THE ARENA.

EDITED BY JOHN CLARK RIDPATH, LL. D.

VOL. XVIII

July to December, 1897

published by
THE ARENA COMPANY
Boston, Mass.
1897

Copyrighted, 1897
by
THE ARENA COMPANY.

Skinner, Bartlett & Co., 7 Federal Court, Boston.

CONTENTS.

ILLUSTRATIONS.

THE ARENA.

THE CITADEL OF THE MONEY POWER.

During the earlier part of this century the banking interests of Wall Street quite overshadowed those of the stock market. The growth of railway securities was not fairly under way until the opening of the fifth decade. Elderly men can recall the date when the New York Central existed only as a series of connecting links between Buffalo and Albany, under half-a-dozen different names of incorporation; and passenger cars were slowly and laboriously hoisted by chain power over the “divide” between the latter city and Schenectady. Since there were but few railways in the entire country, there were few opportunities for speculative dealings in their shares. These shares, too, were as a rule locally held, and were more frequently transferred by executors under court orders than by brokers on the stock exchange.

Prior to 1840 and 1845, however, the members of the stock exchange were not idle. Public stocks were largely dealt in. The United States government frequently issued bonds, and the prices of these bonds fluctuated sufficiently to afford tempting chances of profits. State bonds also were sold in Wall Street in larger amounts than to-day. About the year 1850 the sales of Missouri sixes and Ohio sixes frequently amounted to millions of dollars daily. During that uncertain epoch of finance when the United States Bank was both a financial and a political power, the shares of that institution were a favorite subject of speculative dealing. The shares of Delaware & Hudson, and of the original Erie Railway, the latter laboriously constructed over a rough, barren, and thinly settled portion of the State, partly by State funds, had also become actively exchangeable in the market.

During this period a relatively enormous quantity of banking capital had located itself in and near Wall Street. The Bank of New York existed before 1800, and later, although not long after, the Street witnessed the erection of buildings of a now obsolete, and yet at that time an attractive, style of architecture, devoted to the uses of the Manhattan Banking Company, the Bank of America, the Merchants, the Union, the Bank of Commerce, and others. Were it not that land in the banking district is so valuable, and that the need of upstair offices is so great, one might be tempted to regret the demolition of the graceful money temples occupied by three of these corporations on the north side of Wall Street. In each of them the entablature rested upon two fluted stone pillars with Doric capitals, in addition to the supports of the side walls. Between the steps and the doors of the temple extended a marble-paved court which often served as a convenient place of ‘change for borrowers and lenders. Entering the doors you found yourself in a large, airy, dome-lighted room, the sides of which were occupied by the clerks of the institution, guarded by high barricades from the intrusive eyes and feet of the general public. At the rear were the offices of the president and cashier. Throughout the entire building there reigned a solemn and semi-religious silence. One may witness something like this to-day in the Wall-Street end of the U. S. Treasury Building, and only there.

Up to the epoch of the rise of railway building and railway-share speculation, the main aliment of Wall-Street banks was the profit derived from the discount of commercial paper and from loans upon government and State securities. But when railway shares and bonds, based upon lines of road which were constructed through the rich regions of the Union lying between the Atlantic and the Mississippi river, came upon the market in large amounts, affording ample security for investment and loans, the great banks of Wall Street were quick to appreciate the advantages of loans made upon such undoubted values, which were at all times convertible into cash on the stock exchange. In times of pressure, commercial paper is an inferior asset for a bank, all of whose obligations are payable on demand. At such times notes become practically unsalable, and are not always paid at maturity. A failure of one firm brings down others, and renewals are urgently required from banks just when they are least able to grant them. Salable securities are on such occasions an ark of safety, and, dating from the early fifties, this class of securities has always been the basis of a large amount of the loans of the banks of Wall Street and their near neighbors of the same class in lower Nassau Street and also Broadway.

With the immense outgrowth of business consequent upon the discovery of gold in California in 1849, and the construction of the great railways of the Middle West, such as the Michigan Southern, the Northern Indiana (now the Lake Shore), the Michigan Central, the Galena & Chicago, the Rock Island, and others of like importance and real value, the banks and banking houses of Wall Street, and the stock exchange, grew into most important factors in developing the prosperity of the country. Enterprises were originated by able men acting under corporate powers, and when these were brought before the committees of the stock exchange and duly approved and listed, capital instantly flowed forth from its reservoirs in answer to the securities thus offered. And it may safely be said that but for the combined machinery of the New York banks and the stock exchange the actual developments of twenty years would have dragged laboriously through an entire century.

Amid so much progress and activity, speculation was not idle. Those were the days of many of our greatest railway operators, daring, able, enthusiastic men, who had the rare gift of imparting confidence to their followers and the public, and realized the fable of King Midas, whose touch transmuted all things into gold. Their careers were those of conquest and accumulation, like that of Napoleon; and, like him, they underwent, with few exceptions, their retreats from Russia and their Waterloos. Of such were Jacob Little, Daniel Drew, Anthony Morse, and others, to whom now the motto of Junius applies: Stat nominis umbra. Merely the shadows of their names reach over to us from the horizons where their suns set so long ago.

There was an epoch too in the Wall Street of the past when gigantic and deeply considered combinations were set in motion, entitled “corners.” As to corners, a word of explanation may not be amiss. There are always two factions in the stock market: the bulls, who want stocks to rise in price in order that they may sell out; and the bears, who want stocks to fall in price so that they can buy in. Contrary to the superficial belief of the public, the bulls are sellers and the bears are buyers. But in order to sell a commodity you must buy or borrow it; and in order to buy at a future date you must sell at a previous date; and thus the bull buys for the purpose of selling at a profit, and the bear sells something which he doesn’t own for the purpose of buying it at a lower price. The bull therefore hopes to push prices up so that he can sell his purchase at a profit, and the bear hopes to drag prices down so that he can buy what he has sold, also at a profit.

Meanwhile, the bear has delivered the shares sold by him, and in order to deliver them, has borrowed them, and given security in money at its market price. Here he has placed himself in danger, because the owner of the shares may at any time tender him this money and demand the shares, which the bear may not be able to provide himself with, except at the price which the owners choose to set upon them.

Thus a person might be under contract to deliver the shares of some corporation which might be absolutely worthless, and yet these shares might be so held that the holders could exact one thousand dollars a share. Given a railway with a share capital of ten millions, one person or knot of persons might own every certificate of its stock, and have it all loaned out to bears who had sold, borrowed, and delivered it. It is obvious that this person or club of persons could compel purchases of the shares which he or they alone possess, at whatever price he or they think proper to demand; and since such things can be done by skilful combinations under able generalship, they have been done, and were a favorite scheme during the eventful years between the sixties and the eighties. The corners in Harlem, Hudson, Erie and Northwest, in which Vanderbilt, Drew, and Gould achieved such success for themselves and their associates, have passed into history as a conspicuous portion of the great events of Wall Street. Their interest is chiefly historical, because of late years no comprehensive corners have been organized. Share capitals are so large that it is difficult for one man to control any one of them, and a divided corner is apt to fail. But in their day and generation they have offered brilliant illustrations of genius and strategic skill in financial warfare.

The system of selling short, however, which gave birth to the idea of creating corners, and which came into vogue in the fifties, has never ceased to be a leading factor on the stock exchange. It was the result of certain inflations of values which necessarily follow the construction of great enterprises. However high a valuation may be set upon any given commodity, there are always persons who expect a higher price. Early historical examples of this fact are the South-Sea shares and John Law’s Mississippi shares, over which England and France respectively went crazy in the last century. The loftier the figures to which these shares mounted, the greater was the eagerness of the public to buy them. But at that period the art and mystery of selling short had not been brought into practice, and when the bubbles collapsed there were universal losers and no direct winners.

During the latter half of this century there have been periods in the history of Wall Street when the prices of railway and industrial shares have been forced enormously above the standard of actual values, and innumerable persons have parted with good money in exchange for mere phantoms of imaginary values. At such times the short sales of discernment, directing the X rays of clear-sighted criticism into the swollen and opaque mass of financial carrion that is exposed for sale in the market, are of the utmost benefit to the public. The bear is then a benefactor to the community, and when he pulls down and tears to pieces the rotten carcass of some gigantic humbug, strewing the highway with its remains, we cannot praise his work too highly.

II.

The present condition of Wall Street is one of lassitude and expectancy. The great banks have an abundance, perhaps a superabundance, of money, their own and their depositors, which they are only too glad to lend on solid and readily salable collateral at low rates of interest, approximating the prevalent rates in London and Paris, where similar accumulations of idle capital exist. A large part of this money is deposited with them by local banks in all parts of the country, which recognize New York City as the financial centre of the Union, and are content with interest of from one to two per cent upon the funds which they are unwilling or unable to use safely at home. The stock exchange is also in a condition of quietude. The public are neither buying nor selling stocks in any large amount.

This state of things is the resultant of well-known facts. Numerous over-capitalized and badly managed railways have gone into bankruptcy, and either are in the hands of receivers or have emerged from such guardianship, and are painfully toiling along on the road to prosperity on the twin crutches of assessments upon stockholders and the withholding of dividends from the same long-suffering and patient class.

The transactions at the stock exchange at present average about two hundred thousand shares a day, exclusive of bonds, government, State, and railway; and a certain class of observers who like to subject circumstances to a minute analysis inform the public that the daily profits of the members of the exchange are about sufficient to pay the expense of office rent and clerk hire. This conclusion takes it for granted that these profits should be equally divided among the membership. This is not a reasonable supposition. Many of the members are such only in name, and rarely go on the floor. Others live during most of the time on their accumulations, and come into the market to buy or sell only when prices are abnormally low or high. The comparatively small busy portion manage somehow to keep fairly active, and are cheerfully looking forward to better times, through a vista from which the cloud of a change of the monetary standard has already passed away, and into which the genius of enterprise beckons them to enter.

III.

While in many respects the future is a sealed book, yet there is such a thing in the economy of nature as an absolutely accurate prevision of events, such as eclipses of the sun and moon, and conjunctions of the planets, and a relatively correct prevision of events depending upon the growth of enlightened communities. Since the incorporation of the Bank of New York, at the corner of Wall and Williams Streets, the banking capital of New York has increased more than sixtyfold, of which more than one-half is held and used in and around Wall Street, and the aggregation of deposited and loanable capital has grown from a few millions to over half a billion. If this has been the result during one century, what will take place in the same direction during the next century? The ratio of increase will not be kept up. A thousand dollars may be doubled in a day, but no such ratio as a hundred per cent a day can be predicated of a million. And yet it is certain that, under proper management, the million will go on increasing; and in the same manner will our half-billion increase by its own earning power, and by contributions from all parts of the Union. The development of the United States in the direction of population, agriculture, manufactures, and mines is so enormous and so steady that this nation will at some not distant period become the most opulent of all the nations of the planet, unless unforeseen and improbable political events happen by which our great commonwealth shall be disrupted or its financial stability overturned. Under a normal condition of things the capital of the citizens of the Union will continually increase, and the banks of the city of New York will be the depositary of larger and larger reserves of whatever capital is temporarily idle in the places where it is created. In due time the financial centre of the world will be shifted from London to our imperial city.

Such a destiny has been foretold for St. Petersburg, in view of the construction of the Siberian Railway and its branches, which in time will open up to industry an immense tract of productive soil in the most fertile parts of Asia, abounding in wheat and corn land, and full of superior water power. But in this superb rivalry between the United States and the colossus of Europe and Asia, the former nation has an immense start as to time, and a still greater advantage in the character of its population. And in addition to these we have the undoubted and constantly increasing supremacy of the English language. Just as during the Middle Ages Latin was the vernacular of the learned classes, and as to-day French is the language of diplomacy in Europe, so is English the common tongue in all the commercial localities of the globe. With English a man can commit himself to foreign travel anywhere, while outside of Russia there are few towns on the various continents in which Russian is not an unknown speech. These controlling conditions cannot be readily or easily changed, especially since no paramount reasons exist why they should be changed.

It is then a reasonable forecast of the future, that in due time the weighty import of the names of Lombard[1] and Threadneedle Streets will be transferred to the name of Wall Street, and the facts implied by such a transfer are of a dignity and power which it is impossible to estimate. The road leading to this great destiny can only be blocked by injurious legislation, and the good sense of our citizens may be confidently relied upon to prevent the creation of such a barricade against national prosperity.

II. THE TRUE INWARDNESS OF WALL STREET.

To this end Wall Street strives to justify itself in periodical and general literature. No other power in human society to so great a degree and in so subtle a manner exploits its own virtues. Taking advantage of the well-known carelessness of American readers, and knowing full well how easily they are duped—how easily they are cozened out of their senses and led into false beliefs with mere plausibilities and sophisms—this imperial and far-reaching Wall Street, this elephantine fox of the world, takes possession of American journalism—owns it, controls it. It seizes and subsidizes the metropolitan press. It purchases newspapers and magazines by the score. It establishes bureaus; it buys every purchasable pen, from the pen of the gray philosopher to the pen of the snake editor. It overawes every timid brain, from the brain of the senator to the brain of the tramp. What it cannot purchase it terrorizes; and the small residue which it cannot terrorize it seeks to cajole: all this to the end that its dominion may be universal and everlasting.

In this work of gaining possession of public opinion and perverting that opinion to its own uses Wall Street employs all methods and uses all expedients. Wall Street deliberately marks its game; and we have to confess that the game generally falls at the first fire. We have heard, however, of a single case of a brave man, now dead, who, when offered ten thousand dollars for his voice against his conviction and his opinion against his soul, in the matter of electing President of the United States the man who was the candidate of Wall Street, told the subtle committee to make an immediate and expeditious visit to the bottom of the old theology.

This train of thought rises vividly to mind when I consider the article of Mr. Henry Clews on “Wall Street, Past, Present, and Future.” This article came unsought and unexpected to the editorial desk of The Arena. I confess that I doubted its genuineness. For why should Mr. Clews address the public through the columns of The Arena? What has The Arena done to merit such distinction? Satisfying myself that the contribution was genuine, that it was not—and is not—a hallucination, I at once divined that it must be a sort of challenge to this magazine. I do the author of “Wall Street, Past, Present, and Future,” the honor to believe that he does not suppose The Arena to be sufficiently verdant to publish his adroit and well-covered apology for the great institution which he represents,—without knowing the sense and significance of it. If indeed the distinguished gentleman imagined that we could do such a thing here, then in good sooth he must be undeceived. Or if he supposed that a paper of the kind submitted would be rejected at this office because of our well-known antagonism to the fact which Mr. Clews defends, let him in that instance also be undeceived.

At the office of The Arena we take all challenges. Nor should our friends suppose or fear that the welcome admission of Mr. Clews’s article to the pages of The Arena implies timidity or some possible weakness in the presence of that gigantic institution known by the name of Wall Street. The fact is, that the nightmare which that power has been able to spread, bat-like, over the souls of men for a quarter of a century has about been dissipated; it is already the beginning of the end. It is the dawn; the day is not very far in the future when the American people, roused at last to the exertion of their majesty, will shake themselves from the dread of this incubus and spring up like a giant refreshed from slumber.

Mr. Clews’s article on “Wall Street, Past, Present, and Future,” is a most gentle and dove-like performance. It is not a paper intended to produce alarm, but to allay it. It is one of the finest examples of a literary opiate that I have ever seen. The bottom theme of the paper is that Wall Street is a natural growth, and is therefore inevitable. Wall Street has come by a gentle evolution. Good men and true have conspired with nature to bring it forth. Under natural and necessary conditions Wall Street has appeared in our American system, and under these conditions it flourishes. Whatever great fact in society has thus appeared has been born of necessity and out of the nature of things. If Wall Street have been born out of necessity and the nature of things, then it has come of righteousness, and is the child of truth. If of righteousness and truth, then Wall Street is good as well as glorious. That which is good and glorious ought to be admired and honored. Whatever is admired and honored, whatever is good and glorious, should have influence and power in society and state. Such a golden product of evolution is Wall Street; therefore the sceptre which Wall Street stretches forth over the prostrate Western world should be obeyed and upheld by the voice and hand of the American people.

Not only so, but the sceptre should be extended. The empire of Wall Street should become universal. It should be enlarged and confirmed until all outlying kingdoms and all islands of the sea shall pass under the beneficent sway of this monarchy of the world! Then with Mr. Clews we may well consider his “reasonable forecast of the future.” With him we shall be able to see “that in due time the weighty import of the names of Lombard and Threadneedle Streets will be transferred to the name of Wall Street.” With Mr. Clews we shall be able to see that “the facts implied by such a transfer are of a dignity and power which it is impossible to estimate.” Then, finally, with Mr. Clews we shall agree that “the road leading to this great destiny can only be blocked by legislation.” Mr. Clews says “injurious” legislation. Certainly; that is true—most true. The consummation hoped for by Mr. Clews can verily be blocked by legislation! But when it comes to the definition of “injurious” how fearfully do we part company! The writer of “Wall Street, Past, Present, and Future” flatters himself, in fine, with the belief that “the good sense of our citizens may be confidently relied upon to prevent the creation of such a barricade against national prosperity.” Oh, it is “national prosperity” then that we have in view! That is good. If there be anything under heaven which Wall Street adores and dotes on more than any other thing in the world it is national prosperity! When it comes to national prosperity Wall Street is always full-handed. With the mere mention of national prosperity Wall Street raises a shout of sympathetic enthusiasm which reverberates from Passamaquoddy to San Diego, and from the Florida everglades to the snow-capped shoulders of Shasta!

Let me, however, explain to Mr. Clews one thing, and that is that the blessed condition of universal society in which Wall Street, having absorbed Lombard and Threadneedle, shall be supreme over the nations will occur only when our free American institutions shall be crushed into fragments and when civil liberty shall lie bleeding among the ruins. It will occur then, and not before. It will occur when the residue of the old American spirit has been stamped out, and when a miserable, slavish subserviency shall have been substituted for the revolutionary freedom which our fathers won and made sacred with their blood on every patriot battlefield from Lexington to Appomattox.

Temperately and patiently I will follow Mr. Clews’s paper through. The writer of the article is a gentlemanly and able representative of that colossal power which he has helped to build up and fortify. From being a child of that power he has now become, in a most theosophical manner, one of the fathers of it! As such he has made himself the apologist of a gigantic and rampant beast on whose horns of hazard the values produced by the labor of seventy millions of Americans are tossed about as if the wreckage were so much waste excelsior thrown on the horns of a bull! Mr. Clews tells us that in 1792 twenty-seven gentlemen met under a buttonwood tree and formed the association known as Wall Street. The purpose of the association was “the purchase and sale of public stocks at a fixed and unvarying commission, with a proviso of mutual help and preference.” The result was the addition of “the prestige and power of the stock exchange to the prestige and power of the banks.” That indeed is a combination worthy to be considered! A consolidation of interests was effected between the exchange and the banks to purchase and sell stocks “with a proviso of mutual help.”

The organization thus created has existed for one hundred and five years. It has made a history. It has become ever greater and more firmly fixed in and on American society. It has made itself to be the foundation of all things financial and political in the United States. The story of the process by which this prodigious result has been reached is narrated by Mr. Clews in the manner of one who gives an account of the formation of a temperance society or a Sunday school! In the whole article there does not appear a symptom of a suspicion that the thing of which he gives the history is the most dangerous and abusive fact that ever threatened the integrity of a nation. The argument is that if twenty-seven gentlemen thus met and created Wall Street, then the result, being a natural product, is good and wholesome. But the inquiry at once arises whether it is valid logic to suppose that what men do is right, simply because they do it. The affirmative of such a proposition would make Aristotle stagger. It amounts to this, that whatever is is right; therefore, let it alone.

By this argument of Mr. Clews all the tyrannies of the past, all the horrors that have afflicted the human race, all the sufferings which men have endured from sword and pestilence, from servitude, from the butchery of war and the cruelty of the Inquisition, have been right merely because they have been natural. Under this rule every monster that has tormented society from the first day until now can find full justification for itself on the simple ground that it exists! Under such an argument a howitzer is as good as a plough, a sword is as good as a sickle, a pillory is as good as a baby-wagon. By such reasoning a shark is as useful as a horse. By this logic a boa-constrictor is as good as a reindeer, a tiger is as useful and salutary in his office as an ox or a St. Bernard, and a cancer is as beautiful as a blush. That is, everything is good, not because it is useful and just, but because it is.

Or again, Mr. Clews’s argument is this: that the men who created Wall Street were gentlemen; therefore their work was salutary. Just as though respectable people could not engage in a nefarious business. Just as though gentlemen could not, and would not, make a conspiracy to enslave the human race. The “gentleman” is a very uncertain factor in civilization; his devotion to right and truth requires always to be tested with a chemical and to be taken with the usual combination of chlorine and sodium.

Mr. Clews explains that the stocks underlying our old railroad properties in the United States were aforetime “held locally,” and that they were transferred “more frequently by executors than by brokers on the stock exchange”—as though that were an evil. Then “there were but few opportunities for dealing in shares”—as though that were an evil! It thus became necessary for Wall Street to get the old stocks belonging to the people out of the people’s hands and into the hands of the Street—as though that were a good. Our public improvements were in the first place made by the people, but the people were not fit to own them. Our railways were constructed with capital subscribed by the people, generally by those through whose country the given improvement was extended. The people themselves then owned their own, and controlled it. Until Wall Street reached out and clutched such properties—first putting down the prices of the shares to nothing and then pulling the given stocks to par—the people were able to protect themselves; but never afterwards.

The same was true of all other securities, whether public or private. Nearly all bonded debts were at first local; but the holding of securities locally has always been a thing abhorrent to Wall Street. The idea of the Street is that all stocks and all securities belong, not to the public, but to itself. Of course the money capital of the country belongs to the Street. And if, with the consent of public authority, the stocks of the country also can be held by the Street, then a humble peasantry, paying perennial rents and compound interest, can be created and kept under forever throughout the domains of the great Republic. It may ultimately require arsenals to do it, but these we can supply.

The next stage in the game was the creation by Wall Street of fictitious enterprises for the distinct purpose of getting possession of the stocks on which such enterprises were based, and of speculating in the shares of such properties. When the existing stocks of railways were not sufficient—when the bonds of States and of the general government were insufficient in quantity to fill the maw of the benevolent being called Wall Street—then an artificial supply must be created; that is, some scheme of debts must be invented by which the people might be made to pay tribute to the good Wall Street, and pay it still more abundantly.

Thus were invented new banks and new banking systems. Thus came the bull and the bear and the bucket-shop. Thus were projected a thousand railways and canals. Many of these were laid into impossible regions—all “for the benefit of the people!” Other enterprises which were not sufficiently stocked began to be stocked more heavily—this also for the benefit of the people. The plan of watering was invented; the method of “promoting” enterprises was perfected,—until, as early as the time of the Civil War, Wall Street had acquired the greatest skill in making debts, or, in the language of James Fisk, Jr., in “rescuing the property of other people from themselves.”

These beautiful processes are glossed over by Mr. Clews with a pleasant account of how, with the growth of business and the discovery of gold and the oncoming of the age of construction, great enterprises were “promoted” by Wall Street, and how “capital instantly flowed forth from its reservoirs in answer to the securities” that flowed thereto. The author of “Wall Street, Past, Present, and Future,” affirms “that but for the combined machinery of the New York banks and the stock exchange the actual developments of twenty years would have dragged laboriously through an entire century.” Permit us to say that it would have been better that such “actual developments” should have dragged through two centuries than that the United States of America should have been stocked and mortgaged and bonded and enslaved, under the tyrannous lash of debt, by such a master as Wall Street.

Mr. Clews next comes to the subject of corners. On this topic we doubt not that he speaks as one having authority. He tells us quite complacently that there was “an epoch in the Wall Street of the past when the gigantic and deeply considered combinations were set in motion entitled ‘corners.’” Then he goes on to explain what corners are. He does so without the slightest expression of criticism or aversion. He tells us of the bulls and the bears by whose agency a corner is conducted as though they were the friendly competitors in some great philanthropy! Instead of describing corners as so many carefully contrived schemes to rob the people of the proceeds of their labor by putting the prices of their commodities and securities down until such commodities and securities are taken from their hands, and then putting the prices up in order that the robbers may reap the harvest, he speaks of corners as offering “brilliant illustrations of genius and strategic skill in financial warfare!”

The fact is that the men who are reared in Wall Street, who from their youth are familiarized with its processes, and who are well set in the plastic age to consider human life as an auspicious opportunity for getting possession of something that does not belong to them, are fatally blunted in their sensibilities; the ethical quality in them is battered out—or at least battered; they come to regard the human race as an enormous ranch of sheep to be shorn at the pleasure of the shearers; they even grow to consider each other as so much mutton to be butchered and roasted by whoever is able to do it.

I notice with surprise that Mr. Clews in his sketch of Wall Street dwells not at all upon the benevolent agency of that power during the Civil War. This is an oversight which I beg leave to supply. There has never perhaps been an instance in human history in which a great power has so ardently devoted itself “to the preservation of free institutions” as did Wall Street in that epoch of mortal agony. Then it was that Wall Street engaged in the patriotic work, first of destroying the national credit, then of buying it up at half price, then of converting it into a bonded debt to be perpetuated for a full generation, and finally of compelling the people to pay it in a dollar worth four times as much as the dollar with which it was purchased. It was a beautiful scheme of devotion and self-sacrifice the like of which history has never before recorded. It was a speculation which involved the life of the American Republic. The Union was on trial. All nerves were strained, and all hearts were torn. The nation was bleeding at every pore. Every freight-train that came from the front brought back its loaded boxes of dead. Fathers and mothers gathered at the station, and each received his own. The rough coffin containing the body of the patriot boy who had given his life for the flag was taken by the silent father and mother to its resting-place under the apple trees. All true men had tearful faces, and a stern resolve in the heart. And while this was the condition of the nation and the people, the high-toned Wall Street was speculating on the life of the Republic. It bought and sold blood. It was a bull on disaster and a bear on victory. It established bureaus through which to falsify intelligence and to bring the nation to the verge of ruin. It had no compunction. It regarded the gore of battlefields as the rich rain and mould out of which its own harvest was to grow. The more blood the merrier. The more tears the richer the yield. The more war the more debt. The more depression of the national credit the more cheaply we shall be able to gather it up! The more grape-vine despatches the more distraction and the better opportunity for us. The more death the more millions. The more horror and devastation the heavier will be our coffers. The more the people groan the more we will shout. The more they die the more we will live. The more the flag is torn the more our damask curtains will flutter. The more liberty perishes and withers from the earth the more we shall plant ourselves and flourish and rule and reign over a nation that we have destroyed and a people whom we have enslaved. If Mr. Clews wishes any further outline of the history of Wall Street during our Civil War we shall be glad to contribute such a sketch as a reminiscence of a great fact which appears to be dim in his memory.

There is another almost fatal omission in Mr. Clews’s article. He says but little about the principal work in which Wall Street, historically considered, has been engaged during the last thirty years. I do not like the way in which this great section of the “Past” of Wall Street is glossed over. During the period referred to, that institution has had one bottom purpose and one reason of action from which it has never deviated. This purpose, this reason of action, has been the perpetuation of the national debt and the increase of its value by bulling the unit of money in which the debt is payable. Wall Street knows that the bonded debt of the United States is the basis, or central fact, in the whole system of bonds and stocks. Wall Street knows that the dollar is the central fact in the bond. It knows that if the bond can be made everlasting and the dollar can be increased in value until a single unit of it shall be equivalent to an acre of farming land, then the Street can own the United States in fee simple, and can presently annex the rest of the world.

I acknowledge a certain admiration when I consider this stupendous scheme. It is more than Napoleonic; it is continental, interplanetary, sidereal! I cannot recall another conspiracy in the history of mankind quite equal in colossal and criminal splendor to the profound and universal plot of Wall Street to make perpetual the national debt, to keep that debt the bottom fact in the banking system of the United States, and to bull the unit of money and account until it shall be worth four times as much, or perhaps ten times as much, as it was when the bulk of the debt was contracted.

The history of this scheme in its true inwardness is the history of Wall Street for the past thirty years. The details of the history relate to such small circumstances as the transfer of the government of the great Republic from the hands and control of the people to the hands and control of the Street. Of course no such scheme as that referred to could be carried into successful operation unless the national government could be delivered over to the keeping of the Street and be locked up, as it were, in the same vault where the national debt is deposited.

This feat, however, was easily accomplished. Wall Street reached out its hand and plucked down the American eagle from his perch. Wall Street got possession of the government. The coup was accomplished while the nation was asleep—else it never could have been accomplished. Wall Street climbed the Tarpeian rock in the night, and no goose cackled to give the alarm. Columbia had gone to bed. The keeper of her treasure-house had already given the key to the enemy. The keeper of the treasury was a part of the enemy. He gave up both citadel and city. In the morning the walls were placarded with lying posters which said that the delivery of the government into the hands of the Hessians had been rendered necessary in order “to preserve the national honor!” It was done in order to keep faith with those benevolent patriots who had bought the debt of the nation at less than fifty cents to the dollar, and who, not satisfied with bringing it to par, were now engaged in the honorable work of making it worth two hundred cents to the dollar. The fact that the industries of the people would be crushed and the people themselves be reduced to poverty by the transfer of the national sovereignty from the capitol to the stock exchange was nothing in comparison with the “preservation of national honor.”

The scheme was carried out. The methods by which it was carried out constitute the subject-matter of the true history of Wall Street during the past generation. Wall Street, from being a financial organization, became a political power. It took full possession of the executive and legislative departments of the government. It controlled them both. It promptly established and defended its ownership. It instituted one scheme after another. For the purpose of fortifying its usurpation, it learned to choose its men and to prepare its measures in advance. In 1884 it created an administration for its own purposes, and manned it to the same end. It forced its way into the House of Representatives and stood with a bludgeon behind the Speaker’s chair. It entered every committee-room and dictated every successful bill. The people’s bills all went one way. If by any chance one of the people’s bills got before the House the subsidized press, owned by Wall Street, raised against it a chorus of groans and catcalls; that was “an expression of public opinion”!

From that day forth the popular voice was strangled into silence. The next administration (that of 1888) was prepared in the same manner. Wall Street has no politics except the politics of the bond; it has no platform except the platform of cent per cent. It suffices that when a president is to be elected he shall be one of us. He shall not be a man of the people; else in that case he would be a demagogue, a windbag, a vox et præterea nil. Our man shall not even know the despised people. He shall not smell of the filthy ground, but must be “sound” on questions of finance. If he be not “sound,” we will make him so. We will teach him his paces. If the people conclude to change their government, we will see to it that the incoming powers are just like the outgoing. As for the “principles” on which the candidate shall be chosen, we will attend to that. We will make his principles for him. We understand principles perfectly. We will fix the platform; we know the carpenters. If the candidate and his friends have already fixed a platform before the date of the convention, and if it have been published everywhere as the decision of the candidate and his following, we will take that platform from the wires and will carefully revise it, to the end that the “national honor” shall be preserved. We will write it over again into new meanings. We will interpret it so that no harm shall be done to the “national credit.” We will make our candidate into a puppet. When we put our foot on the treadle his jaw shall drop and he shall utter many mocking words about the “national honor” and the “prospects of our glorious country”—signifying nothing.

All this we will do for the public good. We will say that we are striving for national prosperity. We will proclaim our candidate as the advance agent of prosperity—until after the election. Then we will say that prosperity will come with the inauguration. Then we will say that it will shine out promptly when Congress adjourns and ceases to menace the national credit. Then we will say that prosperity will reveal itself when the hot season is over. By this time the hoodwinked people can be coddled to sleep, or else set to dancing with rumors of foreign wars. To this end we will have our newspapers carefully promote our principles and studiously avoid all reference to those subjects in which the people feel the deepest concern. Finally, we will omit all these matters from our history of “Wall Street, Past;” we will proceed to speak of our “Wall Street, Present,” and will explain that it is in a state of “lassitude and expectancy.” Indeed “lassitude and expectancy” is good.

But there is still another yawning chasm in the history of “Wall Street, Past,” and that is Mr. Clews’s failure to discuss the transfer of the Treasury of the United States to the custody of the Street, and the consequent reduction of the Secretary of the Treasury to the rank of a clerk. This very thing has been most successfully accomplished. I believe that the Secretary still has an office at Washington, but that should be closed in the interest of economy and reform. To do so, we doubt not, would be a strong factor in the restoration of confidence. Perhaps the Washington office might be left in charge of a janitor, for it is understood that some official correspondence is still directed to the old address! The presence of the Secretary in New York, however, has become so essential to the proper discharge of his duties that the removal of his residence thither can only be deferred by an absurd deference to public opinion!

The results of the transfer of this vital function of the national government have, in the meantime, been so salutary as fully to vindicate the change. This was shown in 1893-94 when the Street, with a strong repugnance to investing money in useful enterprises, and having a prodigious accumulation of funds on hand, concluded that a sale of Government bonds was necessary for the “national honor.” To this end the managers began to pull the treasury. In that institution a large sum of gold was stored, wholly without warrant of law. The people needed the gold beyond measure—that is, they needed the money; and gold is one form of money. The industries of the people had been prostrated by an international conspiracy, and the nation was quivering on the verge of apprehended ruin.

In this crisis the patriotic Street devised the bucket-chain, the crank of which was in the hand of the Street, while the “chain” ran through the Treasury of the United States. Every bucket came out filled with gold. Lazard Frères emptied out the gold and shipped it abroad to their confederates. This created the necessity for buying it back with bonds. The people were stunned with the audacity of the thing—just as the unfortunate owners of a house in flames are stunned to see gentlemen of the profession rush in and empty the safe. Wall Street danced and shouted while the work was done. The bonds were “popular,” and the Street got them—got them for one price and sold them for another.

By this beautiful process the great American nation was literally held up and robbed of more than nineteen million dollars! No highwayman ever more successfully clutched the wizen of his victim than did the Street with its supple fingers around the white larynx of Columbia. The wheezing of the strangulated Republic could be heard from the St. Lawrence to the Rio Grande. The nation was thus “saved,” and the robbers took the money and went sailing away on summer cruises to Norway and Venice and the Cyclades. The “national credit” was preserved; Wall Street “rescued” us from dishonor! That part of the proceeds not consumed in yacht races, pyrotechnics, and balls was passed to the credit of the reform fund, needed for the restoration of prosperity in the fall of 1896! Certainly a history of “Wall Street, Past,” ought to contain some reference to these crimes.

Mr. Clews, turning to “Wall Street, Present,” tells the nation that now “the great banks have a superabundance of gold to lend on solid and readily salable collateral at low rates of interest, approximating the prevalent rates in London and Paris, where similar accumulations of idle capital exist.” This is a true statement of the facts. Mr. Clews has here spoken by the books. What he says signifies that Wall Street is now ready to go ahead and issue new mortgages on the American people. It is now ready to offer inducements to our fourteen millions of voters to sell themselves into another twenty-year cycle of bondage. If they will only be gentle and not interrupt us; if they will give us a true death-grip on themselves, on all they possess, and all they ever hope to possess, we will lend back to them a part of the very money which we have sucked up from their wheat fields and pastures, from their barns and potato patches, from their humble stores and markets, from their mills and their mines, and we will thus expedite them on the way to serfdom. Meanwhile we will continue to bankrupt their railways, to snatch their local stocks, to convert all shares in all enterprises into bonds, and to put the bonds into our safes to the end—that confidence may be restored and prosperity come back like the flowers that bloom in the spring.

For the time being we, the Street, are able to toss “two hundred thousand shares a day” on the horns of our bull, and to put the same amount of securities under the custody of our bear. “This conclusion takes it for granted that the profits should be equally divided among the membership.” Such are Mr. Clews’s very words. By the bond of my faith! there is nothing else so beautiful and magnificent as this among the arts invented by mankind! As for the people, one of your own kings, Messieurs of the Street, has very properly indicated your wish and purpose with regard to them.

Mr. Clews tells us that the “Future” of Wall Street is a sealed book; and yet we may allow that “there is such a thing as an accurate prevision of events.” Of this kind are eclipses, occultations, and tides of the sea. If the capital of Wall Street has, since the institution was founded, increased more than sixtyfold, as Mr. Clews declares, then we may expect it, according to his philosophy, to increase full sixty times sixty, until the world shall be swallowed up. Then, when Threadneedle and Lombard Streets shall have lost their sceptre; then, when Seneca’s forecast of the time to come shall have been fulfilled; then, when Macaulay’s New Zealander shall have made his sketch, not only of St. Paul’s, but also of the bank of England; then, when all the wealth, and all the power, and all the functions of civil society in the United States shall have been transferred to Wall Street; then, when nothing shall remain to the American people except their squalid huts and the sorrowful reminiscences of a great republic; then, when Wall Street in very truth shall have possessed itself of the earth and consumed mankind,—I suppose that the benevolent owners of the world will found a few libraries, build a few marble mausoleums for themselves, and sally forth to establish a stock exchange in Mars! That done, interplanetary wars may be engendered, bonds on the solar system may be issued and bought at half price, a gold standard of values may be fixed on the basis of the pound sterling good from the sun out to Neptune, and the inhabitants of the worlds, either by arms or by journalism, may become the helots of consolidated wealth enthroned as the governing power of the universe.