The following pages are intended to throw some light on imperfectly known events connected with Wall Street speculations and investments, and also upon the condition and progress of the country from a financial standpoint, during the fifty years which I have experienced in the great money center.

The theme is worthy of an abler pen, but in the absence of other contributors to this branch of our National history, I venture the plain narrative of an active participator in the financial events of the time in which I have lived.

I have also made a brief retrospect of the history of Wall Street, and financial affairs connected therewith since the origin of the Stock Exchange in New York City.

In sketching the men and events of Wall Street, I have freely employed the vernacular of the speculative fraternity as being best adapted to a true picture of their characteristics, although probably not most consonant with literary propriety.

I have simply attempted to unfold a plain, unvarnished tale, drawing my material from experience and the records of reliable narrators.

HENRY CLEWS.

New York, March 31, 1908.

INTRODUCTORY.

CHAPTER I.MY DEBUT IN WALL STREET.

CHAPTER II.WALL STREET AS A CIVILIZER.

CHAPTER III.HOW TO MAKE MONEY IN WALL STREET.

CHAPTER IV.IMPORTANCE OF BUSINESS TRAINING.

CHAPTER V.PERSONAL HONOR OF WALL STREET MEN.

CHAPTER VI.WALL STREET DURING THE WAR.

CHAPTER VII.MORE WAR REMINISCENCES—BRITISH AND NAPOLEONIC DESIGNS.

CHAPTER VIII.FOREIGN INTRIGUES AGAINST AMERICAN LIBERTY.

CHAPTER IX.SECRETARY CHASE AND THE TREASURY.

CHAPTER X.THE NATIONAL BANKS.

CHAPTER XI.THE NEW YORK STOCK EXCHANGE.

xCHAPTER XII.“CORNERS” AND THEIR EFFECT ON VALUES.

CHAPTER XIII.THE COMMODORE’S “CORNERS.”

CHAPTER XIV.DANIEL DREW.

CHAPTER XV.DREW AND VANDERBILT.

CHAPTER XVI.DREW AND THE ERIE “CORNERS.”

CHAPTER XVII.INTERESTING EPISODES IN DREW’S LIFE.

CHAPTER XVIII.PANICS.—THEIR CAUSES.—HOW FAR PREVENTABLE.

CHAPTER XIX.OLD-TIME PANICS.

CHAPTER XX.THE TRUE STORY OF BLACK FRIDAY TOLD FOR THE FIRST TIME.

xiiiCHAPTER XXI.CAUSES OF LOSS IN SPECULATION.

CHAPTER XXII.VILLARD AND HIS SPECULATIONS.

CHAPTER XXIII.FERDINAND WARD.

CHAPTER XXIV.HENRY N. SMITH.

xivCHAPTER XXV.KEENE’S CAREER.

CHAPTER XXVI.OUR RAILROAD METHODS.

CHAPTER XXVII.THE GEORGIA BOND REPUDIATION.

xvCHAPTER XXVIII.ANDREW JOHNSON’S VAGARIES.

CHAPTER XXIX.THE DIX CONVENTION.

CHAPTER XXX.CONSEQUENCES OF THE UTICA (DIX’S) CONVENTION.

CHAPTER XXXI.GRANT’S SECOND TERM.

CHAPTER XXXII.THE TWEED RING, AND THE COMMITTEE OF SEVENTY.

CHAPTER XXXIII.HON. SAMUEL J. TILDEN.

CHAPTER XXXIV.COMMODORE VANDERBILT.—HOW HIS MAMMOTH FORTUNE WAS ACCUMULATED.

xviiCHAPTER XXXV.WM. H. VANDERBILT.

CHAPTER XXXVI.“YOUNG CORNEEL.”

CHAPTER XXXVII.THE YOUNG VANDERBILTS AND THEIR FORTUNES.

CHAPTER XXXVIII.THE ROTHSCHILDS.

CHAPTER XXXIX.TRAVERS.

CHAPTER XL.CHARLES F. WOERISHOFFER.

CHAPTER XLI.WOMEN AS SPECULATORS.

CHAPTER XLII.WESTERN MILLIONAIRES IN NEW YORK.

CHAPTER XLIII.RAILROAD INVESTMENTS.

CHAPTER XLIV.THE SILVER QUESTION.

CHAPTER XLV.THE LABOR QUESTION.

CHAPTER XLVI.AN IMPORTANT SYNOPSIS.

CHAPTER XLVII.INTERNATIONAL SIGNIFICANCE OF THE BARTHOLDI STATUE.

CHAPTER XLVIII.LARGE FORTUNES AND THEIR DISPOSITION.

CHAPTER XLIX.SOUTHERN AFFAIRS IN SPECULATION.

CHAPTER L.WESTERN AND SOUTHERN FINANCIAL LEADERS.

CHAPTER LI.ARBITRATION.

CHAPTER LII.NEW YORK AS A FINANCIAL CENTRE.

CHAPTER LIII.EARTHQUAKE THEORIES AND WALL STREET AFFAIRS.

CHAPTER LIV.AUGUST BELMONT.

CHAPTER LV.THE SOCIALIST OBJECTIONS TO THE PRESENT ORDER OF SOCIETY EXAMINED.

CHAPTER LVI.STOCK EXCHANGE CELEBRITIES.

CHAPTER LVII.A LOOK INTO THE FUTURE.

CHAPTER LVIII.JAY GOULD.

CHAPTER LIX.MEN OF MARK.

CHAPTER LX.

CHAPTER LXI.

CHAPTER LXII.

CHAPTER LXIII.

CHAPTER LXIV.

CHAPTER LXV.

CHAPTER LXVI.

CHAPTER LXVII.

CHAPTER LXVIII.

CHAPTER LXIX.

CHAPTER LXX.

CHAPTER LXXI.

CHAPTER LXXII.

CHAPTER LXXIII.RECENT MEN OF MARK.

xxvCHAPTER LXXIV.

CHAPTER LXXV.

CHAPTER LXXVI.

CHAPTER LXXVII.

CHAPTER LXXVIII.

CHAPTER LXXIX.

CHAPTER LXXX.

CHAPTER LXXXI.

CHAPTER LXXXII.

CHAPTER LXXXIII.

CHAPTER LXXXIV.

CHAPTER LXXXV.

CHAPTER LXXXVI.

CHAPTER LXXXVII.

CHAPTER LXXXVIII.

CHAPTER LXXXIX.

xxvi

Henry ClewsFrontispieceMills Building5Parents of Henry Clews7Birthplace of Henry Clews9Map of U. S. by Henry Clews11Jacob Little13Salmon P. Chase39John Sherman73E. G. Spaulding81New York Stock Exchange (exterior)87New York Stock Exchange (interior)91Daniel Drew117George I. Seney175Henry Villard209Georgia State Bond255Samuel J. Tilden337Commodore Vanderbilt345W. H. Vanderbilt355Cornelius Vanderbilt387W. K. Vanderbilt389F. W. Vanderbilt393Three Rothschilds397Nathan Rothschild401W. R. Travers407C. P. Huntington451Leland Stanford455D. O. Mills457Charles Crocker459John W. Mackay461James C. Flood463James G. Fair465Robert Garrett553August Belmont595George J. Gould607Jay Gould619Cyrus W. Field659P. D. Armour661Levi P. Morton663J. A. Stewart665A. J. Drexel667Leonard W. Jerome669Addison Cammack671Russell Sage673Chauncey M. Depew675James M. Brown677E. C. Stedman679H. Victor Newcombe681Moses Taylor683Thomas L. James685John H. Clews687James B. Clews689Roswell P. Flower691J. Pierpont Morgan693John D. Rockefeller701William Rockefeller713Henry H. Rogers729John D. Archbold735Edward H. Harriman793Wm. H. Moore821Daniel G. Reid843Thomas F. Ryan849John W. Gates853Chas. M. Schwab869August Belmont879Anthony N. Brady881Stuyvesant Fish903William E. Gladstone921Fac-simile, Gladstone letter923

MOST OF WHOM I HAVE KNOWN PERSONALLY.

My Dear Friends:

I have attempted, in the following pages, to relate in a simple and comprehensive manner, without any aim at elaboration, the leading features of the most prominent events that have come within the sphere of my personal knowledge and experience during the twenty-eight years of my busy life in Wall street. I have never kept a diary regularly, but have been occasionally in the habit of preserving certain memoranda in the form of letters, and a few scraps from the newspapers at various times. With these imperfect mementoes, I have revived my recollection to dictate to my stenographer the matter which these pages contain, in a somewhat crude form and unfinished style. In fact, I have not aimed at either finish or effect, not having time for it, but have simply made a collection of important facts in my own experience that may help the future historian of Wall Street to preserve for the use, knowledge and edification of posterity some of the most conspicuous features and events in the history of the place that is yet destined to be the great financial centre of the world.

If I can only succeed, out of all the poorly-arranged material I have gathered, in furnishing the historian of the future with a few facts for a portion of one of his chapters, I shall have some claim upon the gratitude of posterity.

In my description of Drew, Vanderbilt, Gould, Travers, xxviiiKeene, Conkling and others, I have followed the advice which Oliver Cromwell gave his portrait painter: “Paint me as I am,” he said. “If you leave out a scar or a wrinkle, I shall not pay you a farthing.” I have given my opinion of men and things also without any superstitious regard for the proverb de mortuis nil nisi bonum.

I have also endeavored to refrain from setting down aught in malice. Many of those referred to are now dead.

When any of those gentlemen of whom I have had occasion to speak, who still survive, shall write a book, they can indulge in the same privilege with my name that I have done with theirs, whether I am living or dead at the time.

I shall ask no indulgence for myself that I don’t accord to others.

I have expressed my opinions freely from a Wall Street point of view, from the standpoint of the much-abused operator and broker, and “bloated bondholder.”

I have endeavored to enlighten the public on the true status of Wall Street, as the very backbone of the country’s progress and prosperity, instead of misrepresenting it as a den of gamblers, according to the ignorant and somewhat popular prejudice of the majority who have attempted to write or speak on the subject. This feeling has been largely fostered by clergymen, on hearsay evidence, as well as by the practices of professional swindlers, who have been smuggled into Wall Street from time to time, but who have no legitimate connection therewith any more than they have with the church, which repudiates them as soon as it discovers them.

In fact, the great aim of the book is to place Wall Street in its true light before the eyes of the world, and help to efface the many wrong impressions the community have received regarding the method of doing business in the great financial mart to which the settlement of accounts in all our industry, trade and commerce naturally converges.

xxixI have endeavored to correct the utterly erroneous impression that prevails outside Wall Street, in regard to the nature of speculation, showing that it is virtually a great productive force in our political and social economy, and that without it railroad enterprise and other branches of industrial development which have so largely increased the wealth of the nation, would have made but slow progress.

To preserve and inculcate these ideas by putting them in what I hope may be a permanent form, is another object of publishing this volume. I know you can sympathize with me in this effort to set public opinion right, as many of you have long been making strenuous endeavors after success in the same direction.

To put the whole matter, then, into one short and comprehensive clause, my cardinal object in this book is to give the general public a clearer insight of the reputed mystery and true inwardness of Wall Street affairs.

In my relation of certain reminiscences of Wall Street, and in discussing the checkered career of certain brokers, operators and politicians, I have endeavored to be guided by a historic aphorism of Lord Macaulay:

“No past event has any intrinsic importance,” says the great essayist, litterateur, historian and statesman. “The knowledge of it is valuable,” he adds, “only as it leads us to form just calculations with respect to the future.”

In the samples of my experience which I have given in this book I have aimed, to some extent, at this rendition of the noble purposes of history and biography in their philosophic and scientific application of teaching by example. If I have fallen far short of this high ideal of the British Essayist, as I humbly feel that I have, I must throw myself on the kind indulgence of the readers, and ask them to take the will for the deed. For the presentation of the facts themselves I crave no indulgence. They are gems worthy of preservation in the light xxxof the above definition. I only submit that the setting might be much better.

My chapters on politics may be considered foreign to the main issue, but as many of the events therein described were intimately connected with my business career, I think they are not much of a digression.

Henry Clews.

MY PART IN MARKETING THE UNITED STATES CIVIL WAR LOANS.

By Henry Clews, LL.D.

To a very large majority of Americans now living the great Civil War—waged from 1861 to 1865—between the North and the South is only known as a matter of history. But it was the greatest war the world ever witnessed, involving the loss of nearly a million of men, and I have a vivid recollection of it, for I was an actor in it, from its beginning to its end, to the extent of providing some of the sinews of war for the United States Government, without which it could not have defeated the armies of secession, and preserved the Union.

From the time that Abraham Lincoln was elected to the Presidency of the United States, in November, 1860, the South began to prepare for secession from the North, peaceably if the North consented, but by war if it resisted. It was bent on this course because it foresaw in a Republican administration at Washington its practical loss of control of Congress and the spoils of office—in fact, of the Government itself—that it had so long enjoyed under Democratic administrations. James Buchanan’s term as President having expired on March 4, 1861, Abraham Lincoln was then inaugurated as his successor. It angered the South to see a Republican succeed a Democrat in the White House, and it precipitated the tremendous conflict that followed, by seizing Fort Moultrie, in Charleston Harbor, and firing on Fort Sumter. Fort Moultrie’s guns awoke the North to action, and made it a determined unit in defense of the flag that had xxxiibeen fired upon, and its cry was, “The Union must and shall be preserved!”

As this was the most eventful and critical period in our national history since 1776, and so many know it only by what they have read of it, I will give a general idea of its salient features bearing upon the Government finances and the war loans.

When, after the bombardment of Fort Sumter by Fort Moultrie, on April 14, 1861, Major Robert Anderson, the Union commander, accepted, under the stern necessities of the situation, General Beauregard’s terms of evacuation, the die was cast.

The North picked up the gauntlet of war with patriotic enthusiasm, and the great conflict had begun. But when our troops marched out of that dismantled stronghold of the Union, with drums beating and colors flying, it is safe to say that few or none, either in the North or the South, foresaw the long and mighty struggle that would, for four eventful years, follow the bombardment of Fort Sumter, during which gold would become demonetized before the end of the year. It did so on December 30, 1861, and in the darkest days of the conflict commanded a premium as high as one hundred and eighty-five per cent. over United States legal tender notes, making these worth only 54 1/20 cents in gold, while United States bonds were selling for about 60 cents on the dollar in gold.

When the New York Clearing House agreed, on the date named, to suspend specie payments, the example was at once followed by all the banks in the country, and gold immediately began to command a small premium. None supposed then that the suspension would continue for eighteen years.

In England, during the long suspension from 1797 to 1821—through the Napoleonic wars—the premium on gold never rose above forty-one per cent., and that was in 1814, the year before the end of hostilities. This was owing to the policy of William Pitt and his successors in the management of the British finances. They raised all the money needed for war xxxiiipurposes by taxation and loans, thus restricting the paper money issues, so as to prevent currency inflation, whereas we pursued the opposite course.

When Fort Sumter was fired upon, my firm—Livermore, Clews & Co.—was already prominent in Wall Street, and I immediately began to devise ways and means to help the Government to raise the money that I saw would be necessary to prosecute the war for the Union which this bombardment made inevitable. Fort Moultrie’s guns had united the North in a call to arms, and men by tens of thousands left the farm, the loom, the office, and the store, from Maine to Indiana, to join the Union army.

Money, therefore, was needed by the United States Government, and very large amounts of it, to equip troops and purchase munitions of war.

As James Buchanan was then President, and, like a long line of his predecessors, a Democrat, he had several Southerners in his Cabinet. These promptly resigned their places and went South, including the Secretary of the Treasury, Howell Cobb, who left with surprising suddenness, and the office was filled for a brief period by General John A. Dix, as acting Secretary.

But before leaving, Howell Cobb had offered and sold to Wall Street bankers $20,000,000 of United States five per cent. bonds at 105, authorized, of course, by an old law. Owing, however, to the heavy decline in securities, and general depression following the outbreak of the war, only about one-quarter of these bonds were taken and paid for by those who had subscribed for them; and nothing was done by the Government to enforce the completion of the purchase by those who had defaulted under the severe stress of the times.

Their default was a serious matter for the Government at that time, as it left the funds in the Treasury in a very depleted condition, and interest payments on the public debt were about to fall due, which it had no money in its vaults to provide for. At this crisis John J. Cisco, the United States Sub-treasurer in New York, was instructed, from Washington, xxxivto call a meeting of the principal Wall Street bankers at the Sub-treasury, and after stating the situation to them, to ask for an emergency loan on one-year United States notes, and let them fix the rate of interest themselves to correspond with the state of the money market.

Money was then loaning at about twelve per cent. per annum in Wall Street. So when the bankers who responded to Mr. Cisco’s call, myself among the number, assembled at the Sub-treasury, they, after full discussion, agreed to take the amount of notes offered, and at this rate of interest. It was a very high rate for the Government to pay, too high under ordinary circumstances, but the emergency justified it; and Mr. Cisco approved of it, in view of the market rate and the notes running for one year only. My firm took a considerable amount of them and induced others to do so also, and we did so, presumably like the rest of the buyers, not merely because the rate agreed upon was so high, but because we felt it a duty to help the Government; and at all times thereafter during that critical period we worked no less diligently to uphold the public credit.

The Government recognized that a default in its interest payments would have been disastrous to the public credit, and a stumbling block in the way of raising money to prosecute the war, besides causing general depression of business. It therefore had to be prevented at all hazards.

Had these notes not been taken, the Treasury would undoubtedly have been left without the means of paying this interest when due. Consequently, it gratified me to feel that I had been instrumental in inducing others to subscribe for a part of this urgently needed loan.

Soon afterwards Mr. Salmon P. Chase was appointed Secretary of the Treasury by President Lincoln.

Not long afterwards Secretary Chase came to the Sub-treasury and invited bids for $20,000,000 of six per cent. United States bonds maturing in 1884. These were authorized by an old law. He accepted all bids at 94 and over, but rejected all under 94, the result of which was that considerably xxxvmore than a third of the 1884’s remained unsold. This was to be regretted, because the Treasury was in great need of money. I therefore quickly bestirred myself to form a combination to purchase the unsold bonds of 1884 at 94, my firm being willing to take a liberal share of them, and I succeeded in getting subscriptions from banks and capitalists who had not bought any of those sold, for the unsold amount, subject to my own discretion as to the advisability of taking the bonds, after going to Washington and conferring with Secretary Chase.

So I immediately went there by night train and saw the Secretary early in the morning at the Treasury, and told him I had come on behalf of the combination I had formed, to make him a direct offer at his own price—94—for the unsold 1884 bonds. He was evidently pleased and surprised by the apparent improvement in the demand for them. He said, however, with a fine sense of probity, and consideration for the rights of others, that while he was glad I had come to Washington, and made the proposition to take the balance, he did not think it would be fair to those who had bid and whose bids were thrown out, to sell the rest of the issue without first notifying them of the new offer, and giving them the option of taking what they wanted at the price I offered—94.

He asked me to call again the next morning, after he had given the matter further consideration, and I did so. But meanwhile I had talked with many Southern politicians and office-holders, Peter G. Washington, one of the Virginia Washingtons, among them, and seen so much of the extensive war preparations which were being made in and about Washington, that I came to the conclusion that a long and very bitter war lay before us, notwithstanding that Mr. Chase had the day previously assured me that it would all blow over, with peace restored, within sixty days, a prediction that was echoed by Secretary of State Seward a little later. I was particularly impressed by what Mr. Washington, himself a prominent Government official, had told me of Southern sentiment and Southern determination to fight till all was xxxvilost or gained, and by his and other Southerners’ absolute but mistaken confidence that the South would establish its own Confederacy, however long a war it might take to do it. The South in seceding from the Union expected to be able to establish a slave oligarchy, for in Lincoln’s election it foresaw the doom of slavery, as both he and the Republican party were pledged to work for its abolition. Yancey and the other leading Southern “fire eaters” were responsible for this false view.

When I made my second call upon Mr. Chase, I said: “Since I saw you yesterday, Mr. Secretary, I have heard so much in conversation with Southern politicians and office-holders at the hotels, and seen and heard so much of the extensive war preparations on both sides, that I am convinced the war will be a long one, and I fear we shall see much lower prices for Government bonds and securities of all kinds. Feeling as I do, therefore, in justice to those I represent and who have given me full power to use my own discretion in the matter, I must withdraw the offer I made you yesterday. Had you accepted my offer at the time, of course I would have considered the transaction closed, and taken the bonds without question, but as it is, you will admit I am under no obligation, and free to retire.”

“Oh, certainly,” said Mr. Chase, “but I think you are making a mistake, for the war will be over in sixty days and these bonds will go to par!”

But my sober second thought and foresight, based upon what I had seen and heard, and the information I had gleaned in Washington, served me well, and my associates in the combination had reason to thank me for my sagacious action, as the bonds soon afterwards declined to 84; and the Union disaster at the battle of Bull Run, fought at Manassas on July 21, 1861, aroused the North to a realization of the gravity and vastness of the conflict far more than any of the warfare that had preceded it had done; at the same time it made it more determined than before to prosecute the war till the South was conquered into submission to the Union forces.

xxxviiMr. Chase’s second act, in replenishing the Treasury’s funds, was to offer for subscription six per cent. United States notes, receivable for all payments, including customs duties, authority to issue which already existed. He found difficulties in the way, however, and, after conferring with the Sub-treasurer, Mr. John J. Cisco, who recommended the appointment of three Wall Street banking houses to act as Government agents for their sale, on commission, namely, Morris Ketchum & Co., Read, Drexel & Van Vleck, and Livermore, Clews & Co., he appointed them. These were the first and sole Government agents for the sale of its securities that had been thus far selected, and they all appreciated the compliment, and did their work well, for they promptly sold all the notes, of this issue, the Secretary had offered.

Mr. Chase throughout made strenuous efforts to supply the Government with the means for carrying on the war, and he was loyally aided by the banking interests of New York, a fact which he recognized and acknowledged to me and others in appreciative terms.

On a subsequent memorable occasion, in the summer of 1861, Secretary Chase appeared at the Sub-treasury after Sub-treasurer John J. Cisco had called, at his request, a number of leading bankers and capitalists to meet and confer with him. When we assembled there he said to us, in his stately and impressive manner, “Gentlemen, the Government needs and must have fifty millions of dollars, and it wants it at once to meet war expenses. For this I am prepared to issue that amount of Treasury notes of the two hundred and fifty million issue just authorized by Congress—by the act of July 17, 1861—bearing interest at 7 3/10 per cent. I am no financier, so I cannot tell you how to raise the money, but you distinguished leaders in the world of finance well know what means to adopt to get it. So I leave it in your hands entirely. All I need say further is to repeat that the Government must have fifty millions of dollars, and I leave it to you to find the way to procure it.”

Then Mr. Chase sat down, and all of us who were present xxxviiicompared notes with each other in conversation about the room; that is, we talked the matter over for nearly twenty minutes. The result of the conference was then announced by our spokesman, Moses Taylor, who said, addressing Mr. Chase:

“Mr. Secretary, we have decided to subscribe for the fifty millions of United States Government securities that you offer, and to place that amount at your disposal immediately! So you can begin to draw against it to-morrow!”

A general clapping of hands followed this prompt announcement, and Mr. Chase responded by saying:

“Gentlemen, I thank you on behalf of the Government for your public spirit in helping it so generously and so promptly in this emergency.”

The whole scene was of rare and stirring interest, and momentous consequences hinged upon its result. As a drama drawn from real life it would have been effective if represented on the stage, with the large and portly form and massive head of Secretary Chase as its leading feature.

This was the first lot, or installment, of the $250,000,000 issue of 7-30 Treasury notes put on the market.

Of these, the Secretary had the privilege of issuing $50,000,000, payable in coin at the Sub-treasuries in New York, Boston, and Philadelphia, without interest, to be used as currency.

After disposing of the first 50,000,000 of 7-30 notes, as I have described, Secretary Chase communicated with the banks concerning the sale of the remainder, with the view chiefly of saving the payment of commission to the agents. But he was unable in that way to make sales on satisfactory terms to them. So he added to the three Government agents originally appointed for the sale of its securities, Fisk & Hatch, and Vermilye & Co., of New York, and Jay Cooke & Co., of Philadelphia, and told them the “7-30” notes would be delivered to them as fast as called for at the New York Sub-treasury.

Thereupon the New York agents held a meeting, at which xxxixit was agreed that Jay Cooke, of Philadelphia, should be at the head of the agency system and take charge of the advertising of the 7-30 loan, or, in other words, that Jay Cooke should act as Chairman of the agency system. The agreement also specified the commission rates and other details for the purpose of avoiding cutting, or clashing, between the agents. To this organization and agreement Mr. Chase assented; and all the agents made strenuous efforts to make sales from the word go.

Jay Cooke & Co. had no office in New York at that time, nor did they establish one till after the end of the war. This really led to their designation as the head of the agency system, as the selection of a New York firm would have created jealousy among the New York firms.

After all the 7-30s authorized to be issued were sold, came the 5-20 loans, which were sold through the same Government agency system, and the 5-20s were as successful as the 7-30s had been.

Mr. Munson B. Field, Assistant Secretary of the Treasury under Salmon P. Chase, had an examination made of the books at Washington, at my request, to see which individual firm of the Government agents sold the most United States 7-30s and 5-20s, and he reported that Livermore, Clews & Co. had the highest record. But I am willing that the credit should be shared equally by the four United States war loan banking firms, viz.: Jay Cooke & Co.; Livermore, Clews & Co.; Vermilye & Co., and Fisk & Hatch, as all did equally good and earnest work in financing the Government during the Civil War. Certainly the four firms are entitled to equal credit, and no one to a greater extent than the others. There was sufficient glory achieved by the magnificently patriotic work done by these four firms to admit of dividing the honors, so that I do not hesitate to say that they did immensely valuable service to the Nation, and made for themselves a proud National record, which should be always greatly appreciated by the American people, as it was at the time by the Government authorities in Washington. The Government xlwas thus enabled to clothe and feed a million of soldiers in arms on the battlefield, fighting for the salvation of the Nation, and these finally brought the war to a victorious end, thus perpetuating the best form of government known to man.

I may here mention that Secretary Chase said:

“If it had not been for Jay Cooke and Henry Clews, I should never have been able to sell enough of the 7-30 notes and 5-20 bonds to carry on the war.”

This remark of his was generally published at the time in the newspapers.

The Government had sold through its agents $150,000,000 of the 7-30 notes before the suspension of specie payments, an event that was hastened by the Secretary’s withdrawal from the banks into the Sub-treasuries of most of the proceeds of the sales, his call for payment from the agents to the Treasury being in three installments: on August 19th, October 1st, and November 2d. Moreover, the hoarding and exportation of gold were largely stimulated by the anticipation of specie suspension, and, after it occurred, gold suddenly disappeared from circulation.

This obviously involved a corresponding contraction of the circulating medium, and Mr. Chase, to neutralize it, and supply the place of the demonetized coin, issued the $50,000,000 of non-interest-bearing notes, which were called United States Demand Notes. He did this also to obviate the necessity of the State Banks issuing more of their own notes, as well as to raise money to meet the rapidly increasing demands of the Treasury.

Congress, seeing that this contraction tended to produce stringency in the money market, and handicapped the Government’s agents in the sale of its securities, had, on August 5, 1861, suspended the act of August 6, 1846, “providing for the better organization of the Treasury, and for the collection, safe-keeping, and disbursement of the public revenue.” It did this so as to permit the Secretary of the Treasury to deposit any of the money obtained on authorized loans in such xlisolvent specie-paying banks as he might select, and, in addition, it expressed this in a resolution. The resolution was promptly acted upon by Secretary Chase, and this, and a later law, governed the policy of the Treasury ever afterwards. Monetary stringency was thus avoided by the Treasury keeping as much of its money in the banks as it could, and so locking up as little as possible in the Treasury and Sub-treasuries. The evil effects of the Sub-treasuries system in locking money out of circulation was thus practically acknowledged and guarded against.

When the sale of the 7-30s had been completed by the Government agents, there was great pressure brought to bear by the banks throughout the country, who were backed by many influential newspapers, in favor of giving the sale of the 5-20s to the banks instead of to the Government agents. The pressure upon Secretary Chase became so great that he concluded to try the experiment, and authorized all the banks throughout the country to sell the 5-20s. After giving them every opportunity to supersede the agency system, as previously adopted with the six per cent. and the 7-30 Treasury notes, the Secretary was finally compelled to abandon the banks and go back again to the agents, who took hold with vigor and made the sale of the 5-20s as brilliant a success as they had previously made that of the 7-30s. We were friendless in Europe, but we overcame this by patriotism and energy at home.

After a time, some of the banks, and there were only State Banks then, threw out the Demand Notes, and so it became necessary to enforce their circulation. To accomplish this, Secretary Chase asked Congress to make them a legal tender for the payment of all debts, public and private, excepting customs duties, and interest on the public debt, payable in coin.

Congress, therefore, on February 25, 1862, remedied the difficulty by passing the Legal Tender Act, making these and all the United States notes lawful money. In the same act it authorized the issue of $150,000,000 of new non-interestbearing xliilegal tender notes. The provision for the payment in coin of customs duties and interest on the bonded debt was obviously as necessary as it was wise, as customs duties furnished the means for paying the interest in specie; and the fact of its being payable in gold created a demand for our bonds in other countries, as well as at home, which would not have existed on paper money interest.

Before long, the whole of the authorized $250,000,000 of 7-30 notes had been sold to the public through the Government agents; and later, from time to time, Congress authorized large additional amounts of these till finally they reached their maximum, in August, 1865, when $830,000,000 of them were outstanding.

At the same date, also, the Government bond issues, which had kept pace with the 7-30 note issues, and simultaneously reached their maximum, showed immense totals. There were then outstanding $514,880,500, of 5-20 bonds, and $172,770,100 of 10-40 bonds. Among our own people patriotism and profit combined to make these great United States loans doubly attractive, and the Government agents used their best efforts to stimulate the demand for them both at home and abroad. Livermore, Clews & Co., in particular, sold large amounts of these in England and other foreign countries, where they ultimately proved extremely profitable investments. To meet the demands of the war, we—the Government agents—were as anxious as the Secretary of the Treasury himself, and never were men more successful in accomplishing their object and doing good work than we were. There was patriotism worthy of Patrick Henry, as well as profit, in this, and Wall Street can lay the flattering unction to its soul that it rendered, through the Government agents, the best of good service to the Government in this time of peril to the Union.

As General Grant said long afterwards to me, we were not fighting for the Union as soldiers in the field, but we served it equally well by helping it in its struggle for money to prosecute the war; and I felt proud of the active part I took xliiiin thus helping to preserve the Union as one of its army in civil life.

The campaign in Virginia having proved prolific of disaster to the Union army, Congress, on July 11, 1862, authorized the issue of a hundred and fifty millions more of non-interest-bearing United States legal tender notes, and on January 17, 1863, another hundred millions to which it added $50,000,000 on March 3d, in the same year, making $450,000,000 of legal tender notes, or greenbacks, fifty of which were to be held as a Treasury reserve, for the redemption of temporary loan certificates.

This was the maximum issue of non-interest-bearing legal tender notes at any time, and by the act of January 28, 1865 Congress restricted the total to $400,000,000, and there it remained till Hugh McCulloch became Secretary of the Treasury, early in 1865.

Secretary Chase had meanwhile become Chief Justice of the United States Supreme Court, and Thomas Fessenden, who succeeded him as Secretary, had resigned. Mr. McCulloch began to contract the legal tender notes, and had withdrawn $44,000,000 before Congress interfered to prohibit any further contraction. It did this in response to a general protest against any further curtailment of the greenbacks in circulation.

From that time until the panic of 1873 their amount remained at $356,000,000. In the interval Mr. Boutwell had succeeded Mr. McCulloch, and Mr. Richardson had succeeded Mr. Boutwell as Secretary. Mr. Richardson, under diminished customs and revenue receipts, and the stress of the panic, restored to circulation $26,000,000 of the $44,000,000 of legal tender notes that had been withdrawn by Mr. McCulloch, whereupon Congress, on June 22, 1874, provided that the greenbacks in circulation should remain fixed at the then existing total of $382,000,000.

The same law which thus legalized the reissue of the $26,000,000 of legal tender notes by Secretary Boutwell abolished the National Bank reserve, previously required to xlivbe kept on bank-note circulation, and for this substituted the provision that the banks were to deposit five per cent. in legal tender notes of the amount of their own note issues with the United States Treasurer at Washington for the redemption of their notes.

This law is still in force, and the establishment of the Redemption Bureau at Washington has resulted, ever since, in daily receipts by it of mutilated bank notes to be replaced by new notes, in addition to the ebb and flow caused by banks increasing or reducing their circulation. The five per cent. in legal tender deposited is counted by them as part of their legal reserve. But the necessity of sending the notes to Washington, and of receiving them therefrom, involves trouble and loss of time to the banks, and also prevents the banks from contracting their circulation when the demand for it is light and increasing it when heavy, as freely and promptly as they would if every Sub-treasury was made a redemption point for National Banks. Congress ought therefore to authorize the equipment of the Sub-treasuries with redemption bureaus for the banks in their respective districts, in order to facilitate this ebb and flow of bank-note issues, and so increase the much needed elasticity of the currency.

In addition to United States legal tender notes, large amounts of interest-bearing legal tender notes were issued during the war. On September 1, 1865, when the currency, like the whole National debt, reached its greatest amount of inflation, the noninterest-bearing legal tender notes and fractional currency stood at $459,505,311, the three years six per cent. compound interest legal tender notes at more than $217,000,000, and the one and two years five per cent. legal tender notes at nearly $34,000,000, the whole aggregating $685,236,269 issued by the Treasury.

There were also outstanding $107,000,000 of temporary loan certificates. These, being payable after ten days’ notice, were treated as greenbacks by the banks, and counted as part of their lawful money reserve, while the remainder circulated as currency, and so practically increased the xlvvolume of paper money. At the same time the new National Bank law had put in circulation $170,000,000 of National Bank notes; and more than $70,000,000 of State Bank notes were still circulating. The last named were, however, soon taxed out of existence by Congress. The grand total of the issues enumerated was ten hundred and sixty-seven millions of paper money in circulation. Nor was this all, for there were then outstanding $85,000,000 of one-year certificates of indebtedness; and the $830,000,000 of 7-30 notes, called 7-30s, outstanding were extensively used as money, and so tended to increase the inflation of the currency and prices.

It will be seen therefore that the inflation of the currency was really much larger than it appeared to be by the Public Debt statements at that time. But so rapid was the contraction during the eight years following, through the maturity and cancellation of interest-bearing notes and certificates, that it is safe to say we had from sixty to seventy-five per cent. less paper, used as money, in circulation when the panic of 1873 commenced than we had in September, 1865, and to this enormous contraction of our medium of exchange that disastrous panic, the worst this country ever had, was largely due. It was, I repeat, the worst in its effects that this country ever experienced, not excepting the panics of 1837 and 1857, and was aggravated by the Franco-German War, that practically shut American securities out of the European markets, which had previously taken them freely. This was a severe blow to the American bankers who had undertaken to finance the railways then in process of construction in different parts of the country, and who had relied upon finding both home and foreign markets for the sale of the bonds issued against the completed mileage of these railways, and it led to much embarrassment and a number of failures. The depression following this panic of 1873—in which Jay Cooke & Co. failed owing to their having undertaken to finance the Northern Pacific—was prolonged, and prosperity did not really return to us as a Nation till after the resumption of specie payments in 1879. Meanwhile, xlvinearly all the uncompleted railways in the country had been reorganized through foreclosures that wiped out hundreds of millions.

Our National debt, which had increased from $64,000,000 on June 30, 1860, and $88,409,387 on June 30, 1861, to $2,845,907,626 on September 1, 1865, had then been very largely reduced, for it was only $2,140,695,365 on September 1, 1873. The debt and the currency had gone up and down together under the influence of a common cause. Not till specie payments were resumed by the Government and the banks did gold cease to command a premium. With this the Gold Room became a thing of the past.

The great activity and the enormous sales of the Government agents may be inferred from the maximum amounts I have quoted, of the 7-30 notes, and the 5-20 and 10-40 bonds outstanding five months after Lee surrendered to Grant at Appomattox on April 9, 1865.

The total debt on which interest was payable in coin then amounted to $1,116,658,100, while that bearing interest in lawful money was $1,874,478,100, the first calling for $65,001,570 in gold annually, and the other for $72,527,646 of greenback currency.

That great event—Lee’s surrender to Grant—that ended the war, was the fitting prelude to General Grant’s election to the Presidency. It made it certain that no other Republican candidate for the office of President of the United States would have any chance of success at the next general election, and, of course, no Democratic candidate could be elected. Grant became our great National hero, and the country glorified him for his splendid war record.

But soon after the memorable historical scene at Appomattox, while the country was rejoicing over the advent of peace, with the Union restored, there came that terrible tragedy at Ford’s Theater in Washington, when President Lincoln, on April 14, 1865, was assassinated by John Wilkes Booth, and on the following day Vice President Andrew Johnson was sworn in as President.

xlviiThen, indeed, the Nation was plunged into mourning, and mourning emblems from ocean to ocean testified to the National grief.

I will not dwell on the stormy career of Andrew Johnson as President, and the impeachment proceedings against him, that for a long time made both branches of Congress seething cauldrons of excitement. But it was a happy relief to the country when his term expired and General Grant succeeded to the Presidency on March 4, 1869, with Schuyler Colfax as Vice President. The Democratic candidates who had run against General Grant in the campaign in which he was elected in November, 1868, were Horatio Seymour and General Francis P. Blair, Jr. But the popularity of Grant was so overwhelming that his election was a foregone conclusion.

Till within a short time of its final termination the duration of the war was a matter of much uncertainty, and its ultimate result had long been the subject of doubt and gloomy forebodings by many who failed to see that the superior money power and resources of the North were sure to conquer and crown the Union with victory in the end. Our currency, greatly inflated though it was, remained good throughout the trying ordeal, whereas that of the Confederate States became utterly discredited and worthless, thus repeating the history of the French assignats.

A new era opened in our history with the ending of the war, and our currency, which, of course, had previously no circulation in the South, began to circulate there. This, of itself, was equivalent to extensive contraction. The currency of one section had now to supply the currency needs of both sections, and for a long time the drain of money from the North to the South was felt in the money market.

The country was somewhat like a sick man accustomed to and dependent on stimulants, to withdraw which suddenly would have been perilous. Many in Congress recognized this danger, for it was a noticeable feature of the debates on the subject that not a few of those who had been strongly opposed to our excessive issues of paper money during the war, and xlviiiwarned the country against them, were among those who opposed violent contraction as being a remedy worse than the disease. The radical contractionists, however, failed to see, or refused to acknowledge, that the arguments which would have applied to the rising tide of the currency while the war continued, and there was danger of indefinite further inflation, did not apply with equal force to the altered condition of affairs.

Although schemes of radical contraction were rejected, even the moderate measure of contraction that was adopted proved too severe to be endured without much complaining from business interests, so hard and painful is the process of contraction, whereas that of inflation is always pleasant and easy.

In later years I became very well acquainted with General Grant, and toward the end of his first term of the Presidency, when a good deal of opposition was manifested to his renomination by the press, including the New York Evening Post, I made strenuous efforts to secure his renomination. To that end I organized a public meeting at the Cooper Institute, and induced William E. Dodge to act as Chairman. It was a great popular success, and Grant’s renomination was unanimously advocated with immense enthusiasm. The Evening Post then said that after such an overwhelming demonstration it was evident that public sentiment was on the side of Grant, and that it was useless to oppose his renomination. He was accordingly renominated by the Republican Party and triumphantly reëlected. His second term as President began on March 4, 1873, and he retired from the Presidency four years later.

General Grant was well aware of the part I took at this meeting, which, many said, turned the scale in favor of his renomination when it was doubtful and trembling in the balance, and he also knew of my services in connection with the Government war loans, and in organizing various public meetings to celebrate Union victories and stimulate recruiting for the army. He said that I deserved some public recognition xlixof my public services in supplying the sinews of war, and asked me how I would like to be Secretary of the Treasury, but I said I preferred Wall Street. Therefore, later on, he appointed me Fiscal Agent for the United States Government in all foreign countries, in place of Baring Brothers, of London, who had been its fiscal agents up to that time, since the Bank of England had acted in that capacity.

When it became certain that General Grant’s death was very near, I was anxious to see him once more, and also a strong advocate of his burial in the city of New York, where his tomb would be a conspicuous monument, to be seen by all, instead of burying him almost out of sight in Arlington Cemetery or at West Point, which places were strongly urged. The States of Ohio and Illinois also claimed him, as did the city of St. Louis. They all made strenuous efforts to obtain the family’s consent, as well as his, through committees sent to Mount McGregor for that purpose.

So I went to Mount McGregor, where he was, and as delicately as possible urged this upon him and his family. All of the members of the family assented, and the General, being unable to speak, nodded his assent also to what I said. Then when he was wheeled out in his chair, on the veranda, on his way to take his regular afternoon sun bath on the mountain side, accompanied by Dr. Douglas, he wrote on a pad that all he demanded was that his wife should be buried by his side when her own time came. Knowing them all well, I remained there two hours, talking with the General and the family, and my visit, when I made its result known, led to the selection of New York as the great soldier’s burial place, on the conditions mentioned by him. Within three days after I had seen him, the great General died. I had visited him on a Monday afternoon, and he died on the following Wednesday. His death threw the Nation into mourning.

Incidentally, I may mention that I started the organization of the famous Committee of Seventy, that brought about the overthrow of the corrupt Tweed Ring, that had robbed the lcity of New York of about a hundred millions of dollars. I nominated sixty-five of its members, and for my instrumentality in forming that Committee of eminent and public-spirited citizens I received many congratulations. That Committee not only drove the thieves out of office, but caused the prosecution of all of them who had not fled the country, and ultimately brought back and convicted Tweed, who died in prison. Meanwhile, it had reorganized the City Departments, and put new men in office, with Andrew H. Green as Comptroller. It purified, and, for a time, virtually ruled the city, through controlling its government.

But above everything else in my business life, I regard with most satisfaction the work I did in marketing the Civil War loans of the Government of this great and glorious country of ours—the United States of America—and in other ways strengthening the hands of the Government to the best of my ability and with all my heart and soul, not only as a banker but a patriotic American citizen; and I felt that I had my reward when, after the memorable four years’ war, peace came bringing with it Victory for the Union and a reunited country, a victory which gave permanence to the best government ever known to man—a government “of the people, for the people, and by the people,” which bids fair to be everlasting.

The Company had an office in Wall Street, and on the announcement of the collapse, business became completely paralyzed. This failure was immediately followed by the suspension of many large firms that had withstood the shock of all ordinary collisions and had successfully weathered many financial storms.

The panic was due in part to excessive importations of foreign goods, and also to the rapid construction of railroads, to a large extent on borrowed capital. There were other contributing causes. The crops were bad that year, and the country was unable to pay for its imports in produce, and coin was brought to the exporting point. In October, the New York City banks suspended payments, and their example was followed throughout the country. 6Bank credits had been unduly expanded everywhere, and the time had naturally arrived for contraction. It came with a bound, and financial disaster spread like a whirlwind, becoming general.

The Stock Exchange had been a moderately growing concern for the ten years previous to this calamity, and the securities there dealt in had been rapidly accumulating in number and appreciating in value. Its members were wealthy and conservative, with a strong infusion of Knickerbocker blood, an admixture of the Southern element and a sprinkling of Englishmen and other foreigners.

The effect of the crisis on the majority of Stock Exchange properties was ruinous. Prices fell fifty per cent. in a few days, and a large proportion of the Board of Brokers were obliged to go into involuntary liquidation. There was a great shaking up all around.

Then came the work of rehabilitation and reorganization. Confidence gradually returned. The Young Republic had great recuperative powers, and they were thoroughly exerted in the work of resuming business. Much of the old conservative element had fallen in the general upheaval, to rise no more. This element was eliminated, and its place supplied by better material, and with young blood, and in December the banks resumed business.

This panic and its immediate results created an entire revolution in the methods of doing business in Wall Street. Prior to this time, the antique element had ruled in things financial, speculative and commercial. This crisis sounded the death knell of old fogyism in the “street.” A younger race of financiers arose and filled the places of the old conservative leaders.

The change was a fine exemplification of the survival of the fittest, and proved that there was a law of natural selection in financial affairs that superseded old conservatism and sealed its doom.

Until that time, the general idea prevailed that those engaged in financial matters must be people well advanced in 7years, even to the verge of infirmity. It is the same idea that has been handed down, as if by divine right, from old world prejudices, especially in the learned professions. No doctor was considered a safe prescriber unless his hoary locks, bald head and wrinkled brow proclaimed that he had almost passed the period of exercising human sympathy. The same rule of judgment was applied to the lawyer and the clergyman.

These unworthy prejudices were fostered by the character of the Government of the old country, and nurtured by the surroundings of the venerable monarchies of Europe, where they exist largely even to the present day. So tenacious of life are these old-fashioned ideas, that many of them were found in full vigor, dominating Wall Street affairs up to the crash of 1857, fostering the antique element and choking off salutary enterprise.

Hence the process of decay of these archaic notions and our gradual development.

This struggle for new life in Wall Street was not successfully developed without a serious effort to attain it. The old potentates of the street fought hard to prolong their obstructive power, and their tenacious vitality was hard to smother, reminding one of the nine lives attributed to the feline species. The efforts of the young and enterprising men to gain an entrance to the Stock Exchange were regarded by the older members as an impertinent intrusion on the natural rights of the senior members. It was next to impossible for a young man, without powerful and wealthy patrons, to obtain membership in the New York Stock Exchange at the time of which I speak.

The old fellows were united together in a mutual admiration league, and fought the young men tooth and nail, contesting every inch of ground when a young man sought entrance to their sacred circle.

The idea then struck me that there was a chance for young men to come to the front in Wall Street. I was then engaged in the dry goods importing trade, in which I received 8my early training. I had been kept out of the Exchange for several years by the methods to which I have alluded. My fate was similar to that of many others. It was only by an enterprising effort, and by changing the base of my operations, that I finally succeeded.

The commissions charged at that time were an eighth of one per cent. for buying and selling, respectively.

After numerous efforts to gain admission to the Exchange, without success, I finally made up my mind to force it. I at once inserted an advertisement in the newspapers, and proposed to buy and sell stocks at a sixteenth of one per cent. each way. This was such a bombshell in the camp of these old fogies that they were almost paralyzed. What rendered it more distasteful to them still was the fact that, while they lost customers, I steadily gained them. The result was that they felt compelled to admit me to their ranks, so that I could be kept amenable to their rules and do business only in their own conventional fashion. My membership cost me, in all, initiation fee and other trifling expenses in connection therewith, $500. This presents a striking contrast to the recent price of a seat, $35,000, but though this difference seems very large, yet the changes in every other respect connected with Wall Street affairs have been in similar proportion. Among some of the old members of that day were Jacob Little, John Ward, David Clarkson and others whose names may be found in the archives of the Stock Exchange.

As an instance of the way in which membership was then appreciated, it may be mentioned that speculators frequently offered $100 a week, or ten times the cost of membership, for the privilege of listening at the keyhole during the calls.

Although the prostration growing out of this panic was very great and of long continuance throughout the country, general confidence being shaken to its very foundation, yet, on the whole, it was a great gain, and marked an era of financial and speculative progress. It was the chief cause 9in drawing out the young element in the business of Wall Street, which might have lain dormant for a much longer period without this sudden and somewhat rude awakening. It not only brought Young America to the front in speculation, commerce and general business, but it imparted an impetus of genuine enterprise to every department of trade and industry, from the good effects of which the country has never since receded.

This new element, emanating from the throes of one of the greatest business revolutions that any country has ever experienced, has continued to grow and thrive with marvellous rapidity. It is now getting so large that the Exchange will soon require a whole block instead of a basement as at its origin for its headquarters. The Governing Committee of the Stock Exchange are now looking forward to arrangements for this consummation. How the ancient fathers of my early days in Wall Street would have been shocked at the bare idea of such amazing progress!

It is not the least singular phase of this evolution in Wall Street, that the youthful element to which I have referred stands alone as compared with the progress achieved by the same class of men in any other nation. In America only does the youthful element predominate in financial affairs; and results have justified the selection, which perhaps in no other nation is possible. Thanks to the freedom of our Republican institutions, which, in spite of some individual deductions and the occasional obstructions of “crankdom,” make way for that progress, in the wake of which the other nations of the world are emulous to follow.

The Exchange was at this time situated on William street between Beaver street and Exchange Place. That place is rich in speculative reminiscences. It was there that Jacob Little made and lost his nine fortunes. It was there that Anthony Morse, the lightning calculator, operated. He could foot up four columns of figures as easily as the ordinary accountant could run up one. He had been a clerk, and having saved seven hundred dollars by close economy, 10began to deal in stocks. His career at that time was more marvellous even than that of Keene of a recent date. Morse made a fortune of several millions in a year, and became bankrupt during the same period, without any available assets to speak of. It was all honorably lost, however. There was no Ferdinand Ward game connected with it.

Youthful speculators had not then learned the “crooked” methods of the young idea of modern times. It was there also that Daniel Drew began to accumulate those millions that afterward were subject to such a rude scattering. It was there that the celebrated “corners” in Rock Island, Prairie du Chien and Harlem were concocted. It was there that the wealth was accumulated which built twenty thousand miles of Western railroads, causing many millions of acres, that would otherwise have been a wilderness, to blossom like the rose, in spite of Mr. Powderly’s opinion that no material good can come out of speculation, and thus adding immense wealth in real estate to the country, besides conferring incalculable benefits on trade and commerce, and preparing comfortable homes not only for the pioneers and surplus population of the Eastern States, but a teeming soil that has attracted the down-trodden of every nation to come and partake of the blessings of freedom and prosperity.

One of Jacob Little’s speculative ventures has been rendered historically famous through the rule of limitation of sixty days for option contracts. The necessity for this limit was brought about by one of his celebrated attempts to manipulate the market. He was one of the most prominent speculators in Erie in the early days of Drew’s transactions with that property and its stocks. Mr. Little had been selling large blocks of Erie on seller’s option, to run from six to twelve months. This was in the early history of “corners,” before the method of managing them scientifically had been fully developed and while “blind pools” were yet in embryo.

The leading members of the Erie Board formed a pool to “corner” Mr. Little, and ran Erie shares up to a considerable 11height. They imagined that he was in blissful ignorance of their purpose, and had everything arranged for a coup d’etat which was to reach its crisis at two o’clock on a certain day, when Little was to be completely overwhelmed and hopelessly ruined. An hour prior to the time appointed by the clique for his disaster he walked into the Erie office, opened a bag filled with convertible bonds, and requested an exchange of stock for the same. He had purchased the bonds in London and had them safely locked up for the emergency, which he promptly met on its arrival. He got the stock, settled his contracts, broke the “corner,” and came out triumphantly.

The option limit of sixty days was afterwards adopted in order to prevent similar triumphs in manipulation on the “short” side.

As will be illustrated more fully in subsequent chapters, Mr. Little’s convertible bond trick was used with signal advantage by his speculative successors in Erie, who practically demonstrated on several occasions that there were millions in it.

Mr. Little was generous and liberal to a fault with his brother speculators who had experienced misfortune. He used to say that he could paper his private office with notes he had forgiven to the members of the Board. He was also remarkable for his great memory. He could easily remember all the operations he made in the course of a day without making a note or a mistake.

Like Drew, he was careless in his attire, wearing a hat like that of a farmer, and not a very prosperous one, but he had no compeer in his day at calculating ahead in a speculative venture.

The dense ignorance displayed by men outside of Wall Street, in regard to the business of that great mart, is almost incredible. Even the most intelligent men I meet in other professions and walks of life have the most utterly crude and undefined notions about the methods of doing business at the Stock Exchange. Many good and pious clergymen are under the impression that Wall Street is a name for the sum total of all kinds of infamy, and solemnly exhort their devoted flocks not to touch the unclean thing.

Clerical obliquity of judgment is not quite so bad, nor popular ignorance so dense in this respect, as it has been, but there is a large field for improvement yet. The business activity of the country, and the spirit of intercourse being so rapidly infused throughout all ranks of the community, have demonstrated that this antipathy to Wall Street has been simply an unworthy prejudice, in spite of the high moral authority from which it has emanated.

I don’t wish to throw any aspersion on the noble purposes of the clergy. The end they have been seeking has been good, but it has not always justified the means employed. These good men have unwittingly misrepresented Wall Street, to the great detriment of the business interests of the country.

14There is no excuse, however, for a man in this enlightened age, who professes to be a Shepherd in Israel and a spiritual leader of the people, to remain ignorant of an important fact, or to continue to see that fact through a false medium, when he has the opportunity of coming into Wall Street and seeing for himself. He has no right to set himself up as a censor, a public detractor, and a public libeller upon a set of men and merchants who are the bone and sinew of the commercial and industrial interests and prosperity of the country. It is not only a personal wrong but a public injury.

The Rev. T. De Witt Talmage has perhaps done more than any other clergyman to make our speculators, investors and business men ridiculous in the eyes of the rest of the community and in the estimation of John Bull, in whose dominion his so-called sermons are extensively read. Talmage has employed his flashing wit and mountebank eloquence to bring financial disgrace on the business methods of the whole country by the manner in which he has ignorantly vilified Wall Street.

He can go to the Cremorne Garden, Billy McGlory’s, Harry Hill’s and other places of dubious reputation, and make himself acquainted with the real condition of things there.

How far he has penetrated into the green rooms and behind the scenes in these places it is not my business to know, but why should he not treat Wall Street as fairly, where everything is open to inspection, as he does these dens of vice, where midnight scenes of villainous revelry and reckless dissipation reign supreme? Why does he misrepresent Wall Street without knowing anything about it? He can come here and go wherever he wishes without a bodyguard of detectives or fear of molestation. Why is he so particular about doing justice to the brothel and the gaming den, while he airs his ludicrous eloquence to the highest pitch to falsify the respectable business methods of Wall Street?

15I recollect the time that men in the higher walks of life, and among the higher classes (if I may use the expression, in opposition to the opinion of the New York Sun, whose editor maintains that we have no classes in this country) would have been ashamed to be seen in Wall Street. Now, men in the same sphere are proud of the distinction, both socially and financially. In fact Wall Street has become a necessity as a healthy stimulant to the rest of the business of the country. Everything looks to this centre as an index of its prosperity. It moves the money that controls the affairs of the world.

Take the Clearing House, for example, with its 50 billions of transactions annually. All but a fraction of this wonderful wealth, compared with which the stupendous pile of Crœsus was a mere pittance, passes through Wall Street, continually adding to its mighty power. This great power, in comparison with which the influence of monarchies is weak, is not, like the riches of these, concentrated chiefly on itself. It is imparted to all the industries and productive forces of the country. Wall Street is a great distributor. It is also universal in its benevolent effects, practically unlimited by either creed or geography.

It has taken greater advantage, for the general good, of scientific discovery than all the scientific societies combined. Wherever the electric wires have penetrated the Wall Street broker has followed. The members of the Stock Exchange are, through the power of electricity, in closer sympathy with the great heart of civilized humanity than all the missionaries and philanthropic societies in the world. They are the great cosmopolitans of the age. In practical sympathy they outshine the most devoted efforts of the benevolent associations of half the continent. They have the means to do it, and this comes chiefly from being practical, and from their strong antipathy as a body to cant and hypocrisy.

There are many popular delusions outside the ranks of the clergy connected with the effort to form a correct estimate 16of Wall Street affairs by the general public. It is a popular delusion that it is a place where people who are in the “ring” take something for nothing. No idea could be further wide of the mark in regard to Wall Street men as a class, however true it may be of some individual instances, as in other departments of business. Wall Street gives full value for everything it receives, and the country at large is deeply its debtor. Some people may think this a paradox, but there is nothing more easily demonstrated to those who have observed the commercial and industrial progress of the country and the age.

Wall Street has furnished the money that has set the wheels of industry in motion over the vast continent, and in one century has brought us abreast, in the industrial arts, of countries that had from one to two thousand years the start of us. In this respect it has assisted nobly to carry out the ideas of the fathers of the Constitution. Washington, Jefferson, Madison, Franklin and Hamilton laid down the doctrine that it would be a betrayal of the interests of posterity to limit the productive energies of this country to raw material. With our present experience we may think it strange that this question should ever have been debated, but it was, even after the old tyranny had been obliged to loosen its grasp on the struggling enterprise of the young Republic. Our old revolutionary sires deserve credit for their foresight, but what would have been the fate of their commercial philosophy if Wall Street had not supplied the sinews of war to cope with the forces of nature, to work our mines and build our railroads, and through these and other means, to attract the teeming population from every clime to cultivate our virgin soil and develop our wonderful industries and resources?

Apropos of the above observations, I may add that during the debate in the British Parliament, on the recognition of the Confederacy, the great manufacturing power in our industrial, financial and commercial progress was clearly 17exhibited and thoroughly appreciated by British statesmen. It was made one of the strongest arguments, too, by some of the representatives of our jealous and envious cousins on the other side of the “pond,” why Great Britain should recognize and aid the South in the war. Lord Salisbury, then Lord Robert Cecil, at present the leader of the Tory party in England, and the advocate of twenty years’ coercion for Ireland, was one of the bitterest foes of the Union, chiefly on this account. He was one of the Vice-Presidents of the “Southern Independent Association,” for the promotion of the cause of the Rebellion, and for supplying the Confederates with money and arms, and for the ultimate object of founding an empire of slavery on this continent.

In his speech then, on the Southern blockade, the future Lord Salisbury made the following touching allusion to our dangerous prosperity on this side: “The plain matter of fact is, as every one who watches the current of history must know, that the Northern States of America never can be our sure friends, for this simple reason—not merely because the newspapers write at each other, or that there are prejudices on both sides, but because we are rivals—rivals politically, rivals commercially. We aspire to the same position. We both aspire to the government of the seas. We are both manufacturing people, and in every port as well as at every court we are rivals to each other. With respect to the Southern States the case is entirely reversed. The population are an agricultural people. They furnish the raw material of our industry, and they consume the products which we manufacture from it. With them, therefore, every interest must lead us to cultivate friendly relations, and we have seen that when the war began they at once recurred to England as their natural ally.”

Thus we see how anxious Great Britain was to take the place which the North has reserved for itself, and so proudly maintained in commerce and industry.

The great coming man, Salisbury, wanted to reduce us all 18to the position of hewers of wood, drawers of water and planters and pickers of cotton, for the special accommodation of Great Britain, as the mighty centre of the world’s manufacturing industries. This would have given a set-back to our civilization, causing us to make a retrogressive move to the dark ages. Since then we have afforded this noble lord and his nation ample proof that we are very far advanced in the manufacturing arts ourselves, and that in many things we are far ahead of England, and they are no doubt greatly surprised that the arrangement by which England was to have all the profit and America all the hard work, has not been carried out.

In this wonderful development of the industrial arts, Wall Street money, enterprise and speculation have played by far the most conspicuous and progressive part, thus enabling us, in little more than two decades, to outstrip the old nations that were so anxious to enslave us, in spite of the fact that they had centuries upon centuries the start of us. It must be galling to some of these people that we are now the most available candidates for the commercial and industrial supremacy of the world, and we have attained this position, in a great measure, through the instrumentality of Wall Street as a civilizer.

How to take Advantage of Periodical Panics in Order to Make Money.—Wholesome Advice to Young Speculators.—Alleged “Points” from Big Speculators End in Loss or Disaster.—Professional Advice the Surest and Cheapest, and How and Where to Obtain it.

But few gain sufficient experience in Wall Street to command success until they reach that period of life in which they have one foot in the grave. When this time comes these old veterans of the Street usually spend long intervals of repose at their comfortable homes, and in times of panic, which recur sometimes oftener than once a year, these old fellows will be seen in Wall Street, hobbling down on their canes to their brokers’ offices.

Then they always buy good stocks to the extent of their bank balances, which have been permitted to accumulate for just such an emergency. The panic usually rages until enough of these cash purchases of stock is made to afford a big “rake in.” When the panic has spent its force, these old fellows, who have been resting judiciously on their oars in expectation of the inevitable event, which usually returns with the regularity of the seasons, quickly realize, deposit their profits with their bankers, or the overplus thereof, after purchasing more real estate that is on the up grade, for permanent investment, and retire for another season to the quietude of their splendid homes and the bosoms of their happy families.

If young men had only the patience to watch the speculative signs of the times, as manifested in the periodical egress of these old prophetic speculators from their shells of security, they would make more money at these intervals 20than by following up the slippery “tips” of the professional “pointers” of the Stock Exchange all the year round, and they would feel no necessity for hanging at the coat tails, around the hotels, of those specious frauds, who pretend to be deep in the councils of the big operators and of all the new “pools” in process of formation. I say to the young speculators, therefore, watch the ominous visits to the Street of these old men. They are as certain to be seen on the eve of a panic as spiders creeping stealthily and noiselessly from their cobwebs just before rain. If you only wait to see them purchase, then put up a fair margin for yourselves, keep out of the “bucket shops” as well as the “sample rooms,” and only visit Delmonico’s for light lunch in business hours, you can hardly fail to realize handsome profits on your ventures.

The habit of following points which are supposed to emanate from the big operators, nearly always ends in loss and sometimes in disaster to young speculators. The latter become slavish in their methods of thought, having their minds entirely subjected to others, who are presumed to do the thinking for them, and they consequently fail to cultivate the self-reliance that is indispensable to the success of any kind of business.

To the question often put, especially by men outside of Wall Street, “How can I make money in Wall Street?” there is probably no better answer than the one given by old Meyer Rothschild to a person who asked him a similar question. He said, “I buys ‘sheep’ and sells ‘dear.’”

Those who follow this method always succeed. There has hardly been a year within my recollection, going back nearly thirty years, when there have not been two or three squalls in “the Street,” during the year, when it was possible to purchase stocks below their intrinsic value. The squall usually passes over in a few days, and then the lucky buyers of stocks at panic prices come in for their profits ranging from five to ten per cent. on the entire venture.

21The question of making money, then, becomes a mere matter of calculation, depending on the number of the squalls that may occur during any particular year.

If the venture is made at the right time—at the lucky moment, so to speak—and each successive venture is fortunate, as happens often to those who use their judgment in the best way, it is possible to realize a net gain of fifty per cent. per annum on the aggregate of the year’s investments.

In this way it is easy to see how the rich will get richer, and the poor poorer.

Sometimes men make money in Wall Street by strange turns in their fortunes that appear like having been governed by a special Providence, and this sometimes occurs when men appear to be utter wrecks.

One of the strangest examples of this kind, in my personal experience, occurred in the summer of 1885.

A man called at my office utterly broken down in spirit, but with a few hundred dollars left out of many thousands that he had possessed a few months previously.

“I read your letter of the third of July,” he said, “and had some mind to act on the advice which it contained, but was unfortunately dissuaded therefrom by reading an article in a city paper by a very able writer, who had got the bearish mania, then prevalent, on the brain, and who, I am informed, is now, like myself, almost ruined.”

“I hardly know what to do,” he continued. “I have a few hundred dollars left, which I will leave with you, and you can use your pleasure with it. I am going out to the country for the remainder of the summer. I will leave my address with you, and, if there is any good result, you can let me know of it. I really don’t hope for much, and of course, I need hardly tell you that, in the event of being ‘wiped out,’ you need not apply to me for more margin. Let this go with the rest,” he added, in a despairing tone.

The man walked sadly out, and I did not see him again for months. I invested his pittance on the carte blanche 22order which he had given me, to the best of my judgment. The result was favorable, and his account began to accumulate. He was duly advised, according to our business methods, of his good luck, but I did not hear anything from him personally for several months.

One day, a portly gentleman, with rosy health beaming in his face, stepped into my private office, and was quite profuse in his thanks to me.

“Well,” I said; “I have but a hazy recollection of your acquaintance, if I know you at all.”

“Don’t you recollect,” he said, “the time I went to the country in summer, when I told you my case, and how I had been unfortunate in speculation?”

“And are you the man who went to the country in despair to die?” I asked, in surprise at his changed appearance.

“I am,” he replied, “and I owe the wonderful change which you now see to your timely advice. I staked almost my last dollar on that counsel, and now I am comfortably fixed through your management of the small fund placed at your disposal.”

How, this was an example of a man who did make money simply by taking the advice that was freely tendered him.

There are others who lose, in spite of all that the most honest judgment can do to prevent them.

Some men, when they have money, are so fearfully perverse that all attempts to get them to do the right thing only have the opposite effect, and they prefer to follow every wild rumor.

One day, for instance, a man gave me an order to buy a thousand shares of Erie without limit. The order was executed at 94. I had no sooner bought it than the stock went down.

My customer returned in a short time and ordered the stock to be sold. It was then 92½.

In half an hour afterwards he returned again and ordered it bought back again, without any limit as before. It was bought back at 95.

23After consulting with other friends for some time he ordered it sold again. The market by that time was 90.

He then came back the fifth time, and said: “I first saw one man who told me to buy, and then another who told me to sell. I understand one is called a ‘bull’ and the other a ‘bear.’ About these names I don’t know much, but I do know now that I am a — jackass.”

This affords a good illustration of the way the average speculator is managed and perplexed in Wall Street. There is a means of avoiding such a peck of trouble, however, if he would only take a little wholesome advice, wait patiently for a proper opportunity, and not rush headlong to purchase on the “tips” of the delusive rumor mongers. He would then begin to learn how to make money in Wall Street.

As I have pointed out in another chapter, speculation is a business that must be studied as a specialty, and though it is popularly believed that any man who has money can speculate, yet the ordinary man, without special training in the business, is liable to make as great a mistake in this attempt, as the man who thinks he can act as his own lawyer, and who is said “to have a fool for a client.”

The common delusion, that expert knowledge is not required in speculation, has wrecked many fortunes and reputations in Wall Street, and is still very influential in its pernicious and illusory achievements.

When a man wants correct advice in law he goes to a professional lawyer in good standing, one who has made a reputation in the courts, and who has afforded other evidence to the public that he is thoroughly reliable. No man of average common sense would trust a case in law to a bar room “bummer” who would assert that he was well acquainted with Aaron J. Vanderpoel, Roscoe Conkling, and Wm. M. Evarts, and had got all the inside “tips” from these legal lights on the law relating to the case in question. The fellow would be laughed at, and, in all probability, if he persisted in this kind of talk, would be handed over to 24the city physician to be examined in relation to his sanity, but in Wall Street affairs men can every day make similar pretensions and pass for embodiments of speculative wisdom.

If speculators are caught and fleeced by following such counsel, the professional brokers who are members of the Stock Exchange, are no more to blame than the eminent lawyers to whom I have referred would be for the upshot of a case that had been taken into court on the advice which some irresponsible person had pretended to receive from these celebrities of the New York Bar.

Professional advice in Wall Street, as in legal affairs, is worth paying for, and costs far less in the end than the cheap “points” that are distributed profusely around the Street, thick as autumn leaves in Vallombrosa, and which only allure the innocent speculator to put his money where he is almost certain to lose it.

My advice to speculators who wish to make money in Wall Street, therefore, is to ignore the counsel of the barroom “tippers” and “tipplers,” turn their backs on “bucket shops,” and when they want “points” to purchase, let them go to those who have established a reputation for giving sound advice in such matters, and who have ample resources for furnishing correct information on financial topics, as well as a personal interest in making all the money they can for their clients.

There is no difficulty in finding out such reliable men and firms in the vicinity of Wall Street, if speculators will only read the newspapers, or make inquiry of the first messenger boy they may happen to meet.

IMPORTANCE OF BUSINESS TRAINING.

I have usually found that the sons of independent gentlemen, who have great expectations, make very poor clerks and don’t develope into Good Wall Street men.

Their expectations seem to dwarf the ability that might develope under the more favorable auspices of being obliged to paddle their own canoe. Like the light under a bushel, referred to in the Good Book, their brilliant qualities are obscured and circumscribed by the paternal protection in prospect. They have not a sufficient incentive to work, because they know that all they require for their natural wants will fall easily into their laps. The motives, therefore, which usually develope the greatest mental qualities are absent and the qualities themselves lie dormant, and frequently decay like poppy seeds in their seed vessels, without being productive of the fruits which are the result of industrial habits and the desire for acquisition. Such young men, instead of being a help to an office into which they happen to be thrust, often through friendship and favoritism, are a great hindrance and a stumbling block in the path to promotion of other young men.

26After many ineffectual attempts to reform and remodel them, they have generally to be discarded, as the drone bees are ejected from the rest of the industrious hive. And they usually become as unpopular with the other boys as the drone does with his comrades who make the honey and will not suffer the idle fellow to feast on the fruits of their labor.

Young men who have nothing but their own resources to depend upon will be found far more meritorious than this higher class. There are some eminent exceptions, but it takes a large amount of good sense to counteract the conceit instilled by the idea of financial independence by birth.

The latter are more liable to youthful and enervating excesses, as they have the means to indulge in nocturnal amusements that are not conducive either to clear brains or active habits during the day.

Night dancing and late suppers, with some of their social concomitants, when habitually indulged, don’t contribute to business success. I know how this is myself, and therefore speak feelingly; but I don’t lay myself open to the charge of egotism when I say that I have never permitted the habit to get the better of me.

I am not setting myself up as a censor of other men’s habits, nor attempting to utter mere moral or religious cant. I am simply discussing the question from a scientific and physical standpoint, and I say that these habits don’t contribute to business success, but, on the contrary, form one of the greatest hindrances to it. They make any man, no matter how strong he may be, physically unfit for ordinary business. These “recreations” up town, however attractive and delightful they may be, don’t fit a young man for business down town. The line must be drawn somewhere. Let us draw it, say, at Fourteenth street.

There has been much said and written about Civil Service Reform by various authorities from President Cleveland down to Dorman B. Eaton and the Custom House officials. The great rule to follow is to give merit its true reward 27This draws out the best efforts of the recipient, where real merit is found, and keeps the drones beyond the pale of competition. It develops the qualities that are worthy of being encouraged, and keeps worthless pretense in its true position. This is the role I have adhered to in my office, and it works like a charm. My office, though not quite so large as the Custom House or Post Office of New York city, I think affords a fair test of what could be done on the largest possible scale.

If public office is a public trust, and we have the high authority of President Cleveland and of the New York Tribune for saying so, I think it can be administered on the same business principles that have contributed to the success of some of the largest and most successful firms in the world; and among these, I think I can say without egotism, as the matter is capable of demonstration, that the house of which I have the honor to be the head, stands second to none in the attributes to which I have referred.

The reader may say, “This is a puff for his own house.” Well, even so. If it is, it is true, and will bear the strictest investigation. So I don’t see why I should feign any false modesty about the assertion. It would be sheer affectation to do so.

Collegiate education is a great question for debate among literary men, journalists and business men, as to its utility in forming the character of youth for business life. As the college curriculum and training stand at present, the ordinary course is not in general calculated to make a good business man. It is erroneously regarded by some people as a kind of substitute for business training in the earlier years of a young man’s life. There could be no greater mistake in the beginning of a business career. It is in many instances not only a hindrance, but absolutely fatal to success. To put a young man in an office fresh from college, on a level with one of the same age who has been training in business methods since he left the common school, is demoralizing to both.

28I wish to have it distinctly understood that in the foregoing remarks I have not made any attempt to cast the slightest reflection on the personal attributes and abilities of any young man in any line of life or status of society, and I make this statement perfectly independent of the mere social incident as to whether the young man in question may part his hair in the middle or assume other dudish airs. That is his business, and I have no right to trench on the sacred precincts of his individuality, nor do I mean to do so. As a rule I stick to my own business. I simply intend to imply that when a dude happens to come into my office, where I think he will find the most æsthetic appointments in the way of furniture and the business arrangements, if he should, upon thus entering into my employment, come to the sudden conclusion that this æstheticism of office furnishing implied any plea for idleness or assumption of airs on his part, he would very soon experience a rude awakening from his charmed lethargy of conceit, and if he were not prepared to undertake in a calm and appreciative tone of mind the first lessons of business industry, I would politely bid him an affectionate adieu, and on parting tell him very kindly that though his great natural gifts might be thoroughly adapted to shine in another sphere of life, he was both by nature and education totally unfitted to play the most humble part in a business career, such as that of which my firm affords a fair and most successful example.

The same remarks will apply to any other young man who does not appreciate his vocation, and try to know himself as old Seneca taught.

I don’t insidiously single out the dude for an odious comparison. The remark will apply just as appropriately to the young man who is better fitted for a blacksmith or a farmer, or perhaps a preacher, than a business man or a financier.

“All blacksmiths,” says the Rev. Robert Collyer, “can’t become preachers, and it would be bad for the world if they 29did.” There is a good deal of philosophy in the remark of this popular preacher, and quite to the point on the subject which I am now attempting to handle.

In fact, there is nothing in this world would grieve me more than the prospect of being obliged to reflect in future years on the fact that I had been instrumental in keeping a young man’s “nose to the grind-stone,” so to speak, in my office, where he would make a very poor employee without the chance of attaining average success, while in a career for which nature and education had fitted him, he might not only be happy and successful, but make his mark as a star of the first magnitude.

When viewed in this light, the question of adaptability becomes a serious affair, for young men starting in life, and for their parents, who often sacrifice a great deal of their worldly comforts and peace of mind to launch their fond offspring.

The best thing for parents to do, then, as a general rule, is to encourage their children in that occupation or avocation for which they show a decided preference. Whatever young men do voluntarily, as a rule, they do well. This is especially illustrated in the lives of youths who exhibit an inclination for a military pursuit, which offers the least inducement to human avarice, and attracts the mind through the more sentimental motives of patriotism and the love of glory. But in our present civilization there are national feelings that must be inculcated and encouraged.

I entertained at my Newport residence, during the past Summer, the officers of the 23d Brooklyn regiment of the National Guard of the State of New York, because I felt it a matter of duty to do so, as well as a privilege to do my part in contributing to the encouragement of the young men who have taken it upon themselves voluntarily to be members of that militia company.

These young men visit Newport at very great cost to each one, as they themselves have to contribute to the expenses 30attending the trip, and their presence in Newport in going through, regularly each day, their drills and parades with as much precision and correctness as though they all had been graduates of West Point, all well equipped and well attired in plain but most becoming military apparel, made a most interesting scene to witness, contributing not a little to the amusement and gratification of the residents of that famous watering place. They are becoming disciplined to be soldiers. They are mostly young men of good families, of profitable occupation, many in business for themselves and others trustworthy clerks in the employ of others, with good salaries; consequently they make a great sacrifice to themselves in the time that they thus bestow upon such excursions as well as ordinarily in the drills which they have to go through, when at home, once or twice each week, frequently oftener. What is the incentive in this personal sacrifice on their part?

The answer is, the spirit of patriotism, and that really is what it means, for in the event of a foreign invasion or internal disturbances, their services are pledged to the State and to the Government. They are therefore liable to receive at a moment’s notice a call from any quarter to go to the front with their lives in their hands, leaving their families, their wives, their children, their old parents, their business, leaving all and requiring a farewell at their departure, as the dangers they may have to encounter are threatening in character and, not unlikely, may prevent their ever returning alive.

Taking this view of the subject, therefore, these young men should be encouraged by all who have the means and power at their hand, and to the full extent of their ability. Whenever they go on missions of State defense, it is only just and fair that they should be received as soldiers, and accorded the honors which soldiers merit. They are entitled to it to a greater extent than the regular soldiers of the United States standing army. These men do not make 31one-half the sacrifice that the young militia do, nor do they make any better soldiers on the battle-field.

These militia soldiers, when they go to the front, leave behind them enough, in the way of properly, good homes and families, to make them more enthusiastic to fight for victory, than the regular army, so that they may return to their own domestic circles with the laurels that victory gives.

In thin country we do not desire standing armies, for we do not wish the expense entailed upon the Government to sustain them, but we do want the young men encouraged to do military duty and be prepared for action when it comes. The only money, therefore, that the Government need expend to protect our continent is a good militia force in each of the various States, to be well disciplined. In that case our country will be prepared to meet foreign foes.

I am also opposed to a large standing naval force, not only on account of the expense, but also because our country is less likely to get into trouble with other nations, providing we have no ships to send into their waters. Naval officers are often very impetuous and chivalrous and sometimes fancy they have grievances to repel, which are largely imaginary, and with them it is a word and a blow.

With a thoroughly equipped and largely efficient naval force, we might thus not unlikely be driven into a conflict without cause or reason with some friendly power. Our country is happily located far in the distance from the quarrelling nations of Europe, and our being so removed is our protection. It is not desirable to be brought in closer contact by sending our naval vessels into their waters, to be under their fire. The policy of this nation is peace and good will to all mankind. What gain would it be to America to have a conflict with England, even though we should conquer in the end, or France, or Germany, or Russia? We couldn’t tow any of these countries to ours, 32nor could we hold on to our conquest as a permanent possession; neither should we desire to do so, as we have territory enough in the 38 States which comprise the United States of America, already, without desiring to annex that of any of our far-off neighbors.

And if an emergency should arise in what has been called the last resort of kings, namely, the necessity of going to war, it would be found that the importance of this training in the special business of war could then be appreciated at its true value.

The importance of business training, that is, training for the special occupation in which a man’s energies are to be developed, is always made apparent when those energies are put to the test of competition, or are called upon to put forth an extraordinary effort. If a man has not got the special training, whether in the army or in civil life, he is never reliable in an emergency, but is like that weak and vacillating friend which old Solomon compared to a broken ankle.

I say, therefore, to the young man of the rising generation, while you don’t relax any effort to procure all the education that your time and means will afford, above all things, don’t neglect the paramount importance of business training.

PERSONAL HONOR OF WALL STREET MEN.

Breach of Trust Rare Among Wall Street Men.—The English Clergyman’s Notion of Talmage’s Tirades Against Wall Street.—Adventurous Thieves Have No Sympathizers Among Wall Street Operators.—Early Training Necessary for Success in Speculation.—Ferdinand Ward’s Evil Genius.—A Great Business can only be Built up on Honest Principles.—Great Generals Make Poor Financiers, Through Want of Early Training.—Practical Business is the Best College.

There is no place in the world where people are trusted so much on faith as they are in Wall Street; not even in the Church.

The business is one of mutual confidence, and each day there are numerous opportunities for men to secure many millions of dollars of other people’s money and take themselves safely off to that Paradise of defaulters and absconders over the Border. Yet instances of this nature are comparatively rare when we consider the large number of transactions and the immense amount of money handled in Wall Street.

The men of Wall Street have, therefore, become world-renowned for straightforward dealing, and have thus obtained the first position as leading spirits in the speculative affairs not only of their own country, but of the entire world. Wherever the speculative spirit of the age has obtained a foothold, there Wall Street is a household word, and Wall Street men are held in the highest esteem. It has become a term familiar to the ears of those even who know nothing about the business which has made its name almost universal.

“What is that Wall Street?” said an English curate to a friend of mine who recently visited Liverpool. “What a queer place,” he continued, “for Mr. Talmage to have his Tabernacle.”

34The English divine, evidently only having “caught on” to isolated sketches of the Brooklyn preacher’s calumnious invectives, thought they were actually delivered among the bulls and bears, and that Talmage had the boldness to beard these ferocious animals in their den.

It is true the honor of Wall Street is sometimes slightly tarnished, especially in the eyes of those who reside at a great distance, owing to the occasional delinquencies of dishonorable men, who consider Wall Street men and Wall Street money fair game for swindling operations. These are for the most part outsiders, who pounce upon the Street as their illegitimate prey, after probably making a show of doing business there.

There is no place, of course, where confidence men have the opportunity of reaping such a rich harvest when they can succeed in establishing the confidential relations that help them to secure their swag. But Wall Street proper is not any more responsible for such men than the Church, whose sacred precincts are used and abused by the same social pariahs in a similar manner. The Street is the victim of these adventurers, and has no more to do with nurturing and aiding them than the Church has.

What should be said of a financier who would have the temerity to assert that the Church was an asylum for swindlers, and that thence they issued forth to commit their lawless depredations on society? He would be tabooed by all intelligent people. Yet there would be about as much truth in such a statement as in most of the eloquent anathemas and objurations launched from the pulpit every Sunday against Wall Street.

There is no place on this earth where adventurous thieves have fewer sympathizers than in Wall Street, except perhaps in Pinkerton’s and Byrnes’ detective bureaux.

There is another popular delusion with regard to those who don’t succeed in Wall Street. Their failure is frequently attributed to sharp practice on the part of the old 35habitues of the Street. People forget that the business of speculation requires special training, and every fool who has got a few hundred dollars cannot begin to deal in stocks and make a fortune. The men who don’t succeed are usually those who have spent their early life elsewhere, and whose habits have been formed in other grooves of thought.

The business of Wall Street requires long and close training in financial affairs, so that the mind may attain a flexible facility with the various ins and outs of speculative methods. If this training is from youth upward, all the better. It is among this class that many of our most successful men are to be found, though there are some eminent examples of success among those who began late in life. It will be found, however, that the latter must have a special genius for the business, and genius, of course, discounts all the usual conditions and auxiliaries; but among ordinary intellects early training is generally indispensable to financial success.

It seldom happens, moreover, that the early trained man from youth up does any great wrong.

Ferdinand Ward may seem an exception to this rule, but he had a born genius for evil, and though he had all the early advantages of Timothy and Samuel the Prophet, with a higher civilization thrown in, so utterly incorrigible was his nature that nothing but prison walls and iron bars could prescribe bounds to his rascality. He is an extraordinary exception, a genius of the other extreme, against whose subtle operations society must always be on its guard; but he is only one of the dangerous exceptions that prove the rule for which I am contending, the rule that early training in finance more, perhaps, than in any other field of human energy, is the great desideratum.

If such a man is unsuccessful, dishonor seldom accompanies his misfortunes. He may pass through the whole catalogue of financial disasters and their natural results. He may fall to the gutter through over-indulgence in liquor 36and the despair attendant on a run of bad lack or unfortunate connection with wicked partners, but he is still capable of rising from the very ashes of his former self. He will never stoop to swindle, no matter how low the rest of his moral condition may be brought.

No great business can be built up except upon honest and moral principles. It may flourish for a time, but it will topple down eventually. The very magnitude to which the business of Wall Street has grown is a living proof of its moral stamina. It is impossible, in the social and moral nature of things, to unite a large number of men, representing important material interests, except on principles of equity and fair dealing. A conspiracy to cheat must always be confined to a small number.

The most successful men of Wall Street, to my own personal knowledge, are those who came to the Street young and have “gone through the mill,” so to speak; those who have received severe training, who have had some sledgehammer blows applied to their heads to temper them, like the conversion of iron into steel.

These are some of the prerequisites of a successful financial career.

One of the most common delusions incident to human nature in every walk of life is that of a man who has been successful in one thing imagining he can succeed in anything and everything he attempts. In general, overweening conceit of this kind can be cured by simple experiments that bring men to a humiliating sense of their mortal condition and limited capacity. When the experiment is tried in Wall Street, however, to these healthy admonitions are frequently added irreparable disaster and overwhelming disgrace.

I shall note a few examples within the memory of newspaper readers still living. The brief panic of 1884 brought several instances of this character to the surface. Some of them had fought our battles for national existence and preserved the Union when this achievement seemed almost 37hopeless. Their fame as generals was as extensive as history itself. They had planned and executed projects with success on which the destiny of a great nation, and perhaps the destiny of other nations, had impended, yet when they attempted to manage banks, railroads and financial operations they became hopelessly entangled.

The great captain of the Union’s salvation was as helpless as a babe when Ferdinand Ward and James D. Fish moved upon his works. The eye that took in the whole situation at a glance at Vicksburg, Richmond and Appomatox was totally unable to penetrate the insidious and speculative designs of the “Young Napoleon of finance.”

General Grant was a victim, not so much to the sincere, veracious and unsuspecting attributes which were so largely predominant in that great man, as to his want of early training in financial business affairs, and to the fact that he was unable to appreciate its necessity in dealing with sharp business men of loose morals. Generals Winslow and Porter fell into a similar error of judgment in the West Shore Railroad matter. Their mistake came near being a serious blow to the railroad interests of this country. General Wilson, of the New York and New England, and General Gordon were similarly unfortunate. The common mistake committed by these worthy men, to whom the country owes an inestimable debt of gratitude, was the chief cause of the “general demoralization,” to which Treasurer Jordan facetiously but indignantly alluded when denouncing railroad methods, and which from time to time has played sad havoc with some of the best securities in the country.

Therefore, I say to all who have sons destined for a business career, let your cherished offspring have the advantage of early practical training in the particular line of business for which you may consider them best adapted, and do so, even to the partial neglect of their school and college education. Practical business is the best school and college in which they can possibly graduate. I shall attempt to make this point clearer in another chapter.

WALL STREET DURING THE WAR.

The Financiers of Wall Street Assist the Government in the Hour of the Country’s Peril.—The Issue of the Treasury Notes.—Jay Cooke’s Northern Pacific Scheme Precipitates the Panic of 1873.—Wall Street Has Played a Prominent Part in the Great Evolution and Progress of the Present Age.

Wall Street came to the rescue of the country when the war broke out. The Government then did not have money enough to pay the interest on the debt, and was sorely embarrassed for a time. The Hon. S. P. Chase, Secretary of the Treasury, sent word to Mr. Cisco, the Sub-Treasurer in New York, to do everything in his power to raise the money required to sustain the nation’s credit.

Mr. Cisco apprised the “Street” of the instructions he had received from Washington concerning the empty condition of the Treasury. He showed a number of the leading operators and financiers that within a few days the interest on the accruing obligations would have to be paid, or the Government paper should go to protest. It was clearly demonstrated that if funds could not be raised the Government should be placed in a perplexing position, that would, in all probability, greatly complicate and prolong the struggle for national existence. It was one of the most critical moments in the whole history of the Republic, and the emergency required clear, decisive judgment, and promptitude of action.

Wall Street men perceived the gravity of the situation at a glance. If the Government’s credit should collapse, it was feared that the whole framework of our political system would be endangered.

The foundation of all securities was threatened with a destructive upheaval, and most serious consequences were 40likely to ensue, menacing a contraction of all values. The prospect was very dark. Not a ray of hope shone through the sombre clouds that hung dismally over the Union. The internal dissensions of our people, and the apparent destruction of our national life, were watched with the deepest interest by European friends and foes—the latter being then largely in the majority, and only waiting a favorable opportunity to pounce upon what they considered their destined prey.

Manifest destiny seemed to have leagued all her forces in opposition to us. The stoutest hearts quailed at the prospect of our dissolution as a nation.

At this momentous juncture, when there was no eye to pity, and when no other arm seemed mighty enough to save, the Wall Street men were equal to the occasion. They put their heads together, came to the front, and resolved to extricate the Government from its perilous position. It is true that they were well paid for it. They charged twelve per cent. for the loan, but that was nothing when the risk is taken into account. It was then almost impossible to get a loan at any rate of interest. By some of the great nations of Europe the risk then involved in such a loan was regarded in about the same light as the people of this country now estimate the present chances for realizing on Confederate paper money, or Georgia bonds of the old issue.

In this state of public feeling, Lombard Street was not in a favorable mood to negotiate loans with this country, and, the whole fraternity of the Rothschilds shut their fists on their shining shekels and shook their heads negatively and ominously at the bare mention of advancing money to the once great but now doomed Republic.

Money was dear at the time, and the Government was only obliged to pay what could have been obtained in other quarters. Curiously enough, private property then was considered better security than the Government endorsement, on the principle—which was not a very patriotic one, though 41in reality true—that the country could survive its form of government. That form, however, the best the world has yet seen, survived the shock and maintained its autonomy. That it did so was in a large measure due to the prompt action of Wall Street men in raising the sinews of war at the incipient stage of the rebellion. Had they failed to do so, it is not improbable that the repulse at Bull Run might have proved a decisive blow to the Union, and plunged the country into a state of anarchy from which nothing but a despotism almost as bad could have retrieved it.

The negotiation of this loan brought out the twelve per cent. Treasury notes. After this issue the rates fell. Then came the 11 and the 10¾ per cent. issues, and subsequently the well-known and long to be remembered 7 3-10 Treasury notes.

After this issue had been popularized, successfully disposed of, and finally taken up at maturity by the 5-20 loan, Jay Cooke was quick to issue, after their pattern, his famous 7 3-10 Northern Pacific Railroad bonds. Evidently he had a patent for negotiating that famous 7 3-10 per cent. railroad loan, as almost every clergyman, Sunday-school teacher and public benefactor were found to have invested in them, when the crash came, and although the road was the means of his financial downfall, with the ruin of an innumerable number of others besides, who were dragged into the same speculative whirlpool, this unfortunate event was not entirely an unmixed evil.

It is true that this was the main and visible cause of precipitating the panic of 1873, of which I shall speak more fully in another chapter, but the Pacific road was the great pioneer in opening up the Far West, and developing its material resources, the great artery of the Western railroad system, conveying vigorous and durable vitality to the industrial life of the expansive regions beyond the Rockies.

Thus, in taking a retrospect of my twenty-eight years in Wall Street, I find that what sometimes appeared to be 42great evils have been succeeded by compensating good, fate counter-balancing fate, as the Latin poet has it. It was so, as I have previously observed, after the panic of 1857. It was so after the convulsion of 1873, and though I have only historic evidence to guide me in regard to the earlier history of the Street, I find it was so after 1837. So, the maxim that history repeats itself has been fully verified in Wall Street.

So, now that I have relapsed into a reflective mood on this subject, a host of important associations connected with the main issue rush upon me. The prominent idea that stands out in bold relief is the rapid and wonderful progress made in Wall Street during the period that I have undertaken to chronicle. And not only so, but the rapid strides that have been made in everything, almost universally, during that time, present a vast theme for consideration. The part that Wall Street men have taken in this mighty evolution is the topic that concerns me most at present. As I attempt to progress with my subject, I observe this division of it becoming more expansive, so that I find myself in the position of the Irishman when he ascended to the top of a mountain. After recovering from the first effects of his surprise, he exclaimed: “I never thought the world was so large!”

So it is with me. I never thought that Wall Street was so big, nor that Wall Street affairs were so extensive, until I began to write about them. They expand, as well as improve, surprisingly on closer acquaintance. I only hope I shall be able to impress this idea more vividly on the minds of my clerical friends, and others who have been misguided in this respect, chiefly on hearsay and irresponsible evidence, and who, I am sorry to say, have been the well-meaning, but over-zealous instruments of misleading others.

To come to an approximate deduction of facts, then, it is, I think, a fair estimate of the general progress of humanity, to say that there has been greater material advance in everything that relates to a higher civilization, and the greatest 43good to the greatest number, during the last thirty years, than in all the previous time that has elapsed since the period that the father of history, old Herodotus, began to chronicle, in his racy style, the real and imaginary events of the human family.

The part that Wall Street has played in this amazing progress has been comparatively large, and would, if thoroughly investigated and fully discussed, make a larger book than I have time to write at present.

I can only glance at the prominent topics and leading events in the extensive and somewhat sensational history of Wall Street, and sketch briefly the conspicuous features in the lives of certain celebrities who have been conspicuous in the history of speculation, and of those who have been prominent in the financial affairs of the country.

CHAPTER VII.

MORE WAR REMINISCENCES—BRITISH AND NAPOLEONIC DESIGNS.

How Napoleon Defied the Monroe Doctrine.—The Banquet to Romero.—Speeches by Eminent Financiers, Jurists and Business Men.—The Eloquent Address of Romero against French Intervention.—Napoleon shows his Animus by Destroying the Newspapers Containing the Report of the Banquet.—The Emperor Plotting with Representatives of the English Parliament to Aid the Confederates and Make War on the United States.

There were other critical periods during the war when Wall Street came to the front, besides the one in which it rendered such timely aid to the Government in its financial embarrassment. One of these was when the Emperor of the French, Napoleon III., showed his cloven foot and exhibited anew the rancorous disposition which ten years previously had crushed the Republican hopes of La Belle France by the murderous Coup d’Etat. He made a bold attempt to plant that blood-stained foot on this fair soil, in open defiance of the Monroe doctrine, and to crush the liberties that his immortal uncle, even in the full flush of his great conquests, dared not attack and was forced to respect.

I shall here relate an incident of this period, which, I think, has not obtained the prominence in our national history to which, I believe, it is justly entitled.

Senor Romero, then Mexican Minister at Washington, was invited to a public dinner in New York, in order that proper occasion might be found to discuss the situation with regard to the intentions of Napoleon the Little concerning Mexico, and with a view of preventing foreign intrusion, which was only the entering wedge for future invasion, at a time when our nation was engaged in a family struggle to 46maintain its own existence, and demonstrate the durability of Republicanism.

The dinner, at which there was a grand manifestation of sympathy in favor of the Mexican cause against French invasion, took place on the evening of March 29, 1864, at Delmonico’s, Fifth Avenue and Fourteenth street. The banquet was held in four of the largest rooms. The large dining hall was illuminated as a promenade for the families of the hosts and guests, and a large concourse of ladies and gentlemen who were invited to see the table and be presented to the distinguished envoy. The rooms were elegantly decorated with flowers, grouped and festooned with artistic skill, and the doorways arrayed with fragrant wreaths and garlands. One room was set apart for the orchestra, and Helmsmuller furnished the music.

Senor Don Juan N. Navarro, Consul-General of the Mexican Republic, Ignacio Mariscal, an eminent jurist of Mexico, and Don Fernando De La Cuesta, Assistant-Secretary of the Legation, were invited guests. Following are the names of the Committee of Invitation:

WILLIAM C. BRYANT,WILLIAM H. ASPINWALL,HAMILTON FISH,JOHN W. HAMERSLEY,JONATHAN STURGES,JAMES W. BEEKMAN,J. J. ASTOR, Jr.,SMITH CLIFT,W. E. DODGE, Jr.,DAVID HOADLEY,FREDERICK DE PEYSTER,W. BUTLER DUNCAN,WILLIAM CURTIS NOYES,HENRY CLEWS,FREDERICK C. GEBHARD,JAMES T. BRADY,GEORGE T. STRONG,HENRY DELAFIELD,HENRY E. PIERREPONT,GEORGE OPDYKE,DAVID DUDLEY FIELD,GEORGE BANCROFT,C. A. BRISTED,ALEXANDER VAN RENSSELAER,GEORGE FOLSOM,WASHINGTON HUNT,CHARLES KING,WILLARD PARKER,ADRIAN ISELIN,ROBERT J. LIVINGSTON,SAMUEL B. RUGGLES.

Hon. James W. Beekman presided. The stewards were John Jacob Astor, John W. Hamersley and Henry Clews.

When full justice had been done to the large variety of sumptuous dishes, the chairman called the company to order, and explained that the object of the meeting was to 47do honor to the great cause of religions and political freedom contended for by the Republic of Mexico. The chair gave the first regular toast, “The President of the United States,” and called upon David Dudley Field to respond, who did so in his usual eloquent style, stating that the sentiment of the whole country was united in sympathy with the cause of the Mexicans, and that the Executive Department of the Government was simply the agent and exponent of the popular will. He dwelt at some length on the French invasion of Mexico as one of the greatest crimes of the age, and predicted the brief reign of Maximilian. Mr. Field wound up his discourse with the following grand peroration:

Maximilian may come with the Austrian eagle and the French tricolor; he may come with a hundred ships; he may march on the high road from Vera Cruz to the capital, under the escort of French squadrons; he may be proclaimed by French trumpets in all the squares of the chief cities; but he will return, at some earlier or later day, a fugitive from the New World back to the Old, from which he came; his followers will be scattered and chased from the land; the titles and dignities which he is about to lavish on parasites and apostates will be marks of derision; the flag of the republic will wave from all the peaks of the Cordilleras, and be answered from every mountain-top, east and west, to either ocean; and the renewed country, purified by blood and fire, will resume its institutions, and be free.

The second toast was, “Don Benito Juarez, Constitutional President of the Mexican Republic,” to which Mr. Charles King, President of Columbia College, responded. He spoke of Mexico as the friend and ally of the Union as opposed to European hostility.

His Excellency, Senor Matias Romero, the honored guest of the evening, then made a brilliant speech on the situation, from which I take the following extracts:

“I am very happy to say that the kind of feeling you express for Mexico is fully reciprocated. In Mexico there 48are now but the sentiments of regard and admiration for the United States, and the desire to pursue such a course as will draw more closely all those powerful ties by which both nations should be united.

“The Emperor of the French pretends that the object of his interference in Mexican affairs is to prevent the annexation of Mexico to the United States; and yet that very thing would, most likely, be ultimately accomplished if a monarchy were established in Mexico. Fortunately for us, that scheme is by no means a feasible one.

“We were willing to grant to the United States every commercial facility that will not be derogatory of our independence and sovereignty. This will give to the United States all possible advantages that could be derived from annexation, without any of its inconveniences. That once done, our common interests, political as well as commercial, will give us a common whole American continental policy which no European nation would dare disregard.

“The bright future which I plainly see for both nations had made me forget for a moment the present troubles in which they are now involved. I consider these troubles of so transitory a nature as not to interfere materially with the common destiny I have foreshadowed; but, as they have the interest of actuality, I beg to be allowed to make a few remarks in regard to them.

“Every careful observer of events could not help noticing, when the expedition against Mexico was organized in Europe, that it would, sooner or later, draw the United States into the most serious complications, and involve them in the difficulty. The object of that expedition being no less than a direct and armed interference in the political affairs of an American nation, with a view to overthrow its republican institutions and establish on their ruins a monarchy, with a European prince on the throne—the only question to be determined by the United States and the other nations concerned, was as to the time when they would be willing or ready to meet the issue thus boldly and openly held out by the antagonistic nations of Europe.

“This, in my opinion, is the situation in which the United States are placed with regard to Mexico. Taking into consideration the well-known sagacity of American statesmen the often-proved devotion of the American people to republican institutions, and the patriotism and zeal of the 49Administration that presides over the destinies of the country, I cannot entertain the slightest doubt that the United States will act in this emergency as will conduce to the best interests they and mankind at large have at stake in the Mexican question.

“The United States may find that they are brought squarely to the issue in the Mexican question sooner than they expected, should the report, lately reached here, of any understanding between Maximilian, as so-called Emperor of Mexico, and the insurgents in this country, prove correct. The archduke, it is stated, will inaugurate his administration by acknowledging the independence of the South, and, perhaps, he will go further; and this, of course, by the advice, consent and support of the French Government, whose satellite, and nothing else, will the archduke be in Mexico.

“Among the many events calculated to terminate immediately French intervention in Mexico, the European complications which threaten to cause a general war on that continent should be particularly mentioned. It is certainly wonderful that while Europe is in so insecure and agitated a condition, menaced by revolutions everywhere, and wrestling to recover its own existence and independence, the French Emperor should be thinking about arranging other people’s affairs, as if his own did not require his immediate and most particular attention.”

Mr. George Bancroft, the eminent historian, was next called upon to reply to the toast, “The Eminent Statesmen of Mexico,” among whom the chair named Guatimotzin, Hidalgo, Morelos, Ocampo, Lerdo and Degollado. Mr. Bancroft said:

MR. BANCROFT.

Gentlemen—Although I am not prepared to deliver an address worthy of this auditory, I can not refrain from replying and expressing my sentiments, as I have been called to reply to the toast which our president has just proposed to the statesmen of our neighboring sister republic. The struggle which for many long years the Mexican people have sustained against their interior tyrants has been an heroic struggle, worthy of a civilized and cultivated people, and in which the sympathies of the whole civilized 50world—of all the friends of political and religious liberty—ought to have been manifested in a frank and decided manner in behalf of the Mexican people, directed by the liberal party. I believe, gentlemen, that the cause of civil wars, not only in Mexico, but throughout all Spanish America, has been the clergy alone, who, when they come to acquire power in the State, always strive to overturn the government and to subordinate the temporal interests of society to their own. This attribute seems to belong principally to the Catholic clergy.

“The struggle, then, in which up to this time the patriotic Mexicans have been engaged, was a holy struggle, and the sympathy of the whole people of the United States was with them—a people who, whatever may be their religious creeds, adopts as a fundamental principle the most complete religious liberty, and the absolute independence of the Church from the State.

“But now the sympathy of the United States is increased for the Mexican people, when, in addition to the facts already mentioned, we find this people struggling for their independence and nationality against a European nation, which, taking advantage of the civil strife in which we were engaged, has sought to establish before our eyes a form of Government in open antagonism to our own. We can not do less than receive this project in the same way as Europe would receive it, were we to foment revolutions and establish republics on that continent.

“Then it is that those statesmen in the United States who aid us to emerge from our present difficulties, and to restore our power and legitimate influence, and those who in Mexico not only consummate the great work of establishing religious liberty on a solid basis, but who succeed in driving from their country the foreign invader, or at least keep the sacred fire of patriotism and of resistance to the invader burning, while we disembarrass ourselves of our complications, deserve, in the highest degree, our success and ardent homage.

“Gentlemen, the Egyptians used to place a burning lamp at the feet of their royal corpses. On descending the steep vaults in which the corpses were deposited, the lamp was naturally extinguished.

“Let Europe place at Maximilian’s feet the weak lamp of monarchial power. It will not burn in the atmosphere of our continent.”

51Mr. William Cullen Bryant was then called upon, and said, in part:

“We of the United States have constituted ourselves a sort of police of the New World. Again and again have we warned off the highwaymen and burglars of the Old World who stand at the head of its governments, styling themselves conquerors. We have said to them, that if they attempted to pursue their infamous profession here they did it at their peril. But now, when the police is engaged in a deadly conflict with a band of ruffians, comes this Frenchman, knocks down an unoffending bystander, takes his watch and purse, strips him of his clothing, and makes off with the booty. This act of the French monarch is as base, cowardly and unmanly as it is criminal and cruel. There is no person, acquainted, even in the slightest degree, with the political history of the times, who does not know that it would never have been perpetrated had not the United States been engaged in an expensive and bloody war within their own borders.

“We thought that we saw the dawn of an era of enlightened government in the administration of Juarez. That dawn has been overcast by the clouds of a tempest wafted hither from Europe. May the darkness which has gathered over it be of short continuance; may these clouds soon be dispelled by the sunshine of liberty and peace, and Mexico, assured of her independence, take the high place which belongs to her in the family of nations.” (Continued applause.)

Senor Don Ignacio Mariscal responded to “Our Guest and the Bar of Mexico.”

Mr. George Folsom, formerly envoy from the United States to the Netherlands, responded on behalf of the diplomacy, making special reference to Don Jose Lopez Uraga, Mexican Minister to Berlin.

Dr. Willard Parker responded to the health of Dr. Navarro, formerly Chief of the Medical Staff of the Mexican Army.

Mr. George Opdyke responded on behalf of the merchants.

52Senor De La Cuesta replied to the Commerce of Mexico.

Mr. Jonathan Sturges spoke for the fine arts of Mexico.

Mr. Washington Hunt spoke, protesting strongly against the French invasion of Mexico.

Mr. Frederick De Peyster, President of the New York Historical Society, responded on behalf of the historians of Mexico. He also made some eloquent remarks on the tyranny of French intervention.

Mr. Henry E. Pierrepont spoke, as the representative of Brooklyn, against the French policy in Mexico.

Mr. Smith Clift responded on behalf of the Bar.

Mr. Charles Astor Bristed replied on behalf of the Literary Men.

Mr. William E. Dodge, Jr., spoke on behalf of the Young Men of America. “The tread of a French invasion,” he said, “is to them a direct insult, and were our own sad war over, I believe there is not a town, or village, or hamlet, where a full company would not spring to arms to aid our sister republic in her glorious struggle. I give, as a sentiment in which I know all will heartily join, the “Monroe Doctrine”-“Americans can never allow the heel of European despotism to place its imprint upon the soil of our Western continent.”

The Chair then said, “Let us now recognize the services of our commissariat, who have so nobly discharged their stewardship. I propose the health of the stewards. I beg Mr. John W. Hamersley to speak in their behalf.” Three cheers were then given for the stewards.

Mr. Hamersley delivered an eloquent address, from which I take the following excerpts:

“It is hardly fair, sir, to call on us while our hearts are beating with fervid thoughts, and your ears ringing with burning words. Had this toast been on the programme, one of my coadjutors would have prepared an address worthy of the compliment and the occasion. This Committee was not chosen for their gifts of utterance, but for 53those humbler tastes, which only lend a grace to eloquence. Our duties are æsthetic, industrial and artistic. We have compassed the ends of the earth, the depths of the sea; we have levied contributions on the four winds of heaven, to cluster here all that can tempt the appetite, or fascinate the ear and eye, and we fancied our mission accomplished.

“However, there is the post-prandial law; the despotism of the wine cup, to which we all owe allegiance—the only despotism which the descendants of the Huguenots, or Pilgrim Fathers, will ever tolerate on this continent. We are here, sir, in menace to none, but firmly and respectfully, in the majesty of manhood, and in consciousness of power, to reassert a principle, imbibed with our mother’s milk, a household word, a dogma of American faith; but while we cordially grasp our neighbor’s hand, in the darkest hour of her trial, the grasp has due emphasis and significance.

“With her, we have kindred traditions; each of us has hewn an empire from the wilderness; each of us has expelled the oppressor; and both of us, with tattered banners drenched in the gore of hero martyrs, are now appealing from treachery to the God of Battles.

“We have a common future; for who can doubt that our successes and the death-knell of treason is already rung?—who can doubt that the triumph of our arms will be the signal for the eagles of Austerlitz “to change their base,” from the pyramids of Puebla for their perch on the towers of Notre Dame? And permit me here, sir, to express a hope, suggested by the season (God grant it may be a prophecy), that the Easter chimes of Mexico, of the coming year, with the glad tidings of a Saviour risen, shall peal from sierra to sierra, from ocean to ocean, with the glad tidings of a nation risen, a nation born again. (Cheers.)

“Sir [to the Chair], it is fitting, while the accents of sweet music recall tender and happy memories (man, imaged by that armed cactus; woman, by that graceful palm), it is holy to consecrate the hour to her who was “last at the cross and first at the sepulchre.” I propose, sir, a toast, to which your heart’s pulse will echo:

‘The daughters of Mexico—Fair as her sons are brave.’”

(Enthusiastic and prolonged applause. Music—Viva Republica.)

54THE CHAIR.

“We must not permit the modesty of our banker and steward, Mr. Clews, to outweigh our desire to hear from the Bourse.”

MR. HENRY CLEWS.

Mr. President and Gentlemen—Enough has already been said, in the speeches made this evening, to indicate most conclusively the depth of sympathy which pervades this community in behalf of the cause of Mexico, and I rise to express my cordial concurrence with the sentiments which have been avowed.

The unanimous and determined voices of this company clearly show that public opinion in this country will not submit to the encroachments of foreign powers upon any portion of the territory of the continent.

The principles of free republican government are so strongly implanted in the hearts of the people both of Mexico and the United States, that they will never consent to surrender them.

“Human freedom and the rights of man make common cause between Mexico and all other American States.

“I do not utter these words in prejudice against any government. In my judgment, European nations will best promote the welfare of their own people by carefully abstaining from all interference with the declared will of those who dwell on this continent.

“The doctrine has been solemnly asserted, and will be maintained inviolate against all alliances which seek to impede the progress of liberal institutions, or to impair the strength of governments founded on the rights and intelligence of the people.

“This is the doctrine of the United States, and, under the shield of its power and influence, the safety, prosperity and independence of Mexico will be maintained and made perpetual.” (Cheers.)

The meeting then separated, marching out to the inspiring strains of the Marseillaise.

A few days after this meeting the House of Representatives unanimously resolved that the United States would never consent to the establishment of a monarchy which would arise under the auspices of Europe, upon the ruins of a republic on the American continent.

55The speeches at the Romero banquet, followed by this resolution, were the premonitory sounds of the death knell of Maximilian’s empire, even before he took formal possession of his evanescent throne.

To show the animus of the Emperor regarding this meeting, and how closely he was watching the struggle, I may state that when the New York Herald, which had a full account of the meeting, arrived in Paris it was promptly seized by Napoleon’s censors and shared the fate of La Lantern and some of Victor Hugo’s most vigorous productions. It was committed to the flames on account of the speeches made by some of our representative men. It will be seen by reference to this incident that our representatives in Wall Street were among the first to perceive this threatened danger to the nation, and that they manifested their business tact and capacity in promptly meeting it. They acted literally on the maxim of Sir Boyle Roche, that “the best way to shun danger is to meet it half way.”

Wall Street men were the first to make the move that checkmated the tyrant who was ambitious to prove before the eyes of the world that Republicanism was a failure.

A volume might be written by the student of universal history, and probably will be by some future Herodotus, Macaulay, or Prescott, on the far-reaching influences of this original move on the part of the Wall Street men. There is a large field for speculative theorizing, containing much important truth in the way the Republican spirit was reflected in the political thought of Mexico, as the result of the feeling manifested at this public dinner in New York. It was undoubtedly the active precursor of the events that sealed the fate of that unfortunate cat’s paw, Maximilian. It gave birth to the idea that reverberated across the Atlantic, created distrust in Napoleon’s schemes of conquest as visionary with his own people, and alarmed their Teutonic foes, who urged forward those mighty preparations that culminated in the terrible overthrow at Sedan.

56To the mere reader of our local newspapers the connection between cause and effect of these great events may seem far-fetched, but it is all plain sailing to the student of general history.

In this connection it would be unjust to the genius of history to omit the part which England played on the same chessboard with her former political refugee, constable and Imperial protégé. Although Mr. Disraeli has done considerable justice to the case in Endymion, he has not dealt with it from this side of the Atlantic. And I am now going to touch on some points of hitherto unwritten history.

There was a secret alliance formed between Napoleon and the British Cabinet—an international conspiracy on a large scale—to demolish the liberties of this country, pounce upon the wreck and then share the spoils between these two powerful pirates. How this was planned and subsequently averted would form, if fully written up, one of the most interesting chapters in the voluminous library of statecraft, and would take most of the political sensation out of the best efforts of Macchiavelli, Talleyrand and Prince Metternich. I can only glance at the leading features of the diabolical scheme, and show how Wall Street men were again promptly in the breach at the proper moment.

The New York riots of 1863 were fomented by British, French and Southern influence combined, as a part of the villainous plot. The design was to give our troops enough to do in quelling local riots, so that they should have no opportunity of going to the front. Southern passion was predominant, and could not discern at the time that their would-be allies were their bitterest enemies. It was hoped that the “draft riots” would be so widespread as to afford Southern chivalry a chance to march unimpeded to Washington and capture the Capitol, when the allied foes of liberty, by virtue of their entente cordiale, should seize upon their prey.

Everything was in readiness for raising the blockade 57and pouring in armaments from Europe to complete the conquest. England had acted with more caution than Napoleon, and was slow to move, though he was constantly urging her forward. It is due to the villainy of his great conception to state, that, had he been able to move his more sluggish ally in crime with greater celerity, the result might have been overwhelmingly disastrous to this country.

CHAPTER LVIII.

JAY GOULD.

His Birth and Early Education.—Clerk in a Country Store.—He Invents a Mouse Trap.—Becomes a Civil Engineer and Surveys Delaware County.—Writes a Book and Sells It.—Gets a Partnership in a Pennsylvania Tannery and Soon Buys his Partner Out.—He Comes to New York to Sell his Leather, Falls in Love with a Leather Merchant’s Daughter and Marries her.—Settles in the Metropolis and Begins to Deal in Railroads.—Buys a Bankrupt Road from his Father-in-law, Reorganizes it and Sells it at a Considerable Profit.—Henceforth he Makes his Money Dealing in Railroads.—His Method of Buying, Reorganizing and Selling Out at a Large Profit.—How he Managed Erie in Connection with Fisk and Drew.—His Operations on Black Friday.—Checkmated by Commodore Vanderbilt and Obliged to Settle.—He Makes Millions out of Wabash and Kansas & Texas.—His Venture in Union Pacific.—His Construction Companies.—Organization of American Union Telegraph, and His Method of Absorbing and Getting Control of Western Union.—The Strike of the Telegraphers and his Great Encounter with the Knights of Labor and Trades Unionists.—Gould’s First Yachting Expedition.—An Exceedingly Humorous Story of his Early Experience on the Water.—His Status as a Factor in Railroad Management.—His Acquisition of Baltimore & Ohio Telegraph, &c.

If Fenimore Cooper, Sir Walter Scott, Charles Dickens or Dumas, in the height of the popularity of any of these great writers of fiction, had evolved from his inner consciousness a Jay Gould as the hero of a novel, its readers would have found serious fault with the author for attempting to transcend the rational probability allowed to the latitude of fiction. Few novel readers, in fact, would have patiently submitted to such a strain on their credulity prior to the era in 619the financial development of this country which produced some of the leading characters which Wall Street has brought to the front, as stern realities of every day life, since my advent in the great arena of speculation.

Among these Jay Gould is conspicuous, and of all the self-made men of Wall Street he had probably the most difficulty in making the first thousand dollars of the amazing pile which he now controls.

Jay Gould was born at Stratton Falls, Delaware county, New York, about the year 1836. He was the son of John B. Gould, a farmer, who kept a grocery store. At the age of sixteen young Gould became a clerk in a variety store belonging to Squire Burnham, about two miles from the Falls. Here, in his leisure hours, he assiduously improved the little learning he had received at the village school, by applying himself to the study of book-keeping in the evenings.

It was when he was at this store, according to the most reliable accounts, that he manifested his natural aptitude for making sharp and profitable bargains. His employer, the Squire, had his eye on a piece of land in Albany, which he expected to obtain cheap and so make a profit. He whispered his intention to some friend in the store and his young assistant overheard him. When he went to put his design of purchasing the land in execution he found that young Mr. Gould had been there before him, and had secured the title.

About this time there was a firm which had undertaken to survey the county and make office maps of it, and young Gould was employed to assist them. Having mastered the elementary principles of geometry, and being naturally quick and correct at figures, he soon became a fair expert in common land surveying, and made himself exceedingly useful to his employers. But the idea of not only being his own boss but an employer of other people’s brains and muscles was one of his ruling propensities, and he used every effort 620to attain this object. In a short time he bought out the firm, wrote a history of the county to accompany the maps and peddled his book among the residents.

This natural inclination to buy out every concern with which he has been connected has been the ruling passion of his life, and still tenaciously adheres to him. Prior to his negotiations with the firm of surveyors, he had invented a mouse trap in his intervals of leisure in the store, and with the proceeds of this and the bargain in the land, out of which he had outwitted his employer, he was enabled to make himself master of the situation with the surveyors. Shortly after this Gould became interested in a Pennsylvania tannery with Zadoc Pratt, who was the capitalist. Through the advice of Israel Corse, the Commission Merchant of the firm, Col. Pratt proposed to dissolve the partnership. Gould induced Charles M. Leupp & Co. to purchase Pratt’s interest for $150,000. The business did not meet the expectations of Leupp, who in a fit of despondency committed suicide. After his death Gould failed to retain possession of the property, which was sold to H. D. H. Snyder, thus terminating Mr. Gould’s career as a Pennsylvania tanner.

On his visits to New York Mr. Gould was attracted by the greater advantages which the Empire City afforded for extending his business, and came here to reside. He had ingratiated himself in the favorable esteem of one of the grocery merchants with whom he had done business. The merchant took him to his house to board and Mr. Gould fell in love with his handsome daughter. It was a mutual affair of the heart, like that of his son George and Miss Edith Kingdon, and a speedy marriage was the result. The results of the happy union seem to have been all that could be desired, and the domestic felicity of Mr. and Mrs. Gould, so far as the public have been able to ascertain, has never suffered the slightest jar or interruption.

The father-in-law owned shares in a railroad which was in a bad financial condition. He employed his new son-in-law to see what he could do to extricate him from a position in 621which he was likely to become embarrassed, and he wanted to sell his shares. Mr. Gould examined the road, (with the locality of which he had been well acquainted in his boyhood,) saw the favorable possibilities of its future, under good management, and instead of selling his father-in-law’s shares to a stranger, he took them at their market value himself, purchased more, finally obtained control of the entire property, and sold it to a rival company at a large profit.

This, I believe, was Mr. Gould’s first transaction in railroad matters, and from that day to this his great speculative forte has been buying and selling railroads. It was in that kind of business, and not in the stock market, as is popularly supposed, that he made the great bulk of his enormous fortune.

On his entrance to Wall Street he began business alone. Afterwards he formed a partnership with Henry N. Smith and — Martin, the firm taking the name of Smith, Gould & Martin. Martin is now in a lunatic asylum, and Henry N. Smith, who was the chief cause of the failure of Wm. Heath & Co. for a million dollars, is now a poor pensioner on the bounty of his wife. But Mr. Gould still towers aloft, in the full enjoyment and the continued progress of his speculative prosperity, without being dismayed by any competitor, however powerful, and overcoming all obstacles, no matter how gigantic.

As I have noticed pretty fully some of Mr. Gould’s greatest speculative transactions, mostly behind the scenes in the chapter on Black Friday and also in the account of the “Commodore’s Corners,” it will be unnecessary to repeat them here.

There was one clever transaction in the Black Friday affair that should be put on record to the credit of the able management of that great deal. One prominent individual connected therewith was personally responsible for $4,500,000. This was a pretty heavy load at that time even for him to carry, but it did not weigh very heavily upon 622him for any appreciable length of time. He adroitly managed to shift it over on to the shoulders of that broad-backed, soulless creature called the Erie Corporation, making it responsible by simply signing himself “T. R.,” instead of “J.G.,” the large letters representing the ordinary contraction “Tr.” for Treasurer. By this simple and ingenious device this shrewd gentleman got rid of the burthensome legacy on the negative side, bequeathed to him by the “Black Friday corner.”

There is a story told, with several variations, in regard to a sensational interview between Mr. Gould and Commodore Vanderbilt. The scene is laid in the parlor of the Commodore’s house. It was about the time that the latter was making desperate efforts to get a corner in Erie, and at that particular juncture when, having been defeated in his purpose by the astute policy of the able triumvirate of Erie—Gould, Fisk and Drew—he had applied to the courts as a last resort to get even with them.

They had used the Erie paper mill to the best advantage, in turning out new securities of Erie to supply the Vanderbilt brokers, who vainly imagined that they were getting a corner in the inexhaustible stock. Mr. Vanderbilt was wild when he discovered the ruse and had no remedy but law against the perpetrators of this costly prank. These adroit financiers usually placed the law at defiance, or used it to their own advantage, but this time they were so badly caught in their own net that they had to fly from the State and take refuge at Taylor’s Hotel in Jersey City.

It seems that during their temporary exile beyond the State Gould sought a private interview one night with the Commodore, in the hope of bringing about conciliatory measures.

The Commodore conversed freely for some time, but in the midst of his conversation he seemed to be suddenly seized with a fainting spell, and rolled from his seat unto the carpet, where he lay motionless and apparently breathless.

623Mr. Gould’s first impulse was to go to the door and summon aid, but he found it locked and no key in it. This increased his alarm and he became greatly agitated. He shook the prostrate form of the Commodore, but the latter was limp and motionless. Once there was a heavy sigh and a half suffocated breathing, as if it were the last act of respiration. Immediately afterward the Commodore was still and remained in this condition for nearly half an hour. Doubtless this was one of the most anxious half hours that ever Mr. Gould has experienced.

If I were permitted to indulge in the latitude of the ordinary story teller, I might here draw a harassing picture of Mr. Gould’s internal emotions, gloomy prospects in a criminal court and dark forebodings. His prolific brain would naturally be racked to find a plausible explanation in the event of the Commodore’s death, which had occurred while they were the sole occupants of the room; and at that time, in the eyes of the public, they were bitter enemies.

I can imagine that, in the height of his anxiety, he would have been ready to make very easy terms with his great rival, on condition of being relieved from his perilous position. It would have been a great opportunity, if such had been possible, for a third party to have come in as a physician, pronouncing it a case of heart disease. No doubt Mr. Gould would have been willing to pay an enormous fee to be relieved of such an oppressive suspicion.

The object of the Commodore’s feint was evidently to try the courage and soften the heart of Mr. Gould, who never seemed to suspect that it was a mere hoax. His presence of mind, however, was equal to the occasion, as he bore the ordeal with fortitude until the practical joker was pleased to assume his normal condition and usual vivacity. If Mr. Gould had been a man of common excitability he might have acted very foolishly under these trying circumstances, and this doubtless would have pleased his tormentor intensely.

624The modus operandi of Mr. Gould, in the purchase and sale of railroads, has been to buy up two or more bad roads, put them together, give the united roads a new name, call it a good, prosperous line, with immense prospects in the immediate future, get a great number of people to believe all this, then make large issues of bonds and sell them at a good price, for the purpose of further improving and enhancing the value of the property. After these preliminaries had been gone through, if profitable purchasers came along, they could have the road at a price that would amply compensate Mr. Gould for all his labor and acute management. If these purchasers should be unable to run the road profitably and were obliged to go into liquidation after a year or two, as frequently happens, then Mr. Gould or his agents would very likely be found on hand at the sale to take back the road at a greatly reduced price. Mr. Gould would then get a fresh opportunity of showing the superiority of his management. He would be able to demonstrate that the road had left his possession in excellent and progressive condition, but through loose management had been run down. He would then set about the work of reorganization again and go through the same role substantially, with slight variations, as before, realizing a handsome profit on each successive reorganization.

It would take too much time, and swell this volume far beyond the space which I have laid out for it, to go minutely into the history of all Mr. Gould’s great enterprises. In fact, it would take a large volume in itself to do justice to the various schemes which have been put under way by him directly and indirectly and carried to a successful issue during his busy life of a quarter of a century in Wall Street. This seems a long time for a man who is still so young, although he is a grandfather, and enjoying the use of his mental faculties more vigorously than ever.

Owing to my own busy life I have only time to sketch the most salient points of Mr. Gould’s prosperous career. Some 625future historian of Wall Street is destined to make a big “spread” upon him, as the newspaper reporter would say. He will have ample material if he only begins his work soon; but whoever undertakes the job should not forget the maxim of that great veteran of literature, old Dr. Samuel Johnson, about material for biography having a general tendency to become scarce, and, in some instances, eventually to vanish. While the reliable material for Mr. Gould’s biography may be subject to the common fate of growing less, as time advances, there is no danger of utter oblivion in his case. He has impressed his footprints on the sands of time too firmly for that.

I don’t for a moment mean to insinuate the reason for this, which is given by Shakespeare as applicable to similar cases, although some ill-natured and envious people might use the well-known quotation in this connection:

“The evil that men do lives after them,The good is often interred with their bones.”

I have no hesitation in saying that Mr. Gould will leave a large amount of good after him, and, indeed, it seems now as if the Shakespearian adage was to be reversed in his case. The evil that he may have done is likely to be forgotten. He bids fair to outlive most of it, if he only goes on to the end as he has been doing for the past few years. He is now showing a decided disposition to become more of a builder up than a wrecker of values.

Through his great executive ability in railroad management and construction he has been instrumental in making many blades of grass grow where none had grown before, causing the desert to blossom like the rose, assisting thousands who had formerly been poor and almost destitute, pent up either in European hovels or New York tenement houses, to find happy homes in the West and South. He has been a great factor in improving the value of the land, and thus, while he was enriching himself, adding materially 626to the wealth and prestige of the nation and thereby elevating it in the appreciation of the world at large.

The correspondent of the London Times recently sent over here to write up a description of the country, dwells emphatically on this characteristic of Mr. Gould and other great millionaires and railroad magnates, who contribute so largely to the general prosperity of which they seem to be the indispensable mediums.

It was as the managing power in the Erie Railroad that Mr. Gould laid the broad foundation of his fortune. His speculative connections with Erie are more fully dealt with in the lives of Daniel Drew and Commodore Vanderbilt. The money and influence which he gained, in connection with the Erie corporation, enabled him to extend his operations in the acquisition of railroad property until, through Union Pacific and its various connections, Wabash and a number of Southwestern roads, it seemed probable, at one time, that he was in a fair way of grasping the entire control of the trans-continental business in railroad matters. And this was prior to the time when he obtained his present hold on telegraph facilities.

Some of the able schemes in which Mr. Gould has had credit for playing an important part, and sometimes a role that was considered rather reprehensible, were managed, so far as the outside business was concerned, chiefly by one or more of his wicked partners. In one of the most noteworthy of those projects, namely, the attempt to capture the Albany & Susquehanna Railroad, Mr. Gould seldom or never appeared in person before the public. His partner, James Fisk, Jr., was cast in that role and played it with great ability. With the essential aid of those two shining lights of the New York bar, David Dudley Field and Thomas G. Shearman, the Prince of Erie, (as Jim Fisk was called,) came pretty near snatching possession of 142 miles of a very important railroad, with the control of only 6,500 out of 30,000 shares of the stock, and 3,000 shares of these 6,500 had been illegally obtained, as was eventually decreed by the court.

627Mr. Fisk, though the silent member of the Erie firm, had also control of Judge Barnard, of the Supreme Court of the City and County of New York.

The Albany & Susquehanna road would have been a valuable prize for Erie. It runs from the eastern extremity of the New York Central at Albany to a junction with Erie at Binghamton. At that time Erie aspired to be a successful competitor with Central for New England business, and had determined to monopolize the coal trade between that section and Pennsylvania. This connecting link of 142 miles was therefore regarded as a very valuable acquisition by both the large roads. Hence it was worth a desperate effort, and Jim Fisk showed that he had a true appreciation of its value, for he organized a company of New York roughs, placed himself at their head, and being armed with bludgeons and pistols and an injunction from Judge Barnard, obtained from him in New York city—while he was really in Poughkeepsie at the time—went to Albany and took forcible possession of the offices of the railroad. He had the President, Secretary, counsel and receiver of the road arrested and put under $25,000 bonds each. Mr. Fisk went through the farce of an election of Erie candidates for the offices which he had forcibly made vacant in the Albany & Susquehanna, bringing his roughs up to vote as stockholders.

The President of the road, Mr. Joseph H. Ramsey, fought stoutly for his rights and ousted the intruders. He had spent eighteen years building the road, and was naturally attached to it. He also found a Judge to aid him. Justice E. Darwin Smith, of Rochester, eventually rendered a decision in favor of the Ramsey party, with the opinion that “Mr. Fisk’s attempt to carry the election by his contingent of ‘toughs’ was a gross perversion and abuse of the right to vote by proxy, tending to convert corporation meetings into places of disorder, lawlessness and riot.” Costs were decreed to the Ramsey directors, and a reference made to 628ex-Judge Samuel L. Selden, of the Court of Appeals, who fixed the allowance to be paid by the Fisk board to the Ramsey board at $92,000. It is worthy of note that the Fisk board consisted of the unlucky number of thirteen.

The Erie party appealed, but long before the appeal could be heard the Albany & Susquehanna was leased in perpetuity to the Delaware & Hudson Canal Company, against whom the Erie party was not strong enough to go to law. Thus ended the struggle for this great connecting link.

It is worthy of remark that this was one of the few cases in which, where Mr. Gould made up his mind to obtain the control, possession or ownership of property, he did not succeed.

The methods of acquiring the control and the possession of other people’s property have been raised to the dignity of a fine art by Mr. Gould. This art has been prosecuted, too, through “legitimate” means. He has had the law at his back every time, and been supported in his marvellous acquisitions by the highest Court authority.

The manner in which he managed to get Western Union into his hands affords a very striking illustration of his methods and the great secret of his success.

When first laying his schemes to obtain the control of the telegraph property he got up a construction company to build a telegraph line. This was a company of exceedingly modest pretensions. It had a capital of only $5,000. It built the lines of the Western Union Telegraph Company, with which Mr. Gould paralleled most of the important lines of Western Union, and cut the rates until the older and larger corporation found that its profits were being reduced towards the vanishing point. Then it was glad to make terms with its competitor; a union of interests was the result, and Mr. Gould obtained control of the united concern.

“Impossible,” said Norvin Green, in high dudgeon, when the insidious intentions of Mr. Gould were broached to him a few months before the settlement took place. “It would 629bankrupt Gould and all his connections to parallel our lines, and to talk of harmony between him and us is the wildest kind of speculation.” The genial Doctor was then master of the situation in Western Union, or imagined himself so at that time, and regarded with contempt the efforts of Gould and his colleagues to bring the company to terms. In a few months afterward the Doctor tamely submitted to play second fiddle to the little man whom he had formerly despised.

The arrangement in reference to the cable companies followed the capture of Western Union. The struggle is still pending for the entire monopoly in the cable business, and it now seems only a question of time when the Bennett-Mackay party will have to succumb, leaving Gould in the supreme control of the news of the world. If this should happen he would become an immense power for either good or evil both in speculation and politics. In fact it would be too great a monopoly to be entrusted to the will of one man. Although it might be judiciously managed, as the cup of his ambition would then be surely full, yet the experiment would be extremely hazardous.

The controlling interest in the Elevated Railroads of this city, recently achieved by Mr. Gould through his business and speculative relations with Mr. Cyrus W. Field, are of too recent date to require any special notice or comment here. Suffice it to say, that I fear my friend Mr. Field has not come out at the big end of the horn, although everything has no doubt been in conformity with the most approved business principles and in strict adherence to the most honorable methods of dealing in railroad securities. It is significant, however, that Mr. Field has preserved a prudent reticence on the subject.

Mr. Gould, from my point of view, has been a public benefactor in the bold and successful stand which he has maintained against strikers. Though Western Union lost over half a million dollars by the strike of the telegraphers, 630which greatly alarmed the stockholders, yet Mr. Gould held out until the strikers were obliged to give in. He pursued the same policy, with a similar result, in the case of the Knights of Labor. During the strike of the latter I explained my views on the subject in a circular to my customers as follows:

“The Knights of Labor have undertaken to test, upon a large scale, the application of compulsion as a means of enforcing their now enlarged demands. This has necessitated a crisis of a very serious kind. The point to be determined has been, 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 to not only deprive him of his freedom, but also expose him to interferences seriously impairing the value of his capital. To the employes, 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 normal relations between capital and labor, 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 apprehension that such an utterly anarchial 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 631rights of the citizen, and so completely subversive of social order, that the whole community has come to a firm conclusion that these pretensions must be resisted to the last extremity of endurance and authority.”

The manner in which Mr. Gould acquired his great control in some of the Western and Southwestern railroads was pretty fully developed in the recent investigation held in this city, Boston and San Francisco by the Pacific Railway Commissioners. Mr. Gould’s testimony, as reported in the daily papers of May, 1887, probably contains almost as correct and succinct an account of his pooling arrangements and schemes in connection with certain railroads and his methods of making money out of them as can be obtained anywhere. His testimony, on the whole, was exceedingly affable, comprehensive and precisely to the point, and has not been contradicted in any material points by any of the succeeding witnesses that have yet been examined on this widely interesting subject. Its substance was as follows:

[From the Herald, May 18, 1887.]

A dapper little man in plain pepper and salt (the pepper predominating) business suit entered the Pacific Railway Commissioners’ offices yesterday morning and sat down quietly with his not over shiny silk hat on his knee.

The natty gentleman, unobtrusive possessor of the small dark and brilliant eyes, was the man of millions.

He had lots of information for the Commission, and he gave them more of the inside facts of the early consolidation deals of the Union Pacific than they hoped to get.

It had been expected that Mr. Gould would prove a wily witness, hard to corral and liable to shy over the fence at the slightest provocation, but at the very outset his manner was a complete surprise. He told the Commission that he was suffering from neuralgia, and said that he could not speak very loud in consequence. There were times during his examination that his tone was faint, and it was only loud two or three times, when he became very much interested in some explanation. At all times, however, it was well modulated, and now and again had a musical cadence about it 632that was very pleasing. He first became interested in Pacific roads in 1873. He bought Union Pacific stock in the market, but it went down to fourteen cents on the dollar. He held about 100,000 shares. He had a consultation with Sidney Dillon, and finally made a proposition to fund the floating debt in bonds, of which he took a million dollars’ worth at above their par value. In 1874 he became a director and served on the executive committee. He continued in the direction during 1874, 1875 and 1876, and went over the road twice a year. He had no interest in the Fisk suit, but knew it was brought. He had no contingent interest whatever in the suit.

He became interested in the Kansas Pacific in 1878, but thought he knew the road in 1874. He remembered a proposition looking toward a unity of interest between the Denver Pacific and the Colorado Central.

Being examined as to the positions of the roads, and as things did not appear to be very clear, Mr. Gould, putting his hand to his inside pocket, said: “I have a little map here if you are not familiar with the location.”

The little map was brought out and all hands gathered around it, while Mr. Gould’s index finger went on an excursion over States and Territories in absolute defiance of the Inter-State Commerce Law. He recalled the fact that the plan of consolidation was considered as early as 1875, after Mr. Anderson read some extract from a paper, but he said it was not carried out then. He might even have had a talk with Scott about it on further consideration.

The little road connecting with the Colorado Central was built by him, and was the result partly of the contest between the Union Pacific and the Kansas Pacific. Prior to 1878 he could not recollect having owned any stock or securities of the Kansas Pacific. His interest in the Union Pacific has increased to 200,000 shares, the total issue of stocks being 367,000 shares. He kept books of his transactions. Mr. Morosini kept them a part of the time.

Q. Where are the books? A. I have them.

Q. Where? A. In my possession.

Q. Are they at the service of the Commission? A. If they desire them, with the greatest of pleasure.

This was the first sensation of the day, and the witness smiled blandly as he felt the full force of it.

Up to this time he had answered every question promptly. 633There appeared to be no hesitation on his part, and, indeed, there was none during the entire day’s session. Almost every preceding witness had taken refuge behind “I don’t know,” or “I cannot remember,” or “Really I am not sure,” but there was none of this from Gould. And the apparently full and free offer of his books capped the climax.

After this whenever his memory was in any way at fault the witness fell back on the books. In asking him what he had bought certain stocks for he said the books would show.

“Will your books also show who the broker was?”

“Oh, yes; certainly, certainly, certainly.”

In the matter of the St. Louis pool he had conversed with a number of persons.

Q. With whom did you converse? A. I presume with all the signers of the agreement.

Q. Will you tell us all about the preliminary measures leading up to this? A. I would have the neuralgia a good deal worse than I have if I undertook to tell you all of the details.

This was the original proposition of consolidation, which was a stock instead of a bond agreement, and it was soon demonstrated that it would not work.

Q. How soon after this was the new arrangement entered into? A. Almost immediately afterward, I think. The object was the funding of a heterogeneous mass of securities into one class of securities.

Q. Did you confer with others? A. I conferred with myself as well as others. What I thought was a fair price for me was a fair price for the others.

Q. To whom did you deliver your bonds? A. I suppose to the committee, but I do not know.

Q. But you would not deliver $2,000,000 to a man in whom you did not have confidence? A. Probably not.

Q. Who kept the accounts? A. I don’t know.

Q. You don’t remember? A. I don’t charge my memory with these things after they are over, but my books will show, and they are at the service of the Commission.

Mr. Gould’s manner in saying this was unusually suave and polite, and the lines of his mouth relaxed just enough to suggest a smile.

In speaking a few moments later of the securities bought by Mr. Gould from the “St. Louis parties” he was asked of whom he bought them.

634“I cannot tell about that off-hand, but my books will show it.”

“Which of the St. Louis people did you confer with?”

“I think they came on here to see me. They were tired out and wanted to sell, and came over to do it.”

“Then you bought all the securities first and tried to get some other gentlemen to go in with you afterward?”

“Yes, several gentlemen whom I thought would be of service to the road. There ought to be some books. Somebody must have kept accounts of the transactions. My recollection is that these people came on and told me they wanted to sell. I asked them how much they thought they ought to have and they gave me the price quoted in the agreement.”

“I simply said, ‘I will take them,’ and that was all there was to it. That is my recollection. In 1879 I owned about $4,000,000 worth.”

The examination led into the stamped income bonds of the Kansas Pacific, and Mr. Gould was asked as to the condition of the road. He thought it was poor. The road had a large intrinsic value, but it had been badly financed and its securities were way down.

Q. Did you not buy some of your securities abroad? A. I bought two millions of Denver Pacific at seventy-four cents, I think, from some Amsterdam people. I was in London and heard that they wanted to sell. I was afraid to go over, because I had very little time, and thought they would probably take a couple of days to smoke before finding out whether they would sell or not. But I was mistaken. I went over and got to Amsterdam in the morning; washed and had my breakfast. I saw them at eleven, bought them out at twelve, and started back in the afternoon.

When Mr. Gould was asked as to the prices he had paid for the securities with which he had acquired the Kansas Pacific bonds he took out his papers and handed the Commission a series of neatly written reports on these purchases and sales.

He purchased in 1879 St. Jo. and Denver first mortgage bonds, $1,562,886.69, for $603,204.78.

Of these, $617,000 worth he sold to Russell Sage, F. L. Ames, Sidney Dillon, S. H. H. Clark, Ezra H. Baker, F. G. Dexter and Elisha Atkins for $246,800.

On January 24, 1880, he surrendered $956,779.76 in these 635bonds and scrip in exchange for 9,568 shares of Union Pacific at par.

For St. Jo. and Denver Pacific receivers’ certificates to the number of fifty-nine he paid $60,695, and on January 24, 1880, he surrendered them for 590 shares of Union Pacific at par, or $59,000.

Of St. J. and Denver stock during 1879 he acquired 8,819 shares, and sold 3,806 shares to the same persons purchasing the bonds. On January 24 he surrendered the 5,013 shares he had remaining on hand at par for $100,200.

During the same time he bought $784,000 worth of the St. Joseph Bridge bonds for $586,940, of which he sold to Sage and Dillon $150,000 worth for $112,500.

He also bought 4,000 shares of stock for $6,000, making the total cost of $634,000 bonds and 4,000 shares of stock $480,440. Received in exchange for the whole business, 6,340 shares of Union Pacific stock at par, making $634,000.

The gentlemen to whom Gould sold the securities were all directors of the Union Pacific. These gentlemen, the witness thought, retained their bonds until the consolidation, as they were bought with a purpose. “The Denver stock was called trimmings,” said Mr. Gould, smiling, “and went with the bonds.”

On the consolidation of the company he transferred 27,000 shares of Union Pacific Railroad stock for new stock.

He had transferred his Union Pacific stock at one time to some other parties on account of a peculiar law in Massachusetts, which enables an attachment of stock on a suit, whether there was anything in it or not.

“I found out about that law,” said Mr. Gould, “and put the stock in somebody’s else’s name. You can’t tell anything,” he continued, sharply, “about any stock list. There are many shares of stock held by brokers for years.”

After the consolidation he had begun to distribute his stock among other holders.

“I made up my mind,” he said, “it would be better to have four or five stockholders do a little of the walking instead of one.”

Q. That idea was very much stimulated by the rise in the stock after the consolidation, was it not? A. Yes, because the stock went up then so much that there wasn’t enough to go round.

636The witness told the story of the employing of General Dodge and Solon Humphreys to recommend the consolidation. They were fair men, he thought, and would make a fair report.

He had not talked to them after they went West to make their report.

Q. How is that? A. Well, he naively replied, while they were making their examination my interests had changed.

Q. They had changed? A. Yes, I had bought the Missouri Pacific.

Q. Did General Dodge and Mr. Humphreys look into the past history of the road? A. I consider the future of a road more important than its past.

Q. Yes, but what I want— A. The past was no criterion as to the Union Pacific road.

Q. But don’t you think that General Dodge and Mr. Humphreys—? A. “All my life,” said Mr. Gould, warming up; “all my life I have been dealing in railroads—that is, since I have been of age, and I have always considered their future and not their past.”

“That is the way I have made my money,” said he. “The very first railroad I ever bought had a most deplorable past, but its future was fair. I paid ten cents on the dollar for its bonds, and finally sold the stock for $1.25. It was the future of the Union Pacific that drew me into it. I went into it to make money.”

“You were not in favor of the consolidation at the time it was made?”

“No, my interests had changed.”

“Did you try to stop it?”

“Well,” said Mr. Gould, slowly, “my opposition to it was known and they were greatly alarmed.”

“Who?”

“Ames, Dexter, Atkins and Dillon. They came on from Boston to see me about it. They had heard that I was going to build an extension to the Denver Pacific and connect the Missouri Pacific. They said I was committed to the consolidation and laid right down on me. I offered my check for $1,000,000 to let me out, and I have offered it since.

“I will pay it now,” said the witness, with a strong rising inflection of the voice and looking hard at the Union Pacific people in the room.

637“I offered them a million, but they would not let me out of the room until I had signed an agreement to carry out the consolidation.”

“Where is that paper?”

“I suppose it is in Boston. If I could have carried out my Missouri Pacific plan I would have a property now that would be worth par.”

“I don’t think you have any reason to complain of your profits in the matter,” replied Mr. Anderson, at which Mr. Gould partly closed his eyes to hide their twinkle, and said nothing.

The paper which he signed was an agreement to carry out the consolidation on certain terms. The consolidation was an assured fact after January 15, because the witness held the controlling interest.

“But I have now ceased to be the tower of the Union Pacific,” he said.

In asking Mr. Gould about his connection with Lawyer Holmes at the time of the consolidation, Mr. Anderson asked him whether he was sure about a certain conversation.

“Yes,” he said, “for I had it impressed on my mind.”

“How was that?”

“Well, I remember parting with a lot of stock at ten cents for which I could have got par a few days afterward. Wouldn’t that impress the occasion on your memory, Mr. Anderson?”

Everybody laughed at this, and the witness, although he had lost a million or two, laughed as heartily as the loudest.

As far as the Denver Pacific stock was concerned Mr. Gould said it was worth practically nothing unless the consolidation was made. It was the signature of the Union Pacific that made it good.

“Do you consider that the trustees fulfilled their duty in letting this stock out of trust?” he was asked.

“I consider that it was the only thing to do, and I stand on what was done. I am ready to take the responsibility for it that day, or this day, or any other day.”

[From the New York Times, May 19, 1887.]

Jay Gould gave another day to the Pacific Railway Commission yesterday. His manner was, as usual, cool and collected, and he was apparently full of a patient desire to tell everything he knew. Yet Mr. Gould told very little, although he answered hundreds of questions, some of them 638puzzling enough to drive a less long-headed financier into a corner. The Denver Pacific stock and the way it got out of the trust were first taken up. Mr. Gould said he thought the course taken was best for everybody. Naturally he wanted the Denver Pacific to go into the consolidation, holding as he did, $1,000,000 of the securities, and being trustee of over $3,000,000 more. At first it was doubtful if the Union Pacific would take it, but it did for the franchises. “I want to say again,” declared Mr. Gould, “that no director or person connected with the Union Pacific ever made a dollar out of Denver Pacific. I am glad to put a final nail in that coffin.”

His plan at one time was to build a line from Denver to Ogden, via Salt Lake and Loveland Pass. It would have been shorter than the Union Pacific and obtained more local business, for the Union Pacific ran north of the mineral belt and the Southern Pacific south of it. After he obtained the Missouri Pacific he saw what a good thing he had in it, but he was persuaded to give his pledge to go on with the consolidation of the other roads. The Boston folk became agitated within a month after he bought the Missouri Pacific, and got the pledge from him. If the Missouri Pacific had been put through it would have injured the Union Pacific a great deal.

“According to the ethics of Wall Street,” Mr. Gould was asked, do you consider it absolutely within the limits of your duty, while a director of the Union Pacific, to purchase another property and to design an extension of the road which would perhaps ruin the Union Pacific?”

“I don’t think it would have been proper. That’s the reason I let it go.”

“Did you consider your duty to the Government?”

“I had considered it.”

“How would the Government claim have been affected by building a parallel line?”

“It would have been wiped out.”

After the Thurman bill had been sustained by the Supreme Court Mr. Gould had a plan to build a road from Omaha to Ogden, just outside the right of way of the Union Pacific, and give that road back to the Government. It would give others “a chance to walk.” The Government tried to squeeze more out of the turnip than was in it. For $15,000,000 a road could be built where it had cost the Union Pacific $75,000,000.

639“You were not devoted to the interests of the Government?”

“I wanted to protect them. Their legislative action hurt their own interests and put those of the stockholders in jeopardy. The Government repudiated their own contracts. Cash was offered to pay the Government the Union Pacific debt. I had the debt reckoned up and offered to pay it. In 1877 or 1878 I made the offer to the Judiciary Committee, of which Mr. Edmunds was Chairman. I made the offer myself. The debt was estimated at $15,000,000 or $17,000,000. But the Government would not concede that interest terminated with the bonds. No action was taken on the proposition.”

Mr. Gould thought he wrote his own resignation as Director of the Union Pacific. He resigned because he ought not to deal with the company while one of its directors. He put it in President Dillon’s office. Mr. Dillon knew what it meant.

“What did it mean?”

“That if the consolidation went through it involved large transactions with Jay Gould, and if I had stayed in it would have complicated things. Before January 10, 1880, no bargain was made to pay par for St. Jo. and Western bonds, nor Kansas Central, nor 239 for Central Branch stock. That came afterward.”

The Colorado Central lease was canceled on account of a State law against consolidating competing lines. Mr. Gould did not know that the Dodge and Humphreys letter was to be presented to the meeting of January 24. He was probably informed of the consolidation on the day it took place. He was also probably present at the first meeting of the new company on January 24. Mr. Gould’s resignation from the Kansas Pacific Board was gone over, and in summarizing his reasons for resigning Mr. Gould said he did not want to be mixed up with trusteeships and directorships. When he was not a Union Pacific director he felt at liberty to take care of himself. There was a chance that the properties might be made hostile to him, and then it would have been improper for him to be a director. He did not know that Russell Sage was to move the acceptance of his resignation.

“At the Kansas Pacific meeting a list of the branch lines 640obtained from you was read. President Dillon said the company had bought them. What did he mean?”

“Possibly he referred to the directors’ agreement with me.”

“But we can find no record of this in the books. Don’t you think he referred to the agreement with the Boston gentlemen?”

“Very likely, but it had no authority until it was accepted or rejected.”

Mr. Gould was set to explaining some discrepancies between the accounts of his dealings in branch securities, handed in on Tuesday, and the list submitted by Controller Mink. Mr. Mink gave 15,162 shares of St. Jo. and Western stock, and Mr. Gould 8,119. The difference was explained by Mr. Gould’s getting some stock for building the Hastings and Grand Island. He retained control of the $150,000 St. Jo. Bridge bonds he sold Dillon and Sage and turned them over with his own. His $479,000 Kansas Central bonds and 2,521 shares of the stock cost him $431,820.25 at the time he bought the Missouri Pacific. They all went into the consolidation for $479,000. Mr. Gould bought the Central Branch of the Union Pacific from Oliver Ames and President Pomeroy, who came to New York and induced him to go and look at the property.

“I thought it was doing a big business,” said he. “Afterward I learned they had kept the freight back for a week to impress me. So I saw a freight train at every station when I got there. I bought the road anyway.” Its total cost to Mr. Gould was $1,826,500. Over the Central Branch, whose stock was disposed of by Mr. Gould for 239, there was a little stir in the hearing, but the witness tranquilly explained that the road was practically stocked at only $2,500 a mile, and therefore the stock ought to range way above par.

“Has the road earned dividends?” he was asked.

“I don’t think so.”

“Have the aggregate earnings exceeded the fixed and Government charges?”

“I never figured it out. Stock doesn’t always depend upon dividends altogether. I paid 750 for my Missouri Pacific—4,000 shares at that figure. You pay more for rubies than for diamonds and more for diamonds than for glass.”

641Then the examination turned to the days just after the consolidation, and the witness was asked if there was any corporate action of the new company before the stock was turned over to him.

“All I know,” he said, “is that the stock of the new company was delivered.”

“Was the new company bound to carry out the Kansas Pacific obligations of this sort?”

“Well, I suppose it assumed the Kansas Pacific obligations.”

“Why were you not paid in Kansas Pacific consols instead of stock?”

“I suppose they preferred stock to bonds. I was clever to them and took stock.”

Another turn carried questions and answers to other differences in the accounts, but the commission got little light. “It’s safe to say the lawyers got the difference,” chuckled Mr. Gould, at the end of the set of questions. He had made large cash advances, at different times, to the Kansas Pacific to meet the floating debt, and very likely these would have to be counted in to explain matters in all cases. There was one point upon which the witness strongly insisted, and that was that all through the negotiations and transactions no class of people nor any particular holders of securities experienced any discrimination in their favor, as compared with the treatment given everybody else.

After the consolidation Mr. Gould said he had few transactions in Union Pacific branch lines. He had an interest in the Denver & South Park, however, a minority interest at first, but subsequently he bought the whole road from Governor Evans. “I’m showing you my whole hand,” he said, cheerfully, at the end of the catalogue of the branches. Of the Union Pacific’s legal expenses he knew of none which were not perfectly legal.

“Who were the road’s counsel in Washington?”

“Messrs. Shellabarger & Wilson were the only ones, as far as I knew.”

“Have you ever been to Washington on business of the company?”

“Yes. And I paid my own hotel bills.”

“Do you recall persons sent to Washington from other places in the interest of the road?”

“Judge Usher and Mr. Poppleton.”

642“Who represented the Kansas Pacific?”

“Judge Usher. I don’t know that they had anybody in Washington.”

“How often did you go to Washington for the road?”

“I was there while the Thurman bill was pending. It passed, and I haven’t been there since. No, I take that back. I was down before the Labor Committee. I got rather disgusted.”

“Do you know whether anything was spent to influence legislation?”

“No, sir. I know of no such expenditure.”

“Where could we find records of such transactions?”

“I don’t think such transactions exist.”

“Do you remember advising, at a meeting, that Mr. Ordway, of Washington, be employed in the interests of the Kansas Pacific?”

“No, sir.”

Mr. Anderson read from the minutes of a Kansas Pacific meeting, in 1876, and Mr. Gould remembered that Senator Rollins, a great friend of Mr. Ordway, asked him to write a letter about it. He knew of nothing coming from the letter.

“Do you remember any talk of fighting the Credit Mobilier?”

“I saw some of their stockholders and they said they would turn in their stock to us. Others wouldn’t. The Credit stockholders alleged that the Union Pacific owed their company a great deal of money. I succeeded in getting the great bulk of the stock turned over before a judgment was obtained.”

“You remember your address to the Union Pacific president and directors.”

“I wanted to put myself in a position to bring a suit.”

“Who opposed this proposed action of yours?” asked Mr. Anderson, reading from the minutes of a directors’ meeting that Mr. Dexter moved “to decline to bring suit, as requested by Mr. Gould.”

“I think the directors declined, and I brought the suits individually.”

“There is another letter of yours to the directors, requesting them to begin suit against the Credit for a full accounting of all profits, under certain alleged contracts,” etc.

“I think that was on a different set of contracts.”

643Mr. Frederick L. Ames, the first witness called, testified that he was formerly a stockholder in the Union Pacific Railroad, and is a cousin of the Hon. Oliver Ames, Governor of the Commonwealth. He was familiar with the relations of this road and the Kansas Pacific Road prior to 1877. “I personally attended,” he said, “to the affairs of the road under the direction of my father, Oliver Ames. The first dividend of the road was paid in 1875 or 1876. I do not remember the rate paid. I was somewhat familiar with the condition of the Kansas Pacific. I did not think the stock of much value in 1877. Mr. Jay Gould was instrumental in buying up the Kansas Pacific securities in 1876. I understood that he owned a large amount of the funding bonds and unstamped incomes. I never knew what the respective interests of any of the gentlemen interested were. I owned no securities that entered into that pool. I received two certificates for $50,000 each. I have not these in my possession now. They were turned over to somebody. These certificates were probably issued to every member of the pool. I think I paid $100,000 to the Farmers’ Loan and Trust Company.”

Mr. Anderson—Have you been able to find those certificates, Mr. Mink?

Controller Mink—They are not in our possession, sir.

Mr. Anderson—It is very strange that we cannot get any clue to these certificates.

Continuing, Mr. Ames testified as to the manner in which the business of the pool was conducted, a copy of the consolidated mortgage being introduced in evidence.

“I do not remember,” he said, “that I ever contributed the $388,000 funding bonds named in this mortgage. My connection with this pool was limited to the advancement or the $100,000. The pooling rates and mortgage rates were identical. I was a director in the Kansas Pacific Road in 1879. I cannot explain why bonds were issued to persons having claims against the road at a rate which would exaggerate its indebtedness more than $1,000,000. I exchanged my bonds for Kansas Pacific bonds. I do not remember that, in 1880, $2,950,000 of preferred stock was issued to Jay Gould at 75 when the bonds were worth 94. I do not know of any other transaction of the kind. I do not know how the Kansas Pacific Road came to be indebted to Jay Gould for $2,000,000 at this time. All the directors 644were in favor of the consolidation except Jay Gould. He was unwilling to accede to any such terms as we thought we were entitled to, and seemed very much agitated at the course we had taken. The final consummation was reached at Mr. Gould’s house. I do not remember that we would not let Mr. Gould leave the room until he had signed the paper. The paper was signed by all present. The basis of the consolidation was $50,000,000.”

When asked how he explained the payment of dividends by the Union Pacific with a condition of affairs which requires a sale of stock for the extinction of a floating debt, Mr. Ames said that the declaration of the dividend was made upon the statement of the net earnings, and the road might very well have earned the dividends several times over and at the same time have been building roads and borrowing money and using its funds for other purposes, in addition to the property, which would not interfere with the right to declare dividends. Mr. Ames also said that the directors of the Union Pacific were largely controlled in signing the agreement read at the forenoon session by the fact that they were cornered by Jay Gould. “I think it has resulted favorably for the Union Pacific,” he continued, “and I would not take back the action if I could. I made nothing by the consolidation, as I did not sell my Kansas Pacific stock, but hold it now. Mr. Gould made about $3,500,000.”

Judge Dillon cross-examined Mr. Ames, and showed from his evidence that he had no personal ends served by the consolidation. He said that his interest in the Union Pacific is larger now than it was in 1880, and that he is one of the largest stockholders.

JAY GOULD AND HIS SYSTEM.

The following from the New York Times of April 27, 1887, contains a graphic account of Mr. Gould’s mode of reviewing his system of railroads:

On first thought it seems almost impossible that Jay Gould has only been a railroad magnate of the first class little more than half a decade, yet such is the fact. In 1879 he owned only the nucleus of his present Southwestern system of railroads, and as the rival of the Wabash through considerable territory was the Missouri Pacific, he felt by no means at ease regarding the ultimate fate of his venture. 645Commodore Garrison owned a controlling interest in Missouri Pacific, which was managed by his brother Oliver. Commodore Garrison did not like Mr. Gould, and would not have objected to make Gould’s purchase of Wabash a dear bargain. He probably would have done so had it not been for Oliver Garrison. The latter and Ben W. Lewis, Gould’s manager of the Wabash, were close friends, and Garrison, as chief executive of the Missouri Pacific, did nothing to injure Gould’s property. But when Mr. Lewis called upon Mr. Gould in New York one day toward the close of 1879, and tendered his resignation on the ground of other interests which claimed his attention, Gould immediately saw breakers ahead, and said so. Lewis suggested that he remove the breakers by buying the control of Missouri Pacific. The suggestion was not allowed to get moldy. Gould called upon Oliver Garrison and offered $1,500,000 for the Garrison interest in the road. Garrison was much surprised, and said it would be necessary to consult with the Commodore. He said, however, that $1,500,000 was at least $500,000 too low. When the Commodore heard of Gould’s offer he rubbed his hands, laughed, and put the price at $2,800,000. Gould retorted that he could have bought it on the previous day for $2,000,000. The Commodore explained that the difference between yesterday and to-day was $800,000. Gould said nothing and retired. He made another effort on the following day. The Commodore had been thinking. His thoughts cost Mr. Gould $1,000,000, for his price on the third day of the negotiations was $3,800,000. Mr. Gould did not express his thoughts, but his speech demonstrated that he appreciated the danger and expense of delay. He said, “I’ll take it,” and he did. Thus from a beginning of less than 1,000 miles he secured control of a system of over 5,000, forming the Missouri Pacific, Iron Mountain, and International and Great Northern and their branches into one compact system. The bargain, in comparison with the present value of the properly, was as close a one as Mr. Gould ever managed to make, and from the day it was closed he has lost no opportunity of extending his railroad properly, which, with lines that are yet on paper, but are almost certain to be built, is soon likely to embrace at least 6,000 miles of rail.

Though the General Manager’s office is at St. Louis, and none of the Gould roads—for the Wabash is not considered 646in the system—run east of the Mississippi, nothing of importance is transacted there without the knowledge and sanction of Mr. Gould. Private wires run from the St. Louis office to the Western Union Building, in which is Mr. Gould’s private office, where he spends some hours each day sitting at a desk that never ought to have cost more than $25.

He has traveled many times over every mile of his railroads. There is an immensity of interest in such a trip when made for the first time, or even the second or third, but it has been made so often by Mr. Gould that he has thoroughly absorbed all the pleasure to be obtained from it except that which smacks of dollars and power. His trips occupy about three weeks from the time his special car, the Convoy, leaves St. Louis until it returns to that hot and dusty city of pageants and conventions.

When word is flashed to St. Louis that Mr. Gould is on his way, every official on the system packs his head full of information, and there is unwonted activity from Omaha to Galveston and from Fort Worth to San Antonio. All of the system’s executive force was selected either by Mr. Gould or by trusted officials in whom he had implicit faith, and the heads of divisions who work for Jay Gould could not work harder for anybody else, although in some instances their bank accounts do not show it.

Mr. Gould lately was in the Southwest on a tour of inspection. On his trips he is always accompanied by General Superintendent Kerrigan, a New Yorker by birth, a South-westerner by education. Physically they are in marked contrast. The cleanly shaven, fair-complexioned Superintendent would make two of his employer. In manner they are much alike, though Kerrigan has a spice of bluffness that is lacking in the other. He has the composed, unexcitable manner of Gould to perfection, and is never known, no matter how great the provocation may be, to speak except in a low-pitched tone. He is a walking railroad encyclopedia, and has the topographical features of the Southwest—every corner of it—at his fingers’ ends. He has been employed on railroads of the system for over thirty years. From his Superintendent Mr. Gould obtains such details as the latter gathers from the Division Superintendents and other officials, but in making a trip Mr. Gould insists upon stopping at every point included in one of Mr. 647Kerrigan’s regular trips of supervision. He is always accompanied by a stenographer, who is also a typewriter, and the Superintendent and the heads of divisions follow the same plan.

Upon arriving at a station at which it has been decided to make an inspection, Mr. Gould asks how long a stop will be made. The answer may be “an hour.” Mr. Gould looks at his watch. He then accompanies the Superintendent on a part of his rounds, listens quietly to his talk with the railroad officials of the place, and having heard all he cares to listen to, wanders around by himself while the Superintendent picks up the information which later he will give to his employer. Mr. Gould manifests no impatience until the hour has been exhausted. But if the engineer is not ready to start on the minute, and all hands are not in their places on the car, he begins to fidget, and is restless until a fresh start is made.

He is a strong advocate of method. The day’s work is laid out in the morning and almost before the train starts in the morning he has settled how many stops can be made during the day and where the night can be spent. He dines and sleeps on board his car from the start to the finish of a three weeks’ trip. At night the Convoy is run to the quietest part of the yard, as the owner objects to more noise than he can avoid at night, though he can apparently stand as much as any one else in daylight. His car is always a curiosity along the line, and people come from far and near to look at it as it stands in the evening in a secluded spot, secure in its loneliness. In some parts of the country through which his roads run he is quite as much of a curiosity in the eyes of the country folk as a circus, and were he to stand on the platform after the manner of James G. Blaine, would attract quite as big a crowd as that gentleman. He is never apparently anxious to achieve notoriety in that way, and is quite as modest in his demeanor while on one of his tours as he is in his office or his Fifth Avenue mansion. In the latter, as a few newspaper reporters know, he is more unassuming and far more polite than a majority of his thousand-dollar employes.

Mr. Gould meets some odd as well as prominent people on his trips and occasionally has a peculiar experience. On his first visit to Galveston, Texas, he discovered that it was on an island. Like a good many others he imagined it was on 648the mainland. On this occasion a number of citizens had been appointed to do him honor and he had promised to take up his quarters at a hotel. The committee had neglected to secure carriages for the party, and made a desperate effort just before the arrival of his car to repair the omission. This it was unable to do. There was an election at Galveston on that particular day. It was a hot one, both the day and the election, and everything on wheels had been bought up by the contending parties. Twenty dollars was offered for a hack and refused. The committee felt forlorn until Mr. Gould laughed at its dilemma and remarked that he saw no hills that he couldn’t climb. This is the only joke charged against Mr. Gould by the people who live on the line of his roads, for the highest point of Galveston is only three feet above the sea level. The inhabitants claim four feet, and denounce as a libel the statement made by people who live inland to the effect that tide water is three feet higher than Galveston.

While skimming along over the International and Great Northern, between Houston and Galveston, Mr. Gould cannot look on either side of him without looking at land owned by A. A. Talmage, manager of the Wabash Railroad. Mr. Talmage owns a tract or ranch—though there are but few cattle on it—of 160,000 acres. For this land Mr. Talmage paid 12½ cents per acre. He would probably refuse to sell it to-day for $6 an acre. If Mr. Talmage owned nothing else besides this ranch he might be considered above want. Mr. Gould owns some land in different parts of the country also, but as a proprietor of the soil he occupies a much lower grade than Manager Talmage. George Gould probably owns as much land—railroad land grants not considered—in the Southwest as his father, and is always on the lookout for bargains. These are always to be had at the close of a disastrous agricultural or cattle season. Newcomers in Texas are liable to forget that disastrous years only occur occasionally, and that in three favorable seasons the profits will be large enough to stand one bad season in three. They may hear of all this after they sell out, but the old settler is not offering information that can only be bought with experience until it is valuable as a mournful reflection.

The Iron Mountain Railroad has a station called Malvern. It is 44 miles south of Little Rock. As his car pulls into Malvern Mr. Gould sees on a narrow gauge railroad that also has 649a station there an engine with a diamond-shaped head-light. The narrow gauge road runs from Malvern to Hot Springs. Mr. Gould has no interest in it, but he knows it was built and is owned—every spike in it—by a man who received his first start in life from the same man who placed him on his feet. The Hot Springs railroad is owned by “Diamond Joe” Reynolds, who was started in business many years ago by Zadock Pratt, of the town of Prattsville, Greene county, N. Y., when the young man lived in Sullivan county, right across the line of Delaware county, Penn., where Jay Gould was enabled by Mr. Pratt to tan hides with oak and hemlock bark, not after the fashion of Wall Street. Reynolds and Gould were assisted by Mr. Pratt about the same time. Reynolds is not as wealthy to-day as Mr. Gould, but he owns all the money he wants, and Mr. Gould has often said it did not need fifty millions to secure contentment. “Diamond Joe” Reynolds is a rich man and he spends much of his time between Chicago and Hot Springs. On his first visit to Hot Springs he was compelled to stage it from Malvern. The ride disgusted him as much as the Springs delighted him. He found a man who had obtained a charter for a railroad from Malvern to the Springs and who had no money. The charter and some money changed hands. Reynolds built the railroad and owns it, rolling stock and all. The road is 24 miles long. He made his money in wheat, but not in Sullivan county. After getting a start there he went West and shipped wheat from Wisconsin to Chicago. He shipped it in sacks and marked the sacks with a diamond and inclosed in it the letters “J. O.” It was from this circumstance, because the sacks and trade mark became widely known, that he obtained the sobriquet of “Diamond Joe,” and not as those who have only heard of him think for a penchant for gems, and Mr. Reynolds is modest as well as rich.

Mr. Gould travels like a rocket while inspecting his roads. In this way he gets a certain amount of exercise, for, as travelers know, a heavy train drawn at the rate of 50 miles an hour will make little fuss in comparison with the antics of a single car tacked to an engine making the same rate. Mr. Gould often travels in the Convoy at a 50-mile gait, and during such a trip he has been known to change seats—from one side of the car to the other—not of his own volition, but without changing countenance. So long as Superintendent 650Kerrigan keeps his hand off the bell rope Mr. Gould makes no remonstrance, but accepts his shaking without a grumble. He changed engineers on one of his recent trips without knowing it. The engineer had been running slowly, for reasons of his own, in spite of numerous pulls at the bell cord. When, however, he discovered that dinner was under way he pulled the throttle open, and the locomotive darted ahead suddenly as if going through space. The jar cleaned the table like a flash. At the next station the engineer was promoted to a freight train.

A REMINISCENCE OF KANSAS PACIFIC.

There is an interesting piece of information regarding the deal in Kansas Pacific in the testimony of Mr. Artemus H. Holmes, formerly the attorney of that company, showing how the stock made a marvelous leap from two or three dollars to par in seven days. Mr. Holmes testified as follows:

From 1873 to 1877 the market value of all the Kansas Pacific securities was extremely low. The Kansas Pacific stock was $2 to $3 a share and practically valueless. Land grant bonds were worth 10 cents on the dollar, and Denver extension about 40, but ranged from 50 to 70 in 1876 to 1878. The first mortgage bonds were below par, the company’s credit was gone and the stock unmarketable. Sidney Dillon, who was then President of the Kansas Pacific Company, was anxious to have the matter settled as quickly as possible. At the former’s suggestion a friendly suit was brought on January 17, 1880, before Judge Donohue, in the Supreme Court, in this city, to settle the ownership of the Denver Pacific stock. The trustees said they could not do anything with the stock that would injure it. On January 20, 1880, Horace M. Ruggles, as referee, heard argument, the case was closed in two days, the decision was made January 23 and the decree signed by Judge Donohue on January 24, giving the stock to the Gould party. Mr. Holmes stated: “All the time this was pending the articles of consolidation were being drawn up, but I did not know anything about it until they were signed on January 24.” Referee Ruggles decided that 29,000 snares of Denver Pacific stock free from mortgages should pass to the Kansas Pacific. This was put into the Union Pacific and 29,000 shares of the consolidated 651company’s stock given in exchange, which sold at par. The witness was sharply questioned as to what he knew about Referee Ruggles’ report. He was asked if he knew who wrote the report, or had any knowledge as to who did.

Q. In order to prepare the decree which was signed on Jan. 24, you must have had the finding before you, did you not? A. No.

Q. How could you prepare it without knowing what the finding was, for the decree was presented the very next day? A. I must withdraw that answer, and change it to yes.

Gov. Pattison—Do I understand you to say that the stock which was exchanged had risen in a few days from $2 to $3 a share to par. Mr. Holmes said that was a fact, and then this question was put to him:

Q. In other words, Mr. Dillon had sworn on Jan. 17, 1880, that the stock had no financial value, and yet on Jan. 24 it was worth par. A. Yes.

This discloses another of Mr. Gould’s valuable secrets of the way to make money rapidly.

GOULD’S FIRST YACHTING EXPERIENCE.

There is a humorous story told of Mr. Gould’s first yachting experience, which was recently published in the Philadelphia Press, and its veracity vouched for by a living witness to the event. It is characteristic of Mr. Gould in some special respects, and runs as follows:

At the residence of a club man, whose reputation as a raconteur is nearly as great as that of his Burgundy, I noticed a pretty model of a jib and mainsail yacht. Replying to my admiring inquiry the club man explained:

“That is the model of a boat upon which were passed some of the sunniest hours of my life. She was owned by one of the Cruger family, of Cruger-on-the-Hudson, and has an added interest from the fact that upon her Jay Gould acquired his first yachting experience, and so eventful a one that I’ll bet he remembers it to this day.

“Crugers—one of the oldest and best known families in the State, intermarried as they are with other Knickerbockers like the Schuylers, Livingstons and Van Rensselaers—owned all the land in the neighborhood of the station subsequently named after them. A portion of this property 652consisted of a brick yard, which was rented to the son of old Schuyler Livingston. It was in 1853 or 1854, and Jay Gould had just failed in the tannery business in Pennsylvania.

“Young Livingston’s leased brick yard wasn’t paying, and he concluded that it needed a shrewd business man at its head. He advertised for a partner, and one day there appeared in response a small, dark gentleman, looking scrupulously neat in his black broadcloth. He gave his name as Jay Gould. Pending negotiations, Mr. Gould became the guest of the Crugers at the old mansion on the hill. Every effort was put forth to entertain him during his stay, the more as he seemed to regard favorably a partnership with their young friend.

“One day Mr. Cruger invited Gould to a sail to Newburgh, and got ready his yacht, of which that model is the reduction. Several of us youngsters were taken along to help work the boat. Eugene Cruger, a nephew of the yacht’s owner, was one of us. Peekskill was reached and the whole party went up to the hotel.

“All the way up the river we had noticed that Mr. Gould was uneasy, shifting about constantly on the deck, where he sat, and squirming and twisting as if seeking to find a softer spot. Nothing was said about it, of course, but when we landed Mr. Gould himself furnished the explanation. From the heat of the sun the yellow paint on the boat’s deck had become baked and chalky, and it was not long before the little man discovered that the dry powder was coming off on his trousers. Hence his uneasiness. He concluded by saying he was afraid his broadcloth nether garments would be, if they were not already, ruined, and was determined to abandon the trip and return by rail. This Mr. Cruger would not hear of, and promised to obviate the difficulty. We all adjourned to a general store and Cruger bought, for two shillings and a half, a pair of jean overalls. These Mr. Gould put on when we went aboard the boat and expressed his unqualified satisfaction at the result.

“On our trip back from Newburgh we again called at Peekskill, and once more the party started for the hotel. This time Mr. Gould declined the invitation to take something and preferred to remain on board. About an hour was spent in the hotel, when suddenly Mr. Cruger remembered that he wanted some white lead, and young Eugene 653Cruger and I went with him to the store to carry it down to the boat.

“‘How’d the overalls work, Mr. Cruger?’ was the salutation of the storekeeper. Then before answer could be returned, he added admiringly: ‘That friend o’ yourn is purty shrewd.’

“‘Who, Mr. Gould? Yes, he appears to be a thorough business man.’

“‘Well, I sh’d say so! He can drive a mighty sharp bargain.’

“‘Drive a sharp bargain?’ repeated Cruger, all at sea. ‘What do you mean?’

“‘Why, don’t you know he was in here ’bout three quarters of an hour ago, and sold me back the overalls you bought for him.’

“‘Thunder, no!’ roared Cruger in astonishment.

“‘Well, sir, he jest did that. He kem in here, tole me he’d no fu’ther use for ’em, that they was as good as when I sold ’em, an’ after we’d haggled awhile he ’greed ter take two shillin’ fur ’em, which I paid him. Here’s the overalls.’

“I can shut my eyes now,” went on the jolly club man, with a hearty laugh, suiting the action to the words, “and call up Mr. Cruger’s face with its mingled expression of amazement and incredulity. He left the store in silence. Not until we had nearly reached the boat did he speak. Then he only said, ‘Boys, I’ll fix him for that?’ We reached home without any reference to the incident. On the way back Mr. Gould sat upon his pocket-handkerchief.

“The same night Mr. Cruger perfected his plan. Next day Mr. Cruger proposed a fishing party. Mr. Gould declined to go. He had concluded, he said, not to take an interest in young Livingston’s brickyard, and would return to the city on the afternoon train. A business engagement, involving quite a sum of money, had to be kept. His host argued with him, but for a time to no purpose. The saturnine little man had a tremendous amount of determination in his composition. Finally a compromise was effected, it being agreed that he should put Gould off at a station in time to catch the train. That he must catch it without fail, he most emphatically declared.

“The day passed on and we were off Sing Sing, when we saw the smoke of the coming train. We had been running free before the wind, but immediately Mr. Cruger, who was 654at the stick, shoved it down; we hauled in on the sheets and headed for the Eastern shore. Mr. Gould was by this time on his feet, clinging to the windward coaming, the deepest anxiety pictured on his face. Just there the water shoals rapidly. We were within fifty feet of the shore, opposite the railroad depot. The time had now come for Mr. Cruger’s revenge.

“‘Let go the main and jib sheets!’ he shouted. ‘Down with your board!’

“Never was order more eagerly obeyed. The sheets whizzed through the blocks, ready hands slipped out the pin and jammed down the centre-board, and in a second the yacht, with a grating shock and shaking sails, came to a stand, fast on the sandy bottom. There she was bound to stay until the obstructing board was lifted again.

“‘What’s the matter?’ exclaimed Mr. Gould, anxiously. Of course he had not detected the ruse, for he knew no more about the working of a yacht than a sea cow does about differential calculus.”

“‘I’m afraid we’re aground,’ replied Mr. Cruger, with a fine assumption of sadness. ‘Boys, get out the sweeps and push her off.’

“We struggled with the long oars in a great show of ardor, while Gould watched us in breathless suspense, between hope and fear. But as we had taken care to put the sweeps overboard astern, the harder we shoved the faster we stuck. The little man’s suspicions were not in the slightest degree aroused and he turned in despair to Mr. Cruger.

“‘What shall I do!’ he almost wailed. ‘I’ve got to catch that train!’

“‘Then,’ replied the joker, solemnly, ‘you’ll have to wade or swim.’

“Already the train was in sight, two miles away, and whatever was to be done had to be done quickly. As I have said, there was plenty of grit in the embryo railroad king, and quick as a wink he was out of his sable clothes and standing before us clad only in his aggressively scarlet undergarments. Holding his precious broadcloth suit above his head, he stepped into the water, which, shallow as it was, reached to the armpits of the little gentleman. Then he started for the shore, his short, thin legs working back and forth in a most comical fashion as he strove to quicken his pace. The station platform was crowded with people, and 655very soon the strange figure approaching them was descried. A peal of laughter from 500 throats rolled over the water to us, the ladies hiding their blushes behind parasols and fans. The men shouted with laughter. Finally the wader reached the base of the stone wall, and for a moment covered with confusion—and but little else—stood upon the rock, one scarlet leg uplifted, looking for all the world like a flamingo on the shore of a Florida bayou, while the air was split with shrieks of laughter, in which we now unreservedly joined. Then came the climax of the joke, which nearly paralyzed the unfortunate victim.

‘Haul on your sheets, boys, and up with the board!’ was Cruger’s order. As the yacht gathered headway and swept by within ten feet of the astonished Mr. Gould, we laughingly bade him good-bye, advising a warm mustard bath when he got home.

“Then his quick mind took in the full force of the practical joke we had worked upon him and his dark face was a study for a painter. But the train had already reached the station, taken on its passengers and the wheels were beginning to turn again for its run to the city. As Gould scrambled up the wall, his glossy black suit still pressed affectionately to his bosom, the ‘All aboard!’ had sounded and the cars were moving. Every window was filled with laughing faces as he raced over the sand and stones and was dragged by two brakemen on to the rear platform, panting and dripping. The last glimpse we caught of him was as the train entered the prison tunnel. Then, supported on either side by the railroad men, he was making frantic plunges in his efforts to thrust his streaming legs into his trousers as the platform reeled and rocked beneath him.”

“Did he ever return Mr. Cruger the two shillings?” the writer inquired.

“Return the two shillings!” echoed the club man. For a moment he was silent. Then, as a retrospective gleam crept into his eyes, he slowly shook his head and, with seeming irrelevancy, said:

“I—guess—you—are—not—very—well—acquainted—with—Mr.—Jay—Gould.”

The above story was submitted to Mr. Eugene Cruger at his residence, No. 1211 Livingston Avenue, together with the inquiry as to its accuracy. Mr. Cruger made the following reply: “I must say that I can’t imagine who can have furnished 656these particulars, for most of those who took part in the incidents related have gone forever. Whoever the informant may be, however, it cannot be denied that you have received a true account of what occurred. I enjoyed the affair at that period, but time has softened things and the recollection is not without its unpleasant side.”

The success of Mr. Gould in securing the Baltimore and Ohio Telegraph to be consolidated with Western Union, has placed him at the head of the greatest telegraph monopoly in the world, practically beyond competition. It remains to be seen whether or not Congress will take any action towards the creation of a Government telegraph that will afford a guarantee of protection against extortionate rates. It is true that Western Union has lowered its rates, but this is generally regarded as a conciliatory move of a temporary character on the part of Mr. Gould for the purpose of showing that Government telegraphy is not a necessity, and that as soon as the attention of Congress is turned away from the question rates will go up again.

While I should not approve of the Government going so far as to condemn Western Union property, and making a purchase thereof on an appraised valuation, still I do believe that proper Congressional action should be taken to provide supervision and protective control over the telegraphic communication throughout the country. My idea is that the Government should interfere rather as a regulator than an owner, being careful to avoid everything that could be construed into monopoly on its own part, any more than in connection with our railroad system.

Mr. Gould went to Europe late in the fall, and visited several places there ostensibly for health, pleasure, and recreation. What his secret and ultimate designs may be has not yet transpired, although they have been a leading topic of much conjecture among financiers and Wall Street magnates since his arrival on the other side. One of the best things got off on this subject was, that when Mr. Gould sent in his card to one of the Rothschilds, the latter requested 657the messenger to inform the gentleman that Europe was not for sale.

He returned about the end of March to find some of his railroads, especially in Missouri Pacific system, in a somewhat crippled condition.

With a feeling of deep humility that I have made many important omissions in Mr. Gould’s variegated career, although I have surrendered all the space to him that I can very well afford, I now beg to take my leave of him, at least so far as the present edition is concerned.