American Men of Mind Part 19

Born in 1836, a farmer's boy, with only such education as he could pick up, he managed to find time to study surveying, and for two or three years was engaged in making surveys of various New York counties. While thus engaged, he fell in with a wealthy and eccentric individual named Zadock Pratt, who sent him to the western part of the state to select a site for a tannery. He was soon doing a large lumbering business, first with Pratt and then in his own name; but he sold out just before the panic of 1857, and soon after entered upon that career of speculation in New York City which, in the end, made him the best-hated man in America.

Picture the man, small, only five feet six inches in height, with sallow skin and jet black whiskers, his eyes dark and piercing, his whole personality, as one observer put it, "reminiscent of the spider." His reputation was that of an unscrupulous and immoral rascal, who would not hesitate to sacrifice his best friends, if need be. His war against Cornelius Vanderbilt for control of the Erie was one of his typical operations--a war which, when he saw he was losing, he won by issuing $5,000,000 worth of fraudulent stock. There was never any question about the criminality of this proceeding, and Gould was forced to flee to New Jersey, where he spent millions in corrupting courts and legislatures--millions, not taken from his own pocket, but from the treasury of the Erie, of which he had control. He was ousted, at last, but not until he had added $62,000,000 to the indebtedness of the road, of which amount it was a.s.serted Gould had pocketed $12,000,000.

The culminating feature of his career was his attempt to corner gold, which brought about the famous Black Friday panic of 1869. The scheme, one of the most daring ever attempted by any operator, came near success. Gould is said to have bribed the brother-in-law of President Grant and to have persuaded the President himself not to release any of the government supply of gold. He then succeeded in driving the price up to 162, when suddenly the bubble burst. Gould, himself, had been warned and succeeded in getting away with his immense profits, covering himself at the expense of his a.s.sociates, an act of treachery unprecedented even in the stock market.

These were only two of the remarkable operations which he engineered, and which need not be given in detail here. The net result was a fortune of some seventy million dollars, and a reputation for duplicity such as perhaps no man in America ever had before. It is only fair to Gould to say, however, that he accomplished merely what most stock gamblers would like to accomplish, if they could, and that outside of finance, he seems to have been an estimable man, faithful to his wife, devoted to his children, and pa.s.sionately fond of flowers. He made no gifts of any consequence to charity during his life, nor did he make a single benevolent bequest in his will; but one of his children, Helen Miller Gould, has more than atoned for this by practically devoting her life and her fortune to charitable work. It is doubtful if there is a better-loved woman in America to-day than Helen Gould, who has shown so notably how a life may be consecrated to good works.

[Ill.u.s.tration: WANAMAKER]

The great marble palace which A. T. Stewart built on Broadway, in New York City, to house his business, and which was, at the time, the largest building in the world devoted to a retail business, is now occupied by another great merchant, who, starting from a beginning even smaller than Stewart's, has built up a business many times as great.

John Wanamaker, whatever the growth of the country may be hereafter, will always remain one of America's most representative and most successful men of affairs--both representative and successful because his business has rested from the first on the principle of honest dealing, of making satisfied customers--in a word, upon the altogether modern principle of "your money back, if you want it."

John Wanamaker was born in Philadelphia in 1838, a poor boy with his way to make in the world. He received his education in the common schools, and at the age of fourteen, entered upon his business career as an errand boy in a book store. From that, he got a clerkship in a clothing store, and for some years acted as salesman, until he could save enough money to start a little store of his own. This he was able to do in 1861, in partnership with a man named Nathan Brown, and ten years later, he was sole owner of a prosperous and growing business. It was at about this time that an idea occurred to him which was destined to revolutionize the retail business of the larger cities of the country.

The idea was simply this: In the great cities, most shoppers have to travel a considerable distance to get to the business centre, and must there waste time and energy going from one store to another to make their purchases. Why not, then, combine all the representative retail businesses into one store, so that the shopper could make all purchases under a single roof, pay for them all at once, and have them all delivered at the same time? Moreover, why could not one great business be conducted more cheaply, and so undersell, the small ones, since a single executive staff would do for it, rent, delivery cost, and a hundred other fixed charges would be reduced, to say nothing of the advantages of large buying, and the advertising which every department would get from all the rest? The idea grew into a carefully-formulated plan, and 1876 saw the start of the great Wanamaker department store, perhaps the most famous retail business in the world.

Its tremendous success is an old story now, and it has found hundreds of imitators. Twenty years after the opening of the Philadelphia store, another was opened in New York in the old Stewart building, to which another building, four times as large, has recently been added.

Wanamaker from the first firmly believed in P. T. Barnum's old adage that "A satisfied customer is the best advertis.e.m.e.nt," and he made every effort to see that none left the Wanamaker stores unsatisfied. He also made it a rule that no visitor to his store should ever be urged to buy anything; that every article of merchandise should be exactly as represented, and that any purchase might be returned and the purchase money would be refunded without question. As a result, Wanamaker got a reputation for fair dealing which proved his greatest a.s.set.

One would think that the management of such a business would fully occupy any man, but Wanamaker found time for many public and benevolent interests. He founded, in 1858, the Bethany Sunday School, which has grown into perhaps the largest in the world and of which he has always been superintendent; he has taken part in many movements for civic reform, and from 1889 to 1893 was postmaster general of the United States. He reorganized the service; set in motion the rural delivery system, the greatest single improvement in its service the department has ever made; and tried to secure a postal telegraph, a postal savings-bank, a parcels post and one-cent letter postage. He was the first official to regard the service as a business pure and simple, and if the reforms he suggested had been carried out, the United States postoffice would now be a model for the world.

The greatest banker and financier in America at the present day is undoubtedly J. Pierpont Morgan, who, however, is known not so well for the millions he has acc.u.mulated as for the other millions he has spent in collecting rare objects of art, until he has become the possessor of a collection surpa.s.sing any ever possessed by another private individual. That much of this will one day be bequeathed by its owner to the public there can be little doubt.

J. Pierpont Morgan is of a family of bankers. His father, Junius Spencer Morgan, was for many years a partner in the great London banking house of George Peabody & Co., and on the retirement of Mr. Peabody, succeeded him as the head of the business. There was never any doubt of the son's vocation. Born in 1837, and carefully educated, he entered the banking house of Duncan, Sherman & Co. at the age of twenty, and from that time, rose steadily, until he became the head of the greatest banking house in the country. He has been largely concerned in the reorganization of railways and the consolidation of industrial properties, and the magnitude of some of his operations is fairly astounding. During the Cleveland administration, he floated a national bond issue of $62,000,000; he marketed the securities of the United States Steel Corporation, with a capitalization of $1,100,000,000; he secured American subscriptions aggregating $50,000,000 for the British war loan of 1901; he controls over fifty thousand miles of railway, and his interests extend into practically every great financial enterprise in America. He has given large sums of money for public enterprises in New York City, among them a million and a half for a great lying-in hospital. He built the "Columbia," which twice defeated the "Shamrock"

in the races for the America's cup, and he has made many valuable gifts to the various museums and libraries of New York City. The power he wields is enormous, but he wields it wisely and legitimately, winning the respect, as well as the admiration of men.

The greatest work of American men of affairs during the past half century has been the upbuilding and extension of the railroad system of the country. The railroad mileage of the United States at the present time is over three hundred and twenty-five thousand; the total cost of the railroad equipment of the country reaches fourteen billion dollars and the yearly earnings average over two and a half billions. They employ over a million and a half men, whose wages average three million dollars a day--and, it may be added, they kill or injure nearly ninety thousand. But that is a detail. With this vast development of the railroad business the names of some half dozen men are so closely connected that the great systems of the country are generally known as the Hill lines, the Harriman lines, the Vanderbilt lines, the Gould lines, and so on. Of these men we shall try to tell something briefly here.

We have already related how Cornelius Vanderbilt secured control of the New York Central and Hudson River roads, and added to these until he had secured an entrance into Chicago; and how his son, William Henry Vanderbilt, added to this system until it became, and still remains, one of the strongest in the country. We have told, too, of Jay Gould's ideas of railroad management, which seem to have been to get the most out of it for Jay Gould. But when Jay Gould died, he was caught, as it were, with thousands of miles of railroads on his hands. He left four sons, George Gould, Edwin Gould, Howard Gould and Frank Gould, of whom George is the only one that really counts. But he, with a real genius for railroad building, has developed the Gould lines into a great system stretching from Buffalo and Pittsburgh southwestward to Chicago, Omaha, Kansas City, Denver, Ogden, St. Louis, New Orleans, Galveston and away out to El Paso. These lines have played a most important part in the development of the great Southwest, and it is said that George Gould is already blazing a way to the Atlantic seaboard, as an outlet for the mighty freight traffic which his lines control.

No man connected with railroad building in this country has had a more interesting or adventurous career than James J. Hill. Born on a little Canadian farm in 1838, descended from the hardy Scotch-Irish of whom we have spoken so often, his father died when he was fifteen years, and he was left to his own resources. He found work as a wood-chopper, and one day, while he was chopping down a tree a traveler stopped at the house to take dinner, hitching his horse to the gate. The boy noticed that it was tired and f.a.gged and carried it a bucket of water. This attention pleased the traveler, and as he drove away, tossed the boy a Minnesota newspaper, remarking, "Go out there, young man. That country needs youngsters of your spirit."

The boy read the paper with its glowing accounts of the new country, and the next morning, walking to the tree he had been cutting he hit it one last lick for luck, and announced, "I've chopped my last tree." That tree, it is said, bears to-day a great placard with the words, "The last tree chopped by James J. Hill." It _was_ the last one, for a day or two later the boy started for St. Paul. He brought with him to the United States the l.u.s.ty body, frugal instincts and good principles of his Scotch-Irish ancestry, and, in addition to those, a self-confidence and sureness of judgment destined to take him far.

He got employment as a shipping clerk in a steamboat office in St. Paul, and so took his first lessons in transportation problems. Pretty soon he was agent for a steamboat line, then he established a fuel and transportation business on his own account and managed it so well that by 1873, he had acc.u.mulated a fortune of a hundred thousand dollars.

There was in Minnesota at the time a little railroad called the St. Paul & Pacific. It started at St. Paul, but it stopped after it had got only a few hundred miles toward the Pacific. Hill decided to buy it. The price was half a million, so he tramped back to Canada and persuaded the bank of Montreal to let him have the $400,000 he needed. That was surely one of the most wonderful feats of a wonderful career. The directors of the bank were severely criticised; men laughed at his purchase, pointing out that the road had never paid, and prophesying that it never would pay.

Yet that Jim Crow road was the foundation of the Great Northern system, the Hill line, stretching across Dakota and Montana to Puget Sound.

Every man who went into the enterprise with Hill now owns his stock in it as a free gift, for in the intervening years, the cost has been returned to him in the shape of dividends and bonuses. It has never failed to pay regular dividends, and has, perhaps, won public confidence more surely than any other in the country. For James J. Hill has kept faith in the smallest detail with every man who ever entrusted a dollar to his hands. The loyalty of the employes of the Great Northern has pa.s.sed into a proverb, "Once a Hill man, always a Hill man," and it is true. He knows his road as few other men do. Before he bought the St.

Paul & Pacific, he traveled over the route in an ox-cart, studying not only the road, but the people along the way--there weren't many--and the resources of the country. Before he extended his line to the Pacific, he went the whole distance on foot and horseback.

People laughed at him when he announced that he was going to extend his line to the Pacific. No line had ever been built across the continent without a great subsidy from the government--to secure a subsidy was always the first step; besides, it was believed that the country through which the Great Northern was to extend would not even grow wheat, and the new road was promptly dubbed "Hill's Folly." But in 1893, his line reached the Pacific. A few years later, the owners of the great Northern Pacific were begging him to manage that road, too. For he had created business for his road--a great market in the Orient to fill his west-bound freight cars, and a great market in the eastern United States for Puget Sound lumber to fill his east-bound cars. For remember no railroad can make money unless, after it has hauled a loaded car from one end of the line to the other, it can find another load to put in that same car to haul back again. Hill supplied the business and his story is the wonderful story of the development of the Great Northwest.

Which brings us to the Napoleon of the railroad world, E. H. Harriman.

America has never seen another quite like him. When the panic of 1901 was at its height and the financial world seemed trembling in ruins about his head, he refused to break the corner, as he might have done, but sat watching the tape, cool, quiet and calculating, while men failed, banks tottered, and his own a.s.sociates begged him to yield. For the ambition of this man knew no limitation. His kingdom must stretch from sea to sea and from the lakes to the gulf.

His kingdom lay to the south of Hill's, for he ruled the Union Pacific, and between the two men there was ceaseless war. Physically and mentally they were as far apart as two men could be. Hill is a large man, with ma.s.sive head and brow, and his eyes are steady and cool and brown, his lips full and sensitive, his whole personality bespeaking force and decision. Quite different was Harriman; a small, ordinary looking man, with gla.s.ses and a scraggy mustache, giving the impression of nervous force rather than of power; an irritable man, easily angered; a fighter clear through, but fighting sometimes when peace were wiser--that was Harriman.

Harriman was born at Hempstead, Long Island, the son of a clergyman with a large family and a small income. The boy was renowned chiefly for his daily fights and for his aversion to study. At the age of fourteen, he was put to work in a broker's office in Wall street, at eighteen he had a partnership, at twenty-two he bought a seat on the stock exchange, and pretty soon entered the railroad field by getting control of the Illinois Central. He at once inaugurated a new policy. Before that time, the prevailing idea of railroad management was to run a road as cheaply as possible and pay big dividends. Harriman's idea was that the biggest dividends would be secured in the end by making a good road, and he proceeded to carry the idea out by putting his road in the very pink of condition. And it paid.

That was the beginning. His great coup was the rebuilding of the Union Pacific. A railroad with 7,500 miles of track, a giant crushed by its own weight, it had gone into a receivership in the panic of 1893. For five years it stayed there, despite the utmost efforts of the giants of finance to lift it out. Then Harriman got possession of it, and taking an engine and a car, turned the train backward and, running in the day time only, went over the road mile by mile. He decided that the road must be made a good road, and he told his executive committee that he needed for his immediate necessities one hundred millions of dollars!

Well, he got the money and he got good men and went to work. The result was soon apparent. Earnings grew, business increased, and the company's credit improved. Never before in the history of railroading had there been such daring rebuilding. The line was levelled down to a maximum grade of forty-one feet to a mile; two hundred and forty-seven feet were scaled off the top of the Great Divide; millions of cubic yards of dirt and stone were blasted out and moved; tunnels were drilled; and, finally, when the Southern Pacific, too, was acquired, a trestle twenty-three miles long was built across Great Salt Lake, through water thirty feet deep, taking railroad trains farther from land than they had ever yet been run, and shortening the road forty-four miles. And the result? The gross earnings have risen to over $170,000,000 a year, and $28,000,000 a year are distributed in dividends. Truly a transformation from the old water-logged road which Harriman took over.

He had his reverses--he attempted to get hold of the Northern Pacific, but it slipped through his fingers; the Burlington was cut out from under his guns, and so was the Rock Island. James J. Hill outgeneraled him more than once, and he was never able to "get back" at Hill effectively.

With Harriman we shall close this chapter on men of affairs. Many others might have been noted. In fact, none of the great industries of the country has been built up except by inspired work. Armour and Cudahy and Swift made the packing business; Marshall Field built up a business in Chicago rivalling Wanamaker's; August Belmont, William C. Whitney, Levi Leiter, Robert Goelet, Pierre Lorillard, and a hundred others, ama.s.sed great fortunes. Yet there was nothing in their career different to those of the men already considered in this chapter. They had a genius for money-making. Each in some special field; but, beyond that, they did few memorable things. And so we need not pause longer over them here, except to remark, that it is, in the main, to such men as these, that America owes her great material prosperity.

SUMMARY

MORRIS, ROBERT. Born at Liverpool, England, January 20, 1734; came to America, 1747, and settled at Philadelphia; delegate to Continental Congress, 1775-78; gave his credit to a.s.sist in financing Revolution and elected superintendent of finance, 1781; organized Bank of North America, 1781; member of Const.i.tutional Convention, 1787; United States senator, 1789-95; died in debtor's prison at Philadelphia, May 8, 1806.

ASTOR, JOHN JACOB. Born at Waldorf, Germany, July 17, 1763; came to America, 1783, and settled at New York City; founded Astoria, at mouth of Columbia River, 1811; died at New York City, March 29, 1848.

VANDERBILT, CORNELIUS. Born near Stapleton, Staten Island, New York, May 27, 1794; became chief owner Harlem railroad, 1863, and of Hudson River and New York Central roads soon afterwards; died at New York City, January 4, 1877.

STEWART, ALEXANDER TURNEY. Born near Belfast, Ireland, October 12, 1803; came to America, 1823, and established drygoods business at New York City; died there April 10, 1876.

BARNUM, PHINEAS TAYLOR. Born at Bethel, Connecticut, July 5, 1810; opened Barnum's Museum in New York City, 1841; managed Jenny Lind's concert tour, 1850-51; established "Greatest Show on Earth," 1871; died at Bridgeport, Connecticut, April 7, 1891.

SAGE, RUSSELL. Born in Oneida County, New York, August 4, 1816; member of Congress, 1853-57; established himself as broker and money-lender in New York City, 1863; died there, July 22, 1906.

FIELD, CYRUS WEST. Born at Stockbridge, Ma.s.sachusetts, November 30, 1819; in paper business in New York, 1840-53, retiring with a fortune; organized New York, Newfoundland & London Telegraph Company, 1854; Atlantic Telegraph Company, 1856; laid Atlantic cable, 1866; first message over it, July 29; died at New York City, July 12, 1892.

MACKAY, JOHN WILLIAM. Born at Dublin, Ireland, November 28, 1831; came with parents to America, 1840; went to California, 1850; discovered Bonanza mines, 1872; died, July 20, 1902.

GOULD, JAY. Born at Roxbury, New York, May 27, 1836; established himself as broker in New York City, 1859; notorious for manipulations of various railroad and other securities, and for "Black Friday"; died at New York City, December 2, 1892.

WANAMAKER, JOHN. Born at Philadelphia, July 11, 1838; established clothing house of Wanamaker & Brown, 1861; established department store in Philadelphia, 1876, and in New York City, 1896; Postmaster-General, 1889-93; founded Bethany Sunday School, 1858; president Philadelphia Y.

M. C. A., 1870-83.

MORGAN, JOHN PIERPONT. Born at Hartford, Connecticut, April 17, 1837; entered banking business, 1857, and developed present firm of J. P.

Morgan & Co., largest private bankers of the United States.

HILL, JAMES J. Born near Guelph, Ontario, September 16, 1838; removed to Minnesota, 1856; entered transportation business; general manager St.

Paul, Minneapolis & Manitoba Ry. Co., 1879-82; president since 1883; built Great Northern, with steamship connection with j.a.pan and China, 1883-93; president of Great Northern system since 1893.

HARRIMAN, EDWARD HENRY. Born at Hempstead, Long Island; entered Wall Street as clerk at age of fourteen; entered New York Stock Exchange eight years later; was president and chairman of the board of directors of the Union Pacific, Oregon Short Line, Southern Pacific, Texas & New Orleans, and many other great railway systems; died near New York City, September 9, 1909.