ifREEl; -^r^r#? '',yj'i,'>if^'it. %U,?f.'i'j', H & 4 6 72^^ C63 CORNELL UNIVERSITY LIBRARY BOUGHT WITH THE INCOME OF THE SAGE ENDO^VMENT FUND GIVEN IN 1 89 1 BY HENRY WILLIAMS SAGE Date Due nfff! •^9--M^i3= h^ J^^^ 1 — iif*' SEP J ^afiMW*^F^ — ^' — il5 1 •OO M ' ' a ^ 1 IW •«" < D^iNj^mj.i 5. "'^Wtei™*** !»tV-?"»'^i'^ u.-ti-iy^iitiiij'WJiSifflB n — Miiy- ' "1 1 Cornell University Library HG4572 .C63 Twenty-eight years in Wall Street. olln 3 1924 030 206 100 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030206100 \CLLU hit ^■C CyV TWENTY-EIGHT YEARS TN WALL STREET. HENRY CLEWS. NEW YORK IRVING PUBLISHING CO. 1888. 3? COPYRIGHT, 1887. BY HENRY CLEWS. PEEFICE BY THE AUTHOE. 'C't^J-xyuLA/'t. cC^ ^.Xtx /n^t^n^ ^-^Qc^oZx '>tt^t^t-^ MILLS BUILDING NEW YORK. To My Readers: The following pages are intended to throw some iight on imperfectly known events connected with Wall Street speculation and investments, and also with the condition and progress of the country from a financial standpoint, during the twenty-eight years which I have experienced in the great money centre. The theme is worthy of an abler pen, but in the absence of other contributors to this branch of our National history, I venture the plain narrative of an active participator in the financial events of the times in which I have lived. I have also made a brief retrospect of the history of Wall Street, and financial affairs connected therewith since the origin of the Stock Exchange in New York city. In sketching the men and events of Wall Street, I have freely employed the vernacular of the speculative fraternity as being best adapted to a true picture of their characteris- tics, although probably not most consonant with literary propriety. I have simply attempted to unfold a plain, unvarnished tale, drawing my material from experience and the records of reliable narrators. HENKY CLEWS. Nbw Yoek, Dec. 26, 1887.' CONTEISTTS. PA.GE. CHAPTER I. MY DBBTIT IN WALL STREET. Results of tlie Panic ol 1857. — Creating a Revolution in the Methods of Doing Business in Wall Street.— The Old "Fo- gies " of the Street, and How They were Surprised. — Their Prejudices and How they Originated. — The Struggle of the Young Bloods for Membership. — The Youthful Element in Finance Peculiar to this Country. — The Palmy Days of Little, Drew and Morse. — The Origin of " Corners," and the " Option" Limit of Sixty Days 5 CHAPTER II. WALL STREET AS A CIVILIZER. Clerical Obliquity of Judgment About Wall Street Affairs. — The Slanderous Eloquence of Talmage. — Wall Street a Great Distributor, as Exhibited in the Clearing House Transac- tions. — Popular Delusions in Regard to Speculation. — -Wiiat Our Revolutionary Sires Advised About Improving the Industrial Arts, Showing the Striking Contrast Between Their Views and the Way Lord Salisbury Wanted to Fix Things for This Country 13 CHAPTER III. HOW TO MAKE MONET IN WALL STREET. How to Take Advantage of Periodical Panics in Order to Make Money. Wholesome Advice toYoung Speculators. — Alleged "Points" from Big Speculators End in Loss or Disaster. — Professional Advice the Surest and Cheapest, and How and Where to Obtain It.. 19 CHAPTER IV. IMPORTANCE Olf BUSINESS TRAINING. Sons of Independent Gentlemen make very bad Clerks. —They become Unpopular with the Other Boys, and must Event- ually Go. — Night Dancing and Late Suppers don't Contrib- ute to Business Success.— Give Merit its True Reward. — Keeping Worthless Pretense in its True Position. — Running viii. CONTENTS. Public Offices on Business Principles.— A Pieee of Gratui- tous Advice for the Administration — A CoUege Course not in General Calculated to make e. Good Business Man.— The Question of Adaptability Important.— Children should be Encouraged in the Occupation for which they show a Preference. — Thoughts on the Army and Navy PAGE. 25 CHAPTER V. PERSONAL HONOR OP WALL STREET MEN. Breach of Trust Rare Among "Wall Street Men.— The English Clergyman's Notion of Talm age's Tirades A.gainst Wall Street. — Adventurous Thieves Have No Sympathiizers Among Wall Street Operators.— Early Training Necessary for Success in Speculation.— Ferdinand Ward's Evil Genius. — A Great Business can only be Built up on Honest Prin- ciples. — Great Generals Make Poor Financiers, Through Want of Early Training.— Practical Business is the Best College 33 CHAPTER VI. WALL STREET DtJKINQ THE WAR. The Fmanoiers of Wall Street Assist the Government in the Hour of the Country's Peril. — The Issue of the Treasury Notes. — Jay Cooke's Northern Pacific Scheme Precipitates the Panic of 1873.— Wall Street Has Played a Prominent Part in the Great Evolution and Progress of the Present Age 39 CHAPTER VII. MORE WAR REMINISCENCES — BRITISH AND NAPOLEONIC DESIGNS. How Napoleon Defied the Monroe Doctrine. — The Banquet to Romero. — Speeches by ;Eminent Financiers, Jurists and Business Men.— The Eloquent Address of Romero Against French Intervention. — Napoleon shows his Animus by Destroying the Newspapers Containing the Report of the Banquet— The Emperor Plotting with Representatives of the English Parliament to Aid the Confederates and Make War on the United States 45 CHAPTER VIII. FOREIGN INTRIGUES AGAINST AMERICAN LIBERTY. How the Imperial Pirates of France and England Were Fright- ened Off Through the Diplomacy of Seward.- Ominous CONTENTS* Appearance of ihe Russian Fleet in American Waters. — Napoleon Aims at the Creation of an Empire West of tlie Mississippi, and tlie Restoration of the Old French Colonics. — Plotting with Slidell, Benjamin, Lindsay, Roebuck and Others. — Urging England to Recognize the Confederacy. — Disraeli Explains England's iJesigns and Diplomacy. — After the Nayal "Victory of Farragut and the Capture of 'New Orleans England Hesitates Through Fear, and Napoleon Changes His Tactics. — Renewal of Intrigues Between Eng- land and France.— Their Dastardly Purposes Defeated by the Victories of Gettysburg, Vicksburg and the General Triumph of the Union Arms 59 CHAPTER IX. SECKETART CHASE AND THE TKBASOBY. The Depleted Condition of the Treasury when Mr. Chase took Of&ce. — Preparations for War and Great Excitement in Washington. — Chivalrous Southerners in a Ferment. — Officials Up in Arms in Defence of their Menaced Positions. —Miscalculation with Regard to the Prol^ble Duration oC the War. — A Visit to Washington and an Interview with Secretary Chase. — Disappointment about the Sale of Gov- ernment Bonds. — A Panic Precipitated in Wall Street.— Millionaii'es Reduced to Indigence in a Few Hours. — Mirac- ulously Saved from the Wreck.— How it Happened 7S CHAPTER X. THE NATIONAL BANKS. Secretary Chase Considers the Problem of Providing a National Currency.— How E. G. Spaulding takes a Prominent Part in the Discussion of the Bank Act. - The Act Founded on tlie Bank Act of the State of New York. — Effect of the Act ' upon the Credit of the Country. — A New System of Bank- ing Required 81 CHAPTER XI. THE NEW TOKK STOCK EXCHANGE. History of the Organization for Ninety-four Years. — From a Button- Wood Tree to a Palace Costing Millions of Dollars. — Enormous Growth and Development of the Business. - How the Present Stock Exchange was Formed by the Consolida- tion of other Financial Bodies. — Patriotic Action During the War Period.— Reminiscences of Men and Events 87 X. CONTENTS. PAGB. CHAPTER XII. "COKNEES" AND THEIR EFFECT ON VAiDBS. The Senate Committee on "Corners" and " Futures.'-Specu- lation Beneficial to the Country at Large.— A Regulator of Values, and an Important Agent in the Prevention of Panics.—" Corners" in all kinds of Business . —How A. T. Stewart made " Corners "—All Importing Firms deal in '• Futures."— Legislation Against "Corners" would stop Enterprise and cause Stagnation in Business. — Only the Conspirators themselves get hurt in " Corners."— The Black Friday " Corner." — Speculation in Grain Beneficial to Con- sumers "'■' CHAPTER XIII. THE COMMODORE'S " CORNERS." The Great Hudson " Corner."- Commodore Vanderbilt the "Boss" of the Situation.— The "Corner" Forced upon Him. — How he Managed the Trick of getting the Bears to "Turn" the Stock, and then caught them.— His able Device of Unloading while Forcing the Bears to Cover at High Figures.— The Harlem "Corner." — The Common Council Betrayed the Commodore, but were Caught in their own Trap, and Lost Millions. —The Legislature Attempt the same Game, and meet with a Similar Fate 107 CHAPTER XIV. DANIEL DREW. Drew, like Vanderbilt, an Example of Great Success without Education. — Controlled more Ready Cash than any mau in America. — Drew goes Down as Gould Rises. — " His Touch is Death."— Prediction of Drew's Fall. — His Thirteen Mil- lions Vanish.— How he caught the Operators in "Oshkosh" by the Handkerchief Trick. — The Beginning of " Uncle Daniel's" Troubles. — The Convertible Bond Trick. — The "Corner" of 1866. — Millions Lost and Won in a Day. — Interesting Anecdote of the Youth who Speculated outside the Pool, and was Fed by Drew's Brokers 117 CHAPTER XV. DREW AND VANDERBILT. Vanderbilt Essays to Swallow Erie, and Has a Narrow Escape from Choking. — He Tries to make Drew Commit Financial Suicide. — Manipulating the Stock Market and the Law Courts at the Same Time.— Attempts to "Tie Up" the CONTENTS. XI. PAGE. Hands of Drew.— Manufacturing Bonds with tlie Erie Paper Mill and Printing Press. — Fisk Steals the Boolts and Evades the Injunction. —Drew Throws Fifty Thousand Shares on the Market and Defeats the Commodore. — The "Corner" is Broken and Becomes a Boomerang. — Vanderbilt's Fury Knows no Bounds. — In his Rage he Applies to the Courts. — The Clique's Inglorious Flight to Jersey City. — Drew Crosses the Ferry with Seven Millions of Vanderbilt's Money. — The Commodore's Attempt to Reach the Refugees. — A Detective Bribes a Waiter at Taylor's Hotel, who Delivers the Com- modore's Letter, which Brings Drew to Terms. — Senator Mattoon gets on the right side of Both Parties "... 137 CHAPTER XVI. DKBW AND THE ERIE "C0RNEE8." A Harmonious Understanding with the Commodore. — How the Compromise was Effected. — An Interesting Interview with Fisk and Gould in the Commodore's Bed-Room. — How . Richard Sohell Raised the Wind for the Commodore. — Drew's Share of the Spoils. — He Tries to Retire from Wall Street, but Can't. — The Settlement that Cost Erie Nine Mil- lions. — Grould and Fisk "Water " Erie again, to the Extent of Twenty-three Millions, but leave Drew out. — "Uncle Daniel " Returns to the Street. — He is Inveigled into a Blind Pool by Gould and Fisk, Loses a Million and Retreats from the Pool. — He then Operates Alone on the " Short " Side and Throws Away Millions. — He Tries Prayer but it "Availeth Not." — "It's no Use, Brother, the Market Still Goes Up." — Praying and Watching the Ticker. — Hope lessly " Cornered " and Ruined by his Former Pupils and Partners 137 CHAPTER XVTI. INTERESTING EPISODES IN DKEW'S LIFE. Incidents in the Early Life of Drew, and How he Began to Make Money. — He Borrows Money from Henry Astor, Buys Cattle in Ohio and Drives them over the Alleghany Moun- tains under Great Hardship and Suffering. — His Great Career as a Steamboat Man, and his Opposition to Vander- bilt. — His Marriage and Family. — He Builds and Endows Religious and Educational Institutions. — Returns to his Old Home after his Speculative Fall, but can find No Rest so Par away from Wall Street. — His Hopes through Wm. H. Vanderbilt of another Start in Life. — His Bankruptcy, atii. CONTENTS. FAOE. Liabilities aud Wardrobe.— His Sudden out Peaceful End.— Characteristic Stories of his Eccentricities 147 CHAPTER XVIII. PANICS.— THEIR CAUSES.— HOT FAB PREVENTABLE. Not Accidental Freaks of the Market.— We are Still a Nation of Pioneers.— The Question of Panics Peculiarly American. — Violent Oscillations in Trade Owing to the Great Mass of New and Immature Undertakings. — Uncertainty about the Intrinsic Value of Properties. — Sudden Shrinkage of Rail- road Properties a Fruitful Cause of Panics.— Risks and Panics Inseparable from Pioneering Enterprise. — We are Becoming Less Dependent on the Money Markets of Europe. — In Panics much Depends upon the Prudence and Self-control of the Money-Lenders. — The Law which Com- pels a Reserve Fund in the National Banks is at Certain Crises a Provocative of Panics. — George I. Seney.— John C. Bno. — Ferdinand Ward. — The Clearing House as a Preven- tive of Panics 157 CHAPTER XIX. OLD-TIME PANICS. The Panic of 1837.— How it was Brought About.— The State Banks. — How they Expanded their Loans under Govern- ment Patronage. — Speculation was Stimulated and Values Became Inflated. — President Jackson's " Specie Circular" Precipitates the Pan ic— Bank Contraction s an d Consequent Failures.— Mixing up Business and Politics.— A General Collapse, with Intense Suffering 175 CHAPTER XX. THE TRUE STORY OP BLACK FRIDAY TOLD FOR THE FIRST TIME. The Great Black Friday Scheme originates in patriotic motives. Advising Boutwell and Grant to sell Gold.— The part Jim Fisk played in the Speculative Drama.— "Gone where the Woodbine Twineth."— A general state of Chaos in Wall Street.— How the Israelite Fainted.—" What ish the prish now?-'— Gould the Head Centre of the Plot to "Corner" Gold.— How he Managed to Draw Ample Means from Erie. -Gould and Fisk Attempt to Manipulate President Grant and Compromise him and his Family in the Plot.— Scenes and Incidents of the Great Speculative Drama 181 CONTENTS. XllL PAGE. CHAPTER XXI. CAUSES OP LOSS IN BPECTTLATION. Inadequate Information. — False Information. — Defectsof News Agencies.— InsufBoiency of Margins. — Dangers of Personal Idiosyncrasies.— Operating in Season and out of Season. — Necessity of Intelligence, Judgment and Nerve. — An Ideal Standard.— What Makes a King Among Speculators ? 201 CHAPTER XXII. ■VTLIiARD AND HIS SPECULATIONS. Return of the Renowned Speculator to Wall Street. — Recalling the Famous " Blind " Pool in Northern Pacific. — How Vil- lard Captured Northern Pacific— Pursuing the Tactics of Old Vanderbilt. — Raising Twelve Million Dollars on Paper Credit. — Villard Emerges from the "Blind" Pool a Great Railroad Magnate. — He Inflates his Great Scheme from Nothing to One Hundred Million Dollars. — His Unique Methods of Watering Stock as Compared with those of George I. Seney 209 CHAPTER XXIII. PBEDINAND WARD. Peculiar Power and Methods of the Prince of Swindlers.— How , he Duped Astute Financiers and Business Men of all Sorts, and Secured the Support of Eminent Statesmen and Lead- ing Bank Officers, whom he Robbed of Millions of Money — The most Artful Dodger of Modern Times. — The Truth about the Swindle Practiced upon General Grant and his Family. 315 CHAPTER XXIV. HENRY N. SMITH. How Mr. Smith Started in Life and became a Successful Oper- ator. — His connection with the Tweed " Ring," and how he and the Famous " Boss " made Lucky Speculations, through the use of the City Funds, in Making a Tight Money Mar- ket. — On the Verge of Ruin in a Pool with W. K. Vander- bilt. — He is Converted to the Bear Side by Woerishoffer, and Again Makes Money, but by Persistence in his Bearish Policy Ruins himself and Drags Wm. Heath & Co. down also 223 XlV. CONTENTS. PAGE. CHAPTER XXV. KEBNE'S CAEEBR. He Starts in Speculation as a " Curbstone " Broker.— A Lucky Hit in a Mining Stock Puts Him on the Bead to be a Mil- lionaire. — His Speculative Encounter with the Bonanza Eings. — He Makes Pour Millions, and Major Selorer brings him to Wall Street, where they Form an Alliance with Grould, Who "Euchres" Both of Them. — Selover Drops Gould in an Area Way. — Keens Goes Alone and Adds Nine Millions More to His Fortune. — He Then Speculates Reck- lessly in Everything. — Suffers a Sudden Reversal and Gets Swamped. — Overwhelming Disaster in a Bear Campaign, Led by Gould and Cammack, in which Keene Loses Seven Millions.— His Desperate Attempts to Recover a Part Entail Further Losses, and He Approaches the End of His Thir- teen Mi iions.— His Princely Liberality and Social Relations ■with Sam Ward and Others , 329 CHAPTER XXVI. OtJR RAILROAD METHODS. Deceptive Financiering.- Over-Capitalization. — Stock " Water- ing."— Financial Reconstructions. — Losses to the Public. — Profits of Oonstructors.— Bad Reputation of our Railroad Securities.— Unjust and Dangerous Distribution of the Public Wealth 241 CHAPTER XXVII. THE GEORGIA REPUDIATION BOND SWINDLE. How a Sovereign Southern State Cheated the Northern Men who Helped Her in Distress..- A New Way to Pay Old Debts.— Cancellation by Repudiation of Just Claims for Cash Loaned to Sustain the State Government, Build Public Schools and Make Needed Improvements. — Bottom Facts ■ of the Outrage.— The Recent Attempt to Place a New Issue of Georgia Bonds on the Market while the Old ones Remain Unpaid.— The Case before the Attorney-General of the State of New York.— He Examines the Legal Status of the Bonds in Connection with the Savings Banks.— His Decision Prohibits these Institutions from Investing the Hard Earnings of the Working People in these Doubtful and Dangerous Securities.— A Bold Effort to have the Fresh Issue of Georgia Paper put upon the List of Legitimate Securities of the New York Stock Exchange Firmly Opposed and Eventually Frustrated 055 CONTENTS. PAGE. CHAPTER XXVIII. AKDREW JOHNSON'S VAGAKIES. "Swinging Around the Circle." — How Mr. Johnson Came to Visit New York on His Remarkable Tour. — The Grand Re- ception at Delmonlco's. — The President Loses His Temper at Albany and Becomes au Object o( Public Ridicule. — His Proclamation of "My Policy" Ironically Received. — Re- turns to Washington Disgraced. — The Massacre of New Orleans. — The Impeachment of the President 289 CHAPTER XXIX. THE DIX CONVENTION. How the War Democrat, General Dix, was Elected Governor by the Republican Party. — The Candidates of Senator Conlding Rejected. — How Dix was Sprung on the Conven- tion, to the Consternation of the Caucus. — Judge Robert- son's Disappointment. — Exciting Scenes in the Convention. — General Dix declines the Nomination, but Reconsiders and Accepts on the Advice of His Wife and General Grant. — How Dix's Election Ensures Grant's Second Term as President 297 CHAPTER XXX. CONSECIUENCES OF THE tJTICA (DIX'S) CONVENTION. A Chapter of Secret History. — Conkling gets the Credit for DLx's Nomination and His " Silence Gives Consent " to the Honor. — Robertson Regards Him as a Marplot. — The Sena- ^ tor Innocently Condemned. — The Misunderstanding which Defeated Grant for tlie Third Term, and Elected Garfleld. — How the Noble " 306 " were Discomfited. — " Anything to Beat Grant." — The Stalwarts and the Half Breeds. — " Me Too " — The Excitement which Aroused Guiteau's Murderous Spirit to Kill Garfield 307 CHAPTER XXXI. GKANT'S SECOND TEEM. The Best Man for the Position and Most Deserving of the Honor. — How the " Boom " was Worked up in Favor of Grant. — The Great Pmanciers and Speculators all Come io the Front in the Interest of the Nation's Prosperity and of the Man who had Saved the Country. — The Great Mass Meeting at Cooper Union. — Why A. T. Stewart Refused to Preside. — The Results of the Mass Meeting and how they XVI. CONTENTS. PAGE, were Appreciated by the Friends of the Candidate, licading Representatives of the Business Community and the Pubhc Press Generally, Irrespective of Party 313 CHAPTER XXXII. THE TWEED RINQ, AND THE COMMITTEE OF SEVBKTT. The Ring Makes Itself Useful in Speculative Deals. — How- Tweed and His ' ' Heelers " Manipulated the Money Market. — The Ring Conspiring to Organize a Panic for Political* Purposes. — The Plot to Gain a Democratic Victory Defeated and a Panic Averted Through President Grant and Secre- tary Boutwell, who were Apprised of the Danger by Wall Street Men. — How the Committee of "Seventy" Origin- ated. — Tlie Taxpayers Terrorized by Boss Tweed and his Minions — How " Slippery Dick" got Himself Whitewashed. —Offering the OfBce of City Chamberlain as a Bribe to Compromise Matters. — How the Hon. Samuel Jones Tilden, as Counsel to the Committee, Obtained His Great Start in Life 327 CHAPTER XXXIII. HON. SAMUEL J. TILDEN. How Tilden began to make His Fortune in Connection with William H. Havemeyer.— Tildeu's great Fort in Politics. He Improves His Opportunity with the Discernment of Genius.— How Tilden became one of the Counsel of the 'Committee of Seventy."— His Political Elevation and Fame dating from this Lucky Event.— The Sage of Grey- stone a Truly Great Man.— Attains Marvellous Success by His own Industry and Brain Power. -He not only Deserved Success and Respect, but Commanded them.- -How his Large Generosity was Manifested in His Last WiU and Testament.— The Attempt to Break that Precious Public Document ^^^ CHAPTER XXXIV. COMMODORE VANDERBILT.-HOW HIS MAMMOTH FORTUNE WAS ACCUMULATED. Ferryman. -Steamboat Owuer.-Runs a Great Commercial Fleet.-The First and Greatest of Railroad Kings -The Harlem " Corner. "-Reorganization of N. Y. Central -How He Milked the Street, and Euchred His Co-Speculators - His Portune.-Its Vast Increase by Wm H 345 CONTENTS. xvii. PAaB. CHAPTER XXXV. WM. H. TANDERBILT. A Builder instead of a Destroyer of Public Values.— His Re- spect for Public Opinion on the Subject of Monopolies. — His first Experience in Railroad Management. — How he Im- proved the Harlem Railroad Property. — His great Executive Power manifested in every stage of advance until he be- came President of the Vanderbilt Consolidated System.— Aa Indefatigable Worker. — His habit of Scrutinizing Every Detail. — His Prudent Action in the Great Strike of 1877, and its Good Results. — Settled all misunderstandings by Peace and Arbitration.— Makes Princely Presents to his Sisters. — The Singular Gratitude of a Brother-in-Law.— . How he Compromises by a Gift of a Million with Young Comeel. — Gladstone's Idea of the Vanderbilt Fortune.— Interview of Chaunoey M. Depew with the G. O. M. on the subject. — The great Vanderbilt Mansion and the Cele- brated Ball. — The Immense Picture GaUery. — Mr. Vander- bilt Visits some of the Famous Artists. — His Love of Fast Horses. — A Patron of Public Institutions.— His Gift to the Waiter Students. — While Sensitive to Public Opinion, has no fear of Threats or Blackmailers. — The Public be Damned. — Explanation of the rash Expression. — The Purchase of " Nickel Plate." — His Declining Health and Last Days. — His Will, and Wise Method of Distributing 200 Millions.— Effects of this Colossal Fortune on Public Sentiment 355 CHAPTER XXXVI. " YOTTNG COENBBL." The Eccentricities of Cornelius Jeremiah Vanderbilt, and his Marvellous Power for Borrowing Money, — He Exercises Wonderful Influence over Greeley and Colfax. — A Dinner at the Club, with Young " Corneel " and the Famous " Smiler." — " Corneel " tries to make himself Solid with Jay Cooke. — The Commodore Refuses to Pay Greeley. — " Who the Devil Asked You?" retorted Greeley. — "Corneel's" mar- riage to a Charming and Devoted Woman. — How She Softened the Obdurate Heart of her Father-in-Law 375 CHAPTER XXXVII. THE TOtnjGt VAHBEKBILTS AND THEIR P0HTUNE8. Remarkablefor Physical and Intellectual Ability. — The Mixture of Races and the Law of Selection.— TheWonderful Will and xviil. CONTEwTtf. FAGK. tha Wise DlsirmuTJoii oi Two Hundred Milliona.— Tastes, Habits and Social Proclivities of the Young Vanderbilts.— The Married Relations of Some of Them.— Being Happily Assorted they Make Good Husbands.— Their Property Re- garded as a Great Trust.— Their Railrojd System and its Great Army of Employes.- The Young Men Cautious About Speculating, and Conservative is their Expenses Generally 587 CHAPTER XXXVIII. THE ROTHSCHILDS. The Beginning of the Financial Career of the Great House of Rothschild.— The Hessian Blood Money was the Great Foundation of their Fortune.— How the Firm of the Five Original Brothers was Constituted. — Kathan the Greatest Speculator of the Family. — His Career in Great Britain, and how he Misrepresented the Result of the "Battle of Water- loo" for Speculative Purposes. — Creating a Panic on tlie London Stock Exchange. — His Terror of being Assassinated. — His Death Causes a Panic on the London Exchange and the Bourses 397 CHAPTER XXXIX. TEAVEES. The Unique Character of Travers. — His Versatile Attainments. — Althougli of a Genial and Humorous Disposition, He was Always a Bear. — How He was the Means of Preserv- ing the Commercial Supremacy of New York. — He Squashes the English Bravado, and Saves the Oratorical Honor of Our Country.— Has the Oyster Brains? — It Must have Brains, for it Knows Enough to Sh-sh-shut Up. — The Dog and the Bat. — I d-d-don't want .to Buy the D-d-dog ; I will Buy the R-r-rat.— Travers on the Royal Stand at the Derby. — How He was Euchred by the Pool-Seller — My Proxy in a Speech at the Union Club.— If You are a S-s-self-made Man, Wh-wh-y the D-devil didn't You put more H-hair on the Top of Your Head?— Other "Witticisms. &o. — Death of the Great Wit and Humorist, and some of His Last Witty Sayings 407 CHAPTER XL. CHAELBS F. WOBEISHOFFER. The Career of Charles P. Woerlshoffer and the Resultant Effect upon Succeeding Generations.— The Peculiar Power of the Great Leader of the Bear Element in Wall Street. — His Methods as Compared with Those of Other Wreckers of CONTENTS. XIX PAGE. Values. — A Bismarck Idea of Aggressiveness the Ruling Element of His Business Life. — His Grand Attack on the Villard Properties, and the Consequence Thereof. — His Benefactions to Faithful Friends 425 CHAPTER XLI. ■WOMEN AS SPBCTJLATOES. Wall Street no Place for Women. — They Lack the Mental Equipment. — False Defenses of Feminine Financiers. — The Claflin Sisters and Commodore Vanderbilt. — Fortune and Reputation Alike Endangered 437 CHAPTER XLII. ■vtestbeN millionaiees ih new yoek. Eastward the Star of Wealth and the Tide of Beauty Take their Course. — Influence of the Pair Sex on this Tendency, and Why. — New York the Great Magnet of the Country. — Swinging into the Tide of Fashion.— Collis P. Huntington. — His Career from Penury to the Possessor of Thirty Mil- lions. — Leland Stanford — first a Lawyer in Albany, and afterward a Speculator on the Pacific Coast. — Has Rolled TTp nearly Forty Millions. — D. O. Mills — an Astute and Bold Financier. — Courage and Caution Combined. — His Kapld Rise in California. — He Makes a Fortune by Invest- ing in Lake Shore Stock. — Princes of the Pacific Slope. — Maokay, Flood and Fair. — Their Rise and Progress. — Wil- liam Sharon — A Brief Account of His Great Success. — Wm. C. Ralston and His Daring Speculations. — Begins a Poor New York Boy, and Makes a Fortune in California. — John P. Jones. — His Eventful Career and Political Progress. — " Lucky " Baldwin.— His Business Ability and Advance- ment. — Lucky Speculations. — Amasses Ten or Fifteen Mil- lions. — William A. Stewart. — Discovers the Eureka Placer Diggings. — His Success as a Lawyer and in Mining Enter- prises. — James Lick. — One of the Most Eccentric of the California Magnates. —Real Estate Speculations. — His Be- quest to the Author of the " Star Spangled Banner." — John W. Shaw, Speculator and Lawyer 447 CHAPTER XLIII. KAILROAD INVESTMENTS. Vastness of our Railroad System. — Its Cost. — Fall in the Rate of Interest. — Tendency to a Four Per Cent. Rate on Rail- XX. CONTENTS. PAGB. road Bonds. — Effect of the Change on Stocks.— Prospective Speculation. — Some Social Inequities to beAdjusted through Cheaper Transportation 475 CHAPTER XLIV. THE SILVER QUESTION. Its Fundamental Importance. — Dangers of Neglecting it. — Attempts at Evasion. — How it must be Finally met. — Sil- ver Paper Currency Schemes, and their Futility 481 CHAPTER XLV. THE LABOR QUESTION. Harmony Between the Representatives of Capital and Labor Necessary for Business Prosperity. — If Manufacturers should Combine to Regulate Wages the Arrangement could only be Temporary. — The Workingmen are Taken Care of by the Natural Laws of Trade. — Competition among the Capitalists Sustains the Hate of Wages. — Opinion of John Stuart Mill on this Subject. — Compelling a Uniform Bate of Pay is a Gross Injustice to the Most Skilful Workmen. — The Tendency of the Trades Unions to Debar the Working- man from Social Elevation.— The Power of the Unions Brought to a Test.— The Universal Failure of the Strikes.— Revolutionary Demands of the Knights of Labor.— Gould and the Strikes on the Missouri Pacific, &c., &c 491 CHAPTER XLVI. AN IMPOUTAUT SYNOPSIS. A Resume in Brief of the Leading Events Connected with Wall Street Affairs for Seventy-seven Tears gOS CHAPTER XL VII. INTERNATIONAL SIGNIFICANCE OP THE BAHTHOLDI STATUE. Great as an Achievement of Art, but Greater as the Embodi- ment of the Idea of Universal Freedom the World Over.— It is a Poetic Idea of a Universal Republic— Enlightenment of the World Must Result in the Freedom of Man 525. CHAPTER XLVIII. LARGE FORTUNES AND THEIR DISPOSITION. How the Fortunes of the Astors were Made.-George Peabody and His Philanthropic Sohemes.-Johns Hopkins and his Peouliarities.-A. T. Stewart and his Abortive Plans -A CONTENTS. XXl. PA&E. Sculptor's Opinion of his Head. — Eooentricitie» of Stephen Qirard, and How he Treated his Poor Sister. — His Penuri- ous Habits and Great Donations. — James Lenox and the Library which he Left.— How Peter Cooper Made his For- tune, and his Liberal Gifts to. the Cause of Education. — Samuel J. Tilden's Munificent Bequests. — The Vanderbilt Clinic. — Lick, Corcoran, Stevens and Catharine Wolf 529 CHAPTER XLIX. SOUTHEailf AFFAIRS IN SPECULATION. * The Preservation of the Union a Great Blessing. — To Let them " Secesh " would have been National Suicide. — How Immi- gration has Assisted National Prosperity. — Rescued from the Dynastic Oppression of European Governments. — Showing Good Eellowship towards the Southern People and Aiding them in their Internal Improvements.— The South,^ Immediately after Ihe War, had Greater Advantages thai the North for Making Material Progress. — The Business of the North was Inflated. — The States of Georgia and Ala- bama Offered Inviting Fields for Investment. — Issuing State Securities, Cheating and Repudiating. — President Johnson Chiefly to Blame for the Breach of Faith with Investors who were Swindled out of their Money.— Revenge and Avarice Unite in Financial Repudiation 541 CHAPTER L. WESTERN AND SOUTHERN FINANCIAL LEADERS. -Alfred Sully, his Origin and Successful Career. — Calvin S. Brice, a Financier of Ability. — General Samuel Thomas, Prominent in the Southern Railroad System. — General Thomas M. Logan, a Successful Man in Railroading and Mining. — Financial Chieftains of Baltimore. — The Garretts. — ^Their Great Success as Railroad Managers. — Portrait oE Robert Garrett 553 CHAPTER LI. ARBITRATION. How the Sysjiem of Settling Disputes and Misunderstandings by Arbitration has Worked in the Stock Exchange.— ^Why not Extend the System to Business Matters Generally ? — Its Great Advantages over Going to Law. — It is Cheap and has no Vexatious Delays. — Trial by Jury a Partial Failure. — Some Prominent Cases in Point. — Jury " Fixing" and its tii. CONTENTS. PAGE Consequences.— How Juries are Swayed by tlieir Sympa- thies.— A Curious Miscarriage of Justice before a Referee.— Tlie Little Game of the Diamond Broker 561 CHAPTER LII. NE-W TOKK AS A FINANCIAL CENTRE. Its Past, Its Present, Its Future. — Banking Decadence. — Growth of Interior Centres.— Obstruction from the National Bank Laws. — Relief Demanded. — Requirements of Ihe Future 577 CHAPTER LIII. EAETHQUAKB THEORIES AND WALL STREET AFFAIRS. The Shock of Erery Calamity Pelt in WaU Street. — Earthquakes the only Disasters which seem to Defy the Power of Pre- caution. — Becoming a Subject of Serious Thought for Wall Street Men and Business Men.— The Volcanic Theory of Earthquakes. — Other Causes at Work Producing these Terrific Upheavals. — Why Charleston was more Severely Shaken Up than New York. — Why the Southern Earth- quake did not Strike Wall Street with Great Force. — Earth- quakes Likely to Become the Great Disasters of the Future. 589 CHAPTER LIV. AUGUST BBLMONT. The American Representative of the Rothschilds — Begins Life in the Rothschilds' House in Frankfort. — Consul General to Austria and Minister to the Hague. — A Great Financier and a Connoisseur in Art 595 CHAPTER LV. THE SOCIALIST OBJECTIONS TO THE PRESENT ORDER OF SOCIETY EX- AMINED. Increase of Population and the Growing Pressure upon the Means of Subsistence. — Education and Moral Improvement the True Remedy for Existing or Threatened Evils. — Errors of Communism and Socialism. — How Sooialistio Leaders audPhilosophersRecognize the Truth.— Growth of Popu- lation Does Not MeanPoverty 599 CHAPTER LVI. STOCK EXCHANGE CSLEBUITIES. How Wall Street Bankers' Nerves are Tried. — Fine Humor, Jocular Dispositions, and Scholarly Taste of Operators. CONTENTS. XXlll. PAGE. George Gould as a Future Financial Power. — American No- bility Compared with European Aristocracy. — How the Irish Can Assist to Purge Great Britain of her Bilious Incu- bus of Nobility. — The Natural Nobility of our Own Country, and Their Destiny 603 CHAPTER LVTI. A LOOK INTO THE PUTtlKE. What we Are. — What we Are Preparing For. — What we are Destined to Do and to Become.— We are Entering on an Era of Seeming Impossibilities. — Yet the Inconceivable will be Realized 611 CHAPTER LVIII. JAY GOULD. Kis Eirth and Early Eduoation.--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 Mairies Her. — Settles in the Metropolis and begins to deal in Railroads. — Buys a Bankrupt Road from his Fath- er-in-law, reorganizes it and sells it at a considerable profit. — Henceforth he makes his Inoney 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. — Check- mated by Commodore VanderbUt and obliged to Settle. — He makes Millions out of Wabash and Kansas & Texas. — His Venture in Union Pacific. — His Construction Compa- nies.— Organization of American Union Telegraph, and his method of Absorbing and Getting Control of Western tTnion.— The Strike of the Telegraphers and his Great En- counter with the Knights of Labor and Trades Unionists. — Gould's First Yachting Expedition. — An exceedingly Hu- morous Story of his early Experience on tlie Water. — His StLitus as a Factor in Railrokd Management 619 CHAPTER LIX. MEN OF MAEK. Cyrus W. Field. — Russell Sage. — Addison Cammack. — The .Terome Brothers. — Moses Taylor. — Chauncey M. Depew. — XXIV. CONTENTS. Austin Corbin. — Anthony J. Drexel. — John A. Stewart. — Hon. Levi P. Morton. — Philip D. Armour. — Stedman, the Poet.— Stephen V. White. — Victor H. Newcombe. — James M. Brow^ne.— Former Giants of the Street. — Henry Keep. Antliony W. Morse 659 CHAPTER LX. Two Young Men of Promise 683 CHAPTER LXI. THE U. S. TREASURY DEPARTMENT UNDER PRESPDENT CLEVE- LAND' ADMESISTRATION. The Management both Bold and Masterly, Especially Consid- ering the Limited Powers Provided by Law up to the Period of the Passage by Congress of the Bill Giving the Secretary Pull Authority to Buy Bonds. — It Presents a Fav- orable Comparison with President Grant's and Secretary Richardson's Record in the Same Department Just Prior to and During the Panic of 1873.— Some Incidents Con- neote with and Growing Out of that Great Panic 685 CHAPTER LXri. A TEW WORDS ABOUT MYSELF. The Causes of the Suspension of my Firm in 1873 Accurately Stated. — A Retrospection with a Contrast. — A Word of Encouragement to Aspiring Young Men, and some Sapient Counsel to Business Men, Especially those who have Passed Through the Ordeal of a Financial Collapse.— A Fall Down the Shaft of an Elevator and a Broker's Curi- ous Prediction.— Envy and Malice Among the Strong Forces with which a Successful Man has to Contend. How to Combat these without Loss of Energy or Temper. Useful Suggestions to the Rising Generation 709 Conclusion. 717 ILLUSTRATIONS. PAGE. Henry Clews - - - Frontispiece- Mills Building - - - - 5 Jacob Little - ^3 J. B. Clews - S6o C. M. Foster - - - 524 Salmon P. Chase - 39 John Sherman - - - 73 E. a. SpauldinK - - 81 New York Stock Exchange (exterior) - - ~ - 87 New York Stock Exchange (board room) - - - 95 Daniel Drew .... - . 117 New York Clearing House (clearing room) - - 157 George I. Seney - - ... 175 Henry Villard - - - 209 Georgia State Bond - - - 255 James C Flood - - 463 Samuel J. Tilden - - 337 Commodore Vanderbilt . 345 W. H. Vanderbilt . 355 Cornelius Vanderbilt -. 387 W. K. Vanderbilt . . 389 393 - 397 401 - 407 C. P. Huntington : ^j F. W. Vanderbilt Three Rothschilds Nathan Rothschild W. R. Travers Leland Stanford D. O. Mills Charles Crocker John W. Mackay Jalnes G. Fair Robert Garrett - 455 457 - 459 461 - 465 August Belmont ~ " ^^^ George J Gould ^ _ ' |^^ Jay Gould - Cyrus W. Field P. D Armour Levi P. Morton J. A. Stewart 619 659 661 663 A. j'. Drexel ' |^5 Leonard W. Jerome ^^7 Addison Cammaok ' ?^ Russell Sage . °7i Cliauncey M Depew ^73 James M. Brown . - °75 E. C. Stedman - ' * ^77 Victor H. Newcombe ^79 Moses Taylor - ^^i Thomas L. Jiimes . . " ^^3 • - S98 DEDICATION TO THE VETERANS OF WALL STREET, MOST OP WHOM I HAV:e KNOWN PERSONALITY. My Dear Friends: I liave attempted, in the following pages, to relate in a simple and comprehensive manner, without any aim at elaboration, the leading features of the most prominent events that have come within the sphere of my personal knowledge and experience during the twenty-eight years of my busy live in Wall street. I have never kept a diary regularly, but have been occasionally in the habit of preserving certain memoranda in the form of letters, and a few scraps from the newspapers at various times. With these imperfect mementoes, I have revived my recollection to dictate to my stenographer the matter which these pages con- tain, in a somewhat crude form and unfinished style. In fact, I have not aimed at either finish or efiect, not having the time, but have simply made a collection of important facts in my own experience that may help the future historian of Wall street to preserve for the use, knowledge and edification of posterity some of the most conspicuous features and events in the history of the place that is yet destined to be the great financial centre of the world. If I can only succeed, out of all the poorly-arranged material I have gathered, in furnishing the historian of the future with a few facts for a portion of one of his chapters, I shall have some claim upon the gratitude of posterity. In my description of Drew, Vanderbilt, Gould, Travers, 2 preface;. Keene, Conkling and others, I have followed the advice which Oliver Cromwell gave his portrait painter : ' ' Paint me as I am, ' ' he said. ' ' If you leave out a scar or a wrinkle, I shall not pay you a farthing." I have given my opinion of men and things also without any superstitious regard for the proverb de mortuis nil nisi bonum. I have also endeavored to refrain from setting down aught in mahce. When any of those gentlemen of whom I have had occasion to speak, who still survive, shall write a book, they can indulge in the same privilege with my name that I have done with theirs, whether I am living or dead at the time. I shall ask no indulgence for myself that I don't accord to others. I have expressed my opinions freely from a Wall street point of view, from the standpoint of the much-abused operator and broker, and " bloated bondholder. " I have endeavored to enlighten the public on the true status of Wall street, as the very back-bone of the country's progress and prosperity, instead of misrepresenting it as a den of gam- blers, according to the ignorant and somewhat popular prejudice of the majority who have attempted to write or speak on the subject. This feeling has been largely fostered by clergymen, on hearsay evidence, as well as by the practices of professional swindlers, who have been smuggled into Wall street from time to time, but who have no legitimate connection therewith any more than they have with the church, which repudiates them as soon as it discovers them. In fact, the great aim of the book is to place Wall street in its true light before the eyes of the world, and help to efface the many wrong impressions the community have received regarding the method of doing business in the great financial mart to which the settlement of accounts in all our industry, trade and commerce naturally converges. PREFACE. 3 I have endeavored to correct the utterly erroneous impression that prevails outside Wall street, in regard to the nature of speculation, showing that it is virtually a great productive force in our political and social economy, and that without it railroad enterprise and other branches of industrial development which have so largely increased the wealth of the nation, would have made but slow progress. To preserve and inculcate these ideas by putting them in what I hope may be a permanent form, is another object of publishing this volume. J. know you can sympathize with me in this effort to set public opinion right, as many of you have long been making strenuous endeavors after success in the same direction. To put the whole matter, then, into one short and comprehen- sive clause, my cardinal object in this book is to give the general public a clearer insight of the reputed mystery and true inwardness of Wall street affairs. In my relation of certain reminiscences of Wall street, and in discussing the checkered career of certain brokers, operators and politicians, I have endeavored to be guided by a historic aphorism of I,ord Macaulay : "No past event has any intrinsic importance," says the great essayist, litterateur, historian and statesman. " The knowledge of it is valuable," he adds, " only as it leads us to form just calculations with respect to the future." In the samples of my experience which I have given in this book I have aimed, to some extent, at this rendition of the noble ptirposes of history and biography in their philosophic and scientific application of teaching by example. If I have fallen far short of this high ideal of the British Essayist, as I humbly feel that I have, I must throw myself on the kind in- dulgence of the readers, and ask them to take the will for the deed. For the presentation of the facts themselves I crave no indulgence. They are gems worthy of preservation in the light 4 PREFACE. of the above definition. I only submit that the setting might be much better. My chapters on politics may be considered foreign to the main issue, but as many of the events therein described were intimately connected with my business career, I think they are not much of a digression. Henry Ci^ews. MILLS BUILDING. (Opposite N. Y. stock Exchange.) Nos. 13 AND 15 Broad St., OCCUPIED RY THE BANKING HOUSE OF HENRY CLEWS &. CO. TWENTY-EIGHT YEARS WALL STREET, BY HENRY CLEWS. CHAPTEE I. mr DEBUT IN WALL STREET. MT advent in Wall Street was on the heels of the panic of 1857. That panic was known as the " Western bliz- zard." It was entitled to the name, as its destructive power and chilling effects had, surpassed all other financial gales that had swept over Wall Street. The first serious result of its fatal force was the failure of the Ohio Life and Trust Company, a concern of gigantic dimensions in those days. The Company had an office in Wall Street, and on the announcement of the collapse, business became completely paralyzed. This failure was immediately followed by the suspension of many large firms that had withstood the shock of ^11 ordinary collisions and had successfully weathered many financial storms. The panic was due in part to excessive importations of foreign goods, and also to the rapid construction of rail- roads, to a large extent on borrowed capital. There were other contributing causes. The crops were bad that year, and the country was unable to pay for its imports in pro- duce, and coin was brought to the exporting point. In October, the New York City banks suspended payments, and their example was followed throughout the country. 6 MY DBBUT IN WALI, STREET. Bank credits had been unduly expanded everywhere, and the time had naturally arrived for contraction. It came with a bound, and financial disaster spread like a whirl- wind, becoming general. The Stock Exchange had been a moderately growing con- cern for the ten years previous to this calamity, and the securities there dealt in had been rapidly accumulating in number and appreciating in value. Its members were wealthy and conservative, with a strong infusion of Knicker- bocker blood, an admixture of the Southern element and a sprinkling of Englishmen and other foreigners. The efi'ect of the crisis on the majority of Stock Exchange properties was ruinous. Prices fell fifty per cent, in a few days, and a large proportion of the Board of Brokers were obliged to go into involuntary liquidation. There was a great shaking up all around. Then came the work of rehabilitation and reorganization. Confidence gradually returned. The Young Kepublic had great recuperative powers, and they were thoroughly ex- erted in the work of resuming business. Much of the old conservative element had fallen in the general upheaval, to rise no more. This element was eliminated, and its place supplied by better material, and with young blood, and in December the banks resumed business. This panic and its immediate results created an entire revolution in the methods of doing business in Wall Street. Prior to this time, the antique element had ruled in things financial, speculative and commercial. This crisis sounded the death knell of old fogyism in the '' street." A younger race of financiers arose and filled the places of the old con- servative leaders. The change was a fine exemplification of the survival of the fittest, and proved that there was a law of natural selec- tion in financial affairs that superseded old conservatism and sealed its doom. Until that time, the general idea prevailed that those en- gaged in financial matters must be people well advanced in rNWORTHY PREJUDICES OP ANCIENT WA^I, STREET. f years, even to the verge of infirmity. It is the same idea that has been handed down, as if by divine right, from old world prejudices, especially in the learned professions. No doctor was considered a safe prescriber unless his hoary locks, bald head and wrinkled brow proclaimed that he had almost passed the period of exercising human sym- pathy. The same rule of judgment was applied to the lawyer and the clergyman. These unworthy prejudices were fostered by the character of the Government of the old country, and nurtured by the surroundings of the venerable monarchies of Europe, where they exist largely even to the present day. So tenacious of life are these old-fashioned ideas, that many of them were found in full vigor, dominating Wall Street affairs up to the crash of 1857, fostering the antique element and choking off salutary enterprise. Hence the process of decay of these archaic notions and our gradual development. This struggle for new life in Wall Street was not success- fully developed without a serious effort to attain it. The old potentates of the street fought hard to prolong their obstructive power, and their tenacious vitality was hard to smother, reminding one of the nine lives attributed to the feline species. The efforts of the young and enterprising men to gain an entrance to the Stock Exchange were re- garded by the older members as an impertinent intrusion on the natural rights of the senior members. It was next to impossible for a young man, without powerful and wealthy patrons, to obtain membership in the New York Stock Ex- change at the time of which I speak. Tbe old fellows were united together in a mutual admira- tion league, and fought the young men tooth and nail, contesting every inch of ground when a young man sought entrance to their sacred circle. The idea then struck me that there was a chance for young men to come to the front in Wall Street. I was then en- gaged in the dry goods importing trade, in which I received 8 MY DEBUT IN WAIvL STRKET. my early training. I had been kept out of the Exchange for several years by the methods to which I hare alluded. My fate was similar to that of many others. It was only by an enterprising effort, and by changing the base of my opera- tions, that I finally succeeded. The commissions charged at that time were an eighth of one per cent, for buying and selling, respectively. After numerous efforts to gain admission to the Exchange, without success, I finally made up my mind to force it. I at once inserted an advertisement in the newspapers, and pro- posed to buy and sell stocks at a sixteenth of one per cent, each way. This was such a bombshell in the camp of these old fogies that they were almost paralyzed. What rendered it more distasteful to them still was the fact that, while they lost customers, I steadily gained them. The result was that they felt compelled to admit me to their ranks, so that I could be kept amenable to their rules and do business only in their own conventional fashion. My membership cost me> in all, initiation fee and other trifling expenses in connec" tion therewith, $500. This presents a striking contrast to the recent price of a seat, $35,000, but though this differ- ence seems very large, yet the changes in every other re- spect connected with Wall Street affairs have been in sim- ilar proportion. Among some of the old members of that day were Jacob Little, John Ward, David Clarkson and others whose names may be found in the archives of the Stock Exchange. As an instance of the way in which membership was then appreciated, it may be mentioned that speculators fre- quently offered $100 a week, or ten times the cost of mem- bership, for the privilege of listening at the keyhole during the calls. Although the prostration growing out of this panic was Tery great and of long continuance throughout the country, general confidence being shaken to its very foundation, yet, on the whole, it was a great gain, and marked an era of financial and speculative progress. It was the chief cause YOUNG AMERICA'S SPBCUI5ratic friends cry out " Great is the Credit of Georgia." They claim that Georgia pays all of her obligations when- ever they are due, knowing their claim to be utterly false. Georgia has not only repudiated legal obligations, in the hands of innocent purchasers, but she denies the parties who have paid value for her bonds the right to take the judgment of her own courts on the validity of those bonds. So in the bond business the State of Georgia acts not only the role of the thief and robber, but also of the coward. The man who claims that Georgia meets all hoT obligations is simply a liar. Eespecting State securities, investors are showing a very proper discrimination against the issues of States tainted with repudiation. The action of the Superintendent of the Banking Department of this State, in forbidding savings 274 THB GEORGIA REPUDIATION BOND SWINDI,E. institutions from investing in the new issues of the bonds of Georgia, has attracted attention to the danger of investments thus tainted, and is very generally approved by the invest- ing public as a check to future acts oi this kind. The dis- position shown by certain managers of savings banks to put the funds in their charge into such doubtful securities should be strongly condemned ; and it is a question whether it is not necessary, as a protection to such depositors, to make such a use of the deposits of the poorer classes a penal o£fence. — Weel.lr/ Financial Circular of Henry Clews ^ Co.^ June 6th, 1885. How THE Geoegia Bonds weee Negotiated. The following circular explains the manner in which the Georgia bonds were negotiated with my firm : New Yoek, July 3, 1885. Hon. Wm. A. Post, Deputy Attorney -Greneral, State of New York : The firm of Henry Clews & Co. did not solicit the account of the State of Georgia, but it was opened at the request of Mr. I. C. Plant, the leading private banker of Macon, Ga., and the most influential and affluent banker of the State of Georgia then and at the present time. Mr. Plant was brought to my office by Mr. P. C. Calhoun, President of the Fourth National Bank, which institution was the financial agent of the State of Georgia at the time. Mr. Calhoun in- troduced Mr. Plant to me, by giving that gentleman a very strong endorsement, and stated that Mr. Plant was in this city for the purpose of raising money for the State of Georgia, which money was required to pay off the members of the Legislature. Mr. Calhoun stated that his bank had loaned to Mr. Plant $400,000 on currency 7 per cent. Georgia bonds, and as money was very stringent at the present time and the calls were very numerous, he felt as though $400,000 was as much as he ought to loan in any one quarter. " But if you have any money, Mr. Clews, that you are willing to loan at the present time, if you will ac- commodate Mr. Plant, it may result in your doing some good business with the State of Georgia. I would say," said he, " that you cannot advance money in any quarter where it would be safer than to loan on the Georgia State HOW THIJ LOAN WAS CONTRACTED. 275 bonds which Mr. Plant will offer you. I know the State of Georgia well. I have ridden on horseback over almost every foot of ground in the State in my early life in my collecting trips. My father was in the saddlery and hardware busi- ness, and the larger part of his business was in that State. I know the people of this State ; and as an evidence of my opinion of the future of this State and its bonds, I will say that if I had my choice to put my money into these bonds of the State of Georgia, or those of the State of New York, to leave to my family, I would give the bonds of Georgia the preference, for the reason that her debt is so small as com- pared with the debt of the State of New York at the present time, and the future of the State of Georgia is destined to be one of great prosperity." Mr. Plant then said: "Mr. Clews, Mr. Calhoun has advanced fiO&jOOO towards the amount I need, and I want $250,000 in addition. I know the money market is very tight [as it was at that time, money being worth 7 per cent, per annum and 1 per cent. per day commission]; still, I think, if you will loan this money to the State of Georgia, that it will enable you to make a connection which will prove profitable to you in the end." I said : " Very well, Mr. Plant, I will make the loan to the State of the $250,000 which you require." Mr. Plant then said : " Well, place it to the credit of the State of Georgia, and I will bring in 500,000 of Georgia 7 per cent, currency bonds, the same character of bonds which have been lodged as collateral with the Fourth National Bank. I will go at once to the Fourth National Bank, where they are, and bring them down here ;'' which he did. The $250,- 000 was then placed to the credit of the State and a tele- gram to that effect was sent to the Governor, and it was at once drawn out on the official drafts of the State. This started a correspondence with Governor Bullock, in his official capacity, he being entirely unknown to me before. Other applications were then made direct by the Governor for additional loans, which were made from time to time, until the amount so advanced reached to $1,650,000. After receiving, in addition to the 500,000 bonds referred to, 800,- 000 more of similar bonds came into our possession from time to time as collateral, being put up at 50 cents on the dollar ; and when we afterwards received a large installment of the gold quarterly 7 per cent, bonds, having at that time an excess of collateral in our hands, we voluntarily for- 276 THS GEORGIA REPUDIATION BOND SWINDI,E. warded to the State 500,000 of the Currency 7s. This was precisely and exactly the way my firm's connection was com- menced with the State of Georgia. Mr. I. C. Plant, who is still a banker of Macon, Ga., I am sure, will testify to the correctness of my statements. The State of Georgia gold 7 per cent, quarterly interest bonds were placed by the Governor of Georgia in my firm's hands as additional collateral against the advances made to the State, with full instructions to sell same and credit avails. Application was made by request of Governor Bul- lock to have this issue of bonds placed on the regular list of the New York Stock Exchange, and after a full investiga- tion by that body, they were admitted. A portion of these gold bonds were sold in this country and the balance in Europe. When the Georgia Bond Committee came here 77,000 of these bonds were in Europe in the banker's hands there for sale, and my New York firm held 25,000, all others received having been sold. These 102 bonds were reported to this committee as unsold at that time, but soon there- after, and before the Act of repudiation was passed by the Georgia Legislature, these 102 bonds were sold and reported as sold, and 1 think the price was 97|, and the State's ac- count was credited with tlie avails, and the proper authori- ties of the State were duly notified thereof. Up to the time of sale of these 102 bonds our standing order to sell continued and was never revoked ; because, however, these 1 02,000 had been reported to the Georgia Bond Committee when in this city as being on hand at that time, they were repudi- ated, together with the other bonds which we were supposed to still hold. The New York Stock Exchange was called upon by the Treasurer of the State of Georgia to order struck from the list these 102 bonds, and the Exchange was compelled to be governed thereby, as official notice had been received of their repudiation. The following were the numbers of these bonds * * * * You will perceive that the numbers are not consecutive, thus showing that they were not the last of the bonds placed in our hands. The low numbers were received first and the highest num- bers last, in the deliveries made to us by Governor Bullock. Under this statement of facts, which lam preparedto prove, I insist that these 102,000 bonds are as binding upon the State of Georgia as any of those which are now recognized. My fellow members of the Stock Exchange who have made ACKNOWLEDGING THE DEBT. 277 investigation fully confirm this opinion. A large number of the coupons of these bonds ■were paid by the State on these 102,000 bonds, thus showing the State's recognition of them at one time. My firm repeatedly called upon the oflScials of the State of Georgia to pay the balance due, but we could get no response. After waiting patiently a very long time, we called in eminent counsel for advice in this matter, and under said advice the Governor and Treasurer of the State of Georgia were notified in the regular legal form that if the said indebtedness was not paid on or before a specified date the collateral in our hands, each item being specified, be- longing to the State, would be sold at public auction at the Merchants' Exchange liooms. 111 Broadway, at 12 o'clock, by A. H. MuUer & Sons, auctioneers. This notice of said sale, together with list of securities, was inserted in the newspapers ; the sale took place, and the 800,000 Currency and other bonds were disposed of to the highest bidders, and the State's account credited with the avails. All these securities should be considered, therefore, as having passed out of my firm's possession and in the hands of other hold- ers for value. The State of Georgia in this matter is cer- tainly amenable to New York laws, and the entire. business was conducted in accordance with said law. Governor Bul- lock's successors did all they could to depreciate the securi- ties issued by their predecessors, and are responsible for the low prices which the State of Georgia bonds afterward sold for, as during Governor Bullock's administration the State 7s were at about par and the first mortgage Brunswick & Albany bonds, guaranteed by the State, sold at 90 and upwards. As an evidence of the high credit which my firm had worked up for the State, we bought out the first million issued of Brunswick & Albany First bonds guaranteed by the State of Georgia, in the Berlin and Frankfort markets at 104, and there were seven millions of bids therefor, and the one million had to be distributed pro rata amongst the said bid- ders. In testimony of the correctness of this state- ment, I refer you to Mr. Budge, the head active partner of Hallgarten & Co., and Mr. Schiff, the head active partner of Kuhn, Loeb & Co., of this city, who were interested with me, and through these two gentlemen the bonds were sold. After this great success, I ask you, or any fair-minded man, was not my firm entitled to continue to advanceupon Bruns- wick & Albany first mortgage bonds endorsed bv Georgia ? 278 THE GEOKGIA REPUDIATION BOND SWINDI^E. and as tlie 275 OartersTille & Yan Wert bonds, endorsed by the State of Georgia, were offered to my firm shortly after this signal success as collateral, were they not also equally justified in advancing 167,000 upon them ? and in that way, and in that alone, these securities came into our hands. I most positively assert that my firm never had any other pecuniary interests but as herewith set forth in these two enterprises. At the time of the repudiation of the State, my firm held 750,000 Brunswick & Albany first mortgage bonds, en dorsed by State of Georgia. 275,000 Cartersville & Van Wert first mortgage bonds, en- dorsed by State of Georgia. 587,000 State of Georgia Gold 7s. 350,000 Brunswick & Albany first mortgage bonds. 400,000 Coupons cashed by us on the State of Georgia securities, but a legal claim against the State. 800,003 State of Georgia Currency 7s. 3,162,000 Also, a judgment of 525,000 obtained in favor of Henry Clews & Co in the State courts of Georgia against the Brunswick & Albany Eailroad Company, being an amount due my firm over and above all securities in our hands. My firm also obtained in the United States District Court of Georgia a judgment to secure our advances of 167,000 to the Cartersville & Van Wert Company. Neither of these judgments have ever been satisfied. This leaves out entirely the 102,000 Georgia 7s (quarter- lies), as well as many other scattering lots of different is- sues of the Stai,e of Georgia securities. The past due bonds referred to by Mr. Hammond were being hawked about, both here and in London, for the purpose of forcing their payment, and the holders threatened to use them to interfere with the sale of the gold 7 s which we were about to bring out in this and foreign markets. I mentioned this matter to Governor Bullock when on a visit here. He th.en directed me to buy up such of these bonds which were in troublesome hands, and as they were a demand claim against funds then in the State Treasury, all you have to do, he said, is to charge up the amount which you paid for said bonds to the State s account and retain in your hands the bonds as collateral, and when the State is flush enough I'll POWTICIANS DEPRECIATB THE BONDS. 279 see that you are paid direct from the Treasury. These past due bonds belonged to us, and were taken up by our money and not the State's ; the 98,000 which were cancelled, which Mr Hammond refers to, were so cancelled by error, which I am fully prepared at any time to prove. The depreciation in Georgia rftate bonds which Mr. Hammond refers to did not exist during Governor Bullock's administration, but was brought about by his successors in office, as they did all they possibly could to depreciate the bonds of the State authorized and issued by the previous Legislature. I have the honor to remain, Your obedient servant, Heney Clews. Geobgia Securities and New Yoek Savings Banks. The efforts that are being made to place Georgia securi- ties in the savings banks of New York ought to be resisted for two very good reasons : First, such investment would be contrary to the law of the State ; second, even if it were legal it would be imprudent and unsafe. As to the authority of our savings banks to invest in these securities, it is understood that the opinion of the Attorney- General has been asked. On this point there is not much room for question. Savings banks are prohibited by law from investing in the stocks or bonds of any State that has within ten years defaulted in the payment of any part of the principal or interest of its debt. By a constitutional amendment adopted in 1877, Georgia ratified previous acts of the Legislature repudiating more than eight millions of its obligations. The excuse given for this proceeding was that the State's obligations had not been lawfully contracted, and therefore were not binding. On this ground it is claimed that Georgia securities do not fall within the prohi- bition put by the law upon the savings banks of New York. There would be some force in this view if Georgia were sus- tained by any judicial decision holding the bonds invalid. But it took advantage of that principal which protects a State against suit by a citizen. It decided the question by its own arbitrary edict. It gave its victimized creditors no voice in the matter. In the absence of judicial support or warrant, its action can be regarded only as a repudiation. But if there were no legal obstacle in the way, prudence 280 THE GEORGIA REPUDIATION BOND SWINDI Mt Dear Sib : As a New Yorker and a Republican, I want to thank you for the great service you have rendered our country and our cause in conceiving and carrying forward the great meeting of night before last. The effect of it will be wholesome and widefelt ; it was most timely, and its whole management was a success. Our friends all, I think, know and appreciate the large debt due you in the premises. Noting your suggestions as to the future, I lay them to heart. Yours sincerely, ROSCOB CONKLING. Henbt Clews, Esq. The New York HeralcCs special from Washington next day after the meeting said : " The President, in conversation with Senators who called upon him this morning, expressed himself as much pleased with the demonstration in New York last night, which he regards only as evidence of the popularity of the Eepub- lican party. He has been assured, from reliable sources, that the leading Democratic merchants and bankers in different parts of the country are anxious that the Kepub- lican party may completely triumph at the coming Presiden- tial election, as the surest way of maintaining our credit, and resisting anything like a financial crisis, which they regard as certain if their own party should succeed." Following are the address and resolutions expressed through the representatives of a grateful people in favor of the hero who had saved the country : Grant Meeting at Cooper Institute, MarcJiXI, 1S1%.— Address and Resolutions. ADDRESS. Hon. E. Delafield Smith, on behalf of the Committee of Arrange- ments, read tho following address, remarking that it was prepared by one of the most eminent and substantial ot our busiuess men ; PUBWC AFFAIRS TJNDBR GRANT'S ADMINISTRATION. 321 The administration of public affairs under the government of Presi- dent Grant has been eminently wise, conservative and patriotic ; our foreign relations have been conducted with a scrupulous respect for the rights of other nations, a jealous regard for the honor of our own ; the noble aspiration with which Geneial Grant emphasized his acceptance of his great office, " Let us have peace," has been happily realized ; the TTnion has been completely re-established on such principles of justice and equity as to insure its perpetuity ; the Constitution, with all its amendments, has been adhered to with rigid fidelity ; domestic tran- quility has been restored; a spirit of humanity has been infused into our Indian policy ; the revenues of the country have been faithfully collected and honestly disbursed, so that, while the burdens of taxation have been materially lightened, the public debt has been largely reduced, and the national credit appreciably strengthened ; all branches of in- dustry have been stimulated to healthy activity ; and throughout the length and breadth of the land security, prosperity and happiness re- ward the perils and sacrifices by which the rebellion was suppressed and the Union preserved. It is an act of poetic justice that the soldier whose victories in war, and the statesman whose triumphs of peace have made the last decade the most glorious in the annals of American history, should receive an earnest of the gratitude of his countrymen by his re-election to the Presidency. It is an auspicious circumstance that the people are evidently awak- ening to a higher sense of the duties and responsibilities of public offi- cials. There is a general disposition to hold men entrusted with place and power to a strict accountability for their acts, and to demand that honesty and capability shall be the inflexible conditions of appointment to office. The recommendations of the president in favor of the prin- ciples enunciated in the report of the Civil Service Commission, were timely and apposite, and deserve universal endorsement. Numerous investigations have been set on foot during the present session of Congress, having for their object the discovery of corruption in the public service. Disaffected Republicans and partisan Democrats have made common cause in the endeavor to elicit evidence tending to show acts of wrong doing, and to implicate the President in linowledge or toleration of such acts. As in the days of Daniel, " tliey sought to find occasion against him." But, like the enemies of Daniel, "they coidd find none occasion nor fault, forasmuch as he was faithful, neither was there any error or fault found with Jiim. " The more incisive the scrutiny, the more palpable the demonstration of his purity. The cost of pursuing these investigations has exceeded the aggregate loss incurred by the Government through the dishonesty of its subordinates since the administration came into power. A record so clear and honorable chalknges the admiration, and com- 322 grant's second term. pels tlie approval of citizens whose only i-im is to secure a stable and beneficent Government — to preserve inviolate the faith of the nation — to give security to capital, adequate reward to labor, and equal rights to all. With the grievances of disappointed of&ce seekers, the masses who thrive by their own toil, cannot be expected to find time or patience to sympathize. Whether this Senator has had more or that Senator less than his share of patronage, are insignificant questions compared with the grave issues involved in a Presidential canvass. It is the consti- tutional prerogative of the President to make appointments to office. That he has not exercised these functions unwisely, the success of hij administration abundantly proves. Believing that General Grant's civic career fitly supplements his mili- tary greatness, that he has brought to the discharge of his duties to the State the same energy, foresight and judgment wliich marked his achievements in the field, and made his campaigns from Bonelson to Appomatox for ever illustrious ; and that he possesses and deserves the confidence of the American people, we pledge to him our united and hearty support as a candidate for re-election. EESOLUTIONS. Hon. E. Delafield Smith, Chairman of the Committee on Resolutions, presented the following : First. That the merchants and mechanics, the bankers and business men of New York, represented in this meeting and in the call under which it is assembled, are satisfied with the wisdom, ability, moderation and fidelity with which the national government is administered, and in common with the bulk of our brethren throughout the Union favor the continuance of its distinguished head in the office which he holds with usefulness and honor. Second. That the practical result of the coalition movement, if suc- cessful, would be to. restore the Democratic party to power. Third. That such a restoration, after the late glorious triumph over rebellion, would read in history like the record of a Tory resurrection at the close of our revolutionary war. Fourth. That Republicans elected to office mainly by those who as- sailed the Union at the South and at the North embarrassed its defend- ers, would inevitably become serviceable to the powers that sustain them, like those northern presidents who were chosen by the South and did its bidding better than its own statesmen. Fifth. That the patriotism that made Grant President of the Repub- lic he saved, is akin to that which placed Washington at the head of the nation he created. The trust was accepted by each at a manifest sac- rifice of interest and inclination, with modest misgiving as to civil experience and qualification. But having been well and wisely admin- istered, the confidence implied in a re-electioo is an appropriate reward THE CHOICE OF THB "PI,AIN PEOPI^B." 323 for faithful seryioes, and accords with the broadest views of public poli<'y. Sixth. That against hostile criticisms and unfounded imputations, ftgainst alluring promises and prismatic theories,— we array the practi- cal reforms constantly inaugurated and the substantial results already achieved by the present administration. The chronic vices of existing systems, unfairly paraded to its injury, have been placed in a course of amelioration or removal. The reduction of the national debt has eli- cited the admiration of the world. Our diplomacy has made peace the ally of national honor. And our President has been in deed as in name a kind and "great father " to the Indian tribes still lingering within our borders. Seventh. That while honorable opposition is entitled to respect, every effort to blacken, for political purposes, the character of President Grant, is a crime against truth wliich vindicates him, and an insult to the American people who lionor and exalt him. Pure in private as irre- proachable in public life, with strong convictions yet deferential to the popular will, patient under attack, more ready to listen than to speak, with no display and no ostentation — those who know him best bear testimony to the sense, the sagacity, and the power of analysis by which his utterances are characterized and impressed. Mghth. That in the judgment of this meeting a majority of the peo- ple of the country expect, desire, and decree the re-nomination and re- election of Ulysses S. Grant. SPEECH OF HON. B. DELATIEU) SMITH. Mr. B. Delafleld Smith said : — Fellow Citizens : — It is manifest to us all that President Grant will be re-nominated at the Convention in Phila- delphia. It is equally clear that such is the wish of the American peo- ple. This is due to a confidence reposed in him by the " plain people " of the country, which no misrepresentation seems able to impair. His opponents assert that the public declarations in his favor are influenced by the ofBce holders. But this cannot well be, for the ofSoe holders are always far outnumbered by the ofBce seekers. With regard to executive patronage, it is as true now as when Talleyrand first said it, that every oflBce conferred makes one ingrate and forty-nine enemies. The truth is, possession of the offices is a source, not of strength, but of actual weakness to any political party. In spite of this. General Grant is so strong and popular that a coalition is frantically sought as the only and forlorn hope of defeating him. It is thought that the Democratic mas- ses can be carried over bodily to the few Republican geceders. But the moment the Democratic organization is relaxed, it will lose its hold upon thousands of its own members, and they may and will prefer in voting for a Republican to make the choice themselves, and they will rally in large numbers to the hero of our patriotic armies. The coalition meet- 324 GRANT'S SECOND TERM. Ing, lately held in this city, recalls the old arrangement as to colored troops, where the officers were white men, but the rank and file negroes. So here, the platform was covered with Republicans, but the audience was made up of Democrats. In thus acting with their old opponents our disaffected friends boast of their independence, and impute servil- ity to us. But they are wrong. Tliat man is most independent who is at once loyal to his country, true to his party, and faithful to his friends ! With these brief observations, I move the adoption of the address and resolutions. My only apology for inserting the above address and resolutions is, that I believe they constitute a valuable epitome of a very important chapter, yet to be more fully written, of the political history of the United States. A greater criterion of the success of the meeting, how- ever, was the editorial opinion of the Evening Post next day, which had been for a long time previously very bitter in its attacks upon General Grant. It said : " The meeting held last evening at the Cooper Institute was, we believe, without precedent in our political history. It was expressly called as a gathering of that branch of the Republican party which desires the nomination and re-elec- tion of President Grant. Yet, when it came together, the officers and speakers assumed that it was a mass meeting of the Republicans of New York. This is to say, according to the organizers and promoters of this gathering, the one test of Republicanism now is the political support of one man's aspirations, and that before any nomination has been made by that party. This is a singular position to receive the approval, at least, by their acquiescence, of such men as some scores of those whose names are prominent in the report of the meeting, and who, as we know, would prefer some other candidate than General Grant, if they could hope to control the Philadelphia nomination. " The power of this meeting was wholly in its organization. The list of officers chosen by it is, on the whole, the best, most reputable, and most influential commanded by any partisan meeting within our recollection. There are a few names on it which disgrace their fellows ; there are many which carry no weight, but an unusually large proportion of the very long list are eminent and representative names in this city. The audience assembled was in many respects iu keeping with the officers. It consisted mainly of reputable, thoughtful voters." THE BUSINESS MEN INTERESTED. 325 The good work was continued until November with the result that is now historical. The New York Sun said : " We believe that Henry Clews did more, in a pecuniary way, to promote the success of Grant, than any Republican millionaire of the Union League Club " Another mass meeting was held late in the fall. Refer- ring to it, and other events of that period, the President's Secretary writes a few days prior to the election as follows : Washington, D. C, Nov. 3, 1873. Mt Dear Clews : We are all greatly obliged for the documents and information which you have sent us during the campaign. The President says the list of vice-presidents of tlie last Cooper Institute meeting is the most remark- atle list of prominent names he has ever seen upon one paper. It will of itself do great good. Our news is charming from all quarters, and all our hopes will, with- out doubt, be fully realized on Tuesday next. If the defeat of the enemy is overwhelming, it will be sufacient re- ward for all our labors. Your very truly, HORACE PORTER. To show still further the interest which the leading mer- chants, bankers and business men of this city took in the , movement to re-elect General Grant at that time, the fol- lowing circular furnishes an excellent and historical record. It constitutes, in a small compass and compact form, a valu- able chapter of financial history : CIRCULAR Of the Business Men of New Tork on the Financial Condition of the National Debt of the United States. F'Urther Meduction October I, 10,337,000 Dollars. The undersigned, merchants, bankers and business men of New York, respectfully submit the following statements for the information of all parties interested therein : The Republican candidate for President of the United States is Gen. Ulysses S. Grant, who was unanimously named for re-election at Phila- delphia, in May last. At the commencement of Gen. Grant's first term of office, March 4, 1869, the national debt was $3,535,000,000. On the first day of Septem- ber, of the present year, there had been paid and cancelled of the prin- cipal of this debt, |348,000,000, leaving a balance of principal remaining 32G GRANT'S SECOND TERM. unpaid at that date, in accordance with the official statement of the Secretary of the Treasury, the sum of $3,177,000,000. Of this amount, $1,177,000,000 are represented in a funded debt, bear- ing interest in gold, while $400,000,000 remain unfunded in Treasury circulation. Up to the close of the last session of Congress, the annual reduction of taxes, as measured by the rates of 1869, had been as follows : Internal revenue tax $83,000,000 Income tax, (repealed,) 30,000,000 Duties on imposts, 58,000,000 Making a total reduction of $170,000,000 The reduction of the yearly interest on the public debt exceeds the sum of $23,300,000, of which $31,743,000 are saved by the purchase and cancellation of the six per cent, public securities. A careful consideration of these results of a prudent and faithful ad- ministration of the national Treasury, induces the undersigned to ex- press the confident belief, that the general welfare of the country, the interests of its commerce and trade, and the consequent stability of its public securities, would be best promoted by the re-election of Gen. Grant to the offtce of President of the United States. New York, Oct. 4, 1873. PHELPS, DODGE & CO., WILLIAM ORTON, GBOEGE OPDYKE & CO., ISAAC H. BAILBT, A. A. LOW & BROTHERS, SHEPHERD KNAPP, JOHN A. STEWART, WILLIAMS & GU'lON, VBEMILYE & CO., EDWARDS PIERREPONT, JAY COOKE h CO., RUSSELL SAGE, JOHN STEWARD, PETER COOPER, HARPER & BROTHERS, ANTHONY, HALL Si CO., JOHN TAYLOR JOHNSTON, GARNER & CO., FREDERICK S. WINSTON, J. S. T. STRANAHAN, PEAKB, OPDYCKE & CO., B. D. MORGAN & CO., MORRIS FRANKLIN, DREXEL, MORGAN & CO., SCHULTZ, SOUTHWICK & CO., AUGUSTINE SMITH. J. S. ROCKWELL & CO., WM. H. TANDERBILT, ROBERT H. MCCURDY, MORTON, BLISS & CO., WILLIAM M. VEEMILYB, JONATHAN STURGBS, R. W. HOWES, J. & W. SELIGMAN & CO., WILLIAM CULLEN BRYANT, J. & J. STUART & CO , C. L. TIFFANY. JOHN A. PARKER, SPOFFORD BROS. & CO., BENJAMIN B. SHERMAN, JOHN C. GREEN, JOHN D. JONES, H. B. CLAPLIN & CO., J. D. VERMILYE, MOSES TAYLOR, SAMUEL T. SKIDMORE, WM. H. ASPINWALL, HENRY P. VAIL. ROBERT LENOX KENNEDY, LLOYD ASPINWALL, S. B. CHITTENDEN & CO., JACOB A. OTTO, JAMES G. KING'S SONS, GEORGE W. T. LORD, HENRY E. PIERREPONT, SAMUEL MCLEAN h CO., BMIL SAUER, HENRY CLEWS & CO., BOOTH & EDGAR, OHAPTEE XXXII. THE TWEED RING, AND THE COMMITTEE OF SEVENTY. Thk Ring Makes Itself Useful in Speculative Deals. — How Tweed and His "Heelers" Manipulated the Money Mabket. — The Eing Conspibes to Oeganize a Panic foe Political Purposes — The Plot to Gain a Democeatic Victoey Defeated and a Panic Aveeted Through President Geant and Seceetaey Boutwell, Who Weee Appeised op the Danger by "Wall Steeet Men. — How the Committee of "Seventy*' Origin- ated.— The Taxpayers Terrorized by Boss Tweed and His Minions. — How " Slippery Dick " Got Him- self Whitewashed. — Offering the Office op City Chamberlain as a Bribe to Compromise Matters. — How the Hon. Samuel Jones Tilden, as Counsel to the Committee, Obtained His Great Start in Life. THE Tweed Eing had considerable experience in and out of Wall Street for several years during the municipal reign of the famous Boss. I have made some reference to their attempts to manipulate the market through tight money, in my biographical sketch of that Wall Street ce- lebrity Henry N. Smith. The Eing was often highly subservient in assisting certain operators in speculative deals in stocks, one notable instance being in Hannibal & St. Jo. shares, which resulted in a terri- ble loss to Boss Tweed & Co. This stock became quite neglected for a long period afterwards, and so remained until the famous " corner " was engineered many years after by John E. Duff, of Boston, through his New York broker, Wm. J. Hutchinson, and by which poor Duff was almost, if not entirely, ruined. It is only justice to Mr. Duff, in this connection, to state that he was not to blame, as an exhaust- ive investigation by the Governing Committee of the Stock Exchange showed that his trouble chiefly arose through 328 THE TWEED RING. flagrant dishonesty and betrayal of trust on tlie part of his agent, in whom he reposed too much confidence. Boss Tweed and his special retainers sometimes made "Wall Street instrumental in engineering national and State political movements. About the time of an election, if their opponents happened to be in power, the Eing would produce a stringency in the money market, by calling in simultan- eously all the city money, which was usually on temporary loans in the Street. This the Eing managers would accomplish through some of the banks which were the depositories of the city fimds, and were under their control. By this means they worked up a feeling of antagonism against the Eepublicans who were in office, by throwing the blame on them, and thus rendering them odious in the eyes of those who had lost money in speculation. The blame was not unnaturally fastened on the party in power, and most men, when they lose money, are credulous enough to believe anything that seems to account for the manner in which the loss has been sustained. It seems to have a soothing effect upon their minds, and furnishes them with a tangible object upon which they may wreak their vengeance and feel satis- fied. There is nothing so irritating , to the disappointed speculator as the harassing doubt of where to fix the blame. The Tweed Eing supplied this long-felt want, and filled the aching void in the heai^t of the man who happened to get on the wrong side of the market. When speculators fre- quently had their margins " wiped out," and were almost beggared of everything except their votes, they found that consolation which "Wall Street refused them, in the sympa- thetic hearts of Tweed's "heelers," who pointed to the poor office-holders of the Eepublican party, representing them as the sole possessors of Pandora's box, which contained all evils that flesh is heir to. So these financial disasters were brought about by the Tweed party for the purpose of getting their friends into office, tweed's gang organize a panic. 329 ■wMch always paid tribute to the Boss when he was instru- mental in elevating a person to a fat position. He, himself, did not want any batter office than receiver general of this tribute. In tho3e days a Presidential election was largely influ- enced by the way Pennsylvania went, so that it had grown into a political maxim, "As goes the Keystone State so goes the Union." In the Spring of 1872, the year in which General Grant was the Eopublican candidate for the second term, when it was decided that Horace Greeley should be the Democratic candidate, great effort^ were made to produce a panic in "Wall Street. It was arranged by the Tweed party that the panic should take place simultaneously with the State election in Pennsylvania, so as to illustrate the evil results of Republican rule, and turn the influence in favor of Mr. ■Greeley's election. I received intimation of this politico-speculative conspir- acy, and communicated my information to Senator Oonkling, who was stopping at the Fifth Avenue Hotel at the time. I told him that the Democrats were working up a panic to help to defeat General Grant. He said it was the first he had heard of it, but it was so like a move that Tweed and his party would make, that he felt there was just cause for alarm about it, and he requested me to go and see Governor Morgan, and also George Opdyke, on the subject. I found that the Governor was at a church meeting, and I left my card telling him to call upon me at the rooms of the Kepub- lican National Committee, as I wanted to see him upon important business. I left word for Mr. Opdyke to call also. The Governor soon presented himself at the Committee rooms, and I divulged to him my information and suspi- cions. He did not exhibit so much interest as I imagined the importance of the case demanded, and he appeared to doubt the correctness of the report of the political inten- 330 THB TWEED RING. tions of the Tweed Ring, or rather he seemed to imagine that the Eing was hardly capable of a move that involved such subtlety and depth of design. Therein he greatly underestimated the power, resources and statecraft of Peter "Brains" Sweeney. The Governor was of a phlegmatic temperament, and it was difficult to convince him of any- thing that was not very clearly demonstrable. I told him that my information was of such a positive aad reliable na- ture that I knew I was right, and that if there should be a panic in Wall Street I had serious apprehensions that it would prove disastrous to the Eepublicans in the national campaign. Governor Morgan appointed a meeting for the next day to discuss the matter more fully and obtain further light upon the subject. I took with me to see the Governor, whom I had now convinced of the reality of the political plot, Mr. George Opdyke and Mr. H. B. Clafliu. In the meantime the Governor had seen Travers, who, being an inveterate bear on the situation, had an inkling of what was in progress to break the market. The Governor had satisfied himself that my representations were correct, and that trouble was really brewing. Ho then entered with earnestness into the question of the best policy to be adopt- ed to obstruct the schemes, and frustrate the purposes of the Democratic party. I then suggested, that as the matter did not admit of delay, it was highly essential that some one, or more, of us should go to Washington to see General Grant. The Governor said he could not go. I could not go, and neither could Mr. Claflin. So Mr. Opdyke, who was very ready in such matters, consented to bear the important message in person, provided we all agreed to back him up by writing a strong letter fo the President, setting forth the facts in relation to the emergency. This we did, and Mr. Opdyke left at once for Washington. This was on Friday evening, and he trans- acted his business with more than ordinary despatch, and THE TIGHT MONSY CONSPIRACY DEFEATED. 331 returned on Sunday morning. He sent for me, and told me that he had explained the matter to the President, who felt exceedingly grateful for the warning which he and our letters had conveyed, and tha.t he had forthwith consulted with the Secretary of the Treasury, and it was resolved to order the purchase, on Monday, of ten millions of bonds, and the sale of ten millions of gold, for the purpose of averting, in advance, any financial disturbance that might arise through the project of the Tweed Eing to create an artificial stringency in the money market. Then I saw that these men who were engaged in the con- spiracy to create a panic, and benefit themselves both politic- ally and financially by its results, were a deeply designing lot, and that under the law, gold could be bid up, the highest bid- ders obtaining it, having the option of either paying by de- positing their money in payment for it in the National depos- itories, which were the Fourth National Bank and the Bank of Commerce, or else depositing it in the Sub-Treasury. If deposited in the latter it would be locked up, and the effect intended by the Treasury, to make money easy, would be neutralized, in so far as the influence of the money as a circulating medium was concerned. In order, therefore, to provide for that probable contin- gency, my firm subscribed for the whole ten millions of gold) the names being the clerks of my ofiice. We were awarded eight millions, and we paid the money into the Bank of Commerce, and the Fourth National Bank, through which it was brought into circulation. Thus ten millions of greenbacks and also ten millions of gold came fresh from the Sub-Treasury into circulation im- mediately, promptly anticipating and defeating the machin- ations of the Bing. The Tweed Eing being " all broke up " on this deal, the effect was magical on the market. The plans of the con- spirators had been entirely upset, and the Pennsylvania election took place a few days afterward with an overwhelm- ing majority for the Eepublicans. 332 the; tweed ring. Had the panic, which was projected by the Eing, taken place, the result might have been otherwise, and the re- election of Grant thus jeopardized. After this triumph over Tweed and his gang, I set my wita to work to plan their overthrow. I saw that their power was entirely money power, obtained by official position through official theft. I was satisfied that these patriots who had put their hands up to the elbows in the City Treasury of New York were bent upon buying, stealing or otherwise obtaining their way to the National Treasury at Wash- ington. They had hoped to do there on a large scale what they had accomplished on a smaller scale in the city of New York, where they were becoming restive under their limited resources. It was with the view of suppressing the dangerous aspira- tions of this band of political marauders that I originated the well known Vigilance Committee of Seventy, and at the first meeting to organize this committee I nominated sixty- five of its members. The committee was thus backed at the start by so many prominent citizens as to make it at once a power in the community. Then for the first time in many years the citizens of New York were emboldened to become outspoken on the subject of political plunder and tyranny, and against the officials who had ruled the city with a rod of iron. For a long time previous to this there had been grave suspicions that robbery on a large scale was being perpe- trated, but no one dared to give utterance to the fact except with bated breath and in half smothered whispers. No one, with the possible exception of a few who were not taxpayers, had the temerity to open his mouth to say a word against the desperate men who controlled the destinies of the city, through fear that on the event of any remark reaching the ears of the Boss or his minions, the property of the person SLIPPERY dick's whitewashing SCHEME. 333 thus offending should be marked up to an artificial value and his taxes accordingly increased. This was one of the most effective methods pursued bj the Eing to choke off unfriendly criticism by the rich mBn of the city. In this way the power of some of the most influential citizens became paralyzed, being held in complete subjection under the terrorism of this subtle systepi of blackmailing. The power the Eing possessed of covering up the rascality of its members and bamboozling the public is hardly con- ceivable at this day except by those who had experience of it at the time. As an instance of this I may state that some time prior to the appointment of the Committee of Seventy certain accusations were ventilated against Eichard Con- nolly, the City Comptroller. He put on a bold front, and insisted upon an investigation of his department by a com- mittee of leading and prominent citizens. He named his committee, who were Moses Taylor, Marshall Eoberts and John Jacob Astor* These were men against whom no person could have any objection. They were wealthy and independent citizens, and it might have been difficult at the time to have selected any other three who commanded greater confidence in the community. The investiga- tion, through the unblushing effrontery and audaciousness of Connolly and his "pals," resulted in an acquittal of Mr. Connolly, which gave him a new lease of political life, and rendered it more dangerous than ever for any one to utter a word of hostile criticism against his methods of managing the city finances. Eesults showed, when the Eing was exposed, that Connolly had made the very best use of this investigation in appro- priating additional sums out of the City Treasury. The Eing was now supreme in city affairs, and the city was under a reign of terror. This state of things existed until the summer of 1872, when the Committee of Seventy got into harness, after which the despotic thieves that had ruled the roast so long, were driven from power one after another 834 THE TWEED RING. in rapid succession, and scattered to the four corners of the globe. The task of ousting this brazen band of plunderers, root and branch, was attended with considerable difficulty, as their resources were so numerous and powerful. When they were no longer able to exercise their arbitrary power they stooped to every form of cajolery and bribery in order to adhere to the remnant of their official authority. As an illus- tration of this, I may state that at the beginning of my ef- forts in connection with the Committee of Seventy I was waited upon by a member of the Eing and asked if I would not accept the position of City Chamberlain. I said : "That is a matter, of course, which I could not decide upon at once, as there is no vacancy at present. It will be time enough for me to consider the matter when a vacancy occurs, and then when the position is oifered to me." This answer carried with it an intimation, which I had intended, with a view of drawing out some of the internal methods of procedure in such cases, that I would probably accept the position and help to smooth over impending reve- lations. I thought that the end which the Committee had in view justified this means of mildly extorting an important secret in methods of Eing management, that was calculated to aid us in the work of municipal reform. Next day I was again waited upon by one of Tweed's most trusty friends, who graciously informed me that the City Chamberlain had resigned, and that there was a vacancy which I could fill to the entire satisfaction of the then ap- pointing power. I desired him to convey my feelings of deep gratitude to the power? that were then on the point of being dethroned, and to say that I very lespectfully de- clined the flattering ofi'er. I said that I had thought earn- estly over the matter since the previous day, and as I was a member of the Committee of Seventy, which was a reform- ing organization, I felt that I could not conscientiously ac- cept the position. OFFICrAI^ FLY TO PARTS UNKNOWN. 335 It -was necessary that the office should be filled immediately, and it was next offered to Mr. F. A. Palmer, President of the Broadway Bank, which had been one of the King's deposito- ries of the city funds. Soon after this the majority of the city officials had re- signed and taken their flight to parts unknown. They were scattered broadcast over the world. Some had gone to Europe, some to Cuba, and others to that favorite and paradisaical colony of def aultfers, the New Dominion, leav- ing the Committee of Seventy, as a reform and revolutionary body, in complete control of the city. Tweed remained, but was not quite so audacious in putting his pet interrogative, "What are you going to do about it f He seemed to be convinced that the Committee of Seventy meant business. Mayor Oakey Hall also re- mained, and facetiously protested that as far as he was concerned everything was "O. K." The Hon. SamuelJ. Tildeu began to loom into prominence about this time. Through the influence of William F. Have- , meyer, he was chosen one of the three legal advisers of the committee. Abraham E. Lawrence and Wm. H. Peckham were the other two. Mr. Tilden was quick to seize this opportunity of sudden prominence to bring himself to the front and pose as a great reformer. Had it not been foi the Committee of Seventy, I believe it is very doubtful whether this great reformer would ever have been known as such, and it is also exceedingly problematical whether he would have ever got the chance of being counted out, or, attempting through the magic of his occult cyphers, to count anybody else out of the Presidency of the United States. SAMUEL JONES TILDEN. CHAPTER XXXIII. HON. SAMUEL J. TILDEN. How TlLDEN BEGAN TO MaKE HIS FoETUNE IN CONITEOTION WITH William H. Havembyee. — Tilden's Geeat Foet IN Politics. — He Impeoves his Oppoetunity with the Disceenment of Genius. — How Tilden became one of the Counsel of the " Committee of Seventy." — His Political Elevation and Fame dating feom THIS Lucky Event. — The Sage of Geeystone a Teult Geeat Man. — Attains Maevelous SuccEsg" by His OWN Industey and Beain Powee. — He not only De- SEEVED Success and Eespect, but Commanded them. How his Laege Geneeosity was Manifested in Hi8 Last Will and Testament. — The Attempt to Bbeak that Peecious Public Document. ME. WM. H. HAVEMETER had long been associated with Mr. Tilden in railroad wrecking and the reorgani- zation of broken concerns of this character. Through thia process both these gentlemen became wealthy. When, therefore, Mr. Havemeyer extended the right hand of fellowship to his confidential companion in money mak- ing afifairs, and invited him to oflSciate as one of the counsel of three for the Committee of Seventy, Mr. Tilden was sharp enough to appreciate the opportunity, which he seized with avidity. He was quick to discern the tide in the affairs of men which, when taken at the flood, leads on to fortune. He did not wait until the tide began to ebb, but, like an able seaman, set his sail at the propitious moment to catch the prosperous breeze as well as the tide. Thus, through a lucky chance and other men's exertions, Mr. Tilden was ■ raised high on the very crest of the tidal wave of reform, almost before he knew it. In the first instance, this happy accident of being one of the trinity of legal advisers to our committee, for which he 838 HON. SAMUEI/ J. TILDEN. was well paid, did not lead immediately so much to fortune as to fame, but it formed an important portion of the pedestal upon which the several millions which he so muni- ficently bequeathed to educational purposes were subse- quently raised. To fame he was then comparatively unknown. The Committee of Seventy enabled him to obtain the start which was chiefly instrumental in elevating him to a position of renown in national politics. Tilden's great forte in politics, as in financial afl'airs and railroad matters, was to set a cash value on everything, and measure it accordingly. If he opened his "barrel" the contents were not distributed indiscriminately, but on the principle directed by the most expert judgment of where the money would do the niost good — according to Mr. Tilden's ideas of good. What they were I don't attempt to explain, but, like the popular novelist, charitably leave them to the inference of the reader, or to that expert Moses who so ably deciphered occult telegrams from Florida and Louisiana when there was such a close contest for the oflSce of National Executive. Without departing from the main issue of my subject, however, I may say that the position which Mr. Tilden was enabled to assume as counsellor to our committee made it possible for him to rise from the, not to say dignified, al- though money-making, attitude of railroad wrecker to that of Governor of the Empire State of the Union, thus paving the way for him to become almost a successful candidate for the highest position in the gift of the Great Republic, Such a sudden transition from comparative obscurity was enough to turn any ordinary head. Seeing the unexpected course that both our local and national history have taken, it is impossible to say what might have been the course of this man's destiny, and the fate of this new Daniel come to judgment in canal ring matters, had it not been that his friend Havemeyer dis- covered him at an opportune moment, and rescued him from manifest oblivion in the nick of time. THE POWER OF THE COMMITTEE OP SEVENTY. 339 It must be said, on behalf of Mr. Tilden, however, that he improved the occasion with the discernment of genius, and in the fullest degree, and to the highest extent, thor- oughly justified Havemeyer's choice. The soundness of that proverbial philosophy which holds that lightning never strikes twice in the same place seems to have been fully appreciated by Mr. Havemeyer, al- though this was alittle ahead of the time that John Tyndall and other scientists of the modern school of discovery had demonstrated some of the recent wonders of electricity. Tilden struck while the iron was hot, and though he failed to reach the highest pinnacle of his soaring ambition, he demonstrated the wonderful possibilities which lie in the path of obscure men who are blest with friends who look out for their welfare, and who have the precaution to turn the wheel of fortune in the right direction. Whether it was the result of fate, genius, or wise direc- tion, or a combination of all these attributes, I don't pretend to decide, but I have poted the simple facts from my own observation and experience, associated with the rise and financial progress of the Hon. Samuel J. Tilden, leaving others deeper in scientific and philosophic matters to supply the details and hidden mysteries of the causes of his marvellous prosperity. The Committee of Seventy, when entering upon its labors, passed a resolution authorizing the appointment of a sub- committee by the chair to select and retain three lawyers to represent it in the matters of litigation that might arise in connection with the investigation. Mr. Havemeyer, be- ing a member of the sub-committee, through his influence Samuel J. Tilden was one of the three appointed. To give the reader an idea of the power and prestige of the Committee of Seventy at that time it "is only necessary to state that it was instrumental in making Mr. Abraham Lawrence one of the Judges of the Supreme Court, and Mr. W. H. Peckham, the third counsel, could have obtained al- most any judgeship he had desired, with perfect facility. 840 HON. SAMUEI, J. TII SrV^ been at the time. The Commodore f t^th^j-ith dispafeihed Mr. ' <3ross to San Francisco to manage his steamboat business there. He soon discovered, however, that James was hardly aggressive enough for the go-ahead fellows on the gold coast, and he was recalled. After looking around some time for a man possessing the necessary requirements to be placed in successful competition with the adventurous spirits bf the Pacific Slope, his search was rewarded by an introduction to Commodore C. K. Garrison, then in command of a Missis- sippi steamboat. Garrison had established his reputation for being the best euchre player on the river, and for much besides which that term implies. He was brave and fearless — in fact, in some respects, a Jim Bludso of real life, with the self-sacrificing qualities of that hero largely discounted, or perhaps entirely left out. It required men of mettle in those days to run a steamboat on the Father of Waters, when the greater portion of the passengers belonged to the gambling fraternity, and were all experts with the bowie knife and the ready revolver. The Commodore had an interview with Garrison, which resulted in an engagement, and he was sent to San Francisco as the Commodore's agent. It was soon found that he was the man for the Wild West, and he was not slow to appreci- ate his own value and importance to the increasing fortunes of his employer. He struck very often for higher wages, and was always able to command his price. He rose, from one advance to aiiiOther, until his salary at that day had reached the marvellous figure of $60,000 a year. Numerous stories of Garrison's fabulous prosperity on the Pacific 348 COMMODORE VANDERBILT. t Coast reached this city and the ears of the Commodors, and his fame began to penetrate farther than the name of the latter had ever been heard. These accounts had their effect on a mind so naturally envious as that of the Commodore. He began to realize the humiliating fact that, instead of Garrison being in his employ, the former captain of the IVJ^iSs^gsippi p^.^omboa*'! had him in tow, and was everywhere ''regardyfe^ as the Boss^ while Vanderbilt was simply supposed to be his Eastern agent. This brought matters to the point where patience ceased to be a virtue, and the connection was severed. Soon after this the Commodore sold out to the Pacific Mail Company, which again became a monopoly, and as the fight had been a losing one to him, he was obliged to find other waters for his boats. Since his advent with a common row boat on the waters of our own handsome bay, thence ' through the gradations of ferry boats and steamboats, nothing but unremitting success had attended his ventures, until his unequal struggle in competition with Pacific Mail. He appeared to have met his Trafalgar when he encountered that fleet. His dissociation with Garrison seemed for a time to forebode disaster. He gathered himself up tem- porarily again, but never took to the waters so kindly after- wards. He began to feel that his financial destiny was verg- ing towards a firmer foundation. His last boat was the fam- ous steamship Vanderbilt, which was recognized at the time as one of the finest ships to be found on any sea. He made a present of her to the Government during our great Na- tional struggle, or according to another account, he lent her, and the Government kept her. The Commodore at one time had a fleet of sixty ships. The Commodore became convinced that the growing pros- pects of railroads pointed to greater facilities for transpor- tation in the future, and also a more profitable investment than those watery regions which had hitherto appeared to be his natural element. He promptly resolved to turn hia THB "corner" in harlsm. 34P back on the domain of Neptune, and to devote his greair ener- gies to enterprises on land. He saw there was compara- tively little room for development in water .traffic, while iu the railroad business the field was practically unlimited. He then commenced to buy up Harlem Eailroad stock, so as to obtain control of that road, and in the operation got up the celebrated Harlem " corner." Application had been made to the Legislature for some advantages in connection with the road, which were refused for reasons best known to leading members of that body. In the meantime Harlem stock had been knocked down to a very low figure. The Commodore remained in ambush, and was secretly purchas- ing it. Ee then went to the Legislature to get his bill passed. Most of the members of the Legislature thought they had got the " deadwood" on the Commodore, and enlisted a large number of their friends in the enterprise. They attempted "to work the Commodore for all he was worth," and for a time appeared anxious to pass the measure required. On the strength of this anticipated , action on the part of the Legislature the stock advanced, when the members sold "short" and failed to legislate. The stock naturally went down, and Vanderbilt bought it up. The collapse anticipated by the Legislature did not take place, and, instead of that, the Commodore got a " corner" in the stock, and the members of the Legislature were the parties mulcted. They had, therefore, all to go to the Commodore's office, and settle up with him on his own terms, and he made arrangements to get his measure in favor of the road through the Legislature as part of the bargain. This trans- action is more fully described in another chapter. His next great enterprise was in connection with the New York Central. Having successfully euchred the legislators in the matter of Harlem, he was encouraged to play a still higher game. As soon as he obtained control of this prop- erty, it seemed as if it had been touched by a magic wand, or that famous stone of Midas, contact with which turned 850 commodore; VAND:eRBII7^ CHAPTBE XXXV. WILLIAM H. VANDERBILT. A Builder Instead of a Destboyeb of Public Values.— His Eespeot for Public Opinion on the Subject of Monopolies. — His Fiest Expebience in Railboad Management. — How he Improved the Haelem Eail- EOAD Peopeety. — His Geeat Executive Poweb Mani- fested IN EvEBY Stage op Advance Until he Becomes President OF the Vandeebilt Consolidated System.^ An Indefatigable Woekeb.~His Habit of Scbutiniz- iNG Every Detail. -His Pbudent Action in the Geeat Steike op 1877, and its Good Results. — Settled all Misundeestandings by Peace and Aebiteation. — Makes Peincely Peesents to his Sistees. — The Sing- ular Geatitude of a Beothee-in-Law. — How he COMPEOMISES by A GiFT OF A MILLION WITH YoUNG Coeneel. — Gladstone's Idea of the Vandeebilt Foe- tune — Inteeview of Ohauncey M. Depew with the G. O. M. ON THE Subject.— The Geeat Vandeebilt Mansion and the Celebrated Ball. — The Immense Pictuee Galleey. — Mr. Vanderbilt Visits Some OF THE Famous Artists.— His Love of Fast Horses. — A Patron of Public Institutions. — His Gift to the "Waiter Students. — While Sensitive to Public Opin- ion, HAS NO Fear of Threats oh Blackmailers. — " The Public be Damned." — Explanation of the Eash Ex- pression. — The Purchase of "Nickel Plate." — Hia Declining Health and Last Days — His Will and Wise Method of Distributing 200 Millions. — Ef- fects OF this Colossal Fortune on Public Sentiment. IN treating of tke family in the order of descent, I shall now make a brief survey of the life- of William H» Vanderbilt, especially in its relation to Wall Street affairs and the management of his great railroad system, the two being closely connected. William H. Vanderbilt was not much of a speculator in the Wall Street sense of the term. He was more of an investor than a speculator, and his in- 356 WILLIAM H. VANDERBILT. vestments had always a healthy effect upon the market. Unlike Woerishoffer and others of that ilk, he built up instead of pulling down values, but was at the same time careful to avoid the error of inflation. He paid due defer- ence to public opinion also, in striving to allay its alarm in regard to the dangerous overgrowth of monopolies. A grand illustration of this was seen in the sale of the large block of New York Central. His first experience in railroad matters was in connection with the Staten Island Bailroad, thirteen miles in length. The road had been mismanaged and was deeply in debt, and became bankrupt. As he and his father had considerable interest in the road William H, was appointed receiver. It seems this was done secretly at the suggestion of the Commodore, who wanted to discover by this experiment if his son had any capacity for railroad management. The receivership of the Staten Island road was crowned with signal success. In two years the entire indebtedness of the road was paid, and the stock, which had been worthless, rose to 175. William H. Vanderbilt was then elected President of the road. It was at this time, it is said, that the Commodore began to correct his judgment regarding the '' executive ability of William H.," and the latter relaxed no effort to please his exacting father in everything, taking all his abuse without complaint or anger. After the Commodore secured control of the Harlem road, which was his first great railroad venture, he made William H. Vice-President. As a co-worker with his father the latter further demon- strated his capacity for railroad management, and Harlem stock, which had been down to nearly nothing, in a few years became one of the most valuable railroad properties in the country. So, it is a fact, although not generally known, that William H. Vanderbilt had proved . himself to be a competent railroad manager before his eminent father had fairly begun that line of business. It was almost entirely owing to his individual exertions and sound judgment that, HARD WORK HELPS TO KII,I, HIM. 357 in a few years, the Harlem road was double-tracked, and such other improTements made as sent the stock from 8 or 9 to above par. The Commodore was so highly pleased and agreeably surprised with his son's management of the Har- lem road that he made him Vice-President of the Hudson ' Eiver Eailroad also, and at a later date associated him in the same capacity with the management of the important consolidation ■ of New York Central & Hudson Eiver. The great executive power of William H. was manifested in every succegsive movement which his father directed, and unparalleled prosperity was the result in every instance. After William H. was fully installed in the Vice-Presidency of the consolidated system of the Vanderbilt railroads he became an indefatigable worker, taxing his physical and mental powers to their utmost capacity, and it was doubtless this habit of hard work, persisted in for many years, that resulted in so sudden and comparatively premature death for a member of a family famous for its longevity throughout several generations. He insisted on making himself familiar with the smallest details of every department, and examined everything personally. He carefully scrutinized every bill, check and voucher connected with the financial department of the immense railroad system, and inspected every engine belonging to the numerous trains of the roads. In addition to this general supervision of everything that pertained to the railroads, he was in the habit of going over a large amount of correspondence which the majority of other men not possessing the hundredth part of his wealth hand over to their clerks, and he answered a great number of letters with his own hand which financiers of comparatively moderate means are in the habit of dictating to their stenographers. When his father died, at the age of 82, in January, 1887, William H. Vanderbilt, then 56 years of age, found himself the happy possessor of a fortune variously estimated at from 75 to 90 million dollars. The remainder of the Commodore's bequests amounted to 1 5 millions. 358 WItWAM H. VANDERBIlvT. After the death of his father the executive powers of Wm» H. Vanderbilt, in the management of the vast railroad in- terests bequeathed to him, were called into active play. The great strike of 1877 among the railroad employes . threatened to paralyze business all over the country, and came pretty near causing a social revolution. In this emer- gency a cool head and prudent judgment were valuable attributes to a railroad manager. Mr. Vanderbilt proved that he possessed both in more than an ordinary degree. Just* prior to encountering the knotty problem of the strike he had been highly instrumental in bringing about suspen- sion of hostilities in the freight war, and the course which he advised led to an arrangement that produced harmony among the trunk lines for a considerable period. As a con- sequence of the rate war the railroad companies were obliged to cut down the wages of their employes, and this was the chief element in causing the strike. There were 12,000 men in the employ of the New York Central and Harlem. Their wages had been reduced ten per cent, and they had threat- ened to annihilate the Grand Central Depot. Instead of making application to have the militia called out, as had been done in Pennsylvania, Mr. Vanderbilt — although a man possessed of far more, than ordinary courage — ^with keen foresight proposed a kindly compromise with his em- ployes. He telegraphed from Saratoga to his head officials an order to distribute $100,000 among his striking employes and promising them a restoration of the ten per cent, reduc- tion as soon as business improved to a point justifying such an advance. This prompt and prudent action had the desired effect, and the consequence was that while there was a small insurrection in Pittsburgh, and bloody war to the knife, at great cost to Allegheny County, calmness reigned in the prominent railroad circles of New York, and the tax- payers escaped the burden that might otherwise have been put upon their shoulders, and the demoralizing effects of violence and bloodshed were prevented. Over 11,500 of the A SINGULAR KIND OF GRATITUDE. 359 12,000 men returned to work, thus showing their gratitude to Mr. Vanderbilt and faith in his promise, which was after- wards duly fulfilled. The policy of Wm. H., in the manage- ment of his great railroad system, unlike that of his father, was entirely pacific in its character. He was disposed to settle all misunderstandings by reason and arbitration, and had no inclination for fighting and conquest, after the man- ner of the Commodore, Although a very close calculator in business matters, a habit to which he adhered even to the precision of striking out superfluous items which should not have been charged in his lunch bill, Mr. Vanderbilt was in many respects generous to a fault. He compromised the suit with his brother, " Young Corneel," allowing him the interest on $1,000,000, whereas his father had only left him the interest on $200,000, with a forfeiture clause in the event of "Oorneel" contesting the will. Wm. H. also made a present of $500,000 in United States bonds to each of his sisters, out of his own private fortune. A good story is related in connection with the distribution of this handsome gift. Mr. Vanderbilt, it is said, went around one evening in his carriage, taking the bonds with him and dispensing them to the fortunate recipients from his own hands. One of his brothers-in-law having observed by the evening papers that the bond market had declined a point or two on that day, said, "William, these bonds fall $150 short of the $500,000, according to the closing prices of this day's market." " All right," replied Mr. Vanderbilt, with assumed gravity, " I will give you a check for the balance," and he wrote and signed it on the spot. It is related that another brother-in- law followed him to the door, and said, " If there is to be anything more in this line I hope we shall not be forgotten." It is said that these Remarkable instances of ingratitude, instead of irritating him, as they would have in the case of an ordinary individual, only served to arouse his risible faculties and that he regarded the exhibitions of human weakness as a good joke. 360 WILLIAM H. VANDERBILT. One of the greatest works of Mr. Vanderbilt's life was the building of the beautiful palace on Fifth avenue, between Fifty-first and Fifty-second streets, which he adorned exten- sively with paintings selected from the great masterpieces of the most renowned artists of the world. One reason assigned for his disinclination to speculate was that he regarded the property left by his father in the light of a sacred trust, and while he considered it a filial duty to look after its increase and accumulation, he was careful not to do anything that might risk its dissipation. Mr. Chauncey Depew, who succeeded to the presidency of the New York Central & Hudson Eiver Eailroad Com- pany, was upon one occasion, while visiting in London, a guest at a dinner given to the Hon. Wm. E. Gladstone, then Premier of England, and was honored by a seat on the left of Mr. Gladstone, with whom he discussed the differences between American and English railroad and financial manage- ment. In the course of conversation Mr. Gladstone said, " I understand you have a man in your country who is worth £20,000,000 or $100,000,000, and it is all in property which he can convert at will into cash. The Government ought to seize his property and take it away from him, as it is too dangerous a power for any one man to have . Supposing he should convert his property into money and lock it up, it would make a panic in America which would extend to this country and every other part of the world, and be a great injury to a large number of innocent people." Mr. Depew admitted that the gentleman referred to — who was Mr. Vanderbilt — had fully the amount of money named and more, and in his usual suave and conclusive way, replied, "But you have, Mr. Gladstone, a man in England who has equally as large a fortune." Mr. Gladstone said, " I suppose you mean the Duke of Westminster. The Duke of Westminster's property is not as large as that. I know all about his property and have kept pace with it for many years past. The Duke's pro- WHAT GI.ADSTONE KNOWS OF BIG FORTUNES. 361 perty is worth about £10,000,000 or $50,000,000, but it is not in securities which can be turned into ready cash and thereby absorb the current money of the country, so that he can make any dangerous use of it, for it is merely an here- ditary right, the enjoyment of it that he possesses. It is inalienable, and it is so with all ■ great fortunes in this country, and thus, I think, we are better protected here in England than you are in America." " Ah, but like you in England, we in America do not consider a fortune danger- ous," was the ready response. The best proof of Wm. H. Vanderbilt's great ability as a financier is the marvellous increase in the value of the estate which he inherit^'d from his father during the seven years which he had the use and control of it, and in which he did more than treble the value at which it was estimated on the death of the Commodore. The weakest financial operation on his part, known to the public, was the purchase of the Nickel Plate Eoad, as re- gards the time of the transaction, in which he was rather premature. It is now positively known that if he had waited about a month longer the road would have gone into bankruptcy and have fallen into his lap on his own terms. In that case the West Shore would have followed suit. In such an event I believe Mr. Vanderbilt would have been saved an immense amount of money, remorse and mental strain, which, no doubt, aggravated the malady which was the cause of his sudden death. He realized his error when it was too late, and it was a source of great mental anxiety to him in his latter days. He was very sensitive, and nothing afforded him more gratification than a clean and successful transaction, which drew forth public approval, and in the purchase of Nickel Plate he was caught napping. It was a mistake for which the Commodore, had he been alive, could never have forgiven him. The syndicate that built the road had solely for their object to land it upon either Gould or Vanderbilt, and it 362 WILLIAM H. VANDERBILT. was upon its last legs at the time it made the transfer to Mr. Vanderbilt. The syndicate laid a trap for him. It had been coquetting with Mr. Gould in reference to the purchase, and had made it to appear, through the press and other channels of plausible rumors, that he had an eye upon the road. Mr. Gould had occasion to go West about this time and the syndicate invited him to make his homeward trip over the road, taking particular pains that all these rumors and reports should reach the ears of Mr. Vanderbilt, wio was impressed with the idea that Mr. Gould's trip was one of inspection, with the intention of buying the road if he did not anticipate him. This was just what the syndicate desired, and the successful consummation of their financial plot. The purchase was made solely in the interest of Lake Shore, as it was a parallel road, and the road was afterwards turned over to the Lake Shore Company. The conception of the scheme was to build the road at a nominal price and sell it to Mr. Vanderbilt as high as possi- ble, and this was duly accomplished. I am quite satisfied that if this road had not been sold at this particular time it would then have gone into the hands of a receiver, while a number of the syndicate, who had built the road, would have failed, and a general crash would have ensued. This Mr. Vander- bilt's purchase averted for the time, and served to prolong the period of its coming until May, 1884. For a few years prior to his death Mr. Vanderbilt was in a weak condition. This cause of mental annoyance came upon him at a time when he was not robust enough to bear it and had not sufficient strength to throw it ofl". He had been seized with a slight paralytic stroke, the only visible effect of which was a twitching of the lower lip. Shortly after this he lost the entire sight of one eye, about a year before his death. This was not generally known to the public, how- ever, and it was the principal cause of his giving up his favorite pastime of driving, which was one of his greatest A VARIANT LEADER IN WAI