Fifty years in Wall Street
think this a paradox, but there is nothing more easily demonstrated to
those who have observed the commercial and industrial progress of the
country and the age.
Wall Street has furnished the money that has set the wheels of industry
in motion over the vast continent, and in one century has brought us
abreast, in the industrial arts, of countries that had from one to two
thousand years the start of us. In this respect it has assisted nobly to
carry out the ideas of the fathers of the Constitution. Washington,
Jefferson, Madison, Franklin and Hamilton laid down the doctrine that it
would be a betrayal of the interests of posterity to limit the
productive energies of this country to raw material. With our present
experience we may think it strange that this question should ever have
been debated, but it was, even after the old tyranny had been obliged to
loosen its grasp on the struggling enterprise of the young Republic. Our
old revolutionary sires deserve credit for their foresight, but what
would have been the fate of their commercial philosophy if Wall Street
had not supplied the sinews of war to cope with the forces of nature, to
work our mines and build our railroads, and through these and other
means, to attract the teeming population from every clime to cultivate
our virgin soil and develop our wonderful industries and resources?
Apropos of the above observations, I may add that during the debate in
the British Parliament, on the recognition of the Confederacy, the great
manufacturing power in our industrial, financial and commercial progress
was clearly exhibited and thoroughly appreciated by British statesmen.
It was made one of the strongest arguments, too, by some of the
representatives of our jealous and envious cousins on the other side of
the “pond,” why Great Britain should recognize and aid the South in the
war. Lord Salisbury, then Lord Robert Cecil, at present the leader of
the Tory party in England, and the advocate of twenty years’ coercion
for Ireland, was one of the bitterest foes of the Union, chiefly on this
account. He was one of the Vice-Presidents of the “Southern Independent
Association,” for the promotion of the cause of the Rebellion, and for
supplying the Confederates with money and arms, and for the ultimate
object of founding an empire of slavery on this continent.
In his speech then, on the Southern blockade, the future Lord Salisbury
made the following touching allusion to our dangerous prosperity on this
side: “The plain matter of fact is, as every one who watches the current
of history must know, that the Northern States of America never can be
our sure friends, for this simple reason—not merely because the
newspapers write at each other, or that there are prejudices on both
sides, but because we are rivals—rivals politically, rivals
commercially. We aspire to the same position. We both aspire to the
government of the seas. We are both manufacturing people, and in every
port as well as at every court we are rivals to each other. With respect
to the Southern States the case is entirely reversed. The population are
an agricultural people. They furnish the raw material of our industry,
and they consume the products which we manufacture from it. With them,
therefore, every interest must lead us to cultivate friendly relations,
and we have seen that when the war began they at once recurred to
England as their natural ally.”
Thus we see how anxious Great Britain was to take the place which the
North has reserved for itself, and so proudly maintained in commerce and
industry.
The great coming man, Salisbury, wanted to reduce us all to the position
of hewers of wood, drawers of water and planters and pickers of cotton,
for the special accommodation of Great Britain, as the mighty centre of
the world’s manufacturing industries. This would have given a set-back
to our civilization, causing us to make a retrogressive move to the dark
ages. Since then we have afforded this noble lord and his nation ample
proof that we are very far advanced in the manufacturing arts ourselves,
and that in many things we are far ahead of England, and they are no
doubt greatly surprised that the arrangement by which England was to
have all the profit and America all the hard work, has not been carried
out.
In this wonderful development of the industrial arts, Wall Street money,
enterprise and speculation have played by far the most conspicuous and
progressive part, thus enabling us, in little more than two decades, to
outstrip the old nations that were so anxious to enslave us, in spite of
the fact that they had centuries upon centuries the start of us. It must
be galling to some of these people that we are now the most available
candidates for the commercial and industrial supremacy of the world, and
we have attained this position, in a great measure, through the
instrumentality of Wall Street as a civilizer.
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CHAPTER III.
HOW TO MAKE MONEY IN WALL STREET.
HOW TO TAKE ADVANTAGE OF PERIODICAL PANICS IN ORDER TO MAKE
MONEY.—WHOLESOME ADVICE TO YOUNG SPECULATORS.—ALLEGED “POINTS” FROM
BIG SPECULATORS END IN LOSS OR DISASTER.—PROFESSIONAL ADVICE THE
SUREST AND CHEAPEST, AND HOW AND WHERE TO OBTAIN IT.
But few gain sufficient experience in Wall Street to command success
until they reach that period of life in which they have one foot in the
grave. When this time comes these old veterans of the Street usually
spend long intervals of repose at their comfortable homes, and in times
of panic, which recur sometimes oftener than once a year, these old
fellows will be seen in Wall Street, hobbling down on their canes to
their brokers’ offices.
Then they always buy good stocks to the extent of their bank balances,
which have been permitted to accumulate for just such an emergency. The
panic usually rages until enough of these cash purchases of stock is
made to afford a big “rake in.” When the panic has spent its force,
these old fellows, who have been resting judiciously on their oars in
expectation of the inevitable event, which usually returns with the
regularity of the seasons, quickly realize, deposit their profits with
their bankers, or the overplus thereof, after purchasing more real
estate that is on the up grade, for permanent investment, and retire for
another season to the quietude of their splendid homes and the bosoms of
their happy families.
If young men had only the patience to watch the speculative signs of the
times, as manifested in the periodical egress of these old prophetic
speculators from their shells of security, they would make more money at
these intervals than by following up the slippery “tips” of the
professional “pointers” of the Stock Exchange all the year round, and
they would feel no necessity for hanging at the coat tails, around the
hotels, of those specious frauds, who pretend to be deep in the councils
of the big operators and of all the new “pools” in process of formation.
I say to the young speculators, therefore, watch the ominous visits to
the Street of these old men. They are as certain to be seen on the eve
of a panic as spiders creeping stealthily and noiselessly from their
cobwebs just before rain. If you only wait to see them purchase, then
put up a fair margin for yourselves, keep out of the “bucket shops” as
well as the “sample rooms,” and only visit Delmonico’s for light lunch
in business hours, you can hardly fail to realize handsome profits on
your ventures.
The habit of following points which are supposed to emanate from the big
operators, nearly always ends in loss and sometimes in disaster to young
speculators. The latter become slavish in their methods of thought,
having their minds entirely subjected to others, who are presumed to do
the thinking for them, and they consequently fail to cultivate the
self-reliance that is indispensable to the success of any kind of
business.
To the question often put, especially by men outside of Wall Street,
“How can I make money in Wall Street?” there is probably no better
answer than the one given by old Meyer Rothschild to a person who asked
him a similar question. He said, “I buys ‘sheep’ and sells ‘dear.’”
Those who follow this method always succeed. There has hardly been a
year within my recollection, going back nearly thirty years, when there
have not been two or three squalls in “the Street,” during the year,
when it was possible to purchase stocks below their intrinsic value. The
squall usually passes over in a few days, and then the lucky buyers of
stocks at panic prices come in for their profits ranging from five to
ten per cent. on the entire venture.
The question of making money, then, becomes a mere matter of
calculation, depending on the number of the squalls that may occur
during any particular year.
If the venture is made at the right time—at the lucky moment, so to
speak—and each successive venture is fortunate, as happens often to
those who use their judgment in the best way, it is possible to realize
a net gain of fifty per cent. per annum on the aggregate of the year’s
investments.
In this way it is easy to see how the rich will get richer, and the poor
poorer.
Sometimes men make money in Wall Street by strange turns in their
fortunes that appear like having been governed by a special Providence,
and this sometimes occurs when men appear to be utter wrecks.
One of the strangest examples of this kind, in my personal experience,
occurred in the summer of 1885.
A man called at my office utterly broken down in spirit, but with a few
hundred dollars left out of many thousands that he had possessed a few
months previously.
“I read your letter of the third of July,” he said, “and had some mind
to act on the advice which it contained, but was unfortunately dissuaded
therefrom by reading an article in a city paper by a very able writer,
who had got the bearish mania, then prevalent, on the brain, and who, I
am informed, is now, like myself, almost ruined.”
“I hardly know what to do,” he continued. “I have a few hundred dollars
left, which I will leave with you, and you can use your pleasure with
it. I am going out to the country for the remainder of the summer. I
will leave my address with you, and, if there is any good result, you
can let me know of it. I really don’t hope for much, and of course, I
need hardly tell you that, in the event of being ‘wiped out,’ you need
not apply to me for more margin. Let this go with the rest,” he added,
in a despairing tone.
The man walked sadly out, and I did not see him again for months. I
invested his pittance on the _carte blanche_ order which he had given
me, to the best of my judgment. The result was favorable, and his
account began to accumulate. He was duly advised, according to our
business methods, of his good luck, but I did not hear anything from him
personally for several months.
One day, a portly gentleman, with rosy health beaming in his face,
stepped into my private office, and was quite profuse in his thanks to
me.
“Well,” I said; “I have but a hazy recollection of your acquaintance, if
I know you at all.”
“Don’t you recollect,” he said, “the time I went to the country in
summer, when I told you my case, and how I had been unfortunate in
speculation?”
“And are you the man who went to the country in despair to die?” I
asked, in surprise at his changed appearance.
“I am,” he replied, “and I owe the wonderful change which you now see to
your timely advice. I staked almost my last dollar on that counsel, and
now I am comfortably fixed through your management of the small fund
placed at your disposal.”