Fifty years in Wall Street
churches and religious institutions. If he had studied the life of
Daniel Drew, he might have discovered that investments in such
enterprises as these were not particularly profitable. In his financial
difficulties, Seney was left high and dry without friends who would come
to his rescue. The result was, that the two financial institutions, the
Metropolitan Bank and the Brooklyn bank with which he was thoroughly
identified, had to go under as the result of Mr. Seney’s misfortunes.
And an insurance company in Brooklyn, which had loaned about all of its
surplus to Mr. Seney, taking Metropolitan Bank stock as collateral, was
swamped as well.
There are few of the speculative magnates who succumbed to the crash of
1884, whose financial histories are more interesting than that of Mr.
Seney. He is the son of a Methodist minister, and was born at Astoria,
Long Island, about sixty years ago. He has always manifested the deepest
devotion to his paternal church, and in the very height of his
prosperity the church was the first object of his financial care. He was
educated at the University of the City of New York, and shortly after he
graduated, and when about 22 years of age, entered the Metropolitan Bank
as a clerk. He was afterwards teller and then cashier. This was when Mr.
Williams was President and when Mr. Jacques was Vice-President. Mr.
Jacques resigned that position several years ago and made a prolonged
journey to Europe. Mr. Williams died a few years ago, and Mr. Seney
became his successor as President of the bank.
Mr. Seney’s wonderful financial abilities were a comparatively recent
outgrowth of his mental evolution, at an age when very few men exhibit
signs of new developments.
Up to a date shortly prior to the panic, he was generally regarded as
slow and phlegmatic, without manifesting any special parts that
indicated superior brilliancy as a financier. He first distinguished
himself in Wall Street during the speculative furore of 1879, and came
to the front then with sudden and surprising activity. He carved out an
original course for himself in speculation—so original, in fact, as to
stamp the enterprises with which he became identified with his name. The
Seney properties became almost as familiar to the financial world as the
Goulds, the Vanderbilts and the Villards.
Mr. Seney’s chief securities (so-called through the courtesy of
speculative parlance) were Ohio Central, Rochester and Pittsburgh, East
Tennessee, Virginia & Georgia, and the celebrated “Nickel Plate” Road.
These were known as the Seney Syndicate properties, and the system of
handling them was entirely novel in the history of Wall Street, causing
the financial veterans of Wall Street to stand and stare at the boldness
and rapidity of the Seney movements.
Instead of starting with moderate issues in amount, as has usually been
the custom of most men handling railroad and telegraph properties, and
doing the watering process by degrees, Mr. Seney boldly began the
watering at the very inception of the enterprise, pouring it in lavishly
and without stint. There was nothing mean or niggardly about his method
of free dilution, the sight of which threw some of the old operators
into a fit of consternation. The stocks were strongly puffed, and as
they were so thoroughly diluted their owners could afford to let them
get a start at a very low figure. The future prospects of the properties
were set forth in the most glowing colors, the public took the bait, and
the stocks became at once conspicuous among the leading active fancies
of the market.
The cause of the vigorous life and amazing activity so suddenly imparted
to the stocks of the Seney Syndicate can only be revealed by a careful
perusal of Mr. Seney’s checkbook, which, if still in existence, will
show commissions paid for the execution of the orders to buy and the
orders executed to sell, both by the same pen and in the same
handwriting.
These transactions, in the language of the “Street,” are called washed
sales. In this way Mr. Seney was understood to have made a very large
amount of money, and from being almost one of the poorest men in
Brooklyn, he soon became marked as the richest. While he continued to
thrive it was a singular fact that the majority of his financial friends
seemed to fall into a decline.
When the affairs of the Seney enterprise were wound up, it was
discovered that these people had little left except the certificates
which bore the high-sounding term of the Seney Syndicate Property.
One peculiarity about Mr. Seney in his social relations was, that while
he appeared almost bereft of sympathy for used-up friends whom his
schemes had ruined, he drew largely on his immense gains for
philanthropic purposes, and in the aggregate must have distributed over
$2,000,000 in a very magnanimous manner.
It would seem that Mr. Seney at one time aspired to be a great
philanthropist, and had it not been for the unfortunate exposé which was
the result of the panic, he might one day have stood in as high and
lordly a position as the renowned Peabody, with even a greater
reputation as a financier. It is sad to picture the contrast presented
by the _denouement_ with what might have been, in a career which began
with so much promise, dating from the time that Mr. Seney was installed
as President of the Metropolitan Bank, whose standing and credit were
the highest in the State.
Mr. Seney’s speculative career affords an example of the way in which
this kind of speculation reflects on the stability of our best banking
institutions. The lesson is one that should be carefully taken to heart
by the financiers of this country.
It is due, however, to Mr. Seney to state that he alone was not
responsible for the misfortunes of the Metropolitan Bank, although he
was the ruling spirit; for it could hardly be possible that the
directors of that institution could have been ignorant of its affairs in
connection with the Seney speculations. The Metropolitan Bank cannot be
compared with the Marine Bank, which met a similar misfortune, for it
was no family affair, and Mr. Seney had none of his relatives connected
with it, as Mr. Fish had with the Marine Bank.
It appears that it was chiefly owing to the fact that Mr. Seney had so
little personal interest in the Metropolitan Bank that he was so anxious
to gut the concern, knowing that the loss would fall upon others.
The most important point for speculators and investors, however,
connected with the enterprises of these men is, that the terrible
shrinkage of Stock Exchange values at the time, amounting to over
$1,000,000,000, was in a large measure brought about by a foregone
conclusion on the part of the sagacious bear cliques that disaster would
sooner or later overtake the institutions over which Mr. Seney and Mr.
Fish presided.
This should afford a wholesome lesson, through the medium of practical
experience, to speculators and investors for all future time. For this
very reason the facts are worthy of being put on permanent record as a
reminder and a guide, particularly to Wall Street men, who are too often
prone to forget the past and thus leave themselves liable to be caught
in a similar net again.
The transactions of the four prominent speculators who played the most
conspicuous part in the events which resulted in the panic of May, 1884,
should be preserved for reference, as a guide when similar cases arise,
for in spite of the deep disgrace, shame and misery that have followed
in the wake of their enterprises, these men will have hosts of imitators
for many years to come. Ward, Fish, Seney and Eno, with probably the one
exception, Fish, are, by many, considered smart men, who simply had the
misfortune to become involved, but who had a fair chance of coming out
of all their troubles, great millionaires and publicly honored for their
ability and success.
It must be admitted that there are some examples in the financial world
whose careers will fully support this theory and belief but they are the
exceptions which only prove the rule in speculation, as in other lines
of business, that “honesty is the best policy.” These men, who have been
apparently so successful through dishonest methods, are never free from
dread of being tripped up at any period of their inflated prosperity.
They are always subject to be called upon by the application of the
stern methods of honest financiering to give an account of their
stewardship, and to have the transactions of a lifetime eventually
gauged by the standard of public honesty. It is the winding up that
tells the tale, and exposes the duplicity of the ablest financiers, who
vainly imagine that dishonest methods will always prevail.
JOHN C. ENO.
Of the four famous “financiers” mentioned who were most prominent in the
Summer panic of 1884, the speculative history of John C. Eno was in some
respects the most remarkable and most interesting.
Eno was a young man, not more than twenty-six years of age, and a
representative of that class of ardent and youthful speculators who
plunge into the market with all the recklessness incident to young and
sanguine imaginations, with many roseate schemes of wealth and
greatness, for which inexperienced youth is proverbial. Eno was a victim
of that rashness, impulsiveness and desire for extravagance, by which
the possessors of these attributes frequently get themselves and many of
their associates embroiled in numerous difficulties and embarrassments.
Another point of interest in the curious career of Eno was his position
as President of the Second National Bank of New York, up to the time of
the panic. Seldom does it fall to the lot of a youth of his tender years
to have conferred upon him a position of such responsibility and
dignity. The manner in which he made use of this position of trust, for
appropriating money which did not belong to him, was notable for its
peculiar ingenuity.
Most of the money lent by the bank was upon collateral securities,
which, for convenience, as well as for safety, were kept, not at the
bank, which was situated under the Fifth Avenue Hotel, but in a vault
down town.
The capital stock of the bank was $100,000, and it had $4,000,000 of
deposits, all of which was appropriated to speculative use by this smart
young man, who decamped to Canada in company with a Roman Catholic
priest.
Eno happened to have a rich father, who had made his money by thrift and
economy during a long and prosperous life. To his credit, it must be
said, that he came promptly to the rescue of this wayward and erring
son, and paid the bank, of which he was director, three and one-half
millions of dollars, on condition that the other half million should be
contributed by the other directors, all of whom were very rich men. The
directors willingly accepted the proposition, and thus the entire
deficiency was made good by this generous arrangement, so that none of
the depositors suffered the loss of a dollar.
The methods which Mr. John C. Eno, the President, resorted to for the
purpose of capturing the institution root and branch, were ingenious and
unique in their character, inasmuch as they had a tendency to inspire
the fullest confidence in his vigilance and honesty regarding the
affairs of the bank, instead of exciting any suspicion.
He discouraged the custom of keeping the securities of the bank in its
own vaults, on the pretense that they were not sufficiently secure, and
suggested that a safe should be rented in one of the down town safe
deposit companies. This was done at his request. He argued, further,
that the funds on hand being mostly family deposits, the depositors were
not of a class that often required to be accommodated with discounts,