[Illustration:
_Yours Very Truly. Chauncey M. Depew._ ]
STEDMAN, THE POET AND FINANCIER.
A small, slightly built gentleman with iron gray side whiskers, a refined face and expressive gray eyes, is one of the notable figures in Wall Street. It is Edmund Clarence Stedman, the banker poet. He was born in a small town in Connecticut in 1833, studied at Yale, entered journalism in 1852, came to New York in 1855, and soon began to contribute poems to the _New York Tribune_. He became a war correspondent for the _World_ on the outbreak of the rebellion, and continued in this capacity till 1863. In that year he became private secretary to Attorney-General Bates at Washington. Meantime he studied law, and contributed to the _Atlantic Monthly_ and other leading magazines. As a poet, he holds high rank; as a writer of polished, graceful prose he has few equals; as a thorough gentleman and a scrupulous man of business he is held in the highest respect. Through the imprudence of another he has within a few years met with some financial reverses, which he met courageously and honorably, and he is now well on his way towards his former position of financial ease. Although a poet, he understands Wall Street business thoroughly, and is considered a keen judge of financial opportunities.
Victor H. Newcombe was born in Louisville, Kentucky, about 48 years ago. His father was President of the Louisville & Nashville Railroad, and the son succeeded the father in that position. The elder Newcombe was a financial power in Kentucky. He was sagacious and far-seeing. In every respect, he was an excellent business man. Victor Newcombe has fallen heir to his father’s laurels and is a successful operator in Wall Street. He has achieved signal success in most of the campaigns in which he has engaged, whether on the bull or the bear side of the market. He is cautious, and turns quickly when he thinks there is occasion. He seems to act on the French saying, that “only a fool never changes his mind.” He lives in fine style on Fifth avenue, and also has a beautiful residence at Elberon. He is one of a number of prominent gentlemen from the South who have enrolled themselves among the citizens and taxpayers of New York. He is an ex-director in the New York & New England road, and a prominent member of the Union and Tuxedo Park Clubs.
MOSES TAYLOR.
Moses Taylor, now deceased, was one of the notable figures in Wall Street life for many years. He started as a South street merchant, after having been a clerk with G. G. & S. Howland. Wm. H. Aspinwall was also a clerk with that house at the same time. When Mr. Taylor gave up his situation to embark in business for himself, Mr. Aspinwall was admitted into the Howland firm as a junior partner. Moses Taylor was a man governed largely by intuition. There was little argument; with him, so to speak, it was a word and a blow. Having formed his impression and taken his quick resolution, there was no length to which he would not go in the transaction, either in buying or selling or advancing money. He was President of the City Bank and owned a large amount of its stock. Under his administration the bank was wonderfully successful. His son-in-law Percy R. Pyne, is now its President. Moses Taylor was a valuable aid to the Union cause during the war. He was a close friend of Secretary Chase, and whenever the Government needed the assistance of the banks, the Secretary’s influence with the great merchant speedily brought about the desired result. Moses Taylor realized the fact that the support of the Government by the entire banking system was an imperative necessity. The presidents of the banks would be called together on one of these appeals from the Secretary of the Treasury, and whatever action Mr. Taylor favored would be adopted, so strong was his influence, and so high his standing as a merchant and financier. He accumulated wealth very fast in connection with the sugar branch of his business. Most of the large sugar planters consigned their product to his firm, and they were also governed by his superior judgment in investing their money, so that he always had important connections with Wall Street, a fact that entitles him to a place in this book. While investing millions for Cuban capitalists, he also invested very largely for himself. Moses Taylor was the first to discover the value of the Delaware, Lackawanna & Western Coal property, and while the stock was kicked about Wall Street, because the company was bankrupt, he picked it up at a few cents on the dollar, and made millions of dollars from this investment alone. At his death he was one of the largest owners of the stock, as his faith in it was so strong that he had refused to sell it, even though the price had risen above 140. He died worth at least forty millions of dollars. He had no social aspirations, and no interest in anything but business. It was his idol. Few men have been harder workers from early in life up to their last days. He never felt that he could spare time for recreation, and was seldom known during his long business career to leave the city over night, summer or winter, except on business. Moses Taylor had for partners in his business his son-in-law Percy R. Pyne and Lawrence Turnure, both excellent business men, and Mr. Taylor owed much of his success to the selection of these gentlemen to aid in the management of his affairs. Mr. Taylor placed in the hands of these two gentlemen, especially during the last ten years of his life, the laboring oar of his vast business, and the successful results are the evidence of their sagacity and marvellous ability.
[Illustration:
_James Brown_ ]
ANTHONY W. MORSE.
Anthony W. Morse was once one of the remarkable men of Wall Street. He made $150,000 in speculation, bought a yacht and went to Europe during the war. While in England, he mingled with the aristocracy, and became strongly imbued with the idea that the North would not be successful in the war, and that the National currency would become almost valueless. He thought that the more the National currency depreciated, the more railroad stocks and bonds would advance; in short, that whatever the currency would buy would advance, while the currency itself would become nearly worthless. He therefore became a rampant bull on stocks. He bought almost the whole list, and also did a large business in buying for others whom he succeeded in impressing with his own ideas. He had many followers and made a tremendous inflation. Secretary of the Treasury Chase was advised of this Morse speculation, which might prove prejudicial to the National credit, and he announced that if the inflation was carried any further, he would prick the bubble by selling gold. Anthony W. Morse thereupon personally sent Secretary Chase a dispatch saying that he would take all the gold that the United States Government had to sell. Mr. Chase immediately ordered Assistant Treasurer John J. Cisco to sell $10,000,000 of gold to the highest bidders. The usual notice appeared in the morning newspapers, and a panic at once followed. At 12 o’clock, or two hours after the opening of the Exchange, it was announced from the rostrum that Anthony W. Morse had failed. This terminated the career of Mr. Morse as a large operator and manipulator, and with his downfall the death knell was sounded to his imported theories. He straggled manfully for several years to regain his footing, but his prestige was gone, and he failed in every effort to push his way again to the front. His ill-success soured him. His health failed, and he went to Havana to recuperate. There he died with profanity on his lips, enraged at the failure of all his hopes. He paid the penalty of disloyalty. His friends of the English nobility were largely to blame for all his misfortunes. Their predictions of the success of the South led him on to irretrievable ruin. He did not see that their wish was father to the thought.
[Illustration:
_Edmund Clarence Stedman_ ]
FORMER GIANTS OF THE STREET.
Henry Keep, once President of the Lake Shore road, and also of the New York Central, was in his day a power in Wall Street. He was the first to discover the intrinsic value of railroad property in the Northwest, and manipulated Chicago & Northwestern stock, both common and preferred, very successfully, making a great deal of money for himself and friends. He died very wealthy. He came to New York city from Watertown, in the interior of New York, and at first was an exchange broker, dealing mainly in uncurrent money. He had previously served in some humble position on a railroad. By careful and economical habits he was able to leave a fortune of several million dollars, largely in common and preferred Northwestern stock. The plot of ground on which William H. Vanderbilt built his palatial Fifth Avenue home was once the property of Mr. Keep, who originally bought it for about $250,000 for the purpose of building a charitable institution, but changed his mind when the property quadrupled in value. Then he concluded that charity should begin at home. He sold the plot, extending for one block along Fifth Avenue, to Mr. Vanderbilt for one million dollars. Still his original intentions were good, and it was only after the real estate market, as with Satanic malice, had in that locality advanced 400 per cent. and taken him up into a high mountain of temptation, that his philanthropical project turned awry and lost the name of action. While Mr. Keep made a signally good President of the Lake Shore road and was a great manipulator of stocks, he was a failure as President of the New York Central, and he resigned that post having no confidence in the future of the property. Commodore Vanderbilt, who believed in the property, became his successor, and in a previous chapter I have given the story of the rise of that remarkable man. It is of interest to recall, by the way, that while President of the Lake Shore road Mr. Keep went largely short of the stock. As the President he naturally had inside information. Addison Jerome, a brother of Leonard Jerome, was a big operator of the day, and undertook to corner President Keep. In those days a great deal of stock was sold on seller’s option for thirty and sixty days. Mr. Keep had sold largely in this way, and Addison Jerome and his clique had bought heavily, expecting that the corner would be complete when the options should mature. A surprise awaited them. Mr. Keep made deliveries promptly in brand new shares. They were really an over-issue by the Company. It was a Waterloo in a double sense for Jerome and his fellow bulls. They were in over their heads. It had such a dampening effect that they immediately threw up the sponge and the stock came down with a crash. The issue of this new stock was smoothed over by turning the avails into the treasury of the Company, a fact, however, which did not prevent Mr. Keep from making a pretty good turn on his shorts.
J. PIERPONT MORGAN.
J. Pierpont Morgan, known as the “Railroad Reorganizer,” and who has won a place in the front rank among American financiers, is a son of the well-known Junius S. Morgan, the head of the firm of J. S. Morgan & Co., of London, and the successor of George Peabody, the great philanthropist in the banking business there. George Peabody, some years before his death, visited this country, and, desiring a partner in his great banking house, made inquiry in Boston for a suitable person. Junius S. Morgan was recommended as a young man of exceptional business talents and he was selected for the responsible post, the firm being known as George Peabody & Co. On the death of the celebrated head of the firm, the name was changed to J. S. Morgan & Co. The success of the father has been repeated in the signally successful career of the son. During the palmy days of the firm of Duncan, Sherman & Co., once renowned among the financial strongholds of the country, J. Pierpont Morgan was one of the clerks. It was there he graduated as a practical student of financial achievements; it was there he won his spurs for the monetary campaigns that awaited him. Leaving the house that was then a synonym for invincible solidity, Mr. Morgan established the firm of Dabney, Morgan & Co. Mr. Dabney was formerly one of the firm of Duncan, Sherman & Co. After a few years the firm in which Mr. Morgan had thus first engaged in business on his own account was dissolved. But the check, if it may so be termed, was only momentary, and colossal feats of financiering were to deck his career with triumphs. He formed a connection with the wealthy Drexels, of Philadelphia, and a New York branch of their banking house was established, under the name of Drexel, Morgan & Co., which has for some years been largely engaged in the reorganization of crippled railroads like the West Shore, Reading and many others. And they have been very successful. They have been financial physicians, healing sick corporate bodies; monetary surgeons, amputating needless expenditures and reckless methods; or, in perhaps more happy figure, skilful pruners of the vine, that the ultimate vintage might be more abundant.
[Illustration:
_Yrs Sincerely H. Victor Newcombe_ ]
Mr. Morgan is endowed with very positive traits of character. He has the driving powers of a locomotive. He cares nothing for show; he is a plain man of action. He strikes hard blows; he is naturally aggressive. In speech he is candid to the verge of bluntness; in action he is short, sharp and decisive. Like a true soldier, he is a man of acts rather than words. Rugged as a Spartan in his nature, hating circumlocution, bombast and palaver, going straight to the mark, yet with due caution and prudence, he exhibits many of the best traits of the practical financier.
I have asked Mr. Morgan for his picture for publication in this book, but with natural personal modesty, he has recommended that his handsome partner, Anthony Drexel, of Philadelphia, be selected in his place, and with a view to encouragement in Wall Street of blushing modesty—that century flower of the financial conservatory—I have complied with his request.
THOMAS L. JAMES.
President of the Lincoln National Bank, has had a career in New York brilliant in the service of the public, and marked in the practical skill with which confidences and enterprises have been directed by him. His training has contributed largely to his success as a financier. He came from Utica in 1861 and entered the Custom House as Deputy, and finally attained the position of Postmaster-General after a long and successful term as Postmaster of the City of New York. Mr. James directed the affairs of the Lincoln Bank so successfully that what promised to be a small up-town bank has developed into a National bank of considerable importance. He is one of the men of the times, one who feels the tide of local affairs, a man of the people who acts from wholly conscientious motives, and whose ambition has never exceeded his sense of duty.
[Illustration:
_Moses Taylor_ ]
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CHAPTER LX.
JAMES B. AND JOHN H. CLEWS.
The subjects of this sketch, whose portraits adorn these pages, are both members of my firm and I think this book would be incomplete without putting in a few words in reference to them. As will be seen by the sketches which follow, they both commenced their business careers in a modest way and through perseverance and industry have attained positions in the financial world which are in every way creditable to them. I have made it a rule never to introduce a blood relative into my office for a position of trust unless I believed him worthy of confidence and capable of performing the duties assigned to him in an intelligent manner. To do so would be an act of injustice, not only to him but to his associates in the office, and generally causes ill feeling and bad results in the end. Happily with my nephews I have had no such cause or ground for complaint. On the score of merit alone they have succeeded in advancing themselves to their present positions.
James Blanchard Clews was born in Dunkirk, N. Y., August 4, 1859. After graduating from Chamberlain College, in this State, he entered the general office of the Red Line Transit Company, in Buffalo, N. Y., where he spent two years. He then accepted a position of responsibility in the General Manager’s office of the Union Steamboat Company, also located in Buffalo. Here his ability and his growing capacity for making a good business man were further satisfactorily illustrated and recognized by those officially over him. Realizing, however, that Wall Street offered better opportunities for advancement, he resigned his position and obtained one in my banking office as book-keeper. Commencing at the bottom of the clerical staff, he displayed so much ability, coupled with untiring energy in the performance of his duties, it was a pleasure to promote him from time to time, whenever an opportunity offered, with the result that after eight years of vigorous training through the successive grades of Book-keeper, Cashier, and General Manager, he was rewarded in 1890 by being made a member of my firm. It will thus be seen that my nephew possesses a thorough and practical knowledge of the inside workings of a banking house which is so essential to a successful Wall Street business man. Being besides a student of nature, he has also improved every opportunity to learn the value of railroad and other investments and to-day is a recognized authority on all such matters. He has served as President of an important railroad and is a Director in a number of large corporations.
John H. Clews,[1] junior member of the firm of Henry Clews & Co., was born October 28, 1856. In beginning his business career he entered the service of the Erie Railroad Company, in the transportation department, where he gained a general knowledge of railroad management and its affairs. After a few years with that company he was offered a position with the Western Transportation Company, the water line of the New York Central Railroad. Here he had the opportunity of completing his education in all the branches of transportation. He was then appointed Agent of the New York, Chicago & St. Louis Railway at East Buffalo, N. Y., the distributing point for all freight between the East and the West. From this place he entered Wall Street, where he evinced the same progressive spirit. In 1890 he became a member of the New York Stock Exchange, acting as one of the chief brokers for Henry Clews & Co., and January 1, 1898, he obtained an interest in the firm.
Footnote 1:
Deceased April 10, 1907.
[Illustration:
_Thomas L. James_ ]
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CHAPTER LXI.
A REMARKABLE CHAPTER OF HISTORY.
Any review of the advance of this country during the past fifteen years, forms a record of the most wonderful progress ever made by any nation in such a short period. A record of the development of the country’s resources through a resistless energy that seems destined to control the markets of the world, reads almost like one of Grimm’s famous tales, for after numerous trials, and the surmounting of many obstacles, the fairy wand is turning what we will into gold.
One of the effects of the Vanderbilt boom of 1885 is to be found in the enormous mileage of new railroad construction in 1887, namely 12,000 miles. It may have looked at the time excessive, but it has turned out to be a fortunate anticipation of the great business strides made since that time. As far back as that year, our exports of manufactured articles began to show an appreciable increase.
The year following will always be memorable as the time of the great blizzard which tied New York up so effectually for several days. As a direct result of the exposure to its severity, the country lost in Roscoe Conkling one of the most picturesque figures in American politics and a man of unblemished reputation. He was taken from the arena of affairs too soon to allow his participation in the presidential campaign of that year.
My own experience at the time has impressed the memory of the great storm strongly upon my mind. I had gone to Newport accompanied by Mrs. Clews to inspect some improvements then being made at my summer home, and in returning we came across the bay in the regular boat for the purpose of taking the noon-day train which ran from Boston to New York. When we were about half way over the bay, a vicious squall struck us and we began to doubt if we should ever reach the shore again. Finally, however, we did manage to land, and connected with the belated train. Progress of course was slow, so slow in fact that the next morning saw us only as far as New London, whence further movement was out of the question. Many of my readers will recall the railroad ferry over the bay from New London. The last train previous to ours had been started across, but the violence of the tempest had compelled the pilot to give up the task and return. With more incoming trains, New London was soon congested by the sudden increase in population, and accommodations of any sort were at a premium. We were for a time at a loss as to where we could go, but fortunately succeeded in inducing the manager of the hotel there to install us in the private apartments of the proprietor, who had the day before started with his family for Florida. He spent the ensuing four days upon the railroad, between New London and New Haven, banked in by a snow drift six feet high, while we enjoyed the hospitality of his apartments during that time. I am sure that we could not conscientiously complain of the exchange. Telegraphic communication with New York was completely shut off. As our children had remained in the city, we were naturally anxious to know of their welfare and relieve any anxiety they might have as to our safety. There remained but one means of communication, and that a wire to Boston, whence messages could be cabled to Liverpool, and back to New York, and that is the way we got word to and from the metropolis. That was a rather circuitous way, but it was effective.
[Illustration:
_John H. Clews._ ]
Mr. Cleveland’s renomination and accompanying free trade talk, disturbed the markets more or less from the date of his nomination in 1888 up to the time of General Harrison’s election. The latter’s entrance into the White House started the entire business of the country going, and through his wise management, we were brought to a very high point of prosperity, the last year of his term being, up to that time, one of the most prosperous in our history. One of General Harrison’s most signal achievements was in the exchange of reciprocity treaties, which was managed in such a masterly manner by his resourceful Secretary of State, Mr. Blaine.
In the middle of General Harrison’s term, occurred the greatest financial shock the world had experienced in the last quarter century, or since the panic of 1873.
The suspension of the great firm of Baring Bros. of London in the fall of 1890 proved a demoralizing force from the effects of which finances did not thoroughly recover for several years. The direct cause of the failure, as is now well known, was over-commitment in Argentine enterprises. Through the representations of an agent of theirs who had visited the country, everything bearing the name of Argentine was colored a most rosy hue, and the investments of that great house and its following were enormous. The inevitable reaction from such inflation found them with an immense load of these securities unmarketable, and they were forced to suspend. The assistance rendered in rehabilitating the firm has been signally successful. Through the efforts of Mr. Lidderdale, Governor of the Bank of England, that institution took over some seven million pounds sterling of the congested obligations of the firm. By the wise, patient, and sagacious management of these former unmarketable properties the bank was finally enabled to realize enough therefrom to pay up all the arrears of the firm.
The liquidation of American securities by British holders which was consequent upon their failure was enormous in volume and extended over several years.
The year 1890 was further noteworthy as marking the birth of that unfortunate compromise of the silver agitation known as the Sherman silver-purchase law, which was to bring about such direful results within a brief three years. After the shock of the Baring panic had subsided, the beneficial effects of the McKinley tariff law began to be felt and with increased exports, largely of grain, in the succeeding year, together with ample protection for home industries, we were ushered into 1892 under very auspicious circumstances.
Bountiful crops again provided a basis for what developed into a wonderfully prosperous year. During the year, Jay Gould (largely through the aid of his son George), by one of his characteristic strokes, succeeded in obtaining control of the Union Pacific system, while Mr. Huntington was thinking the matter over; but his personal control was not to last very long, for in December of that year, Mr. Gould died, after a career of great activity and venturesomeness, which has elsewhere been reviewed in this book.
[Illustration:
_J. B. Clews_ ]
The Democratic party still clung to their idol, and Mr. Cleveland was renominated for the presidency in 1892, and by one of those inexplicable turns of public opinion which foolishly wished a change of administration in the midst of prosperous times, he was elected, and returned to Washington the following March, be it said, enjoying the confidence of the great majority of the people. Almost from the time of that election, the Wall Street markets were depressed, the fear of free trade measures being the basis of distrust. Late in the year, the Treasury’s stock of gold began to show signs of diminishing, and with the exception of a few rallies, one notably in the following January, prices continued on the downward course. Co-incident with the decrease of gold reserves arose reports of a disposition on the part of the Secretary of the Treasury to interpret the word “coin” in our Government obligations as allowing the redemption of the bonds in either gold or silver at the option of the Government. The effect of any doubt or question upon this most important subject could only result in unsettling confidence; of which Addison speaks as the “high priest in the temple of trade.” For the first time in very many years, our Treasury operations showed a deficit, and things were going from bad to worse. The first great smash in prices occurred in May, when the famous Cordage Trust went to pieces. At the same time, Sugar stock and the remainder of the then few industrial shares took part in the sharp decline. The gold reserve had by the middle of the year reached alarmingly low figures, so that the pressure of public opinion compelled the calling of an extra session of Congress for the purpose of repealing the silver purchase clause of the Sherman law,—which had proved to be a veritable “Old Man of the Sea” upon the back of the country, threatening to throttle business interests everywhere.
The Congressional procrastination, and obstructive tactics in the Senate worked havoc with trade and finance, and when relief finally came in the repeal of the silver purchase clause, the vitality of the patient had sunk so low, that it was a matter of years before returning health, in the form of confidence, brought back our native buoyancy and push. It became necessary early in the following year to issue $50,000,000 worth of bonds in order to keep the gold reserve from getting too near the vanishing point. Tariff agitation, which had been started by President Cleveland’s message to Congress in December, 1893, upset all the calculations of business men, who hoped, after a disastrous summer, that the tide had turned. But, no sooner was the fear of a silver deluge quieted, than revenue reform brought on another period of anxiety and delay. Fortunately when that distorted measure (with its 640 Senate amendments) which bore the name of the late William L. Wilson, a man of deep thought and the highest integrity, did become a law in the following year, it was not burdened with an income tax.
There are those who argue, probably to their own satisfaction, that this latter is an equitable form of taxation, but it has always appeared to me as putting a premium on idleness by taxing thrift.
[Illustration:
ROSWELL P. FLOWER. ]
Another issue of $50,000,000 bonds was necessary before the year was out, and in spite of this replenishment, gold exports to pay our debts to Europe for securities sent back to us by the ream, continued in such volume as to render a further issue imperative in the following February. This will be remembered as somewhat unique in our Treasury operations, being in the form of a purchase of 3,500,000 oz. of gold, which cost the Government $62,500,000. The famous syndicate which undertook the delivery of the precious metal, agreed to do all in its power by the further deposit of gold in the Treasury and as far as possible, a control of foreign exchange rates to keep the reserve intact. Its powerful aid unquestionably saved the people from many more business disasters, by a bolstering up of confidence in the power of the Government to pay its debts. The syndicate lived up to its agreement fully, depositing in the month of August some seven and a half millions of gold.