The South immediately after the war had greater advantages than most people imagine, if it had only taken hold of them in the right spirit. It had various sources of prosperity, which under prudent management would have enabled it to leave the North far behind in the race for wealth. Its leading staples, cotton, tobacco, and rice, had all a gold value in the markets of the world.
This opportunity of going in to produce at hard-pan prices on a gold basis invested it with an immense leverage against the North, with its inflated currency and war prices, growing out of the large issue of paper money necessary to carry on the war, and consequent over-speculation as a natural result or sequence.
It seemed to me, then, that, while the South had a grand opening for growth in prosperity on a solid basis to begin with, the business of the North was, in comparison, in an inflated position, that must burst before it could get a fair start on a solid foundation. It appeared as if it would sooner or later suffer a temporary collapse, while the South had only to begin and build without fear of any such interruption.
I, therefore, selected for my investments as the best fields in the South the two States that stood the highest in their financial credit, in their character for integrity and enterprise, and that then had the brightest outlook, namely Georgia and Alabama.
These States took my money freely, issued their State securities, their County securities, sold me their bonds, and got me thoroughly interested, and that to a very large extent, and then treated me with the basest ingratitude, repudiating their bonds, and cheating me out of my money and property in every way conceivable.
I attribute the cause of this unjust treatment, however, to Andrew Johnson, who, by accident, through the assassination of President Abraham Lincoln, became President of the United States.
Mr. Johnson was a Tennesseean, loyal during the war to all appearances, and for all practical purposes of the Union cause, and he would doubtless have so remained had it not been for the unfortunate circumstance of Abraham Lincoln’s death.
This made him Executive of the nation, for which by ability he was amply fit and qualified, but through bias and temperament, entirely unfit to fill creditably this eminent position for the best interests of the country at large.
The position I took, as above stated, was, that since the war was over, it was a thing to be forgotten as speedily as possible. The finality was seriously delayed owing to the hostility that President Johnson did his best to excite and prolong amongst the people of the South.
Congress, it will be remembered, was leniently disposed in the passing of measures and framing of laws to bring the traitorous States of the South back again into the Union. The members of Congress most cautiously and delicately worked to patch up old sores that were supposed to exist between the victors and the vanquished, but when their bills went to the President they were unmercifully subjected to a wholesale process of vetoing, almost indiscriminately. This produced a condition of chronic hostility between the legislative and executive branches of the Government, and the wider the breach became the stronger and more vindictive grew the spirit which it naturally aroused in the Southern people.
These people were sadly misled by the President, whom they trusted, and his hobbies were humored at the expense of their prosperity.
Johnson made the people of the South believe that his vetoes would only delay legislation until Congress should be forced to find them something better. They, accordingly, reposed faith in him, and were badly deceived.
The feeling of animosity excited by this condition of things so worked on the minds of the people, causing the South to wax bitter and revengeful, that it appeared to people on this side of Mason and Dixon’s line that their Southern brethren had become even more implacable than during the hottest scenes of the war.
It was for the reasons above stated that bonds which had been issued by the South for money invested by the North were, in a large measure, repudiated. As soon as it was discovered that most of the vested interests were owned by Northern people, the spirit of revenge and avarice combined was aroused to the point of repudiation. And, unlike the courage of Macbeth, it did not require any stimulant to make that the sticking point. Every method that ingenuity could devise to strike a blow at the North was employed. No opportunity was allowed to slip that afforded any advantage, either material or moral.
Thus, instead of accepting the situation as General Lee had done, they were led astray by every one who had a political axe to grind. They took an active part in politics instead of looking after the various industries of the country and developing its resources. They engaged in political discussions and their attendant broils, to the neglect of necessary enterprises that would have brought them material prosperity.
Thus they became poorer and poorer. Many years were lost in these political turmoils, and the people became more and more embarrassed.
From these circumstances there were many financial victims, but few, if any, suffered more in that respect than myself.
I had over two and a half millions of dollars invested in the State of Georgia securities, and in other ways, a million more at least in Alabama and North Carolina together, all of which was perfectly annihilated, the entire disastrous result growing out of the factious spirit that was created and fostered by the vile and narrow prejudices of President Andrew Johnson, of whom I have still more to say in another chapter.
[Illustration:
_Most Very Sincerely Robert Garrett_ ]
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CHAPTER L.
WESTERN AND SOUTHERN FINANCIAL LEADERS.
ALFRED SULLY, HIS ORIGIN AND SUCCESSFUL CAREER.—CALVIN S. BRICE, A FINANCIER OF ABILITY.—GENERAL SAMUEL THOMAS, PROMINENT IN THE SOUTHERN RAILROAD SYSTEM.—GENERAL THOMAS M. LOGAN, A SUCCESSFUL MAN IN RAILROADING AND MINING.—FINANCIAL CHIEFTAINS OF BALTIMORE.—THE GARRETTS.—THEIR GREAT SUCCESS AS RAILROAD MANAGERS.—PORTRAIT OF ROBERT GARRETT.
Alfred Sully, who has become so prominent in the financial world within a year, is tall, rather slightly built, nervous, and energetic. His face, by its long, square contour and thoughtful lines, suggests that of Senator Wm. M. Evarts; the eyes are keen and penetrating but kindly. At heart his tastes are those of a genial literary recluse. Circumstances and unquestioned ability have made him a financial leader. He was born about 46 years ago in Ottawa, Canada, where he received a good academical education. He tried his fortune in the West. He went to Cincinnati, studied law, and was graduated from one of its best schools, whereupon he went to Davenport, Iowa, and formed a co-partnership which became known as the leading law firm of the city. He acquired some means, and in 1872 came to New York, the proper place for men of ability. It is understood that at this time he had some idea of indulging his tastes for authorship, but Austin Corbin put a veto on that. The two had become acquainted in Davenport, where Mr. Corbin was formerly a banker, and the latter, on meeting Mr. Sully in New York, tendered him the position of General Manager of the Corbin Banking Company, which he had established here. He accepted it. But this post, responsible as it was, could not long hold a born financier, and we soon find him obtaining control of the Indiana, Bloomington & Western Road. He next bought the Ohio Southern, of which he is still President, a transaction in which he and his friend nearly doubled their money. Then he made a great deal of money in the Central Iowa and other roads in Illinois. He and Austin Corbin secured control of the Long Island Road, and he gave much time and labor to the Manhattan Beach Road and associated interests at Coney Island. Then he went into the scheme of restoring the financial health of that enfeebled giant among railroads, the Reading, and was one of the prime movers in the reorganizing and consolidation of the Richmond Terminal, the Richmond & Danville, the East Tennessee, Virginia & Georgia, and numerous other Southern roads, which now form one vast system, which will probably yet obtain an entrance into New York.
CALVIN S. BRICE.
Calvin S. Brice was Vice-President of the East Tennessee, Virginia & Georgia Road, and is a Director in the Richmond Terminal and numerous other Southern roads. He is now connected with the United States Express Company, in the management of which he will take an active part. He was born in Lima, Ohio, about 48 years ago, and was educated as a lawyer. He is below the medium height, and rather slightly built, but has broad shoulders, a fitting pedestal for a good head, with firm square features and keen bluish gray eyes. He wears a sandy beard, closely trimmed, which tends to heighten the effect of decision of character. He is a financier of ability.
GEN. SAMUEL THOMAS.
General Samuel Thomas, who is prominent in the Southern railroad system, is now about 50 years of age, is a Western man, and before the war was a civil engineer in the service of an Ohio railroad. After the war he again became a civil engineer, but, drifting after a time to New York, engaged in railroad enterprises, and ultimately secured a large interest in Southern railroads. He is now President of the East Tennessee, Virginia & Georgia, and is largely interested in the Richmond & West Point Terminal, the Richmond & Danville, the Memphis & Charleston, and other Southern roads. He is tall, well-built, energetic, and affable. He lives in fine style, and is a member of the Union League. He is worth several millions.
Gen. Thomas M. Logan is President of the Virginia Midland Railroad, Vice-President of the Richmond & Danville and Richmond Terminal, and a Director in all the roads in this system. He was born in Charleston, S. C., about 44 years ago. He served with distinction in the Confederate Army, and rose to be a Brigadier-General, being one of the youngest in the service. He is a graduate of the University of South Carolina, and formerly practiced law in Richmond, Virginia, where he is also engaged in extensive manufacturing and mining enterprises. He resides in Richmond, and is a member of the Westmoreland Club, but often comes to New York on railroad business, in which he has amassed a comfortable fortune.
John W. Garrett’s name will always be associated with that great property, the Baltimore & Ohio, which he rescued from the verge of bankruptcy. He was a man of great force of character, and inherited an aptitude for business. He was a graduate of Lafayette College in Pennsylvania, and engaged in business in Baltimore. He became a Director of the Baltimore & Ohio Railroad, and in 1858 was elected its President. He was a staunch supporter of the Union in the civil war. Despite a disloyal sentiment plainly noticeable in Baltimore and elsewhere in Maryland, he lent the Government all the assistance in his power in the transportation of hundreds of thousands of Federal soldiers. He was quick to repair burned bridges, and to do anything to facilitate the military operations of the Federal Government. President Lincoln and Secretary Stanton thanked him warmly. His salary as President was $10,000 a year. The Directors repeatedly offered to increase the remuneration, but he declined to accept it. He often refused offers as high as $50,000 a year to become the President of other roads. He was autocratic in his administration. His will was law. He found the Baltimore & Ohio Railroad a weak and struggling underline in the railroad world, and he left it a giant in the American system of railroad transportation.
Robert Garrett, the son of the preceding, and now the President of the Baltimore & Ohio Road, is one of the railroad kings of the United States. He became the President of the Baltimore & Ohio in his thirty-seventh year, after having served as Third Vice-President and First Vice-President under his father’s administration. He is a graduate of Princeton, a man of genial characteristics, and a favorite in society. He has made a study of railroad administration, but is now understood to seek some relief from the burdens unavoidably incident to his position as the head of a great railroad. And he is wise. He is many times a millionaire. Why should he devote his life to unnecessary care and labor? Rich men in this country are apt to work too hard. They do not enjoy life as men of far less wealth do in Europe. Under almost any administration the Baltimore & Ohio Road has a great future before it. The road was built to draw the Western trade to Baltimore. This trade had been diverted from that city by the building of the great canals. New York & Philadelphia were receiving the lion’s share of the traffic. The first stone on the Baltimore & Ohio Road was laid by Charles Carroll, one of the signers of the Declaration of Independence, in 1828. The road was opened to Wheeling in 1853. The firm of Robert Garrett & Sons was established in 1849, and was originally engaged in the wholesale grocery trade. When the road reached Wheeling its finances were at the lowest ebb. The house founded by the grandfather of the present head of the road bought largely of its bonds at a very low figure, and this marked the first connection of the Garrett family with this great property. The house of Garrett & Sons still exists as a banking establishment under the management of T. Harrison Garrett. In 1853 Baltimore & Ohio stock could be bought for a song. Since then it has sold at as high as $225 a share. The improvement in the property was very largely doe to the efforts of John W. and Robert Garrett.
The recent embarrassing complications of Mr. Garrett in connection with the management of his railroad and telegraph companies, it is hoped, will only be temporary, and I expect to see him again, at no distant day, reinstated at the head of the great corporation over which he and his father presided. His present difficulties are matters of current newspaper record and comment, and I need not, therefore, enlarge upon them here. As shown by the latest report, the Baltimore & Ohio Railroad is virtually in a good, prosperous and solvable condition, and I have no doubt that the Drexel-Morgan syndicate which has undertaken to put the property on a still more solid and durable basis with the ten million loan which it has negotiated, will uprightly do its whole duty, and in due time return the trust considerably enhanced in value to Mr. Garrett, his heirs and assigns.
John H. Inman, another member of the Southern railroad circle, was born in Tennessee. He is tall, fine looking and soldierly in appearance. He is one of the shrewdest of the capitalists who have invested large amounts in Southern enterprises. He came to New York from Atlanta, quite poor, after the civil war. In the war he was a quartermaster’s clerk, and his old quartermaster afterwards became one of his brokers on the Cotton Exchange. Young Inman went into the office of an uncle on arriving in New York, and learned the business of a cotton broker. He was clear-headed and successful. After he became a partner in the firm he added very materially to his wealth by carrying cotton for the premiums on the options. He is recognized as one of the leaders of the Cotton Exchange. In recent years he has become a financier, has made large loans to railroads in the South, and has invested heavily in Atlanta real estate, and in iron enterprises in Birmingham, the rising Southern market. He was prominent in the reorganization of the Richmond & Danville railroad system, in which he is largely interested. He is a director in the Richmond Terminal and associate lines, as well as the Louisville & Nashville and other Southern roads. He invested nearly two millions in the Tennessee Coal & Iron Company. He is now about 50 years of age. He seems to be a man of destiny. He is a man of great force of character and exceptional business skill. He resides in New York, and is possessed of a large fortune.
ANCESTRY IN ENGLAND—BRAINS IN AMERICA.
In this country no one cares about ancestry. The spectacle of Mark Twain weeping at the tomb of Adam is a humorous expression of American opinions on this general subject of ancestry. To save time he paid his devoirs to the fountain head without stopping at the Guelphs, the Tudors, the Bourbons, the Hohenzollerns, the Hapsburgs, or the Romanoffs. There is no time, if there was any wish in this great country—shaking to the tread of gigantic business—to inquire, “Who was his father?” There is only time for such questions as, “What do you know?” “What can you do?” “How have you succeeded?” Integrity and ability stand a man in better stead in America than show of purple veins of Norman blood. Even in the aristocracy (so to speak) of brains, ancestry in one sense, so far from being an advantage, is apt to be precisely the reverse. A son of Henry Clay or Daniel Webster can never hope to attain the lofty pre-eminence of the sire, and suffer by comparison. Great men do not always have great sons. For one Pitt, the son of a great Chatham, there are hundreds of sons who intellectually dishonor great fathers. Brains, intelligence, industry, energy, and pluck; these are the talismanic words which stand for success in America, where no ghost of a dead feudalism hovers over the land, darkening it by its blighting presence. In England the first question, a silly echo of centuries, is, “Who is his father?” But who are the nobility? Have they any title as such to the respect of right-thinking persons? The nobility is running to seed, or rather the once noble tree is withering and dying; it has borne its fruit and its time has passed away. In Scriptural language, Why cumbereth it the ground? How many of the nobility are now worthless roues, habitual seducers, dried up or half consumed by the fires of passion and debauchery! They are dying as the fool dieth, with a drunken leer on their shrunken faces and the stain of dishonor on their escutcheons. The Commons of England will yet redeem the nation from the thraldom of a worthless aristocracy. America is the true field for the human race. It is the hope and the asylum for the oppressed and down-trodden of every clime. It is the inspiring example of America—peerless among the nations of the earth, the brightest star in the political firmament—that is leavening the hard lump of aristocracy and promoting a democratic spirit throughout the world. It is indeed the gem of the ocean to which the world may well offer homage. Here merit is the sole test. Birth is nothing. The fittest survive. Merit is the supreme and only qualification essential to success. Intelligence rules worlds and systems of worlds. It is the dread monarch of illimitable space, and in human society, especially in America, it shines as a diadem on the foreheads of those who stand in the foremost ranks of human enterprise. Here only a natural order of nobility is recognized, and its motto, without coat of arms or boast of heraldry, is “Intelligence and integrity.”
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CHAPTER LI.
ARBITRATION.
HOW THE SYSTEM OF SETTLING DISPUTES AND MISUNDERSTANDINGS BY ARBITRATION HAS WORKED IN THE STOCK EXCHANGE.—WHY NOT EXTEND THE SYSTEM TO BUSINESS MATTERS GENERALLY?—ITS GREAT ADVANTAGES OVER GOING TO LAW.—IT IS CHEAP AND HAS NO VEXATIOUS DELAYS.—TRIAL BY JURY A PARTIAL FAILURE.—SOME PROMINENT CASES IN POINT.—JURY “FIXING” AND ITS CONSEQUENCES.—HOW JURIES ARE SWAYED BY THEIR SYMPATHIES.—A CURIOUS MISCARRIAGE OF JUSTICE BEFORE A REFEREE.—THE LITTLE GAME OF THE DIAMOND BROKER.
Wall Street has derived great prestige and character from the New York Stock Exchange. In fact, the Stock Exchange is Wall Street, so to speak, so much so that if the Exchange moved to any other locality, the latter would become the new Wall Street, to the utter oblivion of the old, which would soon be eclipsed and regarded as a thing of the past.
The New York Stock Exchange has distinguished itself in many respects, but there is probably nothing for which it is likely to become more famous in history than its solution of the great problem of settling disputes and misunderstandings by arbitration. Other financial bodies have tried the same substitute for ordinary law proceedings, but it would appear that greater success has crowned the efforts of the Stock Exchange in this particular experiment than any other corporate body.
The large number of cases on record that have been amicably settled by arbitration within the past few years, in which law would have been formerly considered indispensable, seem to point to a period, probably not far distant, when arbitration will be the great and ultimate court of appeal in the large majority of civil cases. Several considerations will make it the most popular. It is cheaper, less complicated, not subject to vexatious delay; it is more equitable, and the members composing the Arbitration Committees are business men, who are quick to discern, accurate in perception, sound in judgment and decisive in drawing their conclusions on business principles.
The expense of arbitration is a mere trifle compared with the enormous sums swallowed up in litigation.
Transactions involving millions of dollars annually in the Stock Exchange are made subject to settlement by this method of arbitration in the event of any difference of opinion arising in any particular case. Very few instances occur in which there is any necessity to carry the case beyond the jurisdiction of the Arbitration Committee.
The number of cases actually settled in this way would probably cost half a million dollars annually if they had to be brought into court, to say nothing of the incidental expenses, which would amount to as much more, arising from delay, on the scale of present charges by the legal profession, even leaving out our own Evarts, who is probably the Boss charger of the Bar.
The success attending the system at the Stock Exchange, I think, goes far to prove that the method might be universally extended to the great pecuniary interest and personal comfort of business men throughout the country, for the adjustment of their misunderstandings and grievances among one another.
My object in writing upon this subject has for its basis the hope that this chapter may catch the eye of some of our great merchants in this and other large cities, and that it may suggest to those of them who have not contemplated the subject already, the advisability and necessity of establishing for themselves a similar method of arbitration to that which has been so successful in the Stock Exchange, to be final and without appeal, in their respective business affairs.
Experience has fully demonstrated that trial by jury is in innumerable instances a signal failure; especially has this been so since what is known as “jury fixing” has become so common in the courts. The practice of bribing jurors has now become a secret profession, and is so ably conducted that it is almost impossible, except in rare instances, to expose it.
But apart from this vicious and criminal practice of tampering with juries, there are many other reasons why it is next to impossible, in a large variety of instances, to obtain justice from an ordinary jury.
Human sympathy plays a very important part in the verdicts of juries generally. I mean by this, class sympathy. A business man who is regarded by the community as rich and powerful, can hardly expect justice from a common jury unless the party opposed to him occupies a similar station in society. Where the position of either the plaintiff or defendant calls forth sympathy with regard to worldly means, in the large majority of cases the ordinary jurors will bring in a verdict in favor of the man of small or moderate means, believing that they are in duty bound to sympathize with the oppressed. In a case where a clerk or a woman, for instance, is a party to the suit, it is next to impossible for a man of means to receive equity at the hands of the great palladium of our liberty. I am sorry it is so, but I speak feelingly in this matter, as I have myself been a victim of this unworthy class prejudice, in a country where all men are theoretically equal.
Counsel usually make a great display over the cases of impecunious clients, out of all proportion to their magnitude. Mole hills become ostensibly transformed into mountains in the eye of the highly imaginative lawyer, who works himself up into such a dramatic pitch of enthusiasm about the wrongs of his client, that he appears to be in dead earnest. He infuses the same feeling into the jury, who are beguiled into solemnity by the force of forensic oratory, and fail to appreciate the farcical side of the case, but are totally swayed by sentiment and prejudice, to the utter exclusion of the evidence.
There are many objections, also, to trial or partial trial, by referee, although it is in many instances an improvement on the jury system. It is, however, amenable to numerous and flagrant abuses.
As an instance of this, I shall briefly relate a case which some time ago came within the sphere of my own observation.
A gentleman of my acquaintance had a claim for a very large amount against a financial man in good circumstances, and it was sent to a referee, who, after a long, tedious and exhaustive investigation of all the facts, gave a decision in favor of the plaintiff for several hundred thousand dollars.
Soon after the decision, the defendant saw the plaintiff, and made him an offer of thirty thousand dollars to settle the matter, at the same time stating that if he did not accept the offer, he would either appeal the case or hunt up fresh evidence for a new trial.
This offer of settlement, which was but a small part of the amount awarded by the judgment, was naturally declined by the plaintiff, and application was made to the court under the pretense of newly discovered evidence, for a new trial, which was granted. Thereupon, after another tedious trial, the old beaten track having been gone carefully over again, without omitting any of the aforesaid “whereases, neverthelesses and notwithstandings,” or any of the monotonous flummery connected therewith, the case was again sent to the same referee, before whom the same wearisome inquiry was repeated. This time, however, the referee relieved the monotony, at the close, by rendering a decision in favor of the defendant, for a large sum, instead of the plaintiff, as on the former occasion.
This decision was a genuine surprise to the plaintiff, who then called upon the defendant and expressed in severe terms his indignation at the change that had been unwarrantably made in the decision of the referee, saying he would not submit to it. He was extremely firm in his manner and said: “I positively assure you that if the judgment is enforced this town will not be large enough to hold you and myself.”
The successful defendant then said, “What do you want me to do?”
“Well,” replied the plaintiff magnanimously, “I simply desire to be released of that judgment.”
“Will that satisfy you?” asked the other litigant.
“Yes,” he replied, “under the circumstances. I have had enough of such law, and want to get rid of it.”
“Well,” said the defendant, “I will do it, and give you a receipt in full in satisfaction of all claims.”
After this cordial termination of the trouble, the defendant turned to the plaintiff and said confidentially, “I am sorry you did not take the thirty thousand dollars which I offered you. I would sooner you had it than anyone else, as I had to pay it all the same.”
The profound lesson of humility taught in Scripture, that “the first shall be last and the last first,” was fully verified in this instance.
As litigation is now carried on either before a jury or a referee, it has a tendency to stir up bad blood, which grows worse as the case progresses through its various and lengthy stages, leaving relations more strained and matters for both parties much worse at the end than at the beginning. As the case drags its slow length along criminations and recriminations between plaintiff and defendant are constantly elicited, and family matters that should be regarded as sacred are dragged before the eyes of the public, subjected to unfriendly criticism, and innocent parties who have no interest in the case are subject to have their private affairs made known, to their great mortification, and often to their great detriment, having a cloud thrown over their reputation long after the litigants have passed away.
Thus the evils of litigation are far reaching in their consequences, and frequently exercise a most deleterious influence over the character and prosperity of those who have nothing to do with the original parties to the contest, and have no interest in the suit.
The expense is also another important consideration in going to law, and is only to be measured by the bank balances of the contending parties.
The time lost in the methods of procedure now generally adopted is of the utmost importance, especially to people the success of whose business in a large measure may depend on their personal attention thereto. It is perfectly astounding to reflect on the important portion of a person’s existence that may be lost in one case, which, from its inception in the lower court up through the regular gradations of the Supreme Court and Court of Appeals when a new trial is had, probably thus going over the entire ground twice, may consume all the way from five to ten years under the perpetual pressure of mental anxiety and torture before the end is reached, when at least one, and sometimes both parties, are financially ruined.