History of the Great American Fortunes Part 6

It is such revelations as these that indicate how it was possible for the s.h.i.+ppers to pile up great fortunes at a time when "a house that could raise $260,000 in specie had an uncommon capital." They showed how the same functions of government which were used as an engine of such oppressive power against the poor, were perverted into highly efficient auxiliary of trading cla.s.s aims and ambitions. By multifarious subtle workings, these cla.s.s laws inevitably had a double effect. They poured wealth into the coffers of the merchant-cla.s.s and simultaneously tended to drive the ma.s.ses into poverty. The gigantic profits taken in by merchants had to be borne by the worker, perhaps not superficially, but in reality so. They came from his slender wages, from the tea and cotton and woolen goods that he used, the sugar and the coffee and so on. In this indirect way the s.h.i.+ppers absorbed a great part of the products of his labor; what they did not expropriate the landlord did. Then when the laborer fell in debt to the middleman tradesman to jail he went.[60]

UNITE AGAINST THE WORKER.

The worker denounced these discriminations as barbarous and unjust. But he could do nothing. The propertied cla.s.s, with its keen understanding of what was best for its interests, acted and voted, and usually dragooned the ma.s.ses of enfranchised into voting, for men and measures entirely favorable to its designs. Sometimes these interests conflicted as they did when a part of New England became manufacturing centers and favored a high protective tariff in opposition to the importing trades, the plantation owners and the agricultural cla.s.s in general. Then the vested cla.s.s would divide, and each side would appeal with pa.s.sionate and patriotic exhortations to the voting elements of the people to sustain it, or the country would go to ruin. But when the working cla.s.s made demands for better laws, the propertied cla.s.s, as a whole, united to oppose the workers bitterly. However it differed on the tariff, or the question of state or national banks, substantially the whole trading cla.s.s solidly combated the principle of manhood suffrage and the movements for the wiping out of laws for imprisonment for debt, for mechanic's liens and for the establishment of shorter hours of work.

Political inst.i.tutions and their offspring in the form of laws being generally in the control of the trading cla.s.s, the conditions were extraordinarily favorable for the acc.u.mulation of large fortunes, especially on the part of the s.h.i.+powners, the dominant cla.s.s. The grand climax of the galaxy of American fortunes during the period from 1800 to 1831--the greatest of all the fortunes up to the beginning of the third decade of that century--was that of Girard. He built up what was looked up to as the gigantic fortune of about ten millions of dollars and far overtopped every other strainer for money except Astor, who survived him seventeen years, and whose wealth increased during that time to double the amount that Girard left.

FOOTNOTES:

[49] "The Astor Fortune," McClure's Magazine, April, 1905.

[50] Innumerable were the sermons and addresses poured forth, all to the same end. To cite one: The Rev. Daniel Sharp of the Third Baptist Meeting House, Boston, delivered a sermon in 1828 on "The Tendency of Evil Speaking Against Rulers." It was considered so powerful an argument in favor of obedience that it was printed in pamphlet form (Beals, Homer & Co., Printers), and was widely distributed to press and public.

[51] Various writers a.s.sert that twenty dollars was the average minimum.

In many places, however, the great majority of debts were for less than ten dollars. Thus, for the year ending November 26, 1831, nearly one thousand citizens had been imprisoned for debt in Baltimore. Of this number more than half owed less than ten dollars, and of the whole number, only thirty-four individually had debts exceeding one hundred dollars.--Reports of Committees, First Session, Twenty-fourth Congress, Vol. II, Report No. 732:3.

[52] In his series of published articles, "The History of the Prosecution of Bankrupt Frauds," the author has brought out comprehensive facts on this point.

[53] The eminent merchants who sat on this committee had their own conclusive opinion of what produced poverty. In commenting on the growth of paupers they ascribed pauperism to seven sources. (1) Ignorance, (2) Intemperance, (3) p.a.w.nbrokers, (4) Lotteries, (5) Charitable Inst.i.tutions, (6) Houses of Ill-Fame, (7) Gambling.

No doc.u.ments more wonderfully ill.u.s.trate the bourgeois type of temperament and reasoning than their reports. The people of the city were ignorant because 15,000 of the 25,000 families did not attend church. p.a.w.nbrokers were an incentive to theft, cunning and lack of honest industry, etc., etc. Thus their explanations ran. In referring to mechanics and paupers, the committee described them as "the middling and inferior cla.s.ses." Is it any wonder that the working cla.s.s justly views "charitable" societies, and the spirit behind them, with intense suspicion and deep execration?

[54] Doc.u.ments of the Board of a.s.sistant Aldermen of New York City, 1831-32, Doc. No. 45:1.

[55] House Executive Doc.u.ment, No. 13, Twenty-fifth Congress, Third Session; also, House Report, No. 313.

[56] Report for 1821 of the "Society for the Prevention of Pauperism."

[57] "New York Gazette and General Advertiser", Aug. 5, 1797. The rewards offered for the apprehension of fugitive apprentices varied. An advertis.e.m.e.nt in the same newspaper, issue of July 3, 1797, held out an offer of five dollars reward for an indented German boy who had "absconded." The fear was expressed that he would attempt to board some s.h.i.+p, and all persons were notified not to harbor or conceal him as they would be "proceeded against as the law directs". That old apprentice law has never been repealed in New York State.

[58] The Government reports bear out Barrett's statements, although in saying this it must be with qualifications. The s.h.i.+ppers engaged in the East India and China trade were more favored, it seems, than other cla.s.ses of s.h.i.+ppers, which discrimination engendered much antagonism.

"Why," wrote the Mercantile Society of New York to the House Committee on Manufactures in 1821, "should the merchant engaged in the East India trade, who is the overgrown capitalist, have the extended credit of twelve months in his duties, the amount of which on one cargo furnishes nearly a sufficient capital for completing another voyage, before his bonds are payable?" The Mercantile Society recommended that credits on duties be reduced to three and six months on merchandise imported from all quarters of the globe.--Reports of Committees, Second Session, Sixteenth Congress, 1820-21, Vol. I, Doc.u.ment No. 34.

[59] "The Old Merchants of New York," 1:31-33. Barrett was a great admirer of Astor. He inscribed Vol. iii, published in 1864, to Astor's memory.

[60] The movement to abolish imprisonment for debt was a protracted one lasting more than a quarter of a century, and was acrimoniously opposed by the propertied cla.s.ses, as a whole. By 1836, however, many State legislatures had been induced to repeal or modify the provisions of the various debtors' imprisonment acts. In response to a recommendation by President Andrew Jackson that the practise be abolished in the District of Columbia, a House Select Committee reported on January 17, 1832, that "the system originated in cupidity. It is a confirmation of power in the few against the many; the Patrician against the Plebeian." On May 31, 1836, the House Committee for the District of Columbia, in reporting on the debtors' imprisonment acts, said: "They are disgraceful evidences of the ingenious subtlety by which they were woven into the legal system we adopted from England, and were obviously intended to increase and confirm the power of a wealthy aristocracy by rendering poverty a crime, and subjecting the liberty of the poor to the capricious will of the rich."--Reports of Committees, Second Session, Twenty-second Congress, 1832-33, Report No. 5, and Reports of Committees, First Session, Twenty-fourth Congress, 1836, Report No. 732, ii:2.

CHAPTER VI

GIRARD--THE RICHEST OF THE s.h.i.+PPERS

Girard was born at Bordeaux, France, on May 21, 1750, and was the eldest of five children of Captain Pierre Girard, a mariner. When eight years old he became blind in one eye, a loss and deformity which subjected his sensibilities to severe trials and which had the effect of rendering him morose and sour. It was his lament in later life that while his brothers had been sent to college, he was the ugly duckling of the family and came in for his father's neglect and a shrewish step-mother's waspishness. At about fourteen years of age he relieved himself of these home troubles and ran away to sea. During the nine years that he sailed between Bordeaux and the West Indies, he rose from cabin-boy to mate.

Evading the French law which required that no man should be made master of a s.h.i.+p unless he had sailed two cruises in the royal navy and was twenty-five years old, Girard got the command of a trading vessel when about twenty-two years old. While in this service he clandestinely carried cargoes of his own which he sold at considerable profit. In May, 1776, while en route from New Orleans to a Canadian port, he became enshrouded in a fog off the Delaware Capes, signaled for aid, and when the fog had cleared away sufficiently for an American s.h.i.+p, near by, to come to his a.s.sistance, learned that war was on. He thereupon scurried for Philadelphia, where he sold vessel and cargo, of which latter only a part belonged to him, and with the proceeds opened up a cider and wine bottling and grocery business in a small store on Water street.

Girard made money fast; and in July, 1777, married Mary Lum, a woman of his own cla.s.s. She is usually described as a servant girl of great beauty and as one whose temper was of quite tempestuous violence. This unfortunate woman subsequently lost her reason; undoubtedly her husband's meannesses and his forbidding qualities contributed to the process. One of his most favorable biographers thus describes him: "In person he was short and stout, with a dull repulsive countenance, which his bushy eyebrows and solitary eye almost made hideous. He was cold and reserved in manner, and was disliked by his neighbors, the most of whom were afraid of him."[61]

During the British occupation of Philadelphia he was charged by the revolutionists with extreme double-dealing and duplicity in pretending to be a patriot, and taking the oath of allegiance to the colonies, while secretly trading with the British. None of his biographers deny this. While merchant after merchant was being bankrupted from disruption of trade, Girard was incessantly making money. By 1780 he was again in the s.h.i.+pping trade, his vessels plying between American ports and New Orleans and San Domingo; not the least of his profits, it was said, came from slave-trading.

[Ill.u.s.tration: STEPHEN GIRARD.

(From an Engraving.)]

HOW HE BUILT HIS s.h.i.+PS.

A troublous partners.h.i.+p with his brother, Captain Jean Girard, lasted but a short time; the brothers could not agree. At the dissolution in 1790 Stephen Girard's share of the profits amounted to $30,000. Girard's greatest stroke came from the insurrection of the San Domingo negroes against the French several years later. He had two vessels lying in the harbor of one of the island ports. At the first mutterings of danger, a number of planters took their valuables on board one of these s.h.i.+ps and scurried back to get the remainder. The sequel, as commonly narrated, is represented thus: The planters failed to return, evidently falling victims to the fury of the insurrectionists. The vessels were taken to Philadelphia, and Girard persistently advertised for the owners of the valuables. As no owners ever appeared, Girard sold the goods and put the proceeds, $50,000, into his own bank account. "This," says Houghton, "was a great a.s.sistance to him, and the next year he began the building of those splendid s.h.i.+ps which enabled him to engage so actively in the Chinese and West India trades."

From this time on his profits were colossal. His s.h.i.+ps circ.u.mnavigated the world many times and each voyage brought him a fortune. He practiced all of those arts of deception which were current among the trading cla.s.s and which were accepted as shrewdness and were inseparably a.s.sociated with legitimate business methods. In giving one of his captains instructions he wrote, as was his invariable policy, the most explicit directions to exercise secretiveness and cunning in his purchases of coffee at Batavia. Be cautious and prudent, was his admonition. Keep to yourself the intention of the voyage and the amount of specie that you have on board. To satisfy the curious, throw them off the scent by telling them that the s.h.i.+p will take in mola.s.ses, rice and sugar, if the price is very low, adding that the whole will depend upon the success in selling the small Liverpool cargo. If you do this, the cargo of coffee can be bought ten per cent cheaper than it would be if it is publicly known there is a quant.i.ty of Spanish dollars on board, besides a valuable cargo of British goods intended to be invested in coffee for Stephen Girard of Philadelphia.

By 1810 we see him ordering the Barings of London to invest in shares of the Bank of the United States half a million dollars which they held for him. When the charter expired, he was the princ.i.p.al creditor of that bank; and he bought, at a great bargain, the bank and the cas.h.i.+er's house for $120,000. On May 12, 1812, he opened the Girard Bank, with a capital of $1,200,000, which he increased the following year by $100,000 more.[62]

A DICTATOR OF FINANCE.

His wealth was now overshadowingly great; his power immense. He was a veritable dictator of the realms of finance; an a.s.siduous, repellent little man, with his devil's eye, who rode roughshod over every obstacle in his path. His every movement bred fear; his veriest word could bring ruin to any one who dared cross his purposes. The war of 1812 brought disaster to many a merchant, but Girard harvested fortune from the depths of misfortune. "He was, it must be said," says Houghton, "hard and illiberal in his bargains, and remorseless in exacting the last cent due him." And after he opened the Girard Bank: "Finding that the salaries which had been paid by the government were higher than those paid elsewhere, he cut them down to the rate given by the other banks.

The watchman had always received from the old bank the gift of an overcoat at Christmas, but Girard put a stop to this. He gave no gratuities to any of his employees, but confined them to the compensation for which they had bargained; yet he contrived to get out of them service more devoted than was received by other men who paid higher wages and made presents. Appeals to him for aid were unanswered.

No poor man ever came full-handed from his presence. He turned a deaf ear to the entreaties of failing merchants to help them on their feet again. He was neither generous nor charitable. When his faithful cas.h.i.+er died, after long years spent in his service, he manifested the most hardened indifference to the bereavement of the family of that gentleman, and left them to struggle along as best they could."

Further, Houghton unconsciously proceeds to bring out several incidents which show the exorbitant profits Girard made from his various business activities. In the spring of 1813, one of his s.h.i.+ps was captured by a British cruiser at the mouth of the Delaware. Fearing that his prize would be recaptured by an American war s.h.i.+p if he sent her into port, the English Admiral notified Girard that he would ransom the s.h.i.+p for $180,000 in coin. Girard paid the money; and, even after paying that sum, the cargo of silks, nankeens and teas yielded him a profit of half a million dollars. His very acts of apparent public spirit were means by which he scooped in large profits. Several times, when the rate of exchange was so high as to be injurious to general business, he drew upon Baring Bros. for sums of money to be transferred to the United States. This was hailed as a public benefaction. But what did Girard do?

He disposed of the money to the Bank of the United States and charged ten per cent. for the service.

BRIBERY AND INTIMIDATION.

The reestablishment and enlarged sway of this bank were greatly due to his efforts and influence; he became its largest stockholder and one of its directors. No business inst.i.tution in the first three decades of the nineteenth century exercised such a sinister and overshadowing influence as this chartered monopoly. The full tale of its indirect bribery of politicians and newspaper editors, in order to perpetuate its great privileges and keep a hold upon public opinion, has never been set forth. But sufficient facts were brought out when, after years of partizan agitation, Congress was forced to investigate and found that not a few of its own members for years had been on the payrolls of the bank.[63]

In order to get its charter renewed from time to time and retain its extraordinary special privileges, the United States Bank systematically debauched politics and such of the press as was venal; and when a critical time came, as it did in 1832-34, when the ma.s.s of the people sided with President Jackson in his aim to overthrow the bank, it instructed the whole press at its command to raise the cry of "the fearful consequences of revolution, anarchy and despotism," which a.s.suredly would ensue if Jackson were reelected. To give one instance of how for years it had manipulated the press: The "Courier and Enquirer"

was a powerful New York newspaper. Its owners, Webb and Noah, suddenly deserted Jackson and began to denounce him. The reason was, as revealed by a Congressional investigation, that they had borrowed $50,000 from the United States Bank which lost no time in giving them the alternative of paying up or supporting the bank.[64]

Girard's share in the United States Bank brought him millions of dollars. With its control of deposits of government funds and by the provisions of its charter, this bank swayed the whole money marts of the United States and could manipulate them at will. It could advance or depress prices as it chose. Many times, Girard with his fellow directors was severely denounced for the arbitrary power he wielded. But--and let the fact be noted--the denunciation came largely from the owners of the State banks who sought to supplant the United States Bank. The struggle was really one between two sets of capitalistic interests.

s.h.i.+pping and banking were the chief sources of Girard's wealth, with side investments in real estate and other forms of property. He owned large tracts of land in Philadelphia, the value of which increased rapidly with the growth of population; he was a heavy stockholder in river navigation companies and near the end of his life he subscribed $200,000 toward the construction of the Danville & Pottsville Railroad.

THE SOLITARY CROESUS.

He was at this time a solitary, crusty old man living in a four-story house on Water street, pursued by the contumely of every one, even of those who flattered him for mercenary purposes. Children he had none, and his wife was long since dead. His great wealth brought him no comfort; the environment with which he surrounded himself was mean and sordid; many of his clerks lived in better style. There, in his dingy habitation, this lone, weazened veteran of commerce immersed himself in the works of Voltaire, Diderot, Paine and Rousseau, of whom he was a profound admirer and after whom some of his best s.h.i.+ps were named.

This grim miser had, after all, the one great redeeming quality of being true to himself. He made no pretense to religion and had an abhorrence of hypocrisy. Cant was not in his nature. Out into the world he went, a ferocious shark, cold-eyed for prey, but he never cloaked his motives beneath a calculating exterior of piety or benevolence. Thousands upon thousands he had deceived, for business was business, but himself he never deceived. His bitter scoffs at what he termed theologic absurdities and superst.i.tions and his terrific rebuffs to ministers who appealed to him for money, undoubtedly called forth a considerable share of the odium which was hurled upon him. He defied the anathemas of organized churchdom; he took hold of the commercial world and shook it harshly and emerged laden with spoils. To the last, his volcanic spirit flashed forth, even when, eighty years old, he lay with an ear cut off, his face bruised and his sight entirely destroyed, the result of being felled by a wagon.

In all his eighty-one years charity had no place in his heart. But after, on Dec. 26, 1831, he lay stone dead and his will was opened, what a surprise there was! His relatives all received bequests; his very apprentices each got five hundred dollars, and his old servants annuities. Hospitals, orphan societies and other charitable a.s.sociations all benefited. Five hundred thousand dollars went to the City of Philadelphia for certain civic improvements; three hundred thousand dollars for the ca.n.a.ls of Pennsylvania; a portion of his valuable estate in Louisiana to New Orleans for the improvement of that city. The remainder of the estate, about six millions, was left to trustees for the creation and endowment of a College for Orphans, which was promptly named after him.

A chorus of astonishment and laudation went up. Was there ever such magnificence of public spirit? Did ever so lofty a soul live who was so misunderstood? Here and there a protesting voice was feebly heard that Girard's wealth came from the community and that it was only justice that it should revert to the community; that his methods had resulted in widows and orphans and that his money should be applied to the support of those orphans. These protests were frowned upon as the mouthings of cranks or the ravings of impotent envy. Applause was lavished upon Girard; his very clothes were preserved as immemorial mementoes.[65]