A Disposition to Be Rich: Ferdinand Ward, the Greatest Swindler of the Gilded Age

by Geoffrey C. Ward

  That pairing pleased Ferd’s parents. Their younger son’s success continued to delight them, though each worried that with Will living so far away, Ferd might still be tempted to stray from the right path or fritter away the fortune he was making: “William McBride [the Casino treasurer] is here,” Ferdinand once nervously reported to his daughter. “He thinks that F’s doing well in business. He thinks that he does not use up his income. I hope he does not—for reverses may come.”11 Once, during a visit to Manhattan, Rev. Ward stopped by the Marine Bank to introduce himself to Fish. He praised the banker as his son’s “guardian and benefactor,” and said he was grateful to God that Ferd was under the daily influence of a man whose caution and experience and integrity would keep him from reckless speculation. “Mr. Fish,” he told him, “we pray for you and yours always.”12

  Ferd’s mother shared in those prayers, but she remained frightened by her boy’s continuing refusal to adhere to God’s laws. When Sarah and her sons visited Ferd and Ella in Stamford, and Sarah gently refused to go out driving with them on Sunday, Jane was delighted.

  I knew you would try to keep the Sabbath and have the children do so as far as possible so that Ferd might see you regard the day with some degree of reverence. He has himself so little conscience about it that I tremble for him, as I know God will not honor him if he does not honor God and his laws.… Oh, how I long to see him converted.13

  Looking back, writers would suggest that Ferdinand Ward had a “hypnotic presence,” an “uncanny power” over even the most seasoned veterans of Wall Street. He was unquestionably good at reading people. He knew whom to flatter and how to coax, and seemed to understand by instinct just how far he could go with each prospective victim. He knew the power of the subtle suggestion and secretive wink that opened purses and emptied pockets, and was masterful at spinning out the kind of particulars that made his supposed contracts seem plausible. James Fish remembered how

  Ward used to tell me rainbow-colored stories of the prospects which seemed to be opening up. He declared that through Mayor [Franklin] Edson [who had been superintendent of the Produce Exchange when Ferd worked there] he was going to get a contract to supply the Department of Charities and Correction with flour. He submitted an estimate of what the flour would cost, what it would be sold for and what the profits would be. He calculated cartage and all the other details. It was one of the great points in his method that he always was prepared to give you facts and figures in the most extreme detail, and they always seemed reasonable and based upon good business principle.14

  But in the end it was neither Ferd’s personality nor his skills as a fabulist that did the trick; it was the astonishing yields he promised—and seemed able to deliver.

  “It is marvelous,” wrote Wall Street veteran Henry Clews, “how the idea of large profits when presented to the mind in a plausible light, has the effect of stifling suspicion.”15 Clews set down the experience of one old friend. The man was a friend of General Grant’s, too, and on the eve of a family trip to Europe in the spring of 1883, he stopped by the firm’s offices and deposited $50,000 with Ferd to invest as he saw fit. Back in New York after six months, and having heard nothing about how his investment was doing, he came into the office and asked to see Mr. Ward.

  Ferd greeted him warmly enough, but said he could not recall offhand what had happened to his money. The press of business made it impossible for him to remember every little transaction that came along. He was sure his visitor would understand. A little annoyed—$50,000 did not seem like a small transaction to him—the man agreed to wait while Ferdinand retreated to an interior office to check the books.

  Moments later, Ferd returned with a broad smile and a check for $250,000. The man insisted there must be some mistake: he had invested just $50,000. No, Ferd assured him, the sum was correct. Sizable returns like that were more or less standard for the customers of his firm.

  The investor pocketed the check and emerged onto Wall Street in a pleasant daze. His money had grown five times in six months. If he’d left it with the firm and things continued at that rate, he would be a millionaire by the end of the year. He was too keyed up to sleep that night, and when Grant & Ward opened for business the next day he was waiting outside the door. Ferd smiled as he let him in, took back the check, and made a note of the reinvestment in his books. The investor apologized for giving him so much extra work to do. Think nothing of it, Ferd said. No trouble at all.*

  By the spring of 1883, all of Grant & Ward’s alleged profits were said to be coming from government contracts. At least one big contract, he whispered, had been secured personally by President Chester A. Arthur (who had succeeded Garfield after his assassination). General Grant may not have known about the supposed contracts, but it is clear that his sons did and were delighted at what they thought they were earning.†

  On May 17, 1883, Buck reminded Ferd that “I have some contract money coming in today and want to re-invest it.… Be a good boy and make some money today, as Mr. Fish says.”16

  Three days later, Fred Grant wrote Ferd, “I will take $50,000 to $55,000 in the new contracts, just as you wish.… With love for you and my regards to Mrs. Ward, your friend.”17

  In July, Buck asked Ferdinand to invest in them for him again: “Will send you $3000 more … and give me as large an interest on a $35,000 good contract as my finances will cover.”‡

  The Grant sons were clearly discussing the supposed contracts among themselves, they were frequent visitors at their father’s home, and, as Fish himself once said, “it does seem strange that the General never heard about them.”18 But Grant seems only to have been dazzled by Ward’s ability to make money for his family. Fish remembered making one of his rare visits to the Grant & Ward offices and finding Fred Grant sitting in the waiting room. He asked the colonel how he was. “I feel grouty,” he said. He jerked his thumb at the general, at work behind his desk: “I don’t like the way he speaks about Ferd Ward. Last night we were all together—father, mother, Buck and Jesse [and our wives]. Someone said something about Ward, and father said, ‘Mother, I’d give anything in this world if our boys were as smart as that young Ward.’ Mother said: ‘How can you say such things?’ ”§

  James Fish was dazzled, too, so pleased by his earnings that in June 1883, he wrote a note to Ella, on notepaper embossed with a golden bird feathering its own nest.

  Dear Mrs. Ward,

  I have for a long time been thinking of some present that I could make you—something that you don’t already possess.

  I thought a piano might be acceptable and have directed that one be sent to you at your Stamford home. I hope it will please you. It is only a small return for the many acts of kindness received from you and your husband.

  Sincerely,

  your friend

  James D. Fish19

  That summer, Ferd and Fish got more good news. If they played their cards right, they could win potentially unprecedented access to a fresh source of big money, the treasury of New York City itself. Millions in municipal funds were on deposit in financial institutions all over town. James Fish had always hoped that his bank’s share of them might be enlarged, but before any additional deposits could be made the signatures of two officials were required: the city chamberlain and the comptroller.

  J. Nelson Tappan, the longtime chamberlain, was already an ally. The fifty-six-year-old broker had been Fish’s friend and business associate for thirty years; he remained a director of his bank, and had begun investing heavily in Grant & Ward’s supposed contracts. Tappan understood that the more municipal money the Marine Bank held, the better he himself was likely to do: the value of his stock in the bank would rise and, by deepening the pool of available cash, he would make more money available for loans to Grant & Ward that would help boost its profits as well. But thirty-two New York banks were officially designated depositories, many of them larger than the Marine Bank, whose capital—assets minus liabilities—was less than $400,000. Nevertheless,
by the summer of 1883, Tappan had already seen to it that the Marine Bank held $241,000. He dared not try to deposit any more without the active cooperation of the comptroller.

  Then, Mayor Franklin Edson named a new man to that office. Edson was himself well disposed toward Ferd and Fish: in addition to running the Produce Exchange when Ward went to work there, he had also served as a director of Fish’s bank until he was elected and cut all his ties to private business for the sake of appearances. Whether or not the mayor was deliberately showing favoritism to old friends by his choice for controller, Ferd and Fish couldn’t have been more pleased. S. Hastings Grant had been Ferd’s immediate boss at the Produce Exchange for six years; he owed his former employee several thousand dollars, and he, too, was already investing in Grant & Ward’s contract business. The partners were so eager to have him in office that they put up half the $200,000 bond required so that he could accept the post. “This,” Ferd told Fish, “is the biggest thing for us.”20

  It was. Over the next ten months, Tappan and Grant would increase city deposits at the Marine Bank six times, and Fish would permit Ferd to draw upon them again and again to fuel his frantic dealings.

  Rumors now spread through the financial world that Ferd was paying profits of 10, sometimes 20 percent a month. No one quite understood it, but virtually everyone wanted to get in on it. The great cartoonist Thomas Nast invested his life’s savings in the firm at least nominally headed by the ex-president he had once championed with his pen. So did scores of Union veterans and their widows. William R. Grace, the shipping magnate and former New York mayor, was pleased enough with the profits he made that he asked to become a partner; Ferd turned him away, probably because he wanted no one in the firm who might insist on a real accounting.‖

  Bird W. Spencer, treasurer of the Erie Railroad, did so well investing in the firm on his own that at Ferd’s urging he deposited hundreds of thousands of dollars’ worth of company bonds in the Marine Bank and assigned their sale to Grant & Ward. Ferd’s uncle by marriage, Freeman Clarke, the former comptroller of the currency, was sufficiently impressed by what he’d heard about the firm that he deposited $50,000 of his own money with his nephew.

  And at Ferd’s urging, Buck Grant talked his father-in-law, former senator Chaffee, into turning over to the firm bonds worth $500,000 on which to raise still more money. “As there were great profits in prospect it would be better to use the money of our friends than to borrow from those for whom we did not care,” Buck remembered Ferd telling him; besides, Ferd was now so rich, young Grant told Chaffee, that he would safeguard him against even the possibility of loss.a

  Democratic senator Allen G. Thurman of Ohio suggested that since young Ward was “the most successful financier thus far produced” in America, the next president, Democrat or Republican, “would make a stupendous blunder if he did not make Ferdinand Ward Secretary of the Treasury.”b

  Most of those who invested most heavily in Grant & Ward were veterans of Wall Street far older than he, Ferd remembered. But perhaps his most useful individual source of ready cash was a rough contemporary. William S. Warner was the fat, hulking son of a well-known Manhattan merchant. He spoke with the complacent anglophile accent of a wealthy old New York family, but he had failed at everything he’d tried since leaving school. The big dry goods merchant A. T. Stewart had let him go. His own brokerage had done so poorly that he had had to sell his seat on the stock exchange. Now, thanks to his brother-in-law, J. Henry Work, a partner in the law firm Buck Grant had joined when he first came to New York, he had a glorified clerk’s post in the Mexican Southern Railroad’s office on the floor above Ferd’s office. But he had maintained links with the members of his father’s well-to-do circle and was still eager to find some way to make money on his own.

  One afternoon, Buck Grant brought him downstairs and left him with Ferd. Ward laid out for him the clandestine contract business in which he pretended to be engaged. A project that called upon a contractor to expend a total of, say, $500,000 might require an advance of $100,000 to get under way, he explained. That was where Grant & Ward came in. The big contractors with whom he did business, however, wouldn’t even talk with him unless he was willing to provide the entire advance at once. Sometimes that could cause a problem. Ordinarily, the firm had plenty of cash on hand, but it was a fast-moving business, and when Grant & Ward could come up with only, say, half of a big advance on a given day, Ferd was always willing to let a few trusted and discreet investors in on the big profits grateful contractors were willing to provide.

  Warner was intrigued. Ferd encouraged him to talk to his friends. He couldn’t reveal any details about the numbered contracts, of course, but if they pooled their funds and allowed Warner to invest them with him on their behalf, he could promise remarkable returns. Warner began in late 1882 with an investment of $15,000. Ferd returned it with a profit of $3,750 in just thirty days. Warner came back right away with a larger sum borrowed from friends. It did just as well. Thereafter, he would return several times a month with ever-larger sums that reaped ever-larger profits. He bought himself two grand homes, one on Fifth Avenue; the other in Long Branch, New Jersey. J. Henry Work began collecting money from his friends, too. Ferd insisted on only one thing from Warner and Work: they should bring their business to the office only after hours, when the firm’s clerks had gone home. No one else was to know what they were doing; no one else must understand how desperate Ferd was to keep fresh funds flowing in. He began to carry a pencil and a little notebook in which to keep track of how much money he had promised to whom to be delivered when.

  At Grand Central Station on the evening of November 15, 1883, Ferd joined a group of seven prominent men aboard the Ramapo, the elegantly appointed private railroad car belonging to the president of the Erie Railroad. General Grant and his son Fred were aboard. So were James Fish and three of Grant & Ward’s biggest investors: Mayor Edson, City Chamberlain Tappan, and the financier J. R. Smith. Greeting them at the door of the car was their host, the Erie’s treasurer and another major investor in the firm, Bird W. Spencer.

  He and Ferd had planned the trip. Grant & Ward had an interest in the Bradford, Eldred and Cuba Railroad, a feeder line for the Erie that had recently built the tallest, longest railroad bridge on earth, across Kinzua Creek just south of Bradford, Pennsylvania. At 301 feet high, 2,005 feet long, and built entirely of iron, the Kinzua Viaduct was billed as the “Eighth Wonder of the World” by local boosters, who ran excursion trains out to see it. Ferd and Spencer hoped a well-publicized visit from General Grant would help to increase tourist traffic and maybe promote the sale of some stock, as well.

  But as the special train pulled out of the station, Ferd told his fellow passengers that the object of the trip was to provide everyone aboard with a well-deserved good time. This was to be a vacation. Porters would make sure their glasses were full, their cigars lit. Fresh packs of cards would always be available.

  Above all, no one was to talk business. Ferd smiled as he said it, but he was deadly serious. Everyone aboard was involved in one way or another with Grant & Ward. Should anyone riding in that car question another about what he knew or didn’t know about the shadowy contract business, everything might collapse. And so, as the train rattled along, Ferd moved tirelessly from group to group, asking General Grant to reminisce about battles he had won, encouraging Fish to tell stories about Manhattan business before the Civil War, urging the mayor to talk about the challenges of running City Hall.

  Years later, in a rare moment of candor, Ferd would say that this three-day trip to upstate New York had marked the high point of his business career, because he had managed to keep any of his fellow passengers from asking about the behind-the-scenes transactions from which all believed they were benefiting. He lovingly listed the risks he had run so successfully.

  Mr. Fish had invested with Grant & Ward,… some $2,000,000 which he supposed was in government contracts secured through General Grant, and still all through t
he trip he never said a word about them to [the general]. Col. F. D. Grant at that time had invested … some $1,500,000 in city and other contracts, procured through the influence of Mayor Edson and J. N. Tappan, and still he never mentioned the fact to either gentleman throughout the trip. J. Nelson Tappan … had invested some $300,000 in government contracts which he supposed were secured through the influence of General Grant and his sons and still he never mentioned the fact to the General or any member of his party. Mr. B. W. Spencer had some $300,000 invested in the same way, and still said nothing.… J. R. Smith,… too, remained silent, though he had $100,000 invested. So … here were a party of eight gentlemen who were travelling together for some four days on the closest social terms, five of whom had invested some $4,000,000 at some 10 to 20% per month in a business which they supposed was procured and sanctioned by others of the same party, and still not a word was said by one to the other about the business.21