Chapter 30



True Stories that are Stranger than Fiction—Fortune’s Great Army—The Rise of Jay Gould—The Meteoric Career of James Fisk—Ferdinand Ward, the Napoleon of Finance—How Vanderbilt Made a Million in a Day—A Man who was Devoured by both Bulls and Bears—Some Rules for Timid Investors—John C. Eno, the Free-Lance Operator—The Wonderful Success of James R. Keene—How Daniel Drew Spelled “Door”—The Great Leiter Wheat Deal.

This is a dangerous sea, strewn with wrecks, but the fascination in the thought of making a fortune in a single day ever has and ever will cast its spell upon the human mind. Some men will take great risks in the hope of glittering gains. We give a few of the most promising forms of speculation, with examples of those who have been successful with the dice of fortune.

Jay Gould was employed as a map-maker at a salary of $30 per month. He trudged over whole counties in New York State as a surveyor. A lucky hit brought him into Wall Street, where he made over $70,000,000 in forty years.

James Fisk came down from Vermont a penniless boy, but getting into the company of Wall Street men he soon amassed an immense fortune.

Ferdinand Ward, called the Napoleon of Finance, had an unequaled gift for shrewd speculation, and might have excelled all contemporaries had he chosen to stick by honest methods. He made a fortune before he was arrested for “crooked ways.”

Cornelius Vanderbilt at twenty earned a living by rowing a boat between Staten Island and New York. At sixty he was proprietor of a fleet of sixty-six steamboats and owner of several railroads. He made his money in stocks. In the fluctuations of the Erie, on one occasion he made a million dollars between rise and set of sun.

John C. Eno was called the free-lance operator. He was one of the boldest manipulators of stocks, and acquired an immense fortune.

Perhaps the most striking success was that of James R. Keene, who made $9,000,000 in three years.

Others who have won their fortunes in Wall Street are Russell Sage, William Belden, George I. Seney, Henry Villard, William H. Vanderbilt, William R. Travis, C. P. Huntington, and Daniel Drew.

Of the last named it may be mentioned—to show how little a college education has to do with success in business—that he was very illiterate, possessing only a scanty knowledge of grammar, and even of spelling. It is related that on one occasion he told his cashier that he would set the safe lock on the word “door.” When the cashier wanted to open the safe, he tried “door” in vain. Knowing his employer’s queer methods of spelling he tried varieties on “door,” such as “dore,” “doar,” etc., but all in vain. At last he was obliged to go to the hotel and awake his employer, who had gone to bed. “Uncle Dan’l” was quite crusty at being awakened, and told his cashier again that he had set the safe on the word “door.” “But how do you spell ‘door’?” inquired the cashier. “Why,” said “Uncle Dan’l” tartly, “any fool can spell ‘door.’ You’d better get out of the business if you can’t spell, and I’ve a mind to discharge you on the spot. How do I spell ‘door?’ Why, ‘d-o-a-r-e,’ of course!” The next day, however, on reflection the old man relented, and concluded not to discharge his trusted employee for so trivial a blunder.

A rule for speculators is: “Don’t invest on professional advice.” Your advisers have “an ax to grind.” A man once ordered a broker to buy 1,000 shares of Erie when the price was 94; it immediately dropped, and he ordered it sold when it was 92-1/2. In half an hour he returned and ordered it bought again. It had then gone up to 95. After consulting again with “friends,” he again ordered it sold. The market then was down to 90. He came back the fifth time and said: “I consulted one man who told me to buy; then another who told me to sell. I understand that one is called a bull and the other a bear. I don’t know much about these names, but I do know that I have been a jackass.”

A much, safer plan is to follow the lead of shrewd speculators. In Wall Street you should reverse the advice given to the disciples concerning the Pharisees. Christ said, “Do as they say, but not as they do.” But with speculators the direction should be, “Do as they do, but not as they say.”

The chief form of speculation is in stocks. These stocks may be railroads, mines, wheat, corn, cotton, wool, tobacco, oil, gas, coal, and, in fact, almost any industry where capital has constantly vacillating values. We have room to mention only a very few:

  1. City Bonds.—These are generally among the best securities for investment. The element of speculation comes in when they are bought below par in the belief of an early rise. A sharp Yankee bought $100,000 of defaulted bonds of the city of Houston, Texas, forced a settlement at par, and doubled his money.
  2. Colonial Trade.—We have the very best authority for the information that the trade in our newly acquired territory, the Philippine Islands, will be worth one billion dollars annually under American development. Here is an immense opportunity for every form of profitable speculation. Cuba, Porto Rico, and Hawaii, also, are inviting fields, and there is no doubt that the next decade will witness the making of many fortunes in those islands, and the foundations of hundreds of others. Now is the time to begin, as those earliest in the field will have the first chance to buy up depreciated stocks and lagging industries.
  3. The American Tobacco Company.—One of the most vacillating stocks lately has been that of the American Tobacco Company. In January of the current year—1898—Mr. J. R. Keene purchased 80,000 shares at $90. September 26th, fearing the market was about to decline, he began to sell, and in two days had completely unloaded at figures ranging at $145 to $139. He cleared about $1,500,000 in the two days.
  4. Collapsed Railroads.—For a capitalist there are few more promising fields than the buying up of collapsed or run down railroads. Mr. George I. Seney accumulated a large fortune by purchasing at a little more than nominal figures bankrupt or embarrassed roads, and by thorough equipment, and by connection with more prosperous roads, soon put them in a paying condition. If you can get one end of a small road into a large city, or if you can arrange to make it the feeder instead of the rival of a large road, it will be almost certain to yield abundant returns.
  5. Wheat Margins.—Fortunes are daily made and lost in wheat. Everybody has heard of the great Leiter deal. Joseph Leiter often made $100,000 in a single day. In ten months he rendered things lively in every great center of the world, and in this period of less than a year he actually made $4,500,000. True, he lost it again, but the fact that one could corner such a fortune in so short a time shows what may be accomplished with courage and capital. The safest rule for small and timid operators is to follow in the wake of these bold speculators, but not too far. It may be laid down almost with the certainty of a logical premise, that, when a man of vast resources and thoroughly familiar with the field enters the market, he is bound to win at first, but bound to lose if he presses things too far, because the tremendous stress produces at last reactionary conditions which no manipulator and no combination of speculators are able to face. It does not matter so much whether you are a bull or a bear, if you can perform the difficult feat of holding yourself in.

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