Fifty years in Wall Street
Wall Street business man. Being besides a student of nature, he has also
improved every opportunity to learn the value of railroad and other
investments and to-day is a recognized authority on all such matters. He
has served as President of an important railroad and is a Director in a
number of large corporations.
John H. Clews,[1] junior member of the firm of Henry Clews & Co., was
born October 28, 1856. In beginning his business career he entered the
service of the Erie Railroad Company, in the transportation department,
where he gained a general knowledge of railroad management and its
affairs. After a few years with that company he was offered a position
with the Western Transportation Company, the water line of the New York
Central Railroad. Here he had the opportunity of completing his
education in all the branches of transportation. He was then appointed
Agent of the New York, Chicago & St. Louis Railway at East Buffalo, N.
Y., the distributing point for all freight between the East and the
West. From this place he entered Wall Street, where he evinced the same
progressive spirit. In 1890 he became a member of the New York Stock
Exchange, acting as one of the chief brokers for Henry Clews & Co., and
January 1, 1898, he obtained an interest in the firm.
Footnote 1:
Deceased April 10, 1907.
------------------------------------------------------------------------
CHAPTER LXI.
A REMARKABLE CHAPTER OF HISTORY.
Any review of the advance of this country during the past fifteen years,
forms a record of the most wonderful progress ever made by any nation in
such a short period. A record of the development of the country’s
resources through a resistless energy that seems destined to control the
markets of the world, reads almost like one of Grimm’s famous tales, for
after numerous trials, and the surmounting of many obstacles, the fairy
wand is turning what we will into gold.
One of the effects of the Vanderbilt boom of 1885 is to be found in the
enormous mileage of new railroad construction in 1887, namely 12,000
miles. It may have looked at the time excessive, but it has turned out
to be a fortunate anticipation of the great business strides made since
that time. As far back as that year, our exports of manufactured
articles began to show an appreciable increase.
The year following will always be memorable as the time of the great
blizzard which tied New York up so effectually for several days. As a
direct result of the exposure to its severity, the country lost in
Roscoe Conkling one of the most picturesque figures in American politics
and a man of unblemished reputation. He was taken from the arena of
affairs too soon to allow his participation in the presidential campaign
of that year.
My own experience at the time has impressed the memory of the great
storm strongly upon my mind. I had gone to Newport accompanied by Mrs.
Clews to inspect some improvements then being made at my summer home,
and in returning we came across the bay in the regular boat for the
purpose of taking the noon-day train which ran from Boston to New York.
When we were about half way over the bay, a vicious squall struck us and
we began to doubt if we should ever reach the shore again. Finally,
however, we did manage to land, and connected with the belated train.
Progress of course was slow, so slow in fact that the next morning saw
us only as far as New London, whence further movement was out of the
question. Many of my readers will recall the railroad ferry over the bay
from New London. The last train previous to ours had been started
across, but the violence of the tempest had compelled the pilot to give
up the task and return. With more incoming trains, New London was soon
congested by the sudden increase in population, and accommodations of
any sort were at a premium. We were for a time at a loss as to where we
could go, but fortunately succeeded in inducing the manager of the hotel
there to install us in the private apartments of the proprietor, who had
the day before started with his family for Florida. He spent the ensuing
four days upon the railroad, between New London and New Haven, banked in
by a snow drift six feet high, while we enjoyed the hospitality of his
apartments during that time. I am sure that we could not conscientiously
complain of the exchange. Telegraphic communication with New York was
completely shut off. As our children had remained in the city, we were
naturally anxious to know of their welfare and relieve any anxiety they
might have as to our safety. There remained but one means of
communication, and that a wire to Boston, whence messages could be
cabled to Liverpool, and back to New York, and that is the way we got
word to and from the metropolis. That was a rather circuitous way, but
it was effective.
Mr. Cleveland’s renomination and accompanying free trade talk, disturbed
the markets more or less from the date of his nomination in 1888 up to
the time of General Harrison’s election. The latter’s entrance into the
White House started the entire business of the country going, and
through his wise management, we were brought to a very high point of
prosperity, the last year of his term being, up to that time, one of the
most prosperous in our history. One of General Harrison’s most signal
achievements was in the exchange of reciprocity treaties, which was
managed in such a masterly manner by his resourceful Secretary of State,
Mr. Blaine.
In the middle of General Harrison’s term, occurred the greatest
financial shock the world had experienced in the last quarter century,
or since the panic of 1873.
The suspension of the great firm of Baring Bros. of London in the fall
of 1890 proved a demoralizing force from the effects of which finances
did not thoroughly recover for several years. The direct cause of the
failure, as is now well known, was over-commitment in Argentine
enterprises. Through the representations of an agent of theirs who had
visited the country, everything bearing the name of Argentine was
colored a most rosy hue, and the investments of that great house and its
following were enormous. The inevitable reaction from such inflation
found them with an immense load of these securities unmarketable, and
they were forced to suspend. The assistance rendered in rehabilitating
the firm has been signally successful. Through the efforts of Mr.
Lidderdale, Governor of the Bank of England, that institution took over
some seven million pounds sterling of the congested obligations of the
firm. By the wise, patient, and sagacious management of these former
unmarketable properties the bank was finally enabled to realize enough
therefrom to pay up all the arrears of the firm.
The liquidation of American securities by British holders which was
consequent upon their failure was enormous in volume and extended over
several years.
The year 1890 was further noteworthy as marking the birth of that
unfortunate compromise of the silver agitation known as the Sherman
silver-purchase law, which was to bring about such direful results
within a brief three years. After the shock of the Baring panic had
subsided, the beneficial effects of the McKinley tariff law began to be
felt and with increased exports, largely of grain, in the succeeding
year, together with ample protection for home industries, we were
ushered into 1892 under very auspicious circumstances.
Bountiful crops again provided a basis for what developed into a
wonderfully prosperous year. During the year, Jay Gould (largely through
the aid of his son George), by one of his characteristic strokes,
succeeded in obtaining control of the Union Pacific system, while Mr.
Huntington was thinking the matter over; but his personal control was
not to last very long, for in December of that year, Mr. Gould died,
after a career of great activity and venturesomeness, which has
elsewhere been reviewed in this book.
The Democratic party still clung to their idol, and Mr. Cleveland was
renominated for the presidency in 1892, and by one of those inexplicable
turns of public opinion which foolishly wished a change of
administration in the midst of prosperous times, he was elected, and
returned to Washington the following March, be it said, enjoying the
confidence of the great majority of the people. Almost from the time of
that election, the Wall Street markets were depressed, the fear of free
trade measures being the basis of distrust. Late in the year, the
Treasury’s stock of gold began to show signs of diminishing, and with
the exception of a few rallies, one notably in the following January,
prices continued on the downward course. Co-incident with the decrease
of gold reserves arose reports of a disposition on the part of the
Secretary of the Treasury to interpret the word “coin” in our Government
obligations as allowing the redemption of the bonds in either gold or
silver at the option of the Government. The effect of any doubt or
question upon this most important subject could only result in
unsettling confidence; of which Addison speaks as the “high priest in
the temple of trade.” For the first time in very many years, our
Treasury operations showed a deficit, and things were going from bad to
worse. The first great smash in prices occurred in May, when the famous
Cordage Trust went to pieces. At the same time, Sugar stock and the
remainder of the then few industrial shares took part in the sharp
decline. The gold reserve had by the middle of the year reached
alarmingly low figures, so that the pressure of public opinion compelled
the calling of an extra session of Congress for the purpose of repealing
the silver purchase clause of the Sherman law,—which had proved to be a
veritable “Old Man of the Sea” upon the back of the country, threatening
to throttle business interests everywhere.
The Congressional procrastination, and obstructive tactics in the Senate
worked havoc with trade and finance, and when relief finally came in the
repeal of the silver purchase clause, the vitality of the patient had
sunk so low, that it was a matter of years before returning health, in
the form of confidence, brought back our native buoyancy and push. It
became necessary early in the following year to issue $50,000,000 worth
of bonds in order to keep the gold reserve from getting too near the
vanishing point. Tariff agitation, which had been started by President
Cleveland’s message to Congress in December, 1893, upset all the
calculations of business men, who hoped, after a disastrous summer, that
the tide had turned. But, no sooner was the fear of a silver deluge
quieted, than revenue reform brought on another period of anxiety and
delay. Fortunately when that distorted measure (with its 640 Senate
amendments) which bore the name of the late William L. Wilson, a man of
deep thought and the highest integrity, did become a law in the
following year, it was not burdened with an income tax.
There are those who argue, probably to their own satisfaction, that this
latter is an equitable form of taxation, but it has always appeared to
me as putting a premium on idleness by taxing thrift.
Another issue of $50,000,000 bonds was necessary before the year was
out, and in spite of this replenishment, gold exports to pay our debts
to Europe for securities sent back to us by the ream, continued in such
volume as to render a further issue imperative in the following
February. This will be remembered as somewhat unique in our Treasury
operations, being in the form of a purchase of 3,500,000 oz. of gold,