Chapter XLVII…

Chapter XLVII

INTERNATIONAL SIGNIFICANCE OF THE BARTHOLDI STATUE.

GREAT AS AN ACHIEVEMENT OF ART, BUT GREATER AS THE EMBODIMENT OF THE IDEA OF UNIVERSAL FREEDOM THE WORLD OVER.—IT IS A POETIC IDEA OF A UNIVERSAL REPUBLIC.—ENLIGHTENMENT OF THE WORLD MUST RESULT IN THE FREEDOM OF MAN.

The following was sent by me to the New York World, as briefly embodying my views on Bartholdi’s great work, a few days prior to the dedication of the Statue of Liberty:

“When, several years ago, the gigantic forearm, with the torch in its hand, of the Statue of Liberty was exhibited in Madison square, the people who gazed at it with idle curiosity had little idea that the mammoth structure of which it was a part would so soon be completed, or that it would be so great an achievement as it now stands. Thanks to the New York World, which gave the impetus to the subscription fund movement, which enabled the great sculptor to realize the greatest artistic dream of his life within a reasonable period. Some people may imagine that the time has been long, but many people who understood the magnitude of the work, and observed the slowness of the subscriptions, had no hope of seeing it finished in this generation prior to the time the subscription for the pedestal was under way.

“Until the last few days, when this colossal goddess arose on Bedloe’s Island in all her full, finished and magnificent proportions and artistic splendor, like the ancient divinity emerging from the foam of the sea, the people did not begin to realize the magnitude of Bartholdi’s idea. In mere mechanical size the statue with its appurtenances excel anything and everything of the same character in the world. It is the biggest thing of its kind either ancient or modern, and is, therefore, the most appropriate emblem to show forth the evolution and the international and historic associations of the two greatest Republics that the world has yet seen. The Colossus of Rhodes, the great Sphinx and other colossal statues sink into insignificance when compared with the latest production of Bartholdi’s brain.

“But great as the statue is as a work of art, the international idea which it embodies is greater still. When taken in connection with that earlier and comparatively insignificant effort of the same eminent artist, the Statue of Lafayette in Union square, the Colossus of Liberty suggests a whole century of history, replete with greater events than the thousand years which preceded it. In these two statues the interdependence of the two great nations is clearly portrayed, and their destiny as the pioneers of universal Republicanism brought out in bold relief. If Tennyson’s poetic dream of a universal Republic is ever to be realized it will come through the idea which the chisel of Bartholdi has immortalized, and which the World has been chiefly instrumental in providing with a local habitation and a name on Bedloe’s Island. European monarchs are now trembling on their thrones, which are doomed to crumble into ruins at no distant day, through the very idea which ‘The Statue of Liberty Enlightening the World’ is destined to propagate from this day forward in its imposing position in our spacious harbor. The Israelites of old were cured of their bodily maladies by gazing at a serpent erected on a pole. In a similar way the politically afflicted and oppressed of all nations, as soon as they emerge through the narrows of our magnificent bay, either by day or night, will find a panacea for all their ills in the sight of that wonderful statue, with all that its name implies.

“And one word as to what is in that name which has been so severely criticised. On account of it Americans have been charged with egotism, but those who talk in this way seem to forget that Bartholdi himself, as the representative of the French nation, is the author of the name. So, as it comes from him in his representative capacity, we can receive it with good grace, and without being amenable to any such charge as that referred to. Taken, with all its broad, historical associations, I don’t think the name is at all too pretentious. I have no hesitation in predicting that, ere the present century draws to a close, results will fully justify the assumption.

“The magnificent gift of the French people, and the years of toil and study which Bartholdi has devoted, gratis, to his unprecedented labor of love, cannot fail of the great and only reward which both have so earnestly and magnanimously sought, namely—to enlighten the world.”

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XLVIII. LARGE FORTUNES AND THEIR DISPOSITION

HOW THE FORTUNES OF THE ASTORS WERE MADE.—GEORGE PEABODY AND HIS PHILANTHROPIC SCHEMES.—JOHNS HOPKINS AND HIS PECULIARITIES.—A. T. STEWART AND HIS ABORTIVE PLANS.—A SCULPTOR’S OPINION OF HIS HEAD.—ECCENTRICITIES OF STEPHEN GIRARD, AND HOW HE TREATED HIS POOR SISTER.—HIS PENURIOUS HABITS AND GREAT DONATIONS.—JAMES LENOX AND THE LIBRARY WHICH HE LEFT.—HOW PETER COOPER MADE HIS FORTUNE, AND HIS LIBERAL GIFTS TO THE CAUSE OF EDUCATION.—SAMUEL J. TILDEN’S MUNIFICENT BEQUESTS.—THE VANDERBILT CLINIC.—LICK, CORCORAN, STEVENS AND CATHARINE WOLF.

I shall take a short review in this chapter of some of the most prominent wealthy men who have been the architects of their own fortunes, and comment briefly on their methods of disposing of their estates.

In the United States, John Jacob Astor was one of the first to arrest public attention in the matter of large fortunes. Before his day there were few, if any, millionaires on this side of the Atlantic. Now there are thousands of these lucky individuals. It is true, George Washington, the Father of our country, was very comfortably fixed, and supported aristocratic style in his domestic life, but he probably never was worth more, all told, than $200,000. It is singular that none of his successors have ever been worth even this amount. It was believed at one time that Grant had accumulated a large amount of money and value, and was fast approaching the financial status of a millionaire, but this popular delusion was suddenly dispelled when he and his family were victimized by the first young Napoleon of finance, Ferdinand Ward.

The founder of the now wealthy house of Astor and of the Astor Library died in 1848, at the age of 85. He left the greater bulk of his estate to his son, William B. Astor. He bequeathed $400,000 to the Astor Library, also a few legacies, amounting in all, the library inclusive, to about $500,000. His wealth, at the time of his death, was estimated at twenty millions, a very large fortune at that time.

William B. Astor, who died in 1875, left $250,000 to the library, and the large balance of his estate to his sons and widow.

The Astors have been characteristic for their benefactions, in a quiet way, to a large number of public objects. Their estate is remarkable for the way it has been kept intact, and for its steady and considerably rapid improvement, and they are popular as landlords.

The elder Astor who came to this country from Waldorf in Germany, near Heidelberg, before he was 20 years of age, and who started in life dealing in furs, had a grand scheme on foot at one time for monopolizing the fur trade of the whole world, which he had calculated would then have brought him a million dollars a year. He was diverted from this purpose by the large profits which he found in real estate, by dealing in which he made most of his money; and the family has steadily adhered to this line of speculation and investment through two generations.

The native American who, perhaps, ranks above all others in the munificence of his gifts, and the beneficence of his purpose was George Peabody. He was a poor Massachusetts boy, who, by hard industry, arose to be one of the largest millionaires of his day. He was also a philanthropist in the highest sense of the term. His fortune at one time probably exceeded ten millions. His well-known benefactions, during his life, exceeded seven million dollars, and it is supposed that he gave away vast amounts in charity of which no definite account was kept.

Shortly before his death, in 1869, he bequeathed two and a half millions as a building fund for lodging houses for the poor of London, and devised for a Southern Education Fund two million one hundred thousand. In addition to these he left five millions to various relatives. J. S. Morgan, who was Mr. Peabody’s partner in the banking business, became, at his death, his successor, and is now supposed to be a richer man than Mr. Peabody ever was.

Johns Hopkins, who died at Baltimore in 1873, at the age of 78, was one of the most eccentric millionaires and philanthropists. Very few expected that he would bequeath the great university and the hospital which are called by his name. He was so wretchedly penurious that he hardly afforded himself the means of subsistence. His benefactions to these two institutions, however, exceed eight million dollars.

Alexander T. Stewart, the great dry goods merchant, who was reputed to be one of the three wealthiest men in the United States, Commodore Vanderbilt and John Jacob Astor being the other two, died in 1876. He had no legitimate heirs, and his estate, estimated at one time between twenty and thirty millions, was left to his wife, with the exception of a million to Judge Hilton and $325,000 to his employes.

Mr. Stewart’s two great benefactions were failures, as he left nobody able and willing to carry out his intentions in regard to their arrangement.

They would probably have been failures in any event, as they seemed to the majority of people to be in a large measure Utopian. One was Garden City on Long Island, intended to be homes for industrious mechanics on a higher and more comfortable scale than the majority of the dwelling of these sons of physical and intellectual toil. A grand cathedral was built there in memory of the merchant prince, and a beautiful crypt for his mortal remains, which were stolen from St. Mark’s churchyard shortly after the interment.

The mechanics and laborers were not attracted to Garden City, and it is now making slow progress with tenants whose avocations are generally in the higher walks of life.

The other great enterprise was a home for girls and women at moderate expense. This was in the shape of a hotel on a large scale at Park Avenue and Thirty-third street. The restrictions and the prices were such that the home also failed to attract the class it was intended for. The public gift, therefore, reverted to the Stewart estate, or rather was taken forcible possession of by the trustees and transformed into the Park Avenue Hotel. To carry out the rather indefinite terms of the bequest would probably have involved the expenditure of a very large amount of the Stewart estate, and, perhaps, the enterprise would even then have been a failure. It is more than probable that if Mr. Stewart had lived a few years longer, he himself would have been satisfied with the impracticability of both his semi-philanthropic schemes.

There were great things expected in the shape of benefactions from Mr. Stewart at the time of his death. He had done so little in that respect while living that the public indulged the hope that he would make up for his charitable shortcomings when he found that his worldly accumulations could no longer be of any service or gratification to him, and that he could not take any of them away with him.

Hence, it was a considerable disappointment to the public when the will revealed the fact that nothing had been devised, out of the immense hoard of nearly half a century’s savings, to charitable purposes.

On the day of his death I had an engagement with my dentist, Mr. Dwinell, in Thirty-fourth street, and while I was seated in the chair Mr. Wilson MacDonald, the well known sculptor, came in to pay a visit to the dentist, with whom he was well acquainted. Having been introduced by the sculptor, we immediately entered into conversation on the prominent local topic of the day, the death of Mr. Stewart and the probable distribution of his wealth.

Mr. MacDonald invited me to go to his studio to see a bust in clay of Mr. Stewart that he had just about finished. He said, “I knew Mr. Stewart’s aversion to having any portraits or photographs taken of himself during his lifetime, so I provided for the emergency some time ago by taking close observation of him at various intervals. During the past two years I have frequently come in contact with him, going into his store and getting a good look at him from various points of view, so as to impress his likeness upon my mind. I have thus succeeded in getting a pretty good bust of him in clay.”

Mr. MacDonald was very anxious that I should call and see this bust, because, as I knew Mr. Stewart so well, he inferred that my judgment would be worth something, and he expressed a desire that I should criticise his work. I promised him I would call and see the bust as soon as I could spare the time.

On leaving the dentist’s office I made another engagement to go back the following week, and in the meantime I had been unable to call at the studio of the artist, but the latter happened to be in the office of the dentist when I called there again. The will of Mr. Stewart had been published in the interim, and in it all reference to charities and benevolent institutions had been carefully omitted.

Mr. MacDonald reminded me that I had not called to see the bust, and added, “If you had called that time you would hardly recognize any resemblance between what it is now and what it was then.” “How is that?” I inquired. “Because,” he replied (facetiously), “as soon as I saw the will published in the newspapers and none of that immense pile left to the public, from whom it had been collected, I set to work and toned down the bumps of benevolence, conscientiousness, sublimity, veneration and ideality, making those of acquisitiveness, inhabitiveness, amativeness and all the selfish and animal propensities prominent. I naturally concluded, if phrenology is not a fraud, that Stewart’s will was a manifestation of the non-existence of the higher and more humane organs in his cranium. There certainly could be nothing there indicative of any generous emotions.”

I think everybody who knew the great dry goods merchant will be inclined to say that the judgment of the sculptor was neither rash nor uncharitable.

STEPHEN GIRARD.

Stephen Girard was another of the great millionaires who arose from penury, and whose eccentricity took a philanthropic turn. Mr. Girard was a Frenchman, born near Bordeaux in 1750, who made his home in later years in Philadelphia. He bequeathed over two million dollars to found and endow Girard College in that city.

There is a good story told, which seems to be well authenticated, of the manner in which Mr. Girard rewarded the ingratitude of a sister. When he was a boy about ten he manifested very little disposition for hard work, and his family treated him harshly. One morning a rumpus arose about his idleness, and having said something that aroused the ire of his sister, she clutched the broom and flew at him in a rage. He retreated, receiving a few hard blows over the shoulders as he passed for the last time over the threshold of his paternal home. He went to sea, his father having been a seaman, and through various vicissitudes of fortune eventually turned up as a millionaire in Philadelphia.

After young Girard had gone through the preliminary course as cabin boy, trading between France, the West Indies and New York, he had saved up some money and became part owner of a small trading vessel. This was in 1776, the year of the Declaration of Independence. His trading was suspended by the war with Great Britain. He then speculated in the renting of a number of stores in Philadelphia, and sub-let them at a large profit. Afterward he purchased a controlling interest in the stock of the old U. S. Bank in 1812, and became a private banker with a capital of more than a million. Subsequently he loaned five millions to the Government to help defray war expenses.

In the meantime fortune, however, had not favored his irate sister, who had chastised him with the broom. She remained poor. She had heard of her brother’s wealth, however, but did not have money enough to pay her passage to this country. In this extremity she went to the captain of a Philadelphia vessel in a French port and told him that she was a sister of Stephen Girard, without money, and desired to go and see her brother, who was well known to the captain. She received the best accommodation that the vessel could afford. Having arrived in Philadelphia the gallant captain escorted her to the house of her wealthy brother. Leaving her in the hallway he went in to see Mr. Girard and told him that a lady outside wished to see him. The benevolent captain was prepared to behold a demonstration of joy, which he thought would be exhibited as soon as the long lost brother and sister should recognize each other. He was not kept long in suspense. Mr. Girard knew his sister instantly. “C’est vous.” “It is you,” he said. “Oui,” she replied. These were all the words that passed. There was no rushing into each others arms, but on the contrary, Mr. Girard plunged at the captain in a lively mood. “What authority had you to bring that woman here?” he said. The captain was dumbfounded and hardly knew what to answer. “Take her back again at your own expense,” he added.

The captain did not stand a minute on the order of his going, and the millionaire’s sister, without receiving one kind adieu, was conducted from the palatial mansion of her brother to the vessel, and thence to her pauper home in France.

This shows that the great philanthropist had a good memory and was resentful of injuries, yet it also betrays a narrowness from some taint of which the greatest minds are not entirely free. The Girard sister was unable to comprehend the higher aspirations of her young brother and his intelligent convictions, which had, no doubt, taken form at that early period of his life, that a man can never become wealthy by hard manual labor. He was wrong, however, in giving her the cold shoulder. She was correct in one sense, from her point of view, although a narrow view, and his large charity should have condoned an error arising from her superficial conception of his early designs.

His narrow-mindedness, with all his genuine greatness, and his eccentricity were exhibited in a remarkable degree in some of the restrictions of his will regarding the college. Although he was exceedingly generous in his gifts to religious denominations, without distinction, as well as to charitable institutions generally, he was, though illiterate, a free thinker of the school of Voltaire and Rousseau. He, therefore, had inserted in his will a prohibitory clause to the effect that no clergyman should be permitted to have anything to do with Girard College, nor even be admitted as a visitor. The college is for orphans between six and ten years of age, who are put to a trade when they are sixteen, all expenses being defrayed until they are able to earn a living. There are now over 500 beneficiaries. Girard died in 1831, at the ripe age of four score and one. He was worth nine million dollars, of which but a very small pittance went to a few of his relatives, the great bulk of the estate having been distributed among charitable institutions. This great philanthropist was exceedingly close in money matters with men generally, and it is said that he never had a friend, except the friend in the pocket, which is by all odds the most genuine.

The late James Lenox takes rank with the great philanthropists of the age, in attempting to devote a large portion of his surplus wealth to the good of humanity. When he died, in 1880, at the age of eighty, he was supposed to be one of the five wealthiest men in New York. He spent a million dollars to found and endow the Presbyterian Hospital at Seventieth street and Madison avenue, and over a half million in building the Lenox Library at Seventieth street and Fifth avenue.

The building and the library are both immense gifts, but admission to the latter is so hampered by red tape, forms and ceremonies that it is of little or no earthly use to the general public. As a piece of architecture the building may, according to the ideas of the famous John Buskin, help to educate the people, but in other respects they derive no benefit from it. The library, which is built on ten city lots, contains the choicest selection of books in the world, outside of the British Museum, besides valuable manuscripts and works of art, and its collection of American works is unsurpassed anywhere. That part of the collection, consisting of Mr. Lenox’s own private library of 15,000 volumes, contains books of rare value, many of which could not be duplicated. This is one reason why the general public are excluded.

In fact, there is a good deal to be said in favor of the fastidious care that is taken of some libraries and picture galleries, as a large portion of the general public don’t know how to appreciate their privileges, and therefore abuse them, some through the relic monomania and others actuated by pure mischief. Thus it was that Mr. William H. Vanderbilt was very reluctantly obliged to exclude the general public from his fine picture gallery, as certain visitors scratched the etchings with their canes and put their fingers on the pictures, while others were incessantly on the relic hunt and had to be carefully watched during their visit.

PETER COOPER.

Peter Cooper was another of the philanthropists, with large means, who sought to distribute a considerable part of it where it would do the most good to humanity, especially to that portion of it who are in pursuit of knowledge under difficulties. Mr. Cooper had a hard time of it himself getting a fair education, and he knew how to appreciate the boon. He was born in New York in 1791, and at the age of seventeen was apprenticed to a coachmaker. He tried his hand at several other occupations, was an inventor by nature, and the designer and builder of the first locomotive in this country, which had its trial trip on a part of the Baltimore & Ohio Railroad.

Mr. Cooper experienced his great success in fortune building in the manufacture of glue. He afterwards erected extensive iron works at Baltimore, Maryland, and subsequently in Trenton, New Jersey. During his life he built the Cooper Institute, at a cost of $650,000, with a subsequent donation of $150,000. This institution is devoted to the instruction and elevation of the working classes. It consists of a large reading room and library and a public lecture hall. The building occupies a small block at the junction of Third and Fourth avenues and Eighth street. It has evening schools, attended by 2,000 pupils; a school of design for females, in which there are 200; also, a school of telegraphy for women, from which, in two years, over 300 operators have been sent out.

The rents from the building on the lower floor and the offices defray the greater portion of the expenses. Ample provision was made in Mr. Cooper’s will for the permanence of the institution. During his life he was a general donor to all kinds of charitable institutions, and almost every variety of labor organization. He ran for President in 1876 on the Greenback and Labor ticket, and was defeated by an overwhelming majority. He had an idea that a large issue of greenbacks would create universal prosperity and make everybody happy. He died in 1883, at the age of ninety-two, leaving five or six million dollars, the greater portion of which fell to his son and daughter, the latter being the wife of Mayor Hewitt.

One of the greatest of American philanthropists, especially as his princely bequest was rather unexpected, was the Hon. Samuel Jones Tilden, whose financial and political career I have referred to in another chapter. He was about seventy-three years of age at the time of his death, in August, 1886.

Mr. Tilden died worth about five millions, four of which he left to be donated to public and beneficent objects. The greater part of this is to be spent in the erection and endowment of a grand free library, which, if the terms of the bequest are properly administered, will be the greatest institution of its kind in this country.

The disposition of the Vanderbilt fortune, up to the present time, has been briefly described in the lives of the various members of the family in another chapter. The Clinic of the College of Physicians, however, which has recently been opened at Sixtieth street and Fourth avenue, is entitled to greater detail, as it is, perhaps, destined at some future day to become a great medical centre. Mrs. W. D. Sloane, daughter of Wm. H. Vanderbilt, subscribed $250,000 to build the Maternity Hospital, in connection with this institution, her father having, prior to that, donated the balance of the million necessary to finish the entire structure, which consists of the Clinic, the Maternity Hospital and the College Hospital. It is said that in all their appointments the different departments of this institution are superior to anything of a similar description in the world.

Among the men who disposed of great fortunes I may mention James Lick, of California, who devoted millions to charitable purposes; William W. Corcoran of Washington, who gave two millions for an art gallery and a home for old, decrepit and superannuated women; also, Mr. Stevens, of Hoboken, who devised two millions, one for the Stevens Battery and the other for the Stevens Institute at Hoboken. Miss Catharine Wolf, who died last year worth twelve millions, bequeathed largely of her estate to charitable purposes, and donated her magnificent art gallery to the Metropolitan Museum of Art.

What a lesson is taught in these examples of philanthropic celebrities to our fellow-beings—I was going to say fellow citizens, but that would not be appropriate in many instances—the Socialists. Those millionaires, who have all more or less been denounced as hard-hearted monopolists, have been among the hardest workers and thinkers all their lives, many of them denying themselves the luxuries and some of them even the full necessities of life. For what purpose? Simply to be the hard worked and poorly fed mediums of accumulating wealth to relieve the necessities and minister to the comfort of the less fortunate, the idle, the dissipated, the poor and the needy, and in general those who misunderstood and abused them on account of their good work.

It was good for those benefactors of humanity that virtue is its own reward.

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XLIX. SOUTHERN AFFAIRS IN SPECULATION

THE PRESERVATION OF THE UNION A GREAT BLESSING.—TO LET THEM “SECESH” WOULD HAVE BEEN NATIONAL SUICIDE.—HOW IMMIGRATION HAS ASSISTED NATIONAL PROSPERITY.—RESCUED FROM THE DYNASTIC OPPRESSION OF EUROPEAN GOVERNMENTS.—SHOWING GOOD FELLOWSHIP TOWARDS THE SOUTHERN PEOPLE AND AIDING THEM IN THEIR INTERNAL IMPROVEMENTS.—THE SOUTH, IMMEDIATELY AFTER THE WAR, HAD GREATER ADVANTAGES THAN THE NORTH FOR MAKING MATERIAL PROGRESS.—THE BUSINESS OF THE NORTH WAS INFLATED.—THE STATES OF GEORGIA AND ALABAMA OFFERED INVITING FIELDS FOR INVESTMENT.—ISSUING STATE SECURITIES, CHEATING AND REPUDIATING.—PRESIDENT JOHNSON CHIEFLY TO BLAME FOR THE BREACH OF FAITH WITH INVESTORS WHO WERE SWINDLED OUT OF THEIR MONEY.—REVENGE AND AVARICE UNITE IN FINANCIAL REPUDIATION.

During the war I did all that lay in my humble power to farther the cause of the Union, believing that it was a righteous one, and that the North went into the struggle to maintain, uphold and preserve the best form of government known to man, and certainly the only one suitable to America.

View it as we may, the wisdom of man has yet evolved nothing to surpass the Constitution of the United States. Whether Thomas Jefferson or Thomas Paine was the author of its leading features, is a matter that I shall not stop to discuss, but suffice it to say, that upon it has been established the best government in the world. There is no other system in ancient or modern history that could weld together and bring into the social and political affinity of one great integral harmony the immense variety and diversity of human elements that are dwelling as one large and comparatively happy family in the United States.

What other system could combine so many nationalities, creeds, passions and prejudices, modifying all of them and uniting all for the general good and the perfection of a higher development of human nature in political and social life?

There is none. We must go to the pleasanter pages of political fiction to find a comparison.

This country has made greater strides in each decade towards the possible approach of More’s Utopia or Plato’s Republic than any other country has done in the same number of centuries.

It must be admitted that we are a considerable distance from the happy goal contemplated by the writers named, but we are moving in the direction to show that its attainment is possible. We shall yet accomplish what the world has hitherto considered a pleasant fiction overworked through the highest ideal of Greek art.

This high state of development is what we are coming to in spite of the fact that the average ward politician has immense chasms to cross before the hill tops of his evolution shall appear in sight. When he begins to climb, however, his ascent will be marvellously rapid and he will leave that vehement youth of Longfellow’s, whose watchword was Excelsior, far in the distance. Moreover, his steps will be steady and prudent, and not liable to unfortunate reaction or fatal mishap.

It has been said that revolutions never go backward. With much stronger emphasis it may be asserted that evolutions in a Republic like those I am now contemplating never recede, but still press forward and upward towards the mark of a higher ideal.

A large proportion of the people who come here do so for the chief purpose of getting away from other forms of government that are despotic in their rule and oppressive to their subjects.

These people who come to us are saved and redeemed Their lives would have been wasted if they had remained in the land of their birth. In this country, they not only add to the wealth of the nation, but they become useful members of the social fabric, with few exceptions, enjoying happiness themselves and bringing up children, whom they teach to admire, honor and revere the institutions of this country in contrast with the land of their own nativity.

This country has thus become the asylum for the down-trodden of every nation, and it is a great gainer by the contrast thus constantly presented to the minds of those who come here. Our own people are also in this way taught to appreciate their privileges and set a higher value upon the advantages they enjoy.

If it were not for the constant stream of immigration to these shores, the people of this country might begin to think that Republicanism was the birthright of all, and forget that they enjoyed especial privileges by birth, and came into this world with a very important start of other nations. I fear that some of them are prone to imagine, especially some of the fair sex, that we suffer here from that long felt want of a hereditary and native nobility. Some of these fair ones have had sad experience, that should have disabused their young minds of these notions not very long ago. The force of these examples will have some effect, at least, in moderating the folly of their mothers. It can hardly be expected that many of the young ladies will learn much themselves, except by a repetition of the same sad experience, but the persuasive powers of the mammas may exercise a deterring effect in many instances where hasty matrimonial alliances to catch the bauble of a foreign title would be the forerunner of much misery and sometimes shame.

I might cite many instances of these from our own city, but the sensational papers will deal with them ad nauseam. I don’t aspire to be sensational in this book. I only attempt to state in matters of this kind what may suffice to point the moral, leaving the sensational story-teller to adorn the tale Nor do I mean to cast any reflection on such happy marriages as that of Miss Jerome to Lord Randolph Churchill, and others I could mention.

Our expansive territory has enabled the adventurous and energetic of all nations of the world to come here and make homes for themselves, instead of remaining in the land of their birth, where many of them were existing in a modified condition of slavery under other names.

The idea of encouraging this large exodus from other lands, and this freedom of assimilation with our people, has been one of the great bulwarks of our prosperity.

I realized this fact very clearly at the commencement of the war of the Rebellion, and have cherished it ever since.

I therefore felt deeply earnest in my sympathy with the North against the South, whose great effort was to break up the present form of government, attempting to destroy its autonomy and powerful cohesiveness.

The nation would have been split in twain to start with, if Horace Greeley’s advice had been taken, “Let them secesh.” Mr. Greeley’s counsel was well meant, as he thought the Southern people would soon be glad to return to the Union, but it would have been national suicide to follow it.

The two parts of the dissevered nation would have been constantly menacing each other, and kept on a war footing, with occasionally recurring hostilities across the border on every slight provocation. The result would have been that some or all of the European powers would have taken advantage of this state of affairs to plant the standard of despotism once more on these shores, making this fair land a battle ground for Imperial and kingly ambition.

These designs were foreshadowed by Napoleon III., whose actions I have dealt with more fully in another place, and Great Britain was only awaiting the opportunity to avenge Bunker Hill, Saratoga and Yorktown.

In fact, all the powers of Europe would have taken advantage of the chance of acquiring a slice of such a fine domain, where in the event of successful secession only feeble resistance could have been offered to foreign aggression.

In the event of a decisive victory for the Confederate arms, faction fights would have always been springing up, and the tendency would still have been increasing to create a greater number of separate and independent governments.

Napoleon had been looking at matters in this probable light, when he resolved to make Mexico a backdoor, with Maximilian as its keeper, to enable him to gain an entrance to this country when a favorable opportunity for the completion of his purposes should arise.

Having myself been born in a foreign land, where I passed my boyhood’s days, I have a vivid recollection of the workings of the harsh system of a European government, although by the accident of birth I was placed in circumstances where the pressure on myself was not very galling.

I saw enough, however, to make a durable impression on my mind, to arouse my sympathies for others and to excite my lasting indignation against dynastic oppression.

I lost no opportunity during the dark days of the rebellion in this country, to be outspoken in favor of the cause which I had espoused from a firm conviction that it was right. I did all I could to help to promote ways and means for aiding the North in carrying on the war. I went into the contest with my whole heart, and gave my entire and undivided attention to the sale of Government securities to raise the sinews of war.

In this way, I believe, I rendered more valuable assistance to the cause than if I had been performing deeds of valor amid the roar of cannon and the rattle of musketry.

I became pronounced in my opinions and made myself active in organizing meetings to celebrate every victory of the Union army, thus inspiring the men in the field and the recruits on their way thither, and sustaining the hearts of our business men to place implicit confidence in the future triumph of the nation.

It required more courage than many people now imagine to take this stand at that time, for opinion was largely divided in this city on the prospects of the issue, and a strong sentiment in favor of the enemy threatened at one time to become predominant.

Many people were eyed with very strong suspicion during the greater part of the struggle in regard to their loyalty, who had followed the course of extreme prudence in keeping their counsel, being doubtful of the result. I took the ground that citizenship would not be worth much in the event of final disaster to the Union cause. I was also of the opinion, when the war was ended to the glory of the country and the maintenance of the Government on a substantial basis, that the time had come to bury the hatchet.

I believed not only in bringing back the South under the old flag, but also in extending the right hand of fellowship to the people, who, whatever may have been their faults, had been terribly punished.

I believed that no good could come out of a policy that persisted in trampling upon a fallen foe, especially as that foe had, after all, only been an erring brother, and could be brought back again into the family fold to share its mutual sympathy and material prosperity.

I felt, therefore, that I could afford to be prominent in a movement that had this great and harmonious end in view, the more especially as my loyalty had never been questioned in the hour of our greatest peril.

I not only extended the right hand of fellowship to Southern men, but gave aid and comfort to them wherever they appeared in our midst.

My office, therefore, after having been the headquarters of loyal Northern men, and for every project in the interest of the Union cause, became notorious as the rendezvous of Southern generals and Southern people generally, almost as soon as the war was over.

General Beauregard was one of the prominent leaders of the Confederacy to whom I exercised the liberty of extending hospitalities on his first visit here. I relaxed no effort to make his visit agreeable, and show him the sights around the city. I recollect escorting him as my guest to the Gold Room, which was then quite an institution in Wall Street. At this time gold was selling at a premium of about 50.

On our entrance to the Room it was at once whispered around that my distinguished guest was General Beauregard. The President of the Board was at that time outspoken and bitter in his opinions against everything Southern, and had not the good sense and common manners to conceal his animus on this occasion. Others took a similar attitude, and the feeling manifested became as belligerent as if the war had been actually raging.

This exhibition of bad blood and bad manners was very distasteful to me. I was a member of this Exchange, and I thought I knew my rights, and I was disposed to maintain them. I regarded the insult to Beauregard as offered to myself, and was prepared to resent it accordingly. He was my guest, and I had determined to stand by him at all hazards. I informed those who were foremost in manifesting these unworthy feelings of resentment that I should protect my friend no matter what course they should take, as long as he desired to remain in the room. This had some effect in smoothing down the asperities of the most hostile, and we were permitted to depart in peace. I escorted General Beauregard afterwards to the New York Stock Exchange, where he was kindly received, and without a murmur of feeling. I introduced him to many of the members individually, who shook hands with him and interchanged civilities in the warmest manner, giving him a hearty welcome to our city. Beauregard was delighted with this reception at the Stock Exchange, but was greatly chagrined at the conduct of the people in the Gold Room.

After this, many other Southern notabilities from time to time came to the Street, and received at my hands similar treatment. Among others, General Forrest, of Fort Pillow carnage notoriety, paid me a visit.

I could relate a great many other instances, if time and space would permit, showing very explicitly the efforts I have made to help along harmony and reconstruction. I was anxious, in the interest of general prosperity, to assist the South to recover from the dreadful blow inflicted upon her by a fratricidal war as soon as possible.

So, as the work of reconstruction progressed, I became interested in the internal improvements of that section of our country, as my subsequent investments there will fully attest. I thought that the South had experienced fighting enough, as the North had, and that the people of that section would gratefully accept the terms in the main agreed upon under the appletree at Appomattox, between General Grant and General Lee. I had hoped that the peace would be such as to conserve all the interests of the country, including every man, from the boldest and bravest Confederate general down to the lowest of the negro race, without any invidious distinction. I had the hopeful impression that all would go to work and do all in their power to till the soil, or do anything else that would add to the material wealth of the country and the individual happiness of its recreated citizens; that they would apply themselves to every form of industry that would help in any degree to a recovery from the disasters growing out of the war, and the lamentable destruction of property attending it.

The South immediately after the war had greater advantages than most people imagine, if it had only taken hold of them in the right spirit. It had various sources of prosperity, which under prudent management would have enabled it to leave the North far behind in the race for wealth. Its leading staples, cotton, tobacco, and rice, had all a gold value in the markets of the world.

This opportunity of going in to produce at hard-pan prices on a gold basis invested it with an immense leverage against the North, with its inflated currency and war prices, growing out of the large issue of paper money necessary to carry on the war, and consequent over-speculation as a natural result or sequence.

It seemed to me, then, that, while the South had a grand opening for growth in prosperity on a solid basis to begin with, the business of the North was, in comparison, in an inflated position, that must burst before it could get a fair start on a solid foundation. It appeared as if it would sooner or later suffer a temporary collapse, while the South had only to begin and build without fear of any such interruption.

I, therefore, selected for my investments as the best fields in the South the two States that stood the highest in their financial credit, in their character for integrity and enterprise, and that then had the brightest outlook, namely Georgia and Alabama.

These States took my money freely, issued their State securities, their County securities, sold me their bonds, and got me thoroughly interested, and that to a very large extent, and then treated me with the basest ingratitude, repudiating their bonds, and cheating me out of my money and property in every way conceivable.

I attribute the cause of this unjust treatment, however, to Andrew Johnson, who, by accident, through the assassination of President Abraham Lincoln, became President of the United States.

Mr. Johnson was a Tennesseean, loyal during the war to all appearances, and for all practical purposes of the Union cause, and he would doubtless have so remained had it not been for the unfortunate circumstance of Abraham Lincoln’s death.

This made him Executive of the nation, for which by ability he was amply fit and qualified, but through bias and temperament, entirely unfit to fill creditably this eminent position for the best interests of the country at large.

The position I took, as above stated, was, that since the war was over, it was a thing to be forgotten as speedily as possible. The finality was seriously delayed owing to the hostility that President Johnson did his best to excite and prolong amongst the people of the South.

Congress, it will be remembered, was leniently disposed in the passing of measures and framing of laws to bring the traitorous States of the South back again into the Union. The members of Congress most cautiously and delicately worked to patch up old sores that were supposed to exist between the victors and the vanquished, but when their bills went to the President they were unmercifully subjected to a wholesale process of vetoing, almost indiscriminately. This produced a condition of chronic hostility between the legislative and executive branches of the Government, and the wider the breach became the stronger and more vindictive grew the spirit which it naturally aroused in the Southern people.

These people were sadly misled by the President, whom they trusted, and his hobbies were humored at the expense of their prosperity.

Johnson made the people of the South believe that his vetoes would only delay legislation until Congress should be forced to find them something better. They, accordingly, reposed faith in him, and were badly deceived.

The feeling of animosity excited by this condition of things so worked on the minds of the people, causing the South to wax bitter and revengeful, that it appeared to people on this side of Mason and Dixon’s line that their Southern brethren had become even more implacable than during the hottest scenes of the war.

It was for the reasons above stated that bonds which had been issued by the South for money invested by the North were, in a large measure, repudiated. As soon as it was discovered that most of the vested interests were owned by Northern people, the spirit of revenge and avarice combined was aroused to the point of repudiation. And, unlike the courage of Macbeth, it did not require any stimulant to make that the sticking point. Every method that ingenuity could devise to strike a blow at the North was employed. No opportunity was allowed to slip that afforded any advantage, either material or moral.

Thus, instead of accepting the situation as General Lee had done, they were led astray by every one who had a political axe to grind. They took an active part in politics instead of looking after the various industries of the country and developing its resources. They engaged in political discussions and their attendant broils, to the neglect of necessary enterprises that would have brought them material prosperity.

Thus they became poorer and poorer. Many years were lost in these political turmoils, and the people became more and more embarrassed.

From these circumstances there were many financial victims, but few, if any, suffered more in that respect than myself.

I had over two and a half millions of dollars invested in the State of Georgia securities, and in other ways, a million more at least in Alabama and North Carolina together, all of which was perfectly annihilated, the entire disastrous result growing out of the factious spirit that was created and fostered by the vile and narrow prejudices of President Andrew Johnson, of whom I have still more to say in another chapter.

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L. WESTERN AND SOUTHERN FINANCIAL LEADERS

ALFRED SULLY, HIS ORIGIN AND SUCCESSFUL CAREER.—CALVIN S. BRICE, A FINANCIER OF ABILITY.—GENERAL SAMUEL THOMAS, PROMINENT IN THE SOUTHERN RAILROAD SYSTEM.—GENERAL THOMAS M. LOGAN, A SUCCESSFUL MAN IN RAILROADING AND MINING.—FINANCIAL CHIEFTAINS OF BALTIMORE.—THE GARRETTS.—THEIR GREAT SUCCESS AS RAILROAD MANAGERS.—PORTRAIT OF ROBERT GARRETT.

Alfred Sully, who has become so prominent in the financial world within a year, is tall, rather slightly built, nervous, and energetic. His face, by its long, square contour and thoughtful lines, suggests that of Senator Wm. M. Evarts; the eyes are keen and penetrating but kindly. At heart his tastes are those of a genial literary recluse. Circumstances and unquestioned ability have made him a financial leader. He was born about 46 years ago in Ottawa, Canada, where he received a good academical education. He tried his fortune in the West. He went to Cincinnati, studied law, and was graduated from one of its best schools, whereupon he went to Davenport, Iowa, and formed a co-partnership which became known as the leading law firm of the city. He acquired some means, and in 1872 came to New York, the proper place for men of ability. It is understood that at this time he had some idea of indulging his tastes for authorship, but Austin Corbin put a veto on that. The two had become acquainted in Davenport, where Mr. Corbin was formerly a banker, and the latter, on meeting Mr. Sully in New York, tendered him the position of General Manager of the Corbin Banking Company, which he had established here. He accepted it. But this post, responsible as it was, could not long hold a born financier, and we soon find him obtaining control of the Indiana, Bloomington & Western Road. He next bought the Ohio Southern, of which he is still President, a transaction in which he and his friend nearly doubled their money. Then he made a great deal of money in the Central Iowa and other roads in Illinois. He and Austin Corbin secured control of the Long Island Road, and he gave much time and labor to the Manhattan Beach Road and associated interests at Coney Island. Then he went into the scheme of restoring the financial health of that enfeebled giant among railroads, the Reading, and was one of the prime movers in the reorganizing and consolidation of the Richmond Terminal, the Richmond & Danville, the East Tennessee, Virginia & Georgia, and numerous other Southern roads, which now form one vast system, which will probably yet obtain an entrance into New York.

CALVIN S. BRICE.

Calvin S. Brice was Vice-President of the East Tennessee, Virginia & Georgia Road, and is a Director in the Richmond Terminal and numerous other Southern roads. He is now connected with the United States Express Company, in the management of which he will take an active part. He was born in Lima, Ohio, about 48 years ago, and was educated as a lawyer. He is below the medium height, and rather slightly built, but has broad shoulders, a fitting pedestal for a good head, with firm square features and keen bluish gray eyes. He wears a sandy beard, closely trimmed, which tends to heighten the effect of decision of character. He is a financier of ability.

GEN. SAMUEL THOMAS.

General Samuel Thomas, who is prominent in the Southern railroad system, is now about 50 years of age, is a Western man, and before the war was a civil engineer in the service of an Ohio railroad. After the war he again became a civil engineer, but, drifting after a time to New York, engaged in railroad enterprises, and ultimately secured a large interest in Southern railroads. He is now President of the East Tennessee, Virginia & Georgia, and is largely interested in the Richmond & West Point Terminal, the Richmond & Danville, the Memphis & Charleston, and other Southern roads. He is tall, well-built, energetic, and affable. He lives in fine style, and is a member of the Union League. He is worth several millions.

Gen. Thomas M. Logan is President of the Virginia Midland Railroad, Vice-President of the Richmond & Danville and Richmond Terminal, and a Director in all the roads in this system. He was born in Charleston, S. C., about 44 years ago. He served with distinction in the Confederate Army, and rose to be a Brigadier-General, being one of the youngest in the service. He is a graduate of the University of South Carolina, and formerly practiced law in Richmond, Virginia, where he is also engaged in extensive manufacturing and mining enterprises. He resides in Richmond, and is a member of the Westmoreland Club, but often comes to New York on railroad business, in which he has amassed a comfortable fortune.

John W. Garrett’s name will always be associated with that great property, the Baltimore & Ohio, which he rescued from the verge of bankruptcy. He was a man of great force of character, and inherited an aptitude for business. He was a graduate of Lafayette College in Pennsylvania, and engaged in business in Baltimore. He became a Director of the Baltimore & Ohio Railroad, and in 1858 was elected its President. He was a staunch supporter of the Union in the civil war. Despite a disloyal sentiment plainly noticeable in Baltimore and elsewhere in Maryland, he lent the Government all the assistance in his power in the transportation of hundreds of thousands of Federal soldiers. He was quick to repair burned bridges, and to do anything to facilitate the military operations of the Federal Government. President Lincoln and Secretary Stanton thanked him warmly. His salary as President was $10,000 a year. The Directors repeatedly offered to increase the remuneration, but he declined to accept it. He often refused offers as high as $50,000 a year to become the President of other roads. He was autocratic in his administration. His will was law. He found the Baltimore & Ohio Railroad a weak and struggling underline in the railroad world, and he left it a giant in the American system of railroad transportation.

Robert Garrett, the son of the preceding, and now the President of the Baltimore & Ohio Road, is one of the railroad kings of the United States. He became the President of the Baltimore & Ohio in his thirty-seventh year, after having served as Third Vice-President and First Vice-President under his father’s administration. He is a graduate of Princeton, a man of genial characteristics, and a favorite in society. He has made a study of railroad administration, but is now understood to seek some relief from the burdens unavoidably incident to his position as the head of a great railroad. And he is wise. He is many times a millionaire. Why should he devote his life to unnecessary care and labor? Rich men in this country are apt to work too hard. They do not enjoy life as men of far less wealth do in Europe. Under almost any administration the Baltimore & Ohio Road has a great future before it. The road was built to draw the Western trade to Baltimore. This trade had been diverted from that city by the building of the great canals. New York & Philadelphia were receiving the lion’s share of the traffic. The first stone on the Baltimore & Ohio Road was laid by Charles Carroll, one of the signers of the Declaration of Independence, in 1828. The road was opened to Wheeling in 1853. The firm of Robert Garrett & Sons was established in 1849, and was originally engaged in the wholesale grocery trade. When the road reached Wheeling its finances were at the lowest ebb. The house founded by the grandfather of the present head of the road bought largely of its bonds at a very low figure, and this marked the first connection of the Garrett family with this great property. The house of Garrett & Sons still exists as a banking establishment under the management of T. Harrison Garrett. In 1853 Baltimore & Ohio stock could be bought for a song. Since then it has sold at as high as $225 a share. The improvement in the property was very largely doe to the efforts of John W. and Robert Garrett.

The recent embarrassing complications of Mr. Garrett in connection with the management of his railroad and telegraph companies, it is hoped, will only be temporary, and I expect to see him again, at no distant day, reinstated at the head of the great corporation over which he and his father presided. His present difficulties are matters of current newspaper record and comment, and I need not, therefore, enlarge upon them here. As shown by the latest report, the Baltimore & Ohio Railroad is virtually in a good, prosperous and solvable condition, and I have no doubt that the Drexel-Morgan syndicate which has undertaken to put the property on a still more solid and durable basis with the ten million loan which it has negotiated, will uprightly do its whole duty, and in due time return the trust considerably enhanced in value to Mr. Garrett, his heirs and assigns.

John H. Inman, another member of the Southern railroad circle, was born in Tennessee. He is tall, fine looking and soldierly in appearance. He is one of the shrewdest of the capitalists who have invested large amounts in Southern enterprises. He came to New York from Atlanta, quite poor, after the civil war. In the war he was a quartermaster’s clerk, and his old quartermaster afterwards became one of his brokers on the Cotton Exchange. Young Inman went into the office of an uncle on arriving in New York, and learned the business of a cotton broker. He was clear-headed and successful. After he became a partner in the firm he added very materially to his wealth by carrying cotton for the premiums on the options. He is recognized as one of the leaders of the Cotton Exchange. In recent years he has become a financier, has made large loans to railroads in the South, and has invested heavily in Atlanta real estate, and in iron enterprises in Birmingham, the rising Southern market. He was prominent in the reorganization of the Richmond & Danville railroad system, in which he is largely interested. He is a director in the Richmond Terminal and associate lines, as well as the Louisville & Nashville and other Southern roads. He invested nearly two millions in the Tennessee Coal & Iron Company. He is now about 50 years of age. He seems to be a man of destiny. He is a man of great force of character and exceptional business skill. He resides in New York, and is possessed of a large fortune.

ANCESTRY IN ENGLAND—BRAINS IN AMERICA.

In this country no one cares about ancestry. The spectacle of Mark Twain weeping at the tomb of Adam is a humorous expression of American opinions on this general subject of ancestry. To save time he paid his devoirs to the fountain head without stopping at the Guelphs, the Tudors, the Bourbons, the Hohenzollerns, the Hapsburgs, or the Romanoffs. There is no time, if there was any wish in this great country—shaking to the tread of gigantic business—to inquire, “Who was his father?” There is only time for such questions as, “What do you know?” “What can you do?” “How have you succeeded?” Integrity and ability stand a man in better stead in America than show of purple veins of Norman blood. Even in the aristocracy (so to speak) of brains, ancestry in one sense, so far from being an advantage, is apt to be precisely the reverse. A son of Henry Clay or Daniel Webster can never hope to attain the lofty pre-eminence of the sire, and suffer by comparison. Great men do not always have great sons. For one Pitt, the son of a great Chatham, there are hundreds of sons who intellectually dishonor great fathers. Brains, intelligence, industry, energy, and pluck; these are the talismanic words which stand for success in America, where no ghost of a dead feudalism hovers over the land, darkening it by its blighting presence. In England the first question, a silly echo of centuries, is, “Who is his father?” But who are the nobility? Have they any title as such to the respect of right-thinking persons? The nobility is running to seed, or rather the once noble tree is withering and dying; it has borne its fruit and its time has passed away. In Scriptural language, Why cumbereth it the ground? How many of the nobility are now worthless roues, habitual seducers, dried up or half consumed by the fires of passion and debauchery! They are dying as the fool dieth, with a drunken leer on their shrunken faces and the stain of dishonor on their escutcheons. The Commons of England will yet redeem the nation from the thraldom of a worthless aristocracy. America is the true field for the human race. It is the hope and the asylum for the oppressed and down-trodden of every clime. It is the inspiring example of America—peerless among the nations of the earth, the brightest star in the political firmament—that is leavening the hard lump of aristocracy and promoting a democratic spirit throughout the world. It is indeed the gem of the ocean to which the world may well offer homage. Here merit is the sole test. Birth is nothing. The fittest survive. Merit is the supreme and only qualification essential to success. Intelligence rules worlds and systems of worlds. It is the dread monarch of illimitable space, and in human society, especially in America, it shines as a diadem on the foreheads of those who stand in the foremost ranks of human enterprise. Here only a natural order of nobility is recognized, and its motto, without coat of arms or boast of heraldry, is “Intelligence and integrity.”

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LI. ARBITRATION

HOW THE SYSTEM OF SETTLING DISPUTES AND MISUNDERSTANDINGS BY ARBITRATION HAS WORKED IN THE STOCK EXCHANGE.—WHY NOT EXTEND THE SYSTEM TO BUSINESS MATTERS GENERALLY?—ITS GREAT ADVANTAGES OVER GOING TO LAW.—IT IS CHEAP AND HAS NO VEXATIOUS DELAYS.—TRIAL BY JURY A PARTIAL FAILURE.—SOME PROMINENT CASES IN POINT.—JURY “FIXING” AND ITS CONSEQUENCES.—HOW JURIES ARE SWAYED BY THEIR SYMPATHIES.—A CURIOUS MISCARRIAGE OF JUSTICE BEFORE A REFEREE.—THE LITTLE GAME OF THE DIAMOND BROKER.

Wall Street has derived great prestige and character from the New York Stock Exchange. In fact, the Stock Exchange is Wall Street, so to speak, so much so that if the Exchange moved to any other locality, the latter would become the new Wall Street, to the utter oblivion of the old, which would soon be eclipsed and regarded as a thing of the past.

The New York Stock Exchange has distinguished itself in many respects, but there is probably nothing for which it is likely to become more famous in history than its solution of the great problem of settling disputes and misunderstandings by arbitration. Other financial bodies have tried the same substitute for ordinary law proceedings, but it would appear that greater success has crowned the efforts of the Stock Exchange in this particular experiment than any other corporate body.

The large number of cases on record that have been amicably settled by arbitration within the past few years, in which law would have been formerly considered indispensable, seem to point to a period, probably not far distant, when arbitration will be the great and ultimate court of appeal in the large majority of civil cases. Several considerations will make it the most popular. It is cheaper, less complicated, not subject to vexatious delay; it is more equitable, and the members composing the Arbitration Committees are business men, who are quick to discern, accurate in perception, sound in judgment and decisive in drawing their conclusions on business principles.

The expense of arbitration is a mere trifle compared with the enormous sums swallowed up in litigation.

Transactions involving millions of dollars annually in the Stock Exchange are made subject to settlement by this method of arbitration in the event of any difference of opinion arising in any particular case. Very few instances occur in which there is any necessity to carry the case beyond the jurisdiction of the Arbitration Committee.

The number of cases actually settled in this way would probably cost half a million dollars annually if they had to be brought into court, to say nothing of the incidental expenses, which would amount to as much more, arising from delay, on the scale of present charges by the legal profession, even leaving out our own Evarts, who is probably the Boss charger of the Bar.

The success attending the system at the Stock Exchange, I think, goes far to prove that the method might be universally extended to the great pecuniary interest and personal comfort of business men throughout the country, for the adjustment of their misunderstandings and grievances among one another.

My object in writing upon this subject has for its basis the hope that this chapter may catch the eye of some of our great merchants in this and other large cities, and that it may suggest to those of them who have not contemplated the subject already, the advisability and necessity of establishing for themselves a similar method of arbitration to that which has been so successful in the Stock Exchange, to be final and without appeal, in their respective business affairs.

Experience has fully demonstrated that trial by jury is in innumerable instances a signal failure; especially has this been so since what is known as “jury fixing” has become so common in the courts. The practice of bribing jurors has now become a secret profession, and is so ably conducted that it is almost impossible, except in rare instances, to expose it.

But apart from this vicious and criminal practice of tampering with juries, there are many other reasons why it is next to impossible, in a large variety of instances, to obtain justice from an ordinary jury.

Human sympathy plays a very important part in the verdicts of juries generally. I mean by this, class sympathy. A business man who is regarded by the community as rich and powerful, can hardly expect justice from a common jury unless the party opposed to him occupies a similar station in society. Where the position of either the plaintiff or defendant calls forth sympathy with regard to worldly means, in the large majority of cases the ordinary jurors will bring in a verdict in favor of the man of small or moderate means, believing that they are in duty bound to sympathize with the oppressed. In a case where a clerk or a woman, for instance, is a party to the suit, it is next to impossible for a man of means to receive equity at the hands of the great palladium of our liberty. I am sorry it is so, but I speak feelingly in this matter, as I have myself been a victim of this unworthy class prejudice, in a country where all men are theoretically equal.

Counsel usually make a great display over the cases of impecunious clients, out of all proportion to their magnitude. Mole hills become ostensibly transformed into mountains in the eye of the highly imaginative lawyer, who works himself up into such a dramatic pitch of enthusiasm about the wrongs of his client, that he appears to be in dead earnest. He infuses the same feeling into the jury, who are beguiled into solemnity by the force of forensic oratory, and fail to appreciate the farcical side of the case, but are totally swayed by sentiment and prejudice, to the utter exclusion of the evidence.

There are many objections, also, to trial or partial trial, by referee, although it is in many instances an improvement on the jury system. It is, however, amenable to numerous and flagrant abuses.

As an instance of this, I shall briefly relate a case which some time ago came within the sphere of my own observation.

A gentleman of my acquaintance had a claim for a very large amount against a financial man in good circumstances, and it was sent to a referee, who, after a long, tedious and exhaustive investigation of all the facts, gave a decision in favor of the plaintiff for several hundred thousand dollars.

Soon after the decision, the defendant saw the plaintiff, and made him an offer of thirty thousand dollars to settle the matter, at the same time stating that if he did not accept the offer, he would either appeal the case or hunt up fresh evidence for a new trial.

This offer of settlement, which was but a small part of the amount awarded by the judgment, was naturally declined by the plaintiff, and application was made to the court under the pretense of newly discovered evidence, for a new trial, which was granted. Thereupon, after another tedious trial, the old beaten track having been gone carefully over again, without omitting any of the aforesaid “whereases, neverthelesses and notwithstandings,” or any of the monotonous flummery connected therewith, the case was again sent to the same referee, before whom the same wearisome inquiry was repeated. This time, however, the referee relieved the monotony, at the close, by rendering a decision in favor of the defendant, for a large sum, instead of the plaintiff, as on the former occasion.

This decision was a genuine surprise to the plaintiff, who then called upon the defendant and expressed in severe terms his indignation at the change that had been unwarrantably made in the decision of the referee, saying he would not submit to it. He was extremely firm in his manner and said: “I positively assure you that if the judgment is enforced this town will not be large enough to hold you and myself.”

The successful defendant then said, “What do you want me to do?”

“Well,” replied the plaintiff magnanimously, “I simply desire to be released of that judgment.”

“Will that satisfy you?” asked the other litigant.

“Yes,” he replied, “under the circumstances. I have had enough of such law, and want to get rid of it.”

“Well,” said the defendant, “I will do it, and give you a receipt in full in satisfaction of all claims.”

After this cordial termination of the trouble, the defendant turned to the plaintiff and said confidentially, “I am sorry you did not take the thirty thousand dollars which I offered you. I would sooner you had it than anyone else, as I had to pay it all the same.”

The profound lesson of humility taught in Scripture, that “the first shall be last and the last first,” was fully verified in this instance.

As litigation is now carried on either before a jury or a referee, it has a tendency to stir up bad blood, which grows worse as the case progresses through its various and lengthy stages, leaving relations more strained and matters for both parties much worse at the end than at the beginning. As the case drags its slow length along criminations and recriminations between plaintiff and defendant are constantly elicited, and family matters that should be regarded as sacred are dragged before the eyes of the public, subjected to unfriendly criticism, and innocent parties who have no interest in the case are subject to have their private affairs made known, to their great mortification, and often to their great detriment, having a cloud thrown over their reputation long after the litigants have passed away.

Thus the evils of litigation are far reaching in their consequences, and frequently exercise a most deleterious influence over the character and prosperity of those who have nothing to do with the original parties to the contest, and have no interest in the suit.

The expense is also another important consideration in going to law, and is only to be measured by the bank balances of the contending parties.

The time lost in the methods of procedure now generally adopted is of the utmost importance, especially to people the success of whose business in a large measure may depend on their personal attention thereto. It is perfectly astounding to reflect on the important portion of a person’s existence that may be lost in one case, which, from its inception in the lower court up through the regular gradations of the Supreme Court and Court of Appeals when a new trial is had, probably thus going over the entire ground twice, may consume all the way from five to ten years under the perpetual pressure of mental anxiety and torture before the end is reached, when at least one, and sometimes both parties, are financially ruined.

The worry, wear and tear of attending to a lawsuit in the capacity of either plaintiff or defendant is perfectly incomprehensible to those who have never passed through the trying ordeal. A person in either capacity, with his train of witnesses, is obliged to dance attendance on court every day, no matter how pressing the necessities of his own business may be. Books must be carried thither, and all his establishment must be upset for the convenience of the court and to gratify the whims and caprices of the opposing litigant. The business places of the two contending parties are entirely disarranged, and the help thrown into a state of partial disorganization. Each party to the suit seeks to give the other all the trouble he possibly can, and to subject him to all the sources of annoyance his imagination can devise. Such is the spirit imbued by going to law.

A lawyer, therefore, who has about half a dozen moderate cases has thus his entire time occupied, and while his clients keep out of bankruptcy his income is as good as the annuity of a life insurance company, and frequently the security is better.

The effect of the change which I propose, in the majority of cases where merchants and business men find it necessary now to resort to legal methods, would perhaps not render the life of the ordinary lawyer so happy as it is under the present system, but the merchants would gain ten-fold more than the lawyers would lose, so the effect upon the entire community would be incalculably beneficial.

The system of arbitration which I contemplate could be extended in every line of business throughout the entire country, with a Central Association in New York or any other city that might be agreed upon. In fact, there might be several business centres, one in each important city, with its ramifications extending throughout the section in which its commercial interests more immediately clustered. Branch associations could be organized in the smaller cities and towns, enjoying all the facilities of direct communication with the central body, and availing themselves of all the information and statistics there collected, and the nature of decisions in special and leading cases of settlement.

Each association in its own city or town should be considered fully competent to deal with its own affairs, the Central Association being only consulted as an advisory body. I should recommend also that each association should have a governing committee, which should constitute its Court of Appeal, whose decision should be deemed final.

It would hardly be necessary to prescribe penalties for the few isolated cases that would kick against the arbitration system, and resort to law, as their legal experience before they got through would be punishment sufficient without the association taking any further action. Discipline, however, of a mild character, would have to be enforced in these and other special cases, for the better efficiency of organization.

It might be well to have a rule whereby the parties submitting their cases to arbitration should recognize the necessity, after having the methods of procedure thoroughly explained to them, of putting themselves under obligations to abide by the decision.

In carrying out a national idea of this kind of association, business could be greatly facilitated and much expense saved by the various committees having due regard to their places of meeting, so as to be as near as possible to the centre of the greater number of the witnesses in each particular case.

The courts, which are now greatly overworked, would be immensely relieved by this system, and they would have more time to sift important and exceptional cases which, in their nature, could not possibly be made subjects of arbitration. There are quite enough of such cases to occupy the time of the various courts.

One of the most vexatious and irritating things connected with court trials is the constant attendance required, even when no progress is being made in the case. The expenses, too, are always accumulating.

Though nothing is accomplished the attendance of the lawyers is far from being a labor of love. Their services must be handsomely rewarded by the litigants.

Such a process of settlement as I suggest would not, after all, be any great hardship to the best of the legal fraternity, as there would be enough work left for them, but it would afford immense relief to the now overworked judges, while it would facilitate and forward the ends of justice to an extent that can hardly be imagined by those who have been always accustomed to the slow and monotonous machinery of the law courts, and it would help to weed out the large camp following of pettifoggers, whose occupation would be partially gone.

There is a great deal of time lost in regular court business, causing much exasperation to the parties to a suit, in settling mere technicalities and side issues of law, before the real merits of the case can be reached. Many of these technical delays could be easily disposed of by business men, on business principles, and by taking a simple and common-sense view of the matter, by the usual methods pursued in arbitration.

This new method of settling disputes would do away with the farce of giving bonds in many cases, which is another great source of annoyance, and which, after all, only amounts to a mere formality in a large number of cases, and in many others a very hollow and fraudulent pretense, as many of the bondsmen are only men of straw, and though technically qualified, are not in reality responsible for the obligations undertaken by them.

When good, reliable sureties are offered, in many instances they are put through an irritating course of examination in relation to their private affairs, much of which is entirely unnecessary, and only designed to perplex and annoy them. They are thus obliged to expose matters relating to their private business, about which the public have no right to know anything, and they are often examined in such a way, as if they themselves were on trial, and were attempting criminal concealment of something that they had a right to disclose. A good deal of this arises from the impudent, unmannerly style of certain lawyers, who treat a man as a criminal suspect, when he has no interest in the case whatever, but has simply come voluntarily forward to assist a friend in trouble.

This is all, however, in the present method of procedure, connected with the machinery of so-called justice, and this kind of abuse has been carried to such an extent in some of the instances just referred to, that very few responsible parties, who know anything about the modus operandi of qualifying as a surety, are willing to respond to such calls of friendship. Hence, one of the difficulties in obtaining good bondsmen, and an additional reason why the professional straw men are so plentiful.

It probably helps the business of the latter, between whom and the abusive lawyers there may be an understanding on “boodle” principles.

I shall relate an instance which I consider worthy of permanent record illustrative of the matters to which I here refer, in which my firm was victimized.

On the occasion referred to, my firm sued a client for a just debt of sixteen thousand dollars. The case was sent to a referee, whose standing, in his particular line, was unquestioned at the time, and very few men, in his circle, had better family connections. He stood high in his profession and both sideS were satisfied with the choice. The case was very long and tedious, having been drawn out to a most provoking extent by encumbering the record with immense piles of irrelevant matter. The renewed calls for legal fees on both sides were numerous and vexatious, yet there was no help but graceful submission to the payment of this tribute.

After a number of years it was reluctantly conceded by the lawyers that the evidence was all in on both sides. The litigants breathed heavy and responsive sighs of relief, each side being confident of victory.

A short time prior to the close of the case, the referee spoke to me, gratuitously offering his advice to settle the case, as he said he intended to give a decision adverse to my firm. To this I demurred, and expressed my determination to fight the case to the bitter end.

The result was, however, that my firm not only did not get a decision in its favor for the $16,000 to which it was justly entitled, but this claim was wiped out by this Daniel come to judgment, who gave a decision in favor of the defendant for $132,000.

I regarded this award as such a terrible outrage upon justice that I obtained a stay of proceedings, and made an appeal, setting forth therein the advice given to me by the referee to settle before the case was closed.

Judge Fancher, who wrote the opinion on behalf of the bench, consigned that referee to everlasting disgrace, and set aside his opinion. There the case ended.

Another instance in my experience will illustrate the point which I have made in regard to the sympathy exhibited by juries with those whom they regard, rightly or wrongly, as oppressed. At one time I had employed a clerk at the rate of $2,000 per annum. He was a great disappointment to me in regard to competency, for the work for which I had engaged him, and for his entire lack of application to, as well as deficiency in, the department to which he was assigned. At the end of the first year, therefore, I gave him notice, in presence of two competent witnesses, that I should not require him after his year had expired, and advised him to look out at once for another situation. On the last day of the year he came to me with tears in his eyes and said that he had been unable to obtain another place, owing to the bad times prevailing, and begged me, in the name of his family, who was solely dependent upon him, to keep him in my services still longer, until he could get another situation. Purely out of sympathy for his condition, and believing his story, which was very plausible and pathetic, I told him that he might remain a short time longer on the same salary, but that I should require him to use all his exertions to get another place as speedily as possible.

When he entered on the second term his services were no more use to me than a fifth wheel is to a coach. After the expiration of a few weeks, I sent for him and inquired if he had got another situation; I said I had given him ample time to obtain one, and that I could not consent to keep him any longer. I therefore requested my cashier to draw a check to his order for the balance of his wages, up to date, filled in as a part of the body thereof with the words “payment in full for all claims and demands.”

Thereupon he left my employment, but called repeatedly at the office afterward. I assumed that his visits were simply for the purpose of paying his respects. At the expiration of the second year I received a notice of suit which he had commenced in Brooklyn for the balance of salary due him for the year, being at the rate of $2,000 a year for ten months.

The case came up duly in the Brooklyn court, his only witness being his father, who had made several calls upon me after the discharge of his son, on the strength of which he set forth, in his evidence, certain conferences that should have taken place between him and myself, the greater part of which were purely fictitious. He was the only witness called on the side of the plaintiff, while I had five or more witnesses to substantiate the facts, as I have related them, in relation to the young man’s discharge, all of them being of most excellent character.

Strange to say, the jury entirely ignored the overwhelming testimony on my side, and seemed to be altogether influenced by the “spread-eagle” address of the defendant’s counsel, which I am free to say was both able and ingenious. He drew a harassing picture of the poverty of the young man, and presented the imminent destitution of his family in a most pitiable light, brought about solely by the ruthless treatment of this hard-hearted millionaire and bloated bondholder. Hence the verdict was made, through the force of counsel’s oratory, to depend exclusively on the sympathy of the jury, irrespective of the evidence.

The case occupied several days, with five or six employees from my office in constant attendance, who were obliged to carry to and from court, every day, huge books and large quantities of papers, disturbing the regular business of the office in a very disagreeable manner.

After counsel had gone over the ordinary rigmarole in reviewing the testimony, the jury went through the formality of retiring, to keep up appearances, and after a brief interval of absence returned to court with a verdict for the deeply injured clerk for back pay, together with interest for the ten months during which he had not rendered me an hour’s service.

My lawyer was easily able to obtain fresh evidence from other sources, but he had not considered it necessary to put any more witnesses on the stand, as he had regarded the testimony already produced more than ample, so sanguine was he of success, and so fully satisfied of the plainness of his case, which he considered had only one side, and that in my favor.

The jury, however, put the boot on the other foot, upset all my counsel’s calculations and showed him that his law went for nothing where the famous twelve had the right to judge and legislate at the same time in accordance with their sympathies and prejudices. Still he went through the formality of going before the judge with new evidence, and applied for a new trial, which was ordered on the ground that the verdict was not in accordance with the weight of evidence.

The new case was called after the customary delays, and the same ground was duly traversed again, with my additional witnesses, before another highly intelligent jury, whose prejudices were all on the side of the greatly injured young man, who sought twelve months’ pay for two months’ useless services. The only witness that appeared again for the defendant was his faithful and veracious father, whose memory was marvellously correct in relation to his former statements on the first trial.

There is an old proverb which says that it requires such men to have good memories. I need not quote it, as almost everyone knows it.

To make a long story short, however, that forensic orator appeared again for his poverty-stricken client, armed with all the old enthusiasm exhibited on the former trial. He had not much new matter to present, but his dramatic attributes, by dint of longer practice, and more familiarity with his side of the case (it was only necessary for him to study the one side) had become considerably improved since his former effort, and it is needless to say that he carried the jury with him.

By that intelligent safeguard of our liberties, the jury, the second trial was only regarded as an aggravated case of persecution, on my part, and the verdict was given more cheerfully in favor of the plaintiff than on the former occasion.

Although it would have been much better for me, from a financial point of view, to have paid the amount of the exaction, with all the legal and illegal fees and impositions connected therewith, yet I felt disinclined to be bamboozled in that way.

When the court was applied to for another new trial, the judge said, “I have already given you one new trial, taking the responsibility. The relief you now ask has already been before two juries, and I am not willing to take upon me any additional responsibility in the matter. You must therefore look for any further rights or redress to which you may consider yourself entitled, to the Court of Appeals.”

The case is now, therefore, awaiting the good time and discretion of the Court of Appeals, where it will, in all probability, be heard and adjudicated upon sometime within the next ten years. In the meantime the young man is happy in the reflection that his judgment is a good investment, drawing six per cent. interest.

There is still another case illustrative of some of the peculiar points referred to, and showing the truth of the maxim among lawyers that, “You never know what a jury will do,” in which I had the honor, or the misfortune to be joined.

A well-known outside broker in Wall Street, who had a large experience in transacting business for Mr. Sage and other notabilities of the street, in “puts,” “calls,” and other exterior securities, came to me one afternoon and asked me if I didn’t want to buy a pair of diamond earrings.

At that time I had not begun my career as a dealer in diamonds, except in one solitary instance, and that was when I purchased the wedding ring, which is one of the requisites in a matrimonial contract for a long term. I was, therefore, comparatively a tyro in the business, and the party with whom I was dealing did not fail to take advantage of my inexperience. I made some inquiry about the diamonds from this broker, to which I received apparently satisfactory answers, and I concluded they would suit my wife, and as I had had a good day’s business I made him an offer of a thousand dollars for the precious ornaments, which he quickly accepted, and I paid him the money.

In the course of a few weeks after I was waited upon by a diamond dealer and his lawyer, with neither of whom I had the honor of any previous acquaintance, and they accordingly introduced each other. The diamond dealer introduced the lawyer and vice versa. I immediately concluded I was going to get a good stock order from both of them, but I was soon disappointed as well as surprised to find that these gentlemen had called on an entirely different kind of business, which was totally devoid of commissions on any stock transactions.

They said I had a pair of earrings belonging to them, and I declined to give them up except on return of my thousand dollars.

These two gentlemen bade me good day, and in the course of time I was served with the usual legal papers in a suit which reached the calendar after some time. The young man who sold me the diamonds was put on the stand. He testified that he had received them from a certain diamond broker, but not the dealer in question, with whom he had had no connection whatever.

The diamond broker, it appeared, had long been agent for this dealer, selling diamonds and had, as set forth in the evidence, sold over ten thousand dollars’ worth in a few years.

During the trial a paper was produced to prove that this broker had received these diamonds to show them to a customer, and as it turned out I happened to be the customer. The money which I had paid him for them he had failed to turn over to his employer, of whom I had no knowledge, nor had I any chance of knowing him in the transaction.

All the facts were presented, as above related, to the jury, who, after due deliberation, decided that I must give up the diamonds and suffer to be cheated out of my thousand dollars.

This case is now on appeal. I have since offered to relinquish the diamonds and lose my money, rather than suffer the expense and trouble of continuing the litigation, but plaintiff wants to bleed me further to the tune of $300 to cover his law expenses. To this illegal tribute I have not yet submitted, and have resolved to see what virtue there is in further defense before a higher tribunal.

“Millions of dollars for defence, but not a dollar for tribute,” is a maxim which it is expensive to follow, but after all, the result of such a course, if one can afford it, may be morally healthy.

I consider that these cases, in which I acted a rather unenviable part, are only samples of many which constitute one of the best arguments for a general system of arbitration, such as I have briefly and imperfectly outlined.

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LII. NEW YORK AS A FINANCIAL CENTRE

ITS PAST, ITS PRESENT, ITS FUTURE.—BANKING DECADENCE.—GROWTH OF INTERIOR CENTRES.—OBSTRUCTION FROM THE NATIONAL BANK LAWS.—RELIEF DEMANDED.—REQUIREMENTS OF THE FUTURE.

What New York has been as a centre for the settlement of financial transactions is a matter of history; what it is destined to be, in that respect, may not be so entirely certain as some people hastily assume. There are some facts which seem to suggest the question whether our city may prove able to retain its past proportion of the vast settlements of this ever-growing continent; and, although there is nothing to warrant very positive opinions about the future, it must be conceded as an unquestionable historic fact that in late years there have been symptoms of positive decadence in the status of our financial metropolis.

In the past there have been three separate successive sets of conditions directly affecting the financial standing of New York. First, there was the period when this city was the distributing point for nearly all the importations, and for the bulk of our domestic manufactures through all parts of the country. Equally, New York was the almost sole port of export for Western products, and although the exports for the cotton States were made direct from their local ports, yet the financial transactions connected with those shipments were effected through this city. Then New York had virtually no competitor as an exchange centre.

Next came a period during which the larger Western cities, especially Chicago and St. Louis, aspired to become distributors of foreign and Eastern merchandise; a change very naturally following the rapid growth of population in the West and Southwest. Thus a vast jobbing trade became rapidly established at these interior centres, and New York’s share in the distribution of goods to the retail trade became, in a large measure, confined to the Middle and nearer Western States, and to a portion of the South. The jobbers of these new interior centres, however, had still to get their supplies of merchandise from or through the Eastern metropolis; so that, whilst we lost much of our jobbing business, we retained, with some limited exceptions, the importing and commission branches, together with their ordinary rate of increase.

We are now in the beginning of a third and still more important era, during which both the importing and commission branches of our trade are threatened with invasion. The Western jobbing houses have attained a standing which warrants their importing direct from the countries of production, instead of through New York. Another Western and Southwestern consumption has risen to such a magnitude as to encourage the creation of manufacturing establishments in the vicinity of the markets. The West is rapidly becoming a competitor in the leading branches of manufacture with the East, and is evidently destined to supply itself, at no distant day, with a very large portion of the domestic merchandise hitherto contributed through New York merchants, and with the facilities of New York banks. Nor is this all. Chicago and some other Western cities are throwing off their dependence on New York intermediaries for the exportation of grain and provisions, selling them direct to Europe, and shipping the goods on through bills of lading.

These changes are not the result of any mere spirit of blind recklessness grasping after business. They are the product of actual natural economies, and appear to be so decidedly in the interest of the Western merchants that it can hardly be doubted that the new methods have come “to stay.”

Clearly, then, the natural development of national production of commerce is to build up independent financial centres at the interior, the effect of which can only be to check in some measure the growing ascendancy of New York. Perhaps few among my readers will be prepared for the following statistical facts bearing on this question; the conclusions to be drawn from which are not very flattering to the pride of the “Gothamites.”

The transactions at the New York Clearing House are the surest indication of the standing and progress of this city as a financial centre. The records of that institution show that its annual exchanges rose step by step from 5,750 million dollars in 1854 to 48,566 in 1881, an increase of 744 per cent. in 27 years, or at the average rate of 1,585 millions per year. From 1881 there has been the following remarkable rate of decline:

In 1881, the exchanges were 48,566 millions of dollars. In 1882, the exchanges were 46,553 millions of dollars. In 1883, the exchanges were 40,293 millions of dollars. In 1884, the exchanges were 34,092 millions of dollars. In 1885, the exchanges were 25,251 millions of dollars.

Thus it will be seen that there has been a decline in the transactions of the Clearing House banks of 23,315 millions, or at the rate of 48.4 per cent., within the last four years. Last year the exchanges fell below even those of twenty years previous, when the amount was 26,032 millions. Of course, this very remarkable decrease in the volume of transactions is, in part, attributable to the great falling off in the amount of speculative transactions in 1885, as compared with 1881. This, however, can only account to a comparatively small extent for such a vast change. Something is also to be attributed to the general decline in the prices of merchandise and investments during the period; but this explanation is also entirely inadequate, for the average fall in prices did certainly not exceeded 20 per cent., while the decrease in the exchanges, as already shown, had been 48.4 per cent. Moreover, on the other side, some offset against the decline in speculation and in prices must be allowed on account of an increase of five to six millions in the population of the country during the interval; which, alone should call for an increase of 10 per cent. within this period. It is still more significant that, since the year 1872, the capital of the banks in the New York Clearing House has been reduced from $84,400,000 to $58,600,000, a decline of 30 per cent.; which at least implies that banking has become less profitable than it formerly was, and which could scarcely have happened if New York had retained its wonted share of the increase of financial operations arising from the growth of population and commerce in the nation at large.

Some light may be thrown on these changes by a comparison between the ratio of progress in the transactions of the Clearing Houses of New York and Chicago respectively.

In 1866, the first complete year of the Chicago Clearing House, the clearings amounted to $453,800,000, while in 1885 the figures reached $2,318,500,000—an increase of 410 per cent. At New York, in 1866, the clearings were $28,717,000,000, and in 1885 they had fallen to $25,250,000,000—a decrease of 12½ per cent. within two decades of great national progress, and while the population tributary to this city had increased over twenty millions.

In the year 1879—the period of the resumption of specie payments and of the beginning of a great revival of commerce and of financial enterprise—the Chicago Clearings were $1,257,700,000, and last year they were $2,318,500,000, showing an increase of 84.3 per cent. The clearings at New York, within the same period, show an increase of about ¼ of one per cent.

It has already been shown that the capital of the banks in the New York Clearing House (exclusive of surplus) fell 30 per cent. below 1872 and 1886; on the other hand, the capital of the banks in the Chicago Clearing House rose from $9,845,000 in 1872 to $16,928,000 in the present year, an increase of 72 per cent.

The foregoing comparisons show that although the clearings at Chicago are only about one-tenth those of New York, yet the former city is making very rapid strides, while here we are virtually retrograding, and confirm the conclusion above expressed, that the importance of New York as a financial centre is suffering from diversion of settlements and of banking facilities to the larger cities of the interior, and especially to Chicago.

So far as this tendency is the result of natural changes in conditions, it is inevitable and must be permanent, if, indeed, it be not destined to gain in force and extent. But so far as the change is due to artificial obstructions to banking operations, it is susceptible of modification.

And here I may be permitted to venture certain suggestions which may quite possibly encounter objections from men more than my peers in banking experience and wisdom. It has long been my conviction that the banking arrangements existing at New York are far from satisfying the requirements of a city that not only aspires to be, but also possesses many adaptations for occupying the position of the great financial centre, not only for domestic settlements, but also for international exchanges.

The bulk of our banking transactions are done by banks incorporated under either national or State laws. Admirably as the national banking system, taken as a whole, is constructed, yet it includes some important positive disqualifications for its institutions performing an important class of operations essential to a great centre of exchanges. It was, perhaps, not to be expected that a system designed mainly for provincial cities and for rural populations should adequately provide for these broader wants. Nor could any uniform and homogeneous system be expected to be very perfect and satisfy at the same time both classes of requirements. Interior banks, whose management must be expected to be more or less lacking in experience and competency, may need to be placed under legal restraints, which, in the case of a thoroughly conducted metropolitan bank, would be not only needless, but positively injurious. Unfortunately, this discrimination has received little recognition in our national bank legislation; on the contrary, that larger discretion which should have been conceded to the higher training and more select ability that administer the metropolitan banks, has been ignored, and heavier restrictions have been placed upon the New York national banks than upon those of any other part of the national system.

The “reserve” laws are oppressive to no better purpose than that of positive injury. All other banks than those of New York are permitted to count in their reserves any funds resting with their “redemption agents;” and this item usually constitutes, in the case of banks of the “other reserve cities,” 41 per cent. of the total reserves held, and in the case of all other banks about 60 per cent. The New York banks, on the contrary are compelled to hold their entire reserve (25 per cent. of their deposits) in the form of lawful money. Nor is this the heaviest embargo. The reserves are not permitted to be used when the occasion arises for which a bank reserve is always presumed to be provided. The moment a bank allows its reserve to fall below the required 25 per cent. it becomes the duty of the Comptroller of the Currency to close its doors and put it into liquidation if the deficiency be not immediately made good. If panic occurs, and depositors want their money, there is nowhere any power to relax the crushing force of this law, and the banks are therefore compelled to suspend payment to depositors and in order to avert general ruin at such times they have to resort to the expedient of making their cash assets available in common, thereby saving themselves and their customers outside of and in spite of the destructive tendency of the law. Of course, the danger of running into such a crisis as this creates a feverish dread in all times of special stringency in the money market. All eyes are at such times fixed upon the reserve “dead line;” and, as that limit is approached, loans are artificially contracted, depositors draw their money, and the very reserve that should be used for elasticity and to relieve periods of special tension become the certain cause of panic and ruin. A banking centre whose banks are periodically exposed to dangers of this serious character, and where the law unites with adverse circumstances to foster panics, is hampered with the worst possible disqualification for performing those higher and broader functions of banking which demand freedom of discretion and elasticity of resource.

This evil appears all the greater when it is considered that the amount required to be set apart as so much idle reserve ordinarily exceeds the entire capital of the banks. It might be supposed to be serious enough that such a large proportion of the resources of the bank should be held perpetually idle and earning no interest; but when this sacrifice of earning capacity is made for a purpose that brings no advantages, but rather a very serious danger, the effect can be nothing less than an unwholesome and very injurious restriction upon banking operations, and it is not surprising, therefore, that the national banks of New York city exhibit decadence instead of progress.

What is needed to enable this metropolis to reach the financial status to which it is entitled is a class of banking institutions possessing facilities and functions much broader and freer than those conferred by the national charters. It is out of the question to hope that these facilities may be provided through modifications of the national bank system. The banks, and especially those of New York, have to encounter so much prejudice and ignorant demagogism from Congress, in seeking any modification of the national system, that they would sooner endure almost any wrong than demand changes in the law. Their only redress is in reorganizing under the State laws, which many of them have already done, whilst new institutions almost uniformly prefer the State system. To meet the wants here contemplated, it would probably be necessary to get from the State Legislature special authorization for forms and functions of banking not now distinctly provided for under either Federal or State laws.

The special business to be done by such a class of banks scarcely needs enumeration, much of it being so self-evident. In the present stage of our national development, it is becoming a grave reflection upon our men of capital that we should remain almost entirely dependent on foreign bankers for the facilities for transacting our immense external commerce. The necessity that formerly existed for this dependence can no longer be urged as an excuse. All the capital and the banking experience necessary to found and to administer large credit and exchange institutions are ready to hand. A business of $1,200,000,000 per annum connected with our imports and exports would be available for this form of enterprise. Our export trade is crippled in many branches of business simply because it is found impossible to get the liberal credits necessary to facilitate consignments to distant markets. Manchester defeats us on cotton goods, not so much on the ground of prices or superiority of fabrics, but because her merchants can get any time or amount of credit required, whilst we have to market our goods on restricted credits and through Manchester agents, who at the same time are selling English products in competition with ours. The English exporter has the advantage of being able to get his credits from the bank with which he keeps his account, while the American has to go to a foreign banker, who has no inducement to consider his convenience or to moderate his charges. The natural place for an export merchant to keep his account is with the bank that grants him his credits; and this fact suggests the facility with which banks of the kind here suggested could build up a large business.

Every year we find it necessary to largely pledge our cotton crop in advance to provide the means for gathering and marketing it. Why should this money have to be drawn from England, especially as the crop is thereby subjected to the control of the foreign buyers, and we are unable to protect our own products? These advances afford an illustration of another class of important operations in which the existing banks cannot directly participate, but which ought properly to be undertaken by domestic banks.

With respect to our importations, what sufficient reason can be urged why the importer should have to get his credit from the agent of a London banker, instead of receiving it from an American bank through which he chose to transact his entire business, and which, therefore, would be the fittest source for procuring his credits? It cannot be to the advantage of the importer to be exposed to the vicissitudes of the European money markets, nor can the London banker grant credits to merchants 3,000 miles distant, whose position he imperfectly knows, without compensation for the extra risk. The business is, therefore, done at a disadvantage to both parties. The credit should be issued directly from the point where the importer does his business; and this would soon become the fact were banks to be provided possessing special adaptations for doing such a business.

Other functions proper to institutions of the character here suggested would be the negotiation of corporate loans, temporary advances to corporations, the receiving of corporate accounts, and the facilitation of corporate reconstruction. Banking for the larger corporations presents many possibilities of advantage to both banks and companies of which our existing banks cannot, as at present restricted, avail themselves.

It is needless to say that these suggested institutions, whilst undertaking operations of the special character above indicated, should also aim to secure the best class of deposits and to discount the higher class of paper. As the national bank laws would prohibit to them the profits of circulation, it might well merit consideration whether they should not issue to customers of high standing their own acceptances, within certain safe limits. These credits, yielding the current rate of interest, would be a highly profitable, as well as an entirely legitimate branch of business; and they have the sanction of successful usage among the best banks of London. I am unable to see what objection there should be to further following London precedent by allowing on deposits a rate of interest below that current in the market for the time being. Such a course would attract accounts and would immensely increase the power and the earning resources of the banks. Moreover, as such institutions, being exempt from embarrassing reserve restrictions and other needless limitations, would be less subject to the oscillations of the money markets than are the present banks, they would afford better advantages to members of the Stock Exchange in the form of loans upon securities than they now are able to get. The importance of this business may be inferred from the fact that the yearly transactions in stocks at the Exchange have averaged, for the last six years, 102,000,000 shares, which, at an estimated average of $60 per share, represents an annual business of $6,120,000,000, to say nothing of the business in bonds, which also is very large.

Banks of this character would naturally attract a large portion of the Stock Exchange houses, which experience has shown to be exceptionally safe and profitable. The single fact that these banks would not be obligated to conform their loans to arbitrary 25 per cent. reserve would be a decisive reason for Wall Street firms doing their business with such institutions.

To some extent the wants here alluded to have been met by our loan and trust companies. As institutions of loan and deposit these institutions are doing important public service, and the deficiencies in the functions allowed to the national banks are diverting to them a large and valuable business. The companies of this character in New York and Brooklyn have nearly $14,000,000 of capital and $15,000,000 of surplus and profits. Their resources aggregate $175,000,000, and their deposits $137,000,000. Their rapid progress is indicated by the fact that, since 1883, their resources have increased $32,000,000, or at the rate of 27 per cent. during three years of depression in business. But while this success demonstrates the great necessity for enlarged local banking facilities, the facilities afforded by the trust companies are entirely too limited to satisfy the large special requirements of a great financial centre above referred to, and only add to the necessity for a class of banks which shall do for New York what the great joint stock banks and the mammoth private discount houses of London are doing for the business of that cosmopolitan centre.

These suggestions are offered for what the men of Wall Street may deem them worth. They demonstrate that there is ample scope and urgent need for a new element in our banking arrangements to accommodate the larger operations of finance and commerce; and it would not be difficult to prove that the country is suffering seriously from lack of such facilities. It will not be pretended that there is any lack of either the capital or the managerial talent requisite for such enterprise. Nor, since the rate of interest has come to rule as low in this country as it is in Europe, have we any longer anything to fear on that ground from the competition of foreign bankers. At any rate, if New York aspires to a position of financial independence and to become, in the broadest possible sense, the financial centre of the vast and growing exchanges of this continent and of its transactions with other nations, there should be no delay in giving this greater breadth and scope to its banking institutions. Our merchants, I am satisfied, are ready to respond to a movement of this character; are the bankers and the capitalists equally prepared to provide the facilities?

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LIII. EARTHQUAKE THEORIES AND WALL STREET AFFAIRS

THE SHOCK OF EVERY CALAMITY FELT IN WALL STREET.—EARTHQUAKES THE ONLY DISASTERS WHICH SEEM TO DEFY THE POWER OF PRECAUTION.—BECOMING A SUBJECT OF SERIOUS THOUGHT FOR WALL STREET MEN AND BUSINESS MEN.—THE VOLCANO THEORY OF EARTHQUAKES.—OTHER CAUSES AT WORK PRODUCING THESE TERRIFIC UPHEAVALS.—WHY CHARLESTON WAS MORE SEVERELY SHAKEN UP THAN NEW YORK.—WHY THE SOUTHERN EARTHQUAKE DID NOT STRIKE WALL STREET WITH GREAT FORCE.—EARTHQUAKES LIKELY TO BECOME THE GREAT DISASTERS OF THE FUTURE.

Wall Street is the financial centre of this country as much so as London is recognized to be the financial centre of the world at the present time. Hence it is really the heart of the nation, through which its financial blood flows to invigorate and impart new life to every section of the land. Hence, also, every section and city have an influence on Wall Street. When the Chicago fire occurred it immediately created a panic. When a calamity occurs at any part of the country the shock is first felt in Wall Street. When a large failure happens, such as that of a bank or important railway, in any other locality, the influence is at once imparted to Wall Street. This is owing to the fact that Wall Street is the recognized and only market for securities of every description. All sections are dependent upon it, because it controls the money market. It is the great connecting link of the financial transactions of the whole country. A probable disaster through fire, like that which occurred at Chicago, is now no longer a terror to the Street or to the country, as was the case for a long time after that terrible calamity, for the reason that methods have been adopted for the purpose of restricting the conflagration and confining it within narrow limits. Fires which occur now are soon extinguished, and it is unlikely that they can ever play such havoc as they have done in the past. The possibility, with our enlarged experience, of taking precaution against those various calamities has robbed fires of most of their former terrors. Science and machinery have furnished us with the means of grappling with them.

But the one great, and now very alarming exception, which seems to defy the power of science and every human precaution, is an earthquake. This remarkable phenomenon has awakened great interest and inspired terror in the minds of the people at the present time, because the exhibition of its destructive powers is fresh in our memories on account of its terrific visitation at Charleston. Hence, many people are in great fear that some other section of the country may be stricken at any moment with a similar overwhelming disaster. It is the insidious and uncertain nature of the calamity that strikes the mind with awe. There is no possibility of anticipating it or making the least provision to avoid its dreadful consequences. The Charleston earthquake wiped out over ten millions of property. It came, like a thief in the night, and before morning the greater portion of the city was a mass of ruins. When we reflect on the extent of the destruction of property, it is marvellous how few people were killed—only about one hundred, and only two or three hundred were wounded. One of the greatest wonders why this calamity should have occurred in Charleston is, that part of the city has stood for nearly two centuries, and the recent earthquake has been the first it has experienced. Another curious circumstance is, that the disaster should have occurred on so large a scale there, as the locality is so far removed from the region of any volcano.

This clearly demonstrates that the old “volcano” theory of earthquakes is thoroughly exploded, and we must seek for causes and the explanations in other quarters. Although Wall Street has not been governed by any known law of earthquakes, except as regards the fluctuations of the properties in a bear market dealt in at the Exchange, yet a great number of Wall Street habitues, as well as other business men, are beginning to think seriously on the subject of earthquakes, and are attempting to penetrate their causes. Reflecting upon the upheaval—or rather the settling down of Charleston—I have come to the conclusion that similar disasters may be looked for in other localities, hitherto not subject to them, and considered by scientists absolutely free from these phenomena, at least on so large a scale. These peculiar disturbances that now make life so precarious on this planet, I attribute to the innumerable and so largely increasing excavations going on in various parts of the country, in the different mining operations, which displace the underpinning of the surface and cause it to sink beneath the weight which it carries. Of all the great mining industries which conspire to produce earthquakes, I think that of oil plays the most important part, and is the most treacherous in its operations beneath the surface of the earth. The pumping of oil from the bowels of the earth has been going on for thirty years in this country in several districts. I believe it is not too large an estimate to state that in that time an enormous lake of oil has been removed, that would probably fill the basin of Lake Erie or Ontario. That fluid made its way, probably, some of it from long distances in subterraneous rivers before reaching the place where the nature of the soil permitted it to gush through a shaft to the surface, as it does in such abundance in the oil regions of Pennsylvania. Some of those undercurrents may have come from other States, percolating through and disintegrating the soil in their passage for hundreds of miles, until they found an outlet, on the principle that all fluids have a tendency to find their level. There may be a great underground reservoir of this oil, which has taken many years to penetrate through the earth owing to the tendency stated, cleaving, in its subterraneous journey, fissures through ranges of mountains, and thus loosening the earth and taking away the support from the surface wherever it has penetrated. The fluid, percolating through various strata of clay and rock, has displaced these in its course. Owing to this displacement there must, of necessity, be a settling down of the land in the various regions through which the oil has passed, which will, of course, differ in degree owing to the density of the rock or clay. If the earth should be of a pulpy, soft nature the settling will be greater, and when it happens to be the foundation of a town or city the catastrophe will also be greater in inverse proportion to the degree of consistency of the earth. It is presumable, therefore, that some of the streets beneath the foundation of Charleston is of this pulpy, yielding character, and hence great was the fall of that city.

When New York was visited by the earthquake in 1884, and at various other times, there was only a moderate shaking up, comparatively speaking. Why? Because its substructure is solid stone to an immense depth, even lower than the depths of the ocean. Of these subterraneous rivers of which I have spoken we have many examples besides that of oil, and also proofs that they traverse great distances, as, for instance, in the case of the Saratoga Springs. It is clearly demonstrated that in the case of these and other springs the waters must come from various sources, and pass through many varieties of minerals before they arrive at their destination, and thus receive the combination of elements which impart to them their medicinal qualities. Then there are numerous instances of this remarkable power of water in the case of these monstrous land slides in mountainous regions, such as the Alps. In the act of attempting to find its level, too, water sometimes exerts its influence, in breaking up rocks, equal in its manifestation to a powerful explosive. Thus we see the great influences that are at work everywhere capable of producing earthquakes without the necessity of resorting to the volcanic theory and without the aid of fire.

In further illustration of this theory of earthquakes, let us suppose that one of these immense oil lakes which must exist in the bowels of the earth should be situated beneath a mountain, where it has been undisturbed for ages, but through some recent disturbing cause—most likely that of excavating, to which I have referred—it begins to find an outlet through various fissures. When once started, this great mass of fluid matter begins to go with a rush, forcing innumerable outlets, until the internal lake is in a measure exhausted. This creates an immense vacuum, which deprives the mountain of a large portion of its support; hence there is a settling down of several inches or several feet, according to the nature and the solidity of the support. It is this process of settling down and the struggle of the large masses of fluid to force their way out, that create the rumbling noise resembling that of distant thunder, and which also cause the tremulous and quivering motion felt at the surface of the earth, and still more distinctly in the houses, and most distinctly of all in the upper stories thereof. These effects may be produced at a great distance from the original cause of action, varying, of course, in their intensity according to that distance. Several of these effects have been distinctly experienced in Charleston since the first great catastrophe, but showing that the cause is weaker and further removed from the scene of the disaster than it was during the first fearful shock.

The Charleston earthquake did not strike Wall Street with very great force. The very fact of its weak effect upon the great financial centre of gravity created about as much surprise in the Street as the frightful shock itself did in a very different and opposite manner upon the people of Charleston. The reason that the great catastrophe which overwhelmed Charleston had so little effect on Wall Street was chiefly owing to the fact that comparatively little loss fell upon the corporations or the people connected with Wall Street interests. The loss of ten millions fell mainly upon the people of the doomed city alone. Only a small portion fell upon people located elsewhere either in the North or the South. Had such a disaster happened in any of the large cities North, East or West, owing to their intertwining connections with Wall Street, a panic would have been the result not unlike the one which followed the Chicago fire.

Earthquakes are likely to become the great disasters of the future most to be dreaded. Our population now comprises sixty millions, which, at the present rate of increase, will soon reach one hundred millions. Among these is a large proportion of go-ahead, driving men, who are constantly diving into the bowels of the earth to dig up the vast treasures which are there concealed. Through this laudable enterprise the underpinning of the surface of our globe is being constantly disturbed; and though it is far from a consoling reflection, the time may come, and may not be far distant, when such calamities as that of Charleston may be as common as railroad accidents are now.

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LIV. AUGUST BELMONT

THE AMERICAN REPRESENTATIVE OF THE ROTHSCHILDS.—BEGINS LIFE IN THE ROTHSCHILDS’ HOUSE IN FRANKFORT.—CONSUL GENERAL TO AUSTRIA AND MINISTER TO THE HAGUE.—A GREAT FINANCIER AND A CONNOISSEUR IN ART.

August Belmont has achieved the highest credit of any banker in the United States. His bills are always in demand and command a little more than those of any one else. He came to New York comparatively poor, but is now worth millions. As a representative of the Rothschilds in this country he has for many years held a high position in the financial world. He has managed the business of that historic house with prudence and exceptional acuteness and sagacity. Contrast his success in this country with the experience of Americans abroad. George Peabody, and J. S. Morgan, the successor of that philanthropist, may seem to be exceptions to the rule, but they did not win such social and business success as has been achieved by Mr. Belmont in this country, and the fact remains that no American could have been so successful abroad as he has been in the United States. Europe does not afford the opportunities that so often arise here. This is the country of great and frequent opportunities; there is a large and inviting field for enterprise and business skill, although, of course, all cannot win such a position in the financial world as that occupied by Mr. Belmont, who is reckoned among the wealthiest as well as the most honored of America’s adopted citizens.

He was born in the Rhenish Palatinate sixty-eight years ago. His father was a man in well-to-do circumstances, who sent him, when he was thirteen years old, to become an apprenticed clerk to the Rothschilds in their Frankfort house. According to the German custom, he received no pay; he was compensated by the opportunity of learning the banking business. He made rapid progress. Before he was twenty-one he was selected to accompany one of the Rothschilds to Italy and France as his secretary. In 1837 the famous house, recognizing the promising field in this country for profitable investments, sent young Belmont to New York as their agent, a position which he held till 1858, when he became their American correspondent and general representative, and this responsible post he has held ever since. In 1844 he was appointed Consul-General for Austria, and held the position for five years, when he relinquished it because of his personal friendship for Louis Kossuth and his sympathy with Hungary in the quarrel with Austria. In 1849 Mr. Belmont married the niece of Commodore Perry, the hero of Lake Erie, a beautiful and accomplished lady, who did much to strengthen his social position. In 1853 he was appointed Minister to the Hague by President Pierce, and served four years. He has always been a staunch Democrat, and was for several years chairman of the Democratic National Committee. He has generally refused to accept public office, but his eldest son, Perry, has served several terms in Congress.

Mr. Belmont is under the medium height, rather stout, with iron-gray side whiskers, round German features and keen dark eyes, and among the strong characteristics of the man is his marked chivalric courtesy and knightly courage. As a financier he has few equals and no superior, and to his politic and conservative management, as well as his foresight and intimate knowledge of affairs, is due the American prestige and success of the Rothschilds. Mr. Belmont’s house on Fifth Avenue, with its splendid art treasures, is worth a large fortune in itself. He is a connoisseur in works of art, and has one of the finest private collections of pictures in the world. For many years he has also had a princely residence at Newport and a stock farm at Babylon, Long Island. Though not, strictly speaking, a club man, he was one of the founders of the Manhattan Club. His successful career is an illustration of the fact that this country affords a fine opportunity for the intelligence, thrift and industry not only of native Americans but of the Republic’s adopted citizens.

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Chapter LV

THE SOCIALIST OBJECTIONS TO THE PRESENT ORDER OF SOCIETY EXAMINED.

INCREASE OF POPULATION AND THE GROWING PRESSURE UPON THE MEANS OF SUBSISTENCE.—EDUCATION AND MORAL IMPROVEMENT THE TRUE REMEDY FOR EXISTING OR THREATENED EVILS.—ERRORS OF COMMUNISM AND SOCIALISM.—HOW SOCIALISTIC LEADERS AND PHILOSOPHERS RECOGNIZE THE TRUTH.—GROWTH OF POPULATION DOES NOT MEAN POVERTY.

Mr. Mill says: “It is impossible to deny that the considerations brought to notice in the preceding chapter make out a frightful case either against the existing order of society or against the position of man himself in this world.” How much of the evils should be referred to the one, and how much to the other, is the principal theoretic question which has to be resolved. But the strongest case is susceptible of exaggeration; and it will be evident to many readers, even from the passages I have quoted, that such exaggeration is not wanting in the representations of the ablest and most candid Socialists. Though much of their allegations is unanswerable, not a little is the result of errors in political economy; by which, let me say once for all, I do not mean the rejection of any practical rules of policy which have been laid down by political economists—I mean ignorance of economic facts, and of the causes by which the economic phenomena of society as it is are actually determined.

In the first place, it is unhappily true that the wages of ordinary labor, in all the countries of Europe, are wretchedly insufficient to supply the physical and moral necessities of the population in any tolerable measure. But, when it is further alleged that even this insufficient remuneration has a tendency to diminish; that there is, in the words of M. Louis Blanc, une basse continue des salaires (a continual decline of wages); the assertion is in opposition to all accurate information, and to many notorious facts. It has yet to be proven that there is any country in the civilized world where the ordinary wages of labor, estimated either in money or in articles of consumption, are declining; while in many they are, on the whole, on the increase—and an increase which is becoming, not slower, but more rapid. There are, occasionally, branches of industry which are being gradually superseded by something else, and in those, until production accommodates itself to demand, wages are depressed; which is an evil, but a temporary one, and would admit of great alleviation even in the present system of social economy. A diminution thus produced of the reward of labor in some particular employment is the effect and the evidence of increased remuneration, or of a new source of remuneration, in some other; the total and the average remuneration being undiminished, or even increased. To make out an appearance of diminution in the rate of wages in any leading branch of industry, it is always found necessary to compare some month or year of special and temporary depression at the present time, with the average rate, or even some exceptionally high rate, at an earlier time. The vicissitudes are no doubt a great evil, but they were as frequent and as severe in their former periods of economical history as now. The greater scale of the transactions, and the greater number of persons involved in each fluctuation, may make the change appear greater, but though a large population affords more sufferers, the evil does not weigh heavier on each of them individually. There is much evidence of improvement, and none that is at all trustworthy, of deterioration, in the mode of living of the laboring population of the countries of Europe. When there is any appearance to the contrary it is local or partial, and can always be traced either to the pressure of some temporary calamity, or to some bad law or unwise act of government which admits of being corrected, while the permanent causes all operate in the direction of improvement.

M. Louis Blanc, therefore, while showing himself much more enlightened than the old school of levellers and democrats—inasmuch as he recognizes the connection between low wages and the over-rapid increase of population—appears to have fallen into the same error which was at first committed by Malthus and his followers, that of supposing that because population has a greater power of increase than subsistence, its pressure upon subsistence must be always growing more severe. The difference is that the early Malthusians thought this an irrepressible tendency, while M. Louis Blanc thinks that it can be repressed, but only through a system of Communism. It is a great point gained for truth when it is recognized that the tendency to over-population is a fact which Communism, as well as the existing order of society, would have to deal with. And it is encouraging that this necessity is admitted by the more considerable chiefs of all existing schools of Socialism. Owen and Fourier, as well as M. Louis Blanc, admitted it, and claimed for their respective systems a pre-eminent power of dealing with this difficulty. However this may be, experience shows that in the existing state of society the pressure of population on subsistence, which is the principal cause of low wages, though a great is not an increasing evil; on the contrary, the progress of all that is called civilization has a tendency to diminish it, partly by the more rapid increase of the means of employing and maintaining labor, partly by the increased facilities opened to labor for transporting itself to new countries and unoccupied fields of employment, and partly by a general improvement in the intelligence and prudence of the population. This progress, no doubt, is slow; but it is much that such progress should take place at all, while we are still only in the first stage of that public movement for the education of the whole people which, when more advanced, must add greatly to the force of the two causes of improvement specified above. It is, of course, open to discussion what form of society has the greatest power of dealing successfully with the pressure of population on subsistence, and on this question there is much to be said for Socialism; what was long thought to be its weakest point will, perhaps, prove to be one of its strongest. But it has no just claim to be considered as the sole means of preventing the general and growing degradation of the mass of mankind through the peculiar tendency of poverty to produce over-population. Society as at present constituted is not descending into that abyss, but gradually, though slowly, rising out of it, and this improvement is likely to be progressive if bad laws do not interfere with it.

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LVI. STOCK EXCHANGE CELEBRITIES

HOW WALL STREET BANKERS’ NERVES ARE TRIED.—FINE HUMOR, JOCULAR DISPOSITIONS, AND SCHOLARLY TASTE OF OPERATORS.—GEORGE GOULD AS A FUTURE FINANCIAL POWER.—AMERICAN NOBILITY COMPARED WITH EUROPEAN ARISTOCRACY.—HOW THE IRISH CAN ASSIST TO PURGE GREAT BRITAIN OF HER BILIOUS INCUBUS OF NOBILITY.—THE NATURAL NOBILITY OF OUR OWN COUNTRY, AND THEIR DESTINY.

Among the well-known members of the Stock Exchange not elsewhere mentioned are James D. Smith, who is now in his second term as President, and who is also President of the New York and Exchange clubs and Commodore of the New York Yacht Club, a man of a genial nature and everyone’s friend; Brayton Ives, twice President of the Stock Exchange, the colonel of a cavalry regiment under General Sheridan in the civil war, and later a Brevet-Brigadier General; a graduate of Yale, and a member of the Union League, Century, Athletic and University clubs; Charles Johnes, the King of board room traders, once a clerk for Henry Clews & Co., now worth a million, and a Prince of good fellows, as bright and quick as he is popular; Louis Bell, a daring and successful operator, a son of the well-known Isaac Bell, and who was at one time a clerk with Brown Brothers & Co., the bankers; John Kirkner, another plucky operator, keen in forecasting the market, and tenacious of his opinions, whether contrary to generally accepted views or not; Eugene Bogert, Wm. B. Wadsworth, William Henriques and James Raymond, also successful traders; John Slayback, Edward Brandon, James Mitchell, Vice-Chairman Alexander Henriques, ex-President J. Edward Simmons, Secretary Geo. W. Ely, Donald Mackay, Thomas B. Musgrave, Frank Work, the Wormsers, R. P. Flower, John T. Lester, Frank Savin, Charles Schwartz and A. E. Bateman, are all worthy of special notice. Some of the foregoing have a large following, more particularly the large room traders, like Messrs. Johnes, Bell, Bogert, Kirkner and Wadsworth. There are eleven hundred members of the Stock Exchange, and it is seldom that a black sheep is discovered among them. There are some lambs, perhaps, who receive a spring and fall shearing, but if they have pluck the wool comes back again, and they push up the thorny and brambly path to wealth, leaving, it is true, a little fleece here and there in the struggle, but generally “getting there,” nevertheless. It is, however, a mistake to suppose that all the members of the Stock Exchange are wealthy. They have their ups and downs like everybody else, and some are in very moderate circumstances.

The strain on a Wall Street broker is so great, the tension of the nerves, in one of the most trying vocations known in the business world, is so severe, that joking and in fact boyish pranks constitute a safety valve for the relief of brains that would otherwise become disordered. Without the relief of joking and skylarking, Nature’s own remedy for the burdened mind in such circumstances—many a stock broker would go mad. “There is nothing so good as a laugh,” says the song, and this expresses a profounder truth than is generally suspected. Charles Darwin relaxed the severe mental strain induced by his inquiries into occult questions of biological science by reading the humorous extravagances of Mark Twain, and the greatest thinkers, men who are far out on the cold frontiers of thought, seeking, as intellectual pioneers, the solution of the fundamental problem of existence, are proverbially jocular in their hours of relaxation. Nature herself may be said to laugh, and why not overburdened business men? The pranks at Christmas on the Stock Exchange, the sound of hand organs in the Board Room, the smashing of hats, pushing and jostling, the blowing of tin horns, the waltzes and lanciers, the walking matches, wrestling and sparring—these are only the natural reaction through the safety valve of humor which tend to relieve undue tension and keep the spirits clear and fresh. There is more or less skylarking on all dull days, and the effect is mental invigoration. It is a mistake to suppose that only the younger men participate in these amusements. The older members are the most incorrigible. When a new member, for instance, is receiving his vigorous initiation and being hustled here and there like a chip in raging waters, his silk hat skimming along the floor, the foot ball of hundreds of feet, his collar at right angles with his person and his coat tails flying like a Dutch lugger under full sail, a group of older members may look on with apparent disapproval, but the moment the newcomer is driven in their direction he finds that his last state is worse than the first. The veterans give him a reception that makes him look wilder and gasp more than ever, and he is glad to escape from these gray bearded evil-doers. The horse play is rough but it does no harm, and the new member, after buying a new hat, is ready to “get square” on the next unfortunate wight to be initiated.

As to the Stock Exchange as a great financial institution, none stands higher in the world. Its transactions involve hundreds of millions in a year, and nowhere is there more regard for strict equity in business. Its members are as exemplary a class of business men as can be found anywhere. Its methods are strictly upright, and a black sheep finds no mercy. Wealth will not necessarily procure a membership in this great financial emporium. The applicant must be a person of good repute. It numbers men of great wealth, men of a high order of talent, men of scholarly tastes, connoisseurs in art, students of science, literature and philosophy, and men capable of standing at the helm and giving direction to vast enterprises in the domain of finance and commerce. There is not a more intelligent body of men in the world. The very nature of their business compels them to study great public questions, and many of the members are men of a distinctly statesmanlike caste of mind, of whom the Stock Exchange may well be proud, while they themselves derive no small distinction from being identified with so illustrious and honorable a body.

WASHINGTON E. CONNOR.

Washington E. Connor was born in New York city about 37 years ago. He first appeared in Wall Street as a clerk for Wm. Belden & Co., a firm in which the redoubtable Jim Fisk was once a partner. Black Friday of September, 1869, when a financial hurricane whistled through Wall Street, brought young Connor to the front, and he has ever since remained there. He was long the able lieutenant of Mr. Gould in large speculations. He is a natural leader in speculation—cool, quick and adroit. From time to time he has been a director in the Western Union, Union Pacific, Missouri Pacific, Missouri, Kansas & Texas, Kansas Pacific and Wabash Companies. He was president of the Central Construction Company, which established the lines of the American Union Telegraph Company. He was a director in the famous Credit Mobilier Company, the Texas & Colorado Improvement Company, the Metropolitan and New York Elevated roads and the New Jersey Southern. He is a member of the Union League and the Lotus clubs, and especially enjoys the society of artists, writers and other persons of talent and cultivation. He has a good library, and is of a somewhat studious turn of mind. As a youth he studied at the College of the City of New York.

A FUTURE FINANCIAL POWER.

George J. Gould will be one of the few very rich men in this country, as he will, of course, be his father’s successor. He possesses good abilities, has an attractive presence, and is modest and retiring in his manners. He has, thus far, made an excellent record, and the Stock Exchange was glad to admit him to membership. He is connected with all of his father’s roads, and is gradually relieving him of much of the onerous work connected therewith. If anything should happen to Jay Gould, George Gould would stand in the same financial relation to his affairs that Wm. H. Vanderbilt sustained to his father, the Commodore, and, like him, would be found equal to the new honors and responsibilities devolving upon him. This reasonable expectation should dispel any apprehension of a financial shock in the event of Jay Gould’s demise.

George Gould is bright and agreeable, and a good husband. If Jay Gould has made enemies, that is no reason why his son should not be popular. It is proverbial that the male descendants of a family are more akin to the side of the mother than to that of the father, and as Mrs. Jay Gould has always been recognized as a most exemplary wife and mother, she may rightfully be regarded as the equal of any woman in New York, and one to be respected and honored accordingly by those whom we ought to take as social exemplars. There should be no other standard of social test than that of merit; not judging individuals by what they were, but by what they are to-day; not judging by the ridiculous test of ancestry—a criterion which would upset some of our social demi-gods—but by the real worth of the living man or woman. Suppose, for instance, the young Vanderbilts, who rank high in society, and are splendid specimens of nature’s noblemen, should be measured by the standard of the old Commodore when he was a boatman on Staten Island. Everybody would recognize such a test of fitness as to the last degree absurd. In the United States nature’s nobility is at the front, as against the parchment nobility of England and the Continent. The personelle of the English nobility makes a sorry showing beside that of young George Gould, the young Vanderbilts, and others of our wealthy Americans.

The modern nobility spring from success in business. Peace has its victories in the formation of character greater than those of war; and peace and republicanism will develop the future greatness of the human family, and not pretentious yet effete monarchies, of which mankind is heartily sick. Many of the so-called noblemen of to-day shine only by a faint reflected glimmer from the armor of mediæval ancestors; or their ancestry may be much more recent, and steal slyly off in the gloom of forgotten crimes to the prison or the gallows; or their patent of nobility may be a thing of yesterday, a child’s bauble solemnly displayed by addle-pated dotards, ridiculous even to the unthinking. The English nobility is coming to the auction block. Not a few in former times laid their heads there for treason, but now it is articles of more value, namely, the curious, the antiquities, the bric-a-brac, the works of art, the rare furniture, which comes to the block, and they are purchased by the new nobility raised up by success in finance and commerce. There is very little in Europe which is not obtainable at a price. Titles in England may yet be sold as they have been in Italy. Who cares for a title of Italian or French nobility? To this low estate must English titles come at last. It is marvellous that they have endured so many centuries after the downfall of the feudal system that originally gave them birth.

Why is it that Gladstone has always refused a title?

One reason is that at his birth nature gave him a higher title to nobility than parchment can ever confer.

Another is that he did not care to be ennobled and then wrapped, as a titled mummy, in the sweet-scented cerements of political death, to be buried in that Egyptian tomb of political extinction, the House of Lords. And to-day he is a Colossus among statesmen, whose grand figure will loom up in history as one of the foremost men of the nineteenth century, a Titan dwarfing the proudest of a senile nobility. And yet he is simply a great Commoner.

If the Irish wish to assist nature in purging Great Britain of her bilious incumbus of nobility, they should recognize the fact that ridicule is a good medicine. The Irish are proverbially prolific. Let them make a point of christening the rising generation with titled names. Then there would be myriads bearing the name of Duke O’Reilly, Earl McCarty, Marquis O’Brien, Baron Sullivan, Sir Timothy Finnegan, Lord McSwynny, and so on. The objection to this plan, however, is that it would brand thousands of innocent and helpless children of worthy parents with titles which have become contemptible to all right-thinking persons as the badges of imbecility, mediocrity, or dishonor. This is a rather lengthy digression after beginning with one of the natural nobility which we have in this country, namely, the nobility founded solely on merit, but the case of a young man like George Gould naturally suggests contrasts. He is destined to take a commanding position in the world of finance in future years, and it is gratifying to know that he is a man of high character, excellent capacity, and of great promise. There is usually a disposition to criticise the sons of very wealthy men, due to that envy to which poor human nature is so prone, but the fact in this case is indisputable that young Gould is held in high esteem wherever he is known. He is a graduate of Harvard and Columbia, and a member of the Manhattan and other clubs, and he is, in the business world, where he is most powerful, simply a reserved and quiet associate, always controlling his lines, but never interfering in a strident way with those who are working for them.

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LVII. A LOOK INTO THE FUTURE

WHAT WE ARE.—WHAT WE ARE PREPARING FOR.—WHAT WE ARE DESTINED TO DO AND TO BECOME.—WE ARE ENTERING ON AN ERA OF SEEMING IMPOSSIBILITIES.—YET THE INCONCEIVABLE WILL BE REALIZED.

In reviewing the past, I am struck with the enormous growth of New York as a city, New York as a State, and the United States as a Nation. The fact is that we hustle through the business world so fast (and this is especially applicable to Wall Street), that we do not realize how rapidly we are going. To any one who is familiar with the appearance of the down town or business part of the city, as it was twenty years ago, ten years ago, or even eight years ago, the difference to-day will give some intimation of the changes which are going on around us, and are merely features of development. Why, even ten years ago, the old Equitable Building was a structure to which attention was attracted because of its greatness and its superiority over any other building in New York city—its height, its width, its breadth, its depth, its elevators, its beauty of arrangement inside and its artistic aspect outside. Millions of dollars have been spent in the past few months in making this one building about four times as large as the original structure which brought pride to the hearts of New Yorkers, and surprised and startled their friends from the country. To-day it is one of the greatest buildings on the Island, and even rivals the State Capitol, which is supposed to be the pride of the people of the Empire State. This is only one instance. All along lower Broadway, the great business artery of the country, four-story and five-story buildings have been torn down, and nine-story buildings put up in their place. Four and five buildings have been dug away and a single structure put up in their place, and in some of the buildings—indeed in scores of them—within a few blocks of the Stock Exchange, there are whole communities of people who are performing life’s work in their own good way, rather than interfering with their neighbors or themselves, and who know nothing of what goes on around and about them, and care less. Small armies of retainers and servants, and the most perfect mechanism, are needed to enable these communities to carry on their work with dispatch and convenience. That is to say, where offices are rented in the eighth and ninth stories of a building, the occupants expect to be shot up to them, and down from them, with no trouble to themselves, and no weariness of limbs—and they are. This must be done, too, without loss of time—and it is. All the attendant arrangements must have the elements of luxuriousness and comfort—and they do.

This is a small feature of our development, however. So far as the development of the city is concerned, this appears to be an era of bridges, and Rapid Transit Elevated roads. So far as the development of inter-State communication is concerned this is an era of Express Trains, which, although they have reached a speed of a mile a minute in certain perfected sections of the roads, do not at all indicate what will come to pass in the future. Electricity is, of course, the means for instantaneous communication between separate points known to human intelligence, practically annihilating time between the New World and the Old World, and between separated points in either world, or even in the cities. But electricity does not travel with anything like the speed of light and air. Now, in some few instances, we have utilized compressed air as a means of locomotion. Efforts are being made, but are still in a crude state of development, for the utilization of electricity as a motive power. Suppose we look one handled years ahead, and, calculating upon the factors and experiences of the past one hundred years, imagine what the picture will be of this town as a city, and this people as a nation. I believe that one hundred years hence the era of bridges between this city and those which adjoin it across the rivers, will have passed away, and that instead of one or two or five bridges across the East River, we will have pneumatic tubes at every pier, and I believe the same will be true on either side and at the end of the island. These tubes will spread from New York, as the blood vessels in the human body spread out and are supplied from the heart; for New York is not only the business heart of this country, but it is destined to be, so surely as God permits growth, the business heart of the world, and the money centre of the world. And the arteries from this centre will distribute the blood all over, and in all directions. Through these pneumatic tubes I believe there will be almost instantaneous communication or transportation of people from one point to another. Nor will this be confined to New York city alone. In the near future the Trunk Line Railroad to leading points, such as Washington, Philadelphia, Boston and Chicago, will probably run trains at the rate of one hundred miles an hour, and even this will only be a beginning. To admit of this, steel rails will be required of about double their present weight, and the wheels must be proportionately massive and strong. The risk attendant upon such increased speed will be no greater than the ordinary speed of the present day, say forty miles an hour. But the time will come, during the next five generations, when the pneumatic tubes will extend from here to these central points of the East and the West and the South; and it will be possible for a man to leave New York at seven o’clock and go to Chicago for breakfast, transact his business and return to New York for lunch or business appointment by twelve o’clock noon of the same day. Of course, one of the problems to be solved in connection with this sort of meteoric speed will be to supply air for breathing purposes; and the same compressed air which will shoot the carriage through the tube, will be in some form utilized for the purpose. This, however, only for a period; for I think the time must come when electricity will be the one motive power of this country and of the world, so far as the transportation of people and property is concerned. Time is money, and the American idea is to save time. We now waste little enough of it in all conscience. The greatest business of the world, that of the New York Stock Exchange, is already compressed into five hours’ time; and yet it is a business in which the most trivial error or accident because of haste might cause losses of millions. The obliteration of time is a necessity of American enterprise. When Electricity is made the general propelling power, it is likely that a stationary engine will be located at Niagara Falls, and the force and power of those waters utilized to supply all the needed propelling power for this State, if not even beyond, to remote and far-off sections of our country. I heard it once said by an intelligent authority, that it had been predicted that instead of the coal mines of this country sending their products hundreds and thousands of miles away, for transportation-power, at a great expense, that a stationary engine would be located at the mouth of the mine, and the power derived from the coal transmitted therefrom over an electric wire. This would, indeed, be a great transformation, and a great improvement and a great economy. But a greater change, one quite as likely in the future, and perhaps possible within the lifetime of some of our children, will be the abolition of railroads by the pneumatic tube process, and the transmission of power as I have suggested.

A hundred years hence the people who then occupy our places will look upon us as primitive and crude, or, in accordance with the Darwinian theory, as the monkeys from which their perfected race has been developed. In fact, there is a good deal of Darwinism in our development, in a business sense, if not in a human sense. As the surroundings grow, so does the intellect of the human race, and there is no telling what we may do or what we may become—provided we live long enough. We have plenty of room, plenty of power, plenty of natural ability, and we make our own opportunities; all we lack in this world is time and perfect science, and if time is given us we may be able to show what giants of enterprise a free people may become; that, as the first choice of God’s creation, we lack nothing.

We are proud now of our Brooklyn Bridge. But when the Bridge was opened, and the foot passenger rate was made one cent per person, and the car rates three cents, it was a grave question of consideration for the men upon whom devolved the responsibility of the conduct of the Bridge, whether or not the cities would supply passengers enough to make the Bridge self-supporting. It was not expected that they could or would. But to-day, the rate for foot passengers is one-fifth of one cent, and the car passengers are transported for two and one-half cents. The time is not far distant when these rates will be made much less, if not abolished entirely. They certainly will be abolished so far as the promenade is concerned; and, at the rate of one cent per passenger now, the Bridge would earn dividends for each of the two cities which issued bonds for its construction; while the taxable value of the property in both has been so largely enhanced, that the Bridge has paid for itself already, and, yet it has been open less than five years. More than a year ago the experience of the Directors was that the facilities of this Bridge were perfectly inadequate; and, while everything has been done to increase them and extensions and improvements have been made, the Bridge is still too slow, and its power facilities too limited for the proper accommodation of the people who cross it from city to city.

This is only one evidence of the growth of New York; it is merely an incident. There is another incident, which, in connection with what I have said about the difference in construction of buildings during the past few years, I think I will mention right here. The city of New York donated to the Government the site in the City Hall Park where the New York post-office now stands. It was the original intention that the building should be only three stories in height. The capping was already on, and the roof was in the primitive stages of construction, when, walking down Broadway one morning, as I passed the structure, the thought occurred to me that, for a building of its size and heavy granite exterior, its height was disproportionate, and gave it a dwarfed appearance, and a lack of symmetry. Besides that, whatever space could be added to it by the increase in its height, even though the additional room might be a surplus for the time being, the time would soon come when even more would be needed. I wrote to Architect Mullet, calling his attention to these facts, and insisting that, in confining the building to three stories, he was making a mistake; that it was not in keeping with the magnificence of the structure; that it should have one or more additional stories, with a mansard addition besides, and that the business experience of the past most certainly demonstrated that the room would soon be needed by the Government for the proper conduct of its affairs in this the greatest business center of the country. Within a week Mr. Mullet called to see me, and I convinced him that I was correct in my criticism and predictions. He said, in reply: “But there is no appropriation; the money appropriated is exhausted, and the building cannot be enlarged.” I asked him: “Well, what is necessary to be done in the matter? Suppose I write to Mr. Boutwell, the Secretary of the Treasury, about it, and urge that the building be enlarged as I suggest.” Mr. Mullet approved of the suggestion, and I added: “I will write to several members of Congress to the same effect.” This I did, and it was not long afterward that Mr. Mullet informed me that my efforts in the matter had been successful, and he had received orders to go ahead and make the building four stories in height, with a mansard roof story besides. This additional room was not needed at the time, but it has already become inadequate for the accommodation of the Government postal employees, and a few others who have been granted quarters there. And now there is a proposition under consideration for the construction of an additional Government building in this city which will cover two blocks of ground or more, and in which may be centered the various departments of Government, which are now scattered in a half dozen or more places. Is not this evidence of growth? Is not this evidence of development which justifies what has been said as to our prospective growth? Yet this is merely incidental to the strides of progress going on; and, if we are walking at this pace, will not our children’s children be racing at the different paces suggested by some of the predictions I have made?

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