Fifty years in Wall Street

by Henry Clews

Photograph from Underwood & Underwood, N. Y.
JOHN D. ROCKEFELLER.

Another factor too, has developed in the Street that prevents the usual excitement and hurly burly incident to a rising market. This is the absence of a pronounced central figure, or controlling force. Usually a boom centres about some one man who stands boldly out in the open, or whose hand it is known is manipulating values. At present the manipulation is being carried on in a method that is as quiet as it is novel and unusual. That the market is being manipulated, is apparent enough even to the most casual observer. But the source of this manipulation is probably known only to a few; all others are but students in the Street. They know that a new order has come, and that this order is due to the most powerful and resistless influence that has ever manifested itself in Wall Street. This influence is very largely composed of the Standard Oil Combination, who have introduced in their Wall Street operations the same quiet, unostentatious, but resistless measures that they have always employed heretofore in the conduct of their corporate affairs. Beside this group, every other man or combination of men that has ever operated in the Street are materially belittled by comparison. The heretofore conspicuously big operators that have flashed up and across the horizon, appear comparatively small beside the men who are running things for us now.

At his best, Jay Gould was always compelled to face the chance of failure. Commodore Vanderbilt, though he often had the Street in the palm of his hand, was often driven into a corner where he had to do battle for his life, and so it has been with every great speculator, or combination of speculators, until the men who control the Standard Oil took hold. With them, manipulation has ceased to be speculation. Their resources are so vast that they need only concentrate on any given property in order to do with it what they please. And that they have so concentrated on a considerable number of properties outside of the stocks in which they are popularly credited with being exclusively interested is a fact well known to every one who has opportunities of getting beneath the surface. They are the greatest operators the world has ever seen, and the beauty of their method is the quiet and lack of ostentation with which they carry it on. There are no gallery plays, there are no scareheads in the newspapers, there is no wild scramble and excitement. With them the process is gradual, thorough and steady, with never a waver or break. How much money this group of men have made, it is impossible even to estimate. That it is a sum beside which the gains of the most daring speculator of the past were a mere flea bite, is putting the case mildly, and there is an utter absence of chance that is terrible to contemplate. This combination controls Wall Street almost absolutely. Many of the strongest financial institutions are at their service in supplying accommodations when needed. With such power and facilities it is scarcely conceivable what these men must be making, what they can do on either side of the market. So far, fortunately, their manipulations have all been one way, upwards, and in conjunction with the general prosperity it has resulted in making large sums of money for nearly everybody in the Street.

Here and there we have heard of losses, some of them fairly large, but in comparison with the general money making these are hardly to be taken into consideration.

The last preceding boom that Wall Street enjoyed was as different from the present as it is possible to imagine. It had all the elements which this one has not. It centred about one man who stood out in the lime-light clear and distinct. It kept the Stock Exchange in a constant state of ferment. It filled the newspapers with column upon column of sensational stories. It made millions for an army of retainers, on paper, and it kept the market jerking up and down for months. Roswell P. Flower, ex-governor of the State of New York, was the leader of the boom, and a more picturesque figure has never been seen in Wall Street, which is saying a great deal. Mr. Flower was an individual of very plain exterior. He often used language that was noticeable more for its force and directness and emphasis, than it was for polish. He had an ambling gait and looked like a well-fed farmer. He was rarely seen without a huge quid of tobacco that almost filled the left side of his mouth. Spittoons were an essential part of the furnishings of his office. His clothing hung on his person not unlike meal sacks. His hat was rarely brushed, and for days at a time, apparently, he forgot to shave. Altogether he was the last person, in appearance, who might be expected to lead in a district that is famous for its well groomed men. His education was certainly not collegiate; doubtless all his peculiar traits the ordinary man would have judged a handicap, still they were Mr. Flower’s strongest aids. The lack of artificial polish gave people confidence in his statements. His limited education enabled him to think clearly along certain lines without being hampered with mental digressions, which would probably have come with a higher original mental culture.

As the administrator and manager of the estate of his brother-in-law, Henry Keep, he came into the Street twenty or twenty-five years ago. He in that way controlled a large amount of funds, which by conservative direction he increased very substantially. He scarcely ever figured in the speculative field to any great extent, until after he had completed his term as Governor of New York State. When he returned to the Street from Albany, he naturally came with a considerable prestige. Ex-governors of the Empire State are not very plentiful in and about the Stock Exchange. He also brought with him a large political following. In both of the great parties in New York State there are many men of standing and influence who like to take a flyer in Wall Street. Almost to a man they associated themselves with Mr. Flower, who, during his term at the capital had made hosts of friends with Republicans and Democrats alike, and this, though his party loyalty had never been questioned. He also had close associations with most of the big capitalists. After he had settled down to business, on leaving politics behind, Mr. Flower picked out several stocks as his specialties, Chicago Gas, Federal Steel and Rock Island being some of these. Under his manipulation all these properties went up and soon began to show a big advance, unusual strength and great activity. The bears made frequent assaults on his position and now and then pushed him towards the wall, but he always fought his way to the front again, and came out master in every encounter. When he had himself pretty well entrenched in the specialties he was handling, he suddenly plunged into Brooklyn Rapid Transit, and for months he kept things stirred up in a way that even Wall Street has not seen very often., He picked up the stock commencing at six dollars a share, and in an incredibly short time ran it up to over 138. Almost every politician in the State made a fortune on paper. Mr. Flower was immensely popular with the Wall Street news reporters, who helped his boom along through the glowing accounts they wrote from day to day.

Under the impetus of the swirl in Rapid Transit, practically every property in the Street went flying upward, until the end did not seem to be in sight. The bears were beaten to a standstill every time they showed their heads, the only result of their attacks being that Flower stocks would jump up a notch higher. The ex-governor preached Americanism and confidence, until everybody believed that if a stock was only grounded, and the property located in America, you could buy it at any price and still be on the safe side.

That a terrible panic did not grow out of this boom was due only to one fact: Mr. Flower’s sudden death. Had he lived thirty days longer, the bubble must have been pricked, and the result would have been disastrous. Mr. Flower went to the country for a day’s rest, ate freely of ham and radishes and washed his frugal meal down with a copious supply of ice water; he naturally, in consequence, died in a few hours afterwards of an attack of acute indigestion; his death alone saved the Street.

The Rockefellers, the Vanderbilts and his other wealthy friends rushed into the market with millions and sustained values. They were in a position to attribute the threatened reaction to his death and pointed out the absurdity of letting such an incident affect the value of stocks. They discounted the break that must have come in the natural course of events under the forcing process that was going on. Reasoning such as this spread broadcast through the papers stopped the break. Where the bottom would have fallen out entirely there was only virtually a moderate break all along the line; why it was not worse was due to the market being bolstered up by the Standard Oil Combination and others with them coming to the rescue just in time to prevent a big smash. The small speculators operating on moderate margins were of course all wiped out almost to a man, but many of the big fellows were saved. It is probably the only instance on record where the death of a big operator saved a general smash. Those hurt were numerous politicians and small fry operators who instead of getting away with snug fortunes in the shape of profits, lost their all.