Fifty years in Wall Street
Everybody thought that the Commodore was hopelessly ruined. Harlem
stock, however, dropped three points only, to 72. This created surprise
among the Aldermen and the bears. They thought it should have dropped to
50. The “shorts” went into the market for the purpose of covering.
Harlem ascended with amazing rapidity to 100, to 150, to 170 and finally
to 179. The Common Council were obliged to make their final settlements
at the last figure. The Commodore had all the stock. The Common Council
lost a million, and their friends, whom they had advised to sell
“short,” lost several millions. The Commodore “raked in” five or six
millions, and went on his way rejoicing and improving Harlem, having now
taken “Bill” in with him as vice president.
One would naturally imagine that the severe lesson which the Common
Council had received in “corners” would have taught others to beware of
the Commodore in this line of speculation, although it was new to him,
but it did not. People as a rule will not learn either by precept or
example. They must go through the rough experience themselves.
The Legislature soon fell into the same trap in which the Common Council
had been caught and which they had actually set for themselves. The
following year the Commodore secured control of the Hudson River
Railroad through the purchase of its stock, and afterwards secured a
sufficient number of the members of the Legislature to pass a bill
consolidating the road with Harlem. He also won the promise of the
Governor to sign the bill.
Harlem again began to rise, and went from 75 to 150. This was early in
1864.
The members of the Legislature employed to pass the bill pocketed the
money of the Commodore and then hatched a conspiracy, after the manner
of the Common Council, to ruin him and make millions by his fall. He had
a shrewd lobbyist in the Legislature, however, who attentively watched
his interests while he came down to New York to purchase stock for the
rise that must have necessarily followed the passage of the bill. He had
not been long in Wall Street when he was informed that the Legislature
were imitating the game in which the Common Council had been so signally
defeated the previous year. The Commodore sent him word to keep close
watch at Albany, and he went on buying stock in Wall Street.
The bill was defeated. Harlem stock had a slump from 150 to 90. The
Commodore was in a dilemma, and would have been dreadfully embarrassed
only for the intense avarice of the Legislature. If they had bought and
delivered at 90, they would have made millions, which the Commodore
would have lost; but, like the horse leech’s daughter, they cried out
for more. Nothing would satisfy them until the stock should be depressed
to 50. Then they could “scoop” in several millions and the Commodore
would be wound up. This was probably the darkest hour in the Commodore’s
life. He hardly knew which way to turn. He was on the ragged edge. He
has often pathetically described his feelings at this crisis to his
intimate friends. He was almost on the brink of despair. He sent for old
John Tobin, who had been a gate keeper at the ferry-house at Staten
Island. Tobin had made quite a haul in the former deal in Harlem, and
was worth over a million. He told Tobin what the perfidious members of
the Legislature had done. John had been buying Harlem also in prospect
of a rise.
“They stuck you too, John,” said the Commodore. “How do you feel about
it?” John sighed, and replied that his feelings were not the most
enviable. “Shall we let ’em bleed us?” queried the Commodore.
John sighed again, but did not know what reply to make.
“John, don’t them fellows need dressing down?” emphatically queried the
Commodore. John answered in the affirmative, but did not see how it was
to be accomplished, as “them fellows” at that moment seemed to hold the
fort.
After a pause of deep reflection, the Commodore, again addressing John
with intensified emphasis in his tone, said: “John, let us teach ’em
never to go back on their word again as long as they draw breath. Let us
try the Harlem ‘corner’ once more.”
It was agreed to try and repeat the Harlem “corner.”
John put up a million. Leonard Jerome also went into the deal. It took
five millions to face the Legislature in this game, in which they had
every opportunity of packing all the cards. It was virtually, at first,
a silent game of whist, at which the Commodore was a noted player. He
never played with greater skill than this time, except in the Hudson
“corner,” and in both instances he almost manifested the skill of
inspiration.
The members of the Legislature completely lost their heads. The old
classic maxim, “whom the gods devote to destruction, they first make
mad,” appeared to apply peculiarly to them, in the manipulation of the
Harlem “corner.” Some of them mortgaged their houses and lands to get
money to sell Harlem “short.” They advised all their friends that it was
such a sure thing that failure was impossible, and brought all of their
acquaintances whom they could influence into the speculative maelstrom
of Harlem.
In the coarse of a few weeks, the members of the Legislature and their
friends had sold millions of Harlem to be delivered at various periods
during the summer, when they expected it would go ‘way down, probably to
8 or 9, where the Commodore had originally bought it.
They expected, moreover, that the Commodore would have appeared at
Albany either in person or by his lobby representatives to sue for terms
of settlement. They were greatly disappointed. He never left the company
of his brokers in Wall Street, and persisted in purchasing. The members
thought he must be mad, or at least in his dotage. He was then
threescore and ten, the Scriptural limit of human days.
The Commodore continued to purchase Harlem until he had
bought—paradoxical as it may seem to the general reader—27,000 shares
more than were in existence of Harlem stock.
When the members of the Legislature who set the trap to catch
Vanderbilt, but in which they themselves were now hopelessly ensnared,
went into the market to buy for the purpose of covering, there was no
Harlem to be had. Vanderbilt and his brokers had every share of it
safely secured in their strong boxes.
The members of the Legislature were paralyzed. They could expect no
mercy from the Commodore. He owed them none, and though a good Christian
prior to his death, he was then practically a stranger to the doctrine
of the great Nazarene. “Return good for evil,” or, “whosoever shall
smite thee on thy right cheek, turn to him the other also.” He was
rather inclined to follow the maxim of that practical Quaker, who, when
smitten on the cheek and asked to turn the other, replied, “Friend, thou
didst not read far enough. It is written, ‘pay what thou owest,’” and he
knocked the fellow down.
This was the rule of action to which the Commodore rigidly adhered in
dealing with the Legislature in the Harlem “corner.”
When a compromise was mooted to him, the Commodore replied, “Put it up
to a thousand. This panel game is bring tried too often.”
No doubt he would have put it up to a thousand and totally ruined the
members of the Legislature, with the Governor and their friends
included, only for the overpowering appeals of his two trustworthy
friends, Leonard Jerome and John Tobin.
Mr. Jerome had no sympathy for the Legislature, any more than Vanderbilt
had, but he had a patriotic desire to take care of the “Street,” thus
showing the large and comprehensive view of which this able financier is
capable where a broad speculative question and a variety of diverse
interests are involved.
“If you should carry out your threat,” said Mr. Jerome to the Commodore,
“it would break every house on the Street.”
The Commodore yielded to that touch of nature that makes all the world
akin, and under the magnetism of Jerome’s prudent entreaty, like Pharaoh
with the Israelites, agreed to let the Legislature go—at 285 for Harlem.
In one day 15,000 shares matured at this figure. Speculators who read
these lines, just pause and think of it for a moment! The stock that
sold at $3 when I made my debut in Wall Street in 1857, reached 285 in
1864, and could have been put to 1,000. Don’t you feel astounded at the
possibilities of speculation?
Then, again, think of the one-man power that could accomplish this
wonderful feat and prevail against a whole Legislature and its Governor,
with the choicest assortment of “crooked” lawyers in the State, versed
in all the arts of duplicity and cunning to aid and abet said
Legislature and its Governor.
Think of this, and then you will have some conception of the astute mind
that the Commodore possessed, without education to assist it, in the
contest against this remarkable combination of well-trained mental
forces. There can hardly be a doubt that the Commodore was a genius,
probably without equal in the financial world. There was hardly any
achievement of his life which he gloated over with such ineffable
delight as the cornering of the Legislature. He would say, when
referring to the matter afterwards: “We busted the whole Legislature,
and scores of the honorable members had to go home without paying their
board bills.” Thus ended the second “corner” in Harlem.
Many large houses were ruined by the “corner,” and a host of private
speculators lost all they had. Daniel Drew came very near being swamped
in it, but finally escaped with paying a million, chiefly through his
influence at court.
It is unnecessary to speak of the celebrated Erie “corners” here, as I
have treated them pretty fully in the life and speculations of Drew.
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CHAPTER XIV.
DANIEL DREW.
DREW, LIKE VANDERBILT, AN EXAMPLE OF GREAT SUCCESS WITHOUT
EDUCATION.—CONTROLLED MORE READY CASH THAN ANY MAN IN AMERICA.—DREW
GOES DOWN AS GOULD RISES.-“HIS TOUCH IS DEATH.”—PREDICTION OF DREW’S
FALL.—HIS THIRTEEN MILLIONS 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.
One of the most singular and eventful careers in Wall Street was that of
Daniel Drew, familiarly called “Uncle Daniel.” This man affords another
remarkable instance of the possibility of attaining great success by
stubbornly following up one idea, and one line of thought and purpose.
His life also shows that education is not necessary to success in the
acquisition of money, but, as I have attempted to show in another
chapter, may be a great hindrance.
This fact is abundantly illustrated in the lives of both Drew and
Vanderbilt. In fact, everybody who knew these two men were of the
opinion that with a fair or liberal education they would never have cut
a prominent figure as financiers. It is also questionable whether either
of them, with all their ability in other respects, would have been
capable, with their peculiar predilections for other pursuits, of
receiving a common school or college education. They, probably, had not
the capacity for that kind of acquisition. Perhaps it might have been
impossible for any teacher to make Drew pronounce the word shares
otherwise than “sheers,” or convince Vanderbilt that the part of a
locomotive in which, the steam is generated should not be spelt
phonetically, “boylar.”
It is more than probable that professors in grammar would have found it