History of the Great American Fortunes Part 16

CHAPTER VI

THE PROPULSION OF THE ASTOR FORTUNE

At the time of his father's death, William B. Astor, the chief heir of John Jacob Astor's twenty million dollars, was fifty-six years old. A tall, ponderous man, his eyes were small, contracted, with a rather vacuous look, and his face was sluggish and unimpressionable. Extremely unsocial and taciturn, he never betrayed emotion and generally was dest.i.tute of feeling. He took delight in affecting a carelessly-dressed, slouchy appearance as though deliberately notifying all concerned that one with such wealth as he was privileged to ignore the formulas of punctilious society. In this slovenly, stoop-shouldered man with his cold, abstracted air no one would have detected the richest man in America.

Acquisitiveness was his most marked characteristic. Even before his father's death he had ama.s.sed a fortune of his own by land speculations and banking connections, and he had inherited $500,000 from his uncle Henry, a butcher on the Bowery. It was said in 1846 that he possessed an individual fortune of $5,000,000. During the last years of his father he had been president of the American Fur Co., and he otherwise knew every detail of his father's multifarious interests and possessions.

WILLIAM B. ASTOR'S PARSIMONY.

He lived in what was considered a fine mansion on Lafayette place, adjoining the Astor Library. The sideboards were heaped with gold plate, and polyglot servants in livery stood obediently by at all times to respond to his merest nod. But he cared little for this show, except in that it surrounded him with an atmosphere of power. His frugality did not arise from wise self-control, but from his parsimonious habits. He scanned and revised the smallest item of expense. Wine he seldom touched, and the average merchant spent more for his wardrobe than he did. At a time when the rich despised walking and rode in carriages drawn by fast horses, he walked to and from his business errands. This severe economy he not only practiced in his own house, but he carried it into every detail of his business. Arising early in the morning, he attended to his private correspondence before breakfast. This meal was served punctually at 9 o'clock. Then he would stride to his office on Prince street. A contemporary writer says of him:

He knew every inch of real estate that stood in his name, every bond, contract and lease. He knew what was due when leases expired, and attended personally to the matter. No tenants could expend a dollar, or put in a pane of gla.s.s without his personal inspection. His father sold him the Astor House [an hotel] for the sum of one dollar. The lessees were not allowed to spend one cent on the building, without his supervision and consent, unless they paid for it themselves.

In the upper part of New York hundreds of lots can be seen enclosed by dilapidated fences, disfigured by rocks and waste material, or occupied as [truck] gardens. They are eligibly located, many of them surrounded by a fas.h.i.+onable population....

Mr. Astor owned most of these corner lots but kept the corners for a rise. He would neither sell nor improve them.... He knew that no parties can improve the center of a block without benefiting the corners.

He was sombre and solitary, dwelt alone, mixed little with general society, gave little and abhorred beggars.[143]

It was a common saying of him "when he paid out a cent he wanted a cent in return;" and as to his abject meannesses we forbear relating the many stories of him. He pursued, in every respect, his father's methods in using the powers of city government to obtain valuable water grants for substantially nothing, and in employing his surplus wealth for further purchases of land and in investments in other profitable channels. No scruples of any kind did he allow to interfere with his constant aim of increasing his fortune. His indifference to compunctions was shown in many ways, not the least in his open support of notoriously corrupt city and State administrations.

This corruption was by no means one existing despite him and his cla.s.s, and one that was therefore accepted grudgingly as an irremediable evil.

Far from it. Corrupt government was welcomed by the landholding, trading and banking cla.s.s, for by it they could secure with greater facility the perpetual rights, franchises, privileges and the exemptions which were adapted to their expanding aims and riches. By means of it they were not only enabled to pile up greater and greater wealth, but to set themselves up in law as a conspicuously privileged body, distinct from the ma.s.s of the people.

THE PURCHASE OF LAWS.

Publicly they might pretend a proper and ostentatious horror of corruption. Secretly, however, they quickly dispensed with what were to them idle dronings of political cant. As capitalists they ascribed their success to a rigid application and practicality; and being practical they went about purchasing laws by the most short-cut and economical method. They had the money; the office-holders had the votes and governmental power; consequently the one bought the other. It was a systematic corruption springing entirely from the propertied cla.s.ses; they demanded it, were responsible for it and kept it up. It worked like an endless chain; the land, charters, franchises and privileges corruptly obtained in one set of years yielded vast wealth, part of which was used in succeeding years in getting more law-created sources of wealth. If professional politicians had long since got into the habit of expecting to be bought, it was because the landholders, traders and bankers had accustomed them to the lucrative business of getting bribes in return for extraordinary laws.

Since the men of wealth, or embryo capitalists who by hook or crook raised the funds to bribe, were themselves ready at all times to buy laws in common councils, legislatures and in Congress, it naturally followed that each of them was fully as eager to partic.i.p.ate in the immense profits accruing from charters, franchises or special grants obtained by others of their own cla.s.s. They never questioned the means by which these laws were put through. They did not care. The mere fact that a franchise was put through by bribery was a trite, immaterial circ.u.mstance. The sole, penetrating question was whether it were a profitable project. If it were, no man of wealth hesitated in investing his money in its stock and in sharing its revenue. It could not be expected that he would feel moral objections, even the most attenuated, for the chances were that while he might not have been a party to the corrupt obtaining of this or that particular franchise, yet he was involved in the grants of other special endowments. Moreover, money making was not built on morality; its whole foundation and impetus lay in the extraction of profits. Society, it is true, professed to move on lofty moral planes, but this was a colossal pretension and nothing less.

THE INVERTED NATURE OF SOCIETY.

Society--and this is a truth which held equally strong of succeeding decades--was incongruously inverted. In saying this, the fact should not be ignored that the capitalist, as applied to the man who ran a factory or other enterprise, was an indigenous factor in that period, even although the money or inventions by which he was able to do this, were often obtained by fraud. Every needed qualification must be made for the time and the environment, and there should be neither haste in indiscriminately condemning nor in judging by the standards or maturity of later generations.

Yet, viewing society as a whole and measuring the results by the standards and ideas then prevailing, it was undoubtedly true that those who did the world's real services were the lowly, despoiled and much discriminated-against ma.s.s of mankind. Their very poverty was a crime, for after they were plundered and expropriated, either by the ruling cla.s.ses of their own country or of the United States, the laws regarded them as semi-criminals, or, at best, as excrescences to whom short shrift was to be given. They made the clothes, the shoes, hats, s.h.i.+rts, underwear, tools, and all the other necessities that mankind required; they tilled the ground and produced its food. Curiously enough, those who did these indispensable things were condemned by the encompa.s.sing system to live in the poorest and meanest habitations and in the most precarious uncertainty. When sick, disabled or superannuated they were cast aside by the capitalist cla.s.s as so much discarded material to eke out a prolonged misery of existence, to be thrown in penal inst.i.tutions or to starve. Substantially everywhere in the United States, vagrancy laws were in force which decreed that an able-bodied man out of work and homeless must be adjudged a vagrant and imprisoned in the workhouse or penetentiary. The very law-making inst.i.tutions that gave to a privileged few the right to expropriate the property of the many, drastically plunged the many down still further after this process of spoliation, like a man who is waylaid and robbed and then arrested and imprisoned because he has been robbed.

On the other hand, the cla.s.s which had the money, no matter how that money was gotten, irrespective of how much fraud or sacrifice of life attended its ama.s.sing, stood out with a luminous distinctness. It arrogated to itself all that was superior, and it exacted, and was invested with, a lordly deference. It lived in the finest mansions and laved in luxuries. Surrounded with an indescribably pretentious air of importance, it radiated tone, command and prestige.

But, such was the destructive, intestinal character of compet.i.tive warfare, that even this cla.s.s was continually in the throes of convulsive struggles. Each had to fight, not merely to get the wealth of others, but to keep what he already possessed. If he could but frustrate the attempts of compet.i.tors to take what he had, he was fortunate. As he preyed upon the laborer, so did the rest of his cla.s.s seek to prey upon him. If he were less able, less cunning, or more scrupulous than they, his ruination was certain. It was a system in which all methods were gauged not by the best but by the worst. Thus it was that many capitalists, at heart good men, kindly disposed and innately opposed to duplicity and fraud, were compelled to adopt the methods of their more successful but thoroughly unprincipled compet.i.tors. And, indeed, realizing the impregnating nature of example and environment, one cannot but conclude that the tragedies of the capitalist cla.s.s represented so many victims of the compet.i.tive system, the same as those among the wageworkers, although in a very different way. Yet in this bewildering jumble of fortune-s.n.a.t.c.hing, an extraordinary circ.u.mstance failed to impress itself upon the cla.s.s which took over to itself the claim to superior intelligence and virtue. The workers, for the most part, instinctively, morally and intellectually, knew that this system was wrong, a horror and a nightmare. But even the capitalist victims of the compet.i.tive struggle, which awarded supremacy to the knave and the trickster, went to their doom praising it as the only civilized, rational system and as unchangeable and even divinely ordained.

THE PREVAILING CORRUPTION.

If corruption was flagrant in the early decades of the nineteenth century, it was triply so in the middle decades. This was the period of all periods when common councils all over the country were being bribed to give franchises for various public utility systems, and legislatures and Congress for charters, land, money, and laws for a great number of railroad and other projects. The numerous specific instances cannot be adverted to here; they will be described more appropriately in subsequent parts of this work. For the present, let this general and sweeping observation suffice.

The important point which here obtrudes itself is that in every case, without an exception, the wealth ama.s.sed by fraud was used in turn to put through more frauds, and that the net acc.u.mulation of these successive frauds is seen in the great private fortunes of to-day. We have seen how the original Astor fortune was largely derived by the use of both force and fraud among the Indians, and by the exercise of cunning and corruption in the East. John Jacob Astor's immense wealth descends mostly to William B. Astor. In turn, one of the third generation, John Jacob Astor, Jr., representing his father, William B.

Astor, uses a portion of this wealth in becoming a large stockholder in the New York Central Railroad, and in corrupting the New York Legislature still further to give enormously valuable grants and special laws with incalculably valuable exemptions to that railroad. John Jacob Astor, Jr., never built a railroad in his life; he knew nothing about railroads; but by virtue of the possession of large surplus wealth, derived mainly from rents, he was enabled to buy enough of the stock to make him rank as a large stockholder. And, then, he with the other stockholders, bribed the Legislature for the pa.s.sage of more laws which enormously increased the value of their stock.

It is altogether clear from the investigations and records of the time that the New York Central Railroad was one of the most industrious corrupters of legislatures in the country, although this is not saying much in dealing with a period when every State Legislature, none excepted, was making gifts of public property and of laws in return for bribes, and when Congress, as was proved in official investigations, was prodigal in doing likewise.[144]

In the fourteen years up to 1867, the New York Central Railroad had spent upward of a half million dollars in buying laws at Albany and in "protecting its stockholders against injurious legislation." As one of the largest stockholders in the road John Jacob Astor, Jr., certainly must have been one of the masked parties to this continuous saturnalia of corruption. But the corruption, bad as it was, that took place before 1867, was rather insignificant compared to the eruption in the years 1868 and 1869. And here is to be noted a significant episode which fully reveals how the capitalist cla.s.s is ever willing to turn over the managing of its property to men of its own cla.s.s who have proved themselves masters of the art either of corrupting public bodies, or of making that property yield still greater profits.

BRIBERY AND BUSINESS.

In control of the New York and Harlem Railroad, Cornelius Vanderbilt had showed what a remarkably successful magnate he was in deluging legislatures and common councils with bribe money and in getting corrupt gifts of franchises and laws worth many hundreds of millions of dollars.

For a while the New York Central fought him; it bribed where he bribed; when he intimidated, it intimidated. But Vanderbilt was, by far, the abler of the two contending forces. Finally the stockholders decided that he was the man to run their system; and on Nov. 12, 1867, John Jacob Astor, Jr., Edward Cunard, John Steward and others, representing more than thirteen million dollars of stock, turned the New York Central over to Vanderbilt's management on the ground, as their letter set forth, that the change would result in larger dividends to the stockholders and (this bit of cant was gratuitously thrown in) "greatly promote the interests of the public." In closing, they wrote to Vanderbilt of "your great and acknowledged abilities." No sooner had Vanderbilt been put in control than these abilities were preeminently displayed by such an amazing reign of corruption and exaction, that even a public cynically habituated to bribery and arbitrary methods, was profoundly stirred.[145]

It was in these identical years that the Astors, the Goelets, the Rhinelanders and many other landholders and merchants were getting more water grants by collusion with the various corrupt city administrations.

On June 14, 1850, William B. Astor gets a grant of land under water for the block between Twelfth and Thirteenth streets, on the Hudson River, at the ridiculous price of $13 per running foot.[146] William E. Dodge likewise gets a grant on the Hudson River. Public opinion severely condemned this practical giving away of city property, and a special committee of the Board of Councilmen was moved to report on May 15, 1854, that "the practice of selling city property, except where it is in evidence that it cannot be put to public use, is an error in finance that has prevailed too frequently; indeed the experience of about eleven years has demonstrated that sales of property usually take place about the time it is likely to be needed for public uses, or on the eve of a rise in value. Every pier, bulkhead and slip should have continued to be the property of the city...."[147]

WATER GRANTS FROM TWEED.

But when the Tweed "ring" came into complete power, with its unbridled policy of accommodating anyone who could pay bribes enough, the landowners and merchants rushed to get water grants among other special privileges. On Dec. 27, 1865, William C. Rhinelander was presented with a grant of land under water from Ninety-first to Ninety-fourth street, East River.[148] On March 21, 1867, Peter Goelet obtained from the Sinking Fund Commissioners a grant of land under water on the East River in front of land owned by him between Eighty-first street and Eighty-second street. The price asked was the insignificant one of $75 a running foot.[149] The officials who made this grant were the Controller, Richard B. Connolly, and the Street Commissioner, George W.

McLean, both of whom were arch accomplices of William M. Tweed and were deeply involved in the gigantic thefts of the Tweed ring. The same band of officials gave to Mrs. Laura A. Delano, a daughter of William B.

Astor, a grant from Fifty-fifth to Fifty-seventh street, Hudson River, at $200 per running foot, and on May 21, 1867, a grant to John Jacob Astor, Jr., of lands under water between Forty-ninth and Fifty-first streets, Hudson River, for the trivial sum of $75 per running foot. Many other grants were given at the same time. The public, used as it was to corrupt government, could not stomach this granting of valuable city property for virtually nothing. The severe criticism which resulted caused the city officials to bend before the storm, especially as they did not care to imperil their other much greater thefts for the sake of these minor ones. Many of the grants were never finally issued; and after the Tweed "ring" was expelled from power, the Commissioners of the Sinking Fund on Feb. 28, 1882, were compelled by public agitation to rescind most of them.[150] The grant issued to Rhinelander in 1865, however, was one of those which was never rescinded.

During its control of the city administration from 1868 to 1871 alone, the Tweed "ring" stole directly from the city and county of New York a sum estimated from $45,000,000 to $200,000,000. Henry F. Taintor, the auditor employed by Andrew H. Green to investigate Controller Connolly's books, testified before the special Aldermanic Committee in 1877, that he had estimated the frauds during those three and a half years at from $45,000,000 to $50,000,000.[151] The committee, however, evidently thought that the thefts amounted to $60,000,000; for it asked Tweed during the investigation whether they did not approximate that sum, to which question he gave no definite reply. But Mr. Taintor's estimate, as he himself admitted, was far from complete even for the three and a half years. Matthew J. O'Rourke, who was responsible for the disclosures, and who made a remarkably careful study of the "ring's" operations, gave it as his opinion that from 1869 to 1871 the "ring" stole about $75,000,000 and that he thought the total stealings from about 1865 to 1871, counting vast issues of fraudulent bonds, amounted to $200,000,000.

PROFITING FROM GIGANTIC THEFTS.

Every intelligent person knew in 1871 that Tweed, Connolly and their a.s.sociates were colossal thieves. Yet in that year a committee of New York's leading and richest citizens, composed of John Jacob Astor, Jr., Moses Taylor, Marshall O. Roberts, E. D. Brown, George K. Sistare and Edward Sch.e.l.l, were induced to make an examination of the controller's books and hand in a most eulogistic report, commending Connolly for his honesty and his faithfulness to duty. Why did they do this? Because obviously they were in underhand alliance with those political bandits, and received from them special privileges and exemptions amounting in value to hundreds of millions of dollars. We have seen how Connolly made gifts of the city's property to this cla.s.s of leading citizens.

Moreover, a corrupt administration was precisely what the rich wanted, for they could very conveniently make arrangements with it to evade personal property taxation, have the a.s.sessments on their real estate reduced to an inconsiderable sum, and secure public franchises and rights of all kinds.

There cannot be the slightest doubt that the rich, as a cla.s.s, were eager to have the Tweed regime continue. They might pose as fine moralists and profess to instruct the poor in religion and politics, but this att.i.tude was a fraud; they deliberately instigated, supported, and benefited by, all of the great strokes of thievery that Tweed and Connolly put through. Thus to mention one of many instances, the foremost financial and business men of the day were a.s.sociated as directors with Tweed in the Viaduct Railroad. This was a project to build a railroad on or above the ground _on any New York City street_.

One provision of the bill granting this unprecedentedly comprehensive franchise compelled the city to take $5,000,000 of stock; another exempted the company property from taxes or a.s.sessments. Other subsidiary bills allowed for the benefit of the railroad the widening and grading of streets which meant a "job" costing from $50,000,000 to $60,000,000.[152] This bill was pa.s.sed by the Legislature and signed by Tweed's puppet Governor Hoffman; and only the exposure of the Tweed regime a few months later prevented the complete consummation of this almost unparalleled steal.

Considering the fact that the richest and most influential and respectable men were direct allies of the Tweed clique, it was not surprising that men such as John Jacob Astor, Jr., Moses Taylor, Edward Sch.e.l.l and company were willing enough to sign a testimonial certifying to Controller Connolly's honesty. The Tweed "ring" supposed that a testimonial signed by these men would make a great impression upon the public. Yet, stripping away the halo which society threw about them simply because they had wealth, these rich citizens themselves were to be placed in even a lower category than Tweed, on the principle that the greater the pretension, the worst in its effect upon society is the criminal act. The Astors cheated the city out of enormous sums in real estate and personal property taxation; Moses Taylor likewise did so, as was clearly brought out by a Senate Investigating Committee in 1890; Roberts had been implicated in great swindles during the Civil War; and as for Edward Sch.e.l.l, he, by collusion with corrupt officials, compelled the city to pay exorbitant sums for real estate owned by him and which the city needed for public purposes. And further it should be pointed out that Tweed, Connolly and Sweeny were but vulgar political thieves who retained only a small part of their thefts. Tweed died in prison quite poor; even the very extensive area of real estate that he bought with stolen money vanished, one part of it going in lieu of counsel fees to one of his lawyers, Elihu Root, United States Secretary of State under Roosevelt.[153] Connolly fled abroad with $6,000,000 of loot and died there, while Sweeny settled with the city for an insignificant sum.

The men who really profited directly or indirectly by the gigantic thefts of money and the franchise, tax-exemption, and other measures put through the legislature or common council were men of wealth in the background, who thereby immensely increased their riches and whose descendants now possess towering fortunes and bear names of the highest "respectability."[154]

The original money of the landholders came from trade; and then by a combination of cunning, bribery, and a moiety of what was considered legitimate investment, they became the owners of immense tracts of the most valuable city land. The rentals from these were so great that continuously more and more surplus wealth was heaped up. This surplus wealth, in slight part, went to bribe representative bodies for special laws giving them a variety of exclusive property, and another part was used in buying stock in various enterprises the history of which reeked with corruption.

From being mere landholders whose possessions were confined mainly to city land, they became part owners of railroad, telegraph, express and other lines reaching throughout the country. So did their holdings and wealth-producing interests expand by a c.u.mulative and ever-widening process. The prisons were perennially filled with convicts, nearly all of whom had committed some crime against property, and for so doing were put in chains behind heavy bars, guarded by rifles and great stone walls. But the men who robbed the community of its land and its railroads (most of which latter were built with _public_ land and money) and who defrauded it in a thousand ways, were, if not morally exculpated, at least not molested, and were permitted to retain their plunder, which, to them, was the all-important thing. This plunder, in turn, became the basis for the foundation of an aristocracy which in time built palaces, invented impressive pedigrees and crests and coats-of-arms, intermarried with European t.i.tles, and either owned or influenced newspapers and journals which taught the public how it should think and how it should act. It is one thing to commit crimes against property, and a vastly different thing to commit crimes _in behalf_ of property. Such is the edict of a system inspired by the sway of property.

RENTALS FROM DISEASE AND DEATH.

But the sources of the large rentals that flowed into the exchequers of the landlords--what were they? Where did these rents, the volume of which was so great that the surplus part of them went into other forms of investments, come from? Who paid them and how did the tenants of these mammoth landlords live?

A considerable portion came from business buildings and private residences on much of the very land which New York City once owned and which was corruptly squirmed out of munic.i.p.al owners.h.i.+p. For the large rentals which they were forced to pay, the business men recouped themselves by marking up the prices of all necessities. Another, and a very preponderate part, came from tenement houses. Many of these were also built on land filched from the city. And such habitations! Never before was anything seen like them. The reports of the Metropolitan Board of Health for 1866, 1867 and succeeding years revealed the fact that miles upon miles of city streets were covered with densely populated tenements, where human beings were packed in vile rooms, many of which were dark and unventilated and which were pestilential with disease and overflowed with deaths. In its first report, following its organization, the Metropolitan Board of Health pointed out:

The first, and at all times the most prolific cause of disease, was found to be the very insalubrious condition of most of the tenement houses in the cities of New York and Brooklyn. These houses are generally built without any reference to the health and comfort of the occupants, but simply with a view to economy and profit to the owner. They are almost invariably overcrowded, and ill-ventilated to such a degree as to render the air within them constantly impure and offensive.