Fifty years in Wall Street
governed by the most iron-clad rules. There was no field for financial
news agencies in those days, for the Board kept its proceedings a
profound mystery, and its members were bound to the strictest secresy on
pain of expulsion. That wonderful development of our later civilization,
the ubiquitous interviewer, was then unknown. The business of the Board
excited the most intense curiosity, and so impatient did outsiders
become to learn the mysteries of the interior, that the members of an
open Board which was organized about the year 1837, after failing to
force themselves into the regular association, engaged a building next
to the Board-room, and dug the bricks out of the wall in order that they
might see and hear what was going on.
The Board removed from the Merchants’ Exchange building in 1863 to a
room in the Commercial Exchange Bank building, at the corner of Beaver
and William. About the year 1857, memorable as the period of the great
panic, and my advent in Wall Street, the Board removed to “Dan Lord’s
building,” which had entrances on William and Beaver streets. It was
here, about the time of my advent, in Wall street, more fully described
in another chapter, that some of the great speculators of that era
figured. Among these were Daniel Drew, Jacob Little, and the lightning
calculator, Morse, who made and lost a fortune of millions in little
more than a year. In this building the rule of secresy was not relaxed,
and the fact is on record that a hundred dollars a day were freely
offered for the privilege of listening at the key-hole during the time
of the calls. The Board continued to hold its meetings in this building
during the war, and up to 1865, when it removed to the present edifice.
It is worthy of note here that the Stock Exchange, during the war, for
the purpose of assisting the Government, passed a resolution prohibiting
members from selling Government bonds “short;” and also a resolution
forbidding all dealings in gold. The latter resolution was the principal
cause of the formation of the Gold Exchange. This action on the part of
the Stock Exchange was taken at a pecuniary loss of many millions of
dollars, the sacrifice having been made for the highest and noblest of
patriotic purposes; yet, in the face of such an historic record as this
some people still imagine that the members of the Stock Exchange never
have been anything but a selfish set of money grabbers. Is there any
other institution in the country whose members would have made such a
personal sacrifice in the interest of the Government? I doubt if there
is. Certainly, none did.
There was a second Open Board of Brokers formed in the year 1863. It
took up its quarters first in a basement in William street, called the
“Coal Hole.” The membership began to increase rapidly, and the business
accumulated so fast that the Board was soon enabled to take more
capacious accommodations on Broad street, contiguous to the Stock
Exchange. In this menacing attitude the new Board began to make serious
inroads on the business of the old one, almost one-half of which it had
acquired by the year 1869, when the old Board called a truce. It was
seen by the judicious members of the Board that the competition was
likely to work the ruin of both, and amicable negotiations were begun
which culminated in consolidation. So the Open Board, the Stock Exchange
and the United States Government Board were consolidated in May, 1869,
making the strongest public financial association in the country, and
one of the most important in the world, and placing it upon an almost
impregnable footing. Mr. William Neilson was the first President in the
new building.
The following are the names of the Presidents of the New York Stock
Exchange from 1824 until the present time:
1824 EDW. LYDE.
1825 “
JOHN WICKER.
1828 “
1829 “
1830 RUSSELL H. NEVINS.
1831 JOHN WARD.
1832 “
1833 “
1834 R. D. WEEKS.
1835 E. PRIME.
1836 R. D. WEEKS.
1837 DAVID CLARKSON.
1838 “
1839 “
1840 “
1841 “
1842 “
1843 “
1844 “
1845 “
1846 “
1847 “
1848 “
1849 “
1850 “
1851 H. G. STEBBINS.
1852 C. R. MARVIN.
1853 “
1854 “
1855 “
1856 “
1857 J. H. GOURLIE.
1858 H. G. STEBBINS.
1859 W. H. NEILSON.
1860 “
1861 “
1862 A. B. BAYLIS.
1863 H. G. STEBBINS.
1864 WM. SEYMOUR, JR.
1865 R. L. CUTTING.
1866 WM. ALEX. SMITH.
1867 JOHN WARREN.
1868 WM. SEARLES.
1869 W. H. NEILSON.
1870 WM. SEYMOUR.
1871 W. B. CLARKE.
1872 EDW. KING.
1873 HY. G. CHAPMAN.
1874 GEO. H. BRODHEAD.
1875 GEO. W. MCLEAN.
1876 SALEM T. RUSSELL.
1877 HENRY MEIGS.
1878 BRAYTON IVES.
1879 “
1880 DONALD MACKAY.
1881 “
1882 F. N. LAWRENCE.
1883 A. S. HATCH.
1884 J. EDWARD SIMMONS.
1885 “
1886 JAMES D. SMITH.
1887 “
1888 “
1889 WM. L. BULL.
1890 “
1891 W. B. DICKERMAN.
1892 “
1893 F. K. STURGIS.
1894 “
1895 F. L. EAMES.
1896 “
1897 “
1898 “
1899 R. KEPPLER.
1900 “
1901 “
1902 “
1903 “
1904 R. H. THOMAS.
1905 H. K. POMROY.
1906 R. H. THOMAS.
1907 “
1908 “
* * * * *
JACOB ISAACS was Secretary from 1824 to 1831.
BERNARD HART was Secretary from 1831 to 1855.
GEO. H BRODHEAD was Secretary from 1855 to 1870.
B. OGDEN WHITE was Secretary from 1870 to 1883.
GEORGE W. ELY was Secretary from 1883 to 1900.
WM. MCCLURE was Secretary from 1900 to 1905.
GEORGE W. ELY was Secretary from 1905 to 1908.
* * * * *
TEN OLDEST LIVING MEMBERS TO 1907, ALL OF WHOM JOINED THE EXCHANGE PRIOR
TO JULY 1, 1864.
WILLIAM ALEXANDER SMITH.
HENRY CLEWS.
E. C. BENEDICT.
JOHN H. JACQUELIN.
H. S. CAMBLOS.
L. D. HUNTINGTON.
J. H. WHITEHOUSE.
A. S. CLARK.
EDWIN CORNING.
L. J. VAN BOSKERCK.
------------------------------------------------------------------------
CHAPTER XII.
“CORNERS” AND THEIR EFFECT ON VALUES.
THE SENATE COMMITTEE ON “CORNERS” AND “FUTURES.”—SPECULATION BENEFICIAL
TO THE COUNTRY AT LARGE.—A REGULATION 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 CONSUMERS.
The New York Stock Exchange is organized after the same manner as a
social club, such as the Union League, the Union or the Manhattan, and
not under a special charter from the Legislature. Hence it is protected
from the interference of that honorable body.
Although various attempts have been made, from time to time, at Albany,
to levy taxes upon the transactions of the Exchange, and to interfere
with the business of speculation and investment in many other ways,
these legislative designs have hitherto been happily frustrated.
Shortly after the memorable “corner” in Hannibal & St. Jo., in 1881,
another attempt was made by the Legislature to force Wall Street matters
under the jurisdiction of Albany lobbyists and “scalpers.”
The newspaper articles on the subject of the “corner” had attracted the
attention of the Legislature then in session, and naturally suggested to
some of the wiseacres of that dignified and incorruptible body that the
“corner” afforded an excellent opportunity, when the public mind was
excited on the subject, to raise an outcry against the shocking
immorality of such huge speculations.
A Senate Committee on “corners” and “futures” was therefore appointed,
and various Wall Street men were summoned to appear before it, and give
their testimony on this interesting subject. I had the honor of being
one of the witnesses cited. I promptly obeyed the subpœna in preference
to taking the risk of being hauled up for contempt and sent to durance
vile. I appeared before the Committee at the Metropolitan Hotel, and not
only answered all questions put to me, without any fashionable lapses of
memory, after the manner of certain other financiers, but I regaled the
Committee with a little dissertation on the subject of investigation. I
had letters from members of the Legislature afterwards complimenting me
for having made the points very clear. So I can say, “Praise from Sir
Hubert is praise indeed,” and therefore I am encouraged to reproduce
that effort in this volume, not so much from an intense desire to go
down to posterity as a successful orator, as from a disposition to
record my approval, in more permanent form, of the soundness of the
legislative judgment on my explanation of “corners.”
When the applause had subsided, I spoke as follows:
“Gentlemen of the Committee on Corners and Futures: Speculation is a
method now adopted for adjusting differences of opinion as to future
values, whether of products or securities. This is more common now than
in former years because the facilities for procuring information have
increased with the greater intelligence and celerity with which all
business is now conducted, and also from the greater rapidity with which
such information can be transmitted by telegraph and cable.
“In former years the results of a crop were known only when it came to
the market. Now almost everything affecting its future value is known
with a fair degree of accuracy before the crop is harvested. This
advanced information naturally becomes the subject of speculative
transactions which could not have existed in former times.
“Speculation brings into play the best intelligence as to the future of
values. It has always two sides. The one that is based principally on
the facts and conditions of the situation wins in the end, and the
result of the conflict is the nearest possible approach to correct
values. The consequences of speculation are thus financially beneficial
to the country at large.
“Speculation for a fall in prices is based upon the presumption of an
over-supply. If it succeeds, the production of the particular product is
checked until prices recover, and in the meantime production is diverted
to articles less abundant. Thus speculation proves a regulator both of
values and production. Speculation for a rise in prices is based upon a
presumption of scarcity or short supply, and its direct effect is to
quicken production and restore the equilibrium of prices.
“‘Corners’ usually come from running speculation to an excessive length,
by which the seller becomes responsible for deliveries beyond what he
can possibly make. He thereby places himself at the mercy of those with
whom he has made the contracts. These exigencies chiefly affect the
speculators themselves, and the community at large but little.
“Extreme prices usually grow out of them, but they are only momentary,
and have small effect upon regular or cash transactions, which
sympathize very remotely with these temporary and artificial quotations.
“Speculation is not to be judged by its occasional excesses, but by the