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Obviously well researched, this book gives us an intimate understanding of a complex man and should remain a standard biography for generations.
— American History
"This volume is more than a biography of an important historical figure. . . . Those who are not necessarily students of the period will finish this book knowing a great deal about how society, politics, and business were intertwined as the United States entered the twentieth century. . . . A first-rate book that explains an interesting era through the eyes of one of its leading participants."—American Historical Review
"Klein brings a wealth of knowledge about railroad and financial history to his biography. . . . Harriman comes alive in Klein's sympathetic account as a man dedicated both to his family and to his business career."—Journal of American History
"A book that should be read by anyone interested in United States financial history or in the history of American railroads. . . . Clearly the definitive work on Edgar Henry Harriman (1848 to 1909) and . . . a fascinating look at big business of the dawn of the twentieth century."—Journal of Economic History
"This is a fine biography. Maury Klein presents a balanced portrait of Harriman by examining his strengths and weaknesses as well as his successes and failures. This book will set the standard for future work on Harriman. It will certainly prove valuable reading for historians, but because it is such an interesting story, wonderfully told, it should also find a wider, popular audience."—Business History Review
Sources of Pride and Strength
The circumstances and conditions that have a determining influence upon a man's life and character often antedate, by many years, his own conscious existence.... When he first becomes conscious of himself and his environment, he is already caught in a web of external relations, conditions and circumstances from which he seldom afterward escapes.
—George Kennan, Autobiography
For a time early in the nineteenth century the Harriman family seemed destined to an inglorious end in a watery grave. Three of William Harriman's sons met with death at sea in very different ways. The eldest, William, died in a naval clash between English and French ships. Alphonso drowned in the waters off the Battery after the family moved to New York, and Edward simply vanished. His father had made him master of cargo on one of the vessels he fitted out for the West Indies, but the ship never reached port and was never heard from again. Three other sons had died in childhood, leaving only one to carry on the family name. Orlando did not need his mother's fervent pleas to spurn adventure at sea in favor of joining his father in business. Upon that frail reed rose the Harriman dynasty.
From the first it was shrouded in mystery. No one knows what induced William to leave his comfortable life as a stationer in London. He was said to be in sympathy with the colonial cause, yet he did not sail for America until April 1795, long after the issues of war and peacehad been decided. He was not a poor man; some of his neighbors in New Haven, where he first resided, liked to refer to him as "the rich Englishman." Nor was it a move to be lightly considered. William brought with him the baggage of a full life: a wife, six children, and his wife's sister, Rosamond Holmes. Whatever pushed or pulled him across the sea had to be of more than ordinary force.
Once settled in New Haven, William tried his luck at the West Indies trade until the treacherous currents of commerce swallowed most of the money he had brought from England. After a few years he took his family to New York City, where he gradually shifted from shipping to a general commission business. There William prospered in a modest way, and young Orlando did well enough to open his own office on Pearl Street in 1811. By the time of William's death around 1820, Orlando had built well on the foundation provided by his father.
Like his father, Orlando possessed a cold, practical nature that suited a merchant, but he did not neglect the social graces entirely. He met his wife at a dancing school they had both attended since childhood. Anna Ingland was the pampered only daughter of a good family, accomplished in needlework and music as well as dance, and surprisingly practical despite having been indulged all her life. Orlando married her in 1810 when he was only nineteen and just starting out in business. Some thought him rash, but the Harrimans showed a knack for marrying wisely and well that endured for generations.
Their marriage produced twelve children, eleven of whom survived to adulthood. The matter of names counted for much to families of ambition, who always had an eye cocked toward posterity. This posed a delicate problem for Orlando. He had been named by his aunt Rosamond after a favorite character in Shakespeare's As You Like It. The fit could not have been less appropriate; there was nothing of the romantic in Orlando, who came to loathe his name. With great reluctance he passed it along to his eldest son but thereafter used his influence to fill later generations with Williams and Edwards and other conventional names befitting good businessmen.
Destiny seemed intent on mocking his intentions. The only child he lost in infancy was named William. Orlando then passed the name to his next son, who died unmarried at the age of thirty. His remaining sons were given the prosaic names of Edward, James, Charles, and Frederick. Only the youngest, Oliver, received a name that smacked of the unusual, and he amassed a larger fortune in business than any of the others. It would have amazed Orlando to know that the Harrimans who left the greatest mark on history descended from his namesake son, the least successful of them all, and that neither Edward nor his sons, William and Edward, ever used those names.
His growing family kept obliging Orlando to find larger quarters. After a siege of yellow fever quarantined the family, Orlando moved them to a stately old house on Broome Street. Sheltered by rows of maple and elm trees, the house sat in the middle of a large, sloping lawn that became the gathering place for the children and their friends. At the nearby Dutch Reformed Church the Harrimans entered a new social circle that included Herveys, Van Alens, Livingstons, and Lows, who remained their friends for generations.
The children grew up in this comfortable, idyllic setting until a devastating fire ravaged New York's business district in 1837 and dealt Orlando a blow from which he was slow to recover. As the boys came of age, they joined their father in business except for young Orlando, who showed a flair for scholarship. He was sent off to Columbia, where he did well enough to graduate with honors. Lacking any talent for business, Orlando chose the ministry. In the spring of 1841 he was ordained a deacon in the Episcopal Church, the first Harriman to eschew commerce for the professions.
It proved an unhappy precedent. Young Orlando was as ill suited for the ministry as he was for business. Like so many of the Harrimans, he possessed a cold, austere personality that seldom warmed or moved his parishioners. The name "Orlando" mocked him as it had his father; he had not a shred of that character's charm or spirit, for which intellectual diligence was a poor substitute. At nineteen he had penned an essay on happiness in which, like St. Paul, he ruled out wealth and glory in favor of goodness and contentment, "the practice of every virtue and the abstaining from every vice." These words served as a perfect epitaph for a life that practiced virtue dutifully without ever veering close to wealth or glory.
The one gift Orlando did reveal was the family knack for marrying well. Cornelia Neilson was the daughter of a well-known physician and elder of the Dutch Reformed Church. One of her ancestors had served on George Washington's staff, and the family tree was intertwined with Stuyvesants, Fishes, Bleeckers, and Livingstons. Cornelia was a strong, proud woman with a fierce sense of family. Why she accepted Orlando is a mystery unless at twenty-six she had no other offers and prospects looked bleak.
Their life together got off to a rocky start. The marriage was planned for the spring of 1840, but Orlando's health forced a postponement. By the time it finally took place two years later, Orlando had been ordained and was seeking a position. All his life the one thing that constantly eluded him was a place suitable to his needs. In 1843 he finally found a post as assistant rector at a church in Tarrytown. It took him another year to get a parish of his own, St. George's at Hempstead, Long Island.
The marriage produced six children, all of whom survived. It says much about Cornelia's influence that the first son, John Neilson (1843), received her father's name while the second son, born a year later, got his father's unwanted name. Anna (1846) was named after Orlando's mother. Not until the fourth child arrived in 1848 did Orlando resort to the family store of prosaic names; he was called Edward Henry and in later years never cared much for either name. He was followed by Cornelia (1850) and William (1854).
As in most small country parishes, the pay at St. George's was meager and often in arrears. As his family grew, Orlando found himself in a losing struggle to make ends meet. In 1849 he quarreled with his vestry over back salary still owed him. Shortly afterward a post as assistant rector opened up on Staten Island, but Orlando could not support his family with the pay. With prospects in the East so grim, he began looking for a place in the West. In 1850 he received an offer from a small parish in the California mountains, where the gold rush had created a frenzy of migration. Unable to find anything better, Orlando decided to try it.
Cornelia Harriman must have blanched at the news. Her strong sense of family and social pride were firmly rooted in the East. That was where she and her children counted for something, where she hoped to see them prosper. In the West they would be one more batch of nobodies, and poor ones at that. If one had to be poor, better to be among family and friends who knew your social worth. Orlando understood these things, and he realized the perils offered by the trip itself. There were only three ways to reach California: the long overland trek, the still longer sea journey around Cape Horn, and the shorter sea journey with its dangerous overland hike through the jungle at the Isthmus of Panama. All of them required stamina and a healthy dose of good luck; for a family with small children the odds got much longer. Orlando could see only one way to manage it. Leaving his family in Hempstead, he sailed alone for Panama in May 1850.
The rugged trip across the isthmus left Orlando weak and exhausted. He fell ill with fever and lay helpless for a month in Panama before he was strong enough to board a steamer for San Francisco. Once arrived in California, he was stunned to learn that the parish, having heard nothing from him for so long a time, had hired another minister. The next year sorely tested his faith in God as he wandered about the state, preaching in mining camps and raw frontier towns, founding a small church in Stockton, and braving a cholera epidemic to start another one in Sacramento.
During those months everything was a struggle and nothing seemed permanent. Slowly, painfully, Orlando came to the harsh truth that there was nothing for him in California. Broken in health and spirit, he climbed aboard a steamer in March 1851 and endured the long journey back to New York. If, as his youthful essay stated, happiness consisted in large measure of contentment, Orlando was not a happy man. After a year's absence he came home to tell his anxious family that the whole adventure had been a dismal failure.
The search for a place resumed. Orlando brought his family from Hempstead to a small house on Hamilton Square in Jersey City, where he found work for meager pay as a semiattached curate in one of the city's churches. While Orlando floundered, his brothers had commenced their careers in business. William and Edward joined their father in the family firm of William Harriman & Company, which had an office at 128 Front Street. Young Oliver started out as a commission merchant on his way to earning a fortune in dry goods.
The family did what it could to help Orlando. In his earnest, fumbling way he grew desperate enough to try his hand at business in partnership with his brothers. During the early 1850s he juggled his duties as curate with work in the family firm, struggling to learn matters utterly foreign to him. When William's untimely death dissolved the firm in 1856, Edward continued it with Orlando as his partner. But Edward also had his own drug import company to run, and Orlando proved as inept in business as he had in managing his own affairs. The arrangement lasted only about a year before a chastened Orlando gave up the experiment and went back to the dreary hunt for a parish of his own.
The search brought him two churches. So wretched was the pay at these small parishes that Orlando was obliged to take both, preaching at Clairemont in the morning and walking to West Hoboken every Sunday afternoon. After he had served for seven years, the West Hoboken church owed him nearly two years' back salary. Unable to collect more than verbal praise from his congregation, he left the post in October 1866.
The pattern of Orlando's life had become painfully clear. While his brothers climbed steadily to prosperous careers, he failed at everything he tried except marriage. The needs of his own family threw Orlando onto the charity of both the Harrimans and the Neilsons. His ineptness doomed him to the role of poor relation in proud and distinguished families that could not have entirely concealed the disdain they felt over his bumbling. When he finally achieved some semblance of financial security well into middle age, it came in the form of a final humiliation: a modest inheritance left his wife by one of her relatives.
It was only fitting that Orlando find himself dependent on his wife's family at the end. Through these years of tribulation it was Cornelia Harriman who kept the family together through sheer strength of character. Herself a creature of tradition, she impressed this sense of pride and place on all her children. Hardship, poverty, even humiliation could be borne so long as they remembered who they were and where they belonged. The worse their prospects, the taller they stood in defiance of them.
While all the children absorbed this lesson, one learned it especially well. The rigors of a childhood in which the family was constantly dependent on the largesse of others left a deep imprint on Edward Henry Harriman. Two lessons in particular were drilled into his character: the importance of family sticking together and sustaining one another and the determination never to be dependent on others. He would never suffer the petty slights and humiliations endured by his father because he could not make his own way in life. Orlando was a good but impractical man in a world that belonged to the practical. His son would not make that mistake. Indeed, the third and perhaps most important lesson he absorbed was learning the importance of finding ways to get things done.
Edward Henry Harriman never talked about these matters later in life when the public lusted greedily for details of his youth. The dogged efforts to cast his upbringing in the Horatio Alger mold got no help from him, but he revealed something of his feelings in a less obvious way. He named a daughter after his mother, but no son bore his father's name. To his thinking, the world had more Orlandos than it needed; certainly he wanted no more reminders of their presence.
The child born February 25, 1848, to Cornelia 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 than 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 the trip 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.
Even this story stands out as an exception. The most striking thing about Henry's childhood is the absence not only of information but of legend as well. Several writers trying to strike the trail of Harriman's past in the 1900s could pry nothing out of his old friends and acquaintances about the early days. There seemed to be a conspiracy of silence led by Harriman himself for reasons that had nothing to do with modesty. A decade later Kennan encountered the same vacuum and managed to wring only dollops of information from family and friends. In the end he was forced to rely on the material gathered by Batson, who had not done much better.
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. Hays, 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 than the older generation they displaced. The newcomers flocked to New York from distant states, where they had piled up fortunes in mining or railroads or commerce, eager to try their hand in the biggest casino of all and willing to play 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 a 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 than 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 than 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 street with a keen nose but as one of the boys hoping to make their way in life by helping each another whenever possible. Short of cash but long on social connections, Henry learned early to maximize the assets at hand.
|Prologue: Mr. Kennan Writes a Biography,||1|
|Part I||Duchy, 1848-1898|
|Chapter 1. Sources of Pride and Strength,||27|
|Chapter 2. Sources of Advancement,||36|
|Chapter 3. Sources of Growth,||48|
|Chapter 4. Sources of Education,||61|
|Chapter 5. Sources of Revelation,||71|
|Chapter 6. Sources of Opportunity,||88|
|Part II||Kingdom, 1898-1900|
|Chapter 7. Going West,||105|
|Chapter 8. Going for Broke,||118|
|Chapter 9. Going Modern,||130|
|Chapter 10. Going Back Together,||148|
|Chapter 11. Going Elsewhere,||162|
|Chapter 12. Going North,||181|
|Part III||Empire, 1900-1904|
|Chapter 13. Seeking Order,||203|
|Chapter 14. Seeking an Advantage,||214|
|Chapter 15. Seeking Trump,||225|
|Chapter 16. Seeking Hegemony,||240|
|Chapter 17. Seeking the Perfect Machine,||254|
|Chapter 18. Seeking the Perfect Organization,||272|
|Chapter 19. Seeking theWorld,||283|
|Chapter 20. Seeking Relief,||292|
|Part IV Immolation, 1904-1909|
|Chapter 21. Fighting the Tide,||307|
|Chapter 22. Fighting Formidable Foes,||317|
|Chapter 23. Fighting Others' Fights,||329|
|Chapter 24. Fighting a Former Friend,||344|
|Chapter 25. Fighting a Formidable Friend,||356|
|Chapter 26. Fighting Nature,||372|
|Chapter 27. Fighting for Survival,||386|
|Chapter 28. Fighting Back,||403|
|Chapter 29. Fighting the Inevitable,||420|
|Epilogue: The Good That Men Do,||443|