found himself drawn to New York, and won unexpected success in

finance here.

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CHAPTER XLIII.

RAILROAD INVESTMENTS.

VASTNESS OF OUR RAILROAD SYSTEM.—ITS COST.—FALL IN THE RATE OF

INTEREST.—TENDENCY TO A FOUR PER CENT. RATE ON RAILROAD

BONDS.—EFFECT OF THE CHANGE ON STOCKS.—PROSPECTIVE SPECULATION.—SOME

SOCIAL INEQUITIES TO BE ADJUSTED THROUGH CHEAPER TRANSPORTATION.

There are, perhaps, few who distinctly realize the magnitude of the

amount of capital invested in the railroads of the United States. The

immense area over which our population is distributed necessitates a

much greater length of railroad, as compared with inhabitants, than

exists in any other nation. In 1884 we had, according to “Poor’s Manual

of Railroads,” no less than 125,380 miles of road within the United

States, which exceeds the entire mileage of Europe. This was required to

provide for the travel and transportation of about 54,000,000 of

population, while Great Britain, France, and Germany, with their

combined population of 120,000,000, had in the same year about 60,000

miles, and Russia, with some 85,000,000 of people, had only about 19,000

miles.

It can hardly be a matter for boasting that we have found it necessary

to provide such a disproportionate length of road to accommodate the

wants of trade and travel; for the more capital we have to invest in the

facilities for carriage the less we have for investment in the means for

production, and the more we have to pay for transportation service the

worse is our position for competing with other nations. This,

undoubtedly, is a much more important factor than is generally allowed

in the question of our ability to command a share in the world’s

international commerce proportioned to the extent of our population.

The cost of our railroads, as indicated by the capitalization statements

of the Companies in 1884, is represented by $3,669,116,000 in bonds and

$3,762,016,000 of stock. As shown in another chapter on “Railroad

Methods,” the actual cash outlay in construction and equipments is very

much less than these figures; but the roads aim to earn an investment

return on these enormously inflated amounts, and do so as far as they

may be able.

Elsewhere in this volume I have shown how the effort to earn dividends

upon hundreds of millions of fictitious railroad capital is imposing an

unjust tax on the people, retarding the growth of national commerce and

creating a distinct millionaire class not without danger to our

political future; and I wish here to refer to one fact from which we may

hope for some mitigation of this pernicious tendency.

Within recent years it has become very clear that a large permanent

reduction has been effected in the rate of interest on fixed capital.

Perhaps, the principal causes of this change has been (1) the high

credit of the Government, represented by a 3 per cent. rate of interest

on its loans; (2) diminution of the element of risk in our corporate

enterprises; (3) the more developed and consolidated condition of our

industry; and (4) the growth of the national earnings in a ratio

disproportionate to the new undertakings inviting capital. To such an

extent has the loanable resources of the country increased that, whereas

ten to fifteen years ago we found it necessary to borrow in other

countries a large portion of the money needed to build our railroads, we

are now almost entirely independent of European lenders, and are

beginning to invest in the construction of roads in Canada and Mexico.

Thus comes about the fact that, while the bulk of the new outstanding

railroad bonds bear interest at 6 to 7 per cent., with exceptions at 5

and 8 per cent., there is no difficulty in now negotiating the mortgages

of sound railroads at 4 per cent., and that may be safely regarded as

the future rate for all meritorious loans. It is not difficult to see to

what course of things this fact points. If new roads can be built on a 4

per cent. ratio of interest charges, then the new constructions on that

basis and the gradual replacing of maturing loans at the same rate will

very quickly establish a competition between roads thus situated and the

large mass of companies burdened with the old high rate of interest that

will bear very seriously on the latter. To a company with, say,

$40,000,000 of bonded debt, it is a matter of a difference of $800,000

per year in fixed charges whether it pays 6 per cent. interest or 4 per

cent. This difference will be so vital in cases of competition between

high rate roads and low-rate ones, that it will leave no choice, with a

very important proportion of our railroads, between facing financial

embarrassment and taking immediate steps for readjusting their debts to

the new and lower rate of interest. As an important proportion of the

original bonds issued 25 to 30 years ago at 6, 7, and 8 per cent. rate

by the older roads are now beginning to mature very rapidly, a large

extent of high-rate debt will from this time forward be transmuted into

4 per cent. bonds, which will add force to the tendency here indicated.

Some important results must follow from this new drift in railroad

investments. One of the effects would naturally be a diminution of the

current high rate of premium on the old bonds, which has become, so

adjusted as to yield, in most cases, a return of 4 to 4½ per cent. on

the market value. Holders of this class of bonds will perceive that the

companies cannot long sustain the burden of their present high rate of

fixed charges, and will soon come to discount in advance the inevitable

“scaling” of their bonds. When the railroads begin to feel the effects

of competition with the low-rate companies, they will not be slow to

adjust their finances to the new situation; neither will they be nice

about their methods of effecting such adjustments; and the rights of

creditors will be ruthlessly dealt with under the compulsion of

foreclosure; and when this compulsory stage is reached, it will not be

very long before a large proportion of the high-rate bonds is transmuted

into long 4 per cent. obligations.

This very important transition, upon a such large mass of investments,

is to be anticipated as one of the most conspicuous financial events of

the comparatively near future. One of its first effects may be expected

to appear in a certain tone of depression among investors, who will feel

themselves impoverished through the fall in the market value of their

bonds, and by the impending reduction of one-third in their income from

this class of securities. The bondholders—and, indeed, investors

generally—will be likely to reason that the reduction in the fixed

charges of the roads will leave so much more available for the

stockholders; and there would be this extent of warrant for such a

conclusion, that, as the stock of a company usually about equals the

amount of its bonds issues, any reduction in the rate of interest on the

latter would be just so much per cent. saved towards the dividend on

share capital. Under such circumstances, there would naturally be a

marked increase in the demand for railroad stocks, and a large advance

in their market value would in all probability result. To those who

contemplate investing in railroad shares, this is a consideration which,

it appears to me, should claim their consideration.

It would seem probable that, in the process of conversion here

foreshadowed, there are the elements of an era of unusual speculative

activity at a period not very remote. That speculative movement may be

expected to consummate and finally adjust the change. Naturally, such an

excitement would tend to produce a great inflation in the price of

stocks (as distinguished from bonds); the final stroke of adjustment,

however, would come ultimately through the construction of new competing

roads, which would take out of the net earnings of the roads as much as

had been saved by the reduction of interest on their debts, thus leaving

the dividend resources where they stood before the change. The final

issue of this transition, therefore, would be to give the public at

large about the entire benefit of what the railroads saved by the

amelioration of their debt charges.

The tendency I have here aimed to foreshadow is one that must largely

tend to the public advantage. In other words, the railroads, having

reduced by 30 to 40 per cent. their interest charges, will be in a

position to perform their services for correspondingly lower charges.

This will be an invaluable advantage to all our industries, and

especially to such as have to deal with bulky products, a considerable

portion of the costs of which consists of charges for transportation,

and the working class, who constitute the bulk of our consumers, will be

especially benefited.

In another chapter I have shown how the overcapitalization of our

railroads has caused a false and unjust distribution of wealth, and

burdened our industries with transportation charges which are a serious

obstacle to our national progress. The tendency above delineated shows

how seriously the natural laws governing the distribution of wealth

provide an ultimate remedy for such violations of these laws. The

railroad capitalists who have made their millions by providing railroads

at such an inflated cost are now faced with the certain prospect of a

loss of one-third of their income from their investments; and that

deduction will have to be distributed among the community at large in

the form of cheaper carriage.

This is but a repetition of what we find so many times in the history of

nations, that when any important class exacts, by some artificial

process, a vast amount of wealth that does not naturally and justly

belong to it, it ultimately finds the earning capacity of its

accumulations declining. This is one among the many reasons why a low

rate of interest is apt to prevail in countries where privileged or

aristocratic classes have absorbed an undue proportion of the national

wealth.

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CHAPTER XLIV.

THE SILVER QUESTION.

ITS FUNDAMENTAL IMPORTANCE.—DANGERS OF NEGLECTING IT.—ATTEMPTS AT

EVASION.—HOW IT MUST BE FINALLY MET.—SILVER PAPER CURRENCY SCHEMES,

AND THEIR FUTILITY.

Of all current public questions, I know of none that so vitally affects

the future of our financial interests as this one—what shall be the

status of silver among the world’s currencies? At the present time,

about one-half of the world’s metallic money consists of silver, and the

other half of gold. It is clear that silver cannot maintain its

necessary function as money unless it is invested with stability of

exchangeable value. Such stability it cannot possess without the

intervention of a conventional arrangement which, with all the force of

a uniform law, makes a given weight of silver virtually exchangeable for

a given weight of gold. This principle once established, and silver

bullion being made convertible into silver coin at the mints of the

chief nations on demand, it follows that the bullion value of silver

must constantly conform closely to its value as coin, and the stability

of the value of silver coin would thus be insured.

The difficulty has been that, owing to petty jealousies and prejudices,

Governments have hesitated to act with the unanimity that is necessary

to an efficient conventional arrangement. Each one has preferred that

others should take the responsibility of free coinage; and the result

has been that unrestricted coinage has been adopted only by those

nations which happened to be most imperatively committed to the

necessity of protecting their silver circulation. Those nations were

comprised in the international combination known as “The Latin Union.”

That Union was found competent to take care of all the new supplies of

silver, so long as the principle of free coinage was maintained and the

value of the metal was kept uniform under its operation. In an evil

hour, however, certain German theorists persuaded Chancellor Bismarck to

commit Germany to the demonetization of silver. The large supply of the

metal thereby suddenly thrown into the mints of the Union nations

alarmed that combination, first, into a limitation of their coinage of

silver, and, finally, into a suspension of it. The coinage demand for

silver being thus cut off, the price of silver bullion was cut loose

from the relative legal valuation between silver coin and gold, and was

left to drift with the variations in the commercial demand, and to

decline in consequence of an excess of supply over demand. This is a

brief explanation of the causes of the present depreciation in the value

of silver.

I know of no way of repairing the value of that metal other than by

establishing an international union, similar in its objects and

conditions to the now virtually defunct Latin Union, but embracing a

wider range of Governments than that combination did; the co-operation

of the United States, England and Germany being especially important.

Here I may perhaps be permitted to republish a series of questions

propounded by the New York _Daily Commercial Bulletin_, in October last,

with my answers appended, as briefly expressing the conclusions I have

been led to form on this question:

QUESTIONS.

I. Would the stock of gold in the world afford a basis broad enough to

meet the banking and commercial operations of Europe and the United

States, without the co-ordinate use of a properly regulated silver legal

tender?

II. Would you favor an International Coinage Union, embracing the United

States and the leading European Governments, based upon a uniform

valuation of silver as compared with gold, and binding each member to

coin on demand all silver presented at its mints and to make such coin a

legal tender?

III. Supposing the ratio of valuation adopted by such a Union to be the

present most general one of 15½ to 1, do you see any reason why the

obligation of all nations in the Union to convert silver bullion into

legal tender coin at that rate should fail to restore silver to its

former value of about 60 pence per ounce?

IV. Would the suspension of the coinage of the Silver Dollar be

judicious, or necessary, or effectual, as a means of inducing European

Governments to join in an International Coinage compact?

V. Are there any important reasons connected with the finances of the

United States Government, with our currency system, or with the

prospective trade of this country, why the coinage of the Standard

Dollar should be suspended?

IV. Do you favor the immediate suspension of coinage of the Silver

Dollar?

REPLIES.

1. Possibly the existing stocks of gold in Europe and America might be

sufficient to serve the purposes of banking reserves and for

transmission in the international exchanges; but it is impracticable to

use such a valuable metal to the extent required for the purposes of

active circulation, and this creates a necessity for a silver legal

tender coin for the retail transactions of business. For this reason I

regard the use of silver, co-ordinately with gold, as an indispensable

element in the world’s currency.

2. I regard an international union as absolutely necessary for

maintaining the joint use of gold and silver, if the relative value

between those metals is to be steadily maintained. If a uniform value of

silver were adopted by members of such a union, and if the mint of each

nation were bound to coin all silver brought to it, and the coins were

made a legal tender, it appears to me that this would establish a

uniform value for silver bullion the world over, on a parity with the

legal valuation of silver coin; and this conventional value of bullion

would be preserved as long as the union should be continued. Even the

limited international arrangement known as the Latin Union sufficed to

keep silver at about 60 pence per ounce, until its members, taking

fright by the demonetization of silver by Germany, stopped the coinage

of silver; when, the conventional support being withdrawn and the

coinage demand suspended, bullion fell to its value as a mere commodity.

This shows how effective the union principle is, and what becomes of

silver without it.

3. If an international union were to fix the value of the two metals at

15½ weights of silver to 1 of gold, the rate now general in Europe, and

the members of the union were compelled to coin it on demand at that

rate, then the free convertibility of bullion into coin would

necessarily make the coin and the bullion of equal value, except the

slight difference that might arise from coinage charges; which is

tantamount to making silver worth about 60 pence an ounce, or its former

value.

4. In view of the differences of opinion in Europe on the standard

question and the strong prejudices in England in favor of the gold

standard, it appears to me more than doubtful whether any step will be

taken on this subject until those countries are made to carry the

burthen of the large surplus of silver that we are now coining. But with

25 to 30 millions of bullion of our silver going thither every year, the

effect would be so serious upon Asiatic trade and upon the immense

silver circulation of the Latin nations, that it seems certain they

would soon become willing to assume their share in restoring silver. At

any rate, it is a proper and necessary compulsion for us to apply.

5. The Government is very closely threatened with a suspension of gold

payments, if the coinage is continued. We have already seen a point at

which the Treasury had to negotiate with the banks for six millions of

gold to avert that catastrophe; and it is only a thin margin of a very

few millions that separates us from such a condition all the time. Of

course, if the Government suspended coin payments, gold would be apt to

go to an indefinite premium; with the consequence of a rush of

greenbacks into the Treasury for redemption and a depreciation of such

paper as is redeemable in silver to the purchasing power of that coin.

In my view, these dangers are much nearer than is generally supposed;

and it is a most unjustifiable policy that needlessly perpetuates this

state of things.

6. For the reasons assigned in my other answers to your inquiries, I

regard the suspension of the coinage of the the silver dollars as to the

last degree imperative. And the suspension should be both total and

unconditional. Either a partial or a temporary suspension would fail

equally to avert the home dangers with which we are threatened, and to

bring about that European action which is indispensable to a sound and

permanent settlement of the question.

So long as there was no efficient conventional arrangement for

maintaining the value of silver, no nation can safely continue its

coinage, because, in so doing, it was increasing its stock of currency,

the future value of which could not be depended upon, and which might

easily become a source of embarrassment and injustice between citizen

and citizen, between debtor and creditor. In our country, however, such

was the political influence of the silver-producing States that they

easily induced Congress to order the coinage of not less than

$24,000,000 per annum of standard silver dollars. The effect of this has

been, undoubtedly, to somewhat check the decline in silver bullion; but

at the expense of the artificial addition already of $230,000,000 of

badly depreciated legal tender to our circulating medium. Our whole

currency system has thus been vitiated; for our $680,000,000 of paper

money may be redeemed in silver; and we are thus exposed to the very

gravest dangers, in the event of anything causing an important drain of

gold to Europe. That the coin thus issued was not really needed for the

purposes of circulation is demonstrated by the fact that it has been

found impossible to get more than one-third of it into circulation. In

order to obviate this difficulty, various devices have been introduced

for keeping the coin in the Treasury and issuing against it paper

certificates of small denominations. The most ingenious of these

contrivances was the one proposed by Hon. A. J. Warner, of Ohio, and

pressed on the Government for its endorsement. In September last I took

occasion to publish certain objections to Mr. Warner’s scheme, which was

finally rejected by the Silver party; and, with that rejection, there is

probably an end to all proposals for creating a purely silver paper

currency. As a brief exposition of one phase of this controversy, it may

perhaps be permissible to reproduce here the views then expressed:

Mr. Warner’s measure virtually concedes that the coinage of the

silver dollar has already been carried to a point that threatens

serious danger to the currency system of the country, and,

consequently, to the just relations between the creditor and

debtor classes. This confession from a representative of the

Silver party does not come a day too soon; and it would be

welcome, were it not accompanied with proposals that would

aggravate the evils which need to be remedied. Let us briefly

examine Mr. Warner’s plan.

First, it discontinues the current monthly coinage of silver

dollars required under the existing “Bland Act.” 2. It provides

that, in lieu of this current coinage, holders of silver bullion

may deposit any amount thereof in the United States Treasury. 3.

It requires that, against such unrestricted deposits of bullion,

the Government shall issue to the depositors “bullion

certificates,” expressing an amount of money equal to the market

value of the bullion at the time of its deposit. 4. These

certificates are to act as a new form of currency. The

Government could use them in liquidation of all its debts not

made expressly payable in gold; and it would be required to

accept them in payment of customs duties, taxes and public dues

generally. The national banks would be required to accept them

in payments between themselves. And, 5, the certificates are

made redeemable in lawful money, (i. e., either gold, silver or

U. S. notes), or at the option of the Treasury in silver bullion

at its current value at the time of redemption. These are the

more vital provisions of the scheme. Let us see what they

involve.

Against the whole plan there lies a very positive doubt of its

constitutionality. The Constitution empowers Congress to

authorize the coinage of gold and silver, and to make such coins

a legal tender; but there is nothing in the powers thus

conferred, nor in any powers conveyed by that instrument, that

can be construed into a right of the Government to receive

silver bullion on deposit. The Government can have no interest,

duty or function in connection with bullion, except so far as it

may be procured for the express purpose of coinage. It can have

no more power to assume the custody of bullion for the

accommodation of its producers than it has to store cotton, iron

or wheat for the convenience of the dealers in those

commodities. And when, in addition to assuming the grave

responsibilities of custodian, the Government undertakes to

issue receipts endowed with special privileges and attributes,

calculated to incorporate those receipts as an important part of

the currency system, it commits a breach of the true functions

of government and of the true constitutional limitations of

federal authority, which, it would seem, the Supreme Court

should unqualifiedly prohibit.

The provision made for the redemption of these proposed

certificates would be to the last degree objectionable. They are

payable in legal tender money, or, at the option of the

Government, in an equivalent value of silver bullion at its

current market price. If the Government chooses to redeem them

in lawful money, it exposes itself to a new and important demand

upon its legal tender notes or its gold: and as the amount of

greenbacks owned by the Treasury now runs so low as to prohibit

those notes being used for the purpose, it follows that the

redemption of the certificates would have to be made from the

Treasury stock of gold. Thus the operation of the scheme would

be to exchange the Government gold for silver bullion. What

could the silver men desire better? What could all other

interests dread more? It would be a direct step towards

incapacitating the Government for maintaining gold payments;

and, as such, would go far towards dissipating that broad

substratum of gold which is the sole means of preventing our

entire paper currency from depreciating to a level with the

bullion value of the silver dollar.