Fifty years in Wall Street
very much account by the men of ample means who so freely subscribed
$20,000,000 to the Villard bubble. At the moment when these subscribers
were so highly elated with the idea that the Villard fancies were going
far up into the hundreds and, perhaps, the thousands, like the bonanzas
during the California craze, Woerishoffer boldly sold the whole line
“short.” This was a similar stroke of daring to that which James R.
Keene had perpetrated on the bonanza kings in the height of their
greatest power and anticipations. The Villard syndicate determined to
squeeze Woerishoffer out entirely, and for this purpose a syndicate was
formed to buy 100,000 shares of stock. There were various millionaires
and prominent financiers included in the syndicate. These were the
financial powers with which Woerishoffer, small in comparison, had to
contend single-handed. The feat that Napoleon performed at Lodi, with
his five generals behind him, spiking the Austrian guns which were
defended by several regiments, was but a moderate effort in war compared
with that which Woerishoffer was called upon to achieve in speculation.
He took things very coolly, and with evident unconcern watched the
actions of the syndicate. The latter went to work vigorously, and soon
obtained 20,000 shares of the stock which they required. It still kept
climbing rapidly, and so elated was this speculative syndicate with the
success of its plans that it clamored for the additional 80,000 shares,
according to the resolution. The speculators thought they were now in
the fair way of crushing Woerishoffer, and with a hurrah obtained the
80,000 shares required, but Woerishoffer’s brokers were the men who sold
them to the big syndicate. It was not long afterwards that the syndicate
felt as if it had been struck by lightning. In a short time the Villard
fancies began to tumble. The syndicate was in a quandary, but nothing
could be done. It had tried to crush Woerishoffer. He owed it no mercy.
The inevitable laws of speculation had to take their course, and the
great little bear netted millions of dollars. These events occurred in
1883.
After the Villard disruption, Mr. Woerishoffer became conservative for
some time, and was a bull or a bear just as he saw the opportunity to
make money. When the West Shore settlement took place he watched the
course of events with a keen eye, and was one of the most prominent
figures in pushing the upward movement upon the strength of that
settlement. His profits on the bull side then were immense. After this
he became a chronic and most destructive bear. The reason he assigned
for his conversion and change of base was that the net earnings of the
railroads were decreasing, and did not justify an advance in prices. He
pushed his theory to an extreme, making little or no allowance for the
recuperative powers of the country, and the large bear contingent, which
he successfully led, seemed to be inspired with his opinions. These
opinions, pushed to the extreme, as they were, had a very demoralizing
effect upon the stock market, and constituted a potent factor in the
depreciation of all values, throwing a depressing influence on
speculation, from which it did not recover until many months after Mr.
Woerishoffer’s death. The great bear had wonderful skill in putting
other operators off the track of his operations by employing a large
number of brokers, and by changing his brokers and his base of action so
often that speculators were all at sea regarding what he was going to
do, and waiting in anxiety for the next move. It was considered
remarkable at the time that his death had not a greater influence on the
stock market than this result proved. If he had died a week sooner, his
death might have created a panic, for he was then short of 200,000
shares of stock. His short accounts had all been covered before the
announcement of his death on the Stock Exchange.
Woerishoffer was almost as famous for his generosity as James R. Keene.
It is said that he made presents to faithful brokers of over twenty
seats, of the value of $25,000 each, in the Stock Exchange. He made a
present of a $500 horse to the cabman who drove him daily to and from
his office. He was exceedingly generous with his employes. A short time
before his death, feeling that the strain from over-mental exertion was
beginning to tell on his constitution, he had resolved to visit Europe
for the purpose of recuperating, but, like most of our great operators,
he had stretched the mental cords too far before making this prudent
resolve, and he died at the early age of 43. How many valuable lives
would be prolonged if they would take needful rest in time! The death of
Woerishoffer should be a solemn warning to Wall Street men who are
anxious to heap up wealth too rapidly. His fortune has been variously
estimated at from $1,000,000 to $4,000,000. He left a widow and two
little daughters.
Woerishoffer had simply the genius for speculation which is
uncontrollable, irrespective of consequences to others. He had no
intention of hurting anybody, but his methods had the effect of bringing
others to ruin all the same. He merely followed the bent of his genius
by making money within the limits of the law, and did not care who
suffered through his operations. All speculation on the bear side
involves the same principle. If there is any difference among
speculators, it only consists in degree. Large transactions, like those
in which Woerishoffer was engaged, are more severely felt by those who
have the misfortune to get “squeezed;” but it all resolves itself into a
question of the survival of the fittest.
Woerishoffer’s success in this country seems strange to Americans, but
how much stranger it must have seemed to the people of his native town
of Henau Hesse-Nassau, where he was born in 1843, in comparative
poverty. John Jacob Astor was one of the first of a considerable number
of Germans to find this country a veritable new El Dorado, where
peasants’ sons, as if by magic, became far wealthier than many of the
nobility whom they had, as boys, gazed upon with awe. Who could have
foreseen such a career for the poor young German, who came to New York
in 1864? He was then in his twenty-first year. He had had some
experience in the brokerage business in Frankfort and Paris, but he came
here poor. Addison Cammack, who was to become his ally in many a
gigantic speculation, was then prominent in the South, where he had
favored the cause of the people of his State during the war, and had
made a fortune. D. P. Morgan, who was to be another of his speculative
associates, had already won a fortune by speculating in cotton in
London. Russell Sage counted his wealth by the millions. Jay Gould and
Henry N. Smith had gone through the feverish excitement of a Black
Friday, and either, in common parlance, could have “bought or sold” the
poor young German. Nevertheless, by strange turns in the wheel of
fortune, he acquired a financial prestige that enabled him to beard the
lion in his den, and snap his fingers at powerful combinations that
sought to ruin him. When Henry Villard demanded his resignation as a
director in the Oregon Transcontinental Company, on the ground that he
had been selling the Villard properties short, the “Baron” (as
Woerishoffer was often called) tendered it at once, and flung down the
gage of battle in the announcement that he would ruin the head of the
Villard system.
Chas. F. Woerishoffer was slightly built, had a light complexion, was
under the medium height, and, on the street, might have been taken for a
bank clerk. He showed his inborn love of gaming in many ways. He is said
to have broken a faro bank at Long Branch twice; he would play at
roulette and poker for large stakes. He was kind-hearted and charitable.
At Christmas his benefactions to clerks and messenger boys were notable.
In the height of a great speculation he sometimes showed extreme
nervousness, but during the memorable contest with the Villard party he
exhibited the greatest coolness and composure. He was a curious compound
of German phlegm and American nervousness. One of the fortunate events
in his career was his marriage, in 1875, with Miss Annie Uhl, the
step-daughter of Oswald Ottendorfer, the editor and proprietor of the
great German organ of New York, the _Staats Zeitung_, who brought him,
it was understood, a fortune of about three hundred thousand dollars.
The following circular to my customers, which I published May 13th,
1886, with special reference to the death of Woerishoffer, and its
consequences, I think is worthy of reproduction here:
“The future of the market is going to be a natural one, and will go up
and down from natural causes; when this is fully realized there will be
no lack of the public taking a hand in it. That element has been crowded
out of Wall Street for a long time past, largely due to the fact that
its judgment to predicate operations has been sat on by brute force. It
has been, therefore, made to feel that the market was not one where it
was safe to venture. This brute force power came from Woerishoffer, who
has for a long time past been the head and front as a leader on the bear
side, and was a gigantic wrecker of values. His method was to destroy
confidence and hammer the vitality out of every stock on the list which
showed symptoms of life, and his power was the more potential, as all
the room traders were converted to believe in him and were his
followers. His decease leaves, therefore, the entire bear fraternity
without any head, and consequently in a state of demoralization, and in
a condition not unlike a ship at sea without a rudder. Mr. Woerishoffer
was a genial, hospitable man, lovely in character at his own home, true
to his friends and generous to a fault, and will, therefore, be a great
loss as a gentleman; but so far as the prosperity of the country goes,
his death will be the country’s gain. To the fact that Mr.
Woerishoffer’s power and influence are no longer felt on the market is
almost entirely due the change of front of the situation, which is now
one of hopefulness. While he lived the public and half the members of
the Board were completely terrorized by the fear of him, and were kept
in check from being buyers, however much the position of affairs
warranted going on the long side. The bull side of the market has had
for a long time past to contend with the bold and ferocious attitude of
Mr. Woerishoffer. When the bulls felt justified in making a rally and
forcing the market to go their way, when it looked most encouraging, as
a result of their efforts, Mr. Woerishoffer would strike their specialty
a sledge hammer blow on the head; he would repeat that on every attempt
that was made, which finally resulted in discouragement. If ten thousand
shares were not ample for that purpose, he would quadruple the quantity;
in fact, he has often been known to have outstanding contracts on the
short side of the market amounting to 200,000 shares of stock at least.
As an operator he seemed to be so peculiarly constituted as to know no
fear, and would often turn apparent defeat to success by possessing that
trait of character. It will be a long time before another such
determined and desperate man will appear on the stage to take his place;
in the meantime, it will be plainer sailing in Wall Street, besides
safer for operators. Mr. Woerishoffer, as an operator, was full of
expedients. He put his whole soul into his operations, and not only
would he attack the stock market with voraciousness, but he would
manipulate every quarter where it would aid him; sometimes it would be
in the grain market, sometimes by shipping gold, and sometimes by the
manipulation of the London market. He had all the facilities for