In May the price of Harlem was put up to 300. It stood at 285 on the day 15,000 shares had to be delivered, and they were settled for at this price. Daniel Drew compromised by paying $1,000,000 to Tobin in settlement of his own Harlem “shorts,” but the claim against him was $1,700,000. He, however, threatened a suit for conspiracy. Tobin’s share of the profits of the corner was about two millions, and this made him worth three.
Commodore Vanderbilt chuckled, and disposed of the Harlem road by leasing it at eight per cent. on the stock to the New York Central & Hudson when he got control of it. So Harlem proved a bonanza to him till the end, and is still one of the splendid assets of his descendants. After the “corner,” Tobin bulled gold on a tremendous scale in the face of the Union victories that terminated the war. He bulled it from 198 to 211 against the “short” interest at the beginning of 1865, and then it broke on him so heavily that he lost more than $1,500,000. After that he met with a succession of disasters in the stock market, and lost every dollar that he had, besides running in debt with his brokers. He then retired to live with his sister on a farm on Staten Island, and was never seen again in Wall Street. He saw ups and downs with a vengeance. So did his contemporary of the open board, E. A. Coray, who made and lost about as much.
Addison G. Jerome had a career in Wall Street more brief than that of Anthony W. Morse, but he is still well remembered there as a shining light. He entered Wall Street as an operator early in 1863, after being a merchant in the dry goods trade, and during the rest of that year was called “the Napoleon of the public board,” so conspicuously active, bold, and successful was he in his operations. He was a friend and broker of John Tobin’s, and coöperated with him in bulling Harlem, with the result that he made a very large amount of money out of it, first by the rise from 60 to 117, when Commodore Vanderbilt was dealing with the New York Common Council, and next when he was punishing the legislators at Albany for going back on him, as he phrased it, in the 1864 “corner.”
He became a brilliant leader, and had a host of followers, and was successful in everything he undertook until he bulled Michigan Southern, and, with a clique that he formed, bought control of it. He put it to high figures, and was sure of his position. But Henry Keep, the treasurer of the company, and a keen operator in stocks, stepped in, and turned Jerome’s success into utter and disastrous failure.
Henry Keep knew something that Jerome was unaware of, namely, that a clause in the Michigan Southern’s charter permitted its directors to increase its capital stock. So he called a secret meeting of the board, and an increase of 14,000 shares was voted. Then, with this increase for future delivery, he sold the stock against it, and borrowed to make his deliveries, which made Jerome think Keep was largely “short” of Michigan Southern. He and his clique, therefore, kept on buying and advancing the price, while Keep kept on selling more and more. The final result was that Jerome called in all his loans of the stock, so as to force the “shorts” to “cover,” and that Keep responded by delivering the 14,000 shares of new stock, which caused a fall of twenty per cent. in Michigan Southern in one day. This involved the loss of nearly all the three millions of money Jerome had so quickly made, and killed him as a leader, although he was respected as an honorable man. He took the loss of his fortune and prestige so much to heart that he sickened and died in the following year of some obscure disease, a virtually ruined man. But, fortunately, during his nine months of phenomenal success he had settled enough on his wife to keep the wolf from the door. His ups and downs were remarkably swift even for Wall Street.
Leonard W. Jerome, a younger brother of Addison’s, was prominent in Wall Street and society, and as the driver of a four-in-hand, long before the latter appeared, and continued in the Street long after Addison passed away. His career was also marked by memorable ups and downs. In 1863 he was a large holder of Hudson River Railroad stock, which the bears had hammered down to 107. So he formed a strong clique to bull it against the “short” interest, and bought all the stock that was offered until he had taken nearly all the capital. Then he bid up the price gradually till it reached 175, and made the stock so scarce that he loaned it to the bears to make their deliveries, at five per cent. a day. The shorts, estimated to represent about 50,000 shares, finding there was no help for them, covered at a very heavy loss, while Jerome made a great deal of money by squeezing them, presumably two or three millions.
His prestige increased with his wealth, and he became a social as well as a financial lion. He had been watching Pacific Mail since it succeeded the Nicaragua Transit Company in 1856. In 1861 its stock fell to 69, but in the next year its earnings were enormous, and 26,000 of its 40,000 shares were bought by a combination of operators, mostly its directors, who transferred it to Brown Brothers & Co., to be held in trust for their benefit for five years; and they selected Leonard Jerome to bull the stock in the open market. Under his manipulation it rose to 160 in thirteen months after he commenced operations for the ring. There was a large “short” interest in it by that time, and, to force the “shorts” to settle, he put it to 200, and kept it there, and they settled.
In 1865 Pacific Mail’s capital was increased from four millions to ten, and yet its stock stood at 240, and it paid twenty per cent. a year in dividends. The year after, it was increased to twenty millions, yet it sold at 180, with Jerome still bulling it. But in 1867 he met his Waterloo in it. To use his own words, he had bitten off more than he could chew. The company’s earnings fell off largely, and its report showed assets reduced from thirty-four to twenty-two millions; the Government paper-money issues were being rapidly contracted, and the flood of “water” injected into the stock was beginning to tell upon it. Moreover, Jerome had agreed to buy the old five-year combination’s stock at 160. Owing to all this, accompanied by a generally weak stock market, Pacific Mail broke, under enormous sales, from 163 to 115 in a few days on his hands, and he lost practically everything he had, except some real estate. After being thus ruined by Pacific Mail, Leonard Jerome ceased to be a power in Wall Street. He had no longer any prestige there, and soon retired from it entirely, and died, at the home of his daughter, Lady Randolph Churchill, in London, a poor man. He had experienced his full share of the ups and downs of Wall Street.
Pacific Mail was nothing to Leonard W. Jerome after he lost his money, nor he to Pacific Mail. The company had seen its most palmy and prosperous days, and its water-logged stock was heavy on the market. It suffered from reduced traffic and bad management, and in 1871-72 its stock had sunk to so low an ebb that the directors felt it was necessary to do something to mend matters. So, having little of the stock, they decided, instead of trying to reëlect themselves, to give up the ship. They retired to make room for a new board in November, 1871, with Alden B. Stockwell at the helm as president. Nominally the new board selected him, but really he selected them to do his bidding.
His name was then very little known in Wall Street, but he was known to have been a steamboat clerk on Lake Erie, and more recently to have married the daughter of Elias Howe, the sewing-machine inventor and manufacturer of Bridgeport, Conn., and thus acquired wealth and become the president of the Howe Sewing Machine Company and the Willcox & Gibbs Company.