Fifty years in Wall Street
continued to grow and thrive with marvellous rapidity. It is now getting
so large that the Exchange will soon require a whole block instead of a
basement as at its origin for its headquarters. The Governing Committee
of the Stock Exchange are now looking forward to arrangements for this
consummation. How the ancient fathers of my early days in Wall Street
would have been shocked at the bare idea of such amazing progress!
It is not the least singular phase of this evolution in Wall Street,
that the youthful element to which I have referred stands alone as
compared with the progress achieved by the same class of men in any
other nation. In America only does the youthful element predominate in
financial affairs; and results have justified the selection, which
perhaps in no other nation is possible. Thanks to the freedom of our
Republican institutions, which, in spite of some individual deductions
and the occasional obstructions of “crankdom,” make way for that
progress, in the wake of which the other nations of the world are
emulous to follow.
The Exchange was at this time situated on William street between Beaver
street and Exchange Place. That place is rich in speculative
reminiscences. It was there that Jacob Little made and lost his nine
fortunes. It was there that Anthony Morse, the lightning calculator,
operated. He could foot up four columns of figures as easily as the
ordinary accountant could run up one. He had been a clerk, and having
saved seven hundred dollars by close economy, began to deal in stocks.
His career at that time was more marvellous even than that of Keene of a
recent date. Morse made a fortune of several millions in a year, and
became bankrupt during the same period, without any available assets to
speak of. It was all honorably lost, however. There was no Ferdinand
Ward game connected with it.
Youthful speculators had not then learned the “crooked” methods of the
young idea of modern times. It was there also that Daniel Drew began to
accumulate those millions that afterward were subject to such a rude
scattering. It was there that the celebrated “corners” in Rock Island,
Prairie du Chien and Harlem were concocted. It was there that the wealth
was accumulated which built twenty thousand miles of Western railroads,
causing many millions of acres, that would otherwise have been a
wilderness, to blossom like the rose, in spite of Mr. Powderly’s opinion
that no material good can come out of speculation, and thus adding
immense wealth in real estate to the country, besides conferring
incalculable benefits on trade and commerce, and preparing comfortable
homes not only for the pioneers and surplus population of the Eastern
States, but a teeming soil that has attracted the down-trodden of every
nation to come and partake of the blessings of freedom and prosperity.
One of Jacob Little’s speculative ventures has been rendered
historically famous through the rule of limitation of sixty days for
option contracts. The necessity for this limit was brought about by one
of his celebrated attempts to manipulate the market. He was one of the
most prominent speculators in Erie in the early days of Drew’s
transactions with that property and its stocks. Mr. Little had been
selling large blocks of Erie on seller’s option, to run from six to
twelve months. This was in the early history of “corners,” before the
method of managing them scientifically had been fully developed and
while “blind pools” were yet in embryo.
The leading members of the Erie Board formed a pool to “corner” Mr.
Little, and ran Erie shares up to a considerable height. They imagined
that he was in blissful ignorance of their purpose, and had everything
arranged for a _coup d’etat_ which was to reach its crisis at two
o’clock on a certain day, when Little was to be completely overwhelmed
and hopelessly ruined. An hour prior to the time appointed by the clique
for his disaster he walked into the Erie office, opened a bag filled
with convertible bonds, and requested an exchange of stock for the same.
He had purchased the bonds in London and had them safely locked up for
the emergency, which he promptly met on its arrival. He got the stock,
settled his contracts, broke the “corner,” and came out triumphantly.
The option limit of sixty days was afterwards adopted in order to
prevent similar triumphs in manipulation on the “short” side.
As will be illustrated more fully in subsequent chapters, Mr. Little’s
convertible bond trick was used with signal advantage by his speculative
successors in Erie, who practically demonstrated on several occasions
that there were millions in it.
Mr. Little was generous and liberal to a fault with his brother
speculators who had experienced misfortune. He used to say that he could
paper his private office with notes he had forgiven to the members of
the Board. He was also remarkable for his great memory. He could easily
remember all the operations he made in the course of a day without
making a note or a mistake.
Like Drew, he was careless in his attire, wearing a hat like that of a
farmer, and not a very prosperous one, but he had no compeer in his day
at calculating ahead in a speculative venture.
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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 TRANSACTIONS.—POPULAR DELUSIONS IN REGARD TO
SPECULATION.—WHAT 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.
The dense ignorance displayed by men outside of Wall Street, in regard
to the business of that great mart, is almost incredible. Even the most
intelligent men I meet in other professions and walks of life have the
most utterly crude and undefined notions about the methods of doing
business at the Stock Exchange. Many good and pious clergymen are under
the impression that Wall Street is a name for the sum total of all kinds
of infamy, and solemnly exhort their devoted flocks not to touch the
unclean thing.
Clerical obliquity of judgment is not quite so bad, nor popular
ignorance so dense in this respect, as it has been, but there is a large
field for improvement yet. The business activity of the country, and the
spirit of intercourse being so rapidly infused throughout all ranks of
the community, have demonstrated that this antipathy to Wall Street has
been simply an unworthy prejudice, in spite of the high moral authority
from which it has emanated.
I don’t wish to throw any aspersion on the noble purposes of the clergy.
The end they have been seeking has been good, but it has not always
justified the means employed. These good men have unwittingly
misrepresented Wall Street, to the great detriment of the business
interests of the country.
There is no excuse, however, for a man in this enlightened age, who
professes to be a Shepherd in Israel and a spiritual leader of the
people, to remain ignorant of an important fact, or to continue to see
that fact through a false medium, when he has the opportunity of coming
into Wall Street and seeing for himself. He has no right to set himself
up as a censor, a public detractor, and a public libeller upon a set of
men and merchants who are the bone and sinew of the commercial and
industrial interests and prosperity of the country. It is not only a
personal wrong but a public injury.
The Rev. T. De Witt Talmage has perhaps done more than any other
clergyman to make our speculators, investors and business men ridiculous
in the eyes of the rest of the community and in the estimation of John
Bull, in whose dominion his so-called sermons are extensively read.
Talmage has employed his flashing wit and mountebank eloquence to bring
financial disgrace on the business methods of the whole country by the
manner in which he has ignorantly vilified Wall Street.
He can go to the Cremorne Garden, Billy McGlory’s, Harry Hill’s and
other places of dubious reputation, and make himself acquainted with the
real condition of things there.
How far he has penetrated into the green rooms and behind the scenes in
these places it is not my business to know, but why should he not treat
Wall Street as fairly, where everything is open to inspection, as he
does these dens of vice, where midnight scenes of villainous revelry and
reckless dissipation reign supreme? Why does he misrepresent Wall Street
without knowing anything about it? He can come here and go wherever he
wishes without a bodyguard of detectives or fear of molestation. Why is
he so particular about doing justice to the brothel and the gaming den,
while he airs his ludicrous eloquence to the highest pitch to falsify
the respectable business methods of Wall Street?
I recollect the time that men in the higher walks of life, and among the
higher classes (if I may use the expression, in opposition to the
opinion of the New York _Sun_, whose editor maintains that we have no
classes in this country) would have been ashamed to be seen in Wall
Street. Now, men in the same sphere are proud of the distinction, both
socially and financially. In fact Wall Street has become a necessity as
a healthy stimulant to the rest of the business of the country.
Everything looks to this centre as an index of its prosperity. It moves
the money that controls the affairs of the world.
Take the Clearing House, for example, with its 50 billions of
transactions annually. All but a fraction of this wonderful wealth,
compared with which the stupendous pile of Crœsus was a mere pittance,
passes through Wall Street, continually adding to its mighty power. This
great power, in comparison with which the influence of monarchies is
weak, is not, like the riches of these, concentrated chiefly on itself.
It is imparted to all the industries and productive forces of the
country. Wall Street is a great distributor. It is also universal in its
benevolent effects, practically unlimited by either creed or geography.
It has taken greater advantage, for the general good, of scientific
discovery than all the scientific societies combined. Wherever the
electric wires have penetrated the Wall Street broker has followed. The
members of the Stock Exchange are, through the power of electricity, in
closer sympathy with the great heart of civilized humanity than all the
missionaries and philanthropic societies in the world. They are the
great cosmopolitans of the age. In practical sympathy they outshine the
most devoted efforts of the benevolent associations of half the
continent. They have the means to do it, and this comes chiefly from
being practical, and from their strong antipathy as a body to cant and
hypocrisy.
There are many popular delusions outside the ranks of the clergy
connected with the effort to form a correct estimate of Wall Street
affairs by the general public. It is a popular delusion that it is a
place where people who are in the “ring” take something for nothing. No
idea could be further wide of the mark in regard to Wall Street men as a
class, however true it may be of some individual instances, as in other
departments of business. Wall Street gives full value for everything it
receives, and the country at large is deeply its debtor. Some people may