Newspaper cuttings, from the manuscript, MEGAdigital (MEGA² IV/19).1 Traducción al español
THE “ALBERT” AND ITS AMALGAMATIONS.
Vice-Chancellor James this morning delivered an important judgment in the case of the Family Endowment Society, one of the many associations which had been amalgamated with the Albert Assurance Company, now undergoing the process of winding up. General Pott, an unpaid annuitant of the Family Endowment Society, had presented a petition praying the court to grant an order for the winding up of that society. The petition was opposed on the part of the society on the grounds that the Albert Company had, upon the amalgamation, undertaken its liabilities, and that by such amalgamation it was dissolved, and therefore the court could not now order it to be wound up.
The Vice-Chancellor, in the course of his judgment, said this was a case in which very cogent evidence would be required to establish that a man who had a grant in writing from a society, which he could enforce under the provisions of an Act of Parliament against that society, had accepted in lieu of his original debtor another joint-stock company without any knowledge on his part, or any means of knowing whether the amalgamation of his original debtor with that company was ultra vires or intra vires. In this case not only was there not that cogent evidence, but it seemed to the court that in truth there was no evidence whatever. The receipts which he gave to the Albert Company were written upon the instrument which was given to him by the Family Endowment Society, and not upon any new or substituted contract. The court was therefore of opinion that the society had entirely failed to make out its first proposition. The next proposition of the society was that it had ceased to exist at the time when the Act of 1862 was passed or came into operation, and that that Act only applied to companies then existing. The court was of opinion that the society had not ceased to exist and could not cease to exist. The arrangement with the Albert provided that the society should continue to exist for the purpose of distributing its assets and paying its debts, and the society, by that arrangement, agreed to indemnify the Albert Company in case of its neglecting to collect its assets. As to the third proposition—namely, that the court should leave the petitioner to his remedy at law—the court did not think that it could properly or justly do so. It would not be right with regard to a creditor in his position to leave him to bring an action against nominal directors, and endeavour to find out shareholders in every part of the kingdom, or to allow nominal defendants to be harassed without any means of being indemnified by the society. Under these circumstances it appeared to the court that the petitioner had made out his case, and that the society having failed to make out any part of their case an order for the winding up of the society went ex debito justitiae.
When the collapse of the Albert Life Assurance Company was first announced we expressed a very decided opinion that the holders of policies issued by any of the offices absorbed by that company could still have recourse against the office in which they had originally insured, provided, of course, that they had not expressly accepted a new and substituted policy from the Albert. The correctness of this view was yesterday confirmed by Vice-Chancellor James in an important judgment. General Pott held an annuity from the Family Endowment Society, which in 1861 was amalgamated with the Albert, and he had since that date received the payments due to him through the latter. When the Albert failed, he fell back upon the Family Endowment Society, and in order to obtain satisfaction of his claims in respect of the annuity, applied to the Court of Chancery to deal with the Family Endowment as having a distinct and independent existence apart from the Albert, and to wind it up accordingly, making the shareholders liable for all policies issued in their name previous to the amalgamation. The Family Endowment Society, on the other hand, argued that they ceased to exist in 1861, and that all claims upon them were then transferred to the Albert. The question before the Vice-Chancellor was, therefore, simply this—whether the Albert as regards the creditors of the absorbed company was an agent or a substitute. His decision was in favour of the former view, that the Family Endowment Society might arrange with the Albert to transact business on its account, but could not substitute the latter for itself as a debtor without the assent of the creditors, and that this assent was not implied merely by the acceptance of payments due by the Family Endowment Society through the hands of the Albert. This is, we believe, the first authoritative judgment on this point, but it is difficult to see how there could be any room for doubt or what the rule of law should be. That a proprietary assurance office should have a right to transfer all liability on its policies to another company without the assent of policy-holders is a proposition, as it seems to us, so monstrous that it only requires to be stated in plain words to be at once rejected as utterly opposed to common honesty and common sense. In the case of the Albert, which had absorbed about a score of different companies, the application of the principle now affirmed is especially important.
AMERICA.
(FROM A CORRESPONDENT.)
NEW YORK, Nov. 14.
London has hardly recovered from the crisis of 1866. Before the financial crash of that year, the Limited Liability Act had produced a short period of fictitious wealth. An idea took root in the minds even of staid careful men that money was worth at least ten per cent. For a few years the ten per cent. was forthcoming, and then the too sanguine investors discovered that they had been receiving back a portion of their own money, and that all that was left to them was the bright memory of ideal riches, and the sad reality of inexorable “calls.” New York is still in our position before 1866. During the war, a golden shower in the shape of contracts and bounties descended upon the inhabitants. Prices rose; but, notwithstanding this, everyone found himself rich, for the rise was in greenbacks, and Government had thrown into circulation 80,000,000 dollars of these vague promises to pay at some future date. This artificial prosperity has been kept up until now by high protective duties, by reckless speculation, and by the paper currency, which was regarded by its originators as a war necessity to be abrogated on the resumption of peace, still continuing to be a legal tender. It may be that the country will get back into a sound financial condition without a crash, but this will only be done by retrenchment in every class, and by a determination on the part of Congress to prepare in time for what must eventually come, a resumption of specie payments and large reductions in the tariff. New York, however, believes in no crisis. No distinction is made between income and capital, and money is squandered by the wealthy on every caprice which can be imagined. I do not think that I am far wrong in saying that full 50 per cent. of the upper ten thousand are living at a rate which is not justified by their incomes or trade profits. The city is situated on an island—“down town” is, like the City of London, devoted to commerce, and after business hours is almost deserted. “Up town” is the fashionable quarter, and yearly, as buildings progress upwards, the distance between the two rival camps increases. Thirteen years ago, the municipality appropriated 900 acres, situated in the centre of the island, to be converted into a park, and at present, thanks to the energy and taste of Colonel Stebbins, the President of the Commission in which all relating to it has been vested, Central Park—as it is called—is one of the most beautiful pleasure grounds in the world. The land comprising it has been laid out with great skill, and no care nor expense is spared to keep it in good order. The balance-sheet of last year showed an expenditure on account of maintenance of 269,416 dols., or about 38,480l. The greater portion of the area partakes more of a landscape garden than of a park, in our sense of the word. It contains several ornamental sheets of water, 20 miles of carriage and bridle roads, numberless secluded walks, where old forest trees are interspersed with huge boulder rocks, well mown lawns, which are reserved as playgrounds for children, and in the centre a wide stone terrace, where, on summer afternoons, a band of music plays. In every part of it there are shady arbours and seats, for the use of which there is no charge. In many places there are statues and works of art. Hired carriages are not, as in Hyde-park, excluded, but, fortunately, the democracy of the city has not as yet claimed a right to hold political meetings in it. New Yorkers, poor as well as rich, are justly proud of their Park, and any demagogue who announced his intention to get up a demonstration in it, would find public opinion against him. Last year 7,089,798 persons used the Park, and of this number, although the police are very strict, only 31 were arrested for disorderly conduct, and only one for injuring the shrubs and flowers. The Park will no doubt become the fashionable centre of the city. The increased assessed value of the three wards surrounding it, since it was laid out, amounts to 91,496,565 dollars. Few houses have as yet been built round it, but a single lot (a lot is 100 feet by 25), in a favourable spot overlooking it, already sells for about 4,000 dols. While the Park is the Belgravia of the future, Fifth-avenue is the Belgravia of today. In a city where there is no caste which can claim to itself social pre-eminence, the position of a man—or rather a man’s wife—in society depends very much upon the location of the house. The head of a family who by some happy speculation has acquired wealth, knows no peace at home until he takes up his quarters in Fifth-avenue. A lot in this favoured locality costs about 6,000 dols., and the house which is built upon it about 15,000 dols. Many persons, however, buy two lots, and build what is called a double house, and this, of course, doubles the cost. The streets around Fifth-avenue are fashionable in proportion to their vicinity to it; good three-windowed houses may be bought in the best for about 12,000 dols. I have been in several of the largest houses, and in many of those of average size, in this city, and they certainly exceed, both in comfort and appearance, anything that, except our few palaces, we have in London. What we call the ground floor is about 10 feet from the level of the street, and is approached by a flight of steps from outside. This floor usually consists of three rooms of equal size; two are used as drawing-rooms, and one as a dining-room. The two drawing-rooms are separated from each other by pillars, and the second room is very dark, as it has no windows. It is consequently rarely used, except in the evenings. The other floors are given up to bedrooms. These are large and airy, few of them are without a bath, with hot and cold water laid on, and most have a dressing-room attached to them; the houses are warmed throughout with hot-air pipes, and, in every room there are one or more gas burners. The furniture is rather in the French than the English style, it is lighter and prettier than ours. There is, however, too much gilding and stucco, and tenth-rate daubs in gaudy frames too often disfigure the walls. Still there are houses which may in point of taste and comfort compare favourably with anything in Europe.
THE CANONIZATIONS OF MAMMON.
(FROM A CORRESPONDENT.)
NEW YORK, Nov. 10.
The statue of George Peabody is opposite the London Exchange, and his mortal remains have found a sepulchre beneath the roof of Westminster Abbey. A rich man, there was nothing wonderful, nothing even remarkable, in the manner in which he acquired his wealth. It was the result of industry, and of ordinary commercial acumen. It was his mode of spending it that has made his name a synonym for all that is noble and generous. By honouring his memory, Englishmen have shown the manner of man that they delight to honour. Although Mr. Peabody was no American, and although he contributed to charitable institutions in America perhaps even a larger amount than he gave in England, neither New York nor any other city in this country has thought him worthy of a statue. That honour has been reserved for Commodore Cornelius Vanderbilt, a rich man of a very different stamp. This morning, in the presence of a vast crowd, the bronze effigy of this hero of speculation was unveiled; a bishop invoked a blessing on him, speeches were made and verses were recited in his praise, and the authorities of the city bowed down and worshipped before his image. A recital of the leading features in the career of an individual, who has thus in his lifetime, like the worst of the Roman Emperors, been acclaimed by his admiring fellow citizens a divinity, may not perhaps prove uninteresting. Fame is approached by many paths; it will serve some purpose to show the path which leads to it in New York.
Cornelius Vanderbilt was born in 1794. His father died when he was still a child, and he became a sailor on a small schooner belonging to his mother, which plied as a ferry-boat between this city and Staten Island. At the age of eighteen, having saved some money, he bought a boat himself, and entered into competition with his mother, whom he ruined. At that time there was a certain Mr. Gibbons, who, from some reason or other, had vowed vengeance against the proprietor of the steamboats which had recently been started on the Hudson River. He heard of Cornelius Vanderbilt, and, pleased with the early emancipation from vulgar prejudice which he had shown in beggaring his mother, he engaged him to superintend a complete line of steamers on the Hudson. This was the origin of Vanderbilt’s fortunes. In his new occupation he gave evidence of energy, resolution, and of a perfect absence of all scruple. The new boats drove the old line off the river after a lengthy struggle, and Vanderbilt, who never forgot his own interests, managed to make money for himself, as well as for his patron. Mr. Gibbons died, and left his young friend some of his steamers; these he used to good purpose: wherever he heard that a boat was doing a remunerative trade on river or estuary, he sent one of them, and there it remained, carrying passengers and freight at nominal prices, until the competition was bought off at a figure which yielded him a handsome profit. His name soon became such a bugbear to all engaged in river navigation, that, for several years, after the manner of a Highland cataran, he received more than a 1,000 dollars a month as blackmail from individuals and companies as the price of immunity from his depredations. As his resources increased, his ambition took a wider range, and he determined to pursue the same tactics on the ocean which had proved so remunerative on rivers. The Pacific Mail Company was then at the summit of its prosperity. Gold had been discovered in California, and the steamers of the company were crowded with passengers, travelling to and from the Isthmus of Panama. The commodore—for he had proprio motu assumed that title—organised an opposition company. Had he confined himself to a legitimate attempt to share in a growing trade he would very probably have benefited the community. But it was repugnant to the nature of the man to gain by common place enterprise what might be acquired by other means. Walker, “the grey-eyed man of destiny,” was then filibustering in Nicaragua, and, making this his excuse, he signed, as president of his company, an agreement with the directors of the Pacific Mail to withdraw from the Isthmus trade, on payment of 8,000 dollars monthly for two years. The first instalment he paid into the exchequer of the company, the others he absorbed into his own; and it is only within a few months that he has been forced to disgorge to the shareholders a portion of this booty. This financial operation had reduced the shares of the company to a mere nominal value, and the president, its fiduciary guardian, declared that it was in debt to him, and as a set-off appropriated to himself its ships. Having by this sharp practice become the absolute owner of a fine fleet of ocean steamers, he engaged in what may be called the trade piracy of the 19th century. Wherever a merchant had built up a remunerative carrying trade, one of these corsairs made its appearance, and competed with him for it, until he agreed to terms of capitulation. Flushed with success, at length Vanderbilt determined to levy contributions from the great English companies which carry passengers between New York and Europe. He established a new line between France and America, and advertised a scale of prices which he imagined would secure him a monopoly of the traffic. But he found that he had to do with men who were not to be frightened. In vain a complaint, Congress aided him in his enterprise with a subsidy; his boats were bad, his officers were ill-paid, and few cared to save a few dollars at the risk of their lives. The Vanderbilt steamers sailed with a beggarly array of empty berths, while the Cunard and the Southampton boats were always full. He persevered for some time in the attempt, but finding that, in his expectation of black mail, he had for once reckoned without his host, he at last avowed himself beaten, and withdraw his ships. After this defeat he turned his attention to the profitable field of Government contracts, and in 1861, feeling that some sort of public recognition was due to his merits, as a gentle reminder he presented to the United States navy one of his steamers, which unfortunately was so constructed that it burnt so much coal as to render it, like an elephant, a burthen to its owner. The thanks of his country and a gold medal were voted to him by Congress for this generous act, although even within the doors of the Legislature many were heard to mutter that the gift was in part a restitution of some portion of the sums which had found their way into the donor’s pockets for questionable contracts, and in part a bid for others still more questionable. With this present to his country, Vanderbilt closed his career on the seas, and he sold the remainder of his steamers to a company which in a few months became bankrupt. In his raids upon commerce he had rivalled Captain Kidd, but while to the worthy captain was adjudged a gibbet, his modern emulator was elected a railroad director. Such is the different estimate of the same exploits in two ages!
With respect to the Commodore’s experiences in the field of railroad enterprise, and his change of tactics from competition to consolidation, I cannot do better than quote from a pamphlet, entitled “A Chapter on Erie.” It is from the pen of Mr. C. F. Adams, a son of the gentleman who so ably represented this country in England. “A Chapter on Erie” has had a very wide circulation, and it exposes, in terse and vigorous language, the corruption of the legislature, of the judiciary, and of the railroad speculators in the State of New York. Mr. Adams says—“Two great lines of railways traverse the State of New York, and connect it with the West—the Erie and the New York Central—the latter communicates with the city by a river and two great railways. To get these two roads—the Harlem and the Hudson River—under his absolute control, and then, as far as the Central was concerned, to abolish the River, was Vanderbilt’s immediate object. First making himself master of the Harlem road, he there learnt his early lessons in railroad management, and picked up a fortune by the way. It was in the successful conduct of this first experiment that Vanderbilt showed his very manifest superiority over previous railroad managers. His success with the Harlem depended upon his getting rid of the competition of the Hudson River Railroad. An ordinary manager would have resorted to contracts which are never carried out, or to opposition which is apt to be ruinous. Vanderbilt, on the contrary, put an end to competition by buying up the competing line. Thus his plans had developed by another step, while through a judicious course of financing, and watering, and dividing, a new fortune had been secured by him. By this time Vanderbilt’s reputation as a railroad manager had become very great, and the managers of the Centralbrought that road to him, and asked him to do with it as he had done with the Harlem and Hudson River. He accepted the proffered charge, and now the magnitude of the prize within his grasp probably first dawned upon him. To obtain absolute control over the commerce of New York, he had but to repeat with the Erie his successful operation with the Hudson River Road. The New York Central passed into Vanderbilt’s hands in the winter of 1866–67, and he marked the Erie for his own in the succeeding autumn.”
Mr. Adams then—and his account should be read by every one who wishes to obtain a clear insight into New York financing—proceeds to relate how Vanderbilt was foiled in his endeavours to buy a commanding share in Erie Stock by the unscrupulous issue on the part of his opponents of new stock, with which they flooded the market. The details of the long fight between Vanderbilt, Drew, and Messrs. Gould and Fisk, in which Legislatures were corrupted, judges bought, and bands of armed men organised, would be almost incredible, were not every fact “authenticated by the sworn evidence of those best acquainted with the truth.” The Erie directors were the victors in the strife. “For once Vanderbilt was effectually routed and driven from the field. That he shrank from continuing the contest with such opponents is much to his credit. It showed that he, at least, was not prepared to see how near he could come to the doors of a State prison, and yet not enter them, that he did not care to take in advance the opinion of leading counsel as to whether what he meant to do would place him in the felon’s dock.” But Vanderbilt, if he did not come off with the honours, was not entirely without the spoils of war, for here as elsewhere, when railroad magnates fall out, it is the shareholders, and not they, who pay the cost of hostilities. In July, 1867, a treaty of peace, which in reality was but a truce, was signed between the contending parties, when Commodore Vanderbilt was provided for. He was to be relieved of 50,000 shares of Erie stock at 70, receiving therefor 2,500,000 dollars in cash and 1,250,000 dollars in bonds of the Boston, Hartford, and Erie at 80. He was also to receive a further sum of 1,000,000 dollars outright, as a consideration for the privilege the Erie Railroad thus purchased of calling upon him for his remaining 50,000 shares at 70 at any time within four months.” When subsequently the details of this corrupt bargain leaked out, he wrote to the New York Times denying his share in them in the following terms:—“I have had no dealings with the Erie Company, nor have I ever sold that company any stock or received from them any bonus,” and he did not cease to protest, in accents of indignant virtue, against this slur upon his honour as a man and his good faith as a director, until Messrs. Fisk and Gould confounded him by the production of two cheques of the Erie Company for the sum of one million of dollars, made payable to the treasurer, and by him endorsed to C. Vanderbilt, upon whose order they had been paid. Convicted thus of falsehood, the Commodore could only complain that his whilom friends had betrayed his confidence! Nor after the war had been again renewed, and a frail treaty of peace concluded, were his interests forgotten. The belligerents united in a joint attack upon the purity of the Legislature of the State, and the public and private interests of the community. “A stock dividend of 80 per cent.”—an operation which netted its fortunate deviser the modest sum of 8,000,000 dollars—“in the New York Central, had been suddenly declared by Vanderbilt. Presently the Legislature met. While the Erie ring seemed to have good reasons for apprehending hostile legislation, Vanderbilt, on his part, might have feared for the success of a Bill which was to legalise his new stock. But hardly a voice was raised against the Erie men, and the Bill of the Central was safely carried through. This curious absence of opposition did not stop here, and soon the two parties were seen in active alliance. Vanderbilt wanted to consolidate his roads, the Erie directors wanted to avoid the formality of annual elections. Thereupon two other bills went hastily through this honest and patriotic Legislature—the one authorising the Erie board, which had been elected for one year, to classify itself so that one-fifth only of its members should vacate office during each succeeding year; the other consolidating the Vanderbilt roads in one colossal monopoly. It may be that public and private interests were not thus balanced and traded away in a servile Legislature; but the strong probabilities are, that the settlement of December made white even that of July.”
The facilities for the president of a railroad to make large sums by dealing in his own stock are far greater here than on any European money market, because the fluctuations in the price of securities are more violent, and because he has far more power than it is considered elsewhere desirable to place in the hands of an individual who is the guardian of funds belonging to others. Thus, the common stock of “Harlem” has been quoted at 9 and 179 since 1860, and within the last three weeks the price of “Vanderbilt securities” has varied by 30 points. By some plan of consolidation, by issuing bonds convertible at any moment into stock, or by declaring scrip dividends, a railroad autocrat can raise or depress the market value of his shares at will. The present quotations of the stock of the Vanderbilt railroads is far above their intrinsic worth. They are bought and sold, as tulips were in Holland, for speculative gain. An operator either “bulls” or “bears” them because he presumes that the president of the lines intends to send them up or down in the market. When the Commodore, a few months ago, married a young wife, they fell, on the chance of marriage at his advanced age proving injurious to his health. His position as the master of two of the great lines of communication between the West and the seaboard is, consequently, that of the proprietor of a hell where the game is carried on with cogged dice. In his financial operations in Wall-street he plays with what Mississippi gamblers call “the advantages.” It can hardly, therefore, be a matter for much surprise that his gains are enormous.
Many persons have achieved fame by questionable acts, but it is doubtful if, at least in the old world, any one ever became famous with so few redeeming virtues, or even amiable vices, as this New York great man. To heap up dollar after dollar with a fierce, ruthless determination, indifferent, like Fate, to the welfare or misery of others, has been the one absorbing occupation of his lifetime. Million on million, his fortune has been built up on the ruin of thousands. A mere lad, he beggared his mother, and in the course of his long career he has beggared relations, friends, and associates with hard, pitiless impartiality. His own sons-in-law have successively had occasion to rue the day when they believed that ties of blood would protect their homes from his greed. His oldest associates have found their fortunes transferred into his pockets by some chicanery of the Stock Exchange. A master in all kinds of legal legerdemain from early youth to extreme old age, his hand has been against all those who have sought to acquire wealth by honourable means. As a shipowner he grew rich by preying on shipowners, as a railroad magnate he has amassed millions by preying on his brother directors, his brokers, and his shareholders. The example of his success has produced in the country a cynical indifference to the rules of right and wrong, a laxity in the ethics of commercial honour, and a wild, restless spirit of speculative gambling, which will be felt long after he and his “monumental brass” have both rotted. Gould and Fisk, men who elsewhere would be consigned to a prison, but who here, to quote Mr. Adams again, “walk erect, proud of their infamy, through the streets of our great cities, and by exposing their portraits in public conveyances, convert noble steamers into branch galleries of a police-office; nay more, bedizen their persons with gold lace, and assume honoured titles,” are but mere vulgar knaves, who seek to emulate him, and who follow up the path to greatness, where he was the pioneer. Nor does the manner in which he spends his gains redeem the mode by which they were acquired. He has more than 1,500,000 dols. I doubt if his warmest admirer could credit him with one single good action. No charity—here where almost all are charitable—can boast of one dollar which he has contributed to its funds, nor, in the length and breadth of the lands, could one poor man be found who has ever benefitted by his boards. “Almost all great men,” said, with unintentional irony, the orator who pronounced his eulogy to-day, “have had some eccentric trait of character. I trace one to Cornelius Vanderbilt, the secret mode of his generosities.” They have indeed been secret. He lives in a large house, where no soul has ever tasted of his hospitality—a harsh, arrogant, cruel man, feared, detested, and yet admired by the stupid and vulgar, and fawned on by parasites who, undeterred by a thousand examples, still believe that if, like the ass of the fable, they hunt with the lion, they will not share the ass’s fate.
This man is now 74 years old, and has lately been seized with a desire not to descend into the grave without leaving behind him some durable monument of his fame. That the statue of George Peabody should have been erected in London, while in New York there was no statue of Cornelius Vanderbilt, disturbed his peace of mind and irritated his self-love. To build and endow a charitable institution, which might bear his name, was alien to the habits of his life; he therefore determined to remedy the mistake of his fellow-citizens, and to elevate a statue to himself. The Commodore felt that ridicule would hardly spare him if he set up his own image in a public place. He had resort therefore to a pious fraud in making his present to his native town—secrecy in his benefactions, being, as we know, the one “eccentric trait in his character.” Among his hangers-on was a certain De Groot, who had formerly been the captain of one of his steamers. This worthy tar, who cared and knew no more of art than a Kaffir, was instructed to organise a committee to receive subscriptions for a statue to his patron. Soon after it was announced that the requisite amount had been subscribed by persons who, like the object of their admiration, were generous in secret. The statue was ordered, and paid for. Its cost was above 50,000 dols., and, needless to add, this sum came, with the exception of a very trifling portion, out of the Commodore’s own pocket. It was finished a few weeks ago, and the services of the indefatigable De Groot were again put in requisition to get up a grand demonstration on its being officially unveiled. The principal men of the country, from the President downwards, were invited to attend. Some accepted the invitation, because they wished to be seen themselves; some, because they desired the Vanderbilt interest at their elections; and some, because they hoped to curry favour with him. Many eminent citizens, however, who were bidden to the ceremony, shone by their absence; while more than one Mordecai was found who indignantly refused to countenance so impudent and so brazen an act of self-glorification.
The unveiling was announced to take place at one o’clock, and shortly after that hour I found myself at the Hudson Railway depôt. This buildings is one of those hideous masses of brick and windows which we owe to the practical spirit of the age. On the top of its western facade I saw an expanse of canvas, and facing this a platform had been erected. On the platform were the “eminent citizens,” between it and the wall persons provided with tickets; right and left, the general public, kept back by ropes and cordons of police. The ceremony had already commenced. When I arrived a bishop was offering up a prayer; it was not a short one, but at length, it came to a close. Then forth stepped De Groot, and introduced to the assemblage the Mayor of New York, who delivered the oration of the day. Here a little difficulty arose. The Mayor had prepared a speech with many telling allusions to “yon bronze which looks down upon us from those walls,” and “yon bronze” had not yet been unveiled. After some delay this was remedied, the canvas was drawn aside by a number of sailors, who lined the root of the depot, and the hero of the day stood forth in all the majesty of bronze. As a work of art, the statue and the bas-reliefs which surround it are beneath criticism. “It is due,” the orator informed us, “firstly, to the happy conception of Albert de Groot, inspired by grateful enthusiasm, it owes its completion to the artistic genius of Ernst Plassman, and the careful skill of Valentine and George Fisher, who moulded it into colossal shape,” and it is very much what the illiterate enthusiasm of a sailor, and the careful skill of an ironmonger, might be supposed to produce. The idol stands within a bronze semicircular niche, and, although intensely realistic, hardly does justice to the original, who in the flesh, is like one of those handsome dissipated hedge-parsons that are frequently portrayed in old engravings. He is represented in a pair of very baggy trousers, and a huge great coat trimmed with Astrakhan fur. One leg is thrust forward, one hand is clasped to his heart, and the other is outstretched. On each side of the central niche are bas-reliefs, they cover a space of 150ft. by 12ft. That on the right is devoted to the marine laudation of the hero—there are steamboats, sailing vessels, and boats, heaped one over the other with an utter disregard of every law of composition. All are apparently bearing down on a figure of Neptune, who brandishes a trident to keep them off. The left bas-relief celebrates the hero’s railroad enterprises. It is a wonderful composition, representing with hideous conscientiousness of detail, locomotives drawing trains up hill, a house, a rural landscape, bales of merchandise, dogs, and oxen, and it is flanked by a figure of Liberty, who, with rigid limbs, gazes in mild astonishment at the heterogeneous articles over which she presides. The unveiling elicited but little applause—for an American crowd does not know how to shout—and the Mayor commenced his oration. His effort, I see in the newspapers of this morning, is described as sublime. There is, we know, but one step from the sublime to the ridiculous, and that step is reached a little sooner with us than in New York. The speech contained little except bombast and high flown metaphors, and whenever these failed him, the orator paused a moment, passed his hand through his hair, looked meditatively up to the statue which faced him for inspiration, and then apostrophised it. The following will serve as a specimen of the civic eloquence of this country; the Mayor, as he delivered himself of it, assumed the rapt air of a seer, and pointed with uplifted arm to the sky:—“Stand there, familiar image of an honoured man! Stand there, and breast the storms, or glitter in the sunshine of coming centuries! Stand there, colossal subject of metropolitan pride. (A voice “Bully for you.”) Stand there and daily teach the lessons which the results of your own long life inspire. (The same voice “You are the chap to rub it into him.”) Stand there and tell those whose industry has been crowned by wealth, that the honours of life and the praise of future generations follow those, and those only, who make the world the better for their living in it.” After this magnificent burst the Mayor resumed his hat, and subsided into private life. He was born, need I add, in the “green island.” Then followed an episode, which reminded me of many a familiar scene in my native land. Few who have attended the election meeting of a candidate for parliamentary honours will not remember the old man who rises from among the audience, and feels himself obliged to offer his testimony in favour of the candidate, who many years ago called upon him, and finding him with his wife and children starving, relieved the unfortunate family. The old man has never mentioned the circumstance before; but, having come by accident to the meeting, and having understood that some portion of the constituency are unable to appreciate their good fortune in having such a candidate, he feels it incumbent upon him to break through the silence of years. Such an old man costs about one dollar and an old coat. No good electioneering agent carries on his campaign without having one to produce at the proper moment. In all connected with the mise en scene of popular demonstrations the Americans can give us points, and so, when the Mayor sat down, an old man—I had been expecting him—raised his voice from among the crowd, and in a spontaneous outbreak of gratitude testified to Commodore Vanderbilt’s numerous virtues. This little theatrical interlude over, De Groot re-appeared, holding by the hand a wild-looking being, with corkscrew ringlets, like Mr. Disraeli, and that general untidiness of dress which denotes genius. This was the poet, William Ross Wallace—a name as yet unknown to fame. The bard cleared his throat, drew forth a portentously large manuscript, stuck an appropriate attitude, and then, suiting as he went along the action to the word, smiling sweetly when he became sentimental, balling his fists and stamping his feet when he became grandly impressive, and gazing aloft when he became reverential, he recited an “ode.” This is the poet Wallace’s notion of harmony and metre:
Mighty monument to Conquest—so the Great Republic cries, Power orbed on her vast forehead, earnestness burning in her eyes; Well it is my myriad children, with such thoughtful gladness hail. Thus thy miracle of dreamings, now resplendent from the vail. Well, it is the Soul of Music, with a shout of triumph leapt, And o’er all the New World’s Banner a new benediction swept. For a conquest inspiration thou art, with no carnage dye—
This gifted child of song poured forth verses equal in poetic beauty and literary merit to his opening stanzas for about half-an-hour. When he ceased, De Groot shouted out, “Hats off,” a clergyman pronounced a short benediction, and the august ceremony was over.
I conclude with one more quotation from Mr. Adams, which is not inappropriate to the occasion:
It is not, however, in connection with the present that all this has its chief significance. It speaks ominously for the future. It may be that our society is only passing through a period of ugly transition, but the present evil has its root deep down in the social organisation, and springs from a diseased public opinion. Failure seems to be regarded as the one unpardonable crime, success as the all redeeming virtue, the acquisition of wealth as the only worthy aim of life. Ten years ago such revelations as those of the Erie Railway would have sent a shudder through the community, and would have placed a stigma on every man who had had to do with them. Now they merely incite others to surpass them by yet bolder outrages and more corrupt combinations. Were this not so, these things would be as impossible among us now as they are elsewhere, or as they were here not many years ago. While this continues it is mere weakness to attribute the consequences of a lax morality to a defective [currency], or seek to prevent its outward indication by statute remedies. The root of the disease is deep, external applications will only hide its dangerous symptoms. It is well to reform the currency, it is well to enact laws against malefactors; but neither the one nor the other will restore health to a business community which tolerates successful fraud, or which honours wealth more than honesty.
Mr. Adams is the grandson and the great grandson of a President of the United States. His family name is a household word here for all that is noble and honourable. In publicly denouncing, in no covert terms, the utter rottenness of everything in New York, he has shown great courage, and it is to be hoped that his book, which is being read by thousands, will force the inhabitants of this city, from very shame, to crush out the corruption which is eating into the core of their commercial and political institutions. Amazement and indignation, unless followed by some persistent effort at reform, are of no use. Public opinion must be aroused to healthy and persistent activity, honest men must combine against knaves, if this community is not to become a reproach to modern civilization, and a stumbling block to the universal recognition of the great principle of self-government.
AMERICAN CURRENCY AND TRADE.
(FROM A CORRESPONDANT.)
NEW YORK, Nov. 16.
The recent gold flurry in Wall-street has not been without good results. It has brought home to all classes the changers of a fluctuating standard of value, and has convinced most persons that the present monetary system of the country is radically unsound. The retail cost of articles and the price of labour do not follow the ups and downs of the gold market. Importers consequently find that, while they are obliged to pay heavy duties in coin, the relation of which to greenbacks alters every week, they only receive from their customers a fixed value for their goods. The importing trade consequently has become a speculative one, and men of sterling business habits are deserting it. The Western farmer, too, has discovered that, as long as the price of his corn depends upon the quotations in Mark-lane, while he has to pay for everything connected with raising it in an inflated home currency, his whole gains, as is the case this year, may be swept away by a fall in the price of gold. But the difficulty of basing any commercial enterprise upon an irredeemable paper currency is not confined to importers and farmers—it affects every species of contract, and introduces a gambling element into every business transaction between man and man. Since the war, the number of legitimate banking and commercial firms has materially decreased, and the number of brokers and Wall-street “operators” has enormously increased. Such is the distrust which is felt by financialists towards the whole commercial system of the country, that, while money may be obtained on collateral security for stock-jobbing operations at seven cent., prime commercial paper cannot be discounted under 12 per cent., and many perfectly solvent firms are obliged to pay as much as 24 per cent. for temporary accommodation, a rate which of course swallows up all their profits. Under these circumstances all are agreed that something must be done, although few agree what that something is to be. In many of the newspapers it has been proposed to follow the example of California, and to quote values and make all contacts in gold, receiving greenbacks at their discount value. This would, indeed, bring home to the community a realisation of the actual worth of their investments, and it would eliminate from contacts their speculative element, as far as regards a standard of value; but it is difficult to suppose that it would effectually remedy the existing state of things, even if the Treasury were to consent to buy Government bonds in gold, instead of going through the double process of first buying greenbacks in the market, and then buying the bonds with the greenbacks.
Another plan, which it is reported is favoured by President Grant, is to announce the purchase of 50,000,000 dollars bonds for gold. This amount of coin thrown on the market, in addition to the 26,000,000 dollars in the banks, would, it is thought, place greenbacks on a par with gold, when the circulation would be increased by all the gold in the country, which would then come into circulation. This scheme is not favoured by any sound financial authorities, because it is evident that its effect would be but temporary, and that, between coin of a real intrinsic worth and promises to pay at some vague indefinite period there can be no permanent equivalent in value. But while commerce and enterprise are paralysed by the existing monetary system, and by the uncertainty in the public mind as to the future financial policy of the Government, the future will, very probably, be still more complicated by a decision of the Supreme Court of the United States, which will be made public in January next, and which will involve the constitutionality of the Legal Tender Act in time of peace. It appears to be the prevailing opinion that the court will decide that the Act was a war measure, and that, in extending its operation after the restoration of peace, Congress has exceeded its constitutional powers. Such a decision, unless preceded by some legislation to meet it, would bring commerce to a dead lock. Until the Treasury and the banks pay out gold it will be impossible for the community to do so. The banks have but a small amount in their vaults, and the Treasury is subject to the direction of Congress. Should the decision of the Supreme Court be adverse to the Legal Tender Act, it will be called upon to decide upon a second question of almost equal importance—are debts contracted in greenbacks to be paid in gold, taking greenbacks and gold as equivalent in value, or are they only worth their value in gold at the time they were incurred? A recent decision of the court has created an impression that the latter will be its opinion. A short time ago an action was brought by a creditor for a debt which had been incurred during the rebellion in Confederate notes. The court decided that “we are clearly of opinion that, in order that justice may be done between the two parties, the party entitled to be paid in these Confederate dollars can only receive their actual value, at the time and place of the contract, in lawful money of the United States. Were this theory of indebtedness to be applied to all greenback contracts, coupled with a decision that greenbacks are no longer a legal tender, it is difficult to estimate the confusion that would follow. Take, for example, the case of a railway company—it would only be required to pay its bonds in an equivalent in gold at the time that they were issued. But these bonds are, in most instances, no longer in the hands of the original holders, consequently existing investors in what is considered here the least speculative investment would find themselves mulcted of a portion of their capital. In view of this contingency it will be additionally necessary, therefore, for Congress, as soon as it meets, to take the whole subject of the currency into consideration. The Legal Tender Act has been called a war necessity, but it was financially a mistake. Whenever a Government tampers with its currency it creates a deep-seated feeling of distrust in its honesty. Had this Act never been passed, the United States would have been able to borrow money on far less onerous terms; nor will it ever be able to fund its debt at a reduced interest until it is abrogated. States and railroad companies which have borrowed money since the war have been obliged to pay 8 and 10 per cent., because foreigners will not invest their savings in a country where the principle is maintained that the standard of value in which they lend their money may be legislatively altered. Sir Robert Peel conferred a benefit upon England by telling us what a pound meant, and an American Minister of Finance who will state in clear and unmistakable terms what a dollar means, and what it will mean in future, will confer an equal benefit on his country. How is it to be expected that loans will be contracted on anything but usurious terms in Europe by either American States or American railways, when the European investor has before him the example of Pennsylvania? That wealthy State borrowed, before the war, money in England at 5 per cent.; the loan was a sterling loan, and the interest was payable in sterling. Taking advantage of an Act of Congress, it paid interest and a portion of the principal of the debt in a depreciated paper currency. The United States now finds itself in a position in which it cannot remain, and yet from which an exit is by no means easy. The problem of a resumption of specie payments is a most difficult one. When Mr. M‘Culloch attempted gradually to reduce the volume of irredeemable notes, he was obliged to give up the attempt, because he found that those which were withdrawn were not replaced by any other circulating medium, and this will ever be the case as long as any contradiction is based upon the notion that gold will be released, and be given as an equivalent for paper which is not worth its nominal value. Some plan must be devised which will enable the Treasury gradually to withdraw the greenbacks, and at the same time cause those which remain in circulation to be an equivalent in value with what replaces them, which in its turn must be an equivalent as regards its nominal value with gold. The best scheme which I have seen suggested is this—1st, to extend the facilities to banks to put notes into circulation convertible on demand into gold, and, as these notes are issued, to cancel an equal number of greenbacks. 2nd, to make greenbacks a legal tender for sums only not above 1,000 dols. 3rd, gradually to accumulate a sufficient amount of United States securities as to be able, at some future period, by selling a portion of them for gold, to make greenbacks redeemable in specie—this would not require a very great amount, because a large number of the notes would be absorbed into the circulation. With respect to the question of the payment in gold of debts contracted in greenbacks, it would be well to fix the relation between these two values, and in order to prevent any general liquidation in view of a resumption of a specie basis, to allow interest and principal of debts which have been contracted in them to be paid in gold, with a reduction of 10 per cent.
The other financial question which will occupy Congress will be that of the tariff. The report of Mr. Commissioner Wells has produced a profound effect, and Free Traders are increasing in number every day. The Tribune, the principal advocate of the Protectionists, is reduced to assert that the gold of British manufactures is producing this change in public opinion. But as the manufacturers who profit by Protection are in a small minority, while the majority of the nation suffers by it, there is no cause for surprise that the doctrine should have caused to be popular. The manufactures are endeavouring to enlist the patriotic feelings of the masses on their side. They ask whether American citizens are to be made to work for the wages of European slaves, and whether this vast country, with all its resources, should be dependent upon other nations? But the working-men here find that high wages do not mean prosperity, when the cost of every article of consumption is quadrupled; and with regard to the second appeal, they pertinently ask, as I somewhere saw, whether a man should black his own boots when he can employ his time more profitably. The only hope for the Protectionists lies in the necessity of raising a large revenue, and in the difficulty of doing this by means of internal taxation. If Congress decides that the revenues of the country can be reduced, an effort will be made to abolish the income tax, which, on account of its inquisitorial character, is most unpopular; and if this proves successful, the duties will remain as they are.
With a sound system of currency, and reasonable reduction of duties on imports, there is little to fear for the future of the country. The tide of emigration has not ceased to flow to its shores; every year increases the area of its cultivated land; in all parts railroads are being built, and throughout the West new towns and villages are springing up. Within two more years, provided the cotton crop is an average one, the South will be as rich, if not richer, than before the war. Formerly only wealthy men could engage in the cultivation of cotton, because it required a heavy investment of capital in negroes; at present men of moderate means do, and can, engage in it. Since the close of the war the Southerners have expended nothing in luxuries, and this saving alone will make up for all they have lost by the devastations consequent on the presence of hostile armies on their soil. Georgia and Alabama bid fair to become, in proportion to their population, two of the richest States in the Union; and even Virginia, which was the greatest sufferer, will shortly resume her legitimate position. In North Carolina, which is termed “the meanest State in the Union,” the value of real estate is more than double what it was twelve years ago.
One of the healthiest signs for the future commercial prosperity of the country is the indignation, which is daily increasing, against all those connected with the management of the Erie Railroad. The disclosures which have been made, both here and in Europe, respecting the mode in which a great commercial enterprise has become a pasture for thieves and scoundrels, who appear not even to care to assume the semblance of honesty in their depredations, has at length roused public opinion. It is felt that, for very shame, an effort must be made to bring them to account, and to show the world that their proceedings are the exception, and not the rule of conduct here. It was expected until very lately that proceedings would be instituted against them by Mr. M‘Henry, of Atlantic and Great Western fame. This gentleman, who had leased the Atlantic and Great Western to them, and who found that they paid him no rent, and that Mr. Gould, the president of the Erie Railroad, had been appointed receiver, went to Ohio, and there brought an action to cancel his contract, and to eject Gould from the receivership. In vain Gould filed an affidavit that he was not interested in the Erie line, and endeavoured to delay proceedings. The courts in Ohio, unlike those of New York, refused to listen to him. After a short struggle he resigned the receivership, and agreed to terms of composition respecting the railroad which were considered satisfactory by M‘Henry. This suit, which would have obliged the directors to put in a statement of their accounts, has thus been quashed. There are not wanting, however, gentlemen in New York who are prepared to act with the foreign holders of Erie stock to endeavour to turn out the present directors of the line, and, in the interests of the commercial honour of their city, they are prepared themselves to bear all the expenses of the war. The difficulty, however, in the way of action is that most of the common and preferred stock is held abroad, and that the shareholders will not act together. Most of them have not even sent over their stock to be transferred to their names, so that at a general meeting Messrs. Gould and Fisk hold the proxies of shares which belong to persons who would, if they voted at all, vote against them. I recently had a conversation with an eminent lawyer here on the subject of the prospects of success in any litigation which might be entered into by the shareholders. He told me that the safest plan would be the following: the preference shareholders have long been defrauded of their dividends; they might, as foreigners, institute proceedings in the District United States Court in Pennsylvania, through which State the Erie line runs for about 40 miles. The District Court, on their affidavit that the line has earned enough to pay them a dividend, would call upon the directors to put in their accounts, in order to invalidate the assertions in the affidavit. These accounts do not exist, and consequently would not be forthcoming, when the court would place the railroad in the hands of a receiver, who would soon be able to produce evidence of the depredations of the directors, and then criminal proceedings would be instituted against them. The reason why the action ought to be brought in Pennsylvania is, because there is no fear in that State of any State tribunal issuing an injunction to stop proceedings, whereas this would probably happen in New York, where the judges are the nominees of Tammany Hall, the Democratic Club, several of whose principal members have seats on the Erie board. By this means the preference shareholders might double the present value of their property. With respect to ordinary shareholders, their case is, I fear, a bad one. Nothing astonishes the American commercial public more than the way in which any number of these shares which are sent over to Europe are eagerly bought up at prices averaging from 25 to 20. As long as this continues Messrs. Gould and Fisk will print off shares, and by selling them abroad provide themselves with funds with which they will defy their own shareholders either to oust them or to punish them. The shares are, I presume, bought by English speculators, in the expectation that some time or the road will fall into honest hands, when their value will rise in the market. But even with the most honest and skilful administrators it is very doubtful whether even 1 per cent. could be paid on their par value. The following is the financial statement of the directors for the year ending 1868:—Capital—Common, 37,765,300 dols.; preferred, 8,536,910 dols.; total, 46,302,210 dols.; bonds and mortgages, 22,243,000 dols. The gross earnings of the road during the year amounted to 14,376,872 dols.; of this sum, 11,132,289 dols. was spent in working it, being 77.43 per cent. of the gross earnings, leaving a net revenue of 3,244,583, dols. The earnings per mile were 20,887 dols., and the expenses 16,173 dols. The profit per mile was consequently 4,714 dols. The income account for the same year is as follows:—Interest on bonds, 1,687,268 dols.; rents, railroads and docks, 703,393 dols.; taxes, 343,503 dols.; total (with several other smaller items), 3,221,911 dols., leaving 22,672 dols. to be divided between the shareholders of common and preferred stock, against which is to be set an item for “accounts payable” of 6,237,326 dols.
During the present year the common stock has been increased by new issues. It now amounts, according to the statement of the directors, to 70,000,000 dols., instead of 37,765,300 dols. But it is generally supposed that in reality it amounts to about 80,000,000 dols. Besides this, there is a floating debt of about 2,000,000 dols., 5,000,000 dols. convertible bonds have been issued, and there is every probability that the number of the preference shares has been largely increased. New locomotives and cars, too, are required, the cost of which is estimated at 4,000,000 dols. Now, the floating debt must be paid, and the cars and locomotives must be bought; and this can only be done by the issue of new shares, under the guise of convertible bonds; and as the shares are at present at 30 (in currency), in order to obtain the required 24,000,000 dols., it will be necessary to issue 80,000,000 worth of shares. I leave to the shareholders of common stock the task of calculating the amount of interest which, when Messrs. Fisk and Gould are replaced by honest men, these shares are likely to pay, and I recommend all those who are not in their predicament to weigh these facts before they become purchasers in Erie at any price. Were I to hazard a prophecy, I should say, that eventually the Erie railroad will be sold for the value of its mortgages, its preference share capital, and its floating debt. It is 557 miles long, it runs through the most populous portion of the State of New York, connects this city with the lakes of the West, the South-West, and with Canada; the cost of working it, to judge by the Vanderbilt lines, may be reduced to 69 per cent. and on a capital of about 50,000,000 dols., it will pay a fair dividend.
OVEREND AND GURNEY PROSECUTION.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—A paragraph has gone the round of the newspapers to the effect that as the prosecutor will not be allowed to appear for himself the defendants will be discharged on Monday next within the hour. If the accused individuals and the presiding judge are willing to accept such a conclusion, I feel very reluctant to become, even passively, a party to a proceeding which, whatever may be the merits of the case, will be at once a mockery of truth and a defeat of justice; I am, therefore, inclined to choose the less of two evils by sacrificing myself rather than my indictment on the altar of an imaginary technicality; in that event, to say nothing more of my personal feelings, I shall, at least, save our penal jurisprudence from the grave charge of conniving at a scandal which, if so condoned, may set an example to many a scandal even worse than itself.—I am, &c.,
ADAM THOM. Dec. 11.
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