Tuesday, May 10, 2016

Watching Richmond With a Cold, Profiteering Eye


“Diamond Jim” Fisk, was a Vermonter who by 1864 had made a fortune through shrewd dealing with army contracts and smuggling cotton northward through Union lines. Allied with the notorious New York political boss Boss Tweed, his buying of judges and bribery of legislatures was the stuff of legend.
Bernhard Thuersam, www.Circa1865.com   The Great American Political Divide

Watching Richmond With a Cold, Profiteering Eye

[Losing a large sum in stocks, Fisk] saw an opportunity to recoup his losses by capitalizing in a similar way on [Northern] victory. Confederate bonds had fallen on the London exchange with Southern losses but were still selling at some eighty cents on the dollar. Grant now had Richmond in a vise. Victory seemed certain, and when the Confederacy met defeat her bonds would plummet in value.

Not yet was there an Atlantic cable, so it would take more than a week for news of the war’s end to reach England by fast steamship.  If anyone could get to London before the news, he could sell Confederate bonds short like mad at eighty cents on the dollar and reap a harvest when they sank. Fisk resolved to get there first.

Forming a pool with three capitalists, he furnished the scheme while they supplied the money. Chartering a fast steamer, he sent it to Halifax, the nearest North American port to England with orders to keep up steam for instant departure. Aboard the ship was his agent, a knowing New York broker named Hargreaves, who had instructions to speed to England when given the signal.

One obstacle was the telegraph, which then fell fifty miles short of reaching Halifax. Fisk had the last fifty miles strung at his colleagues’ expense, then watched Richmond with a cold, profiteering eye.

On the historic day when Lee surrendered, the word sped over the wires to Hargreaves: “Go!”  Hargreaves went.

He reached Liverpool in six days and a half — two days ahead of the arrival of the first ship from New York with the news. Speeding to London, he kept mum about defeat and dutifully sold Confederate bonds short to all buyers.

Alas! — one of Fisk’s partners, a conservative man, had privately telegraphed Hargreaves not to sell more than five millions in bonds, so he limited his sales to that amount. When the news of the surrender reached London, the bonds tumbled to $22.  Hargreaves therefore collected the difference between $22 and $80, making a handsome profit for his employers but missing the downright killing that would have been possible.”

(Jim Fisk The Career of an Improbable Rascal, W.A. Swanberg, Scribner’s Sons, 1959, pp. 20-21)

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