Chapter 2

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.

[1] It will be recollected that Macaulay has pictured a New Zealander of some future day as sitting upon a broken arch of London Bridge, contemplating the ruins of St. Paul's cathedral; and readers of the classics may recall the forecast of Seneca in the time of Nero, as to the discovery of a Western continent by which Rome should be dwarfed: "In later ages the time shall come when the ocean shall loosen the chains which bind us, a mighty continent shall be disclosed, and a deity shall unveil a new world beyond Britannia."

II. THE TRUE INWARDNESS OF WALL STREET.

BY JOHN CLARK RIDPATH.

The organized powers of society are always anxious to conciliate public favor. They know that they exist by sufferance--by sufferance of a mightier than themselves. In proportion as they know themselves to be aggressors and spoliators their anxiety increases. Every abusive power in the world is thus driven to adopt schemes and devices--some dangerous and some merely ludicrous--to keep a footing at that silent bar of opinion before which all wrong must, sooner or later, quail and slink away.

The great concern called Wall Street is such an organized power in society. It exists as a fact in our American system, and would fain conciliate the favor of the public. Wall Street has become one of the most conspicuous features in our national life. Knowing that it is challenged by public opinion--knowing indeed that it is already under the ban and condemnation of the American people--it now seeks, after the manner of its kind, to save itself alive. It would go further than mere salvation; it would make mankind believe that it is a reputable part of the universal swim. Aye more; it seeks to ingratiate itself, sometimes by force and sometimes by gentle craft and stratagem, into the good graces of that civilization which it has so mortally offended.

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.