LVIII. JAY GOULD…

LVIII. JAY GOULD

HIS BIRTH AND EARLY EDUCATION.—CLERK IN A COUNTRY STORE.—HE INVENTS A MOUSE TRAP.—BECOMES A CIVIL ENGINEER AND SURVEYS DELAWARE COUNTY.—WRITES A BOOK AND SELLS IT.—GETS A PARTNERSHIP IN A PENNSYLVANIA TANNERY AND SOON BUYS HIS PARTNER OUT.—HE COMES TO NEW YORK TO SELL HIS LEATHER, FALLS IN LOVE WITH A LEATHER MERCHANT’S DAUGHTER AND MARRIES HER.—SETTLES IN THE METROPOLIS AND BEGINS TO DEAL IN RAILROADS.—BUYS A BANKRUPT ROAD FROM HIS FATHER-IN-LAW, REORGANIZES IT AND SELLS IT AT A CONSIDERABLE PROFIT.—HENCEFORTH HE MAKES HIS MONEY DEALING IN RAILROADS.—HIS METHOD OF BUYING, REORGANIZING AND SELLING OUT AT A LARGE PROFIT.—HOW HE MANAGED ERIE IN CONNECTION WITH FISK AND DREW.—HIS OPERATIONS ON BLACK FRIDAY.—CHECKMATED BY COMMODORE VANDERBILT AND OBLIGED TO SETTLE.—HE MAKES MILLIONS OUT OF WABASH AND KANSAS & TEXAS.—HIS VENTURE IN UNION PACIFIC.—HIS CONSTRUCTION COMPANIES.—ORGANIZATION OF AMERICAN UNION TELEGRAPH, AND HIS METHOD OF ABSORBING AND GETTING CONTROL OF WESTERN UNION.—THE STRIKE OF THE TELEGRAPHERS AND HIS GREAT ENCOUNTER WITH THE KNIGHTS OF LABOR AND TRADES UNIONISTS.—GOULD’S FIRST YACHTING EXPEDITION.—AN EXCEEDINGLY HUMOROUS STORY OF HIS EARLY EXPERIENCE ON THE WATER.—HIS STATUS AS A FACTOR IN RAILROAD MANAGEMENT.—HIS ACQUISITION OF BALTIMORE & OHIO TELEGRAPH, &C.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“The Knights of Labor have undertaken to test, upon a large scale, the application of compulsion as a means of enforcing their now enlarged demands. This has necessitated a crisis of a very serious kind. The point to be determined has been, whether capital or labor shall in future determine the terms upon which the invested resources of the nation are to be employed. To the employer, it is a question whether his individual rights as to the control of his property shall be so far overborne, as to not only deprive him of his freedom, but also expose him to interferences seriously impairing the value of his capital. To the employes, it is a question whether, by the force of coercion, they can wrest to their own profit powers and control which, in every civilized community, are secured as the most sacred and inalienable rights of the employer. This issue is so absolutely revolutionary of the normal relations between capital and labor, that it has naturally produced a partial paralysis of business, especially among industries whose operations involve contracts extending into the future. There has been at no time any serious apprehension that such an utterly anarchial movement could succeed, so long as American citizens have a clear perception of their rights and their true interests; but it has been distinctly perceived that this war could not fail to create a divided if not a hostile feeling between the two great classes of society; that it must hold in check, not only a large extent of ordinary business operations but also the undertaking of those new enterprises which contribute to our national progress, and that the commercial markets must be subjected to serious embarrassments. * * * * * From the nature of the case, however, this labor disease must soon end one way or another; and there is not much difficulty in foreseeing what its termination will be. The demands of the Knights and their sympathizers, whether openly expressed or temporarily concealed, are so utterly revolutionary of the inalienable rights of the citizen, and so completely subversive of social order, that the whole community has come to a firm conclusion that these pretensions must be resisted to the last extremity of endurance and authority.”

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

[From the Herald, May 18, 1887.]

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

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

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

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

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

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

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

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

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

Q. Where? A. In my possession.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“No, my interests had changed.”

“Did you try to stop it?”

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

“Who?”

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

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

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

“Where is that paper?”

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

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

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

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

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

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

“How was that?”

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

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

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

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

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

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

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

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

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

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

“Did you consider your duty to the Government?”

“I had considered it.”

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

“It would have been wiped out.”

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

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

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

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

“What did it mean?”

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

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

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

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

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

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

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

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

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

“I don’t think so.”

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

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

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

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

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

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

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

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

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

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

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

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

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

“Yes. And I paid my own hotel bills.”

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

“Judge Usher and Mr. Poppleton.”

“Who represented the Kansas Pacific?”

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

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

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

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

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

“Where could we find records of such transactions?”

“I don’t think such transactions exist.”

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

“No, sir.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JAY GOULD AND HIS SYSTEM.

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

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

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

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

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

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

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

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

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

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

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

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

A REMINISCENCE OF KANSAS PACIFIC.

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

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

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

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

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

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

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

GOULD’S FIRST YACHTING EXPERIENCE.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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LIX. MEN OF MARK

CYRUS W. FIELD—HON. STEPHEN V. WHITE—AUSTIN CORBIN—PHILIP D. ARMOUR—HON. LEVI P. MORTON—JOHN A. STEWART—ANTHONY J. DREXEL—THE JEROME BROTHERS—ADDISON CAMMACK—RUSSELL SAGE—CHAUNCEY M. DEPEW—JAMES M. BROWN—STEDMAN THE POET—VICTOR H. NEWCOMBE—MOSES TAYLOR—FORMER GIANTS OF THE STREET—HENRY KEEP—ANTHONY W. MORSE.

CYRUS W. FIELD.

Cyrus W. Field has been termed a locomotive in trousers. The simile illustrates the indefatigable energy of the man. His indomitable resolution and his energy of character have placed him high among the distinguished men of the age. He was born at Stockbridge, Mass., in 1819. His father was a clergyman. At fifteen years of age, Cyrus W. Field came to New York with a trifling sum in his pocket. For three years he was in the employ of A. T. Stewart, the dry goods merchant, and then went to Lee, Mass., to work in his brother’s paper mill. Two years later he became a partner in the paper firm of E. Root & Co., in Maiden Lane, but the co-partnership was not successful. Later on he again went into the paper business, and by 1853 had acquired a competence, whereupon he partially withdrew from mercantile pursuits, and his health having failed he took a trip to South America. He was about to withdraw entirely from business, when he was induced, with considerable difficulty, to look into a project for laying a telegraphic cable to England. Frederick N. Gisbourne had interested Matthew D. Field, a civil engineer, and a brother of Cyrus W. Field, in a project for establishing a telegraph line between New York and St. John’s, Newfoundland, partly on poles, partly under ground, and partly under water. At St. John’s, the fastest steamers ever built were to sail for Ireland, and the time between the two countries was to be shortened to six days or less. A company had attempted to carry out this project, and had become bankrupt. The idea was un-American; it was unsatisfactory; much quicker communication was needed. It was not till Mr. Field conceived the idea of laying a cable direct from Newfoundland to Ireland, that he became really interested in the enterprise. He was assured by high scientific authority that the idea could be carried out. In March, 1854, Mr. Field went to St. John’s, Newfoundland, and obtained from the legislature a charter, granting an exclusive right for fifty years, to establish a telegraph line from the Continent of America to Newfoundland and thence to Europe. Then, with considerable difficulty, he obtained in New York subscriptions amounting to $1,500,000, which he thought would be sufficient. The line really cost $1,834,500, being more than 2,600 miles long. His first attempt failed in 1857. He succeeded in the following year, and then the cable became silent, and the incredulous public thought that this would end all attempts to do something that seemed miraculous. For seven years no attempt was made to lay a cable, as the Civil War intervened, but in 1865 Mr. Field again took up the enterprise, in which he had never lost faith. By this time sub-marine telegraphy had been greatly improved, a better cable was constructed, and a better machine for laying it was invented. The famous steamer Great Eastern took the cable, but after going some 1,200 miles, the great vessel gave a lurch that broke the cable and an attempt to grapple it was unsuccessful. In 1866, however, a cable was successfully laid. A private citizen seldom receives such honors as was showered on Mr. Field, in 1866, when Europe and America realized that largely through the exertions of one man, they were joined by the Atlantic cable. He had pushed a vast project to a successful consummation in spite of incredulity, ridicule, indifference and strenuous opposition.

Peter the Hermit did not preach the crusade with more fervor and enthusiasm than this priest of commerce, so to speak, advocated the great work with which history will always link his name. If any one had, a few centuries ago, ventured to predict that the day would come when there would be six or seven cable telegraphs stretched along the ocean bed between America and Europe—along dim prehistoric valleys, four miles under water and over great sub-marine mountains—by means of which a message could be sent nearly three thousand miles and an answer received in thirty seconds; he would have been in danger of incarceration as a lunatic, or even of death on the scaffold or at the stake. This daring utilitarian age, however, has grown accustomed to startling exhibitions of human ingenuity. Mr. Field owns considerable Western Union stock, and is interested in a number of railroads, including the Manhattan Elevated. He owns one-fifth of the stock of the Acadia Coal Co., is a special partner in the grain firm of Field, Lindley & Co., and owns the Mail and Express, one of the great papers of the metropolis. He has a house in Gramercy Park and a fine mansion at Irvington on an estate of about 500 acres. He is a large owner of real estate in that very pleasant section, owning some 56 houses besides considerable land. He is fully six feet in height, of light complexion, with penetrating, bluish-gray eyes, which peer sharply into those of an interlocutor. The nose is prominent, the brows knit with years of thought, the mouth and jaw indicate great decision of character. He is a man of courtly manners and exceptional abilities.

HON. STEPHEN V. WHITE.

Hon. Stephen V. White is a short, compactly built, dark-complexioned man of 54. In manners he is courteous and unassuming; in business methods he is quick and straightforward. He is a Director in the Western Union and the Lackawanna road. He is a bold, dashing operator in stocks, and in Wall Street has met with considerable success. One of his greatest favorites is Lackawanna. He expects to see it some day go to 200. He has several times badly squeezed the shorts in that stock, and, now that he has practically demonstrated what they ought to have known before, namely, that the stock can easily be cornered, the bears are apt to fight shy of it. He has a large clientele, and, being a natural leader, he has plenty of followers in his speculative campaigns. He was born in North Carolina. He was graduated from Knox College at Galesburg, Illinois. He studied law in the office of the Hon. John J. Kasson, afterward United States Minister to Germany. He drifted to St. Louis, and there became a reporter for the Missouri Democrat. He went to Des Moines, practised law for nine years, and was elected a Judge. He came to New York, and for a time practised law, but soon became a stock broker as well. He still occasionally appears as counsel in the Federal Courts, and sometimes in the Supreme Court of the United States. He is a ready and forcible speaker, full of vim and fire. He was a warm personal friend of the late Henry Ward Beecher, the grand old Chrysostom of the nineteenth century, who has left the world brighter for his memory and darker for his absence. In the frank, keen, practical financier and lawyer, and the great, warm hearted preacher, glowing with fervid idealism and generous enthusiasm and high aspirations for the human race, there were kindred qualities that made them friends. Mr. White, in 1886, was elected to Congress from Brooklyn, where he resides. He is scholarly in his tastes, well versed in the classics, and is especially fond of astronomy, for the study of which he has a fine observatory in his palatial home. He is popular in Wall Street.

AUSTIN CORBIN.

Within a year Austin Corbin has become a prominent figure in the financial world, winning wide business celebrity by his identification with the reorganization of the Reading Railroad. He is by nature the reverse of an iconoclast, namely, a builder up. He would construct rather than destroy. He would save a property if it were at all possible, and in pulling that poor, tired, financial pilgrim Reading out of the slough of despond, and in directing its way toward a primrose path of prosperity, he is engaged in a congenial task. He is about 58 years of age, and was born in Newport, New Hampshire. He studied law, and was graduated from the Harvard Law School. For a time he practised law in his native town as a partner of Ex-Governor Metcalf, of New Hampshire, but in 1851 he went to Davenport, Iowa. There he really organized the first national bank under the new system, which was to prove of such incalculable financial benefit to the nation. Mr. Corbin made the first application under the new law, but it happened to be faulty in some minor technicalities, and before their trivialities could be corrected four other national banks were organized, so that his bank became number five under the new system. He came to New York in 1865, and established a banking-house here. He is President of the Reading, Long Island, Indiana, Bloomington & Western, Elmira, Cortland & Northern, and Manhattan Beach Railroads. He is a member of the Union League, Manhattan and Saturday Night Clubs of New York, the Somerset Club of Boston, and the Conservative Club of London. He is a man of strict probity, genial in his manners, and deservedly held in high esteem.

PHILIP D. ARMOUR.

Philip D. Armour was born in a little village near Watertown in the interior of New York State, in 1832. He is powerfully built, with broad shoulders, a large head and firm, square features and light gray eyes, that never seem excited or disturbed. His manners are quiet, composed and courteous. In 1849, leaving his native village, he went to California. He crossed the plains with a six-mule team which he drove himself. He worked for a few years in the gold fields, accumulated a little capital, and in 1855 went to Milwaukee and engaged in the grain and warehouse business. He prospered moderately but steadily. Then he thought of going into the lumber business, but bought an interest in the pork packing establishment of Layton & Plankington, the former retiring. At this time he was worth half a million. He soon increased this three-fold. In the war, provisions were very high, but when Gen. Grant was closing in on the Confederacy for the final struggle that could only end in the triumph of the North, Mr. Armour saw that prices must come down with the Confederacy. He came at once to New York and began to sell pork short. He began to sell at $40 a barrel. He covered at $18 and netted, it is said, nearly two million dollars. He now enlarged his business, established new packing houses in Chicago and Kansas City as well as agencies all over the world. He has sold sixty million dollars’ worth of food products in a year. He has five thousand names on his pay roll. He has cornered pork three times within recent years, and in 1880 made, it is said, three millions in punishing bears who tried to sell the market down. A campaign against the bears in pork or meats he calls protecting his cellars. Those cellars are well protected. No bearish Ali Baba has the pass-word to go in and plunder them, and the number of cinnamons and grizzlies, big and little, who have licked their paws in rueful remembrance of the attempt are not a few. He has made millions in successful grain speculations. He invested four millions in St. Paul stock, buying it outright. He is now one of the recognized financial leaders of the country, as aggressive as a Wellington at the proper time and cautious as a Fabius when caution is the watchword of wisdom. He lives in a plain house on Prairie Avenue in Chicago, and is himself a man devoid of ostentation. He works from 7 A. M. till 6 P. M. His fortune is estimated at fifteen millions of dollars.

Hon. Levi P. Morton received his business training in the dry goods trade. Then he became a banker. He has a national reputation as a financier. He is shrewd, genial and successful. President Garfield made him Minister to France. He had previously done good service as a member of Congress. He is now in his sixty-third year. He is a lineal descendant of George Morton, one of the Pilgrim Fathers who came to this country in 1623. Mr. Morton was born in the State of New Hampshire. At 20 he became a clerk in a country store. He had to shift for himself. Necessity is the stimulus that men of real ability require. He stayed five years in the obscure New Hampshire village and then went to Boston, where he ultimately engaged in business. But New York attracted him. He embarked in the dry goods business here and went into banking afterwards, and soon laid the broad foundations for the successful firms of Morton, Bliss & Co., of New York, and Morton, Rose & Co., of London. His Congressional and diplomatic laurels followed. He filled the French Mission with great satisfaction to the French people as well as those of the American traveling public, as he was a free and generous entertainer. His large fortune has been amassed since he came to Wall Street. He has a fine villa at Newport and also one on the Hudson.

JOHN A. STEWART.

John A. Stewart is President of the United States Trust Company, one of the largest banking and trust corporations in America. Its deposits are over forty millions of dollars. Its great success is largely due to the able management of President Stewart, who has in fact shown marvellous ability in the management of large financial interests. Mr. Stewart during the war period was urged by Secretary Chase to became Sub-Treasurer of the United States in this city, and he finally consented to take the position, although at a great personal sacrifice, being actuated solely by a patriotic spirit. He is one of the financial lights of the metropolis, and is respected for his financial acumen and his sterling qualities as a man.

ANTHONY J. DREXEL.

Anthony J. Drexel is the head of the house of Drexel & Co. in Philadelphia and Drexel, Morgan & Co. in New York. The house was founded by Joseph Drexel, who emigrated to this country from Germany early in the present century, and began business in Philadelphia in a small way as a sort of exchange broker. When the California gold fever broke out he made connections with parties in San Francisco and received large amounts of gold. In these transactions he got his first great start. The returns from the exchange were large. As his means increased he gradually extended his business, and finally, by thrift and diligent attention to business, he accumulated quite a snug fortune. In the end he built up a successful banking business, in which his sons became interested, and at his death inherited his wealth and the business. The elder brother died a few years ago, leaving ten million dollars to his family and to various charities. Anthony Drexel, the present head of this signally successful firm, is 55 years of age, and is a man of excellent business capacity. He is one of the successful business men of the United States.

THE JEROME BROTHERS.

Addison Jerome, who died some years ago, was a gigantic operator in his day, and displayed great ability in the conduct of speculative campaigns, but he went beyond his depth and disaster followed. Like many others in Wall Street, he gained his business education in the dry goods trade. He met with one of his greatest reverses in his attempt to corner Lake Shore. Others followed, one after another, and the end was financial shipwreck.

At this time his brother, Leonard W. Jerome, was one of the foremost men of Wall Street and was a partner of Wm. R. Travers, the firm name being Travers & Jerome. Leonard Jerome is splendidly built and nearly six feet in height. His ancestors were Huguenots. He was born in Pompey, Onondaga county, New York. His grandfather was a Presbyterian clergyman. At 14 Leonard was sent to Princeton College and was graduated with credit. He then spent three years reading law in Albany, and at 22 was admitted to the bar. He practiced law with his uncle, Judge Jerome, of Rochester. Afterward with his brother Lawrence he established a newspaper, called the Rochester Native American, and he made a good editor. President Filmore appointed him Consul at Trieste. He came to Wall Street in 1854. His first operation was in putting up all he could spare, about two thousand dollars, as margin on five hundred shares of Cleveland and Toledo stock, one of the old-time speculative favorites. He bought it on a sure point from the treasurer of the road. He bought. The treasurer sold. Result: The stock fell, and Jerome lost all his spare funds. He was not discouraged. He studied Wall Street tactics, and in the end he made the treasurer pay dearly for his former success in spearing a lamb. He invested $500 in buying calls and made $5,000 within thirty days. He became a partner of William R. Travers. They were very successful on the short side of the market. He was to meet with some reverses, however. In 1862 the agent of the State of Indiana, in a manner that would have deceived the very elect, through an unauthorized issue of Indiana 5 per cent. bonds, swindled him out of $600,000 by the hypothecation of the bonds. The State repudiated the acts of its agent, and as an individual is not allowed to sue a State, Mr. Jerome was robbed of the money. Still another reverse was met in Pacific Mail. When the capital stock was increased to $20,000,000 he took 50,000 shares at 200. The price advanced soon thereafter to 243, and he sold a part of his stock, but kept a large block of it on account of his faith in its value. At the next quarterly meeting of the Board of Directors, however, it was decided by a majority of one, five directors being present, to reduce the dividend from five to three per cent. The street was thunderstruck at the audacity of this move; the market broke, and in two hours Mr. Jerome’s stock depreciated $800,000. Still he made large gains in Pacific Mail as well as big losses. He left Wall Street years ago with an ample fortune. He went there with next to nothing, and in spite of reverses, came out a substantial victor in the financial tourney. In the war he was always enthusiastic in his devotion to the cause of the North, and subscribed with princely liberality to aid patriotic movements. When the first great Union meeting was held at the Academy of Music he paid all the expenses. He was Treasurer of the Union Defense Committee, and he likewise paid all of its incidental expenses. He was the most liberal in his contributions and the most devoted in his allegiance to the Government in its darkest and gloomiest hours. He was the founder of the fund for the benefit of the families of those who were killed or wounded in the New York riots of 1863, growing out of the draft. His checks for $10,000 and more to aid the Union arms were frequent; he contributed $35,000 toward the construction of the “Meteor,” a war vessel built to destroy the famous “Alabama” of the Confederacy. During the war Mr. Jerome purchased and held for some years the largest interest in the New York Times, then edited by the great war editor, Henry J. Raymond, an old friend of Mr. Jerome’s. Like Mr. Travers, his early partner, Mr. Jerome has done much to encourage all out-of-door sports, especially on the race course. He established the Jerome Park Jockey Club, and became half owner in a famous speed horse which cost $40,000. No one has done more to improve the breed of blooded horses in this country than Mr. Jerome. He has also been prominent in yachting. He first owned the “Undine”; then, with Commodore McVickar, he bought the “Restless,” and still later, with Commodore James Gordon Bennett, the “Dauntless.” He paid $125,000 for the steam yacht “Clara Clarita,” which proved a failure, and since then he has not been so enthusiastic a yachtsman as formerly. He made $45,000 on the great ocean yacht race of 1866. He had much to do with introducing the taste for four-in-hands in this country. He has been a liberal patron of American art in all its branches. He paid for the musical education of a number of well-known singers, whose voices were trained in the best Italian schools. His social position has always been high, but it has been still further promoted by the marriages of his beautiful daughters. The elder, Clara, is married to Mr. Morton Frewen, a member of an old English family which long represented their shire in Parliament. Another, Leoni, married Mr. John Leslie of the Guards, and son and heir of Sir John Leslie; while Jennie married Lord Randolph Churchill, the notable but erratic statesman. Leonard W. Jerome, whose history I have followed somewhat minutely, is one of the best-hearted men that Wall Street ever knew. The more he made the more he gave. He was liberal to a fault. He was never happy but when making others happy. He was a Sir Philip Sidney of chivalry and peerless generosity—a man in whom the warmest and most ingratiating traits of human nature were as natural as the winning sunniness of his disposition and the courage which once made him one of the great gladiators in the arena of Wall Street. Both he and his brother Lawrence are old members of the Union Club. Lawrence was formerly a stock broker. He had his ups and downs, and withdrew from Wall Street several years ago. He sold his seat in the Stock Exchange and placed the proceeds, about $30,000, in an annuity which insures him about $4,000 a year for the remainder of his life. This, with his other income, places him in easy circumstances and preserves his naturally cheerful disposition, rendering him one of the most companionable men in the city. He is about five feet ten inches in height, stout and of light complexion. Since the death of his old friend, Wm. R. Travers, to whom he was as Damon to Pythias, he stands pre-eminent among the wits of New York. He is the prince of metropolitan wags and wits. His friends are legion. The great, genial, warm hearted, boyish Larry Jerome, as his friends love to call him, is literally a man without an enemy, and long may he live to brighten society with his happy exuberance of spirits, his scintillating humor and his brilliant wit.

ADDISON CAMMACK.

Addison Cammack is about sixty years of age and was born in Hopkinsville, Kentucky. He was reared in comfortable but humble circumstances. Early in life he began his business career as a clerk in the house of J. P. Whitney & Co., then the largest ship brokers in New Orleans. He showed decided business talent, and ultimately became a partner in the firm. In the early part of the Civil War he was located in Havana, but in 1863 he went to London and and engaged in business and speculation there. He returned to this country in two years, and in 1866 embarked in the wholesale liquor business in New York with J. W. George, the firm being J. W. George & Co. In about two years the firm was dissolved and Mr. Cammack became a member of the Stock Exchange, having previously formed a co-partnership with the late Chas. J. Osborn, under the name of Osborn & Cammack. This co-partnership, after some years of great prosperity, was dissolved, and since then Mr. Cammack has been an operator on his own account. In this capacity he has become widely known. He is a shrewd operator, and quickly changes his mind if he thinks he has been wrong. He jumps from one side of the market to the other with the greatest celerity when occasion demands it, but in the main he seems most at home on the bear side. In bear operations he has met with some reverses, while in this direction he has also made millions. He seems to place great faith in Benner’s book of “Financial Prophecies.” At times he operates on a very large scale, and he has been known to cover fifty thousand shares of stock in a single day. He is tall, well built, and has strong features, with keen, gray eyes. In manners he is very democratic and candid, and occasionally somewhat bluff; but he is a man of generous impulses, very charitable, and has plenty of friends, both for his financial acumen and for his qualities as a man who never deserts his friends, and who has not a few of the characteristics of mediæval chivalry joined to the shrewd practicality of a great stock operator of this practical epoch.

RUSSELL SAGE.

Russell Sage is one of the best known of Wall Street celebrities. He was born seventy years ago in Oneida county, of this State. As a boy, he was employed in a country general store, beginning life in this fashion at 14. His business aptitude early manifested itself, and at 20 he bought out his employer in Troy, to which he had in the meantime removed. He became later on a member of the Troy Board of Aldermen, served seven years, and was then elected Treasurer. Still later he was elected to Congress, serving from 1853 to 1857. He started the project of purchasing Mount Vernon and making it a national domain, and took great pride in the success which attended his efforts in this direction. While in Congress he became connected with the Pacific Mail Steamship Company, and later Vice-President of the Chicago, Milwaukee & St. Paul, also for a time its acting president. He is now a director in the Gould telegraph and railroad systems, is interested in a number of trust companies and is also said to own a large amount of stock in the Importers’ and Traders’ Bank. He is the king of puts and calls. He has usually been successful in writing privileges, but in the summer of 1884, when the market broke so badly as to produce a panic, Mr. Sage met with a decided reverse. He had sold a large number of puts, and the loss was several million dollars. He is known as, in one sense, the largest capitalist of Wall Street, inasmuch as he keeps the largest cash balance. It runs far up in the millions, giving him quick resources with which to carry out any project that may seem desirable. He is quiet and simple in his habits, making no display. He lives on Fifth Avenue, and also has a place at Babylon, Long Island. He is worth about twenty millions. He is tall, light complexioned, with keen, gray eyes, and in Wall Street might be taken for a country gentleman seeing the sights.

CHAUNCEY M. DEPEW.

Chauncey M. Depew owes his rise to native abilities and the friendship of the Vanderbilt family, which he has thoroughly merited. He made the acquaintance of Wm. H. Vanderbilt about the year 1866 and became the attorney of the New York and Harlem Railroad. On the union of the New York Central and Harlem roads, in 1869, he was appointed attorney of the consolidated company, and in 1875 he was made general counsel. A few years previous he had been elected director of the New York Central road, and subsequently became a director in the Chicago and Northwestern, Michigan Central, St. Paul and Omaha, the Lake Shore and the Nickel Plate. In 1882 he was elected second vice-president of the New York Central, and in 1885 succeeded Mr. Rutter as president of that great railroad. He was born in Peekskill in 1834, and comes of an old French Huguenot family. He still owns the homestead purchased two hundred years ago by his ancestors. His mother is a descendant of the brother of Roger Sherman, of revolutionary fame. Mr. Depew was graduated from Yale College in 1856, and three years later was admitted to the bar. In 1862 he was elected to the New York Assembly and acted as Chairman of the Committee of Ways and Means and part of the time as Speaker. In 1863, the year after Governor Seymour’s election, Mr. Depew was a candidate for Secretary of State on the Republican ticket, overcame the Democratic ascendancy, and was elected by about thirty thousand votes. He declined re-election and was appointed Minister to Japan by Secretary Seward. He held the post several years, and resigned it to resume business. His commission as Collector of the Port of New York was once made out by President Johnson, but in consequence of Senator E. D. Morgan’s refusal to sustain Mr. Johnson’s veto of the Civil Rights bill the President never sent the nomination to the Senate, but tore it up in a rage. In 1872 Mr. Depew was a candidate for Lieutenant-Governor of New York on the Liberal-Republican ticket, and was defeated. Two years later the Legislature elected him Regent of the State University. He served one year as one of the Commissioners to build the new Capitol at Albany. In the memorable contest for the United States Senatorship in 1881, Mr. Depew for eighty-two days received the votes of three-fourths of the Republican members, retiring then to ensure the election of Warner Miller. Mr. Depew is President of the Union League and a member of many other clubs and societies, and is very popular wherever he is known. He is one of the wittiest and readiest after-dinner speakers in this country, and when occasion requires, rises to the height of a born orator. His tastes seem to be those of a statesman and a scholar rather than those of a financier in the ordinary acceptation of the term, but his conservative and able administration of his office as President of one of the greatest trunk lines in this country, reveals a thorough apprehension of railroad problems and a natural capacity for whatever duties may be imposed upon him. His great versatility is exemplified by the fact that he has succeeded in law, politics and railroad management.

JAMES M. BROWN.

James M. Brown, the banker, was born in New York city, and is about 65 years of age. He is ex-President of the Chamber of Commerce, and is held in general esteem and respect. The house of Brown Bros. & Co., in which he is now the senior member, has an interesting history. Early in the present century Alexander Brown came from Belfast, Ireland, to this country, and settled in Baltimore, where he engaged in the dry goods business under the firm name of Alexander Brown & Sons. Subsequently the firm comprised five sons of Alexander Brown. The business of the dry goods firm prospered, and branch houses were established in Philadelphia, New York and Liverpool, a son going to each of these cities to represent the parent house in Baltimore. In New York and Philadelphia the style of the firm was Brown Brothers & Co., as the father had died in the meantime. In Liverpool they associated with them Mr. Shipley, and the firm there was Brown, Shipley & Co. Another house was established in London later on under the same title as the Liverpool firm. All the houses were still engaged in the dry goods trade. Here in New York, in which we are more particularly interested, the firm made advances on cotton, and received linens from abroad, and also orders to buy cotton for Liverpool. Gradually the house began to make larger advances to planters and others engaged in the cotton trade, and finally the banking business became so large as to swallow up the dry goods trade and the house thereupon dropped merchandise and became bankers. Later on a branch house was established in Boston, and at times it has had branch houses in New Orleans, Mobile, Galveston, Savannah and Charleston conducted under the name of the parent firm. At present it has houses in London, Liverpool, New York, Philadelphia, Boston, Baltimore and New Orleans. All of the original Brown brothers are dead. James M. Brown is a near relative of James Brown, whose picture appears, and who was the original head of the house in New York. James M. Brown did not enter the house in his youth. He was for years the senior member of the dry goods house of Brown, Seaver & Dunbar. On the dissolution of this firm James M. Brown became a partner in the house of which, by reason of his years and large experience, he may be considered the head. The other partners here are Howard Potter, John Crosby Brown, Charles D. Dickey, Waldron Post Brown, a son of James M. Brown, and W. F. Halsey. The New York partners are interested in the branch houses in this country and abroad. James M. Brown was a member of the famous Committee of Seventy which contributed to the downfall of the Tweed Ring in this city. He is of the medium height and florid complexion, well preserved, genial in manners, and is a man of high character.

STEDMAN, THE POET AND FINANCIER.

A small, slightly built gentleman with iron gray side whiskers, a refined face and expressive gray eyes, is one of the notable figures in Wall Street. It is Edmund Clarence Stedman, the banker poet. He was born in a small town in Connecticut in 1833, studied at Yale, entered journalism in 1852, came to New York in 1855, and soon began to contribute poems to the New York Tribune. He became a war correspondent for the World on the outbreak of the rebellion, and continued in this capacity till 1863. In that year he became private secretary to Attorney-General Bates at Washington. Meantime he studied law, and contributed to the Atlantic Monthly and other leading magazines. As a poet, he holds high rank; as a writer of polished, graceful prose he has few equals; as a thorough gentleman and a scrupulous man of business he is held in the highest respect. Through the imprudence of another he has within a few years met with some financial reverses, which he met courageously and honorably, and he is now well on his way towards his former position of financial ease. Although a poet, he understands Wall Street business thoroughly, and is considered a keen judge of financial opportunities.

Victor H. Newcombe was born in Louisville, Kentucky, about 48 years ago. His father was President of the Louisville & Nashville Railroad, and the son succeeded the father in that position. The elder Newcombe was a financial power in Kentucky. He was sagacious and far-seeing. In every respect, he was an excellent business man. Victor Newcombe has fallen heir to his father’s laurels and is a successful operator in Wall Street. He has achieved signal success in most of the campaigns in which he has engaged, whether on the bull or the bear side of the market. He is cautious, and turns quickly when he thinks there is occasion. He seems to act on the French saying, that “only a fool never changes his mind.” He lives in fine style on Fifth avenue, and also has a beautiful residence at Elberon. He is one of a number of prominent gentlemen from the South who have enrolled themselves among the citizens and taxpayers of New York. He is an ex-director in the New York & New England road, and a prominent member of the Union and Tuxedo Park Clubs.

MOSES TAYLOR.

Moses Taylor, now deceased, was one of the notable figures in Wall Street life for many years. He started as a South street merchant, after having been a clerk with G. G. & S. Howland. Wm. H. Aspinwall was also a clerk with that house at the same time. When Mr. Taylor gave up his situation to embark in business for himself, Mr. Aspinwall was admitted into the Howland firm as a junior partner. Moses Taylor was a man governed largely by intuition. There was little argument; with him, so to speak, it was a word and a blow. Having formed his impression and taken his quick resolution, there was no length to which he would not go in the transaction, either in buying or selling or advancing money. He was President of the City Bank and owned a large amount of its stock. Under his administration the bank was wonderfully successful. His son-in-law Percy R. Pyne, is now its President. Moses Taylor was a valuable aid to the Union cause during the war. He was a close friend of Secretary Chase, and whenever the Government needed the assistance of the banks, the Secretary’s influence with the great merchant speedily brought about the desired result. Moses Taylor realized the fact that the support of the Government by the entire banking system was an imperative necessity. The presidents of the banks would be called together on one of these appeals from the Secretary of the Treasury, and whatever action Mr. Taylor favored would be adopted, so strong was his influence, and so high his standing as a merchant and financier. He accumulated wealth very fast in connection with the sugar branch of his business. Most of the large sugar planters consigned their product to his firm, and they were also governed by his superior judgment in investing their money, so that he always had important connections with Wall Street, a fact that entitles him to a place in this book. While investing millions for Cuban capitalists, he also invested very largely for himself. Moses Taylor was the first to discover the value of the Delaware, Lackawanna & Western Coal property, and while the stock was kicked about Wall Street, because the company was bankrupt, he picked it up at a few cents on the dollar, and made millions of dollars from this investment alone. At his death he was one of the largest owners of the stock, as his faith in it was so strong that he had refused to sell it, even though the price had risen above 140. He died worth at least forty millions of dollars. He had no social aspirations, and no interest in anything but business. It was his idol. Few men have been harder workers from early in life up to their last days. He never felt that he could spare time for recreation, and was seldom known during his long business career to leave the city over night, summer or winter, except on business. Moses Taylor had for partners in his business his son-in-law Percy R. Pyne and Lawrence Turnure, both excellent business men, and Mr. Taylor owed much of his success to the selection of these gentlemen to aid in the management of his affairs. Mr. Taylor placed in the hands of these two gentlemen, especially during the last ten years of his life, the laboring oar of his vast business, and the successful results are the evidence of their sagacity and marvellous ability.

ANTHONY W. MORSE.

Anthony W. Morse was once one of the remarkable men of Wall Street. He made $150,000 in speculation, bought a yacht and went to Europe during the war. While in England, he mingled with the aristocracy, and became strongly imbued with the idea that the North would not be successful in the war, and that the National currency would become almost valueless. He thought that the more the National currency depreciated, the more railroad stocks and bonds would advance; in short, that whatever the currency would buy would advance, while the currency itself would become nearly worthless. He therefore became a rampant bull on stocks. He bought almost the whole list, and also did a large business in buying for others whom he succeeded in impressing with his own ideas. He had many followers and made a tremendous inflation. Secretary of the Treasury Chase was advised of this Morse speculation, which might prove prejudicial to the National credit, and he announced that if the inflation was carried any further, he would prick the bubble by selling gold. Anthony W. Morse thereupon personally sent Secretary Chase a dispatch saying that he would take all the gold that the United States Government had to sell. Mr. Chase immediately ordered Assistant Treasurer John J. Cisco to sell $10,000,000 of gold to the highest bidders. The usual notice appeared in the morning newspapers, and a panic at once followed. At 12 o’clock, or two hours after the opening of the Exchange, it was announced from the rostrum that Anthony W. Morse had failed. This terminated the career of Mr. Morse as a large operator and manipulator, and with his downfall the death knell was sounded to his imported theories. He straggled manfully for several years to regain his footing, but his prestige was gone, and he failed in every effort to push his way again to the front. His ill-success soured him. His health failed, and he went to Havana to recuperate. There he died with profanity on his lips, enraged at the failure of all his hopes. He paid the penalty of disloyalty. His friends of the English nobility were largely to blame for all his misfortunes. Their predictions of the success of the South led him on to irretrievable ruin. He did not see that their wish was father to the thought.

FORMER GIANTS OF THE STREET.

Henry Keep, once President of the Lake Shore road, and also of the New York Central, was in his day a power in Wall Street. He was the first to discover the intrinsic value of railroad property in the Northwest, and manipulated Chicago & Northwestern stock, both common and preferred, very successfully, making a great deal of money for himself and friends. He died very wealthy. He came to New York city from Watertown, in the interior of New York, and at first was an exchange broker, dealing mainly in uncurrent money. He had previously served in some humble position on a railroad. By careful and economical habits he was able to leave a fortune of several million dollars, largely in common and preferred Northwestern stock. The plot of ground on which William H. Vanderbilt built his palatial Fifth Avenue home was once the property of Mr. Keep, who originally bought it for about $250,000 for the purpose of building a charitable institution, but changed his mind when the property quadrupled in value. Then he concluded that charity should begin at home. He sold the plot, extending for one block along Fifth Avenue, to Mr. Vanderbilt for one million dollars. Still his original intentions were good, and it was only after the real estate market, as with Satanic malice, had in that locality advanced 400 per cent. and taken him up into a high mountain of temptation, that his philanthropical project turned awry and lost the name of action. While Mr. Keep made a signally good President of the Lake Shore road and was a great manipulator of stocks, he was a failure as President of the New York Central, and he resigned that post having no confidence in the future of the property. Commodore Vanderbilt, who believed in the property, became his successor, and in a previous chapter I have given the story of the rise of that remarkable man. It is of interest to recall, by the way, that while President of the Lake Shore road Mr. Keep went largely short of the stock. As the President he naturally had inside information. Addison Jerome, a brother of Leonard Jerome, was a big operator of the day, and undertook to corner President Keep. In those days a great deal of stock was sold on seller’s option for thirty and sixty days. Mr. Keep had sold largely in this way, and Addison Jerome and his clique had bought heavily, expecting that the corner would be complete when the options should mature. A surprise awaited them. Mr. Keep made deliveries promptly in brand new shares. They were really an over-issue by the Company. It was a Waterloo in a double sense for Jerome and his fellow bulls. They were in over their heads. It had such a dampening effect that they immediately threw up the sponge and the stock came down with a crash. The issue of this new stock was smoothed over by turning the avails into the treasury of the Company, a fact, however, which did not prevent Mr. Keep from making a pretty good turn on his shorts.

J. PIERPONT MORGAN.

J. Pierpont Morgan, known as the “Railroad Reorganizer,” and who has won a place in the front rank among American financiers, is a son of the well-known Junius S. Morgan, the head of the firm of J. S. Morgan & Co., of London, and the successor of George Peabody, the great philanthropist in the banking business there. George Peabody, some years before his death, visited this country, and, desiring a partner in his great banking house, made inquiry in Boston for a suitable person. Junius S. Morgan was recommended as a young man of exceptional business talents and he was selected for the responsible post, the firm being known as George Peabody & Co. On the death of the celebrated head of the firm, the name was changed to J. S. Morgan & Co. The success of the father has been repeated in the signally successful career of the son. During the palmy days of the firm of Duncan, Sherman & Co., once renowned among the financial strongholds of the country, J. Pierpont Morgan was one of the clerks. It was there he graduated as a practical student of financial achievements; it was there he won his spurs for the monetary campaigns that awaited him. Leaving the house that was then a synonym for invincible solidity, Mr. Morgan established the firm of Dabney, Morgan & Co. Mr. Dabney was formerly one of the firm of Duncan, Sherman & Co. After a few years the firm in which Mr. Morgan had thus first engaged in business on his own account was dissolved. But the check, if it may so be termed, was only momentary, and colossal feats of financiering were to deck his career with triumphs. He formed a connection with the wealthy Drexels, of Philadelphia, and a New York branch of their banking house was established, under the name of Drexel, Morgan & Co., which has for some years been largely engaged in the reorganization of crippled railroads like the West Shore, Reading and many others. And they have been very successful. They have been financial physicians, healing sick corporate bodies; monetary surgeons, amputating needless expenditures and reckless methods; or, in perhaps more happy figure, skilful pruners of the vine, that the ultimate vintage might be more abundant.

Mr. Morgan is endowed with very positive traits of character. He has the driving powers of a locomotive. He cares nothing for show; he is a plain man of action. He strikes hard blows; he is naturally aggressive. In speech he is candid to the verge of bluntness; in action he is short, sharp and decisive. Like a true soldier, he is a man of acts rather than words. Rugged as a Spartan in his nature, hating circumlocution, bombast and palaver, going straight to the mark, yet with due caution and prudence, he exhibits many of the best traits of the practical financier.

I have asked Mr. Morgan for his picture for publication in this book, but with natural personal modesty, he has recommended that his handsome partner, Anthony Drexel, of Philadelphia, be selected in his place, and with a view to encouragement in Wall Street of blushing modesty—that century flower of the financial conservatory—I have complied with his request.

THOMAS L. JAMES.

President of the Lincoln National Bank, has had a career in New York brilliant in the service of the public, and marked in the practical skill with which confidences and enterprises have been directed by him. His training has contributed largely to his success as a financier. He came from Utica in 1861 and entered the Custom House as Deputy, and finally attained the position of Postmaster-General after a long and successful term as Postmaster of the City of New York. Mr. James directed the affairs of the Lincoln Bank so successfully that what promised to be a small up-town bank has developed into a National bank of considerable importance. He is one of the men of the times, one who feels the tide of local affairs, a man of the people who acts from wholly conscientious motives, and whose ambition has never exceeded his sense of duty.

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LX. JAMES B. AND JOHN H. CLEWS

The subjects of this sketch, whose portraits adorn these pages, are both members of my firm and I think this book would be incomplete without putting in a few words in reference to them. As will be seen by the sketches which follow, they both commenced their business careers in a modest way and through perseverance and industry have attained positions in the financial world which are in every way creditable to them. I have made it a rule never to introduce a blood relative into my office for a position of trust unless I believed him worthy of confidence and capable of performing the duties assigned to him in an intelligent manner. To do so would be an act of injustice, not only to him but to his associates in the office, and generally causes ill feeling and bad results in the end. Happily with my nephews I have had no such cause or ground for complaint. On the score of merit alone they have succeeded in advancing themselves to their present positions.

James Blanchard Clews was born in Dunkirk, N. Y., August 4, 1859. After graduating from Chamberlain College, in this State, he entered the general office of the Red Line Transit Company, in Buffalo, N. Y., where he spent two years. He then accepted a position of responsibility in the General Manager’s office of the Union Steamboat Company, also located in Buffalo. Here his ability and his growing capacity for making a good business man were further satisfactorily illustrated and recognized by those officially over him. Realizing, however, that Wall Street offered better opportunities for advancement, he resigned his position and obtained one in my banking office as book-keeper. Commencing at the bottom of the clerical staff, he displayed so much ability, coupled with untiring energy in the performance of his duties, it was a pleasure to promote him from time to time, whenever an opportunity offered, with the result that after eight years of vigorous training through the successive grades of Book-keeper, Cashier, and General Manager, he was rewarded in 1890 by being made a member of my firm. It will thus be seen that my nephew possesses a thorough and practical knowledge of the inside workings of a banking house which is so essential to a successful Wall Street business man. Being besides a student of nature, he has also improved every opportunity to learn the value of railroad and other investments and to-day is a recognized authority on all such matters. He has served as President of an important railroad and is a Director in a number of large corporations.

John H. Clews,[1] junior member of the firm of Henry Clews & Co., was born October 28, 1856. In beginning his business career he entered the service of the Erie Railroad Company, in the transportation department, where he gained a general knowledge of railroad management and its affairs. After a few years with that company he was offered a position with the Western Transportation Company, the water line of the New York Central Railroad. Here he had the opportunity of completing his education in all the branches of transportation. He was then appointed Agent of the New York, Chicago & St. Louis Railway at East Buffalo, N. Y., the distributing point for all freight between the East and the West. From this place he entered Wall Street, where he evinced the same progressive spirit. In 1890 he became a member of the New York Stock Exchange, acting as one of the chief brokers for Henry Clews & Co., and January 1, 1898, he obtained an interest in the firm.

Footnote 1:

Deceased April 10, 1907.

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LXI. A REMARKABLE CHAPTER OF HISTORY

Any review of the advance of this country during the past fifteen years, forms a record of the most wonderful progress ever made by any nation in such a short period. A record of the development of the country’s resources through a resistless energy that seems destined to control the markets of the world, reads almost like one of Grimm’s famous tales, for after numerous trials, and the surmounting of many obstacles, the fairy wand is turning what we will into gold.

One of the effects of the Vanderbilt boom of 1885 is to be found in the enormous mileage of new railroad construction in 1887, namely 12,000 miles. It may have looked at the time excessive, but it has turned out to be a fortunate anticipation of the great business strides made since that time. As far back as that year, our exports of manufactured articles began to show an appreciable increase.

The year following will always be memorable as the time of the great blizzard which tied New York up so effectually for several days. As a direct result of the exposure to its severity, the country lost in Roscoe Conkling one of the most picturesque figures in American politics and a man of unblemished reputation. He was taken from the arena of affairs too soon to allow his participation in the presidential campaign of that year.

My own experience at the time has impressed the memory of the great storm strongly upon my mind. I had gone to Newport accompanied by Mrs. Clews to inspect some improvements then being made at my summer home, and in returning we came across the bay in the regular boat for the purpose of taking the noon-day train which ran from Boston to New York. When we were about half way over the bay, a vicious squall struck us and we began to doubt if we should ever reach the shore again. Finally, however, we did manage to land, and connected with the belated train. Progress of course was slow, so slow in fact that the next morning saw us only as far as New London, whence further movement was out of the question. Many of my readers will recall the railroad ferry over the bay from New London. The last train previous to ours had been started across, but the violence of the tempest had compelled the pilot to give up the task and return. With more incoming trains, New London was soon congested by the sudden increase in population, and accommodations of any sort were at a premium. We were for a time at a loss as to where we could go, but fortunately succeeded in inducing the manager of the hotel there to install us in the private apartments of the proprietor, who had the day before started with his family for Florida. He spent the ensuing four days upon the railroad, between New London and New Haven, banked in by a snow drift six feet high, while we enjoyed the hospitality of his apartments during that time. I am sure that we could not conscientiously complain of the exchange. Telegraphic communication with New York was completely shut off. As our children had remained in the city, we were naturally anxious to know of their welfare and relieve any anxiety they might have as to our safety. There remained but one means of communication, and that a wire to Boston, whence messages could be cabled to Liverpool, and back to New York, and that is the way we got word to and from the metropolis. That was a rather circuitous way, but it was effective.

Mr. Cleveland’s renomination and accompanying free trade talk, disturbed the markets more or less from the date of his nomination in 1888 up to the time of General Harrison’s election. The latter’s entrance into the White House started the entire business of the country going, and through his wise management, we were brought to a very high point of prosperity, the last year of his term being, up to that time, one of the most prosperous in our history. One of General Harrison’s most signal achievements was in the exchange of reciprocity treaties, which was managed in such a masterly manner by his resourceful Secretary of State, Mr. Blaine.

In the middle of General Harrison’s term, occurred the greatest financial shock the world had experienced in the last quarter century, or since the panic of 1873.

The suspension of the great firm of Baring Bros. of London in the fall of 1890 proved a demoralizing force from the effects of which finances did not thoroughly recover for several years. The direct cause of the failure, as is now well known, was over-commitment in Argentine enterprises. Through the representations of an agent of theirs who had visited the country, everything bearing the name of Argentine was colored a most rosy hue, and the investments of that great house and its following were enormous. The inevitable reaction from such inflation found them with an immense load of these securities unmarketable, and they were forced to suspend. The assistance rendered in rehabilitating the firm has been signally successful. Through the efforts of Mr. Lidderdale, Governor of the Bank of England, that institution took over some seven million pounds sterling of the congested obligations of the firm. By the wise, patient, and sagacious management of these former unmarketable properties the bank was finally enabled to realize enough therefrom to pay up all the arrears of the firm.

The liquidation of American securities by British holders which was consequent upon their failure was enormous in volume and extended over several years.

The year 1890 was further noteworthy as marking the birth of that unfortunate compromise of the silver agitation known as the Sherman silver-purchase law, which was to bring about such direful results within a brief three years. After the shock of the Baring panic had subsided, the beneficial effects of the McKinley tariff law began to be felt and with increased exports, largely of grain, in the succeeding year, together with ample protection for home industries, we were ushered into 1892 under very auspicious circumstances.

Bountiful crops again provided a basis for what developed into a wonderfully prosperous year. During the year, Jay Gould (largely through the aid of his son George), by one of his characteristic strokes, succeeded in obtaining control of the Union Pacific system, while Mr. Huntington was thinking the matter over; but his personal control was not to last very long, for in December of that year, Mr. Gould died, after a career of great activity and venturesomeness, which has elsewhere been reviewed in this book.

The Democratic party still clung to their idol, and Mr. Cleveland was renominated for the presidency in 1892, and by one of those inexplicable turns of public opinion which foolishly wished a change of administration in the midst of prosperous times, he was elected, and returned to Washington the following March, be it said, enjoying the confidence of the great majority of the people. Almost from the time of that election, the Wall Street markets were depressed, the fear of free trade measures being the basis of distrust. Late in the year, the Treasury’s stock of gold began to show signs of diminishing, and with the exception of a few rallies, one notably in the following January, prices continued on the downward course. Co-incident with the decrease of gold reserves arose reports of a disposition on the part of the Secretary of the Treasury to interpret the word “coin” in our Government obligations as allowing the redemption of the bonds in either gold or silver at the option of the Government. The effect of any doubt or question upon this most important subject could only result in unsettling confidence; of which Addison speaks as the “high priest in the temple of trade.” For the first time in very many years, our Treasury operations showed a deficit, and things were going from bad to worse. The first great smash in prices occurred in May, when the famous Cordage Trust went to pieces. At the same time, Sugar stock and the remainder of the then few industrial shares took part in the sharp decline. The gold reserve had by the middle of the year reached alarmingly low figures, so that the pressure of public opinion compelled the calling of an extra session of Congress for the purpose of repealing the silver purchase clause of the Sherman law,—which had proved to be a veritable “Old Man of the Sea” upon the back of the country, threatening to throttle business interests everywhere.

The Congressional procrastination, and obstructive tactics in the Senate worked havoc with trade and finance, and when relief finally came in the repeal of the silver purchase clause, the vitality of the patient had sunk so low, that it was a matter of years before returning health, in the form of confidence, brought back our native buoyancy and push. It became necessary early in the following year to issue $50,000,000 worth of bonds in order to keep the gold reserve from getting too near the vanishing point. Tariff agitation, which had been started by President Cleveland’s message to Congress in December, 1893, upset all the calculations of business men, who hoped, after a disastrous summer, that the tide had turned. But, no sooner was the fear of a silver deluge quieted, than revenue reform brought on another period of anxiety and delay. Fortunately when that distorted measure (with its 640 Senate amendments) which bore the name of the late William L. Wilson, a man of deep thought and the highest integrity, did become a law in the following year, it was not burdened with an income tax.

There are those who argue, probably to their own satisfaction, that this latter is an equitable form of taxation, but it has always appeared to me as putting a premium on idleness by taxing thrift.

Another issue of $50,000,000 bonds was necessary before the year was out, and in spite of this replenishment, gold exports to pay our debts to Europe for securities sent back to us by the ream, continued in such volume as to render a further issue imperative in the following February. This will be remembered as somewhat unique in our Treasury operations, being in the form of a purchase of 3,500,000 oz. of gold, which cost the Government $62,500,000. The famous syndicate which undertook the delivery of the precious metal, agreed to do all in its power by the further deposit of gold in the Treasury and as far as possible, a control of foreign exchange rates to keep the reserve intact. Its powerful aid unquestionably saved the people from many more business disasters, by a bolstering up of confidence in the power of the Government to pay its debts. The syndicate lived up to its agreement fully, depositing in the month of August some seven and a half millions of gold.

One scarcely hears mentioned nowadays the name of that poor fellow whose fabulous fortune (on paper) finally proved too burdensome for his uneducated mind. Barney Barnato was in his way a picturesque character, and a most vivid illustration of the overthrow of mind by matter, when the former is not in control.

The sharp break in South African shares in the London market during October, of course exerted a sympathetic influence here; but worse things were yet in store for us. Our President’s famous Venezuela message to Congress in December, 1895, acted like an earthquake—which shook the markets to their very foundations and engulfed hundreds of millions of values before it subsided. The final outcome of the dispute between England and Venezuela has to a very great extent vindicated the former’s claims. Let us, however, look upon the whole matter as a step forward for civilization in the advancement of the principle of arbitration, the true solution of all international difficulties. In 1896, we did finally reach the end of our troubles, though not without much worriment. A further bond issue of $100,000,000 to meet deficits, brought that total up to $262,500,000 issued in two years. A rather expensive administration, but “troubles come not singly, but in battalions.”

The Presidential Campaign just past, with the same nominees at the head of the respective parties, recalls the wild free silver talk of four years ago. Panic and depression succeeding each other had left the people almost hysterical. After Bryan’s nomination in July, gold hoarding was the order of the day. Of course the effect of this on the money and security markets meant, under the circumstances, another downward plunge in prices. New York Central sold at 88, the lowest price in the past fifteen years, and C., B. & Q. at 53, the lowest price in nearly forty years, and all other stocks sold down in the same proportion.

I have said that we reached the end of our troubles in 1896, but the end did not come till the November election, which showed that William McKinley, “the advance agent of prosperity,” had been elected President. The nomination of William J. Bryan, hitherto a comparatively unknown man, but who electrified the Democratic National Convention by his specious eloquence, the eloquence of a political Belial, able, in the Miltonic phrase, “to make the worst appear the better reason,” whose famous phrase, “you shall not press down upon the brow of labor this crown of thorns, you shall not crucify labor upon a cross of gold,” swept the convention off its feet and made him the nominee for president, was a blow that for a time seriously disturbed Wall Street and commercial circles everywhere. Mr. Bryan called for the free coinage of silver at the ratio of 16 to 1, and by his tireless activity in stumping the country created a feeling of depression that reached the pitch of panic and left the people almost hysterical with fear. But as Martin Van Buren said on one occasion, “the sober second thought of the people is never wrong and is always efficient.” The sober second thought of the people carried the day. Crowds might flock to hear the orator, but they voted with the party of prosperity and honor. The carefully written speech of Mr. Bryan, a speech which, for once, he read from his manuscript in the great Madison Square Garden meeting, did not deceive the people; it fell flat.

With Bryan’s fiasco in this city, the clouds finally began to break. How plainly the record of these four years shows the absolute domination of the markets by Washington. And not of the financial markets alone by any means, but of the whole business interests of the country, which finally were well-nigh paralyzed by four years of increasing anxiety and wonder as to what might happen next.

It is gratifying to turn away from that period of distress to the succeeding years of prosperity. The vindication of the good sense of the people in the election of William McKinley did, at last, turn the tide; and for good and all, let us hope. With an unquestioned currency basis, improvement became possible. We were greatly favored too, in the first year of Mr. McKinley’s administration, by bountiful crops at a time of shortage in Russia, France, and the Danubian Provinces. It was a great year of prosperity for our farmers, who, through good prices, and the exportation of some 120,000,000 bushels of wheat, were enabled to pay off mortgages in wholesale fashion, and herein we see the beginning of present good times. Furthermore our export trade showed great increase. As was to be expected, there was a great rush of importations just prior to the passage of the Dingley Tariff Bill in July, and a consequent decline in revenues immediately thereafter; but the completed record of its operation up to the present time is a splendid tribute to the wisdom of its author. The Supreme Court decision in 1897 in what was known as the Trans-Missouri Case, declaring all railroad pooling illegal, proved somewhat of a shock to the market, but with improvement in business, our roads soon found enough traffic before them to more than go ‘round, without worrying about its division.

The year 1898 began very favorably with large gold imports and easy money. Cuban affairs, which had begun to threaten late in the previous year, finally culminated in the outbreak of war with Spain in April.

The condition of things in Cuba having become a reproach to the civilized world, this Government, acting for the conscience of Christendom, directed that the war which Spain was waging against the Cuban revolutionists should cease, with all its indescribable horrors, its barbarous cruelties to women and children, and as Spain did not heed the warning, our Government intervened in the interest of common humanity, an event which marked a distinct advance in the history of the human race, for history makes no mention of any war waged on such a scale in behalf of the cause of humanity. Certainly never was a war more clearly justified or one which showed greater courage on the part of the intervening nation, for there can be no doubt that more than one of the Continental powers of Europe would have been glad to side with Spain and would have done so, but for the emphatic negative of Great Britain.

Naturally there ensued a period of depression, but it was short-lived. The ensuing months of activity and buoyancy surpassed anything of the kind in our history. After the apprehension as to how the business world would adjust itself to war conditions had passed away, business began to boom all over the country. We were on our feet again with financial health restored. That wonderful boom in the stock market, begun in the summer of 1898 and lasting until the spring of 1899, will not soon be forgotten.

It seems more like a dream than a fact that trade and commerce and financial operations could swell to such well-nigh inconceivable figures, revealing a degree of prosperity almost past belief, like some marvelous good fortune of an individual in a Persian tale, favored by good Genii, actual fact rivalling fancy or throwing it far into the shade. In other words the oldest and most experienced merchants and financiers in this country were astounded at the degree of solid prosperity attained by the great Republic, the lion’s whelp, rivalling or surpassing the strength of the old lion, the mother country across the sea.

To the late Ex-Governor Flower belongs the credit of fearlessly taking the initiative in that marvelous rise in values to which I shall revert later on.

The formal close of the Spanish war gave fresh impetus to trading and prices kept soaring well on into the spring of 1899. The year 1898 has the distinction of marking the beginning of the greatest era of trade combinations, those gigantic commercial engines, that the world has ever seen. The capitalization of those inaugurated during 1898 and 1899 reached the fabulous aggregate of $3,500,000,000. The mind is staggered by the possibilities of enterprise which such a sum suggests.

The tendency towards centralization in the railroad world was first shown in the merger of the Lake Shore road with the New York Central.

The year 1899 was one of great prosperity, the greatest since we have been a nation, albeit its close was marked by one of the worst semi-panics the Street has ever experienced. In order to account for some of the most important features of the panic of December, 1899, it is necessary to take a glance backward at certain great financial events of the year even as early as April.

In that month was formed the famous Amalgamated Copper Corporation, a creation of the Standard Oil magnates.

The capital stock of the company was $75,000,000. The shares were said to be subscribed five times over. Owing to its parentage, the stock became popular, and was sustained at par for some time, but scarcely two months had elapsed before a break of 25 per cent. in the price occurred.

This break was regarded as a rather suspicious circumstance, and was supposed by the “knowing ones” to be a part of the deal. The Amalgamated Company was a mammoth combination, comprised of large share interests in over 30 companies, the famous Anaconda of Montana heading the list, and being the most prominent

The panic fell most severely upon the copper companies, the shrinkage on the share capital of which for the year is alone estimated at nearly $200,000,000.

Besides this, the currency movement to the South and West had been unusually large and prolonged, and finally tightness of money brought about an immense drop in the entire stock market. But with general conditions prosperous all over the country, such panics happily do not leave lasting scars.

The last year of the wonderful nineteenth century has been a remarkable one in our history. Since the first defeat of the silver agitators in 1896, our financial strides have been so rapid that it seems now a question of but a short time when New York will be the financial centre of the world. What a contrast between our position in 1900, and that in 1895, when we were knocking at the door of Europe with bonds for sale to provide running expenses for our Government. To-day England finds it to her interest to place $25,000,000 of her war loan with us, Germany asks for $20,000,000 of American gold, Russia is seeking to borrow from us and Sweden has not gone empty-handed away. And these accommodations have been accorded without causing so much as a ripple in our money markets. The source of such plenty is of course found in our wonderful increase of exports. For ten months of this present calendar year, the trade balance in our favor approximates $500,000,000, making, in the past three years, the vast total of fifteen hundred million dollars balance to our credit. There we see both the lever and the fulcrum with which to move the financial world.

A little over a year ago occurred the death of Cornelius Vanderbilt, the grandson and namesake of the Commodore. Here was a gentleman whose charities were almost boundless. His gifts to the people through art and in many other ways were princely, but perhaps his memory is greener in the minds of those who, through his great private charity, were lifted above want.

These great latter day fortunes have not often failed, in this country, in being administered by men whose conception of life, and of duty toward their fellow men has turned the duty into a pleasure. This is a very great tribute to American citizenship and should not be forgotten or lost sight of by our sometime critics.

The passage of the Currency bill in March, 1900, undoubtedly did much to increase Europe’s faith in our monetary stability and, furthermore, the result of the Presidential election of 1900, the triumph of the party of sound money seems to preclude the recurrence of any attacks upon the financial honor of this country. There has been a campaign of education going on in this country ever since the advocate of the free and unlimited coinage of silver at the ratio of 16 to 1 first promulgated his doctrines. The benefit to the people of this knowledge of public affairs is clearly apparent. They will have none of false theories and suicidal experiments, they will not go after false financial gods, they will not bow the knee to the Baal of repudiation and confiscation.

While the modern method of commercial development is open to criticism in some respects, still I take it that the evils complained of are not those of very existence but are rather those of circumstance, and are open to correction by the will of the people. How often have we heard that these combinations stifle competition—but for how long? Does not their existence excite competition? Furthermore, their management calls for the very highest ability and creates a keen intellectual competition which cannot fail to be of educational value at large. It remains for ensuing years to provide correction for those defects which are bound to appear in any new and untried system.

We end the century that almost covers our national existence with a past record and prospects unparalleled. We enter the new century full of faith in our institutions, that have stood severe tests even in our short life, and full of hope for even greater national achievements. We are fast taking the lead in the affairs of nations as well as in the affairs of commerce and finance, and have need of great steadiness of character, and fixity of national honor, which now seems assured for all time. It augurs well that we begin the twentieth century, which displays such vistas of greatness, at peace with all the world.

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LXII. BOOMS IN WALL STREET

Wall Street has lately been enjoying quite a boom in some respects differing from any in its previous history. Probably the most interesting feature about this boom is that it is not in any sense spectacular. In that respect it is unique. Prices of many stocks are higher and intrinsic values greater than they have ever been before. The market has all the qualities that normally would cause intensest excitement and focus the attention of the entire country on the Stock Exchange. Yet in spite of these conditions, the Street is in a normal state of mind, and it is doubtful if the general mass of the people, who get their information from the newspapers are fully aware that there is even an ordinary boom in Wall Street. This unusual condition is due, I believe, to the fact that the boom we are enjoying is built on a foundation that reaches clear to the bowels of the earth. There is nothing unnatural or artificial about it. Wall Street is simply one of the centres that reflects the general prosperity throughout the country. Farmers, merchants, mechanics, mill workers, and miners are all so intent in keeping pace with the progress in their own pursuits that they have no time to cast eyes our way. The same conditions that are booming stocks, are booming everything else in the country at an equal rate, so that we are in nowise singular or deserving of special attention.

Another factor too, has developed in the Street that prevents the usual excitement and hurly burly incident to a rising market. This is the absence of a pronounced central figure, or controlling force. Usually a boom centres about some one man who stands boldly out in the open, or whose hand it is known is manipulating values. At present the manipulation is being carried on in a method that is as quiet as it is novel and unusual. That the market is being manipulated, is apparent enough even to the most casual observer. But the source of this manipulation is probably known only to a few; all others are but students in the Street. They know that a new order has come, and that this order is due to the most powerful and resistless influence that has ever manifested itself in Wall Street. This influence is very largely composed of the Standard Oil Combination, who have introduced in their Wall Street operations the same quiet, unostentatious, but resistless measures that they have always employed heretofore in the conduct of their corporate affairs. Beside this group, every other man or combination of men that has ever operated in the Street are materially belittled by comparison. The heretofore conspicuously big operators that have flashed up and across the horizon, appear comparatively small beside the men who are running things for us now.

At his best, Jay Gould was always compelled to face the chance of failure. Commodore Vanderbilt, though he often had the Street in the palm of his hand, was often driven into a corner where he had to do battle for his life, and so it has been with every great speculator, or combination of speculators, until the men who control the Standard Oil took hold. With them, manipulation has ceased to be speculation. Their resources are so vast that they need only concentrate on any given property in order to do with it what they please. And that they have so concentrated on a considerable number of properties outside of the stocks in which they are popularly credited with being exclusively interested is a fact well known to every one who has opportunities of getting beneath the surface. They are the greatest operators the world has ever seen, and the beauty of their method is the quiet and lack of ostentation with which they carry it on. There are no gallery plays, there are no scareheads in the newspapers, there is no wild scramble and excitement. With them the process is gradual, thorough and steady, with never a waver or break. How much money this group of men have made, it is impossible even to estimate. That it is a sum beside which the gains of the most daring speculator of the past were a mere flea bite, is putting the case mildly, and there is an utter absence of chance that is terrible to contemplate. This combination controls Wall Street almost absolutely. Many of the strongest financial institutions are at their service in supplying accommodations when needed. With such power and facilities it is scarcely conceivable what these men must be making, what they can do on either side of the market. So far, fortunately, their manipulations have all been one way, upwards, and in conjunction with the general prosperity it has resulted in making large sums of money for nearly everybody in the Street.

Here and there we have heard of losses, some of them fairly large, but in comparison with the general money making these are hardly to be taken into consideration.

The last preceding boom that Wall Street enjoyed was as different from the present as it is possible to imagine. It had all the elements which this one has not. It centred about one man who stood out in the lime-light clear and distinct. It kept the Stock Exchange in a constant state of ferment. It filled the newspapers with column upon column of sensational stories. It made millions for an army of retainers, on paper, and it kept the market jerking up and down for months. Roswell P. Flower, ex-governor of the State of New York, was the leader of the boom, and a more picturesque figure has never been seen in Wall Street, which is saying a great deal. Mr. Flower was an individual of very plain exterior. He often used language that was noticeable more for its force and directness and emphasis, than it was for polish. He had an ambling gait and looked like a well-fed farmer. He was rarely seen without a huge quid of tobacco that almost filled the left side of his mouth. Spittoons were an essential part of the furnishings of his office. His clothing hung on his person not unlike meal sacks. His hat was rarely brushed, and for days at a time, apparently, he forgot to shave. Altogether he was the last person, in appearance, who might be expected to lead in a district that is famous for its well groomed men. His education was certainly not collegiate; doubtless all his peculiar traits the ordinary man would have judged a handicap, still they were Mr. Flower’s strongest aids. The lack of artificial polish gave people confidence in his statements. His limited education enabled him to think clearly along certain lines without being hampered with mental digressions, which would probably have come with a higher original mental culture.

As the administrator and manager of the estate of his brother-in-law, Henry Keep, he came into the Street twenty or twenty-five years ago. He in that way controlled a large amount of funds, which by conservative direction he increased very substantially. He scarcely ever figured in the speculative field to any great extent, until after he had completed his term as Governor of New York State. When he returned to the Street from Albany, he naturally came with a considerable prestige. Ex-governors of the Empire State are not very plentiful in and about the Stock Exchange. He also brought with him a large political following. In both of the great parties in New York State there are many men of standing and influence who like to take a flyer in Wall Street. Almost to a man they associated themselves with Mr. Flower, who, during his term at the capital had made hosts of friends with Republicans and Democrats alike, and this, though his party loyalty had never been questioned. He also had close associations with most of the big capitalists. After he had settled down to business, on leaving politics behind, Mr. Flower picked out several stocks as his specialties, Chicago Gas, Federal Steel and Rock Island being some of these. Under his manipulation all these properties went up and soon began to show a big advance, unusual strength and great activity. The bears made frequent assaults on his position and now and then pushed him towards the wall, but he always fought his way to the front again, and came out master in every encounter. When he had himself pretty well entrenched in the specialties he was handling, he suddenly plunged into Brooklyn Rapid Transit, and for months he kept things stirred up in a way that even Wall Street has not seen very often., He picked up the stock commencing at six dollars a share, and in an incredibly short time ran it up to over 138. Almost every politician in the State made a fortune on paper. Mr. Flower was immensely popular with the Wall Street news reporters, who helped his boom along through the glowing accounts they wrote from day to day.

Under the impetus of the swirl in Rapid Transit, practically every property in the Street went flying upward, until the end did not seem to be in sight. The bears were beaten to a standstill every time they showed their heads, the only result of their attacks being that Flower stocks would jump up a notch higher. The ex-governor preached Americanism and confidence, until everybody believed that if a stock was only grounded, and the property located in America, you could buy it at any price and still be on the safe side.

That a terrible panic did not grow out of this boom was due only to one fact: Mr. Flower’s sudden death. Had he lived thirty days longer, the bubble must have been pricked, and the result would have been disastrous. Mr. Flower went to the country for a day’s rest, ate freely of ham and radishes and washed his frugal meal down with a copious supply of ice water; he naturally, in consequence, died in a few hours afterwards of an attack of acute indigestion; his death alone saved the Street.

The Rockefellers, the Vanderbilts and his other wealthy friends rushed into the market with millions and sustained values. They were in a position to attribute the threatened reaction to his death and pointed out the absurdity of letting such an incident affect the value of stocks. They discounted the break that must have come in the natural course of events under the forcing process that was going on. Reasoning such as this spread broadcast through the papers stopped the break. Where the bottom would have fallen out entirely there was only virtually a moderate break all along the line; why it was not worse was due to the market being bolstered up by the Standard Oil Combination and others with them coming to the rescue just in time to prevent a big smash. The small speculators operating on moderate margins were of course all wiped out almost to a man, but many of the big fellows were saved. It is probably the only instance on record where the death of a big operator saved a general smash. Those hurt were numerous politicians and small fry operators who instead of getting away with snug fortunes in the shape of profits, lost their all.

An interesting circumstance of the Flower boom was developed involuntarily by young Joe Leiter. Leiter himself, although he had gone to the wall some time previously, indirectly had brought about certain conditions that served Mr. Flower’s purpose admirably. These conditions were the general release of hundreds of millions of dollars on mortgages on farm lands. When Leiter began to corner wheat, it was ruling down in the neighborhood of sixty cents a bushel. He lifted it to considerably over a dollar before he went broke. This enabled thousands of farmers to realize on their crops at the dollar figure and above, which brought prosperity almost over night to the wheat growing belt. With the money realized from their wheat the farmers paid off their mortgages to the extent of two or three hundred million dollars. These mortgages were generally held in the East. This released that much Eastern capital, causing that vast volume of money to seek investment. The men controlling this money were overjoyed when Mr. Flower made an opening for them through the Wall Street boom, and hence it was a comparatively easy matter for a time to push up values.

J. Pierpont Morgan, now a noted character, was trained as a clerk in the one-time famous banking house of Duncan, Sherman & Co. Later he made a connection with Anthony J. Drexel, probably the wealthiest banker in his time in America. Out of this grew the house of Drexel, Morgan & Co., with Mr. Morgan as the managing partner in New York. When Mr. Drexel died, Mr. Morgan absorbed the entire business, and a few years later when his father died, Mr. Morgan became the head of the London house of J. S. Morgan & Co. as well. This put him in a very prominent position. He soon thereafter demonstrated his influence by reorganizing the bankrupt Richmond & West Point Terminal Railway & Warehouse Co., changing its name to the Southern Railway Co. A number of small roads were added to it, many of which were in financial straits, and practically all of them had been badly managed. He combined them into one system under the one head. This railroad combination is now one of the great properties of this country. Mr. Morgan next turned his attention to the reorganization of the Reading and the Erie roads, which were in a bad way. He soon produced order out of chaos there, and that resulted in a boom in railroad stocks all along the line. He had several sharp tussles, however, with some of the big stock holders, who tried to stand out against him on account, as they thought, of his plans being too drastic; and during these tussles he not infrequently resorted to the usual methods to break values, buying at the reduced prices so as to strengthen his control.

The people who followed Mr. Morgan’s lead in these transactions generally made money.

A different sort of deal was engineered a few years before by S. V. White, popularly known as Deacon White, because of his position as deacon in Plymouth Church. Mr. White is one of the oldest operators in the Street, and one of the most striking figures. He has made half a dozen great fortunes in speculation and lost them, but he is as undaunted as ever, and in spite of the fact that he is now over seventy years old, he is still active daily in the market.

Probably one of the most unique stock deals ever carried out in the Street resulted from the transaction of Joseph Bannigan when President of the Rubber Trust. The history of this deal which for a time resulted in a great boom in industrials, has never been told, and is known to but very few persons, most of whom, by the way, were its victims.

Bannigan was an uneducated Irishman who could hardly read and write. He commenced life in a New England rubber factory and worked for $1.50 per day and died worth five million dollars. He was shrewd and bright and knew the value of money. He saved to such good purpose that when the Rubber Trust was formed he was at the head of one of the biggest factories in the country, located in Providence. His knowledge of the trade was so thorough that despite the fact that he almost invariably used small i’s in writing a letter, he was made President of the Trust, his holdings amounting to about forty thousand shares. When matters had been moving along for some time, Bannigan made up his mind that the other men in the trust, the big fellows, were not treating him right, and that the best thing he could do was to get out. So he packed his stock certificates in a grip sack, left Providence on the night boat, landed in New York bright and early, had his breakfast and then made a bee line for a stock brokers’ office. He had assured himself in advance that this stock broker was to be relied on and told him frankly what he intended to do.

“I want to sell out bag and baggage,” he said. “I want to get rid of every one of my forty thousand shares. Here they are, put them on the market and sell them.” The stock broker told him that that would never do. If he wanted to realize full value for his holdings he would have to go about it in a different way, for if he threw his forty thousand shares into the market it would knock the bottom out and he would get little or nothing for his stock. Mr. Bannigan saw the point, and asked what he was to do.

“Buy,” said the broker.

“But I don’t want to buy; I have got more now than I want.”

“That is all right; buy anyway, that will make a market for the stock, and then you can unload when the time comes.”

“How much must I buy?”

“Oh, about $250,000 worth.”

“But I have not got $250,000 in cash to go and buy Rubber stock.”

“Well, you can borrow it; a man in your position, Mr. Bannigan, would have no difficulty in borrowing $250,000.”

Much against his will the old man was finally persuaded to do as he was told. About two weeks later the broker wrote to him that he must buy some more, this time, $200,000 worth. Mr. Bannigan used rather strong language, but finally yielded as he had before. He borrowed $200,000, and turned it over. With this additional capital to work on, the brokers continued to manipulate the market. The insiders soon discovered that some strong party was buying; but they did not know who, Bannigan having carefully kept himself in the background. His brokers operated skilfully in the stock, one day buying, the next, selling to keep the stock active. The brokers after awhile commenced to borrow large amounts of the stock. This convinced the insiders that there was a big short interest somewhere, and they got together in order to squeeze the shorts. The inside holders who held most of the stock, who had combined to squeeze the shorts out, as they thought, put the price up to 61, and at about that figure Bannigan’s was all unloaded. Bannigan now found himself full of money and the other fellows had his stock. They never awakened to the fact that the President had sold out on them until his shares were delivered against their purchases, as they thought, of short stock. Rubber soon thereafter did not stop tumbling until it had gone from 61 to 16. This deal had all the elements of a comedy-drama and the playwright who can do it justice will find material there which will make him an everlasting fortune and reputation. I have touched but lightly on a few of the important incidents. It is not often, however, that newcomers in the Street fare as well as this in the end. For a time they will go on merrily enough, and send things booming; but in the end many get the worst of it. A. B. Stockwell is a good illustration of the truth of this. He is still around the Street somewhere, but is one of the “has beens,” like numerous other former conspicuously large and supposed to be brilliant operators. At one time he was worth many millions of dollars. To-day, he is upside down. His start in life was as purser on a Lake Erie steamboat; his father, it is said, kept a livery stable in Cleveland. On one of his trips, Stockwell was in a position to show considerable attention to Elias Howe, the inventor of the eye at the upper end of the sewing machine needle. Mr. Howe was accompanied by his daughter. Stockwell made himself agreeable to Miss Howe also, and with such good effect that he managed to win her affections and soon thereafter married the young lady. When Mr. Howe died, Mrs. Stockwell came into possession of her father’s millions. With this nest egg Stockwell started in Wall Street, and before anyone realized what had happened he was the most talked of man in the district. He put all his wife’s millions into Pacific Mail stock, and secured entire control of the Company. He came into the Street as plain Stockwell, then as the news of his liberality and good fellowship spread, he became Mr. Stockwell; after he got hold of Pacific Mail he was Commodore Stockwell, by common consent. Everybody bowed and scraped to him and no man was so high and mighty that he was not proud to shake his hand. Stockwell took hold of Pacific Mail at about 40 and sent it up to 107. It was at this period that he was worth over fifteen million dollars; but he found, unfortunately, when it was too late to retreat, that while Pacific Mail was up to 107, it was not worth that figure when the unloading commenced. He was landed high and dry with it all and the Street told him he was welcome to it. He tried to sell, and found that there was no market. Then came violent demands on him to pay up his numerous call loans, and in order to respond thereto, he had to sell regardless of price and thus created a whirlpool, which finally sent the stock down to the price at which he commenced his original purchase at 40. In this one upset, he lost all his paper profits and his wife’s millions besides. This catastrophe not only stripped him of all his worldly possessions, but reduced him to the position of being plain Stockwell again, and there are many also who even go so far as to call him “that little red-headed cuss.” That was the most famous boom in the history of Pacific Mail, notwithstanding Leonard Jerome’s previous brilliant ups and downs in that former erratic property.

Leonard and Addison Jerome had a good time with Pacific Mail for a while. They ran it up to high figures several times; but finally meeting with the same experience that Stockwell did. The two Jeromes from being among the wealthiest and most dazzling operators in the Street, were in the end practically wiped out. Leonard Jerome, who was the father of Lady Randolph Churchill, had nothing left to bequeath his daughter except an equity in the house now occupied by The Manhattan Club on Madison Avenue, which yields an income of about $15,000 a year, of which Lady Churchill gets $10,000.

These are a few of the booms that have stirred up things in Wall Street at one time or another, as did the Keene booms, of which there were several, the Gould booms, and the Vanderbilt booms, all of which have been referred to in previous chapters in this book.

The question of trusts or trade combinations has, in recent years, excited a good deal of interest. One of the most interesting figures in this connection is John D. Rockefeller, who will undoubtedly be regarded by the future historian as a striking character in the business history of the nineteenth century. And be it remembered that history now concerns itself, not so much with the doings of governments; not so much with the personalities of emperors, kings, presidents or even with political parties, as with the life of the people themselves. This is clearly shown by such historians as Lord Macaulay and John Bach McMaster. And looking at history in this way, surely John D. Rockefeller must be regarded as one of the most interesting types of the great commercial powers of the day. He was a pioneer, a commercial Daniel Boone, striking out into a new and untrodden field of enterprise, taking great risks, undergoing grave financial perils of a novel kind and at length winning a complete and lasting success—a success which has filled business history with his achievements and the world with his fame. It was a great stride from the little farmhouse in Tioga County, New York, to the place which he fills to-day. Born in 1838 he is now in the prime of life. Reared by strict, church-going people, his word is as good as his bond; he is the soul of business integrity, and a striking example of what thrift, enterprise and persistency will do for a young man who starts out in life with apparently little or no chance of success. His old schoolmaster, it seems, was the first to get the young man to look into the refining of petroleum. Not so many years ago, they used sperm oil, and it cost $1.50 a gallon. How to refine the thick, ill-smelling oil found in the water courses of Pennsylvania was a problem. It was black slime, and John D. Rockefeller, by hitting upon a method of refining it and introducing it in the home throughout the world has made a fortune that recalls the fable of Midas. Before he was twenty-one he formed a partnership with a man named Hewitt and at first engaged in the warehouse and produce business. Then came the great oil craze in Pennsylvania. Poor farmers suddenly became rich; thousands flocked to the oil fields. Young Rockefeller kept his head. Asked to make investments in oil wells for Cleveland friends he dissuaded them from the project on the ground that the thing was being overdone, and with Samuel Andrews, who was familiar with the general processes of distilling, engaged in the refining branch of the petroleum trade. The firm subsequently became Rockefeller, Flagler & Andrews, which rapidly expanded its field of operations, and in 1870 organized the Standard Oil Company with a capital of $1,000,000. It started pipe lines to ship the oil to the seaports. It made millions in by-products once considered worthless. It established markets all over the known world, cheapened its methods of production and outstripped all competitors. Little wonder then, that its “extra” dividend in the year 1899 amounted to $23,000,000 over and above the regular dividends on the whole capital stock. Mr. Rockefeller attributes his success to early training and perseverance. That is, like other men who have stamped their individuality upon the affairs of mankind, he is what is termed a causationist; in other words, he believes that nothing is got for nothing; that effects proceed from causes, and the cause of success he believes to be largely perseverance. He believes that perseverance overcomes almost everything, even nature itself, and in that opinion this practical business man is at one with the philosophers of antiquity.

He and his associates in the Standard Oil Company are naturally a power in the stock market. They are, of course, very large holders of railroad stocks and bonds and at times their influence is as irresistible as the laws of gravitation. John D. Rockefeller’s influence alone could be so, as he is supposed to be the richest man in America and indeed the richest man ever known in human history. His is believed to be the greatest fortune ever accumulated by any man within his own lifetime. That he feels the responsibilities of his great wealth is obvious from his munificent gifts to educational and charitable institutions, to churches and to a hundred other praiseworthy objects. His princely donations to schools, colleges and universities rival those of that other public-spirited citizen, Andrew Carnegie. They are equally strong in their belief that the greatest charity lies in helping others to help themselves.

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LXIII. A GLIMPSE INTO THE FUTURE

I believe that it would be difficult to set bounds to the possibilities of American development. The inventive genius of the people, their adaptability to all circumstances, their tenacity of purpose, their wonderful energy, and the fabulous resources of the country all make it certain that the United States will reach a degree of power and prosperity hitherto unexampled in human history. Carlyle’s “French Revolution,” has been strikingly described as “history read by flashes of lightning,” and I am tempted to use the same language in describing the commercial revolution which has taken place in this country during the last few years. Great as it is, however, I think it merely a prelude to what is to come. We are destined for one thing to have a great Pacific trade. Fifty years ago, Humboldt said that the day would come when the trade of the Pacific Ocean would be as great as that of the Atlantic. And the increase within a year or two in this commerce augurs well for the ultimate fulfillment of the great scientist’s prophecy. We readily adapt ourselves to the requirements of foreign markets and that is a very important point. Lord Charles Beresford bears testimony to this fact. He says with truth that Americans find out what the foreign markets want, then they supply it. The English say in effect, “We know what you want better than you know yourselves.” The American sends the Chinese thirty-inch-wide calico, which is what they want; the Englishman sticks to twenty-seven inches, with the remark expressed or implied, “Take it or leave it.” And the Chinese will leave it rather than take it and the American manufacturer will be the gainer thereby. Minister Wu’s recent remarks on the necessity of finding out just what the Chinese want and then conforming to their wants, cannot be too carefully borne in mind. Furthermore, we are ready to adopt the newest and most highly perfected machinery regardless of cost. Mr. Carnegie, for instance, on a single occasion discarded machinery which had cost him $2,000,000, and replaced it with the latest which inventive genius could supply. The London engineering journals, on the other hand, admit that the British manufacturers will not change their machinery no matter how apparent it may be that they are being distanced by their more progressive rivals in this country. They reason that they have put just so much money into the “plant” and must get just so much out of it before they will replace it. This seems a good deal like the ostrich which thrusts its head into the sand and refuses to look danger in the face. In the meantime the British are left behind in the race and Glasgow merchants have to try the puerile and utterly futile device of getting up a boycott against American steel and iron products. Such a device, under the circumstances, seems a good deal like the attempt of the celebrated Dame Partington, as the famous English wit Sidney Smith describes it, to sweep back the Atlantic Ocean. She trundled her mop vigorously and made a gallant onslaught, but the Atlantic was aroused and it is needless to say who was the victor. And the American iron trade’s invasion of English markets must result in a victory, unless there is a radical change in conditions, which no one can now foresee. We study the markets; we take pains to ascertain their wants, and it is an axiom of trade that a man or nation that supplies the demand, whatever it may happen to be, gets the trade. This is a law as inexorable, as unchangeable as the laws of the Medes and Persians.

We are now one of the five great world powers, financial and political, with a population second to none except Russia. That is to say, we have a population of 76,300,000, Germany has 55,000,000, Austro-Hungary 45,000,000, the United Kingdom 41,000,000, France 39,000,000, Italy 32,000,000, Spain 20,000,000, Russia 136,000,000, Japan, 45,000,000, India 340,000,000, China 400,000,000. The Mongolian race is numerically powerful, but in the long run can the yellow race stand up against the white? I doubt it. Meantime the population in this western home of the Caucasian race is steadily increasing. In 1800 the United States had a population of only 5,308,483. It is now 76,304,799. Then we had sixteen states. Now we have forty-five. Then our territory consisted of 909,050 square miles. It is now 3,846,595 square miles. We have practically a new race made up of an amalgamation of all branches of the Caucasian race, speaking the English tongue, which in my judgment is destined to be the one tongue spoken in the world. It is a people determined to uphold just and equitable principles of trade and to have sound money. The amount now in circulation is $2,074,687,871, or an increase within three years of $400,000,000. Russia has only 26,000 miles of railroad; we have 190,000. In the last fifteen years we have made more progress in the things which tend to increase practically the term of human life by annihilating time and space and supplying necessities and comforts of one kind or another than ever before in our history. We are told that what does not happen in a year may happen in a minute. Similarly what might not have happened in a thousand years under adverse conditions, has happened in fifteen.

What of the future? In the language of Daniel Webster, “the past at least is secure.” We see that the bank exchanges which in 1888 were $48,750,886,813, have risen in 1900 to approximately $92,000,000,000. During four years of a sound money Republican Administration, exchanges in our clearing houses steadily increased from $48,750,886,813 in 1888, to the magnificent total of $60,883,572,438 in 1892. But from 1892, during four years of Democratic rule, our clearings fell from $60,883,572,438 to $51,935,651,733 in 1896, running as low as $45,000,000,000 in 1894. From 1896, during Mr. McKinley’s Administration, we gained on an average more than ten billions each year, the exchanges having gone up from $51,935,651,733 in 1896, to the surprising sum of $92,037,588,818 in 1900. From 1888 to 1892 during a Republican Administration, we increased our exports $317,787,505, reaching the then gratifying figure of $1,015,732,011. From 1892 to 1896, during a Democratic Administration, our exports decreased by $152,531,524, falling from $1,015,732,011 to $863,200,487. From 1896 down to June 30, 1900, with two months estimated, during McKinley’s Administration, our exports have gone up from $863,200,487 in 1896, to $1,400,000,000, gaining $537,000,000, or nearly doubling; and of this vast export of $1,400,000,000 more than $400,000,000 are manufactured goods, and would require in their production more than a million of American mechanics.

From the fall of 1888 to the fall of 1892, during a Republican Administration, national banks gained in resources $694,400,000, going from $2,815,700,000 to $3,510,100,000. From the fall of 1892 to the fall of 1896, during a Democratic Administration, the national banks lost in resources $346,500,000, going down from $3,510,100,000 to $3,263,600,000. From the fall of 1896 to April 26, 1900, during McKinley’s Administration, the national banks have gained in resources $1,548,356,000, going up from $3,263,600,000 to $4,811,956,000. The increase in both Republican periods was constant and gradual throughout, demonstrating, as has been well said, the influence and power of far-reaching politics which alone can bring about uniform and universal prosperity worthy the genius of the American people. The Republican party turned over the Government to the Democrats in March, 1893, with a bonded debt of only $585,029,330, and this was increased to $847,365,130, in times of peace. For the purpose of prosecuting the war the debt was increased in 1898 by $200,000,000, and now stands at $1,046,048,750, less such an amount of the twenty-five millions of 2 per cent. bonds as the Secretary of the Treasury may have already redeemed. During the last four years of Democratic administration, $201,003,808 of gold was exported; while during the first three years of the recent Administration, or down to June 30, 1899, we imported $201,071,000, making a difference in favor of Republican politics of $402,074,808. Look, too, at the per capita circulation in the United States. In 1802, it was $5.00; in 1845, $9.00; in 1873, $15.85; in 1892, $24.40; in 1900, $26.77.

As President McKinley pointed out in his message, our foreign trade for the fiscal year of 1900 showed a remarkable record. The total of imports and exports for the first time in the history of the country exceeded two billions of dollars. The exports are greater than they have ever been before, the total for the fiscal year 1900 being $1,394,483,082, an increase over 1899 of $167,459,780, an increase over 1898 of $163,000,752, over 1897 of $343,489,526, and greater than 1896 by $511,876,144. The growth of manufactures in the United States is evidenced by the fact that exports of manufactured products largely exceed those of any previous year, their value for 1900 being $433,851,756, against $339,592,146 in 1899, an increase of 28%. Agricultural products were also exported during 1900 in greater volume than in 1899, the total for the year being $835,858,123, against $784,776,142 in 1899.

The imports for the year amounted to $849,941,184, an increase over 1899 of $152,792,695. The increase is largely in materials for manufacture, and is in response to the rapid development of manufacturing in the United States. While there was imported for use in manufactures in 1900 material to the value of $79,768,972 in excess of 1899, it is reassuring to observe that there is a tendency toward decrease in the importation of articles manufactured ready for consumption, which in 1900 formed 15.17 per cent. of the total imports against 15.54 per cent. in 1899 and 21.09 per cent. in 1896.

The election of November, 1900, stamped out of the minds of the people all fear that any sort of governmental policy in any way inimical to the finances or business or prosperity of the country may be adopted. A very great factor in our future development, which our people are soon to discover, will appear in the building up of the ports of trade on the Pacific Coast, which will be so extensive and rapid in progress that the Atlantic ports will before long begin to feel the competition of the Western coast of our country. Our grasp of the Philippine Islands, and the foothold in trade and greater share of confidence in our disinterestedness as regards territorial encroachment which is fast gaining in the Chinese Empire, will finally consummate the preparations for as great business and prosperity for the Pacific coast States as have heretofore been enjoyed by those of the Atlantic coast. Soon a part of the trade and commerce of the Eastern States will be brought into competition with that of the great Pacific coast, insomuch that it will appear that indeed “Westward the star of empire takes its way.” It is the foresight of such change in the Pacific States that has helped produce such a pronounced electoral result.

Our country is now passing through a rapid growth of progress and power and prestige which will soon place her in the leadership of the nations, with every means necessary for extending civilization, enlightenment, commerce and better government over the world. We have come to the time when we must take up the mighty work of further cultivating and improving the condition of mankind, and we will continue this great work until our labors shall have brought to pass better conditions of government, co-ordination of interests, education, and peace and good will among the nations of the earth. In the progress of civilization since the dawn of the Christian era, the momentous task of leadership has devolved first upon Rome, then upon Spain, then upon England. It seems to have been reserved for the “Young Giant of the West” to complete the tasks undertaken, and assemble into one great community of interest vast national forces which have been the growth of centuries. In due time we shall no doubt finish the work and bring peace and good will to men in every part of the world and prepare men everywhere to turn the spear into a pruning hook, the sword into a ploughshare and to give freedom and protection and prosperity to all sorts and conditions of men, and put an end to strife between the nations. We believe that such is the great office to which we have been called, and that our functions as the leading nation of the world have already begun.

ALL THE PRECEDING PAGES WERE WRITTEN YEARS AGO, AND WHAT FOLLOWS BRINGS THE WORK UP TO THE DATE OF THIS ISSUE, MARCH 31ST, 1908.

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Chapter LXIV

MY CHRISTMAS ADDRESS TO CUSTOMERS DEC. 24, 1906.

You can now realize why we have for so long a period had a congested stock market. It started by the accumulation of Union Pacific by comparatively few people, the purchases being commenced in 1903, the panic year, when the price dipped to 65. By the time the stock touched 100 the accumulation was complete. Then the manipulation was begun for its advance to 190, at which time the ten per cent. dividend was declared, since which the process of distribution has been going on. St. Paul, Northern Pacific, and Great Northern have gone through a similar process. Prior to the declaration of the increased stock issues by these companies, the larger part of the old stock had been bought up by the inside knowing ones, after which the new issues were announced to the public. The profit to the holders of these stocks can be measured by the market value of the rights. Now we all know what the large holdings of these stocks meant. The inside magnates having nearly all of them, the outsiders were left out in the cold, and were consequently in the dark; but now the light of day flashes over the situation. You are asked to buy the rights which represent insiders’ profits, all of which is water pure and simple. The accumulation of stocks has now ceased and distribution is under way, and that is why the market has this present fit of liquidation, which must go on until completed. Then the situation will have righted itself legitimately, and not until then. Remember what I tell you: that the accumulation of stock as I have described has produced the present congested money market, and the unlocking of the former will, after a short time, unlock the other; then all will be well again. The present turbulent waves will pass over without many shipwrecks, and then will come calm weather and a smooth sea. Patience is a great virtue; exercise it, and wait for bottom; then get in and get rich.

Gentlemen, this is my Christmas greeting to you. You all have my best wishes for a happy and prosperous New Year.

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LXV. EDWARD H. HARRIMAN

Edward H. Harriman was born on Long Island in 1848. His father was a clergyman, and the family in poor circumstances. At the age of fourteen he left school, and began his business career in a Wall Street house. Of an aggressive and masterful character, with a great capacity for hard work and the ability to master every detail, he rapidly forged ahead. At eighteen he became partner in a brokerage house; at twenty-two bought a seat on the New York Stock Exchange. In 1883 he was chosen a director of the Illinois Central Railroad Company, and four years later, when he became its vice president, he retired from the brokerage business, having amassed what was then considered a comfortable fortune. For a time, while President Fish was abroad, Mr. Harriman was acting president of the Illinois Central, and promptly put into execution his idea that the way to make a road pay was to put it in the best of physical condition, and thus attract traffic by the ability to handle it, rather than by cutting rates. This policy afterwards brought the Union Pacific up from a financial and physical wreck in 1893 to the most aggressive and progressive railroad corporation of the day, operating, together with the Southern Pacific, over 15,000 miles of road, besides controlling the Illinois Central, Chicago & Alton, and St. Joseph & Grand Island Railroad companies and the Pacific Mail Steamship Company, and owning large interests in the Baltimore & Ohio, New York Central, Atchison, Chicago & Northwestern, and Chicago, Milwaukee & St. Paul roads. Mr. Harriman and his associates were defeated in an attempt to obtain control of the Northern Pacific in 1901, but the Union Pacific system benefited by this defeat, it is estimated, by about $60,000,000. The purchase of Northern Pacific in the open market forced the price of its stock up to $1,000 per share on May 9, 1901, causing the memorable panic of that date.

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