The best and safest way to be rich in New York, as elsewhere, is for a man to confine himself to his legitimate business. Few men acquire wealth suddenly. Ninety-nine fail where one succeeds. The bane of New York commercial life, however, is that people have not the patience to wait for fortune. Every one wants to be rich in a hurry, and as no regular business will accomplish this, here or elsewhere, speculation is resorted to. The sharpers and tricksters who infest Wall street know this weakness of New York merchants. They take the pains to inform themselves as to the character, means and credulity of merchants, and then use every art to draw them into speculations, in which the tempter is enriched and the tempted ruined. In nine cases out of ten a merchant is utterly ignorant of the nature of the speculation he engages in. He is not capable of forming a reasonable opinion as to its propriety or chance of success, because the whole transaction is new to him, and is so rapid that he has no time to study it. He leaves a business in which he has acquired valuable knowledge and experience, and trusts himself to the mercy of a man he knows little or nothing of; and undertakes a transaction that he does not know how to manage. Dabbling in speculations unfits men for their regular pursuits. They come to like the excitement of such ventures, and rush on in their mad course, hoping to make up their losses by one lucky speculation, and at length utter ruin rouses them from their dreams.
Not only do men squander their own money in this way, but they risk and often lose the funds of others committed to their charge. Bank officers, having the use of the deposits in their institutions, take them for speculation, intending of course to return them. Sometimes they are successful, and are able to
replace the money in the bank, so that no one hears of their dishonesty. Again, and most commonly, they fail, and they are ruined. Guardians thus misappropriate the funds of their wards. Even the funds of churches are thus used by their trustees. The amount of speculation engaged in by clergymen with their own money would astonish a novice. Some prominent divines in the city are well known in Wall street. Their brokers keep their secrets, but the habitués of the street are adepts at putting this and that together, and these reverend gentlemen, some of whom preach eloquently against the sins of speculation and gambling, become known as regular customers. The street is full of gossip concerning them, and if the stories told of them be true, some of them have made large fortunes in this way, while others have literally “gone to the bad.”
It is not necessary that a person speculating in stocks should be master of the entire value of the stocks. If he be known to the broker operating for him as a responsible person, he may employ only ten per cent., or some other proportion, of the stock to be dealt in. By depositing $1000 with his broker, he can speculate to the extent of $10,000. This per centage is called a margin, and the deposit is designed to protect the broker from loss in case the stock should fall in value. As the stock depreciates, the customer must either sell out and bear the loss which is inevitable, or he must increase his margin to an extent sufficient to protect his broker. If he fails to increase his margin, the broker sells the stock and uses the money to save himself.
VIII. THE WAYS OF THE STREET.
Like Brette Harte’s Heathen Chinee,
“For ways that are dark
And tricks that are vain,
Wall Street is peculiar.”
It takes a clear, cool head, a large amount of brains, and unaltering nerve, to thread one’s way through the intricacies of
the business of finance as carried on there. It would be interesting to know how many come out of the ordeal untouched by the taint of corruption. Members of the Exchanges are held by a rigid code of laws, but in questions of morality Wall street has a code of its own. Expediency is a prominent consideration in the dealings of the street, and men have come to regard as honest and correct almost anything short of a regular breach of contract. They do not spare their own flesh and blood. Friendships are sacrificed, the ties of kinship are disregarded, if they stand in the way of some bold operation. Every thing must give way to the desire for gain. The great operators plunder and destroy their lesser rivals without a feeling of remorse, and by combinations which they know cannot be resisted blast the prospects and ruin the lives of scores whose greatest fault is an inability to oppose them successfully. Tricks so mean and contemptible that their perpetrator would not be tolerated in social life, are resorted to, and if successful are applauded as evidences of smartness. Every man’s hand is against his neighbor. Clerks are bribed to betray the secrets of their employers. The baser their treachery, the larger their reward. We do not propose, however, to discuss the morality of Wall street transactions, and so we drop the subject.
It is said by the gossips of the street that the great Railroad King, Commodore Vanderbilt, is not above using any means at hand to secure the success of his schemes. It is said that he once tried to use his son William in this way. He came to him one day, and advised him that he had better sell his Hudson River stock, as 110 was too high for it. William thanked him, and made inquiries in the market, and found that his father was buying quietly all he could lay his hands upon.