Fifty years in Wall Street

by Henry Clews

Replies.

1. Possibly the existing stocks of gold in Europe and America might be sufficient to serve the purposes of banking reserves and for transmission in the international exchanges; but it is impracticable to use such a valuable metal to the extent required for the purposes of active circulation, and this creates a necessity for a silver legal tender coin for the retail transactions of business. For this reason I regard the use of silver, co-ordinately with gold, as an indispensable element in the world’s currency.

2. I regard an international union as absolutely necessary for maintaining the joint use of gold and silver, if the relative value between those metals is to be steadily maintained. If a uniform value of silver were adopted by members of such a union, and if the mint of each nation were bound to coin all silver brought to it, and the coins were made a legal tender, it appears to me that this would establish a uniform value for silver bullion the world over, on a parity with the legal valuation of silver coin; and this conventional value of bullion would be preserved as long as the union should be continued. Even the limited international arrangement known as the Latin Union sufficed to keep silver at about 60 pence per ounce, until its members, taking fright by the demonetization of silver by Germany, stopped the coinage of silver; when, the conventional support being withdrawn and the coinage demand suspended, bullion fell to its value as a mere commodity. This shows how effective the union principle is, and what becomes of silver without it.

3. If an international union were to fix the value of the two metals at 15½ weights of silver to 1 of gold, the rate now general in Europe, and the members of the union were compelled to coin it on demand at that rate, then the free convertibility of bullion into coin would necessarily make the coin and the bullion of equal value, except the slight difference that might arise from coinage charges; which is tantamount to making silver worth about 60 pence an ounce, or its former value.

4. In view of the differences of opinion in Europe on the standard question and the strong prejudices in England in favor of the gold standard, it appears to me more than doubtful whether any step will be taken on this subject until those countries are made to carry the burthen of the large surplus of silver that we are now coining. But with 25 to 30 millions of bullion of our silver going thither every year, the effect would be so serious upon Asiatic trade and upon the immense silver circulation of the Latin nations, that it seems certain they would soon become willing to assume their share in restoring silver. At any rate, it is a proper and necessary compulsion for us to apply.

5. The Government is very closely threatened with a suspension of gold payments, if the coinage is continued. We have already seen a point at which the Treasury had to negotiate with the banks for six millions of gold to avert that catastrophe; and it is only a thin margin of a very few millions that separates us from such a condition all the time. Of course, if the Government suspended coin payments, gold would be apt to go to an indefinite premium; with the consequence of a rush of greenbacks into the Treasury for redemption and a depreciation of such paper as is redeemable in silver to the purchasing power of that coin. In my view, these dangers are much nearer than is generally supposed; and it is a most unjustifiable policy that needlessly perpetuates this state of things.

6. For the reasons assigned in my other answers to your inquiries, I regard the suspension of the coinage of the the silver dollars as to the last degree imperative. And the suspension should be both total and unconditional. Either a partial or a temporary suspension would fail equally to avert the home dangers with which we are threatened, and to bring about that European action which is indispensable to a sound and permanent settlement of the question.

So long as there was no efficient conventional arrangement for maintaining the value of silver, no nation can safely continue its coinage, because, in so doing, it was increasing its stock of currency, the future value of which could not be depended upon, and which might easily become a source of embarrassment and injustice between citizen and citizen, between debtor and creditor. In our country, however, such was the political influence of the silver-producing States that they easily induced Congress to order the coinage of not less than $24,000,000 per annum of standard silver dollars. The effect of this has been, undoubtedly, to somewhat check the decline in silver bullion; but at the expense of the artificial addition already of $230,000,000 of badly depreciated legal tender to our circulating medium. Our whole currency system has thus been vitiated; for our $680,000,000 of paper money may be redeemed in silver; and we are thus exposed to the very gravest dangers, in the event of anything causing an important drain of gold to Europe. That the coin thus issued was not really needed for the purposes of circulation is demonstrated by the fact that it has been found impossible to get more than one-third of it into circulation. In order to obviate this difficulty, various devices have been introduced for keeping the coin in the Treasury and issuing against it paper certificates of small denominations. The most ingenious of these contrivances was the one proposed by Hon. A. J. Warner, of Ohio, and pressed on the Government for its endorsement. In September last I took occasion to publish certain objections to Mr. Warner’s scheme, which was finally rejected by the Silver party; and, with that rejection, there is probably an end to all proposals for creating a purely silver paper currency. As a brief exposition of one phase of this controversy, it may perhaps be permissible to reproduce here the views then expressed:

Mr. Warner’s measure virtually concedes that the coinage of the silver dollar has already been carried to a point that threatens serious danger to the currency system of the country, and, consequently, to the just relations between the creditor and debtor classes. This confession from a representative of the Silver party does not come a day too soon; and it would be welcome, were it not accompanied with proposals that would aggravate the evils which need to be remedied. Let us briefly examine Mr. Warner’s plan.

First, it discontinues the current monthly coinage of silver dollars required under the existing “Bland Act.” 2. It provides that, in lieu of this current coinage, holders of silver bullion may deposit any amount thereof in the United States Treasury. 3. It requires that, against such unrestricted deposits of bullion, the Government shall issue to the depositors “bullion certificates,” expressing an amount of money equal to the market value of the bullion at the time of its deposit. 4. These certificates are to act as a new form of currency. The Government could use them in liquidation of all its debts not made expressly payable in gold; and it would be required to accept them in payment of customs duties, taxes and public dues generally. The national banks would be required to accept them in payments between themselves. And, 5, the certificates are made redeemable in lawful money, (i. e., either gold, silver or U. S. notes), or at the option of the Treasury in silver bullion at its current value at the time of redemption. These are the more vital provisions of the scheme. Let us see what they involve.

Against the whole plan there lies a very positive doubt of its constitutionality. The Constitution empowers Congress to authorize the coinage of gold and silver, and to make such coins a legal tender; but there is nothing in the powers thus conferred, nor in any powers conveyed by that instrument, that can be construed into a right of the Government to receive silver bullion on deposit. The Government can have no interest, duty or function in connection with bullion, except so far as it may be procured for the express purpose of coinage. It can have no more power to assume the custody of bullion for the accommodation of its producers than it has to store cotton, iron or wheat for the convenience of the dealers in those commodities. And when, in addition to assuming the grave responsibilities of custodian, the Government undertakes to issue receipts endowed with special privileges and attributes, calculated to incorporate those receipts as an important part of the currency system, it commits a breach of the true functions of government and of the true constitutional limitations of federal authority, which, it would seem, the Supreme Court should unqualifiedly prohibit.

The provision made for the redemption of these proposed certificates would be to the last degree objectionable. They are payable in legal tender money, or, at the option of the Government, in an equivalent value of silver bullion at its current market price. If the Government chooses to redeem them in lawful money, it exposes itself to a new and important demand upon its legal tender notes or its gold: and as the amount of greenbacks owned by the Treasury now runs so low as to prohibit those notes being used for the purpose, it follows that the redemption of the certificates would have to be made from the Treasury stock of gold. Thus the operation of the scheme would be to exchange the Government gold for silver bullion. What could the silver men desire better? What could all other interests dread more? It would be a direct step towards incapacitating the Government for maintaining gold payments; and, as such, would go far towards dissipating that broad substratum of gold which is the sole means of preventing our entire paper currency from depreciating to a level with the bullion value of the silver dollar.

It is thus clear that the Government would be ultimately driven to redeem the certificates in silver bullion. What does that imply? First, that the Treasury would have to stand the loss upon the deposits of bullion that might arise from a fall in its value. Take a case for illustration. A deposit is made of 1,000,000 ounces of gold at the current price of $1.10 per ounce, the Treasury being required to issue against it $1,100,000 of certificates. Later, when the price of silver has fallen to say $1.05, the $1,100,000 of certificates is presented for redemption, and 1,047,619 ounces of silver have to be delivered, as the bullion equivalent at the current market value. The Government thus loses 47,619 ounces of silver by the transaction. Now, seeing what a handsome profit can be made by thus depositing bullion at a higher price and withdrawing it at a lower, are men so virtuous that we can depend on their not working this Treasury silver mine to the utmost possible advantage? With the hands of the Government thus tied, it would be at the mercy of unprincipled speculators and could not escape being mulcted to the extent of millions of dollars. The moment such a bill was signed by the President, speculative combinations would be formed with London bullion dealers; the European stocks would be secured, and, after advancing the price, would be sent to the United States Treasury. The next step would be to force down the price; and then the certificates would be presented to be redeemed by a much larger quantity of silver than had been deposited against them. And thus the game would go on continuously, the Government being the loser in every transaction. A finer scheme for the benefit of speculators could not have been conceived; but for legitimate interests, in many ways dependent on the value of silver, nothing could be more serious.

There is nothing in Mr. Warner’s measure to prevent the United States Treasury from being saddled with as much of the European stocks of silver as speculators find it to their interest to send here, in addition to the product of our own mines; and for such deposits the Treasury would be compelled to pay whatever artificial price it suited the operators to determine. And what does such a transfer involve? First, that we should have to ship so much more gold to Europe, making the operation a virtual exchange of Europe’s silver for America’s gold; next, that the United States Government would thus be made to bear the sole weight and responsibility of carrying the WORLD’S surplus of silver; next, that, as a consequence, England, Germany, and other nations would become still more reluctant than they now are to negotiate for an international settlement of the silver question; next, that the Government would be so handicapped with its enormous load of silver as to place it at an utter disadvantage in such negotiations; next, that the Government would be exposed to immense losses in assuming such vast responsibilities; and, next, that the large issues of certificates to be made against this mass of bullion would be a forcible and artificial inflation of the currency, which could not fail to produce disaster to all the material interests of the country.

Of course, such an arrangement would be all that the silver interests could desire. For them, indeed, it would be a far better protection than the Bland Act. But this advantage would be only temporary; for when the scheme broke down of its own weight, as sooner or later it must, the miners would be exposed to ruin from the consequent derangements.

The only wholesome treatment of this question is to repeal the Silver Coinage Act. That done, we should add $25,000,000 to our yearly exports, instead of locking up so much of our national product as dead capital in the Treasury; while that increase of exports would give us a greater command of European gold and thereby strengthen our international position in this question. Europe, and especially England, would then be compelled to earnestly consider measures for placing the double standard upon a broad and lasting international basis; and as such a disposition began to manifest itself, the silver market would so far sympathize as to amply compensate producers for any losses they might suffer from a temporary fall in bullion.

Henry Clews.

Bad as the situation is, in respect to this vast mass of the world’s circulating medium, yet it is far from being a hopeless one. The more serious it becomes, the nearer will be the remedy. The derangements to commerce and to immense vested interests must ultimately become so serious, that the nations which now obstruct the application of a remedy will be compelled to submit to the necessities of an imperative danger, and the end will probably be that a coinage union will be established between the great nations, on a basis broad enough to give stability to this form of money beyond all possibility of future disturbance.

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CHAPTER XLV.
THE LABOR QUESTION.

Harmony Between the Representatives of Capital and Labor Necessary for Business Prosperity.—If Manufacturers should Combine to Regulate Wages, the Arrangement Could only be Temporary.—The Workingmen are Taken Care of by the Natural Laws of Trade.—Competition Among the Capitalists Sustains the Rate of Wages.—Opinion of John Stuart Mill on this Subject.—Compelling a Uniform Rate of Pay is a Gross Injustice to the Most Skilful Workmen.—The Tendency of the Trades Unions to Debar the Workingman from Social Elevation.—The Power of the Unions Brought to a Test.—The Universal Failure of the Strikes.—Revolutionary Demands of the Knights of Labor.—Gould and the Strikes on the Missouri Pacific, &c., &c.

There is no influence to which business circles are more sensitive than the disruption of harmony between capital and labor. Whatever affects the productiveness of labor affects, more directly than any other cause, the national prosperity and the welfare of all classes of society. The value of the vast aggregate of corporate property represented on the Stock Exchange is vitally dependent on the maintenance of such relations between the employed and employing classes as contribute to the highest welfare of both and to the largest possible national production; and, therefore, whatever tends to imperil such relations becomes a source of serious disturbance to the stock market, to financial interests at large, and to the best interests of labor itself.

There appears to be an idea, in certain quarters, that the modern concentration of capital into large masses has made it necessary for workmen also to organize themselves into large bodies, sinking their individual rights and liberties and selling their labor en masse. For my part, I am unable to see the force of this reasoning, although I cannot but respect the ability of some authorities by which it is sanctioned. It seems to assume that large employers of labor have more power to depress wages than smaller ones; and from this it is inferred that it is necessary for workmen to combine to protect themselves against this supposed increased exposure to aggression from capital. But is either the premise or the conclusion sound? In order to concede the assumption we must suppose that large employers can cease to be competitors for labor; for in no other way can they depress wages. But this can never happen; for capitalists will always produce to the fullest extent compatible with an average rate of profit, and this ensures the largest possible demand for labor and, therefore, the highest possible rate of wages. If employers combined to force the rate of wages down, as workmen do to force it up, they would undoubtedly be able to compel a temporary reduction in the remuneration of labor.

But, of necessity, such an artificial depression of wages could only be temporary; for what was thus taken by force from labor would make manufacturing so unusually profitable that new capital would be immediately attracted to it, and the consequent additional demand for labor would necessitate an advance in wages, which the combined manufacturers would be compelled to pay. As a matter of fact, manufacturers do not combine to regulate wages, not only because of the reasons just stated, but also because they know that no such combination could be maintained in the face of the jealousies and conflicting interests that always exist among them. If, then, it is true that manufacturers are compelled by the necessities of competition to pay as much for labor as it is for the time-being worth, and, if they do not and cannot combine to depress wages, I am unable to see where arises the necessity for the workmen to combine for the purpose of protecting themselves against capital.

The workingmen are taken care of by the natural laws of trade far more perfectly than they can be by any artificial arrangement; and trades unions are simply an intrusion upon the domain of those laws, without the power to supplement or perfect their operation, and with a certainty of obstructing and perverting their tendency, with the inevitable result of mischief to all parties. If the unions do occasionally get an advance in wages, it would have come by the natural laws of competition among the capitalists. It might be delayed for a time, but if you calculate the loss of wages and suffering entailed by the strike, I think the workmen would be safer in the end to wait for the natural advance. I am clearly borne out in this view of the case of the capitalist by that great political economist, philosopher and thinker, John Stuart Mill, who was certainly no enthusiastic friend of the capitalist, and is an acknowledged friend of labor as widely as his writings are known, which is almost as extensive as civilization itself.

After laying down the principles of Socialism, Mill says:

“Next, it must be observed that Socialists generally, and even the most enlightened of them, have a very imperfect and one sided notion of the operation of competition. They see half its effects, and overlook the other half; they regard it as an agency for grinding down every one’s remuneration—for obliging every one to accept less wages for his labor, or a less price for his commodities, which would be true only if every one had to dispose of his labor or his commodities to some great monopolist, and the competition were all on one side. They forget that competition is the cause of high prices and values as well as of low; that the buyers of labor and of commodities compete with one another as well as the sellers; and that if it is competition which keeps the prices of labor and commodities as low as they are, it is competition which prevents them from falling still lower. In truth, when competition is perfectly free on both sides, its tendency is not specially either to raise or to lower the price of articles, but to equalize it; to level inequalities of remuneration, and to reduce all to a general average, a result which, in so far as realized (no doubt very imperfectly), is, on Socialistic principles, desirable. But if, disregarding for the time that part of the effects of competition which consists in keeping up prices, we fix our attention on its effect in keeping them down, and contemplate this effect in reference solely to the interest of the laboring classes, it would seem that if competition keeps down wages, and so gives a motive to the laboring classes to withdraw the labor market from the full influence of competition, if they can, it must on the other hand have credit for keeping down the prices of the articles on which wages are expended, to the great advantage of those who depend on wages. To meet this consideration Socialists, as we said in our quotation from M. Louis Blanc, are reduced to affirm that the low prices of commodities produced by competition are delusive, and lead in the end to higher prices than before, because when the richest competitor has got rid of all his rivals, he commands the market and can demand any price he pleases. Now, the commonest experience shows that this state of things, under really free competition, is wholly imaginary. The richest competitor neither does nor can get rid of all his rivals, and establish himself in the exclusive possession of the market; and it is not the fact that any important branch of industry or commerce formerly divided among many has become, or shows any tendency to become, the monopoly of a few.

“The kind of policy described is sometimes possible where, as in the case of railways, the only competition possible is between two or three great companies, the operations being on too vast a scale to be within the reach of individual capitalists; and this is one of the reasons why businesses which require to be carried on by great joint-stock enterprises cannot be trusted to competition, but, when not reserved by the State to itself, ought to be carried on under conditions prescribed, and from time to time, varied by the State, for the purpose of insuring to the public a cheaper supply of its wants than would be afforded by private interest in the absence of sufficient competition. But in the ordinary branches of industry no one rich competitor has it in his power to drive out all the smaller ones. Some businesses show a tendency to pass out of the hands of many small producers and dealers into a smaller number of larger ones; but the cases in which this happens are those in which the possession of a larger capital permits the adoption of more powerful machinery, more efficient, by more expensive processes, or a better organized and more economical mode of carrying on business, and thus enables the large dealer legitimately and permanently to supply the commodity cheaper than can be done on the small scale; to the great advantage of the consumers, and therefore of the laboring classes, and diminishing, pro tanto, the waste of the resources of the community so much complained of by Socialists, the unnecessary multiplication of mere distributors, and of the various other classes whom Fourier calls the parasites of industry. When this change is effected, the larger capitalists, either individual or joint-stock, among which the business is divided, are seldom, if ever, in any considerable branch of commerce, so few as that competition shall not continue to act between them; so that the saving in cost, which enabled them to undersell the small dealers, continues afterwards, as at first, to be passed on, in lower prices, to their customers. The operation, therefore, of competition in keeping down the prices of commodities, including those on which wages are expended, is not illusive but real, and we may add, is a growing, not a declining fact.”

One principle of the unions is exceedingly unjust to the workingmen to the last degree. It starts with the assumption that all workmen are equal in their capacity as to the quality of service or work and the quantity of production; and upon this false assumption is based the injustice of compelling all members to bind themselves to a uniform rate of pay. A greater injustice and a more flagrant inequity cannot be found in the whole range of the world’s social institutions; nor is the wrong the less culpable because the members voluntarily inflict it upon themselves; for as “no man liveth unto himself” but has dependents for whom he is bound to do the best in his power, so no man is free to throw away to the less industrious or less competent what his superior abilities and industry have earned for himself.

This levelling system is not only in defiance of the law of varied endowment which the Creator has incorporated into the constitution of humanity, but it tends to bind into one cast-iron man the entire working community, debarring them from all chances of progress and consigning them to a degrading condition of semi-slavery or serfdom. Time was when the way was clear to any workingman in this country to the highest positions of wealth, or of social standing or political influence. As a matter of fact, a large proportion of our present successful merchants, and not a few even of our millionaires, are men who have risen from the ranks of labor. The first steps in their progress were won by the superiority of their skill or faithfulness as workmen, which qualified them to rise step by step to higher achievements. Then, the workman was free to rise according to his abilities and his character; he was the free ruler of his own destiny. Now, it seems the tendency of the trades unions is to obliterate all such distinctions and virtually debar the workman from the possibility of earning a rank among his fellowmen proportioned to his merits; and on this plan the American workman would be as completely cut off from the chances of social elevation, as was the American slave twenty-five years ago. This would be a terrible degradation, of which every man who enjoys the rights of American citizenship should deem himself incapable and feel ashamed.

However much political leaders, and even some who rejoice in the reputation of economists, may feel disposed to regard these combinations as a social necessity of the time, and an institution that has come to stay, I cannot resist the conviction that the trades-union movement has already seen its culmination and is destined to a steady disintegration, unless the system is greatly modified. The principle of combination is useless unless it can be successfully employed to compel employers to accept the terms of the employees. In fact, it has been almost the sole object of the unions to employ it, through the agency of strikes, to compel the acquiescence of capital. Up to a recent period, it has been largely successful in this sense. So long as employers could at all afford to comply with the demands of labor, they would make considerable sacrifices to avoid the inconvenience and loss connected with the interruption of their operations involved in a strike. At last, however, the workingmen advanced their demands to a pitch so seriously threatening to industry and so vitally dangerous to the material interests of the country at large, that employers saw, with common consent, that the time had come when a square issue must be made with this modern invasion on their rights.

The spring of 1886 will always be memorable, for its having brought to a fair test the power and principles of trades-unionism. Strikes were suddenly initiated on a stupendous scale, upon the railroads, among the western factories, and among the larger employers in the Middle States, partly to enforce demands for higher wages, partly to shorten the time of work to eight hours a day, and above all, to compel employers to recognize the leaders of the unions in determining the conditions of employment and to submit all disputes between the two parties to arbitration. Employers, simultaneously, but without any concert of action, met the challenge squarely. They refused to concede the demands made; they in many instances declined to recognize the officers of the unions; they proceeded promptly to fill the places of the strikers with non-union men, and refused to make formal conditions with returning strikers; they brought to bear upon the leaders of the strikes the laws against conspiracy; and they took the “boycotters” before the courts. The result of this treatment was an almost universal failure of the strikers; the declaration by the courts that the compulsory methods of the unions are illegal, and in the nature of conspiracies; the throwing out of employment of tens of thousands of union employees, and the exhaustion of the funds raised by the unions for enforcing their coercive tactics.

The result of the contest was that, within one brief month, the power of the unions was shown to be weakness itself; employers everywhere discovered the intrinsic importance of the combinations they had so much before dreaded, and very many respectable and reflecting members of the unions felt themselves discredited in the eyes of the public, while their faith in the efficiency of their system of supposed protection was seriously shaken. After this, if I am not seriously mistaken, employers will find that they have much less to fear from trades-unions than they had once supposed. A defeat so fundamental as this, is likely to be followed by the gradual dispersion of the formidable array of united workmen. Such a result is no more than is to be reasonably expected from an organization based upon no great truth and no sound principle, but resting upon popular ignorance and misconception of the natural laws governing society.

During the progress of the recent strikes, I had occasion to make frequent allusions to the course of events, from which I may be permitted to make the following quotations:

(The following appeared on the 3d of May.)

“The Knights of Labor have undertaken to test, upon a large scale, the application of compulsion as a means of enforcing their demands. The point to be determined is, whether capital or labor shall, in future, determine the terms upon which the invested resources of the nation are to be employed.

“To the employer it is a question whether his individual rights as to the control of his property shall be so far overborne as not only to deprive him of his freedom, but also expose him to interference seriously impairing the value of his capital. To the employees, it is a question whether, by the force of coercion, they can wrest, to their own profit, powers and control, which, in every civilized community, are secured as the most sacred and inalienable rights of the employer.

“This issue is so absolutely revolutionary of the moral relations between labor and capital, that it has naturally produced a partial paralysis of business, especially among industries whose operations involve contracts extending into the future. There has been at no time any serious apprehensions that such an anarchical movement could succeed, so long as American citizens have a clear perception of their rights and their true interests; but it has been distinctly perceived that this war could not fail to create a divided, if not a hostile feeling, between the two great classes of society; that it must hold in check not only a large extent of ordinary business operations, but also the undertaking of those new enterprises which contribute to our national progress, and that the commercial markets must be subjected to serious embarrassments.

“From the nature of the case, however, this labor disease must soon end one way or another; and there is not much difficulty in foreseeing what its termination will be. The demands of the Knights and their sympathizers, whether openly expressed or temporarily concealed, are so utterly revolutionary of the inalienable rights of the citizen, and so completely subversive of social order, that the whole community has come to a firm conclusion that those pretensions must be resisted to the last extremity of endurance and authority; and that the present is the best opportunity for meeting the issue firmly and upon its merits. The organizations have sacrificed the sympathy which lately was entertained for them, on account of inequities existing in certain employments; they stand discredited and distrusted before the community at large as impracticable, unjust and reckless; and, occupying this attitude before the public, their cause is gone and their organization doomed to failure. They have opened the flood gates to the immigration of foreign labor, which is already pouring in by tens of thousands; and they have set a premium on non-union labor, which will be more sought after than ever, and will not be slow to secure superior earnings by making arrangements with employers upon such terms and for such hours as may best suit their interests. Thus, one great advantage will incidentally come out of this crisis beneficial to the workingman, who, by standing aloof from the dead-level system of the unions, will be able to earn according to his capacity, and thereby maintain his chances for rising from the rank of the employee to that of the employer. This result cannot be long delayed, because not only is loss and suffering following close upon the heels of the strikers, but the imprudences of their leaders are breeding dissatisfaction among the rank and file of the organizations, which if much further protracted, will gravely threaten their cohesion. It is by no means certain that we may not see a further spread of strikes, and possibly with even worse forms of violence than we have yet witnessed; but, so long as a way to the end is seen, with a chance of that end demonstrating to the organizations that their aspirations to control capital are impossible dreams, the temporary evils will be borne with equanimity. The coolness with which the past phases of the strikes have been endured, shows that the steady judgment of our people may be trusted to keep them calm under any further disturbance that may arise.

“Prior to the strike in the Missouri Pacific, Jay Gould was one of the most hated men in the people. He was anxious to have public respect and sympathy. He had made all the money he wanted, and was willing to spend part of it in gaining the respect and honor of the country. What his money could not do for him this strike on the Missouri Pacific has done. The sympathy and good-will which previously were with the strikers have been shifted from them to him. There is no doubt that the strikers selected the Missouri Pacific because it was a property with which Gould was known to be most largely identified, and because they thought that general execration would be poured out on him in any event. But, instead of injuring Mr. Gould, they have done him inestimable service.

“The timely and forcible action of Mayor Harrison, of Chicago, will put dynamiters and rioters where they belong, and thus divide the sheep from the goats in a very short time. If officials would sink political bias, the country would soon be rid of law-breakers and disturbers of the peace. As this plan of treatment has now been adopted, it will be far reaching in its effect, and stop mob gatherings, riotous speech-making, and other such bad incentives, which recently have been so conspicuous in Chicago, Milwaukee, St. Louis, and elsewhere. The laboring classes, who are parties to the strike, will now have an opportunity to retire to their homes, where there will be more safety than in the streets, which will bring to them reflection. They will then soon become satisfied that they are the aggrieved parties, and the not unlikely result will be their turning upon their leaders, who have deceived them.

“There have been numerous vacancies created by the strikers voluntarily resigning. There has been no difficulty in filling these vacancies by those who are equally capable, if not more so, from other countries flocking to our shores. The steam ferry between this country and Europe has demonstrated this by the steamer just arrived in six days and ten hours from European shores to our own. As the separation between the oppressed operatives of the Old World and America is thus reduced to hours, Europe will quickly send to us all the labor we need to meet all such emergencies.

“The laboring man in this bounteous and hospitable country has no ground for complaint. His vote is potential, and he is elevated thereby to the position of man. Under the government of this nation, the effect is to elevate the standard of the human race and not to degrade it. In too many other nations it is the reverse. What, therefore, has the laborer to complain of in America? By exciting strikes and encouraging discontent he stands in the way of the elevation of his class and of mankind.

“The tide of emigration to this country, now so large, makes peaceful strikes perfectly harmless in themselves, because the places of those who vacate good situations are easily filled by newcomers. When disturbances occur under the cloak of strikes it is a different matter, as law and order are then set at defiance. The recent outbreaks in Chicago, which resulted in the assassination of a number of valiant policemen through a few cowardly Polish Nihilists firing a bomb of dynamite in their midst, was the worst thing that could have been done for the cause of the present labor agitation, as it alienates all sympathy from them. It is much to the credit, however, of Americans and Irishmen that, during the recent uprisings, none of them have taken part in any violent measures whatsoever, nor have they shown any sympathy with such conduct.

“If the labor troubles are to be regarded as only a transient interruption of the course of events, it is next to be asked, what may be anticipated when those obstructions disappear? We have still our magnificent country, with all the resources that have made it so prosperous and so progressive beyond the record of all nations. There is no abatement of our past ratio of increase of population; no limitation of the new sources of wealth awaiting development; no diminution of the means necessary to the utilization of the unbounded riches of the soil, the mine, and the forest. Our inventive genius has suffered no eclipse. In the practical application of what may be called the commercial sciences, we retain our lead of the world. As pioneers of new sources of wealth, we are producing greater results than all the combined new colonizing efforts which have recently excited the aspirations of European governments. To the over-crowded populations of the Old World the United States still presents attractions superior to those of any other country, as is demonstrated by the recent sudden revival of emigration from Great Britain and the continent to our shores.”

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CHAPTER XLVI.
AN IMPORTANT SYNOPSIS.

A Resume in Brief of the Leading Events Connected with Wall Street Affairs for Seventy-seven Years.

December, 1816.—The first savings banks in the United States went into operation.

July, 1820.—Great financial distress throughout America. The causes were excessive importations and a deranged currency.

August, 1833.—There was great commercial distress, caused by contraction by the United States Bank. The bank defended its course on the ground of the evident hostilities of the Administration, the public deposits, amounting to $10,000,000, having been withdrawn by order of the President.

May, 1837.—In this year commercial distress prevailed throughout the United States. On May 10th all the banks in New York city, by common consent, suspended specie payments, banks throughout the country following the example. In New York about 300 large failures took place. In Boston 168 failures were reported. In New Orleans houses stopped payment owing an aggregate of $27,000,000.

May, 1838.—The banks of New York and New England resumed payment after the suspension due to the panic of 1837. The Philadelphia banks resumed in August, 1838, and in January, 1839, there was nominal resumption throughout the country.

July, 1840.—The bill organizing the United States Sub-Treasury became a law. The act was repealed in 1841, but was re-enacted in 1846.

October, 1842.—The first sub-marine telegraph cable, the invention of Prof. Morse, was laid between Governors’ Island and the Battery, New York, October 18th.

January, 1844.—The first telegraph line in the United States was erected. The telegraph was invented by Morse in 1837.

August, 1851.—The depression of this year reached its height on the 13th. A bad credit system had been in vogue, trade with California had not met expectations, imports had been large, exports of gold heavy, cotton declined in Europe, the banks contracted, property was sacrificed to raise ready money, mercantile credit was disturbed everywhere, and distress was general in all the cities. In Wall Street large blocks of stock were unloaded and the market was broken. Erie went from 90 to 68¾. Later in the month money became easier, prices advanced, and the market resumed its ordinary aspect.

October, 1851.—Panic regarding the value of State money. The Metropolitan Bank made war on the country banks to compel them to deposit with it against their notes, which were extensively circulated in the city. After receiving their bills the Metropolitan Bank demanded their redemption in specie. This led to many suspensions. The bills were well secured by State stocks, and the Metropolitan continued to receive them. As brokers refused to take State moneys of any kind there was a rush to the Metropolitan, and a panic prevailed. Ultimately the brokers bought the bills at a discount and made large profits. Their purchases gradually restored confidence, but not before four country banks had failed.

July, 1853.—A panic in the stock market in consequence of bank contraction. The State Legislature enacted that the banks should publish weekly, in the New York Times, statements of their condition. In preparing for this statement the banks called in a large portion of their loans, and ran after each other for specie. The panic was of short duration.

October, 1853.—Simeon Draper, a railroad banker, failed.—Stocks were depressed on the 19th, in consequence of bank contraction. There were several failures.

January, 1854..—California defaulted in its interest on the 1st, and there was much alarm in financial circles in consequence.

February, 1854.—Heavy failures in California.

May, 1854.—The New York, Newfoundland & London Telegraph Company was organized, and was the first company to attempt Atlantic cable telegraphy.

July, 1854.—Robert Schuyler, President of the New York & New Haven Railroad Company, fraudulently issued nearly $2,000,000 stock of the company. About the same time fraudulent entries, made by Secretary Kyle, were discovered in the stock ledger of the Harlem Company, amounting to about $470,000. Frauds were also discovered in the affairs of the Parker Vein and the Vermont Central railway companies. In consequence there was a rapid decline in the stock market, and many suspensions occurred in New York, Boston and Philadelphia.

September, 1854.—A severe twist in Erie stock on the 13th.

October, 1854.—Frauds on the Ocean, American Exchange and National banks were discovered.

December, 1854.—There was a severe run on the savings banks of the city of New York on the 9th.

September, 1855.—A financial panic in San Francisco and many failures of prominent bankers.

September, 1856.—Charles B. Huntington committed forgeries amounting to $15,000,000 or $20,000,000. The forgeries were used as collateral security for raising money, and for a time were taken up before maturity.

April, 1857.—Freight-train men on the Baltimore & Ohio struck. Trains were molested and many fights occurred. The military were called out and a desperate fight ensued, in which many were killed and wounded.

August, 1857.—The financial panic of this year began on the failure of the Ohio Trust Company, with liabilities about $7,000,000. Banks either failed or suspended specie payments everywhere. The New York banks resumed in December. Business was generally prostrated until the following spring, when improvement became perceptible.

July, 1860.—Congress authorized a war loan of $250,000,000. The National debt was $64,640,838.11. It reached $2,756,431,571, its greatest point, in 1885.

August, 1860.—Treasury notes to the amount of $50,000,000 were authorized by Congress.—The first well ever sunk for oil, and the first petroleum ever obtained by boring. The well was at Titusville, Oil Creek, Pa. It gave 1,000 barrels a day. This was the beginning of the petroleum business.

December, 1860.—The Southern banks suspended specie payment on the 12th.

April, 1861.—The lowest price at which United States bonds sold during the war was 75 for the 5s of 1874, quoted in this month.

December, 1861.—The National Bank system was recommended by Secretary Chase.—A premium for gold was quoted at the New York Stock Exchange for the first time, on the 30th.

April, 1862.—Gold was first quoted at a premium on the 12th, and by October 1 it had advanced to 123.

February, 1864.—Speculation in stocks was “rampant” and “wild.”

March, 1864.—There was a panic in the coal stocks on the 10th.—The month was noted for a rapid rise in gold.

April, 1864.—A semi-panic in Wall Street on the 18th.

June, 1864.—National currency to the amount of $300,000,000 was authorized by Congress. The full amount was issued before the close of 1867.

August, 1864.—Gold touched 261¾, its highest point.

July, 1865.—The Stock Exchange made a rule inflicting a penalty on members who attended Gallaher’s up-town night Exchange.

August, 1865.—Edward B. Ketchum, a junior partner in a prominent banking house in New York, forged gold certificates to the extent of $1,500,000, and they were negotiated at the banks. In addition he abstracted more than $3,000,000 from the vaults of the firm. The firm failed.

October, 1865.—Call loans were made as high a per cent. and a heavy commission added. Tight money checked a rise in stocks. Money was wanted in the West for the moving of crops. Relief came on the demand from the West subsiding, and by temporary loans from the Sub-Treasury to the banks.

November, 1865.—Prairie du Chien common stock was cornered. On the 6th 29,000 shares were bought at about 40. The trap being sprung 200 and more was demanded, and the shorts settled at rates ranging from 110 to 210. There were several failures. It opened on a Monday at 96; on Tuesday it ranged between 160 and 225, and closed on Saturday at 110.

December, 1865.—The new Stock Exchange building was opened for business on the 9th.

February, 1866.—Toward the close, on February 20th, everybody seemed to want to borrow money, and no one was willing to lend. The market verged on panic. People were afraid of the course of the Government in selling upwards of $12,000,000 gold.

April, 1866.—Michigan Southern was cornered. The price rose from 84 to 104. The pool closed out and the price dropped to 80 within 24 hours. Other corners were made in the same month in Reading, Rock Island, Hudson River, Cleveland & Pittsburg and Northwestern preferred. Money was plentiful and speculation was rampant.

May, 1866.—The marketing of Erie stock by Daniel Drew caused a drop in its price from 74½ on May 18th to 60½ on May 31st. The movement had very little effect on the remainder of the market.

July, 1866.—A panic in stocks followed the failure of Overend, Gurney & Co., London bankers.

August, 1866.—London markets were first quoted by Atlantic cable in New York.

November, 1866.—There was heavy speculation in stocks, produce, dry goods and real estate. Poor men became rich by a single turn of the wheel. Unexpectedly the Treasury drew about $15,000,000 for its own purposes, money became tight and the bears became very active. Prices declined about 10 points, and outsiders lost upwards of $25,000,000.

December, 1866.—Northwestern preferred and Cumberland Coal were cornered.

January, 1867.—Prices broke on the 18th with a rush. Cumberland Coal declined 55 points, and the general list went off in sympathy. There were several failures. Money was tied up by bear operators.—President Yelverton, of the Bank of North America, on learning of the failure of A. J. Meyer & Co., the firm having overdrawn its account $219,000, was seized with apoplexy and died.

May, 1867.—A pool in Erie was broken by the sale of a large block of English stock.

October, 1867.—Daniel Drew was turned out of Erie, and the stock advanced 10 points.

December, 1867.—Vanderbilt secured control of New York Central.

January, 1868.—A corner in Rock Island was broken, owing to the company throwing 49,000 shares on the market. The stock declined heavily.

February, 1868.—The contest between Drew, Vanderbilt and Frank Worth was at its height.

April, 1868.—There was a break in Atlantic Mail, with subsequent complications.

June, 1868.—An unsuccessful attempt to corner Pacific Mail was made.

July, 1868.—Jay Gould became president of Erie.

October, 1868.—Money became stringent, owing to the withdrawal of funds from New York for the West. The associated banks lost $20,000,000 in deposits and $12,000,000 in legal tenders, with a reduction of only $9,000,000 in loans. Special efforts were made to break the stock market, but the bull leaders had provided themselves with time loans, running to the end of the year, and were thus enabled to hold prices.

November, 1868.—Erie was cornered, and a panic extending through the whole list occurred. It was helped by the inability of a leading operator, a director of St. Paul, to meet puts on that stock. The common and preferred fell about 20 points. Erie made an extraordinary issue of shares. Later on money became more plentiful, prices advanced and the market became very strong.

April, 1869.—A bill to consolidate the New York Central and the Hudson River railroad companies passed the Legislature.

May, 1869.—The New York Stock Exchange and the Open Board of Brokers were amalgamated under one management. The new Exchange began business with 1,030 members and $750,000 in its treasury.—The era of consolidations. Active stocks advanced to prices never before reached. New York Central sold at 192-5/8. A movement to depress prices at the close of the month met with some success.—The last rails of the Union Pacific and Central Pacific railroads were laid. Trains began running across the continent on the 15th.

June, 1869.—Many brokers failed, the result of a successful bear attack on the market.

July, 1869.—Heavy speculation in the Vanderbilt stocks. New York Central advanced to 217-7/8. Money was stringent.

September, 1869.—New York Central dropped 25 points on the 22d, and a panicky feeling was developed.—Gold reached 165 on Friday, the 24th—Black Friday. Transactions ran up into hundreds of millions, and business was conducted with so much confusion that bids running from 135 to 160 were made at one and the same time in different parts of the room. Between 11 and 12 o’clock the shorts settled on a basis of 148@158, the market price being 5@15 higher. At noon it was officially announced that the Government would sell gold next day and buy bonds, and within 15 minutes the price had fallen to 135, and the great speculation had collapsed.

April, 1870.—The cliques who had bought stocks on the decline after Black Friday, started an upward movement in the last week of the month. The public came in and top figures were reached about May 10. The cliques unloaded, turned bears, depressed prices until margins were wiped out, bought in again at the decline and were ready for another advance.

May, 1870.—The process of “shearing the lambs” was repeated in this month.

June, 1870.—James Boyd, carrying 40,000 shares of stock and $5,000,000 gold, failed. The market showed signs of breaking, but was sustained by the cliques.

July, 1870.—Congress authorized an addition of $54,000,000 to the national currency.

January, 1871.—A prominent operator repudiated his orders to buy Reading. Several brokers failed in consequence. The market was only slightly depressed.

April, 1871.—There was much speculative excitement in the stock market.

June, 1871.—Rock Island was cornered. The pool began buying at 114½ and advanced it to 130-7/8. On liquidation the stock declined to 110. Many failures occurred and bad faith was charged.

October, 1871.—The week beginning October 9, 1871, was one of the most eventful in the history of the Stock Exchange. The banks had expanded beyond precedent and were compelled to contract loans to raise money for crop purposes. The payment by France to Germany in settlement of war claims caused the Bank of England rate to advance from 3 to 5 per cent., and produced a feeling bordering on panic in London. The New York market was very sensitive when news of the Chicago fire came. Prices broke 4@10 points. On Tuesday there was great excitement; sales were enormous and fluctuations wide. On Wednesday there was a rally on the belief that the Government would purchase 5-20s. The lowest prices, however, were made on Thursday. On Friday there was more steadiness and prices were higher. The bank statement was favorable and matters quieted down.

December, 1871.—The Ocean National Bank, the Union Square and the Eighth National Bank failed. Money was scarce, but stocks were firmly held. Operators and brokers were loaded up with stocks and they sustained prices, awaiting an opportunity to get out.

March, 1872.—The Erie revolution occurred. The Board of Directors was overthrown, and Jay Gould resigned the presidency. Gen. Dix became his successor. The operation caused great activity in the stock market, and money became tight.

June, 1872.—Stock dividends on Lake Shore and Michigan Central were declared.

August, 1872.—Gold was cliqued.

September, 1872.—Erie was cornered. The Gould-Smith clique was short of it. The stock first became scarce on purchases by German brokers for foreign account. Then Drew became a heavy purchaser. At the same time the German brokers were long of gold, and with the double idea of punishing them and compelling those carrying Erie to sell out the Gould-Smith clique endeavored to lock up money. This plan was defeated by the refusal of two banks to pay out legal tenders on certified checks. Just then, too, the Government bought $5,000,000 bonds and sold the same amount of gold. This completely broke the speculative manipulation of money, and a panic was averted. During the height of the panic there were no quotations for money. Among the failures of the week were Northrup, Chick & Co., bankers, the Glenham Woolen Manufacturing Co., Paton & Co., dry goods, George Bird, Grinnell & Co., stock brokers, Hoyt, Sprague & Co. and A. & W. Sprague. The banks suspended their weekly statements, and they were not resumed until late in November.

November, 1872.—Jay Gould was arrested on criminal charges based on his management of the Erie Railroad. He surrendered securities, the face value of which was more than $9,000,000, in December.—Northwestern was cornered. It opened Nov. 20 at 83¾ and closed at 95. On Thursday it sold at 100, and at the close on Friday 200 was bid. On Saturday buying in under the rule ran the price up to 230. The settlement was made on the following Tuesday, when the price declined to par, the highest bid made being 85. Jay Gould, Horace F. Clark and Augustus Schell conducted the corner, while the cornered were Drew and Henry N. Smith. It was one of the most profitable corners ever made in Wall Street.

February, 1873.—There was a noted corner in Northwestern.

April, 1873.—The preliminary panic of the year occurred in this month. The stock market was uneasy. The failure of a firm of silk importers was followed by that of Barker & Allen, the members of which were related to Vanderbilt. Three other firms also failed. Confidence returned and quiet prevailed until the 26th, when the Atlantic Bank failed. This brought about another depression, which was followed by a quick rally.

May, 1873.—Heavy break in Pacific Mail. The further retirement of greenbacks was prohibited by Congress.

August, 1873.—Fraud was discovered in the issue of certain bonds of the New York Central & Hudson River Railroad.

September, 1873.—The New York Warehouse & Security Company failed on the 8th; Kenyon, Cox & Co., in which Daniel Drew was a special partner, on the 13th; Jay Cooke & Co. on the 18th, and Fisk & Hatch on the 19th. Innumerable brokers failed. There were runs on the Fourth National Bank and the Union Trust Company. The secretary of the company was a defaulter to the extent of $500,000, and its doors were closed. The Bank of the Commonwealth failed. There was a panic in the stock market, and the excitement ran so high that the Governing Committee closed the Exchange at 11 o’clock on Saturday, the 20th. The Gold Exchange Bank was unable to effect all the clearances, and dealers were unable to get their balances. The result was the temporary suspension of some dozen firms. The Gold Exchange Bank having been enjoined by the courts from making the clearances, the Bank of New York undertook the job and failed in it. Next a committee of 20 was appointed to do the work, but it failed also, because Smith, Gould & Martin refused to render a statement to it. The final settlements were made between members themselves. Smith, Gould & Martin, with contracts amounting to $9,000,000, settled on a basis of 135. Business was resumed on Sept. 30.

December, 1873.—The Credit Mobilier was organized for the construction of the Union Pacific Railroad. It was composed of stockholders of the railway company, and had a capital of $3,750,000. Profits were large, and the stock was quoted at 400. Certain Congressmen were given stock at par on their personal notes, the object being to gain their favor in case adverse legislation was proposed. Oakes Ames, of Massachusetts, was expelled from the House for his connection with the bribery, and James Brooks, of New York, for accepting bribes. Other Congressmen were censured. A proposition to impeach Vice-President Colfax was reported against by the Judiciary Committee.

January, 1874.—The value of the pound sterling was fixed by Congress at $4.86.65.

February, 1874.—Two letters, purporting to come from the Wabash and Western Union companies, were received by the Stock Exchange, announcing an increase of stock by the directors. The market went off three points before it was discovered that the letters were forgeries.

April, 1874.—The President’s veto of the inflation bill unsettled prices and caused depression. The bears raided the market, causing a heavy decline, but a quick recovery followed.

February, 1875.—Wabash went in the hands of a receiver.

May, 1875.—A receiver for Erie was appointed.

July, 1875.—Duncan, Sherman & Co. failed.

August, 1875.—The Bank of California failed. Cashier Ralston committed suicide.

March, 1876.—Jay Gould made his famous attack on Western Union.

April, 1876.—The National Bank of the State of New York failed.

November, 1876.—Many savings banks failed.

January, 1877.—Commodore Vanderbilt died on the 4th.

February, 1877.—Jersey Central went into the hands of a receiver.

July, 1877.—Great railway strikes; rioting and incendiarism in Baltimore and Pittsburgh; losses $10,000,000. Over 100,000 laboring men took part in the movement.

January, 1878.—The Vanderbilt combination, including Michigan Central, Lake Shore and Canada Southern, was made in this month.

February, 1878.—The purchase of silver bullion by the Government to the amount of $2,000,000 to $4,000,000 per month, and its coinage into legal tender dollars, was ordered by Congress on the 28th.

May, 1878.—Congress passed the Resumption Act.

January, 1879.—Specie payments were resumed after the suspension which took place soon after the opening of the war of the rebellion.

April, 1879.—Gould and Field combined, and under their auspices the St. Louis, Kansas City & Northern and Wabash Railways were consolidated. Gould already had control of Union Pacific and Kansas Pacific, and afterward secured control of Missouri Pacific and Denver & Rio Grande.

June, 1879.—Western Union declared a scrip dividend of 17 per cent.

August, 1879.—There was a serious tumble in prices in this month.

October, 1879.—The stock market was very active in October and November. The bull movement of the year was at its height and transactions were so numerous that it was impossible to record them all. The drop came in November.

November, 1879.—William H. Vanderbilt sold 250,000 shares of New York Central & Hudson River stock at 120 to a syndicate headed by J. S. Morgan & Co., of London. Early in the following year the same syndicate took 100,000 shares on the same terms.

May, 1880.—Philadelphia & Reading Railway and Coal and Iron Company failed. There was a flurry in the stock market in consequence.

June, 1880.—A scrip dividend of 100 per cent. to the holders of Rock Island stock on the purchase and consolidation of the Iowa Southern and the Missouri Northern with Rock Island.—A leading German Wall Street banking house, in view of the large exports of gold, offered a premium of 1/2 of 1 per cent. for a call on $1,000,000 gold, the privilege to extend for one year.

November, 1880.—The Louisville & Nashville declared a 100 per cent. stock dividend.—Western Union declined from 104-7/8, on November 22d, to 77½ on December 17th.—Jay Gould purchased most of the stock of the Denver, South Park & Pacific Railroad, in the following month a large block of Iron Mountain and a majority of the International & Great Northern.

December, 1880.—Seats in the New York Stock Exchange sold at $25,000. A great number of new securities were listed. So numerous were the combinations, consolidations and extensions of railways that in many cases the analogy with former periods was lost, and comparisons as to earnings were of little value. In 1886 seats in the Exchange sold at $35,000. In December, 1870, when speculation was stagnant and the market was clear of all outsiders, seats sold at $3,000.—B. G. Arnold & Co., the largest coffee importing house of New York, suspended. They were the principals in a combination to corner Java coffee, and met disaster in the attempt.

January, 1881.—Western Union, American Union and Atlantic & Pacific consolidated. The former company declared a stock dividend of 38¼ per cent. The capital stock was made $80,000,000.

February, 1881.—Call loans were made at 1 per cent. per day on the 25th.

May, 1881.—The Gould southwestern railway system was consolidated.

July, 1881.—President Garfield was shot by Guiteau. The stock market broke on the news of the shooting, and a panic was only prevented by the intervention of Sunday and the National holiday on Monday.—The Oregon war debt was paid.

August, 1881.—There was heavy speculation in wheat and corn in Chicago and New York. Money became scarce, and call loans were made at interest and commission.

September, 1881.—The Hannibal & St. Joseph corner.

January, 1882.—The trunk line railway war of rates was settled.—Gould and Huntington purchased a controlling interest in the St. Louis & San Francisco Railway and half the ownership of the Atlantic & Pacific Railway.

February, 1882.—The market showed some animation early in 1882, but it soon collapsed and became very weak. Bottom was touched on the 23d, the recovery being based on talk of a settlement of the then existing trunk line rate war.—Richmond & Danville plunged from 219 to 130 and a semi-panic ensued on the Stock Exchange.

March, 1882.—To allay reports that he was in financial straits, Mr. Gould, on the 13th, displayed his wealth. He took from a tin box $23,000,000 Western Union, $12,000,000 Missouri Pacific, $6,000,000 Manhattan Elevated, $2,000,000 Wabash common, and $10,000,000 bonds of Metropolitan, New York Elevated and Wabash preferred. He offered to show $30,000,000 additional railway stocks, but his visitors had seen enough.

October, 1882.—A syndicate headed by the late W. H. Vanderbilt purchased 124,800 shares of the common and 140,500 shares of the preferred stock of the New York, Chicago & St. Louis Railway at 13 and 37 respectively. This stock afterwards became the property of the Lake Shore & Michigan Southern Railway.

December, 1882.—The Municipal Bank of Shopin, Russia, failed with liabilities of $60,000,000.—The railway war in the Northwest lasted from September until December 15. On the announcement of the settlement the market improved and the year closed with a better feeling all around.

February, 1883.—Western Union absorbed Mutual Union by lease, the rental being interest at 6 per cent. on $5,000,000 bonds and 6 per cent. on $2,500,000 stock.

March, 1883.—A block of Hannibal & St. Joseph stock was sold to Chicago, Burlington & Quincy. At the same time Wabash was leased to Iron Mountain.—From the 19th until the close of the month there was great depression. Money on call loaned at 4@25 per cent. The public was heavily loaded with stocks.

May, 1883.—Jersey Central was leased to Reading.

June, 1883.—The National Petroleum Exchange and the New York Mining Stock Exchange consolidated.—McGeoch, Everingham & Co., of Chicago, failed in consequence of an unsuccessful attempt to corner the lard market. The firm lost $6,000,000.—The movement against the circulation of trade dollars at par was begun in Philadelphia and extended throughout the country.

July, 1883.—Western Union Telegraph operators struck for increased pay. The strike lasted a month and ended in failure.

October, 1883.—A notable feature of 1883 was the gigantic losses made in speculative operations. The failures of McGeoch, of Chicago, and Ranger, of Liverpool, were notorious instances, but thousands of private individuals were squeezed out by the pressure.—In the summer and fall of this year there had been a shrinkage in prices of stocks, when, in October, the Northern Pacific Company announced a proposed issue of $20,000,000 new bonds. This precipitated a heavy decline in nearly the whole list. The market became largely oversold, when a sharp twist was made in a number of stocks, and prices advanced with great rapidity. Northern Pacific preferred jumped from 56 to 78½ within a few days, and Oregon & Transcontinental went from 34½ to 51. Then Vanderbilt came into the market and put up Michigan Central from 77 to 96½, and the other Vanderbilt stocks to a less extent. Great depression followed this manipulation.

December, 1883.—The mercantile failures in 1883 amounted to $173,000,000, against $81,000,000 in 1881.—The triple alliance between Union Pacific, Rock Island and St. Paul was made.—Villard resigned from Oregon & Transcontinental and Oregon Railway & Navigation.

January, 1884.—Firmness in the market on the announcement that a syndicate had made a large loan to Oregon & Transcontinental on the pledge of its stocks. A quick move against the shorts caused a sharp advance.—Henry Villard resigned the presidency of the Northern Pacific Railroad.—John J. Cisco & Co., New York bankers, failed.—The surplus reserve of the New York National banks was wiped out.—James R. Keene, operator in wheat, failed.

March, 1884.—There was a squeeze in New York Central. It sold up to 122.—Delaware, Lackawanna & Western was cornered, and its price was run up to 133-1/8 regular and 139½ cash. S. V. White managed the pool. Another move in the same stock was made later in the year. The pool closed out at an average of 102. Then the stock dropped to 86¾.

May 6, 1884.—The Marine Bank failed May 6th, wrecked by Grant & Ward. Grant & Ward suspended two days later.,

May, 1884.—During the panic the New York banks issued Clearing House certificates to the extent of $24,915,000, of which $7,000,000 went to the Metropolitan Bank. Similar certificates, to the amount of $26,565,000, were issued in the panic of 1873.—The height of the panic was reached on the 14th. The storm had been brewing for nearly three years, but it was in no sense a commercial panic. Stock Exchange values had shrunk to an unparalleled degree, and the crash was precipitated by the developments regarding Grant & Ward, John C. Eno, Fish, of the Marine Bank, and a few others. The disturbance was over by July 1.—The Metropolitan Bank failed. Eno’s frauds on the Second National Bank discovered. George I. Seney failed. The Atlantic Bank failed.

June, 1884.—The greatest depression following the May panic was reached. Large overselling led to a sharp rally.—Charles Francis Adams, Jr., became president of the Union Pacific.

August, 1884.—The Wall Street Bank failed.

November, 1884.—The Metropolitan Bank, on May 15th had $11,294,000 in deposits; on October 1st $1,338,000, and in November it went into liquidation and retired from business.

December, 1884.—The Lackawanna pool of 1884 closed out its holdings on the 12th, and there being no further support to the market prices declined, and the year closed with much depression.—The largest corn crop ever grown in the United States was that of 1884. It was estimated at 1,800,000,000 bushels.

January, 1885.—Henry N. Smith, a noted bear operator, failed, and carried down with him the brokerage firm of William Heath & Co.

November, 1885.—The trunk lines came to an agreement and advanced rates. This gave confidence, and an upward movement was started. The Vanderbilts and the Grangers were the features of the market.

December, 1885.—Texas Pacific stock collapsed. A receiver was appointed for the property on the suit of the Missouri Pacific, a large holder of its floating debt.—William H. Vanderbilt died suddenly on the 8th. The fact was not known down town until after business hours, but it had a very unsettling influence. The next morning the market opened 1@3 points lower, but the bulls had combined to support prices, and bought freely. In many instances prices were higher at the close than on the previous day.

February, 1886.—The trans-continental pool was ruptured. The railroads declined to continue to pay the subsidy demanded by Pacific Mail.

March, 1886.—Western Union declared a scrip dividend of 1½ per cent. for the quarter. The scrip was made convertible into stock, and carried the same rate of interest as the stock.—The representatives of the coal companies met at a dinner party and reached “an agreement among gentlemen” that the anthracite coal production for the year should not exceed 33,250,000 tons.—F. B. Gowen joined the Drexel-Morgan syndicate for the reorganization of Reading. The announcement caused a rapid advance in all coal stocks.—The great strike on the Gould system of railroads, inaugurated on the 7th, failed.—Heavy engagements of gold for shipment abroad were made.

April, 1886.—Wabash, St. Louis & Pacific were sold in foreclosure.—Labor strikes at their height. The Lake Shore switchmen struck in Chicago, and the Third Avenue horse car drivers in New York. The troubles had a depressing influence on the stock market.

May, 1886.—Charles Woerishoffer, bear operator, died May 9.—Chicago anarchists attacked the police with bombs, killing and wounding many. Police used revolvers freely and many rioters fell. Anarchists were sentenced to death.—The strike on the Southwestern system was officially declared off on the 1st. The men were completely beaten after a contest of six weeks.—Tasker Marvin, bull operator, failed. Marketing of long stock caused decline. The depression was aided by existing labor troubles.

June, 1886.—Western Union passed its dividend.

November, 1886.—The managers of the trunk lines reaffirmed the presidents’ agreement of the previous year to maintain rates.—Richmond & West Point Terminal became very active and strong on the purchase by the company of the control of Richmond & Danville.—There were extraordinary buoyancy and speculative activity in stocks. Low priced non-dividend payers were largely dealt in. One specialty after another was “boomed,” and in some instances large profits were made.

December, 1886.—About $10,740,000 in gold was imported at New York during the month.—Prices toppled over on the 15th. All kinds of cheap stocks had been boomed by cliques, when, on money becoming tight, there was a rush to realize. Sales reached the unprecedented figure of 1,095,159 shares. The most conspicuous stocks in the decline were Philadelphia & Reading and New York & New England. No financial disaster or failure of importance occurred. There was much uneasiness for several days, but a better feeling soon set in, although speculation was checked by the prevailing high rate for money.—The Inter-State Commerce bill was introduced in Congress.

January, 1887.—On a report that Hocking Valley had suffered by irregularities of former directors, stock broke 1½ points. The consumption of iron in the United States exceeded that of Great Britain for the first time in 1886. The Inter-State Commerce Bill was passed by the House Jan. 21, by a vote of 5 to 1. European war rumors caused foreign selling and a break in the market of 2 to 5 points. There was a complete recovery on the following day.

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CHAPTER XLVII.
INTERNATIONAL SIGNIFICANCE OF THE BARTHOLDI STATUE.

Great as an Achievement of Art, but Greater as the Embodiment of the Idea of Universal Freedom the World Over.—It is a Poetic Idea of a Universal Republic.—Enlightenment of the World Must Result in the Freedom of Man.

The following was sent by me to the New York World, as briefly embodying my views on Bartholdi’s great work, a few days prior to the dedication of the Statue of Liberty:

“When, several years ago, the gigantic forearm, with the torch in its hand, of the Statue of Liberty was exhibited in Madison square, the people who gazed at it with idle curiosity had little idea that the mammoth structure of which it was a part would so soon be completed, or that it would be so great an achievement as it now stands. Thanks to the New York World, which gave the impetus to the subscription fund movement, which enabled the great sculptor to realize the greatest artistic dream of his life within a reasonable period. Some people may imagine that the time has been long, but many people who understood the magnitude of the work, and observed the slowness of the subscriptions, had no hope of seeing it finished in this generation prior to the time the subscription for the pedestal was under way.

“Until the last few days, when this colossal goddess arose on Bedloe’s Island in all her full, finished and magnificent proportions and artistic splendor, like the ancient divinity emerging from the foam of the sea, the people did not begin to realize the magnitude of Bartholdi’s idea. In mere mechanical size the statue with its appurtenances excel anything and everything of the same character in the world. It is the biggest thing of its kind either ancient or modern, and is, therefore, the most appropriate emblem to show forth the evolution and the international and historic associations of the two greatest Republics that the world has yet seen. The Colossus of Rhodes, the great Sphinx and other colossal statues sink into insignificance when compared with the latest production of Bartholdi’s brain.

“But great as the statue is as a work of art, the international idea which it embodies is greater still. When taken in connection with that earlier and comparatively insignificant effort of the same eminent artist, the Statue of Lafayette in Union square, the Colossus of Liberty suggests a whole century of history, replete with greater events than the thousand years which preceded it. In these two statues the interdependence of the two great nations is clearly portrayed, and their destiny as the pioneers of universal Republicanism brought out in bold relief. If Tennyson’s poetic dream of a universal Republic is ever to be realized it will come through the idea which the chisel of Bartholdi has immortalized, and which the World has been chiefly instrumental in providing with a local habitation and a name on Bedloe’s Island. European monarchs are now trembling on their thrones, which are doomed to crumble into ruins at no distant day, through the very idea which ‘The Statue of Liberty Enlightening the World’ is destined to propagate from this day forward in its imposing position in our spacious harbor. The Israelites of old were cured of their bodily maladies by gazing at a serpent erected on a pole. In a similar way the politically afflicted and oppressed of all nations, as soon as they emerge through the narrows of our magnificent bay, either by day or night, will find a panacea for all their ills in the sight of that wonderful statue, with all that its name implies.

“And one word as to what is in that name which has been so severely criticised. On account of it Americans have been charged with egotism, but those who talk in this way seem to forget that Bartholdi himself, as the representative of the French nation, is the author of the name. So, as it comes from him in his representative capacity, we can receive it with good grace, and without being amenable to any such charge as that referred to. Taken, with all its broad, historical associations, I don’t think the name is at all too pretentious. I have no hesitation in predicting that, ere the present century draws to a close, results will fully justify the assumption.

“The magnificent gift of the French people, and the years of toil and study which Bartholdi has devoted, gratis, to his unprecedented labor of love, cannot fail of the great and only reward which both have so earnestly and magnanimously sought, namely—to enlighten the world.”

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CHAPTER XLVIII
LARGE FORTUNES AND THEIR DISPOSITION.

How the Fortunes of the Astors were Made.—George Peabody and his Philanthropic Schemes.—Johns Hopkins and his Peculiarities.—A. T. Stewart and his Abortive Plans.—A Sculptor’s Opinion of his Head.—Eccentricities of Stephen Girard, and How he Treated his Poor Sister.—His Penurious Habits and Great Donations.—James Lenox and the Library which he Left.—How Peter Cooper Made his Fortune, and his Liberal Gifts to the Cause of Education.—Samuel J. Tilden’s Munificent Bequests.—The Vanderbilt Clinic.—Lick, Corcoran, Stevens and Catharine Wolf.

I shall take a short review in this chapter of some of the most prominent wealthy men who have been the architects of their own fortunes, and comment briefly on their methods of disposing of their estates.

In the United States, John Jacob Astor was one of the first to arrest public attention in the matter of large fortunes. Before his day there were few, if any, millionaires on this side of the Atlantic. Now there are thousands of these lucky individuals. It is true, George Washington, the Father of our country, was very comfortably fixed, and supported aristocratic style in his domestic life, but he probably never was worth more, all told, than $200,000. It is singular that none of his successors have ever been worth even this amount. It was believed at one time that Grant had accumulated a large amount of money and value, and was fast approaching the financial status of a millionaire, but this popular delusion was suddenly dispelled when he and his family were victimized by the first young Napoleon of finance, Ferdinand Ward.

The founder of the now wealthy house of Astor and of the Astor Library died in 1848, at the age of 85. He left the greater bulk of his estate to his son, William B. Astor. He bequeathed $400,000 to the Astor Library, also a few legacies, amounting in all, the library inclusive, to about $500,000. His wealth, at the time of his death, was estimated at twenty millions, a very large fortune at that time.

William B. Astor, who died in 1875, left $250,000 to the library, and the large balance of his estate to his sons and widow.

The Astors have been characteristic for their benefactions, in a quiet way, to a large number of public objects. Their estate is remarkable for the way it has been kept intact, and for its steady and considerably rapid improvement, and they are popular as landlords.

The elder Astor who came to this country from Waldorf in Germany, near Heidelberg, before he was 20 years of age, and who started in life dealing in furs, had a grand scheme on foot at one time for monopolizing the fur trade of the whole world, which he had calculated would then have brought him a million dollars a year. He was diverted from this purpose by the large profits which he found in real estate, by dealing in which he made most of his money; and the family has steadily adhered to this line of speculation and investment through two generations.

The native American who, perhaps, ranks above all others in the munificence of his gifts, and the beneficence of his purpose was George Peabody. He was a poor Massachusetts boy, who, by hard industry, arose to be one of the largest millionaires of his day. He was also a philanthropist in the highest sense of the term. His fortune at one time probably exceeded ten millions. His well-known benefactions, during his life, exceeded seven million dollars, and it is supposed that he gave away vast amounts in charity of which no definite account was kept.

Shortly before his death, in 1869, he bequeathed two and a half millions as a building fund for lodging houses for the poor of London, and devised for a Southern Education Fund two million one hundred thousand. In addition to these he left five millions to various relatives. J. S. Morgan, who was Mr. Peabody’s partner in the banking business, became, at his death, his successor, and is now supposed to be a richer man than Mr. Peabody ever was.

Johns Hopkins, who died at Baltimore in 1873, at the age of 78, was one of the most eccentric millionaires and philanthropists. Very few expected that he would bequeath the great university and the hospital which are called by his name. He was so wretchedly penurious that he hardly afforded himself the means of subsistence. His benefactions to these two institutions, however, exceed eight million dollars.

Alexander T. Stewart, the great dry goods merchant, who was reputed to be one of the three wealthiest men in the United States, Commodore Vanderbilt and John Jacob Astor being the other two, died in 1876. He had no legitimate heirs, and his estate, estimated at one time between twenty and thirty millions, was left to his wife, with the exception of a million to Judge Hilton and $325,000 to his employes.

Mr. Stewart’s two great benefactions were failures, as he left nobody able and willing to carry out his intentions in regard to their arrangement.

They would probably have been failures in any event, as they seemed to the majority of people to be in a large measure Utopian. One was Garden City on Long Island, intended to be homes for industrious mechanics on a higher and more comfortable scale than the majority of the dwelling of these sons of physical and intellectual toil. A grand cathedral was built there in memory of the merchant prince, and a beautiful crypt for his mortal remains, which were stolen from St. Mark’s churchyard shortly after the interment.

The mechanics and laborers were not attracted to Garden City, and it is now making slow progress with tenants whose avocations are generally in the higher walks of life.

The other great enterprise was a home for girls and women at moderate expense. This was in the shape of a hotel on a large scale at Park Avenue and Thirty-third street. The restrictions and the prices were such that the home also failed to attract the class it was intended for. The public gift, therefore, reverted to the Stewart estate, or rather was taken forcible possession of by the trustees and transformed into the Park Avenue Hotel. To carry out the rather indefinite terms of the bequest would probably have involved the expenditure of a very large amount of the Stewart estate, and, perhaps, the enterprise would even then have been a failure. It is more than probable that if Mr. Stewart had lived a few years longer, he himself would have been satisfied with the impracticability of both his semi-philanthropic schemes.

There were great things expected in the shape of benefactions from Mr. Stewart at the time of his death. He had done so little in that respect while living that the public indulged the hope that he would make up for his charitable shortcomings when he found that his worldly accumulations could no longer be of any service or gratification to him, and that he could not take any of them away with him.

Hence, it was a considerable disappointment to the public when the will revealed the fact that nothing had been devised, out of the immense hoard of nearly half a century’s savings, to charitable purposes.

On the day of his death I had an engagement with my dentist, Mr. Dwinell, in Thirty-fourth street, and while I was seated in the chair Mr. Wilson MacDonald, the well known sculptor, came in to pay a visit to the dentist, with whom he was well acquainted. Having been introduced by the sculptor, we immediately entered into conversation on the prominent local topic of the day, the death of Mr. Stewart and the probable distribution of his wealth.

Mr. MacDonald invited me to go to his studio to see a bust in clay of Mr. Stewart that he had just about finished. He said, “I knew Mr. Stewart’s aversion to having any portraits or photographs taken of himself during his lifetime, so I provided for the emergency some time ago by taking close observation of him at various intervals. During the past two years I have frequently come in contact with him, going into his store and getting a good look at him from various points of view, so as to impress his likeness upon my mind. I have thus succeeded in getting a pretty good bust of him in clay.”

Mr. MacDonald was very anxious that I should call and see this bust, because, as I knew Mr. Stewart so well, he inferred that my judgment would be worth something, and he expressed a desire that I should criticise his work. I promised him I would call and see the bust as soon as I could spare the time.

On leaving the dentist’s office I made another engagement to go back the following week, and in the meantime I had been unable to call at the studio of the artist, but the latter happened to be in the office of the dentist when I called there again. The will of Mr. Stewart had been published in the interim, and in it all reference to charities and benevolent institutions had been carefully omitted.

Mr. MacDonald reminded me that I had not called to see the bust, and added, “If you had called that time you would hardly recognize any resemblance between what it is now and what it was then.” “How is that?” I inquired. “Because,” he replied (facetiously), “as soon as I saw the will published in the newspapers and none of that immense pile left to the public, from whom it had been collected, I set to work and toned down the bumps of benevolence, conscientiousness, sublimity, veneration and ideality, making those of acquisitiveness, inhabitiveness, amativeness and all the selfish and animal propensities prominent. I naturally concluded, if phrenology is not a fraud, that Stewart’s will was a manifestation of the non-existence of the higher and more humane organs in his cranium. There certainly could be nothing there indicative of any generous emotions.”

I think everybody who knew the great dry goods merchant will be inclined to say that the judgment of the sculptor was neither rash nor uncharitable.