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This essay is from "The Life and Legend of E. H. Harriman", by Maury Klein, copyright 2000 by the University of North Carolina Press. Used by permission of the publisher.
The child born February 25, 1848, to Cornelia [and
Orlando] Harriman would never be an imposing physical
specimen. All his life Henry was the runt of the litter, a
large-eared, weak-eyed bantam who made up in scrappiness
what he lacked in size. Where others intimidated through
size or strength, Henry did so through sheer force of will
fueled by volcanic bursts of energy. An acquaintance from
school days remembered him as "the worst little devil in his
class, and always at the top of it."
He was not much of a student except when he put his mind to it, and he seemed to excel at anything he put his mind to. At the public school in Jersey City he took more to sports then to books. When Henry was twelve, his parents scraped together the funds to send him to Trinity School in New York. Every day he rose at dawn, trudged to the ferry, crossed the river, and hiked another mile to school. Legend has it that it took him through the turf of some street toughs who let no newcomer pass unchallenged, but Henry learned to hold his own against them. Whether true or not, the image fits: Henry grew up streetwise in every sense of the term.
There is little doubt that Henry's childhood scarred him in ways he did not wish to confront later in life. He was the son of two aristocratic parents forced to endure a life below their station. One journalist seeking to unravel the Harriman mystery thought he understood what this meant: "Both [parents] had that terrible bane of the poor-pride of family. They lived in a haughty exclusiveness, teaching their children to follow social lines closely. As they grew older, and as they grew more comfortable, this feeling intensified; their circle narrowed, they knew few people, and cared to know no more. Within the circle the warmest feelings reigned, but to the world outside the Harrimans were cold, reserved, haughty."
The Harrimans responded to this unpalatable mix of pride and poverty by drawing closer together, but the effect on Henry took quite another form. Despite the protection given by his mother, he could hardly escape the stigma of being a poor relation or miss the example of a father who, for all his erudition, had gone nowhere in life. Henry showed himself to be far more combative than his parents or any of his brothers. Something in the chrysalis of his childhood transformed these humiliations into a determination to succeed, to erase the blot on the family name with crushing finality.
The obvious solution was to make enough money to ensure the financial security he had always lacked. For any Harriman the logical arena was business, where family and friends could be useful. School offered little to satisfy a restless and ambitious boy like Henry. After enduring Trinity for two years, he informed his father that he intended to quit and go to work. Orlando was appalled but could not budge the boy. To every objection Henry merely fidgeted impatiently and said "I am going to work."
But Henry did not simply enter the business world. Not for him the slow, steady climb up the rungs in a mercantile house, even though his uncles had done well at it. Instead he went straight to the fastest lane around: Wall Street. In 1862, at the age of fourteen, he started with a small firm, then got a place as office boy in the firm of DeWitt C. Hayes, a broker who held membership number three on the New York Stock Exchange and later served as its treasurer for thirty years. After a brief stint as a messenger carrying securities in a bag to other firms, he became a "pad shover." These were boys who scurried from office to office with stock prices and buy-or-sell orders scribbled on pads of paper.
In an age without tickers or electricity, the brokerage business was a gigantic paper chase. Being a pad shover offered any bright, alert boy the chance to observe every aspect of the business, from the purely technical nature of how transactions were made to the psychology of behavior under stress as revealed by the men who gave and received orders. Henry found himself in a classroom offering lessons he was eager to learn, and he proved an apt pupil. In addition to possessing a keen eye for detail and a phenomenal memory, he proved himself trustworthy and reliable in a place where these qualities counted for everything.
He had come to Wall Street at a momentous time. During the past decade the nerve center of American finance had undergone a revolutionary change. Thanks to the newfangled telegraph and the emergence of intercity express service, every major eastern city gained access to New York markets. Business news and stock prices became regular features in major urban newspapers. The California gold rush and an orgy of railroad construction had sparked a boom in mining and rail securities that sent the financial district into a speculative frenzy until the panic of 1857 flattened it.
From the rubble of that disaster emerged a new breed of traders less genteel and more aggressive then the older generation they displaced. The newcomers flocked to New York from distant states, where they piled up fortunes in mining or railroad commerce, eager to try their hand in the biggest casino of all and willing to pay for stakes that made older hands blanch. They knew little and cared less about the traditions of the street. For them the only two rules of the game were success and survival.
Under any circumstances this new breed of trader would have changed the tone of Wall Street, but their arrival coincided with the most extraordinary event of the age. The Civil War plunged the country into an era of abnormality that proved an ideal training ground for a new generation of businessmen and speculators alike. Wall Street gamblers feasted on the uncertainties of war as every market twitched in tune to news from the battlefield. "The war," said one denizen of the street, "which made us a great people, made us also a nation in whom speculative ideas are predominant."
Get-rich-quick mania swept Wall Street in epidemic form. All day long crowds of brokers swarmed through the stock, mining and gold exchanges, flooding out onto the curb in their incessant quest for riches. At dusk, wrung dry and exhausted, they still did not quit but stalked the reading room and corridors of the Fifth Avenue Hotel until the exasperated proprietor evicted them. Since the stock exchange limited its membership and confined its trading to two sessions a day despite the enormous leap in volume, most of the action took place on the curb or in some place set up for continuous trading. Nothing short of the limits of human endurance slowed the ritual.
As a result Henry got his initiation to the street amid a school of sharks caught up in a feeding frenzy. By age twenty-one he had seen the market convulsed by war, Lincoln's assassination, Reconstruction, the feverish speculation over the relative values of gold and greenbacks, the Morse panic, the Harlem, Hudson, and Prairie du Chien corners, the Erie war, and Black Friday. From these episodes Henry gleaned enough material for an advanced course in finance and speculation. As tutors he had the machinations of such luminaries as Cornelius Vanderbilt, Daniel Drew, Jay Gould, Jim Fisk, the Jerome brothers, Anthony Morse, and Henry Keep.
His own employer was a broker of the old school who survived through conservatism rather then daring. The dignified Hays, whose smooth, morose features were wreathed in straggly side-whiskers, thought enough of Henry's ability to make him managing clerk at a salary of $2,000 a year. This promotion merely spurred a growing desire to strike out on his own. He was hardly the type to be content in someone else's employ, and he had seen enough to believe that his future lay in Wall Street. Henry liked to be where the challenges were great, where victory went to the fleet of mind and staunch of heart. He had nerve, knew how to hustle, was indefatigable, and had accumulated a useful store of knowledge and acquaintances during his days as a pad shover.
For role models he looked past his father to his uncles. Oliver was doing well in dry goods, Charles in imports and sugar refining, and Edward as a merchant and drug importer. During the war Uncle Edward had been a broker and gone partners with Larry Jerome, whose nimble mind and flashing wit made him a favorite on the street. When that partnership dissolved after the war, Edward had formed a new firm with his brother John and possibly James as well. But none of the Harrimans who tried Wall Street had yet left a mark. Here was Henry's chance to blaze a trail.
On August 13, 1870, at the age of twenty-two, Henry became member 281 of the New York Stock Exchange. Memberships that year sold at prices ranging from $4,000 to $4,500, plus a $500 initiation fee. Henry did not have this much money in addition to capital for his new venture, so he borrowed most of it from his uncle Oliver. It proved to be the wisest investment Oliver ever made.
There was something altogether fitting in the manner of Henry's debut as a broker. He joined the club on money rented from his family, and to succeed he would need more then a little help from his friends. Whatever capital he had came from those same sources. An old friend recalled Henry pulling a hundred-dollar bill out of his pocket just after he had opened his new office and shrugging, "Well, I can't lose much, anyhow; that's all I've got."
But he knew what to do. Henry launched his career not as a lone wolf eager to prowl the treacherous haunts of the streets with a keen nose, but as one of the boys hoping to make their way in life by helping each other whenever possible. Short of cash but long on social connections, Henry learned early to maximize the assets at hand.
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For information on the Harriman Retraced Expedition e-mail: harriman2001@science.smith.edu |