My life, both in business and socially, in 1892 was not essentially different from that of 1891. Business continued satisfactory, my profits running up to within a few thousand dollars of the previous year.
My senior clerk, George Norman, had been in my employ for eleven years, coming to me as an office-boy. His salary was now twelve hundred and fifty dollars. I told him that as a clerk he would never be worth more to us, and advised him to start as a broker, which he did.
We gave him a strong endorsement in a circular to the trade, and how well we supported him is shown by the fact that we paid him sixty-six hundred dollars in commissions the first year of his business.
We returned to "Redstone" early in May. Our home, after our New York experience, was more attractive than ever, and we did not believe we would again care to leave it.
My readers will remember my reference in a former chapter to a trade journal which I turned over to George Lawton. On July 9th, in celebration of the commencement of its tenth year, the publisher issued a special number, a copy of which is before me. An article it contains is so completely a confirmation of much that I have written, I insert it here verbatim, except for change of names to comply with my narrative and the omission of irrelevant matter. The article was written by the Secretary of the Exchange:
Since the father is properly considered before the child, it has seemed to us most appropriate in celebrating for the first time the birthday of the [name of the paper], that we should not only make some mention of its founder, but even that we should accord him the first place in our brief memorial; and we have accordingly, rather against his own wishes, prepared the fine portrait of him which serves as a frontispiece to this issue. It is hardly in the character of a journalist that our readers will generally think of Mr. Stowe, although most of them doubtless know that he originated and for several years managed what we have no hesitation in saying isfacile princepsamong * * * trade papers; but rather in his more permanent role of decidedly the most successful among the younger generation of * * * dealers—as a man who has carved out for himself a position as commanding in respect of the * * * market, especially, as is occupied abroad by his London correspondent, the famous A * * * S * * *
A trifle over a quarter of a century ago—in February, 1866—Mr. Stowe entered the office of John Derham as a clerk fresh from school, in which capacity he served for just four years, and then succeeded to the business of this firm as a broker on his own account. A broker in those days was an altogether different sort of cogwheel in the machinery of commerce from the broker of to-day; success depending primarily on geniality of manner, industry and intelligence in the execution of commissions intrusted to him by the jobbing houses; all of which qualifications, Mr. Stowe possessed in an eminent degree, and devoting himself particularly to dealing in * * * advanced rapidly to a position in which the major part of such transactions as were not made directly by importers to consumers, passed through his hands. But his business ability was of a broader type than was needed for such services only, and in the process of evolution, through which the old-fashioned broker was practically eliminated, his place being taken by a new type of dealer, who although not always or even usually trading for his own account, yet makes most of his transactions in his own name, and is chiefly differentiated from the jobber only from the fact that he buys and sells in round parcels and does not break them up to shop out into smaller lots. As this change took place, Mr. Stowe developed into a dealer of a newer and more progressive type than the * * * trade had hitherto known. To-day he stands rather as an importer, the entries to his firm's credit having steadily climbed the list of percentages until they are now far ahead of those belonging to any other house; and with his intimate relations with A. * * S. * * * & Co., of London, it would be making no invidious comparison to say that he is the recognized leader of the * * * trade of America.
For all his remarkably prosperous career, Mr. Stowe has been in no way spoiled by success, and is to-day the same quiet, unassuming gentleman as when these characteristics attracted the good will of older men in the trade and secured to him the beginning of a business which has since grown so largely. He was a late comer to the membership of the Exchange, which he joined only in 1886; but has served on its board of managers for four years past, and since the first of April has held the position of vice-president. Outside of his business, his life is a thoroughly domestic one, for which he has abundant excuse in his beautiful home, "Redstone," at Knollwood, N.J., where he is one of the most popular residents of that charming suburb and where he has a particular claim to distinction in the fine stable which he maintains, his chief hobby being horse flesh, though not on the sporting side, with which we are most likely to associate such a passion. In short, the [name of paper] has every reason to be proud of its parentage, and like all good children delights in doing filial honor and wishing its founder all possible prosperity in the future as in the past.
It was the afternoon of a day in the first week of January, 1893. I sat in an easy chair in front of the open fire in my private office deep in thought. In my hand was the balance-sheet for 1892, showing a profit of over seventy thousand dollars. I was considering both sides of a momentous question. It was whether or not to retire from business.
I had for years looked forward with delightful anticipation to the time when I could do this. I wanted to travel extensively. In my library were many books of travel, all of which had been read with great interest. I had an eager longing to see for myself all parts of the civilized world; not in haste, but at my own leisure. I wanted to devote years to a journey that should cover the globe.
My affairs were in excellent shape. Within a period of sixty days I could liquidate my business and retire with about three hundred thousand dollars. I had my home, complete in its appointments; my library; my stable, with all that it could contribute to our pleasure and comfort; my health, and I was but forty-two years of age. That was one side, now for the other. The largest income I could expect with my capital securely invested would be fifteen thousand dollars. My balance-sheet showed that in 1892 I had drawn forty-four thousand. I considered where my expenditures could be cut down. There was the long list of pensioners, relatives, and friends who for years had been receiving regularly from me a monthly cheque on which they depended for their comfort. Could that be cut off? Surely not.
There was a still longer list of people, many of whom I knew but slightly, who from time to time called on me for help, always as loans but rarely returned. I kept no record of such things and never requested repayment. Could that item be cut out? No, for when a man appealed to me for assistance, I knew not how to refuse him. He always received it.
There were all the charities, St. John's Guild, Fresh-Air Funds, hospitals, home for crippled children, and the personal charities of my wife amongst the poor—could these be dropped? Again, no.
Then I looked at home. The education of our children—my elder son was at Harvard with a liberal allowance; my eldest daughter at Miss Dana's expensive school at Morristown; the rest of the children taught at home by a visiting governess; the girls taking music lessons—nothing could be done here. The education item was bound to increase materially as the children grew older.
Then I thought of the monthly bills from Altman, Arnold, Constable & Co., Lord & Taylor, and others. How about those? Oh no; I loved to see my wife in her beautiful gowns and as the girls developed into young ladies those bills would grow.
There seemed nothing left but the entertainment of our friends. A large expense, but essential to our pleasure and position in society.
I carried a very large life insurance, but did not for a moment think of reducing that.
Then my thoughts carried me farther. Suppose I could get my expenses down to my income, how about the people we were helping in another way, whose income would be seriously affected by my retiring?
There was one of our friends at Knollwood. He was employed on a moderate salary, and when his wife inherited nine hundred dollars he brought it to me and asked me to make some money for him. Now, as a result, he was living in a house he had bought for eleven thousand dollars and to cancel the mortgage of a few thousand he relied upon me. There were those three old gentlemen in Connecticut whose income from their investment with us was allowing them to pass in comfort their declining years. Could I cut this off? No; and there were many others.
It was clear to my mind that my labor was not yet at an end. I must still keep at the helm, but I made a resolution that on my fiftieth birthday I would retire.
In the year 1893 there was one great controlling feature in our market that was to culminate on July first.
For years the commodity in which we dealt had been duty free. The McKinley Tariff Bill imposed a duty of four cents per pound, to go into effect on July 1, 1893, for a period of two years. It was the one senseless clause in an otherwise excellent bill and had been inserted as the only means of securing the necessary votes in the Senate. The sole object of the clause was to influence the speculative value of shares in a certain corporation which is now in the hands of a receiver.
When this corporation was first organized I subscribed for some stock and was in its first board of directors and its vice-president. If there was to be a new source of supply of the commodity I dealt in so largely, it was important I should know of it. As soon as I became satisfied that it was nothing but a scheme to make money by the sale of stock, I resigned and disposed of my holdings to one of the promoters at a profit of eight dollars per share.
Efforts to have the clause repealed had been unsuccessful, and as the duty was certain to be imposed, we thought it wise to import largely prior to July first. Others did the same, and when that date arrived the stock in New York was very large. We held on our own account about one-third of the entire stock and in addition a very large quantity which we had sold to our customers for delivery in July.
Of course, our purchases had been made of our London friends, and during this period our remittances were unusually large, running into several millions. An incident of our correspondence at that time was a postscript in one of their letters calling our attention to the fact that the letter from us, to which they were then replying, had been underpaid in postage and cost them six pence. They requested us to see to it in future that our letters were properly stamped. Think of that, from a concern with whom we were doing a business of millions!
Early in July came the panic. It seemed as if over night all the money in the country had disappeared. In Wall Street fabulous rates were bid for money. Banks and bankers said they had none. Where was it?
When the stock market collapsed and values had depreciated hundreds of millions, money was found by the large insurance companies and the powerful factors of Wall Street to pick up the bargains in shares, but it was some time before merchants could get it. Meanwhile, this class all over the country, after a long period of good times, were caught by the panic with their lines greatly extended. Great houses rating "a million and over" had no actual cash. Property?—Lots of it. Solvent?—Absolutely so, but they could not pay their obligations, nor take deliveries on contracts that required payments against delivery.
Our sales for July delivery amounted to nearly a million of dollars; less than fifty thousand was taken according to contract. The rest we had to carry and our bankers had to carry us. We shall never cease to be grateful for the generous help they gave us in that critical period.
Under these financial conditions it was only natural that all merchandise markets should be greatly depressed.
Our market was weak at eighteen cents, although not a pound could now be imported below twenty-two cents. The large stock seemed to hang as a wet blanket, but as a fact most of it was concentrated in three strong hands. We were the largest holders. I called on the other two and told them it was absurd to sell at the ruling price, and if they would assure me we would not have to take their stock—in other words, if they would hold it off the market—we would buy the floating lots and advance the price close to the importing point. I further offered to give them an equal share of the purchases if they so desired. They asked how much I thought we would have to buy? To which I replied, "Not over five hundred tons."
The agreement was made on the basis of an equal division of the purchases. Slowly but steadily we raised the price, and when the end we sought was accomplished we had bought four hundred and ninety tons. The operation and consequent advance in the market made a difference in the value of our holdings of seventy thousand dollars.
All through the summer of 1893 we had been discussing the advisability of leaving "Redstone" and taking up a permanent residence in New York.
Our children were now at a period when good schools were imperative for their proper education, and such did not exist at Knollwood. Our social life was almost entirely with our New York friends, and though two families of the "Immortal Ten" had become residents of Knollwood they were to leave at the end of the term for which they had rented. The Banfords occupied "Sunnyside," while George Lawton, who had removed to Orange, rented his house to the Todds.
While we were fond of all the New York friends and especially so of Will Curtice and his wife, for George and Charlotte Todd we had a tender spot in our hearts that none of the others quite reached. George, in a way, reminded me of my former friend, Frank Slater; not that he resembled him in feature, but in his possession of a charm of manner that won everybody with whom he came in contact. Versatile, witty, and brilliant in his entertaining power, he was easily the most popular man in our circle. Entering the employment of New York's greatest life insurance company as an office boy, he is today one of its vice-presidents, and this proud position is the well-deserved reward of wonderful ability. His wife is one of those sweet, pretty, clever women that everybody loves.
Ned Banford had met with disaster. He was one of many who were unable to weather the panic. At the time of his failure he was indebted to me five thousand dollars. A day or two before the event he brought me a package of unset pearls which he valued at eight thousand dollars and requested me to hold them as security.
Mr. Viedler, who also was a creditor, was abroad. As soon as he learned of the failure he returned to New York and advanced a considerable sum of money to enable Ned to make a settlement with his merchandise creditors. This took considerable time, and meanwhile I required in my own business the use of all my resources. I told Ned if he could not arrange to repay me I would be forced to sell the pearls, and suggested taking them to Tiffany, where I was well known, and asking them to make an offer. To this he strongly objected, and much to my surprise, in view of all that I had done for him, exhibited a good deal of ill-feeling toward me for taking such a position. I remained firm, however, and fixed a date beyond which I would not wait. The day before the specified time Ned brought to my office Mr. Viedler's cheque to my order for five thousand dollars.
[Illustration: EIGHTY-SIXTH STREET AND WEST END AVENUE]
Throwing the cheque on my desk he said, with a smile, "Here's your money, old man; now I want you to do something for me. Just give me your note for five thousand dollars payable to Viedler." I said, "Why should I do that, Ned? I am not borrowing this money of Viedler. This is not to benefit me—it is to help you and save those pearls."
"Yes, I know," he replied, "but Viedler is a queer sort of chap. He has been putting up a lot of money for me. He wants this done this way and I want to humor him. It will help me and won't hurt you. Payment will never be demanded of you." I asked him if Mr. Viedler was fully informed on the matter and knew what my position was. He replied, "Yes, I have told him all about it." I then gave him the note. The sequel to this incident will come in a later chapter.
As a final result of our summer's deliberation we leased a house at Eighty-sixth Street and West End Avenue and by the first of October had become settled in our new home; the horses we took with us but the ponies were sold. The children had outgrown them. "Redstone" we closed for the winter. In the spring I offered it for rent and quickly found a good tenant in the agent of the Rhinelander estate. Our four daughters were entered at the school of the Misses Ely on Riverside Drive and made rapid and satisfactory progress in their studies.
As soon as we had become thoroughly accustomed to life in New York I think every member of the family was glad of the change. The children made many pleasant friends, enjoyed their school life, their Saturday matinees and drives in the park, and not one of them would have liked to return to Knollwood.
As for my wife and myself, our enjoyment of the life was beyond question. We had always been fond of the theatre and now we saw everything worth seeing. We had a delightful circle of friends whom we were meeting continually. Our home was handsome and spacious. Our appointments fitted it beautifully and every room in the house, from the billiard-room in the basement, up through the four stories was very attractive.
Every pleasant morning I drove the T-cart or tandem through the park to the Fifty-eighth Street Elevated station, and in the afternoon, with the brougham, after calls or shopping, my wife would meet me. When there was sufficient snow to permit it we would have out the large sleigh, and with four-in-hand or three abreast derive keen pleasure from our drive.
For clubs I had little use, though a member of several. For many years I went to the Down-Town Association for luncheon and occasionally after the theatre took my wife to the ladies' dining-room in the Colonial Club for a supper; as a rule, however, we went for these suppers to the Waldorf, where we usually met friends.
With our life in New York commenced a closer intimacy with the Caines, though not of our seeking. They lived nearer to us than any of our friends and their informal calls became very frequent. In a way we liked them. They were chatty, sociable people, though a little too much inclined to gossip. They were not well mated. Both had tempers and the wife had some money, the husband, little or none; consequently there was friction and they lacked the good taste to confine their differences to the privacy of their own apartments. This was a great drawback to our enjoyment of their society.
The winter of 1893 and 1894, crowded with its social pleasures, was soon over, and with the approach of warm weather we sought a summer home.
We had passed so many summers inland, we longed for the water—ocean or sound, preferably the latter. Many places on the Connecticut and Long Island shores were looked at without finding just what we wanted, and it was not until the middle of June that we decided on the W. H. Crossman place at Great Neck, L. I.
The place had many attractions, not the least of which was its accessibility by boat. A sail of an hour twice a day was in itself a great rest for me, and combined with this was a commodious, well-furnished house; fine stable; ample grounds, handsomely laid out; good kitchen garden, planted; plenty of fruit; gardener, and Alderney cows on the place, and best of all a fine bathing beach at the foot of the lawn, with the open Sound before us.
As I sat at dinner I could see the Sound steamers go by on their way east, numerous yachts passing constantly, the Sands Point Light, and across the Sound the New York shore.
We drove to Great Neck from New York on the drag, crossing theFerry to College Point.
On one side of us was King's Point, on the other the beautiful residence of Hazen L. Hoyt. The neighbors were friendly and cordial, all very pleasant people; the drives through the surrounding country delightful, over good roads and under great trees that afforded effectual shade from the sun. Later we experienced a few weeks of torment with the mosquitoes, when out of doors, though the house was kept free from the pests. There were days when my poor horses, though coal black, appeared gray, so thickly were they covered with those ravenous mosquitoes.
We entertained many of our friends during the season and I had some good fishing. When we returned to our home in the fall, taking everything into consideration, we voted the summer's experience a success.
At this time we decided to give our horses a well-earned rest. They were in perfect condition, but we thought it would be a good idea to winter them on a farm, and as I had an acquaintance at Boonton, N. J., who made a business of that sort of thing, I sent them to him, bringing them back to town in the spring. They were well cared for and came back to us like young colts.
During the winter of 1894 and 1895 we saw more of the Caines than ever. One evening early in the season, while on our way to the theatre together, Albert, as he sat back in the carnage, remarked, "I wish I could afford to go to the theatre once a week all winter." I said, "Albert, I will tell you how to fix that. You put in five hundred dollars and I will do the same. I will do a little operating in our market with it and we will devote the profits entirely to amusement."
He sent me his cheque a day or two later, and out of the profits of that little account we certainly derived a great deal of pleasure. Every Saturday night a carriage conveyed us to the theatre, and after the performance to the Waldorf, where we had supper. Then in the Moorish room we took coffee and liqueurs while smoking a cigar and chatting with our wives and the friends we frequently met. Those little affairs cost about thirty dollars an evening, and I so managed the account that there was always a balance on hand.
On one of these evenings an incident occurred that gave me a new light on the character of Albert. It had its humor and I relate it:
The Caines and ourselves were in the Moorish room. We had finished our coffee and I had paid the check. While chatting, we were joined by Mr. and Mrs. Curtice, Mr. and Mrs. Todd, and two other friends, making now, with us, a party of ten. Albert, with just a little undue haste, called a waiter and ordered liqueurs for the party. When the check was brought him, he paid for six and sent the waiter to me to collect for our four, the amount being eighty cents. He wanted the amusement fund to stand part of his hospitality. The others of the party noticed it and smiled significantly. They knew the man better than I did.
Another winter had gone, leaving in its wake agreeable memories of many happy reunions with the friends we had learned to love so well, and once again we faced the problem that comes to so many New Yorkers who do not own their summer home—where shall we go for the heated term?
We were considering whether we would risk another encounter with the mosquitoes and try Great Neck once more, when we heard the Crossman place had been rented, and there was no other place there, in the market, that we cared to take.
Our thoughts turned to the ocean. With my wife I searched the Jersey coast from Seabright down to Asbury Park. Farther than that we did not want to go on account of the length of the trip to and from the city.
On our first visit we cut out every place except Monmouth Beach and Seabright, and on the second took a lease of the Brent Wood Cottage at Monmouth Beach. It was delightfully situated, directly on the beach, a spacious and comfortably furnished house with a large stable.
The house was in good repair, except that it needed painting. As I had taken the lease for two seasons and the owner would do nothing, I had it painted at my expense. We also did some redecorating in some of the rooms, and when the work was finished had a very attractive place.
The grand sail down the harbor and across the lower bay to the Highlands was a source of daily delight to me. I had my own large and nicely furnished stateroom with its private deck, rented by the season, and we were very glad that we missed taking the place at Great Neck.
On the first and second stories there were wide piazzas running around the house, and for hours at a time with my marine glasses at hand to look at passing steamers, I sat and enjoyed, what has always been a fascination to me, watching the magnificent surf crashing and dashing on the beach below. The house was protected by a formidable bulkhead, but it was no uncommon occurrence to have great showers of spray come dashing over it.
To watch the moon rise out of the sea, to listen to the roaring of those ceaseless waves, the last thing before I slept at night and the first thing on awakening in the morning, had for me a charm unequalled by anything in Nature's wonders. And those September storms, particularly severe that year, awe-inspiring in their mighty grandeur.
Oh! there is nothing like the ocean.
On July first, the two years having expired, the commodity in which we dealt again went on the free list. Naturally, stocks in this country had been reduced to a very low point. With four cents per pound duty removed, no one wanted any of the old stock, which had paid the duty, on hand. Every consumer and dealer in the country was bare of supplies and a very active demand from all sources set in immediately.
When we abandoned the brokerage business to become importers and dealers, our relations with our London friends changed. We bought of them all that we imported and they sold to no other American firm. If they bought in this market, their orders came to us. With their movements we worked in sympathy. If they advanced the price in London we did the same in New York and vice-versa. We were in constant cable communication, informing each other from hour to hour of the market movements.
There were times, however, when they entered into market campaigns that extended over a long period. In these we did not fully participate. Our market was too narrow to permit of it, and it involved the locking up of too much capital.
In August, in accordance with our London advices, we began quietly to accumulate stock in expectation of a much higher market late in the fall. We remained persistent though quiet buyers until October, meanwhile doing our utmost to hold the market down that we might buy cheaply. We looked to see the operation completed by the end of the year, with a very handsome profit. Early in October our stock was sufficiently large to make it an object to advance the price, and our buying became more aggressive.
Just when the value began to rise, the London market halted. This at once checked the advance in New York and for the time being we had a waiting game on our hands, it being quite impossible for our market to advance above the London parity and remain there. We must wait for London.
After a moderate reaction London again advanced and we bought here freely everything that was offered. Again London halted. All through November conditions were the same; a few days of strength, then a reaction, meanwhile our stock had been largely increased. At the beginning of December our advices from London led us to believe that all hesitation would now disappear and the market rapidly advance. Our holdings were already enormous, but we had no reason to doubt the success of our operations, and continued our purchases.
December 17, 1895, will ever remain in the memory of business men, at least of this generation, as the day when President Cleveland transmitted to Congress his Venezuelan message, a piece of jingoism which was entirely uncalled for and resulted in disastrous consequences to the commercial interests of the country. It came as a flash of lightning from a clear sky. It was the direct and immediate cause of a stock and money panic in Wall Street which, while it added largely to the wealth of certain individuals, brought disaster and ruin to many.
If, my reader, you do not already know, ask any well-informed stock broker of that period who it was that sold the market short on an enormous scale during the few days prior to the message, and when he tells you the name draw your own deductions. You will not require to be a Sherlock Holmes.
We knew just before this fateful day that at last we had undertaken an operation which was to result in loss, and a heavy one, but we never dreamed it was to be our Waterloo—nor would it have been except for the acute stringency in the money market, the result of that Venezuelan message.
Our commitments for the end of December and first week of January were unusually heavy. We met them with increasing difficulty until the twenty-eighth of December and then came our failure.
I was dazed at the extent of the catastrophe. I could not realize that a business which I had built up from nothing to a volume of nearly fifteen millions a year with more than eight hundred active accounts on the books, and out of which I had made a fortune, was swept away, leaving me only a mountain of debt.
Alas, it was only too true. The liabilities were nearly one and one-half millions. Of course, there were large assets, mostly merchandise, but everything was gone, and my wife threw in "Redstone," which had cost me forty thousand dollars, with the rest.
As soon as I recovered myself, I had a meeting with my creditors, all of whom were most kindly disposed, and my statement was accepted without any examination of the books of the firm. Outside of our regular bankers we had heavy loans in which there were large equities. Arrangements were made and these loans taken up at once.
Our position had been so prominent and our holdings were so large, the news of the failure caused a heavy decline, which carried the price down to almost the lowest figure in the history of the trade; but not one ton of our stock was thrown on the market and we ourselves liquidated the business over a period of several months.
Our former clerk, the broker, George Norman, also failed, claiming our failure as the cause.
In our operations it was often necessary to cover our identity by using a broker's name, an established custom in many lines of business. We had favored George largely and our business had been very profitable to him. We did not know at the time, but learned a little later, that prices on the contracts made through him were on our books in excess of the prices he had paid the seller, whereas they should have agreed. This really made him a principal instead of a broker. Actually he had bought of sellers for his own account at one price and sold to us at a higher price, he making the difference in addition to his commissions. His representations to us were always that the price we were paying him was the lowest the seller would accept.
Norman also had been operating on his own account, and by failing escaped his losses. The general opinion of the trade was that he really made money by his failure.
On our books at the time of the failure were a number of discretionary accounts. All of these clients were our friends, and most of them had been with us for many years and had received their investments back in profits over and over again. In order to do justice to all we had to syndicate these accounts. The combined capital was large and the operations had always been very profitable.
These clients had come to us without our solicitation and it was distinctly understood from the start that their investment was at their own risk. All this money was now lost. We had no legal liability, but we did feel, as they were friends, that there was a moral responsibility and we told them one and all we would accept it.
We did something else for them; a few knew it at the time and showed their appreciation. Some of them will not know it until they read it here.
Every one of those clients could have been held as an undisclosed partner, for a very large part of our losses were made in the December operations for the syndicate. Morally, they were not responsible, for they never intended assuming any such liability, nor would we have allowed them to; but legally, technically, they were liable, and we saved them, keeping the burden where it had fallen, on our own shoulders. We had one discretionary account that was not in the syndicate. It was the account of Albert Caine. This was operated under our guarantee against loss, we taking half the profits as compensation for the guarantee. Although this account stood in Albert's name, it was his wife's money and her investment. It had been running for a long time and profits had been paid her to the extent of about forty-seven hundred dollars.
Although we had not the affection for the Caines we had for others in our circle of friends, we were extremely intimate. I have told of our amusement fund and of how residing near each other we were meeting them continually. They had visited us at "Redstone," at Great Neck, and at Monmouth Beach, and I hardly expected they would be the first to desert us. They were—and worse.
As soon as Caine heard of the failure he began a search for property to attach. He told a mutual friend that papers were being drawn to attach the horses and carriages and the house furniture. For some reasons he changed his mind, which was just as well, as all were beyond his reach.
Then he made a statement reflecting on me, giving as his authority my bankers, on whom he had called. This I took up at once. I knew it was false.
Without letting him know the object, I arranged an interview at my lawyer's office, which he attended, accompanied by his lawyer. I had asked George Todd to be there as a witness who could relate an account of the interview to our mutual friends. Caine, when he saw Todd, objected to his presence, but he remained.
My lawyer repeated the statement and asked Caine if he had made it. He replied, "Yes." He asked him if the banker had told him this, and he answered, "No."
Then Todd said, "Albert, do I understand you to say that this statement you made and said you had heard from the bankers, you admit having made, and now say that you did not hear it, and that it was a lie"? To which he replied, "Yes," and burst into tears. That ended the interview and thereafter the Caines were ostracised by our circle of friends.
A little later Mrs. Caine commenced suit. Just to tease her I fought the case, claiming that while guaranteeing against loss, I had not guaranteed profits, and that these should be deducted. After keeping her on the "anxious seat" for about two years she secured a judgment for the full amount, and she owns to-day the only judgment against me. She would have had more money now had she remained a friend.
There were two of my liabilities that distressed me far more than the others and one of these caused me the keenest anguish of mind. At the time of the settlement of the Slater estate, Mr. Pell, Mrs. Slater's father, was a creditor for fourteen thousand dollars. Frank had been using this money and had paid Mr. Pell ten per cent. per annum on it, not regarding it as a matter of interest, but merely to give the old gentleman, who was out of business and becoming feeble, a certain amount of income. Mr. Pell asked me as a favor to take this money and do the same for him as Frank had been doing. I did so, and later he added two thousand dollars to the amount, so that I owed him in all sixteen thousand dollars.
The other liability was for twenty-five thousand dollars due to Mrs. Slater. There had been a time a year or two back when temporarily my resources were pretty well tied up, and I then borrowed this amount of Mrs. Slater. When I asked her at the time if she wanted to help me out, she replied, "I am only too delighted, Walter, to do anything you ask," and she meant it. The loan was made without security and was an act of purest friendship. To make it she had to withdraw the money from her invested funds and of course I told her this would not diminish her income.
It was this liability to Mrs. Slater that caused me such torture of mind. The one thing that slightly relieved this feeling was the knowledge that neither she nor Mr. Pell wanted the money. If the income could be kept up, and this I hoped to accomplish, I could take my own time for repayment of the principal.
My mail was crowded for days with letters of sympathy. Practically all our out-of-town customers wrote us, and to their kindly expressions of regret for our disaster was added the hope that we would continue in business, and promises of hearty support in the matter of sending us their orders.
With our competitors it was different. One or two called on us and were sincere in their regret. Others, as we met them, talked the same way, but we knew they did not mean it; and one, a Sunday-school teacher whom I described in an earlier chapter as doing business on a paving-stone heart, was reported to me as having made derogatory remarks regarding us.
As soon as this report reached me, I went at once to his office, and while his face crimsoned in his confusion at being confronted, he denied that he had made the remark. I accepted his denial, though I did not believe him. I had no more use for him than for the sort of Christianity of which he is an example, and thereafter I treated him with the barest civility.
One of my friends once said to me, "Stowe, it is worth all the trouble you have had to find out what a noble woman your wife is"; and his wife added, "She is the bravest woman I ever knew."
Did not I know full well the bravery of the woman?
Had not her character and nobility of soul been revealed to me time and again in the troubles that beset us in the early years of our married life? True, this catastrophe immeasurably overshadowed anything that had come to us before, but I knew how my wife would take it and I was not disappointed.
If it were possible, she loved me more than ever. Her constant effort was to cheer me up, keep up my courage by imparting her own brave spirit to mine. Never a word of regret for all the luxuries and many comforts that must now be given up, never a suspicion of despondency. Only the brightest of smiles and most tender caresses were lavished on me by my devoted wife, and with all was her earnest desire to do what she could to lighten my burdens and to share in the struggle before us.
The same spirit animated the children. One and all they supported me by their strong affection shown in every possible way.
Immediately following my disaster the loyalty and regard of my social friends, with the one exception of the Caines, was shown on all sides. Kindly letters and personal calls were numerous and did much to relieve the terrible feeling of despondency that weighed me down.
The bright particular star in this firmament of friends was Mrs. Slater. She had made a heavy loss that she could ill afford and she accepted it without a shadow of reproach to me. Of course she expected and hoped that at some time I would be able to repay her, but this thought did not influence her in her stanch friendship. Had she known there was no possible hope of my ever repaying her, her feeling toward me would have been the same. Mrs. Caine, who knew her, while calling and in a spirit of malice endeavored to turn her against me. As a result, the call was never returned, and the acquaintance ceased.
At this time I was seeking no favors from friends except in one little matter in which I was assisted by George Todd and Will Curtice. They were not called upon for financial aid, but they guaranteed my carrying out an agreement which made them jointly liable to the extent of four thousand dollars. I fulfilled my obligation and then returned their guarantee.
The spirit shown by the tradespeople with whom I had dealings touched me deeply. I had always been prompt in the settlement of bills and immediately after my failure every account of this character was paid at once. Of course we immediately cut off all unnecessary expense.
King, the well-known up-town fish dealer, had been serving us oysters and fish regularly each day. We were through now with course dinners and these items were cut out. The next day I received a letter from him, from which I quote:
"I want your trade if it's only a pound of codfish a week, and you can pay once a month, once a year, or whenever it pleases you."
Then there was old Tom Ward, the coal dealer. I had in my cellar about thirty tons of coal and I called at his office to get him to send for it and pay me what he could afford to. As I entered the door he sprang forward with outstretched hand, saying, "Mr. Stowe, I am glad to see you, and I want to say you're the whitest little man on the West Side, and I have a few hundred dollars in the bank. If you want them you're welcome to them." My tailor, with whom I had traded for a great many years, told me I could always have anything in his shop and no bills would be rendered until asked for. And so it was with all.
Of the house on Eighty-sixth Street, I had a lease at three thousand dollars a year. My landlord, Mr. W. E. D. Stokes, told me to "remain until the end of the lease and not bother about the rent." I accepted this offer for one month. The Misses Ely, where the girls attended school, called on my wife and asked her to continue the girls for the rest of the school year without charge. The larger tradesmen, such as Tiffany, Altman; Arnold, Constable, and the like, all wanted our account kept on their books, but we were through with the pomps and vanities and had no use for them. My coachman offered me his savings and with the house servants it was the same.
Before the end of January arrangements had been completed for our new scale of living. The horses and carriages, representing an investment of ten thousand dollars, I sold for less than two thousand. There was no time to look for buyers and I made a forced sale. Of the contents of our home we sold nothing except a panoply of armor and one piece of bronze. These, Mrs. Veidler, who had always admired them, bought, and added to the appointments of her Fifth Avenue home.
At Westfield, N. J., we were offered a large house with modern conveniences, well-stocked conservatory, and attractive grounds, at a rental of fifty dollars per month. This we accepted, and on the eighth of February took possession.
Before leaving the city we were entertained at a series of dinners and theatre parties given by our friends of the "Immortal Ten," and though these occasions were somewhat saddening, partaking of the nature of a farewell honor to a fallen "Prince," we appreciated the compliment.
"W. E. STOWE & CO., INCORPORATED"
At the suggestion of my attorneys, I decided to continue the business as a corporation.
The reason for this was that I wanted to continue under the same firm name and not as an agent, and while aside from Caine there were no antagonistic creditors, it was deemed wise to provide against any possibility of such appearing later on and jeopardizing the new capital which I expected to raise without difficulty.
As a matter of fact no creditor except Caine ever assumed such an attitude.
Under the laws of West Virginia a corporation was organized as W.E. Stowe & Co., Incorporated.
The charter was made broad enough to cover every possible branch of the business and the capital stock fixed at twenty-five thousand dollars with liberty to increase to one million.
The organization was completed by electing as officers members of my family, and the ten per cent required by law to be paid in was raised in part by my wife by the sale of personal property and the remainder by myself in a loan from a gentleman who was one of the heaviest losers in the operations carried on for our friends.
My bankers, within certain reasonable limits and restrictions, promised me their assistance, and I believed I would soon again be on the highway to prosperity.
The first step was to raise the twenty-two thousand five hundred dollars to complete the capitalization.
This seemed easy; why not? There was my friend Viedler; a man worth several millions. He had been warmly sympathetic in his expressions of regret at my misfortune. He and Mrs. Viedler had always shown a cordial fondness for us, which we reciprocated. The social intimacy had been close and always delightful.
At first I thought I would ask him for the entire amount, then concluded to ask for five thousand dollars, really believing he would comply with pleasure and offer more if wanted.
I wrote him asking for the money as a loan, telling him the purpose for which it was wanted and offering to give him a lien on my library, if he so desired, as security.
By return mail came a brief reply, typewritten and signed by his secretary: "Mr. Viedler makes no more personal loans."
That was the sum and substance of the communication, and the first intimation I had that another friend had deserted us. It was such a surprise that I did not fully realize the fact until I had re-read the letter.
Some months later I was informed, to my complete astonishment, that Mr. Viedler had some feeling against me because I had not protected him on that note for five thousand dollars he held and which it will be remembered I gave to Banford in 1893 without any consideration and solely as a matter of accommodation to him. The pearls which I held as security for the money due me from Banford, had been, at Viedler's request, consigned to him for sale, under an agreement by which Banford was to pay out of the proceeds to Mr. Viedler the amount of the note with interest. At the time of the consignment I handed to Mr. Viedler's secretary an order on Banford directing him to do this.
If Mr. Viedler had considered that note my liability it is most singular he did not demand payment at its maturity early in 1894.
As soon as I learned of his feelings in the matter I wrote him on the subject and asked for an interview that we might go into every detail of the transaction. This he declined, and it became evident to me he knew there was no cause for the feeling he claimed to have, and his refusing to aid me was simply for the reason he did not want to, which, of course, was his indisputable right.
Well; Viedler had failed me, who next?
On my desk, amongst the letters of sympathy received immediately after my failure, was one from a prominent Wall Street man, whom I had known for many years and who for a time had been one of my neighbors at Knollwood. I wrote to him about the same as I had written Viedler.
The return mail brought his reply, written personally, expressing regret that he was "unable to assist me as he was a large borrower himself."
All stock brokers are large borrowers in their business, but here was an instance in which this universal custom was given as an excuse for not making a loan of five thousand dollars to a friend in trouble.
And who was this man? Here is what Thomas W. Lawson had to say of him in one of the chapters of "Frenzied Finance":
J*** M*** deserves more than a mere passing mention here, for he was at this time a distinguished Wall Street character and one of the ablest practitioners of finance in the Country. During the last fifteen years of his life, M*** was party to more confidential jobs and deals than all other contemporaneous financiers, and he handled them with great skill and high art. Big, jolly, generous, a royal eater and drinker, an associate of the rich, the friend of the poor, a many-times millionaire.
Another friend off the list—but there were many left. Now for the next one. "The third time a charm"—perhaps.
Again I turned to the letters on my desk. This time I took up one from a former mayor of New York. A man widely known, politically, socially, and as a philanthropist.
His kind letter when received had been a pleasant surprise to me. I had known him but a few years and could not claim a very close intimacy, though he had always been most cordial and our families were acquainted. As I re-read his letter it seemed to me as if it invited me to address him under just such circumstances as then existed.
Again, and for the third time, my messenger went forth seeking for the friend who would help a man when he is down.
The reply came promptly enough and brought me the information that my friend did not "desire to invest in any new business."
I had not asked him to; my request was for a loan, but his answer was all-sufficient.
Despondency followed. Where is the use? I asked myself. "To succeed is to win fame; to fail, a crime." "The world has no use for an unsuccessful man." Thus I gave up the attempt to raise a sum of money that, before I made the effort, seemed but a trifle, "light as air."
During the summer two of our Connecticut friends, who had been members of the syndicate, between them made me a loan of six thousand dollars, and this gave me a capital of eighty-five hundred dollars. With this I attempted to save what I could of the enormous business I had built up. How absurd it seemed, and yet my courage was far from gone.
By midsummer of 1896 the liquidation of the affairs of the old firm was practically completed; that is, in so far as related to the conversion of our assets into cash and payment of the proceeds to our creditors. These payments were very large, but there was still a heavy deficiency, which I hoped in time to pay in full with interest, gigantic as the burden seemed.
Every business day found me at my office working early and late as I had never worked before. With but one clerk and an office-boy, a vast amount of detail had to be undertaken by myself. Night after night my thoughts were almost constantly on plans to keep together the business I had established.
I was fighting an octopus. My competitors all were arrayed against me with a force I had never before experienced. They spared no effort to crush the man who had beaten them over and over again in battles for commercial supremacy. It was their turn now and they showed no mercy.
But how different was the warfare waged on me! In the days gone by I had struck them powerful blows, straight from the shoulder; but a foul blow?—never! No man, living or dead, can or could say I did not fight fair. Nor did I ever press an advantage unduly or profit by the necessities of a competitor.
Here was one enemy, sneaking through the trade with his lying tongue, always under cover, doing his utmost to injure me. Had that man forgotten the day in 1888 when he came to my office and told me he would be ruined unless our London friends would accept a compromise from him and asked me to cable urging them to do so? Had he forgotten how on the following day, when I showed him the reply reading, "Risk of buyers does not concern us. Cannot assist," he raised his hands, and shouting, "My God! what shall I do"? almost collapsed?Surelyhe must have forgotten how I told him that I would stand between him and ruin, allowed him to settle on his own terms, and carried him along for years.
Here was another enemy, a different stripe of man. He sat in his palatial office and never let an opportunity pass to thrust a knife in my back. His blows, less coarse and brutal, were even more effective, for they were backed by the weight of great wealth and respectability. An adept in the refinement of cruelty, between Sundays, when as a vestryman of a prominent church he presumably asked forgiveness of his sins, he did all that he could by false insinuations to help along the work of putting down and out forever the man who had never done him an injury, or conquered him in any way not warranted by fair and generous business competition.
There were many like this man.
I had to fight against practically unlimited wealth in the hands of a score of bitter enemies, men without conscience in the matter of crushing a competitor. Anything to beat Stowe was the war-cry; get the orders away from him, no matter what the cost, the plan of campaign. Those men knew I could not long survive if they could keep me from getting business.
To fight them back I had complete knowledge of the trade, great personal popularity with my customers, and only eighty-five hundred dollars capital. The last item was the weak point. Had I controlled even only one hundred thousand dollars I believe with all their wealth I could have beaten them to a standstill.
My customers stood nobly by me. There were hundreds of instances when telegrams came to the office advising me of my competitors' quotations and giving me the opportunity to meet the price and secure the business. I never lost an order that the buyer did not write and express his regret at our failure to secure it; but I could not do business at a loss, my competitors knew this, and that sooner or later they must surely win the fight.
From business on the Exchange I was barred until after final settlement with creditors. As a matter of fact this was more of a loss to the Exchange than to me. During 1895 our name had appeared on the contracts of fully ninety per cent. of all the business done on the floor, and in the five years immediately following our failure the entire business did not equal that of any two months in 1895.
On December 3lst, I found the volume of business for the year had been less than a million of dollars as compared with nearly fifteen millions in 1895.
Competition had cut into the percentage of profit to such an extent that what I had made was insufficient to counterbalance my expenditures.
Office and home expenses had been kept down to small figures; I had made the regular monthly payments to Mrs. Slater and to Mr. Pell and in addition made some payments of interest on the moral obligations to our Connecticut friends, but my little capital had to some extent been impaired.
The year at Westfield in its home life was far from unpleasant. Our reduced circumstances had not deprived us of the ordinary comforts. We still had our library and the handsome appointments of our former home, and though these latter were out of keeping with the house we enjoyed them.
The game of billiards after dinner, while I smoked my cigar, served to distract for the time being my thoughts from business worries, and for out-of-door exercise we took almost daily spins on our wheels, which had been substituted for the horses.
We made one delightful trip on those wheels during the summer. With my wife, a son, and a daughter, we started on Friday afternoon, and after spending the night in Morristown, went on the next day to Lake Hopatcong, returning home on Monday (Labor Day).
On Sunday, in our wandering, we visited all the familiar spots and recalled the many drag trips we had taken there with our friends as our guests and wondered if we would ever again repeat those pleasant experiences.
We dwelt particularly on one trip, brought to mind by a visit to the Bertrand Island Club. While there we looked back in the register at a sketch made by my friend and architect, Charlie Fitch. He and his wife were included with our guests on that occasion, and after asking me to allow him to register the party he filled a page with an artistic sketch of "Redstone" with the drag in the foreground.
Charlie Wood and his wife also were of that party, and at a dinner at "Redstone" on our return he sang a song composed by himself for the occasion. I quote a few lines:
"Here's a good health to the Lake in the hills,Here's to the hand that our glass ever fills,The Kodak and Banjo;But principally, mind you,To the fellow who pays the bills."
This chapter covering the first year after my failure would be incomplete without its testimony to the devotion of my wife and children under the new conditions. My wife was a glorious sunbeam whose rays of cheerfulness never dimmed. Her wonderful spirits and courage lifted me out of the Slough of Despondency, and her love and tenderness supported me through every trial.
The children, from my elder son, who had cut short his college course and joined me in the office, down to the baby of the family, then a girl of eight years, were constant in their efforts to contribute to my comfort and happiness.
At the commencement of 1897 it seemed as if everything was against me. In the trade the fight for my customers was waged with renewed vigor, and one after another names which had been on our books for years were dropped from the lists of our supporters. We tried to retain them and they tried to have us do so, giving us every possible advantage, but it was useless.
We could not compete against the wealth of our competitors. In our efforts to do this we made losses, small in individual instances, but we knew if continued our little capital would soon be exhausted. Our banking facilities since the liquidation of the old affairs had been greatly restricted. The business was now too small to be of any interest to the bankers and the commissions exacted cut into the profits to such an extent there was nothing left for us.
With no capital, our London connection had entirely lost its value, and this same lack of capital prevented us from doing business with our old speculative clients.
With my mind harassed by the weight of my monthly obligations, support of family, office expenses, payments to Mrs. Slater and Mr. Pell, and the more or less constant inquiry from some of my moral (as I call them) creditors as to how soon I could commence making them monthly payments, my brain was well-nigh turned.
I was beginning to realize the true meaning of the word desperation. Is it any wonder that in this condition of mind my judgment should have failed me or that my operations should turn out badly? At all events, such was the case. Whatever I did in the market it always seemed as if a relentless fate pursued me.
I felt as if I must make money and I lost it.
Through this time of trial my wife was still the same loving, cheerful helpmate. Nothing could daunt her courage nor depress her spirits. If she had her hours of worry, she kept them from me.
We decided to move into a smaller house and sell our surplus household appointments, works of art, and my library. It was hard to part with all the beautiful things we had lived amongst so long, and when it came to the library I fear our tears were very close to the surface.
We arranged for a small house at Sound Beach, Connecticut, a new and pretty cottage directly on the Sound. Our small payments were to apply on the purchase and we hoped in this way to once more own a home.
Early in April there was a three-days' sale at the Knickerbocker auction rooms. I attended the sale and witnessed, with aching heart, the slaughter—for such it proved. With the exception of an exquisite set of Webb cut glass, manufactured on an original design and never duplicated, and a very small part of the rare china, the prices realized averaged but little more than ten per cent. of the cost. The great chest of Gorham silver brought hardly its bullion value.
A few pieces I could not see so sacrificed and bought them in. The fine hall clock, which had cost me six hundred and fifty dollars, I could not let go for seventy-five. An imported cabinet, costing two hundred dollars, at eighteen; a Tiffany vase for which I had paid seventy dollars, at eight, and so on; but I had to stop some where, and so most of the things were sold. Within a few days I sold at private sale what I had bought in, but realized only a little more than the auction prices.
Then came the paintings. These were sent to a down-town auction room. All but four, which I withdrew, I saw sold at absurdly low prices. The four and the hall clock, representing a cost value of twenty-seven hundred dollars, were taken by Charlie Wood in cancellation of a debt of five hundred and seventy-five dollars, borrowed money. He certainly was well paid.
And now the library. Two small cases had been reserved from our furniture sale, and these were to be filled with—what? There was hardly a book in the whole library we did not love and cherish as a friend. How were we to make the selection?
Dickens, Scott, Thackeray, Fielding, Prescott, Irving, Hawthorne, the British Poets, Dumas, Lever, Cooper, Strickland, Kingsley, Bulwer—these, all beautiful sets bound by Riviere, Zahnsdorff and other noted binders, must be sold on account of their money value. Over and over again we went through the catalogue and finally our task was completed.
As I carefully packed case after case of the books destined for sale, it seemed almost like burying a child when I nailed the covers down.
The sale was at Bangs. The first day I attended but had not the courage to go the second day. There were but few private buyers, and hundreds of the volumes went back to the shelves of the booksellers from whom I had purchased them. They told me afterwards they were amazed at getting them so low.
In April we took possession of the cottage at Sound Beach. The house, though very small, was comfortable and cozy, and the lawn extended to the shore of the Sound, at that point rocky and picturesque.
With freedom from care I could have been very happy in the new home; 'but with constant worry over the struggle for existence, this was impossible. Despite my best efforts, matters continued to go wrong, and before the summer was over I had reached the end of my resources.
Then commenced the bitter struggle with real poverty.
It was impossible to keep out of debt for current expenses at home and in the office. For the first time in my life I had become "slow-pay" to small tradesmen. "Buy nothing you cannot pay for" is all right in theory, but let those who preach it put themselves in my place in those dark days. There were days and weeks when the house would have been bare of food if the grocer and butcher had refused me credit. There were days at the office when letters had to be held over night for lack of money to pay postage.
My wife, unknown to me and in hope of helping me over the hard spot, wrote to Mr. Viedler, asking him for a loan of a few hundred dollars. He never replied to her letter. Then she wrote to Charlie Wood. From him came a reply, that if I had not read it, I would never have believed him capable of writing.
It was the first wickedly cruel blow dealt me by one whom I regarded as a warm personal friend, and the cruelty was vastly accentuated by dealing it through my wife.
In his letter he gave as a reason for not making the loan that I had caused him to lose fifty thousand dollars—that as a result he had been compelled to pay for his home, recently completed, and one of the handsomest in Orange, New Jersey, in part by mortgage; further, in writing, he went out of his way to express himself, with an ability for which he is noted, in most unkind and bitter terms.
Here are the facts:
At our first interview after my failure I said, "Charlie, I am sorry for your loss." To which he replied, "Walter, you do not owe me a cent." He had invested with us fifty-four thousand dollars, but he had drawn in profits thirty-two thousand, so that his actual loss was but twenty-two thousand dollars.
In 1890,only two weeksafter he had declined to share with me that small investment in the Connecticut concern to benefit the estate of his deceased partner, because he "could not go into any outside investment," he came to my office and asked me to take eighteen thousand dollars, to be—and was—later increased, for operations in our market. I took it, not that I wanted it, but for the reason that he was a friend who asked me to help him and as was the case with every such investment, except Caine's, it was distinctly understood that the risk of loss was the investor's.
When I negotiated the sale of this man's interest in those properties to Mallison I secured him at least twenty-five thousand dollars more than he expected or could have gotten himself, and it was on that occasion his wife exclaimed, "Oh, Walter, what a friend you have been"! He also was one of those investors whom I relieved from being held as an undisclosed partner at the time of my failure—and this man was my friend!
To the letter he had written to my wife I replied, resenting indignantly the falsity and injustice of his charges and offering the vouchers to prove my statements. His answer was conciliatory, and admitted that "the facts were really much better" than he supposed.
In those days I thought often of the many I had assisted in the past and wondered if the "bread cast upon the waters would return to me after many days" Of course I did occasionally find a friend who helped a little, but these were few and far between.
There was one man whom I had once loaned three hundred dollars. He asked for the loan, to be returned in two weeks. I never asked for the money and it was not until more than two years had passed that he had returned it. I wrote him in 1897 asking a loan of one hundred dollars for a few weeks. In reply he wrote: "You will be surprised at my not granting you this small favor, but I have lost so much money through loans to friends that I make no more personal loans."
Throughout the year there was no improvement in my affairs. I managed to keep the debts for current expenses down to small figures, altogether not more than a few hundred dollars, but I was always a month or two behind, both in the office and at home.
We welcomed the end of the year, for we felt that any change must be for better. I could not see how it could be much worse.