Fifty years in Wall Street

by Henry Clews

The Resistless Power Behind the Market.—The Advent of Governor R. P. Flower.—How Stocks were Boomed with a Dash.—A Sudden Death Averts a Big Panic.—Mr. Morgan as a Railway Reorganizer.—How Bannigan Unloaded His Rubber.—Millions Won Only to be Lost.

Wall Street, after the election of McKinley, enjoyed a boom such as it has seldom known. Probably the most interesting feature about this boom was that it was not in any sense spectacular. In that respect it is unique. Prices of stocks went higher and the intrinsic value of most of them was greater than ever before. The market had all the qualities that normally would cause intense excitement and focus the attention of the entire country on the Stock Exchange. Yet in spite of these conditions the Street was in a normal state of mind, and it is doubtful if the general mass of the people, who get their information from the newspapers, were aware that there was even an ordinary boom in Wall Street. This unusual condition was due, I believe, to the fact that the boom we were enjoying was built on a foundation that reached clear to the bowels of the earth. There was nothing unnatural or artificial about it. Wall Street, instead of being the center, is simply one of the centers that reflects the general prosperity throughout the country. Farmers, merchants, mechanics, mill workers, and miners are all so intent on keeping pace with the progress in their own pursuits that they have no time to cast eyes our way. The same conditions that boom stocks may boom everything else in the country at an equal rate, so that we are in nowise deserving of special attention.

Another factor, too, had developed in the Street that prevented the usual excitement and hurly-burly incident to a rising market. This was the absence of a pronounced central figure. Usually a boom centers about some one man who stands boldly out in the open, and whose hand is known to be manipulating values. But then the manipulation was being carried on by a method that was as quiet as it was novel and unusual. That the market was being manipulated was apparent enough even to the most casual observer. But the source of this manipulation was probably known to only a few.

They knew that a new order of things had come, due to the most powerful influence that had ever manifested itself in Wall Street. This influence was very largely composed of the Standard Oil combination, who introduced in their Wall Street operations the same quiet, unostentatious, but resistless measures that they had always employed in the conduct of their corporate affairs. The heretofore conspicuously big operators were mere tyros 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 frequently driven into a corner where he had to do battle for his life; and so it was 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 to concentrate on any given property in order to do with it what they please; and that they have thus concentrated on a considerable number of properties outside of the stocks in which they are popularly supposed to be exclusively interested is a fact well known to everyone 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 quietness and lack of ostentation with which they carry it on. There are no gallery plays, there are no scare heads in the newspapers, there is no wild scramble or 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 gain of the most daring speculator of the past was a mere bagatelle 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 easily conceivable that these men must make enormous sums on either side of the market. So far, fortunately, their manipulations have all been one way—upward; and in conjunction with the general prosperity this 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 had enjoyed was as different from this as it is possible to imagine. It had all the elements which this one had not. It centered 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 had never been seen in Wall Street, which is saying a great deal. Mr. Flower was an individual of a very plain exterior. He often used language that was noticeable more for its force, directness, and emphasis than it was for polish. 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 would be expected to lead in a district that is famous for its well-groomed men. His education was certainly not collegiate. All these factors the ordinary man would have judged to be handicaps, yet 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 by mental digressions, which would probably have come with a higher mental culture.

As the administrator and manager of the estate of his brother-in-law, Henry Keep, he came into the Street about twenty-five years ago. He 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. 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. 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 toward 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 intrenched 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 seldom seen. He picked up the stock commencing at 6 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.