Great Fortunes, and How They Were Made

by James Dabney McCabe

Without mercantile experience, and possessing little advantage, save his own Scotch-Irish energy and courage, Mr. Stewart started boldly on what proved the road to fortune. No young merchant ever worked harder than he. From fourteen to eighteen hours each day were given to his business. He was his own book-keeper, salesman, and porter. He could not afford to employ help. Credit was hard to obtain in those days, and young merchants were not favorites with those who had such favors to bestow. Mr. Stewart was one of the least favored, inasmuch as he was almost a total stranger to the business community in which he lived. He kept a small stock of goods on hand, which he purchased for cash chiefly at the auction sales. He was a regular attendant at these sales, and his purchases were invariably "sample lots"—that is, collections of small quantities of various articles thrown together in confusion, and sold in heaps for what they would bring. He had these purchases conveyed to his store, and after the business of the day was over, he and his wife would take these "sample lots," and by carefully assorting them, bring order out of the confusion. Every article was patiently gone over. Gloves were redressed and smoothed out, laces pressed free from the creases which careless bidders had twisted into them, and hose made to look as fresh as if they had never been handled. Each article being good in itself, was thus restored to its original excellence. The goods were then arranged in their proper places on the shelves of the store, and by being offered at a lower price than that charged by retail dealers elsewhere in the city, met with a ready sale. Even at this low price the profit was great, since they had been purchased for a mere trifle. For six years Mr. Stewart continued to conduct his business in this way, acquiring every day a larger and more profitable trade. Here he laid down those principles of business and personal integrity from which he has never departed, and which have led-him to the honorable position he now holds.

"His first rule was honesty between seller and buyer. His career is a perfect exemplification of Poor Richard's maxim: 'Honesty is the best policy,' and of the poet's declaration: 'Nothing can need a lie,' His interest consorted with his inclination, his policy with his principles, and the business with the man, when he determined that the truth should be told over his counter, and that no misrepresentation of his goods should be made. He never asked, he never would suffer, a clerk to misrepresent the quality of his merchandise. Clerks who had been educated at other stores to cheat customers, and then to laugh off the transaction as 'cuteness,' or defend it as 'diamond cut diamond,' found no such slipshod morality at Stewart's little store, and learned frankness and fairness in representation at the peril of dismissal. Their employer asked no gain from deceit in trade. On his part, too, in buying, he rarely gave a seller a second opportunity to misrepresent goods to him.

"A second innovation of the young dry goods dealer was selling at one price—a custom which has also lasted without interruption, and which has spread to all the great houses. He fixed his price, after careful consideration, at what he thought the goods could and would bring, and would not deviate from it for any haggling, or to suit individual cases. Of course, he followed the fluctuations of the market, and marked his goods up or down in accordance with it; but no difference in the price was made to different people. Perhaps those who had some art in 'beating down' prices were offended, but people in general were pleased.

"The third principle he adopted was that of cash on delivery. It is said that his own early experience of buying on credit, and selling on credit, drove him to this rule.

"A fourth principle with him was to conduct business as business—not as sentiment. His aim was honorable profit, and he had no purpose of confusing it by extraneous considerations."

While still engaged in his first struggles in his little store, Mr. Stewart found himself called on to make arrangements to pay a note which would soon become due. It was for a considerable sum, and he had neither the money nor the means of borrowing it. It was a time when the mercantile community of New York regarded a failure to pay a note as a crime, and when such a failure was sure to bring ruin to any new man. Mr. Stewart knew this, and felt that he must act with greater resolution and daring than he had ever before exhibited, if he would save himself from dishonor. To meet the crisis he adopted a bold and skillful maneuver. He marked down every article in his store far below the wholesale price. This done, he had a number of handbills printed, announcing that he would sell off his entire stock of goods below cost, within a given time. He scattered these handbills broadcast through the city, and it was not long before purchasers began to flock to his store to secure the great bargains which his advertisements offered them. His terms were "cash," and he had little difficulty in selling. Purchasers found that they thus secured the best goods in the market at a lower figure than they had ever been offered before in New York, and each one was prompt to advise relatives and friends to avail themselves of the favorable opportunity. Customers were plentiful; the little Broadway store was thronged all day, and long before the expiration of the period he had fixed for the duration of his sales, Mr. Stewart found his shelves empty and his treasury full. He paid his note with a part of the money he had thus received, and with the rest laid in a fresh stock of goods. He was fortunate in his purchases at this time, for, as the market was extremely dull and ready money scarce, he, by paying cash, bought his goods at very low prices.

The energy, industry, patience, and business tact displayed by Mr. Stewart during these first years of his commercial life brought him their sure reward, and in 1828, just six years after commencing business, he found his little store too small and humble for the large and fashionable trade which had come to him. Three new stores had just been erected on Broadway, between Chambers and Warren Streets, and he leased the smallest of these and moved into it. It was a modest building, only three stories high and but thirty feet deep, but it was a great improvement on his original place. He was enabled to fill it with a larger and more attractive stock of goods, and his business was greatly benefited by the change. He remained in this store for four years, and in 1832 removed to a two-story building located on Broadway, between Murray and Warren Streets. Soon after occupying it, he was compelled, by the growth of his business, to add twenty feet to the depth of the store and a third story to the building. A year or two later a fourth story was added, and in 1837 a fifth story, so rapidly did he prosper.

His trade was now with the wealthy and fashionable class of the city. He had surmounted all his early difficulties, and laid the foundation of that splendid fortune which he has since won. The majority of his customers were ladies, and he now resolved upon an expedient for increasing their number. He had noticed that the ladies, in "shopping," were given to the habit of gossiping, and even flirting with the clerks, and he adopted the expedient of employing as his salesmen the handsomest men he could procure, a practice which has since become common. The plan was successful from the first. Women came to his store in greater numbers than before, and "Stewart's nice young men" were the talk of the town.

The great crisis of 1837 found Mr. Stewart a prosperous and rising man, and that terrible financial storm which wrecked so many of the best of the city firms did not so much as leave its mark on him. Indeed, while other men were failing all around him, he was coining money. It had always been his habit to watch the market closely, in order to profit by any sudden change in it, and his keen sagacity enabled him to see the approach of the storm long before it broke, and to prepare for it.

He at once marked down all his goods as low as possible, and began to "sell for cost," originating the system which is now so popular. The prices were very low, and the goods of the best quality. Every body complained of the hard times, and all were glad to save money by availing themselves of "Stewart's bargains." In this way he carried on a retail cash trade of five thousand dollars per day in the midst of the most terrible crisis the country has ever seen. Other merchants were reduced to every possible expedient, and were compelled to send their goods to auction to be sold for what they would bring, so great was their need of ready money. Stewart attended all these auctions regularly, and purchased the goods thus offered. These he sold rapidly by means of his "cost system," realizing an average profit of forty per cent. It is said that he purchased fifty thousand dollars worth of silks in this way, and sold the whole lot in a few days, making a profit of twenty thousand dollars on the transaction. Thus he not only passed through the "crisis," but made a fortune in the midst of it.