XXXII

NOR a spell after settling up with the Commodore at the close of the Erie War,

F

I got out of Wall Street. I was by this time over my scriptural allowance of three score years and ten. I thought I had earned a rest.

I figured that I had made my wad, and now should begin to enjoy it.

Let worldly minds the world pursue;

It has no charms for me.

Once I admired its trifles, too,

I seemed to myself to be now in a quiet harbour,
like that fine big bay that dents in from the Hudson
River at Fishkill. I could look out from that safe
retreat onto the human vessels that were tossing
in the billows outside. "From every stormy wind
that blows" - that has always been a favourite
hymn of mine. And that other tune, too:

Oh, Beulah Land, Sweet Beulah Land,
Where on the highest mount I stand;
I look away across the sea,

Where mansions are prepared for me,
And view the shining glorious shore,
My heaven, my home forever more.

But after two or three months of nothing to do, I kind of got tired of resting. I saw Gould and Fisk making money in Erie hand over fist, and I hankered to get back. I wanted to stick a finger in that pudding, so to speak. They had taken Bill Tweed and Pete Sweeney into the Board of Directors. This was giving them such a fine pull with the law courts and the New York City authorities that they could do most anything they wanted to, and not be troubled with suits or legal technicalities. Tweed became a director of the railroad, "to get square For he was still nettled

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with Erie," as he put it. over those old losses in Erie speckilations which he said I had caused him, and now he vowed he was going to get it back was going to take it out of the road, no matter what it cost her. When I had got out of Erie at the time of our settlement with Vanderbilt, I figured that in taking my pay in cash and leaving Fisk and Gould the road, I had got the best end of the bargain. I was chuckling to myself to think how I had taken the horse, so to speak, and had left them holding onto the halter. But Jay's words were proving true. And although Erie seemed a badly waterlogged craft, there was a lot of service left in her yet. Therefore I wanted to get back on board, so to speak.

At the time of that settlement, a little feeling had arisen between me and the other two, Jay and Jimmy. But personal feelings don't count in Wall

Street. Operators can swear everlasting vengeance on each other one day, and be thick as molasses before sundown the next. In financial circles, it's the money that counts. No matter how mad you may be at a fellow, if you need his money you make up with him easy as anything. Erie was still a money-maker. So I wanted to get on the inside once more. If I could have another turn or two at the milking stool, so to speak, I felt I'd be willing to retire from active business altogether. Accordingly, before the summer was over, I was calling on Gould and Fisk, and they were coming to see me, just as though we hadn't had any differences at all. Before I knew it, I was back in the thick of things, and busy as a pup.

We now set out on a Bear campaign we three, Gould, Fisk and I. Being backed by Tweed and his political crowd, it promised big returns. But it required a lot of nerve. In fact, before it was through, it raised more excitement than I had bargained for. It was the Lock-up of greenbacks.

It seemed a foolhardy thing to do -go short of stocks just at that particular time. Because it was the fall of the year. The Government reports showed that bumper crops were to be harvested in nearly all parts of the country. A big traffic from the West to the seaboard was promised. The election of General Grant as president was almost a settled thing; and if he was elected, the policy of

the Government would be an immediate resumption of specie payment. Money was easy as an old shoe. When money is easy, stocks go up. Because at such times people have got the means to margin large holdings and so are hopeful and Bullish. It was about the last time in the world, one would have said, to begin a Bear campaign. But that's really just the time in which to begin it. Because the way to make money in Wall Street, if you are an insider, is to calculate on what the common people are going to do, and then go and do just the opposite. When everybody is Bullish, that is just the time when you can make the most money as a Bear, if you work it right. And we of our little clique thought we could work it right.

When money is easy the public buys stocks, and so the prices go up. The way to do, we calculated, would be to make money tight. Then people would sell, prices would go down, and we could cover our short contracts at a fine low figure. In this work of making money tight we were helped by one fact. The Government, in order to resume specie payments, had adopted a policy of contracting the amount of greenbacks in circulation. It was refusing to reissue greenback notes after it had once got them back into its vaults.

But that wasn't enough to tighten the currency to the point where it would serve our ends. So we set about working it ourselves. For this purpose

we made a pool of money to the amount of fourteen millions. Fisk and Gould provided ten millions, and I agreed to put in four millions.

The banks, as everybody knows, are required by law to keep as reserve twenty-five per cent. of their deposits. This is in order to take care of their depositors. When their cash on hand is over and above this twenty-five per cent. margin, bankers loan money free and easy. As soon as their cash begins to creep down to the twenty-five per cent. limit - which can almost be called the dead line bankers begin to get the cold shivers; they tighten their rates, and if the need is urgent enough, call in their outstanding loans. Knowing this we made our plans accordingly. We would put all of our cash into the form of deposits in the banks. Against these deposits we would write checks and get the banks to certify them. The banks would have to tie up enough funds to take care of these certifications. With the certified checks as collateral we would

borrow greenbacks - and then withdraw them suddenly from circulation.

When our arrangements were complete, we went onto the stock market and sold shares heavily short. People thought we were fools, because of all the signs pointing to a big revival of trade. Soon these contracts of ours matured. We held a council. We decided that the time had come to explode our bomb. So all of a sudden we called upon the banks