The record-union., 1894-03-03
BRASTUS WIMAN'S FALL.
Net Capitalist, But One of the Great
Brain-Workers.
His Wonderful Struggle to Save Him
self and Those Who Had Trusted
Him With Money.

NEW YORK, Feb. 25.-It is a shock to
every mans credit to have a man like
Erastus Wiman fall. His word was as
good as his bond" his life has been one
that has advantaged not alone the COM
munity in which he lived, but various
parts of this continent as well. Liberal
in public works and untiring in enter
prise, he was figure in all the great
activities of his fellow-citizens. But it is
wrong to count Wiman among New
York's capitalists. That he never was.
He was one of the brain -furnishers,
supplier of ideas and director of money
in investment all the greater the shock
of his fall. 1t is the worst personal ruin
the year has produced.
There was some measure of crime, how
ever, in every case recorded; some known
and much concealed. Enough came to
the surface in every instance, however, to
make one suspicious Of his every neigh
Dor, were it not that the general sound
ness of human nature in business has an
equal number Of examples. The trouble
Is to think Of the good and bad at the
same moment.
When A. a. Mcleod, the ''young Ma
"
young and daring financiers are called in
Wall street,, came down with the crash
OF the Reading Railroad, one kind Of the
bad sort was exposed. But his conduct
was not universally condemned, and the
question Of right and wrong is not finally
settled in the street to this day. Leaving
aside what is alleged, consider what he
did. He wanted to extend the control of
his railroad system into New England.
lie was opposed in his own company by
J. Pierrepont Morgan, at the head of
New York railroad bankers, who had in
terests in New England more important
to them than those to be SubServed by
McLeod's daring and worthy scheme for
the Philadelphia and Reading. But the
young President had done almost inn
possible things with the Reading, and
Philadelphia interests believed in and
backed him. He decided to go On. He
used every source of means for buying
stock of New England railroads, and he
had not enough.
Then he took a Napoleonic step, in
deed, as he admits. He took stock and
bonds belonging to the Reading Com
pany, and, putting them up as security,
bought the desired stock on a margin.
This Mr.. Morgan learned, and the in
formation gave him the club to "lay out"
the young man. Reading stock was
beared and the price was driven just be-
low the margin where it covered as col
lateral the bankers loans to Mcleod.
They called in their loans. Mcleod
couldn't pay, and the game was up. He
resigned, and Reading went to the re-
ceivers. The most daring part OF the ad-
venture was the open conflict with Nor
gan, who is the greatest railroad banker
in this country. The worst part of the
scheme was the embeZZlement of the
bonds.
The significant fact to my way OF think
ing, however, is the philosophiZing of
Wall street on the act of Mcleod. Men
of standing, credit, capital and honest
lives said: 'Well he failed; that's the
wrong. Had he succeeded no one would
nave said q word" This incident raised
a clamor because it wrecked property and
carried heavy losses, not because crime
was committed. The talk heard while
working on the Reading slump" limited
constantly at the occasional safe adoption
of such methods of finance, at their fre-
quent adoption in small ways, and at their
usual justification by success. l was
rapidly drawing the conclusion that the
morals of Wall street are as bad as they
are said TO be.
In another instance a man as widely
known as Mcleod or Wiman failed un-
der suspicious circumstances. The man
was defaulter, and | wrote and it was
printed that he had defaulted to large
amount. The statement came from a
trustworthy source, but the source of
further information was quickly closed.
No more could be said and the matter
was patched up. The defaulter is back in
business. just as Mcleod is. Mcleod is
President of the New York and New
England Railroad) The receiver of the
company that failed because of the de-
falcation said one day: eff you had got
all the facts and they had been printed,
the company would have gone to pieces
NIn 4
AS it is, all is Tearranged, the losses are
made good and everybody is satisfied.
Hundreds OF men do every day what this
man did," Then he related all that had
been done on the understanding that no
word should be published. This was the
statement of a man who has been receiver
for more concerns in New York than
perhaps any other one individual here.
Another fresher instance on the wrong
side is that of Francis A. Weeks, still an
other sort Of bad man. He was an aristo-
crat, of excellent New York family, born
to wealth and all else, lawyer, a club
man, a director of charity societies and
a trustee for members Of families associ-
ated with his own for generations. He
speculated on the money intrusted to
him. lost and fled TO South America. He
was brought back and now is serving
term at Sing Sing. This is case of un-
tried trust. The mans credit was not the
result of ability, work, successful service
in finance or of intimate knowledge
gained in trying operations with other
men. 1t came to him as his wealth, posi-
ton and name did-by birth.
In none Of these examples was the bot
tom of commercial credit touched, as in
that of Erastus Wiman, and for the rea-
son | have partially stated, that he was
not a capitalist, but superintendent.
Unlike Mcleod, he was not the manager
OF fighting railroad company, driven to
expedients sometimes resorted to and
not unknown. Unlike the defaulter, he
was not mere criminal. Unlike Weeks,
he was not man outside the contest of
business, a weakling trusted for his con-
nections and lost by primitive templa-
tions.
Wiman was director of money. seer
of opportunities and an ingenious and
energetic developer of enterprises. He is
one of those who are absolutely indis-
pensible in a community OF capitalists,
who are money lenders, but not active
managers of their own means. His class
are the fewest, the most valuable of all IN
a financial system. They furnish the
ideas and they must be trusted under
most trying circumstances. When
capitalist begins TO back up his entire
preunier, as the French call such mid
dleman. there can be no turning back.
a half million is the estimated cost of an
enterprise. If that is gone and the user of
the capital says more is necessary. more
must be forthcoming or all is lost. These
middlemen, then, are the heads of cap
ital, without which money is only self
preserver in the banks, not reproductive
agent on grand scale.
Such man was Erastus Wiman. His
ability is unquestioned. 1t brought him
TO this country from Canada, where he
was born in 1885. Then, after fair edu-