to redeem the certificates in silver bullion. What does that
imply? First, that the Treasury would have to stand the loss
upon the deposits of bullion that might arise from a fall in its
value. Take a case for illustration. A deposit is made of
1,000,000 ounces of gold at the current price of $1.10 per
ounce, the Treasury being required to issue against it
$1,100,000 of certificates. Later, when the price of silver has
fallen to say $1.05, the $1,100,000 of certificates is presented
for redemption, and 1,047,619 ounces of silver have to be
delivered, as the bullion equivalent at the current market
value. The Government thus loses 47,619 ounces of silver by the
transaction. Now, seeing what a handsome profit can be made by
thus depositing bullion at a higher price and withdrawing it at
a lower, are men so virtuous that we can depend on their not
working this Treasury silver mine to the utmost possible
advantage? With the hands of the Government thus tied, it would
be at the mercy of unprincipled speculators and could not escape
being mulcted to the extent of millions of dollars. The moment
such a bill was signed by the President, speculative
combinations would be formed with London bullion dealers; the
European stocks would be secured, and, after advancing the
price, would be sent to the United States Treasury. The next
step would be to force down the price; and then the certificates
would be presented to be redeemed by a much larger quantity of
silver than had been deposited against them. And thus the game
would go on continuously, the Government being the loser in
every transaction. A finer scheme for the benefit of speculators
could not have been conceived; but for legitimate interests, in
many ways dependent on the value of silver, nothing could be
more serious.
There is nothing in Mr. Warner’s measure to prevent the United
States Treasury from being saddled with as much of the European
stocks of silver as speculators find it to their interest to
send here, in addition to the product of our own mines; and for
such deposits the Treasury would be compelled to pay whatever
artificial price it suited the operators to determine. And what
does such a transfer involve? First, that we should have to ship
so much more gold to Europe, making the operation a virtual
exchange of Europe’s silver for America’s gold; next, that the
United States Government would thus be made to bear the sole
weight and responsibility of carrying the WORLD’S surplus of
silver; next, that, as a consequence, England, Germany, and
other nations would become still more reluctant than they now
are to negotiate for an international settlement of the silver
question; next, that the Government would be so handicapped with
its enormous load of silver as to place it at an utter
disadvantage in such negotiations; next, that the Government
would be exposed to immense losses in assuming such vast
responsibilities; and, next, that the large issues of
certificates to be made against this mass of bullion would be a
forcible and artificial inflation of the currency, which could
not fail to produce disaster to all the material interests of
the country.
Of course, such an arrangement would be all that the silver
interests could desire. For them, indeed, it would be a far
better protection than the Bland Act. But this advantage would
be only temporary; for when the scheme broke down of its own
weight, as sooner or later it must, the miners would be exposed
to ruin from the consequent derangements.
The only wholesome treatment of this question is to repeal the
Silver Coinage Act. That done, we should add $25,000,000 to our
yearly exports, instead of locking up so much of our national
product as dead capital in the Treasury; while that increase of
exports would give us a greater command of European gold and
thereby strengthen our international position in this question.
Europe, and especially England, would then be compelled to
earnestly consider measures for placing the double standard upon
a broad and lasting international basis; and as such a
disposition began to manifest itself, the silver market would so
far sympathize as to amply compensate producers for any losses
they might suffer from a temporary fall in bullion.
HENRY CLEWS.
Bad as the situation is, in respect to this vast mass of the world’s
circulating medium, yet it is far from being a hopeless one. The more
serious it becomes, the nearer will be the remedy. The derangements to
commerce and to immense vested interests must ultimately become so
serious, that the nations which now obstruct the application of a remedy
will be compelled to submit to the necessities of an imperative danger,
and the end will probably be that a coinage union will be established
between the great nations, on a basis broad enough to give stability to
this form of money beyond all possibility of future disturbance.
------------------------------------------------------------------------
CHAPTER XLV.
THE LABOR QUESTION.
HARMONY BETWEEN THE REPRESENTATIVES OF CAPITAL AND LABOR NECESSARY FOR
BUSINESS PROSPERITY.—IF MANUFACTURERS SHOULD COMBINE TO REGULATE
WAGES, THE ARRANGEMENT COULD ONLY BE TEMPORARY.—THE WORKINGMEN ARE
TAKEN CARE OF BY THE NATURAL LAWS OF TRADE.—COMPETITION AMONG THE
CAPITALISTS SUSTAINS THE RATE OF WAGES.—OPINION OF JOHN STUART MILL
ON THIS SUBJECT.—COMPELLING A UNIFORM RATE OF PAY IS A GROSS
INJUSTICE TO THE MOST SKILFUL WORKMEN.—THE TENDENCY OF THE TRADES
UNIONS TO DEBAR THE WORKINGMAN FROM SOCIAL ELEVATION.—THE POWER OF
THE UNIONS BROUGHT TO A TEST.—THE UNIVERSAL FAILURE OF THE
STRIKES.—REVOLUTIONARY DEMANDS OF THE KNIGHTS OF LABOR.—GOULD AND
THE STRIKES ON THE MISSOURI PACIFIC, &c., &c.
There is no influence to which business circles are more sensitive than
the disruption of harmony between capital and labor. Whatever affects
the productiveness of labor affects, more directly than any other cause,
the national prosperity and the welfare of all classes of society. The
value of the vast aggregate of corporate property represented on the
Stock Exchange is vitally dependent on the maintenance of such relations
between the employed and employing classes as contribute to the highest
welfare of both and to the largest possible national production; and,
therefore, whatever tends to imperil such relations becomes a source of
serious disturbance to the stock market, to financial interests at
large, and to the best interests of labor itself.
There appears to be an idea, in certain quarters, that the modern
concentration of capital into large masses has made it necessary for
workmen also to organize themselves into large bodies, sinking their
individual rights and liberties and selling their labor _en masse_. For
my part, I am unable to see the force of this reasoning, although I
cannot but respect the ability of some authorities by which it is
sanctioned. It seems to assume that large employers of labor have more
power to depress wages than smaller ones; and from this it is inferred
that it is necessary for workmen to combine to protect themselves
against this supposed increased exposure to aggression from capital. But
is either the premise or the conclusion sound? In order to concede the
assumption we must suppose that large employers can cease to be
competitors for labor; for in no other way can they depress wages. But
this can never happen; for capitalists will always produce to the
fullest extent compatible with an average rate of profit, and this
ensures the largest possible demand for labor and, therefore, the
highest possible rate of wages. If employers combined to force the rate
of wages down, as workmen do to force it up, they would undoubtedly be
able to compel a temporary reduction in the remuneration of labor.
But, of necessity, such an artificial depression of wages could only be
temporary; for what was thus taken by force from labor would make
manufacturing so unusually profitable that new capital would be
immediately attracted to it, and the consequent additional demand for
labor would necessitate an advance in wages, which the combined
manufacturers would be compelled to pay. As a matter of fact,
manufacturers do not combine to regulate wages, not only because of the
reasons just stated, but also because they know that no such combination
could be maintained in the face of the jealousies and conflicting
interests that always exist among them. If, then, it is true that
manufacturers are compelled by the necessities of competition to pay as
much for labor as it is for the time-being worth, and, if they do not
and cannot combine to depress wages, I am unable to see where arises the
necessity for the workmen to combine for the purpose of protecting
themselves against capital.
The workingmen are taken care of by the natural laws of trade far more
perfectly than they can be by any artificial arrangement; and trades
unions are simply an intrusion upon the domain of those laws, without
the power to supplement or perfect their operation, and with a certainty
of obstructing and perverting their tendency, with the inevitable result
of mischief to all parties. If the unions do occasionally get an advance
in wages, it would have come by the natural laws of competition among
the capitalists. It might be delayed for a time, but if you calculate
the loss of wages and suffering entailed by the strike, I think the
workmen would be safer in the end to wait for the natural advance. I am
clearly borne out in this view of the case of the capitalist by that
great political economist, philosopher and thinker, John Stuart Mill,
who was certainly no enthusiastic friend of the capitalist, and is an
acknowledged friend of labor as widely as his writings are known, which
is almost as extensive as civilization itself.
After laying down the principles of Socialism, Mill says:
“Next, it must be observed that Socialists generally, and even
the most enlightened of them, have a very imperfect and one
sided notion of the operation of competition. They see half its
effects, and overlook the other half; they regard it as an
agency for grinding down every one’s remuneration—for obliging
every one to accept less wages for his labor, or a less price
for his commodities, which would be true only if every one had
to dispose of his labor _or his commodities to some great
monopolist, and the competition were all on one side_. They
forget that competition is the cause of high prices and values
as well as of low; that the buyers of labor and of commodities
compete with one another as well as the sellers; and that if it
is competition _which keeps the prices of labor and commodities
as low as they are_, it is competition which prevents them from
falling still lower. In truth, when competition is perfectly
free on both sides, its tendency is not specially either to
raise or to lower the price of articles, but to equalize it; to
level inequalities of remuneration, and to reduce all to a
general average, a result which, in so far as realized (no doubt
very imperfectly), is, on Socialistic principles, desirable. But
if, disregarding for the time that part of the effects of
competition which consists in keeping up prices, we fix our
attention on its effect in keeping them down, and contemplate
this effect in reference solely to the interest of the laboring
classes, it would seem that if competition keeps down wages, and
so gives a motive to the laboring classes to withdraw the labor
market from the full influence of competition, if they can, it
must on the other hand have credit for keeping down the prices
of the articles on which wages are expended, to the great
advantage of those who depend on wages. To meet this
consideration Socialists, as we said in our quotation from M.
Louis Blanc, are reduced to affirm that the low prices of
commodities produced by competition are delusive, and lead in
the end to higher prices than before, because when the richest
competitor has got rid of all his rivals, he commands the market
and can demand any price he pleases. Now, the commonest
experience shows that this state of things, under really free
competition, is wholly imaginary. The richest competitor neither
does nor can get rid of all his rivals, and establish himself in
the exclusive possession of the market; and it is not the fact
that any important branch of industry or commerce formerly
divided among many has become, or shows any tendency to become,
the monopoly of a few.
“The kind of policy described is sometimes possible where, as in
the case of railways, the only competition possible is between
two or three great companies, the operations being on too vast a
scale to be within the reach of individual capitalists; and this
is one of the reasons why businesses which require to be carried
on by great joint-stock enterprises cannot be trusted to
competition, but, when not reserved by the State to itself,
ought to be carried on under conditions prescribed, and from
time to time, varied by the State, for the purpose of insuring
to the public a cheaper supply of its wants than would be
afforded by private interest in the absence of sufficient
competition. But in the ordinary branches of industry no one
rich competitor has it in his power to drive out all the smaller
ones. Some businesses show a tendency to pass out of the hands
of many small producers and dealers into a smaller number of
larger ones; but the cases in which this happens are those in
which the possession of a larger capital permits the adoption of
more powerful machinery, more efficient, by more expensive
processes, or a better organized and more economical mode of
carrying on business, and thus enables the large dealer
legitimately and permanently to supply the commodity cheaper
than can be done on the small scale; to the great advantage of
the consumers, and therefore of the laboring classes, and
diminishing, _pro tanto_, the waste of the resources of the
community so much complained of by Socialists, the unnecessary
multiplication of mere distributors, and of the various other
classes whom Fourier calls the parasites of industry. When this
change is effected, the larger capitalists, either individual or
joint-stock, among which the business is divided, are seldom, if
ever, in any considerable branch of commerce, so few as that
competition shall not continue to act between them; so that the
saving in cost, which enabled them to undersell the small
dealers, continues afterwards, as at first, to be passed on, in
lower prices, to their customers. The operation, therefore, of
competition in keeping down the prices of commodities, including
those on which wages are expended, is not illusive but real, and
we may add, is a growing, not a declining fact.”
One principle of the unions is exceedingly unjust to the workingmen to
the last degree. It starts with the assumption that all workmen are
equal in their capacity as to the quality of service or work and the
quantity of production; and upon this false assumption is based the
injustice of compelling all members to bind themselves to a uniform rate
of pay. A greater injustice and a more flagrant inequity cannot be found
in the whole range of the world’s social institutions; nor is the wrong
the less culpable because the members voluntarily inflict it upon
themselves; for as “no man liveth unto himself” but has dependents for
whom he is bound to do the best in his power, so no man is free to throw
away to the less industrious or less competent what his superior
abilities and industry have earned for himself.
This levelling system is not only in defiance of the law of varied
endowment which the Creator has incorporated into the constitution of
humanity, but it tends to bind into one cast-iron man the entire working
community, debarring them from all chances of progress and consigning
them to a degrading condition of semi-slavery or serfdom. Time was when
the way was clear to any workingman in this country to the highest
positions of wealth, or of social standing or political influence. As a
matter of fact, a large proportion of our present successful merchants,
and not a few even of our millionaires, are men who have risen from the
ranks of labor. The first steps in their progress were won by the
superiority of their skill or faithfulness as workmen, which qualified
them to rise step by step to higher achievements. Then, the workman was
free to rise according to his abilities and his character; he was the
free ruler of his own destiny. Now, it seems the tendency of the trades
unions is to obliterate all such distinctions and virtually debar the
workman from the possibility of earning a rank among his fellowmen
proportioned to his merits; and on this plan the American workman would
be as completely cut off from the chances of social elevation, as was
the American slave twenty-five years ago. This would be a terrible
degradation, of which every man who enjoys the rights of American
citizenship should deem himself incapable and feel ashamed.
However much political leaders, and even some who rejoice in the
reputation of economists, may feel disposed to regard these combinations
as a social necessity of the time, and an institution that has come to
stay, I cannot resist the conviction that the trades-union movement has
already seen its culmination and is destined to a steady disintegration,
unless the system is greatly modified. The principle of combination is
useless unless it can be successfully employed to compel employers to
accept the terms of the employees. In fact, it has been almost the sole
object of the unions to employ it, through the agency of strikes, to
compel the acquiescence of capital. Up to a recent period, it has been
largely successful in this sense. So long as employers could at all
afford to comply with the demands of labor, they would make considerable
sacrifices to avoid the inconvenience and loss connected with the
interruption of their operations involved in a strike. At last, however,
the workingmen advanced their demands to a pitch so seriously
threatening to industry and so vitally dangerous to the material
interests of the country at large, that employers saw, with common
consent, that the time had come when a square issue must be made with
this modern invasion on their rights.
The spring of 1886 will always be memorable, for its having brought to a
fair test the power and principles of trades-unionism. Strikes were
suddenly initiated on a stupendous scale, upon the railroads, among the
western factories, and among the larger employers in the Middle States,
partly to enforce demands for higher wages, partly to shorten the time
of work to eight hours a day, and above all, to compel employers to
recognize the leaders of the unions in determining the conditions of
employment and to submit all disputes between the two parties to
arbitration. Employers, simultaneously, but without any concert of
action, met the challenge squarely. They refused to concede the demands
made; they in many instances declined to recognize the officers of the
unions; they proceeded promptly to fill the places of the strikers with
non-union men, and refused to make formal conditions with returning
strikers; they brought to bear upon the leaders of the strikes the laws
against conspiracy; and they took the “boycotters” before the courts.
The result of this treatment was an almost universal failure of the
strikers; the declaration by the courts that the compulsory methods of
the unions are illegal, and in the nature of conspiracies; the throwing
out of employment of tens of thousands of union employees, and the
exhaustion of the funds raised by the unions for enforcing their
coercive tactics.
The result of the contest was that, within one brief month, the power of
the unions was shown to be weakness itself; employers everywhere
discovered the intrinsic importance of the combinations they had so much
before dreaded, and very many respectable and reflecting members of the
unions felt themselves discredited in the eyes of the public, while
their faith in the efficiency of their system of supposed protection was
seriously shaken. After this, if I am not seriously mistaken, employers
will find that they have much less to fear from trades-unions than they
had once supposed. A defeat so fundamental as this, is likely to be
followed by the gradual dispersion of the formidable array of united
workmen. Such a result is no more than is to be reasonably expected from
an organization based upon no great truth and no sound principle, but
resting upon popular ignorance and misconception of the natural laws
governing society.
During the progress of the recent strikes, I had occasion to make
frequent allusions to the course of events, from which I may be
permitted to make the following quotations:
(The following appeared on the 3d of May.)
“The Knights of Labor have undertaken to test, upon a large
scale, the application of compulsion as a means of enforcing
their demands. The point to be determined is, whether capital or
labor shall, in future, determine the terms upon which the
invested resources of the nation are to be employed.
“To the employer it is a question whether his individual rights
as to the control of his property shall be so far overborne as
not only to deprive him of his freedom, but also expose him to
interference seriously impairing the value of his capital. To
the employees, it is a question whether, by the force of
coercion, they can wrest, to their own profit, powers and
control, which, in every civilized community, are secured as the
most sacred and inalienable rights of the employer.
“This issue is so absolutely revolutionary of the moral
relations between labor and capital, that it has naturally
produced a partial paralysis of business, especially among
industries whose operations involve contracts extending into the
future. There has been at no time any serious apprehensions that
such an anarchical movement could succeed, so long as American
citizens have a clear perception of their rights and their true
interests; but it has been distinctly perceived that this war
could not fail to create a divided, if not a hostile feeling,
between the two great classes of society; that it must hold in
check not only a large extent of ordinary business operations,
but also the undertaking of those new enterprises which
contribute to our national progress, and that the commercial
markets must be subjected to serious embarrassments.
“From the nature of the case, however, this labor disease must
soon end one way or another; and there is not much difficulty in
foreseeing what its termination will be. The demands of the
Knights and their sympathizers, whether openly expressed or
temporarily concealed, are so utterly revolutionary of the
inalienable rights of the citizen, and so completely subversive
of social order, that the whole community has come to a firm
conclusion that those pretensions must be resisted to the last
extremity of endurance and authority; and that the present is
the best opportunity for meeting the issue firmly and upon its
merits. The organizations have sacrificed the sympathy which
lately was entertained for them, on account of inequities
existing in certain employments; they stand discredited and
distrusted before the community at large as impracticable,
unjust and reckless; and, occupying this attitude before the
public, their cause is gone and their organization doomed to
failure. They have opened the flood gates to the immigration of
foreign labor, which is already pouring in by tens of thousands;
and they have set a premium on non-union labor, which will be
more sought after than ever, and will not be slow to secure
superior earnings by making arrangements with employers upon
such terms and for such hours as may best suit their interests.
Thus, one great advantage will incidentally come out of this
crisis beneficial to the workingman, who, by standing aloof from
the dead-level system of the unions, will be able to earn
according to his capacity, and thereby maintain his chances for
rising from the rank of the employee to that of the employer.
This result cannot be long delayed, because not only is loss and
suffering following close upon the heels of the strikers, but
the imprudences of their leaders are breeding dissatisfaction
among the rank and file of the organizations, which if much
further protracted, will gravely threaten their cohesion. It is
by no means certain that we may not see a further spread of
strikes, and possibly with even worse forms of violence than we
have yet witnessed; but, so long as a way to the end is seen,
with a chance of that end demonstrating to the organizations
that their aspirations to control capital are impossible dreams,
the temporary evils will be borne with equanimity. The coolness
with which the past phases of the strikes have been endured,
shows that the steady judgment of our people may be trusted to
keep them calm under any further disturbance that may arise.
“Prior to the strike in the Missouri Pacific, Jay Gould was one
of the most hated men in the people. He was anxious to have
public respect and sympathy. He had made all the money he
wanted, and was willing to spend part of it in gaining the
respect and honor of the country. What his money could not do
for him this strike on the Missouri Pacific has done. The
sympathy and good-will which previously were with the strikers
have been shifted from them to him. There is no doubt that the
strikers selected the Missouri Pacific because it was a property
with which Gould was known to be most largely identified, and
because they thought that general execration would be poured out
on him in any event. But, instead of injuring Mr. Gould, they
have done him inestimable service.
“The timely and forcible action of Mayor Harrison, of Chicago,
will put dynamiters and rioters where they belong, and thus
divide the sheep from the goats in a very short time. If
officials would sink political bias, the country would soon be
rid of law-breakers and disturbers of the peace. As this plan of
treatment has now been adopted, it will be far reaching in its
effect, and stop mob gatherings, riotous speech-making, and
other such bad incentives, which recently have been so
conspicuous in Chicago, Milwaukee, St. Louis, and elsewhere. The
laboring classes, who are parties to the strike, will now have
an opportunity to retire to their homes, where there will be
more safety than in the streets, which will bring to them
reflection. They will then soon become satisfied that they are
the aggrieved parties, and the not unlikely result will be their
turning upon their leaders, who have deceived them.
“There have been numerous vacancies created by the strikers
voluntarily resigning. There has been no difficulty in filling
these vacancies by those who are equally capable, if not more
so, from other countries flocking to our shores. The steam ferry
between this country and Europe has demonstrated this by the
steamer just arrived in six days and ten hours from European
shores to our own. As the separation between the oppressed
operatives of the Old World and America is thus reduced to
hours, Europe will quickly send to us all the labor we need to
meet all such emergencies.
“The laboring man in this bounteous and hospitable country has
no ground for complaint. His vote is potential, and he is
elevated thereby to the position of man. Under the government of
this nation, the effect is to elevate the standard of the human
race and not to degrade it. In too many other nations it is the
reverse. What, therefore, has the laborer to complain of in
America? By exciting strikes and encouraging discontent he
stands in the way of the elevation of his class and of mankind.
“The tide of emigration to this country, now so large, makes
peaceful strikes perfectly harmless in themselves, because the
places of those who vacate good situations are easily filled by
newcomers. When disturbances occur under the cloak of strikes it
is a different matter, as law and order are then set at
defiance. The recent outbreaks in Chicago, which resulted in the
assassination of a number of valiant policemen through a few
cowardly Polish Nihilists firing a bomb of dynamite in their
midst, was the worst thing that could have been done for the
cause of the present labor agitation, as it alienates all
sympathy from them. It is much to the credit, however, of
Americans and Irishmen that, during the recent uprisings, none
of them have taken part in any violent measures whatsoever, nor
have they shown any sympathy with such conduct.
“If the labor troubles are to be regarded as only a transient
interruption of the course of events, it is next to be asked,
what may be anticipated when those obstructions disappear? We
have still our magnificent country, with all the resources that
have made it so prosperous and so progressive beyond the record
of all nations. There is no abatement of our past ratio of
increase of population; no limitation of the new sources of
wealth awaiting development; no diminution of the means
necessary to the utilization of the unbounded riches of the
soil, the mine, and the forest. Our inventive genius has
suffered no eclipse. In the practical application of what may be
called the commercial sciences, we retain our lead of the world.
As pioneers of new sources of wealth, we are producing greater
results than all the combined new colonizing efforts which have
recently excited the aspirations of European governments. To the
over-crowded populations of the Old World the United States
still presents attractions superior to those of any other
country, as is demonstrated by the recent sudden revival of
emigration from Great Britain and the continent to our shores.”
------------------------------------------------------------------------
CHAPTER XLVI.
AN IMPORTANT SYNOPSIS.
A RESUME IN BRIEF OF THE LEADING EVENTS CONNECTED WITH WALL STREET
AFFAIRS FOR SEVENTY-SEVEN YEARS.
_December, 1816._—The first savings banks in the United States went into
operation.
_July, 1820._—Great financial distress throughout America. The causes
were excessive importations and a deranged currency.
_August, 1833._—There was great commercial distress, caused by
contraction by the United States Bank. The bank defended its course on
the ground of the evident hostilities of the Administration, the public
deposits, amounting to $10,000,000, having been withdrawn by order of
the President.
_May, 1837._—In this year commercial distress prevailed throughout the
United States. On May 10th all the banks in New York city, by common
consent, suspended specie payments, banks throughout the country
following the example. In New York about 300 large failures took place.
In Boston 168 failures were reported. In New Orleans houses stopped
payment owing an aggregate of $27,000,000.
_May, 1838._—The banks of New York and New England resumed payment after
the suspension due to the panic of 1837. The Philadelphia banks resumed
in August, 1838, and in January, 1839, there was nominal resumption
throughout the country.
_July, 1840._—The bill organizing the United States Sub-Treasury became
a law. The act was repealed in 1841, but was re-enacted in 1846.
_October, 1842._—The first sub-marine telegraph cable, the invention of
Prof. Morse, was laid between Governors’ Island and the Battery, New
York, October 18th.
_January, 1844._—The first telegraph line in the United States was
erected. The telegraph was invented by Morse in 1837.
_August, 1851._—The depression of this year reached its height on the
13th. A bad credit system had been in vogue, trade with California had
not met expectations, imports had been large, exports of gold heavy,
cotton declined in Europe, the banks contracted, property was sacrificed
to raise ready money, mercantile credit was disturbed everywhere, and
distress was general in all the cities. In Wall Street large blocks of
stock were unloaded and the market was broken. Erie went from 90 to 68¾.
Later in the month money became easier, prices advanced, and the market
resumed its ordinary aspect.
_October, 1851._—Panic regarding the value of State money. The
Metropolitan Bank made war on the country banks to compel them to
deposit with it against their notes, which were extensively circulated
in the city. After receiving their bills the Metropolitan Bank demanded
their redemption in specie. This led to many suspensions. The bills were
well secured by State stocks, and the Metropolitan continued to receive
them. As brokers refused to take State moneys of any kind there was a
rush to the Metropolitan, and a panic prevailed. Ultimately the brokers
bought the bills at a discount and made large profits. Their purchases
gradually restored confidence, but not before four country banks had
failed.
_July, 1853._—A panic in the stock market in consequence of bank
contraction. The State Legislature enacted that the banks should publish
weekly, in the New York _Times_, statements of their condition. In
preparing for this statement the banks called in a large portion of
their loans, and ran after each other for specie. The panic was of short
duration.
_October, 1853._—Simeon Draper, a railroad banker, failed.—Stocks were
depressed on the 19th, in consequence of bank contraction. There were
several failures.
_January, 1854._.—California defaulted in its interest on the 1st, and
there was much alarm in financial circles in consequence.
_February, 1854._—Heavy failures in California.
_May, 1854._—The New York, Newfoundland & London Telegraph Company was
organized, and was the first company to attempt Atlantic cable
telegraphy.
_July, 1854._—Robert Schuyler, President of the New York & New Haven
Railroad Company, fraudulently issued nearly $2,000,000 stock of the
company. About the same time fraudulent entries, made by Secretary Kyle,
were discovered in the stock ledger of the Harlem Company, amounting to
about $470,000. Frauds were also discovered in the affairs of the Parker
Vein and the Vermont Central railway companies. In consequence there was
a rapid decline in the stock market, and many suspensions occurred in
New York, Boston and Philadelphia.
_September, 1854._—A severe twist in Erie stock on the 13th.
_October, 1854._—Frauds on the Ocean, American Exchange and National
banks were discovered.
_December, 1854._—There was a severe run on the savings banks of the
city of New York on the 9th.
_September, 1855._—A financial panic in San Francisco and many failures
of prominent bankers.
_September, 1856._—Charles B. Huntington committed forgeries amounting
to $15,000,000 or $20,000,000. The forgeries were used as collateral
security for raising money, and for a time were taken up before
maturity.
_April, 1857._—Freight-train men on the Baltimore & Ohio struck. Trains
were molested and many fights occurred. The military were called out and
a desperate fight ensued, in which many were killed and wounded.
_August, 1857._—The financial panic of this year began on the failure of
the Ohio Trust Company, with liabilities about $7,000,000. Banks either
failed or suspended specie payments everywhere. The New York banks
resumed in December. Business was generally prostrated until the
following spring, when improvement became perceptible.
_July, 1860._—Congress authorized a war loan of $250,000,000. The
National debt was $64,640,838.11. It reached $2,756,431,571, its
greatest point, in 1885.
_August, 1860._—Treasury notes to the amount of $50,000,000 were
authorized by Congress.—The first well ever sunk for oil, and the first
petroleum ever obtained by boring. The well was at Titusville, Oil
Creek, Pa. It gave 1,000 barrels a day. This was the beginning of the
petroleum business.
_December, 1860._—The Southern banks suspended specie payment on the
12th.
_April, 1861._—The lowest price at which United States bonds sold during
the war was 75 for the 5s of 1874, quoted in this month.
_December, 1861._—The National Bank system was recommended by Secretary
Chase.—A premium for gold was quoted at the New York Stock Exchange for
the first time, on the 30th.
_April, 1862._—Gold was first quoted at a premium on the 12th, and by
October 1 it had advanced to 123.
_February, 1864._—Speculation in stocks was “rampant” and “wild.”
_March, 1864._—There was a panic in the coal stocks on the 10th.—The
month was noted for a rapid rise in gold.
_April, 1864._—A semi-panic in Wall Street on the 18th.
_June, 1864._—National currency to the amount of $300,000,000 was
authorized by Congress. The full amount was issued before the close of
1867.
_August, 1864._—Gold touched 261¾, its highest point.
_July, 1865._—The Stock Exchange made a rule inflicting a penalty on
members who attended Gallaher’s up-town night Exchange.
_August, 1865._—Edward B. Ketchum, a junior partner in a prominent
banking house in New York, forged gold certificates to the extent of
$1,500,000, and they were negotiated at the banks. In addition he
abstracted more than $3,000,000 from the vaults of the firm. The firm
failed.
_October, 1865._—Call loans were made as high a per cent. and a heavy
commission added. Tight money checked a rise in stocks. Money was wanted
in the West for the moving of crops. Relief came on the demand from the
West subsiding, and by temporary loans from the Sub-Treasury to the
banks.
_November, 1865._—Prairie du Chien common stock was cornered. On the 6th
29,000 shares were bought at about 40. The trap being sprung 200 and
more was demanded, and the shorts settled at rates ranging from 110 to
210. There were several failures. It opened on a Monday at 96; on
Tuesday it ranged between 160 and 225, and closed on Saturday at 110.
_December, 1865._—The new Stock Exchange building was opened for
business on the 9th.
_February, 1866._—Toward the close, on February 20th, everybody seemed
to want to borrow money, and no one was willing to lend. The market
verged on panic. People were afraid of the course of the Government in
selling upwards of $12,000,000 gold.
_April, 1866._—Michigan Southern was cornered. The price rose from 84 to
104. The pool closed out and the price dropped to 80 within 24 hours.
Other corners were made in the same month in Reading, Rock Island,
Hudson River, Cleveland & Pittsburg and Northwestern preferred. Money
was plentiful and speculation was rampant.
_May, 1866._—The marketing of Erie stock by Daniel Drew caused a drop in
its price from 74½ on May 18th to 60½ on May 31st. The movement had very
little effect on the remainder of the market.
_July, 1866._—A panic in stocks followed the failure of Overend, Gurney
& Co., London bankers.
_August, 1866._—London markets were first quoted by Atlantic cable in
New York.
_November, 1866._—There was heavy speculation in stocks, produce, dry
goods and real estate. Poor men became rich by a single turn of the
wheel. Unexpectedly the Treasury drew about $15,000,000 for its own
purposes, money became tight and the bears became very active. Prices
declined about 10 points, and outsiders lost upwards of $25,000,000.
_December, 1866._—Northwestern preferred and Cumberland Coal were
cornered.
_January, 1867._—Prices broke on the 18th with a rush. Cumberland Coal
declined 55 points, and the general list went off in sympathy. There
were several failures. Money was tied up by bear operators.—President
Yelverton, of the Bank of North America, on learning of the failure of
A. J. Meyer & Co., the firm having overdrawn its account $219,000, was
seized with apoplexy and died.
_May, 1867._—A pool in Erie was broken by the sale of a large block of
English stock.
_October, 1867._—Daniel Drew was turned out of Erie, and the stock
advanced 10 points.
_December, 1867._—Vanderbilt secured control of New York Central.
_January, 1868._—A corner in Rock Island was broken, owing to the
company throwing 49,000 shares on the market. The stock declined
heavily.
_February, 1868._—The contest between Drew, Vanderbilt and Frank Worth
was at its height.
_April, 1868._—There was a break in Atlantic Mail, with subsequent
complications.
_June, 1868._—An unsuccessful attempt to corner Pacific Mail was made.
_July, 1868._—Jay Gould became president of Erie.
_October, 1868._—Money became stringent, owing to the withdrawal of
funds from New York for the West. The associated banks lost $20,000,000
in deposits and $12,000,000 in legal tenders, with a reduction of only
$9,000,000 in loans. Special efforts were made to break the stock
market, but the bull leaders had provided themselves with time loans,
running to the end of the year, and were thus enabled to hold prices.
_November, 1868._—Erie was cornered, and a panic extending through the
whole list occurred. It was helped by the inability of a leading
operator, a director of St. Paul, to meet puts on that stock. The common
and preferred fell about 20 points. Erie made an extraordinary issue of
shares. Later on money became more plentiful, prices advanced and the
market became very strong.
_April, 1869._—A bill to consolidate the New York Central and the Hudson
River railroad companies passed the Legislature.
_May, 1869._—The New York Stock Exchange and the Open Board of Brokers
were amalgamated under one management. The new Exchange began business
with 1,030 members and $750,000 in its treasury.—The era of
consolidations. Active stocks advanced to prices never before reached.
New York Central sold at 192-5/8. A movement to depress prices at the
close of the month met with some success.—The last rails of the Union
Pacific and Central Pacific railroads were laid. Trains began running
across the continent on the 15th.
_June, 1869._—Many brokers failed, the result of a successful bear
attack on the market.
_July, 1869._—Heavy speculation in the Vanderbilt stocks. New York
Central advanced to 217-7/8. Money was stringent.
_September, 1869._—New York Central dropped 25 points on the 22d, and a
panicky feeling was developed.—Gold reached 165 on Friday, the
24th—Black Friday. Transactions ran up into hundreds of millions, and
business was conducted with so much confusion that bids running from 135
to 160 were made at one and the same time in different parts of the
room. Between 11 and 12 o’clock the shorts settled on a basis of
148@158, the market price being 5@15 higher. At noon it was officially
announced that the Government would sell gold next day and buy bonds,
and within 15 minutes the price had fallen to 135, and the great
speculation had collapsed.
_April, 1870._—The cliques who had bought stocks on the decline after
Black Friday, started an upward movement in the last week of the month.
The public came in and top figures were reached about May 10. The
cliques unloaded, turned bears, depressed prices until margins were
wiped out, bought in again at the decline and were ready for another
advance.
_May, 1870._—The process of “shearing the lambs” was repeated in this
month.
_June, 1870._—James Boyd, carrying 40,000 shares of stock and $5,000,000
gold, failed. The market showed signs of breaking, but was sustained by
the cliques.
_July, 1870._—Congress authorized an addition of $54,000,000 to the
national currency.
_January, 1871._—A prominent operator repudiated his orders to buy
Reading. Several brokers failed in consequence. The market was only
slightly depressed.
_April, 1871._—There was much speculative excitement in the stock
market.
_June, 1871._—Rock Island was cornered. The pool began buying at 114½
and advanced it to 130-7/8. On liquidation the stock declined to 110.
Many failures occurred and bad faith was charged.
_October, 1871._—The week beginning October 9, 1871, was one of the most
eventful in the history of the Stock Exchange. The banks had expanded
beyond precedent and were compelled to contract loans to raise money for
crop purposes. The payment by France to Germany in settlement of war
claims caused the Bank of England rate to advance from 3 to 5 per cent.,
and produced a feeling bordering on panic in London. The New York market
was very sensitive when news of the Chicago fire came. Prices broke 4@10
points. On Tuesday there was great excitement; sales were enormous and
fluctuations wide. On Wednesday there was a rally on the belief that the
Government would purchase 5-20s. The lowest prices, however, were made
on Thursday. On Friday there was more steadiness and prices were higher.
The bank statement was favorable and matters quieted down.
_December, 1871._—The Ocean National Bank, the Union Square and the
Eighth National Bank failed. Money was scarce, but stocks were firmly
held. Operators and brokers were loaded up with stocks and they
sustained prices, awaiting an opportunity to get out.
_March, 1872._—The Erie revolution occurred. The Board of Directors was
overthrown, and Jay Gould resigned the presidency. Gen. Dix became his
successor. The operation caused great activity in the stock market, and
money became tight.
_June, 1872._—Stock dividends on Lake Shore and Michigan Central were
declared.
_August, 1872._—Gold was cliqued.
_September, 1872._—Erie was cornered. The Gould-Smith clique was short
of it. The stock first became scarce on purchases by German brokers for
foreign account. Then Drew became a heavy purchaser. At the same time
the German brokers were long of gold, and with the double idea of
punishing them and compelling those carrying Erie to sell out the
Gould-Smith clique endeavored to lock up money. This plan was defeated
by the refusal of two banks to pay out legal tenders on certified
checks. Just then, too, the Government bought $5,000,000 bonds and sold
the same amount of gold. This completely broke the speculative
manipulation of money, and a panic was averted. During the height of the
panic there were no quotations for money. Among the failures of the week
were Northrup, Chick & Co., bankers, the Glenham Woolen Manufacturing
Co., Paton & Co., dry goods, George Bird, Grinnell & Co., stock brokers,
Hoyt, Sprague & Co. and A. & W. Sprague. The banks suspended their
weekly statements, and they were not resumed until late in November.
_November, 1872._—Jay Gould was arrested on criminal charges based on
his management of the Erie Railroad. He surrendered securities, the face
value of which was more than $9,000,000, in December.—Northwestern was
cornered. It opened Nov. 20 at 83¾ and closed at 95. On Thursday it sold
at 100, and at the close on Friday 200 was bid. On Saturday buying in
under the rule ran the price up to 230. The settlement was made on the
following Tuesday, when the price declined to par, the highest bid made
being 85. Jay Gould, Horace F. Clark and Augustus Schell conducted the
corner, while the cornered were Drew and Henry N. Smith. It was one of
the most profitable corners ever made in Wall Street.
_February, 1873._—There was a noted corner in Northwestern.
_April, 1873._—The preliminary panic of the year occurred in this month.
The stock market was uneasy. The failure of a firm of silk importers was
followed by that of Barker & Allen, the members of which were related to
Vanderbilt. Three other firms also failed. Confidence returned and quiet
prevailed until the 26th, when the Atlantic Bank failed. This brought
about another depression, which was followed by a quick rally.
_May, 1873._—Heavy break in Pacific Mail. The further retirement of
greenbacks was prohibited by Congress.
_August, 1873._—Fraud was discovered in the issue of certain bonds of
the New York Central & Hudson River Railroad.
_September, 1873._—The New York Warehouse & Security Company failed on
the 8th; Kenyon, Cox & Co., in which Daniel Drew was a special partner,
on the 13th; Jay Cooke & Co. on the 18th, and Fisk & Hatch on the 19th.
Innumerable brokers failed. There were runs on the Fourth National Bank
and the Union Trust Company. The secretary of the company was a
defaulter to the extent of $500,000, and its doors were closed. The Bank
of the Commonwealth failed. There was a panic in the stock market, and
the excitement ran so high that the Governing Committee closed the
Exchange at 11 o’clock on Saturday, the 20th. The Gold Exchange Bank was
unable to effect all the clearances, and dealers were unable to get
their balances. The result was the temporary suspension of some dozen
firms. The Gold Exchange Bank having been enjoined by the courts from
making the clearances, the Bank of New York undertook the job and failed
in it. Next a committee of 20 was appointed to do the work, but it
failed also, because Smith, Gould & Martin refused to render a statement
to it. The final settlements were made between members themselves.
Smith, Gould & Martin, with contracts amounting to $9,000,000, settled
on a basis of 135. Business was resumed on Sept. 30.
_December, 1873._—The Credit Mobilier was organized for the construction
of the Union Pacific Railroad. It was composed of stockholders of the
railway company, and had a capital of $3,750,000. Profits were large,
and the stock was quoted at 400. Certain Congressmen were given stock at
par on their personal notes, the object being to gain their favor in
case adverse legislation was proposed. Oakes Ames, of Massachusetts, was
expelled from the House for his connection with the bribery, and James
Brooks, of New York, for accepting bribes. Other Congressmen were
censured. A proposition to impeach Vice-President Colfax was reported
against by the Judiciary Committee.
_January, 1874._—The value of the pound sterling was fixed by Congress
at $4.86.65.
_February, 1874._—Two letters, purporting to come from the Wabash and
Western Union companies, were received by the Stock Exchange, announcing
an increase of stock by the directors. The market went off three points
before it was discovered that the letters were forgeries.
_April, 1874._—The President’s veto of the inflation bill unsettled
prices and caused depression. The bears raided the market, causing a
heavy decline, but a quick recovery followed.
_February, 1875._—Wabash went in the hands of a receiver.
_May, 1875._—A receiver for Erie was appointed.
_July, 1875._—Duncan, Sherman & Co. failed.
_August, 1875._—The Bank of California failed. Cashier Ralston committed
suicide.
_March, 1876._—Jay Gould made his famous attack on Western Union.
_April, 1876._—The National Bank of the State of New York failed.
_November, 1876._—Many savings banks failed.
_January, 1877._—Commodore Vanderbilt died on the 4th.
_February, 1877._—Jersey Central went into the hands of a receiver.
_July, 1877._—Great railway strikes; rioting and incendiarism in
Baltimore and Pittsburgh; losses $10,000,000. Over 100,000 laboring men
took part in the movement.
_January, 1878._—The Vanderbilt combination, including Michigan Central,
Lake Shore and Canada Southern, was made in this month.
_February, 1878._—The purchase of silver bullion by the Government to
the amount of $2,000,000 to $4,000,000 per month, and its coinage into
legal tender dollars, was ordered by Congress on the 28th.
_May, 1878._—Congress passed the Resumption Act.
_January, 1879._—Specie payments were resumed after the suspension which
took place soon after the opening of the war of the rebellion.
_April, 1879._—Gould and Field combined, and under their auspices the
St. Louis, Kansas City & Northern and Wabash Railways were consolidated.
Gould already had control of Union Pacific and Kansas Pacific, and
afterward secured control of Missouri Pacific and Denver & Rio Grande.
_June, 1879._—Western Union declared a scrip dividend of 17 per cent.
_August, 1879._—There was a serious tumble in prices in this month.
_October, 1879._—The stock market was very active in October and
November. The bull movement of the year was at its height and
transactions were so numerous that it was impossible to record them all.
The drop came in November.
_November, 1879._—William H. Vanderbilt sold 250,000 shares of New York
Central & Hudson River stock at 120 to a syndicate headed by J. S.
Morgan & Co., of London. Early in the following year the same syndicate
took 100,000 shares on the same terms.
_May, 1880._—Philadelphia & Reading Railway and Coal and Iron Company
failed. There was a flurry in the stock market in consequence.
_June, 1880._—A scrip dividend of 100 per cent. to the holders of Rock
Island stock on the purchase and consolidation of the Iowa Southern and
the Missouri Northern with Rock Island.—A leading German Wall Street
banking house, in view of the large exports of gold, offered a premium
of 1/2 of 1 per cent. for a call on $1,000,000 gold, the privilege to
extend for one year.
_November, 1880._—The Louisville & Nashville declared a 100 per cent.
stock dividend.—Western Union declined from 104-7/8, on November 22d, to
77½ on December 17th.—Jay Gould purchased most of the stock of the
Denver, South Park & Pacific Railroad, in the following month a large
block of Iron Mountain and a majority of the International & Great
Northern.
_December, 1880._—Seats in the New York Stock Exchange sold at $25,000.
A great number of new securities were listed. So numerous were the
combinations, consolidations and extensions of railways that in many
cases the analogy with former periods was lost, and comparisons as to
earnings were of little value. In 1886 seats in the Exchange sold at
$35,000. In December, 1870, when speculation was stagnant and the market
was clear of all outsiders, seats sold at $3,000.—B. G. Arnold & Co.,
the largest coffee importing house of New York, suspended. They were the
principals in a combination to corner Java coffee, and met disaster in
the attempt.
_January, 1881._—Western Union, American Union and Atlantic & Pacific
consolidated. The former company declared a stock dividend of 38¼ per
cent. The capital stock was made $80,000,000.
_February, 1881._—Call loans were made at 1 per cent. per day on the
25th.
_May, 1881._—The Gould southwestern railway system was consolidated.
_July, 1881._—President Garfield was shot by Guiteau. The stock market
broke on the news of the shooting, and a panic was only prevented by the
intervention of Sunday and the National holiday on Monday.—The Oregon
war debt was paid.
_August, 1881._—There was heavy speculation in wheat and corn in Chicago
and New York. Money became scarce, and call loans were made at interest
and commission.
_September, 1881._—The Hannibal & St. Joseph corner.
_January, 1882._—The trunk line railway war of rates was settled.—Gould
and Huntington purchased a controlling interest in the St. Louis & San
Francisco Railway and half the ownership of the Atlantic & Pacific
Railway.
_February, 1882._—The market showed some animation early in 1882, but it
soon collapsed and became very weak. Bottom was touched on the 23d, the
recovery being based on talk of a settlement of the then existing trunk
line rate war.—Richmond & Danville plunged from 219 to 130 and a
semi-panic ensued on the Stock Exchange.
_March, 1882._—To allay reports that he was in financial straits, Mr.
Gould, on the 13th, displayed his wealth. He took from a tin box
$23,000,000 Western Union, $12,000,000 Missouri Pacific, $6,000,000
Manhattan Elevated, $2,000,000 Wabash common, and $10,000,000 bonds of
Metropolitan, New York Elevated and Wabash preferred. He offered to show
$30,000,000 additional railway stocks, but his visitors had seen enough.
_October, 1882._—A syndicate headed by the late W. H. Vanderbilt
purchased 124,800 shares of the common and 140,500 shares of the
preferred stock of the New York, Chicago & St. Louis Railway at 13 and
37 respectively. This stock afterwards became the property of the Lake
Shore & Michigan Southern Railway.
_December, 1882._—The Municipal Bank of Shopin, Russia, failed with
liabilities of $60,000,000.—The railway war in the Northwest lasted from
September until December 15. On the announcement of the settlement the
market improved and the year closed with a better feeling all around.
_February, 1883._—Western Union absorbed Mutual Union by lease, the
rental being interest at 6 per cent. on $5,000,000 bonds and 6 per cent.
on $2,500,000 stock.
_March, 1883._—A block of Hannibal & St. Joseph stock was sold to
Chicago, Burlington & Quincy. At the same time Wabash was leased to Iron
Mountain.—From the 19th until the close of the month there was great
depression. Money on call loaned at 4@25 per cent. The public was
heavily loaded with stocks.
_May, 1883._—Jersey Central was leased to Reading.
_June, 1883._—The National Petroleum Exchange and the New York Mining
Stock Exchange consolidated.—McGeoch, Everingham & Co., of Chicago,
failed in consequence of an unsuccessful attempt to corner the lard
market. The firm lost $6,000,000.—The movement against the circulation
of trade dollars at par was begun in Philadelphia and extended
throughout the country.
_July, 1883._—Western Union Telegraph operators struck for increased
pay. The strike lasted a month and ended in failure.
_October, 1883._—A notable feature of 1883 was the gigantic losses made
in speculative operations. The failures of McGeoch, of Chicago, and
Ranger, of Liverpool, were notorious instances, but thousands of private
individuals were squeezed out by the pressure.—In the summer and fall of
this year there had been a shrinkage in prices of stocks, when, in
October, the Northern Pacific Company announced a proposed issue of
$20,000,000 new bonds. This precipitated a heavy decline in nearly the
whole list. The market became largely oversold, when a sharp twist was
made in a number of stocks, and prices advanced with great rapidity.
Northern Pacific preferred jumped from 56 to 78½ within a few days, and
Oregon & Transcontinental went from 34½ to 51. Then Vanderbilt came into
the market and put up Michigan Central from 77 to 96½, and the other
Vanderbilt stocks to a less extent. Great depression followed this
manipulation.
_December, 1883._—The mercantile failures in 1883 amounted to
$173,000,000, against $81,000,000 in 1881.—The triple alliance between
Union Pacific, Rock Island and St. Paul was made.—Villard resigned from
Oregon & Transcontinental and Oregon Railway & Navigation.
_January, 1884._—Firmness in the market on the announcement that a
syndicate had made a large loan to Oregon & Transcontinental on the
pledge of its stocks. A quick move against the shorts caused a sharp
advance.—Henry Villard resigned the presidency of the Northern Pacific
Railroad.—John J. Cisco & Co., New York bankers, failed.—The surplus
reserve of the New York National banks was wiped out.—James R. Keene,
operator in wheat, failed.
_March, 1884._—There was a squeeze in New York Central. It sold up to
122.—Delaware, Lackawanna & Western was cornered, and its price was run
up to 133-1/8 regular and 139½ cash. S. V. White managed the pool.
Another move in the same stock was made later in the year. The pool
closed out at an average of 102. Then the stock dropped to 86¾.
_May 6, 1884._—The Marine Bank failed May 6th, wrecked by Grant & Ward.
Grant & Ward suspended two days later.,
_May, 1884._—During the panic the New York banks issued Clearing House
certificates to the extent of $24,915,000, of which $7,000,000 went to
the Metropolitan Bank. Similar certificates, to the amount of
$26,565,000, were issued in the panic of 1873.—The height of the panic
was reached on the 14th. The storm had been brewing for nearly three
years, but it was in no sense a commercial panic. Stock Exchange values
had shrunk to an unparalleled degree, and the crash was precipitated by
the developments regarding Grant & Ward, John C. Eno, Fish, of the
Marine Bank, and a few others. The disturbance was over by July 1.—The
Metropolitan Bank failed. Eno’s frauds on the Second National Bank
discovered. George I. Seney failed. The Atlantic Bank failed.
_June, 1884._—The greatest depression following the May panic was
reached. Large overselling led to a sharp rally.—Charles Francis Adams,
Jr., became president of the Union Pacific.
_August, 1884._—The Wall Street Bank failed.
_November, 1884._—The Metropolitan Bank, on May 15th had $11,294,000 in
deposits; on October 1st $1,338,000, and in November it went into
liquidation and retired from business.
_December, 1884._—The Lackawanna pool of 1884 closed out its holdings on
the 12th, and there being no further support to the market prices
declined, and the year closed with much depression.—The largest corn
crop ever grown in the United States was that of 1884. It was estimated
at 1,800,000,000 bushels.
_January, 1885._—Henry N. Smith, a noted bear operator, failed, and
carried down with him the brokerage firm of William Heath & Co.
_November, 1885._—The trunk lines came to an agreement and advanced
rates. This gave confidence, and an upward movement was started. The
Vanderbilts and the Grangers were the features of the market.
_December, 1885._—Texas Pacific stock collapsed. A receiver was
appointed for the property on the suit of the Missouri Pacific, a large
holder of its floating debt.—William H. Vanderbilt died suddenly on the
8th. The fact was not known down town until after business hours, but it
had a very unsettling influence. The next morning the market opened 1@3
points lower, but the bulls had combined to support prices, and bought
freely. In many instances prices were higher at the close than on the
previous day.
_February, 1886._—The trans-continental pool was ruptured. The railroads
declined to continue to pay the subsidy demanded by Pacific Mail.
_March, 1886._—Western Union declared a scrip dividend of 1½ per cent.
for the quarter. The scrip was made convertible into stock, and carried
the same rate of interest as the stock.—The representatives of the coal
companies met at a dinner party and reached “an agreement among
gentlemen” that the anthracite coal production for the year should not
exceed 33,250,000 tons.—F. B. Gowen joined the Drexel-Morgan syndicate
for the reorganization of Reading. The announcement caused a rapid
advance in all coal stocks.—The great strike on the Gould system of
railroads, inaugurated on the 7th, failed.—Heavy engagements of gold for
shipment abroad were made.
_April, 1886._—Wabash, St. Louis & Pacific were sold in
foreclosure.—Labor strikes at their height. The Lake Shore switchmen
struck in Chicago, and the Third Avenue horse car drivers in New York.
The troubles had a depressing influence on the stock market.
_May, 1886._—Charles Woerishoffer, bear operator, died May 9.—Chicago
anarchists attacked the police with bombs, killing and wounding many.
Police used revolvers freely and many rioters fell. Anarchists were
sentenced to death.—The strike on the Southwestern system was officially
declared off on the 1st. The men were completely beaten after a contest
of six weeks.—Tasker Marvin, bull operator, failed. Marketing of long
stock caused decline. The depression was aided by existing labor
troubles.
_June, 1886._—Western Union passed its dividend.
_November, 1886._—The managers of the trunk lines reaffirmed the
presidents’ agreement of the previous year to maintain rates.—Richmond &
West Point Terminal became very active and strong on the purchase by the
company of the control of Richmond & Danville.—There were extraordinary
buoyancy and speculative activity in stocks. Low priced non-dividend
payers were largely dealt in. One specialty after another was “boomed,”
and in some instances large profits were made.
_December, 1886._—About $10,740,000 in gold was imported at New York
during the month.—Prices toppled over on the 15th. All kinds of cheap
stocks had been boomed by cliques, when, on money becoming tight, there
was a rush to realize. Sales reached the unprecedented figure of
1,095,159 shares. The most conspicuous stocks in the decline were
Philadelphia & Reading and New York & New England. No financial disaster
or failure of importance occurred. There was much uneasiness for several
days, but a better feeling soon set in, although speculation was checked
by the prevailing high rate for money.—The Inter-State Commerce bill was
introduced in Congress.
_January, 1887._—On a report that Hocking Valley had suffered by
irregularities of former directors, stock broke 1½ points. The
consumption of iron in the United States exceeded that of Great Britain
for the first time in 1886. The Inter-State Commerce Bill was passed by
the House Jan. 21, by a vote of 5 to 1. European war rumors caused
foreign selling and a break in the market of 2 to 5 points. There was a
complete recovery on the following day.
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CHAPTER XLVII.
INTERNATIONAL SIGNIFICANCE OF THE BARTHOLDI
STATUE.
GREAT AS AN ACHIEVEMENT OF ART, BUT GREATER AS THE EMBODIMENT OF THE
IDEA OF UNIVERSAL FREEDOM THE WORLD OVER.—IT IS A POETIC IDEA OF A
UNIVERSAL REPUBLIC.—ENLIGHTENMENT OF THE WORLD MUST RESULT IN THE
FREEDOM OF MAN.
The following was sent by me to the New York _World_, as briefly
embodying my views on Bartholdi’s great work, a few days prior to the
dedication of the Statue of Liberty:
“When, several years ago, the gigantic forearm, with the torch in its
hand, of the Statue of Liberty was exhibited in Madison square, the
people who gazed at it with idle curiosity had little idea that the
mammoth structure of which it was a part would so soon be completed, or
that it would be so great an achievement as it now stands. Thanks to the
New York _World_, which gave the impetus to the subscription fund
movement, which enabled the great sculptor to realize the greatest
artistic dream of his life within a reasonable period. Some people may
imagine that the time has been long, but many people who understood the
magnitude of the work, and observed the slowness of the subscriptions,
had no hope of seeing it finished in this generation prior to the time
the subscription for the pedestal was under way.
“Until the last few days, when this colossal goddess arose on Bedloe’s
Island in all her full, finished and magnificent proportions and
artistic splendor, like the ancient divinity emerging from the foam of
the sea, the people did not begin to realize the magnitude of
Bartholdi’s idea. In mere mechanical size the statue with its
appurtenances excel anything and everything of the same character in the
world. It is the biggest thing of its kind either ancient or modern, and
is, therefore, the most appropriate emblem to show forth the evolution
and the international and historic associations of the two greatest
Republics that the world has yet seen. The Colossus of Rhodes, the great
Sphinx and other colossal statues sink into insignificance when compared
with the latest production of Bartholdi’s brain.
“But great as the statue is as a work of art, the international idea
which it embodies is greater still. When taken in connection with that
earlier and comparatively insignificant effort of the same eminent
artist, the Statue of Lafayette in Union square, the Colossus of Liberty
suggests a whole century of history, replete with greater events than
the thousand years which preceded it. In these two statues the
interdependence of the two great nations is clearly portrayed, and their
destiny as the pioneers of universal Republicanism brought out in bold
relief. If Tennyson’s poetic dream of a universal Republic is ever to be
realized it will come through the idea which the chisel of Bartholdi has
immortalized, and which the _World_ has been chiefly instrumental in
providing with a local habitation and a name on Bedloe’s Island.
European monarchs are now trembling on their thrones, which are doomed
to crumble into ruins at no distant day, through the very idea which
‘The Statue of Liberty Enlightening the World’ is destined to propagate
from this day forward in its imposing position in our spacious harbor.
The Israelites of old were cured of their bodily maladies by gazing at a
serpent erected on a pole. In a similar way the politically afflicted
and oppressed of all nations, as soon as they emerge through the narrows
of our magnificent bay, either by day or night, will find a panacea for
all their ills in the sight of that wonderful statue, with all that its
name implies.
“And one word as to what is in that name which has been so severely
criticised. On account of it Americans have been charged with egotism,
but those who talk in this way seem to forget that Bartholdi himself, as
the representative of the French nation, is the author of the name. So,
as it comes from him in his representative capacity, we can receive it
with good grace, and without being amenable to any such charge as that
referred to. Taken, with all its broad, historical associations, I don’t
think the name is at all too pretentious. I have no hesitation in
predicting that, ere the present century draws to a close, results will
fully justify the assumption.
“The magnificent gift of the French people, and the years of toil and
study which Bartholdi has devoted, gratis, to his unprecedented labor of
love, cannot fail of the great and only reward which both have so
earnestly and magnanimously sought, namely—to enlighten the world.”
------------------------------------------------------------------------
CHAPTER XLVIII
LARGE FORTUNES AND THEIR DISPOSITION.
HOW THE FORTUNES OF THE ASTORS WERE MADE.—GEORGE PEABODY AND HIS
PHILANTHROPIC SCHEMES.—JOHNS HOPKINS AND HIS PECULIARITIES.—A. T.
STEWART AND HIS ABORTIVE PLANS.—A SCULPTOR’S OPINION OF HIS
HEAD.—ECCENTRICITIES OF STEPHEN GIRARD, AND HOW HE TREATED HIS POOR
SISTER.—HIS PENURIOUS HABITS AND GREAT DONATIONS.—JAMES LENOX AND
THE LIBRARY WHICH HE LEFT.—HOW PETER COOPER MADE HIS FORTUNE, AND
HIS LIBERAL GIFTS TO THE CAUSE OF EDUCATION.—SAMUEL J. TILDEN’S
MUNIFICENT BEQUESTS.—THE VANDERBILT CLINIC.—LICK, CORCORAN, STEVENS
AND CATHARINE WOLF.
I shall take a short review in this chapter of some of the most
prominent wealthy men who have been the architects of their own
fortunes, and comment briefly on their methods of disposing of their
estates.
In the United States, John Jacob Astor was one of the first to arrest
public attention in the matter of large fortunes. Before his day there
were few, if any, millionaires on this side of the Atlantic. Now there
are thousands of these lucky individuals. It is true, George Washington,
the Father of our country, was very comfortably fixed, and supported
aristocratic style in his domestic life, but he probably never was worth
more, all told, than $200,000. It is singular that none of his
successors have ever been worth even this amount. It was believed at one
time that Grant had accumulated a large amount of money and value, and
was fast approaching the financial status of a millionaire, but this
popular delusion was suddenly dispelled when he and his family were
victimized by the first young Napoleon of finance, Ferdinand Ward.
The founder of the now wealthy house of Astor and of the Astor Library
died in 1848, at the age of 85. He left the greater bulk of his estate
to his son, William B. Astor. He bequeathed $400,000 to the Astor
Library, also a few legacies, amounting in all, the library inclusive,
to about $500,000. His wealth, at the time of his death, was estimated
at twenty millions, a very large fortune at that time.
William B. Astor, who died in 1875, left $250,000 to the library, and
the large balance of his estate to his sons and widow.
The Astors have been characteristic for their benefactions, in a quiet
way, to a large number of public objects. Their estate is remarkable for
the way it has been kept intact, and for its steady and considerably
rapid improvement, and they are popular as landlords.
The elder Astor who came to this country from Waldorf in Germany, near
Heidelberg, before he was 20 years of age, and who started in life
dealing in furs, had a grand scheme on foot at one time for monopolizing
the fur trade of the whole world, which he had calculated would then
have brought him a million dollars a year. He was diverted from this
purpose by the large profits which he found in real estate, by dealing
in which he made most of his money; and the family has steadily adhered
to this line of speculation and investment through two generations.
The native American who, perhaps, ranks above all others in the
munificence of his gifts, and the beneficence of his purpose was George
Peabody. He was a poor Massachusetts boy, who, by hard industry, arose
to be one of the largest millionaires of his day. He was also a
philanthropist in the highest sense of the term. His fortune at one time
probably exceeded ten millions. His well-known benefactions, during his
life, exceeded seven million dollars, and it is supposed that he gave
away vast amounts in charity of which no definite account was kept.
Shortly before his death, in 1869, he bequeathed two and a half millions
as a building fund for lodging houses for the poor of London, and
devised for a Southern Education Fund two million one hundred thousand.
In addition to these he left five millions to various relatives. J. S.
Morgan, who was Mr. Peabody’s partner in the banking business, became,
at his death, his successor, and is now supposed to be a richer man than
Mr. Peabody ever was.
Johns Hopkins, who died at Baltimore in 1873, at the age of 78, was one
of the most eccentric millionaires and philanthropists. Very few
expected that he would bequeath the great university and the hospital
which are called by his name. He was so wretchedly penurious that he
hardly afforded himself the means of subsistence. His benefactions to
these two institutions, however, exceed eight million dollars.
Alexander T. Stewart, the great dry goods merchant, who was reputed to
be one of the three wealthiest men in the United States, Commodore
Vanderbilt and John Jacob Astor being the other two, died in 1876. He
had no legitimate heirs, and his estate, estimated at one time between
twenty and thirty millions, was left to his wife, with the exception of
a million to Judge Hilton and $325,000 to his employes.
Mr. Stewart’s two great benefactions were failures, as he left nobody
able and willing to carry out his intentions in regard to their
arrangement.
They would probably have been failures in any event, as they seemed to
the majority of people to be in a large measure Utopian. One was Garden
City on Long Island, intended to be homes for industrious mechanics on a
higher and more comfortable scale than the majority of the dwelling of
these sons of physical and intellectual toil. A grand cathedral was
built there in memory of the merchant prince, and a beautiful crypt for
his mortal remains, which were stolen from St. Mark’s churchyard shortly
after the interment.
The mechanics and laborers were not attracted to Garden City, and it is
now making slow progress with tenants whose avocations are generally in
the higher walks of life.
The other great enterprise was a home for girls and women at moderate
expense. This was in the shape of a hotel on a large scale at Park
Avenue and Thirty-third street. The restrictions and the prices were
such that the home also failed to attract the class it was intended for.
The public gift, therefore, reverted to the Stewart estate, or rather
was taken forcible possession of by the trustees and transformed into
the Park Avenue Hotel. To carry out the rather indefinite terms of the
bequest would probably have involved the expenditure of a very large
amount of the Stewart estate, and, perhaps, the enterprise would even
then have been a failure. It is more than probable that if Mr. Stewart
had lived a few years longer, he himself would have been satisfied with
the impracticability of both his semi-philanthropic schemes.
There were great things expected in the shape of benefactions from Mr.
Stewart at the time of his death. He had done so little in that respect
while living that the public indulged the hope that he would make up for
his charitable shortcomings when he found that his worldly accumulations
could no longer be of any service or gratification to him, and that he
could not take any of them away with him.
Hence, it was a considerable disappointment to the public when the will
revealed the fact that nothing had been devised, out of the immense
hoard of nearly half a century’s savings, to charitable purposes.
On the day of his death I had an engagement with my dentist, Mr.
Dwinell, in Thirty-fourth street, and while I was seated in the chair
Mr. Wilson MacDonald, the well known sculptor, came in to pay a visit to
the dentist, with whom he was well acquainted. Having been introduced by
the sculptor, we immediately entered into conversation on the prominent
local topic of the day, the death of Mr. Stewart and the probable
distribution of his wealth.
Mr. MacDonald invited me to go to his studio to see a bust in clay of
Mr. Stewart that he had just about finished. He said, “I knew Mr.
Stewart’s aversion to having any portraits or photographs taken of
himself during his lifetime, so I provided for the emergency some time
ago by taking close observation of him at various intervals. During the
past two years I have frequently come in contact with him, going into
his store and getting a good look at him from various points of view, so
as to impress his likeness upon my mind. I have thus succeeded in
getting a pretty good bust of him in clay.”
Mr. MacDonald was very anxious that I should call and see this bust,
because, as I knew Mr. Stewart so well, he inferred that my judgment
would be worth something, and he expressed a desire that I should
criticise his work. I promised him I would call and see the bust as soon
as I could spare the time.
On leaving the dentist’s office I made another engagement to go back the
following week, and in the meantime I had been unable to call at the
studio of the artist, but the latter happened to be in the office of the
dentist when I called there again. The will of Mr. Stewart had been
published in the interim, and in it all reference to charities and
benevolent institutions had been carefully omitted.
Mr. MacDonald reminded me that I had not called to see the bust, and
added, “If you had called that time you would hardly recognize any
resemblance between what it is now and what it was then.” “How is that?”
I inquired. “Because,” he replied (facetiously), “as soon as I saw the
will published in the newspapers and none of that immense pile left to
the public, from whom it had been collected, I set to work and toned
down the bumps of benevolence, conscientiousness, sublimity, veneration
and ideality, making those of acquisitiveness, inhabitiveness,
amativeness and all the selfish and animal propensities prominent. I
naturally concluded, if phrenology is not a fraud, that Stewart’s will
was a manifestation of the non-existence of the higher and more humane
organs in his cranium. There certainly could be nothing there indicative
of any generous emotions.”
I think everybody who knew the great dry goods merchant will be inclined
to say that the judgment of the sculptor was neither rash nor
uncharitable.
STEPHEN GIRARD.
Stephen Girard was another of the great millionaires who arose from
penury, and whose eccentricity took a philanthropic turn. Mr. Girard was
a Frenchman, born near Bordeaux in 1750, who made his home in later
years in Philadelphia. He bequeathed over two million dollars to found
and endow Girard College in that city.
There is a good story told, which seems to be well authenticated, of the
manner in which Mr. Girard rewarded the ingratitude of a sister. When he
was a boy about ten he manifested very little disposition for hard work,
and his family treated him harshly. One morning a rumpus arose about his
idleness, and having said something that aroused the ire of his sister,
she clutched the broom and flew at him in a rage. He retreated,
receiving a few hard blows over the shoulders as he passed for the last
time over the threshold of his paternal home. He went to sea, his father
having been a seaman, and through various vicissitudes of fortune
eventually turned up as a millionaire in Philadelphia.
After young Girard had gone through the preliminary course as cabin boy,
trading between France, the West Indies and New York, he had saved up
some money and became part owner of a small trading vessel. This was in
1776, the year of the Declaration of Independence. His trading was
suspended by the war with Great Britain. He then speculated in the
renting of a number of stores in Philadelphia, and sub-let them at a
large profit. Afterward he purchased a controlling interest in the stock
of the old U. S. Bank in 1812, and became a private banker with a
capital of more than a million. Subsequently he loaned five millions to
the Government to help defray war expenses.
In the meantime fortune, however, had not favored his irate sister, who
had chastised him with the broom. She remained poor. She had heard of
her brother’s wealth, however, but did not have money enough to pay her
passage to this country. In this extremity she went to the captain of a
Philadelphia vessel in a French port and told him that she was a sister
of Stephen Girard, without money, and desired to go and see her brother,
who was well known to the captain. She received the best accommodation
that the vessel could afford. Having arrived in Philadelphia the gallant
captain escorted her to the house of her wealthy brother. Leaving her in
the hallway he went in to see Mr. Girard and told him that a lady
outside wished to see him. The benevolent captain was prepared to behold
a demonstration of joy, which he thought would be exhibited as soon as
the long lost brother and sister should recognize each other. He was not
kept long in suspense. Mr. Girard knew his sister instantly. “_C’est
vous._” “It is you,” he said. “Oui,” she replied. These were all the
words that passed. There was no rushing into each others arms, but on
the contrary, Mr. Girard plunged at the captain in a lively mood. “What
authority had you to bring that woman here?” he said. The captain was
dumbfounded and hardly knew what to answer. “Take her back again at your
own expense,” he added.
The captain did not stand a minute on the order of his going, and the
millionaire’s sister, without receiving one kind adieu, was conducted
from the palatial mansion of her brother to the vessel, and thence to
her pauper home in France.
This shows that the great philanthropist had a good memory and was
resentful of injuries, yet it also betrays a narrowness from some taint
of which the greatest minds are not entirely free. The Girard sister was
unable to comprehend the higher aspirations of her young brother and his
intelligent convictions, which had, no doubt, taken form at that early
period of his life, that a man can never become wealthy by hard manual
labor. He was wrong, however, in giving her the cold shoulder. She was
correct in one sense, from her point of view, although a narrow view,
and his large charity should have condoned an error arising from her
superficial conception of his early designs.
His narrow-mindedness, with all his genuine greatness, and his
eccentricity were exhibited in a remarkable degree in some of the
restrictions of his will regarding the college. Although he was
exceedingly generous in his gifts to religious denominations, without
distinction, as well as to charitable institutions generally, he was,
though illiterate, a free thinker of the school of Voltaire and
Rousseau. He, therefore, had inserted in his will a prohibitory clause
to the effect that no clergyman should be permitted to have anything to
do with Girard College, nor even be admitted as a visitor. The college
is for orphans between six and ten years of age, who are put to a trade
when they are sixteen, all expenses being defrayed until they are able
to earn a living. There are now over 500 beneficiaries. Girard died in
1831, at the ripe age of four score and one. He was worth nine million
dollars, of which but a very small pittance went to a few of his
relatives, the great bulk of the estate having been distributed among
charitable institutions. This great philanthropist was exceedingly close
in money matters with men generally, and it is said that he never had a
friend, except the friend in the pocket, which is by all odds the most
genuine.
The late James Lenox takes rank with the great philanthropists of the
age, in attempting to devote a large portion of his surplus wealth to
the good of humanity. When he died, in 1880, at the age of eighty, he
was supposed to be one of the five wealthiest men in New York. He spent
a million dollars to found and endow the Presbyterian Hospital at
Seventieth street and Madison avenue, and over a half million in
building the Lenox Library at Seventieth street and Fifth avenue.
The building and the library are both immense gifts, but admission to
the latter is so hampered by red tape, forms and ceremonies that it is
of little or no earthly use to the general public. As a piece of
architecture the building may, according to the ideas of the famous John
Buskin, help to educate the people, but in other respects they derive no
benefit from it. The library, which is built on ten city lots, contains
the choicest selection of books in the world, outside of the British
Museum, besides valuable manuscripts and works of art, and its
collection of American works is unsurpassed anywhere. That part of the
collection, consisting of Mr. Lenox’s own private library of 15,000
volumes, contains books of rare value, many of which could not be
duplicated. This is one reason why the general public are excluded.
In fact, there is a good deal to be said in favor of the fastidious care
that is taken of some libraries and picture galleries, as a large
portion of the general public don’t know how to appreciate their
privileges, and therefore abuse them, some through the relic monomania
and others actuated by pure mischief. Thus it was that Mr. William H.
Vanderbilt was very reluctantly obliged to exclude the general public
from his fine picture gallery, as certain visitors scratched the
etchings with their canes and put their fingers on the pictures, while
others were incessantly on the relic hunt and had to be carefully
watched during their visit.
PETER COOPER.
Peter Cooper was another of the philanthropists, with large means, who
sought to distribute a considerable part of it where it would do the
most good to humanity, especially to that portion of it who are in
pursuit of knowledge under difficulties. Mr. Cooper had a hard time of
it himself getting a fair education, and he knew how to appreciate the
boon. He was born in New York in 1791, and at the age of seventeen was
apprenticed to a coachmaker. He tried his hand at several other
occupations, was an inventor by nature, and the designer and builder of
the first locomotive in this country, which had its trial trip on a part
of the Baltimore & Ohio Railroad.
Mr. Cooper experienced his great success in fortune building in the
manufacture of glue. He afterwards erected extensive iron works at
Baltimore, Maryland, and subsequently in Trenton, New Jersey. During his
life he built the Cooper Institute, at a cost of $650,000, with a
subsequent donation of $150,000. This institution is devoted to the
instruction and elevation of the working classes. It consists of a large
reading room and library and a public lecture hall. The building
occupies a small block at the junction of Third and Fourth avenues and
Eighth street. It has evening schools, attended by 2,000 pupils; a
school of design for females, in which there are 200; also, a school of
telegraphy for women, from which, in two years, over 300 operators have
been sent out.
The rents from the building on the lower floor and the offices defray
the greater portion of the expenses. Ample provision was made in Mr.
Cooper’s will for the permanence of the institution. During his life he
was a general donor to all kinds of charitable institutions, and almost
every variety of labor organization. He ran for President in 1876 on the
Greenback and Labor ticket, and was defeated by an overwhelming
majority. He had an idea that a large issue of greenbacks would create
universal prosperity and make everybody happy. He died in 1883, at the
age of ninety-two, leaving five or six million dollars, the greater
portion of which fell to his son and daughter, the latter being the wife
of Mayor Hewitt.
One of the greatest of American philanthropists, especially as his
princely bequest was rather unexpected, was the Hon. Samuel Jones
Tilden, whose financial and political career I have referred to in
another chapter. He was about seventy-three years of age at the time of
his death, in August, 1886.
Mr. Tilden died worth about five millions, four of which he left to be
donated to public and beneficent objects. The greater part of this is to
be spent in the erection and endowment of a grand free library, which,
if the terms of the bequest are properly administered, will be the
greatest institution of its kind in this country.
The disposition of the Vanderbilt fortune, up to the present time, has
been briefly described in the lives of the various members of the family
in another chapter. The Clinic of the College of Physicians, however,
which has recently been opened at Sixtieth street and Fourth avenue, is
entitled to greater detail, as it is, perhaps, destined at some future
day to become a great medical centre. Mrs. W. D. Sloane, daughter of Wm.
H. Vanderbilt, subscribed $250,000 to build the Maternity Hospital, in
connection with this institution, her father having, prior to that,
donated the balance of the million necessary to finish the entire
structure, which consists of the Clinic, the Maternity Hospital and the
College Hospital. It is said that in all their appointments the
different departments of this institution are superior to anything of a
similar description in the world.
Among the men who disposed of great fortunes I may mention James Lick,
of California, who devoted millions to charitable purposes; William W.
Corcoran of Washington, who gave two millions for an art gallery and a
home for old, decrepit and superannuated women; also, Mr. Stevens, of
Hoboken, who devised two millions, one for the Stevens Battery and the
other for the Stevens Institute at Hoboken. Miss Catharine Wolf, who
died last year worth twelve millions, bequeathed largely of her estate
to charitable purposes, and donated her magnificent art gallery to the
Metropolitan Museum of Art.
What a lesson is taught in these examples of philanthropic celebrities
to our fellow-beings—I was going to say fellow citizens, but that would
not be appropriate in many instances—the Socialists. Those millionaires,
who have all more or less been denounced as hard-hearted monopolists,
have been among the hardest workers and thinkers all their lives, many
of them denying themselves the luxuries and some of them even the full
necessities of life. For what purpose? Simply to be the hard worked and
poorly fed mediums of accumulating wealth to relieve the necessities and
minister to the comfort of the less fortunate, the idle, the dissipated,
the poor and the needy, and in general those who misunderstood and
abused them on account of their good work.
It was good for those benefactors of humanity that virtue is its own
reward.
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CHAPTER XLIX.
SOUTHERN AFFAIRS IN SPECULATION.
THE PRESERVATION OF THE UNION A GREAT BLESSING.—TO LET THEM “SECESH”
WOULD HAVE BEEN NATIONAL SUICIDE.—HOW IMMIGRATION HAS ASSISTED
NATIONAL PROSPERITY.—RESCUED FROM THE DYNASTIC OPPRESSION OF
EUROPEAN GOVERNMENTS.—SHOWING GOOD FELLOWSHIP TOWARDS THE SOUTHERN
PEOPLE AND AIDING THEM IN THEIR INTERNAL IMPROVEMENTS.—THE SOUTH,
IMMEDIATELY AFTER THE WAR, HAD GREATER ADVANTAGES THAN THE NORTH FOR
MAKING MATERIAL PROGRESS.—THE BUSINESS OF THE NORTH WAS
INFLATED.—THE STATES OF GEORGIA AND ALABAMA OFFERED INVITING FIELDS
FOR INVESTMENT.—ISSUING STATE SECURITIES, CHEATING AND
REPUDIATING.—PRESIDENT JOHNSON CHIEFLY TO BLAME FOR THE BREACH OF
FAITH WITH INVESTORS WHO WERE SWINDLED OUT OF THEIR MONEY.—REVENGE
AND AVARICE UNITE IN FINANCIAL REPUDIATION.
During the war I did all that lay in my humble power to farther the
cause of the Union, believing that it was a righteous one, and that the
North went into the struggle to maintain, uphold and preserve the best
form of government known to man, and certainly the only one suitable to
America.
View it as we may, the wisdom of man has yet evolved nothing to surpass
the Constitution of the United States. Whether Thomas Jefferson or
Thomas Paine was the author of its leading features, is a matter that I
shall not stop to discuss, but suffice it to say, that upon it has been
established the best government in the world. There is no other system
in ancient or modern history that could weld together and bring into the
social and political affinity of one great integral harmony the immense
variety and diversity of human elements that are dwelling as one large
and comparatively happy family in the United States.
What other system could combine so many nationalities, creeds, passions
and prejudices, modifying all of them and uniting all for the general
good and the perfection of a higher development of human nature in
political and social life?
There is none. We must go to the pleasanter pages of political fiction
to find a comparison.
This country has made greater strides in each decade towards the
possible approach of More’s Utopia or Plato’s Republic than any other
country has done in the same number of centuries.
It must be admitted that we are a considerable distance from the happy
goal contemplated by the writers named, but we are moving in the
direction to show that its attainment is possible. We shall yet
accomplish what the world has hitherto considered a pleasant fiction
overworked through the highest ideal of Greek art.
This high state of development is what we are coming to in spite of the
fact that the average ward politician has immense chasms to cross before
the hill tops of his evolution shall appear in sight. When he begins to
climb, however, his ascent will be marvellously rapid and he will leave
that vehement youth of Longfellow’s, whose watchword was Excelsior, far
in the distance. Moreover, his steps will be steady and prudent, and not
liable to unfortunate reaction or fatal mishap.
It has been said that revolutions never go backward. With much stronger
emphasis it may be asserted that evolutions in a Republic like those I
am now contemplating never recede, but still press forward and upward
towards the mark of a higher ideal.
A large proportion of the people who come here do so for the chief
purpose of getting away from other forms of government that are despotic
in their rule and oppressive to their subjects.
These people who come to us are saved and redeemed Their lives would
have been wasted if they had remained in the land of their birth. In
this country, they not only add to the wealth of the nation, but they
become useful members of the social fabric, with few exceptions,
enjoying happiness themselves and bringing up children, whom they teach
to admire, honor and revere the institutions of this country in contrast
with the land of their own nativity.
This country has thus become the asylum for the down-trodden of every
nation, and it is a great gainer by the contrast thus constantly
presented to the minds of those who come here. Our own people are also
in this way taught to appreciate their privileges and set a higher value
upon the advantages they enjoy.
If it were not for the constant stream of immigration to these shores,
the people of this country might begin to think that Republicanism was
the birthright of all, and forget that they enjoyed especial privileges
by birth, and came into this world with a very important start of other
nations. I fear that some of them are prone to imagine, especially some
of the fair sex, that we suffer here from that long felt want of a
hereditary and native nobility. Some of these fair ones have had sad
experience, that should have disabused their young minds of these
notions not very long ago. The force of these examples will have some
effect, at least, in moderating the folly of their mothers. It can
hardly be expected that many of the young ladies will learn much
themselves, except by a repetition of the same sad experience, but the
persuasive powers of the mammas may exercise a deterring effect in many
instances where hasty matrimonial alliances to catch the bauble of a
foreign title would be the forerunner of much misery and sometimes
shame.
I might cite many instances of these from our own city, but the
sensational papers will deal with them _ad nauseam_. I don’t aspire to
be sensational in this book. I only attempt to state in matters of this
kind what may suffice to point the moral, leaving the sensational
story-teller to adorn the tale Nor do I mean to cast any reflection on
such happy marriages as that of Miss Jerome to Lord Randolph Churchill,
and others I could mention.
Our expansive territory has enabled the adventurous and energetic of all
nations of the world to come here and make homes for themselves, instead
of remaining in the land of their birth, where many of them were
existing in a modified condition of slavery under other names.
The idea of encouraging this large exodus from other lands, and this
freedom of assimilation with our people, has been one of the great
bulwarks of our prosperity.
I realized this fact very clearly at the commencement of the war of the
Rebellion, and have cherished it ever since.
I therefore felt deeply earnest in my sympathy with the North against
the South, whose great effort was to break up the present form of
government, attempting to destroy its autonomy and powerful
cohesiveness.
The nation would have been split in twain to start with, if Horace
Greeley’s advice had been taken, “Let them secesh.” Mr. Greeley’s
counsel was well meant, as he thought the Southern people would soon be
glad to return to the Union, but it would have been national suicide to
follow it.
The two parts of the dissevered nation would have been constantly
menacing each other, and kept on a war footing, with occasionally
recurring hostilities across the border on every slight provocation. The
result would have been that some or all of the European powers would
have taken advantage of this state of affairs to plant the standard of
despotism once more on these shores, making this fair land a battle
ground for Imperial and kingly ambition.
These designs were foreshadowed by Napoleon III., whose actions I have
dealt with more fully in another place, and Great Britain was only
awaiting the opportunity to avenge Bunker Hill, Saratoga and Yorktown.
In fact, all the powers of Europe would have taken advantage of the
chance of acquiring a slice of such a fine domain, where in the event of
successful secession only feeble resistance could have been offered to
foreign aggression.
In the event of a decisive victory for the Confederate arms, faction
fights would have always been springing up, and the tendency would still
have been increasing to create a greater number of separate and
independent governments.
Napoleon had been looking at matters in this probable light, when he
resolved to make Mexico a backdoor, with Maximilian as its keeper, to
enable him to gain an entrance to this country when a favorable
opportunity for the completion of his purposes should arise.
Having myself been born in a foreign land, where I passed my boyhood’s
days, I have a vivid recollection of the workings of the harsh system of
a European government, although by the accident of birth I was placed in
circumstances where the pressure on myself was not very galling.
I saw enough, however, to make a durable impression on my mind, to
arouse my sympathies for others and to excite my lasting indignation
against dynastic oppression.
I lost no opportunity during the dark days of the rebellion in this
country, to be outspoken in favor of the cause which I had espoused from
a firm conviction that it was right. I did all I could to help to
promote ways and means for aiding the North in carrying on the war. I
went into the contest with my whole heart, and gave my entire and
undivided attention to the sale of Government securities to raise the
sinews of war.
In this way, I believe, I rendered more valuable assistance to the cause
than if I had been performing deeds of valor amid the roar of cannon and
the rattle of musketry.
I became pronounced in my opinions and made myself active in organizing
meetings to celebrate every victory of the Union army, thus inspiring
the men in the field and the recruits on their way thither, and
sustaining the hearts of our business men to place implicit confidence
in the future triumph of the nation.
It required more courage than many people now imagine to take this stand
at that time, for opinion was largely divided in this city on the
prospects of the issue, and a strong sentiment in favor of the enemy
threatened at one time to become predominant.
Many people were eyed with very strong suspicion during the greater part
of the struggle in regard to their loyalty, who had followed the course
of extreme prudence in keeping their counsel, being doubtful of the
result. I took the ground that citizenship would not be worth much in
the event of final disaster to the Union cause. I was also of the
opinion, when the war was ended to the glory of the country and the
maintenance of the Government on a substantial basis, that the time had
come to bury the hatchet.
I believed not only in bringing back the South under the old flag, but
also in extending the right hand of fellowship to the people, who,
whatever may have been their faults, had been terribly punished.
I believed that no good could come out of a policy that persisted in
trampling upon a fallen foe, especially as that foe had, after all, only
been an erring brother, and could be brought back again into the family
fold to share its mutual sympathy and material prosperity.
I felt, therefore, that I could afford to be prominent in a movement
that had this great and harmonious end in view, the more especially as
my loyalty had never been questioned in the hour of our greatest peril.
I not only extended the right hand of fellowship to Southern men, but
gave aid and comfort to them wherever they appeared in our midst.
My office, therefore, after having been the headquarters of loyal
Northern men, and for every project in the interest of the Union cause,
became notorious as the rendezvous of Southern generals and Southern
people generally, almost as soon as the war was over.
General Beauregard was one of the prominent leaders of the Confederacy
to whom I exercised the liberty of extending hospitalities on his first
visit here. I relaxed no effort to make his visit agreeable, and show
him the sights around the city. I recollect escorting him as my guest to
the Gold Room, which was then quite an institution in Wall Street. At
this time gold was selling at a premium of about 50.
On our entrance to the Room it was at once whispered around that my
distinguished guest was General Beauregard. The President of the Board
was at that time outspoken and bitter in his opinions against everything
Southern, and had not the good sense and common manners to conceal his
animus on this occasion. Others took a similar attitude, and the feeling
manifested became as belligerent as if the war had been actually raging.
This exhibition of bad blood and bad manners was very distasteful to me.
I was a member of this Exchange, and I thought I knew my rights, and I
was disposed to maintain them. I regarded the insult to Beauregard as
offered to myself, and was prepared to resent it accordingly. He was my
guest, and I had determined to stand by him at all hazards. I informed
those who were foremost in manifesting these unworthy feelings of
resentment that I should protect my friend no matter what course they
should take, as long as he desired to remain in the room. This had some
effect in smoothing down the asperities of the most hostile, and we were
permitted to depart in peace. I escorted General Beauregard afterwards
to the New York Stock Exchange, where he was kindly received, and
without a murmur of feeling. I introduced him to many of the members
individually, who shook hands with him and interchanged civilities in
the warmest manner, giving him a hearty welcome to our city. Beauregard
was delighted with this reception at the Stock Exchange, but was greatly
chagrined at the conduct of the people in the Gold Room.
After this, many other Southern notabilities from time to time came to
the Street, and received at my hands similar treatment. Among others,
General Forrest, of Fort Pillow carnage notoriety, paid me a visit.
I could relate a great many other instances, if time and space would
permit, showing very explicitly the efforts I have made to help along
harmony and reconstruction. I was anxious, in the interest of general
prosperity, to assist the South to recover from the dreadful blow
inflicted upon her by a fratricidal war as soon as possible.
So, as the work of reconstruction progressed, I became interested in the
internal improvements of that section of our country, as my subsequent
investments there will fully attest. I thought that the South had
experienced fighting enough, as the North had, and that the people of
that section would gratefully accept the terms in the main agreed upon
under the appletree at Appomattox, between General Grant and General
Lee. I had hoped that the peace would be such as to conserve all the
interests of the country, including every man, from the boldest and
bravest Confederate general down to the lowest of the negro race,
without any invidious distinction. I had the hopeful impression that all
would go to work and do all in their power to till the soil, or do
anything else that would add to the material wealth of the country and
the individual happiness of its recreated citizens; that they would
apply themselves to every form of industry that would help in any degree
to a recovery from the disasters growing out of the war, and the
lamentable destruction of property attending it.
The South immediately after the war had greater advantages than most
people imagine, if it had only taken hold of them in the right spirit.
It had various sources of prosperity, which under prudent management
would have enabled it to leave the North far behind in the race for
wealth. Its leading staples, cotton, tobacco, and rice, had all a gold
value in the markets of the world.
This opportunity of going in to produce at hard-pan prices on a gold
basis invested it with an immense leverage against the North, with its
inflated currency and war prices, growing out of the large issue of
paper money necessary to carry on the war, and consequent
over-speculation as a natural result or sequence.
It seemed to me, then, that, while the South had a grand opening for
growth in prosperity on a solid basis to begin with, the business of the
North was, in comparison, in an inflated position, that must burst
before it could get a fair start on a solid foundation. It appeared as
if it would sooner or later suffer a temporary collapse, while the South
had only to begin and build without fear of any such interruption.
I, therefore, selected for my investments as the best fields in the
South the two States that stood the highest in their financial credit,
in their character for integrity and enterprise, and that then had the
brightest outlook, namely Georgia and Alabama.
These States took my money freely, issued their State securities, their
County securities, sold me their bonds, and got me thoroughly
interested, and that to a very large extent, and then treated me with
the basest ingratitude, repudiating their bonds, and cheating me out of
my money and property in every way conceivable.
I attribute the cause of this unjust treatment, however, to Andrew
Johnson, who, by accident, through the assassination of President
Abraham Lincoln, became President of the United States.
Mr. Johnson was a Tennesseean, loyal during the war to all appearances,
and for all practical purposes of the Union cause, and he would
doubtless have so remained had it not been for the unfortunate
circumstance of Abraham Lincoln’s death.
This made him Executive of the nation, for which by ability he was amply
fit and qualified, but through bias and temperament, entirely unfit to
fill creditably this eminent position for the best interests of the
country at large.
The position I took, as above stated, was, that since the war was over,
it was a thing to be forgotten as speedily as possible. The finality was
seriously delayed owing to the hostility that President Johnson did his
best to excite and prolong amongst the people of the South.
Congress, it will be remembered, was leniently disposed in the passing
of measures and framing of laws to bring the traitorous States of the
South back again into the Union. The members of Congress most cautiously
and delicately worked to patch up old sores that were supposed to exist
between the victors and the vanquished, but when their bills went to the
President they were unmercifully subjected to a wholesale process of
vetoing, almost indiscriminately. This produced a condition of chronic
hostility between the legislative and executive branches of the
Government, and the wider the breach became the stronger and more
vindictive grew the spirit which it naturally aroused in the Southern
people.
These people were sadly misled by the President, whom they trusted, and
his hobbies were humored at the expense of their prosperity.
Johnson made the people of the South believe that his vetoes would only
delay legislation until Congress should be forced to find them something
better. They, accordingly, reposed faith in him, and were badly
deceived.
The feeling of animosity excited by this condition of things so worked
on the minds of the people, causing the South to wax bitter and
revengeful, that it appeared to people on this side of Mason and Dixon’s
line that their Southern brethren had become even more implacable than
during the hottest scenes of the war.
It was for the reasons above stated that bonds which had been issued by
the South for money invested by the North were, in a large measure,
repudiated. As soon as it was discovered that most of the vested
interests were owned by Northern people, the spirit of revenge and
avarice combined was aroused to the point of repudiation. And, unlike
the courage of Macbeth, it did not require any stimulant to make that
the sticking point. Every method that ingenuity could devise to strike a
blow at the North was employed. No opportunity was allowed to slip that
afforded any advantage, either material or moral.
Thus, instead of accepting the situation as General Lee had done, they
were led astray by every one who had a political axe to grind. They took
an active part in politics instead of looking after the various
industries of the country and developing its resources. They engaged in
political discussions and their attendant broils, to the neglect of
necessary enterprises that would have brought them material prosperity.
Thus they became poorer and poorer. Many years were lost in these
political turmoils, and the people became more and more embarrassed.
From these circumstances there were many financial victims, but few, if
any, suffered more in that respect than myself.
I had over two and a half millions of dollars invested in the State of
Georgia securities, and in other ways, a million more at least in
Alabama and North Carolina together, all of which was perfectly
annihilated, the entire disastrous result growing out of the factious
spirit that was created and fostered by the vile and narrow prejudices
of President Andrew Johnson, of whom I have still more to say in another
chapter.
[Illustration:
_Most Very Sincerely Robert Garrett_
]
------------------------------------------------------------------------
CHAPTER L.
WESTERN AND SOUTHERN FINANCIAL LEADERS.
ALFRED SULLY, HIS ORIGIN AND SUCCESSFUL CAREER.—CALVIN S. BRICE, A
FINANCIER OF ABILITY.—GENERAL SAMUEL THOMAS, PROMINENT IN THE
SOUTHERN RAILROAD SYSTEM.—GENERAL THOMAS M. LOGAN, A SUCCESSFUL MAN
IN RAILROADING AND MINING.—FINANCIAL CHIEFTAINS OF BALTIMORE.—THE
GARRETTS.—THEIR GREAT SUCCESS AS RAILROAD MANAGERS.—PORTRAIT OF
ROBERT GARRETT.
Alfred Sully, who has become so prominent in the financial world within
a year, is tall, rather slightly built, nervous, and energetic. His
face, by its long, square contour and thoughtful lines, suggests that of
Senator Wm. M. Evarts; the eyes are keen and penetrating but kindly. At
heart his tastes are those of a genial literary recluse. Circumstances
and unquestioned ability have made him a financial leader. He was born
about 46 years ago in Ottawa, Canada, where he received a good
academical education. He tried his fortune in the West. He went to
Cincinnati, studied law, and was graduated from one of its best schools,
whereupon he went to Davenport, Iowa, and formed a co-partnership which
became known as the leading law firm of the city. He acquired some
means, and in 1872 came to New York, the proper place for men of
ability. It is understood that at this time he had some idea of
indulging his tastes for authorship, but Austin Corbin put a veto on
that. The two had become acquainted in Davenport, where Mr. Corbin was
formerly a banker, and the latter, on meeting Mr. Sully in New York,
tendered him the position of General Manager of the Corbin Banking
Company, which he had established here. He accepted it. But this post,
responsible as it was, could not long hold a born financier, and we soon
find him obtaining control of the Indiana, Bloomington & Western Road.
He next bought the Ohio Southern, of which he is still President, a
transaction in which he and his friend nearly doubled their money. Then
he made a great deal of money in the Central Iowa and other roads in
Illinois. He and Austin Corbin secured control of the Long Island Road,
and he gave much time and labor to the Manhattan Beach Road and
associated interests at Coney Island. Then he went into the scheme of
restoring the financial health of that enfeebled giant among railroads,
the Reading, and was one of the prime movers in the reorganizing and
consolidation of the Richmond Terminal, the Richmond & Danville, the
East Tennessee, Virginia & Georgia, and numerous other Southern roads,
which now form one vast system, which will probably yet obtain an
entrance into New York.
CALVIN S. BRICE.
Calvin S. Brice was Vice-President of the East Tennessee, Virginia &
Georgia Road, and is a Director in the Richmond Terminal and numerous
other Southern roads. He is now connected with the United States Express
Company, in the management of which he will take an active part. He was
born in Lima, Ohio, about 48 years ago, and was educated as a lawyer. He
is below the medium height, and rather slightly built, but has broad
shoulders, a fitting pedestal for a good head, with firm square features
and keen bluish gray eyes. He wears a sandy beard, closely trimmed,
which tends to heighten the effect of decision of character. He is a
financier of ability.
GEN. SAMUEL THOMAS.
General Samuel Thomas, who is prominent in the Southern railroad system,
is now about 50 years of age, is a Western man, and before the war was a
civil engineer in the service of an Ohio railroad. After the war he
again became a civil engineer, but, drifting after a time to New York,
engaged in railroad enterprises, and ultimately secured a large interest
in Southern railroads. He is now President of the East Tennessee,
Virginia & Georgia, and is largely interested in the Richmond & West
Point Terminal, the Richmond & Danville, the Memphis & Charleston, and
other Southern roads. He is tall, well-built, energetic, and affable. He
lives in fine style, and is a member of the Union League. He is worth
several millions.