One can imagine what the result was-the most important financier and the most distinguished railway enterprise collapsing at one and the same time. "A financial thunderclap in a clear sky," said the Philadelphia Press. "No one could have been more surprised," said the Philadelphia Inquirer, "if snow had fallen amid the sunshine of a summer noon." The public, which by Cooke's previous tremendous success had been lulled into believing him invincible, could not understand it. It was beyond belief. Jay Cooke fail? Impossible, or anything connected with him. Nevertheless, he had failed; and the New York Stock Exchange, after witnessing a number of crashes immediately afterward, closed for eight days. The Lake Shore Railroad failed to pay a call-loan of one million seven hundred and fifty thousand dollars; and the Union Trust Company, allied to the Vanderbilt interests, closed its doors after withstanding a prolonged run. The National Trust Company of New York had eight hundred thousand dollars of government securities in its vaults, but not a dollar could be borrowed upon them; and it suspended. Suspicion was universal, rumor affected every one.
In Philadelphia, when the news reached the stock exchange, it came first in the form of a brief despatch addressed to the stock board from the New York Stock Exchange-"Rumor on street of failure of Jay Cooke & Co. Answer." It was not believed, and so not replied to. Nothing was thought of it. The world of brokers paid scarcely any attention to it. Cowperwood, who had followed the fortunes of Jay Cooke & Co. with considerable suspicion of its president's brilliant theory of vending his wares direct to the people-was perhaps the only one who had suspicions. He had once written a brilliant criticism to some inquirer, in which he had said that no enterprise of such magnitude as the Northern Pacific had ever before been entirely dependent upon one house, or rather upon one man, and that he did not like it. "I am not sure that the lands through which the road runs are so unparalleled in climate, soil, timber, minerals, etc., as Mr. Cooke and his friends would have us believe. Neither do I think that the road can at present, or for many years to come, earn the interest which its great issues of stock call for. There is great danger and risk there." So when the notice was posted, he looked at it, wondering what the effect would be if by any chance Jay Cooke & Co. should fail.
He was not long in wonder. A second despatch posted on 'change read: "New York, September 18th. Jay Cooke & Co. have suspended."
Cowperwood could not believe it. He was beside himself with the thought of a great opportunity. In company with every other broker, he hurried into Third Street and up to Number 114, where the famous old banking house was located, in order to be sure. Despite his natural dignity and reserve, he did not hesitate to run. If this were true, a great hour had struck. There would be wide-spread panic and disaster. There would be a terrific slump in prices of all stocks. He must be in the thick of it. Wingate must be on hand, and his two brothers. He must tell them how to sell and when and what to buy. His great hour had come!Chapter LIX
The banking house of Jay Cooke & Co., in spite of its tremendous
significance as a banking and promoting concern, was a most
unpretentious affair, four stories and a half in height of gray
stone and red brick. It had never been deemed a handsome or
comfortable banking house. Cowperwood had been there often.
Wharf-rats as long as the forearm of a man crept up the culverted
channels of Dock Street to run through the apartments at will.
Scores of clerks worked under gas-jets, where light and air were
not any too abundant, keeping track of the firm's vast accounts.
It was next door to the Girard National Bank, where Cowperwood's
friend Davison still flourished, and where the principal financial
business of the street converged. As Cowperwood ran he met his
brother Edward, who was coming to the stock exchange with some
word for him from Wingate.
"Run and get Wingate and Joe," he said. "There's something big on this afternoon. Jay Cooke has failed."
Edward waited for no other word, but hurried off as directed.
Cowperwood reached Cooke & Co. among the earliest. To his utter astonishment, the solid brown-oak doors, with which he was familiar, were shut, and a notice posted on them, which he quickly read, ran:
September 18, 1873.
To the Public-We regret to be obliged to announce that, owing
to unexpected demands on us, our firm has been obliged to suspend
payment. In a few days we will be able to present a statement
to our creditors. Until which time we must ask their patient
consideration. We believe our assets to be largely in excess
of our liabilities.
Jay Cooke & Co.
A magnificent gleam of triumph sprang into Cowperwood's eye. In company with many others he turned and ran back toward the exchange, while a reporter, who had come for information knocked at the massive doors of the banking house, and was told by a porter, who peered out of a diamond-shaped aperture, that Jay Cooke had gone home for the day and was not to be seen.
"Now," thought Cowperwood, to whom this panic spelled opportunity, not ruin, "I'll get my innings. I'll go short of this-of everything."
Before, when the panic following the Chicago fire had occurred, he had been long-had been compelled to stay long of many things in order to protect himself. To-day he had nothing to speak ofЦ perhaps a paltry seventy-five thousand dollars which he had managed to scrape together. Thank God! he had only the reputation of Wingate's old house to lose, if he lost, which was nothing. With it as a trading agency behind him-with it as an excuse for his presence, his right to buy and sell-he had everything to gain. Where many men were thinking of ruin, he was thinking of success. He would have Wingate and his two brothers under him to execute his orders exactly. He could pick up a fourth and a fifth man if necessary. He would give them orders to sell-everything-ten, fifteen, twenty, thirty points off, if necessary, in order to trap the unwary, depress the market, frighten the fearsome who would think he was too daring; and then he would buy, buy, buy, below these figures as much as possible, in order to cover his sales and reap a profit.
His instinct told him how widespread and enduring this panic would be. The Northern Pacific was a hundred-million-dollar venture. It involved the savings of hundreds of thousands of people-small bankers, tradesmen, preachers, lawyers, doctors, widows, institutions all over the land, and all resting on the faith and security of Jay Cooke. Once, not unlike the Chicago fire map, Cowperwood had seen a grand prospectus and map of the location of the Northern Pacific land-grant which Cooke had controlled, showing a vast stretch or belt of territory extending from Duluth-"The Zenith City of the Unsalted Seas," as Proctor Knott, speaking in the House of Representatives, had sarcastically called it-through the Rockies and the headwaters of the Missouri to the Pacific Ocean. He had seen how Cooke had ostensibly managed to get control of this government grant, containing millions upon millions of acres and extending fourteen hundred miles in length; but it was only a vision of empire. There might be silver and gold and copper mines there. The land was usable-would some day be usable. But what of it now? It would do to fire the imaginations of fools with-nothing more. It was inaccessible, and would remain so for years to come. No doubt thousands had subscribed to build this road; but, too, thousands would now fail if it had failed. Now the crash had come. The grief and the rage of the public would be intense. For days and days and weeks and months, normal confidence and courage would be gone. This was his hour. This was his great moment. Like a wolf prowling under glittering, bitter stars in the night, he was looking down into the humble folds of simple men and seeing what their ignorance and their unsophistication would cost them.
He hurried back to the exchange, the very same room in which only two years before he had fought his losing fight, and, finding that his partner and his brother had not yet come, began to sell everything in sight. Pandemonium had broken loose. Boys and men were fairly tearing in from all sections with orders from panic-struck brokers to sell, sell, sell, and later with orders to buy; the various trading-posts were reeling, swirling masses of brokers and their agents. Outside in the street in front of Jay Cooke & Co., Clark & Co., the Girard National Bank, and other institutions, immense crowds were beginning to form. They were hurrying here to learn the trouble, to withdraw their deposits, to protect their interests generally. A policeman arrested a boy for calling out the failure of Jay Cooke & Co., but nevertheless the news of the great disaster was spreading like wild-fire.
Among these panic-struck men Cowperwood was perfectly calm, deadly cold, the same Cowperwood who had pegged solemnly at his ten chairs each day in prison, who had baited his traps for rats, and worked in the little garden allotted him in utter silence and loneliness. Now he was vigorous and energetic. He had been just sufficiently about this exchange floor once more to have made his personality impressive and distinguished. He forced his way into the center of swirling crowds of men already shouting themselves hoarse, offering whatever was being offered in quantities which were astonishing, and at prices which allured the few who were anxious to make money out of the tumbling prices to buy. New York Central had been standing at 104 7/8 when the failure was announced; Rhode Island at 108 7/8; Western Union at 92 1/2; Wabash at 70 1/4; Panama at 117 3/8; Central Pacific at 99 5/8; St. Paul at 51; Hannibal & St. Joseph at 48; Northwestern at 63; Union Pacific at 26 3/4; Ohio and Mississippi at 38 3/4. Cowperwood's house had scarcely any of the stocks on hand. They were not carrying them for any customers, and yet he sold, sold, sold, to whoever would take, at prices which he felt sure would inspire them.
"Five thousand of New York Central at ninety-nine, ninety-eight, ninety-seven, ninety-six, ninety-five, ninety-four, ninety-three, ninety-two, ninety-one, ninety, eighty-nine," you might have heard him call; and when his sales were not sufficiently brisk he would turn to something else-Rock Island, Panama, Central Pacific, Western Union, Northwestern, Union Pacific. He saw his brother and Wingate hurrying in, and stopped in his work long enough to instruct them. "Sell everything you can," he cautioned them quietly, "at fifteen points off if you have to-no lower than that now-and buy all you can below it. Ed, you see if you cannot buy up some local street-railways at fifteen off. Joe, you stay near me and buy when I tell you."
The secretary of the board appeared on his little platform.
"E. W. Clark & Company," he announced, at one-thirty, "have just closed their doors."
"Tighe & Company," he called at one-forty-five, "announce that they are compelled to suspend."
"The First National Bank of Philadelphia," he called, at two o'clock, "begs to state that it cannot at present meet its obligations."
After each announcement, always, as in the past, when the gong had compelled silence, the crowd broke into an ominous "Aw, aw, aw."
"Tighe & Company," thought Cowperwood, for a single second, when he heard it. "There's an end of him." And then he returned to his task.
When the time for closing came, his coat torn, his collar twisted loose, his necktie ripped, his hat lost, he emerged sane, quiet, steady-mannered.
"Well, Ed," he inquired, meeting his brother, "how'd you make out?" The latter was equally torn, scratched, exhausted.
"Christ," he replied, tugging at his sleeves, "I never saw such a place as this. They almost tore my clothes off."
"Buy any local street-railways?"
"About five thousand shares."
"We'd better go down to Green's," Frank observed, referring to the lobby of the principal hotel. "We're not through yet. There'll be more trading there."
He led the way to find Wingate and his brother Joe, and together they were off, figuring up some of the larger phases of their purchases and sales as they went.
And, as he predicted, the excitement did not end with the coming of the night. The crowd lingered in front of Jay Cooke & Co.'s on Third Street and in front of other institutions, waiting apparently for some development which would be favorable to them. For the initiated the center of debate and agitation was Green's Hotel, where on the evening of the eighteenth the lobby and corridors were crowded with bankers, brokers, and speculators. The stock exchange had practically adjourned to that hotel en masse. What of the morrow? Who would be the next to fail? From whence would money be forthcoming? These were the topics from each mind and upon each tongue. From New York was coming momentarily more news of disaster. Over there banks and trust companies were falling like trees in a hurricane. Cowperwood in his perambulations, seeing what he could see and hearing what he could hear, reaching understandings which were against the rules of the exchange, but which were nevertheless in accord with what every other person was doing, saw about him men known to him as agents of Mollenhauer and Simpson, and congratulated himself that he would have something to collect from them before the week was over. He might not own a street-railway, but he would have the means to. He learned from hearsay, and information which had been received from New York and elsewhere, that things were as bad as they could be, and that there was no hope for those who expected a speedy return of normal conditions. No thought of retiring for the night entered until the last man was gone. It was then practically morning.
The next day was Friday, and suggested many ominous things. Would it be another Black Friday? Cowperwood was at his office before the street was fairly awake. He figured out his program for the day to a nicety, feeling strangely different from the way he had felt two years before when the conditions were not dissimilar. Yesterday, in spite of the sudden onslaught, he had made one hundred and fifty thousand dollars, and he expected to make as much, if not more, to-day. There was no telling what he could make, he thought, if he could only keep his small organization in perfect trim and get his assistants to follow his orders exactly. Ruin for others began early with the suspension of Fisk & Hatch, Jay Cooke's faithful lieutenants during the Civil War. They had calls upon them for one million five hundred thousand dollars in the first fifteen minutes after opening the doors, and at once closed them again, the failure being ascribed to Collis P. Huntington's Central Pacific Railroad and the Chesapeake & Ohio. There was a long-continued run on the Fidelity Trust Company. News of these facts, and of failures in New York posted on 'change, strengthened the cause Cowperwood was so much interested in; for he was selling as high as he could and buying as low as he could on a constantly sinking scale. By twelve o'clock he figured with his assistants that he had cleared one hundred thousand dollars; and by three o'clock he had two hundred thousand dollars more. That afternoon between three and seven he spent adjusting his trades, and between seven and one in the morning, without anything to eat, in gathering as much additional information as he could and laying his plans for the future. Saturday morning came, and he repeated his performance of the day before, following it up with adjustments on Sunday and heavy trading on Monday. By Monday afternoon at three o'clock he figured that, all losses and uncertainties to one side, he was once more a millionaire, and that now his future lay clear and straight before him.
As he sat at his desk late that afternoon in his office looking out into Third Street, where a hurrying of brokers, messengers, and anxious depositors still maintained, he had the feeling that so far as Philadelphia and the life here was concerned, his day and its day with him was over. He did not care anything about the brokerage business here any more or anywhere. Failures such as this, and disasters such as the Chicago fire, that had overtaken him two years before, had cured him of all love of the stock exchange and all feeling for Philadelphia. He had been very unhappy here in spite of all his previous happiness; and his experience as a convict had made, him, he could see quite plainly, unacceptable to the element with whom he had once hoped to associate. There was nothing else to do, now that he had reestablished himself as a Philadelphia business man and been pardoned for an offense which he hoped to make people believe he had never committed, but to leave Philadelphia to seek a new world.