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

by Geoffrey C. Ward

  The visit to the Kinzua Viaduct proved anticlimactic. Heavy snow blanketed the landscape. The general got down from the train, bundled in a greatcoat, cigar jutting from his jaw. Gripping the handrail to keep from slipping on the snowy wooden walkway that ran alongside the tracks, he led the little party out onto the towering bridge. When he reached the middle he stopped and gazed down at the whitened valley for a time. Shivering in the cold wind, everyone waited to hear what he thought of it all. “Judas priest!” he finally said. “How high we are!” His fellow passengers quickly agreed and followed him back to the warmth of the Ramapo.

  The special train pulled into Rochester the next afternoon. Union veterans lined the platform to cheer their old commander, just as they had at every small-town depot along the way. The passengers made their way through the crowd of well-wishers and climbed into carriages that were to take them to the Rochester Club. There, Ferd’s cousin, the banker Levi F. Ward, was to host a formal luncheon. Ferd’s uncle Freeman Clarke was among the waiting guests. So was Ferd’s proud father, who had come to town that morning from Geneseo. The Wards of Rochester had often treated Ferd’s branch of the family as poor relations, as his mother never tired of pointing out; they had not been willing to give Ferd a job in Rochester when he needed one, nor had they thought it worth their while to attend his wedding. Now they had to watch as he took his place at the head table with his business partner, the former president of the United States. His once-dismissive relatives now had to admit that he really did belong among the rich and influential men whose company he’d sought from the moment he moved to New York, that he really was what other investors were now calling him, the newest “Young Napoleon of Wall Street.”c

  Later that month, George Alfred Townsend, a much-admired business reporter for the Philadelphia Inquirer, interviewed Ferd and Fish about their apparent success. Ferd was just thirty-two years old, he wrote, but already “one of the phenomenal young men in [New York]” who has “kept the confidence of every employer and friend he began with.”22

  Ferd was eager to assure potential investors of his caution and reliability. Grant & Ward was a “quiet house,” he claimed, wary of Wall Street’s risks, interested in “investments rather than speculation.”23 That, he said, was why the powerful Erie Railroad permitted the firm to handle its brokerage operations and the city of New York was happy to have it take care of so much of its fiscal business. But he also wanted readers to know that he was constantly in search of what he called “energetic communities,” which were interested in improving themselves and willing to put up the money to make it happen. To that end, he was already working to provide gas lighting to the people of his own hometown of Geneseo, had helped underwrite a new salt mine in Warsaw, New York, and was president of companies that were going to provide clean drinking water to the Kansas City suburbs of Wyandotte and Armourdale.

  Fish spoke of his partner’s “sagacity,” his remarkable ability to make money for himself and for the firm: “I hardly suppose [Ward] was worth over $1500 [when I first knew him]. Today he is worth a million and a half [almost $33 million in modern terms]. He has a magnificent home at Stamford, and is one of the active young fellows of our day.”24

  Ferd returned the compliment. “[Mr. Fish] has been a uniformly kind man, his advice sound,” he said. “I attribute all my success to him alone.”

  What made the banker such an effective partner?

  His “decision” as well as his “caution and conservatism,” Ferd answered. “I generally make propositions for business to him, and he almost always puts himself in opposition for a little while,… not merely for obstinacy but to bring out the truth.”25

  But it was revenues, not truth, that mattered most to the partners of Grant & Ward. “I think we have made more money during the past year than any house in Wall Street,” General Grant told Fish, “perhaps in the city.”26 Grant assured his wife in December that she no longer needed to worry about saving money for their children. “Ward is making us all rich—them as well as ourselves,” he said—so rich he thought it might be a nice gesture to buy “comfortable little homes” for a few of their old friends.27 “The necessity of strict economy does not exist,” he assured his daughter, Nellie, that same month, and as if to prove it, he sent each of his four granddaughters a Christmas gift of $2,500.28

  James Fish was generous at holiday time, too, transferring to five of his children some $100,000 worth of Manhattan real estate.

  In Brooklyn, Ferd ordered the Green family coupe heaped with so many brightly wrapped gifts it took nearly an hour for the servants at Monroe Place to unload them, carry them into the parlor, and arrange them all around the tree.

  Christmas of 1883 also brought a rich harvest of gifts to the Geneseo parsonage. All three children seemed to be doing well now, and all had been generous with their parents. “Not one indifferent or valueless thing,” Jane noted in a letter to Sarah, “and so indicative of the most thoughtful and generous kindness. Surely there was no ‘dark side’ for me to look at.”

  But it was Ferd’s “princely” generosity, Jane continued, that made the holiday so memorable: an elegant black silk dress with jet trimming, two pairs of gloves, she reported, two bottles of cologne, two boxes of guava jelly, two painted china pitchers, and “five photographs of paintings,” including “one of that expensive painting [Ferd] has, ‘Christ Raising Jairus’ Daughter,’ each 10 inches by 8 inches.”

  That evening, the old couple spread their gifts before the fire in the second-story study of the old Session House, which adjoined their home—itself Ferd’s gift to his father—so that neighbors and former parishioners might drop by and admire them. They were there, talking quietly with friends, when the doorbell rang. It was Will Shepard, a young lawyer friend of Ferd’s, home from New York. He came in, stomping snow from his boots, and climbed the stairs to the warm study. He had an envelope for each of the elder Wards, he said. He wished them a Merry Christmas and hurried on his way.

  When he had gone, they tore open the envelopes. Each held a thousand-dollar check from Ferd ($22,000 today). Jane wept with happiness, she said, and “even Father shed tears of grateful joy.”29

  * Ferd’s technique was not foolproof. “I’m a smarter man than Ferdinand Ward,” one young investor told a reporter after the crash.

  “My wife who has got more sense than a dozen men, heard about the big profits that Grant & Ward paid their customers and kept at me until I put $500 into their government contracts. Pretty soon I drew out $1,000. Then I put it back and there came out $1,500. Back that went and out came $2,000. This seemed like picking blackberries. Back it went and out it came again, just as natural.… It beat any game I ever saw, and I have tried them all.… I put it all in again and the bigger it got the more it seemed to grow.… At last my $500 had grown to $10,500. Then my wife said, ‘Take out that $10,000. It’s my speculation and I claim that money. We will have a brown-stone before next Saturday.’

  “I told her she was crazy, and I was never so mad at her in my life. She insisted that we should take our profits and leave in the original capital.… I felt very sheepish when I called on Grant & Ward for my $10,000. I told Ward his business beat anything that human brain ever conceived, and that I was sorry that I had to take the money; that I thought my wife was about the biggest goose that ever lived; that she didn’t know the alphabet of speculation, but that it couldn’t be helped. I expressed my determination to leave in the original capital, and promised him that I would never draw it out until he said so.”

  “Has he ever said so?”

  “Not yet. He still has got the original capital, but I have been smart enough to beat his game out of $9,500.”

  “And your wife?”

  “Well, she has got the brown-stone.”

  Boston Daily Globe, June 9, 1884.

  † Much later, Buck would claim that in early May 1883, he told Ferd expressly that the firm should have nothing to do with the contract business for fear his fathe
r’s name might be dragged into it. “Mr. Ward almost shed tears when he thought I would believe he would do anything to the injury of my father,” Buck testified. “He said my father’s honor was as dear to him as it was to me, and he intended to make the firm … a great success and never have any scandal attached to it in anyway.” Ferd sounds very like himself in this recollection. But the letters from Buck and his brothers show that they, at least, were knowing and enthusiastic investors in contracts of all kinds. Chicago Daily Tribune, November 11, 1887.

  ‡ At least one big investor, Captain Elihu Spicer Jr., testified that both Buck Grant and Ferd had personally promised that he would profit handsomely from government contracts. Spicer would lose a quarter of a million dollars when the firm collapsed. New York Herald, October 8, 1885.

  § Others told similar stories about Grant’s faith in Ferd. General Horace Porter, an old friend of the general’s who now headed the Pullman Company, dropped by his home one afternoon, intending to warn Grant that the revenues from his investments simply seemed too good to be true. But just then Ferd wandered in to report that profits were continuing to rise. The general beamed with pleasure at his prospects. Porter retreated without saying anything. New York World, July 2, 1886; Jean Edward Smith, Grant, pp. 619–20.

  ‖ Grace had proved himself a more demanding investor than most. Missed deadlines and bright promises of bigger profits just around the corner did not satisfy the ex-mayor. “I want to wind up that loan made [to Grant & Ward] a year ago …,” he told Ferd in June 1882. “ ’Tis six months since we were to have wound this up, and now I am desirous of positively closing it out.” Ferd did as he was told. Marquis James, Merchant Adventurer, pp. 206–07.

  a Chaffee himself sometimes worried about how his son-in-law’s firm could be doing so well. “I can’t imagine how you can make so much and do it safely,” he told him, and again, “I am afraid there must be a bad end of this cash business, because I don’t see how anybody or anything can pay such interest for the use of money and end well.” But the former senator did not ask for his securities back. New York Times, December 28, 1884, February 1, 1885.

  b Now and again, Ferd’s exaggerated sense of himself got in his way. One of his early investors, a broker named W. H. Bingham, once challenged him. “See here, Ward, what is there in these contracts?” he asked. How much money was in them? How did it all work? “The relations of General Grant and the firm to the government are of a very delicate nature,” Ferd answered. “If I could tell what those relations are I could get millions where you could get [only] thousands.” Bingham made no further investments in the firm. New York Times, August 24, 1884; New York Tribune, May 23, 1884.

  c Bird Spencer was so grateful to Ferd for helping to organize the trip—and for the opportunities Grant & Ward had given him to make money for himself—that on Ferd’s thirty-second birthday, a week after the railroad excursion ended, he had delivered to his home in Brooklyn a cane with a silver handle from Tiffany’s. It was marked with the date—November 21, 1883—and featured Spencer’s own initials. It was fashioned in the shape of the head of a long-beaked bird, a pun on Spencer’s first name. Author’s collection.

  ELEVEN

  The End Has Come

  On March 11, 1884, in Brooklyn, Ella Ward gave birth to a healthy baby boy. She and Ferd named him Ferdinand Grant Ward, after his father and his grandfather and for the general and ex-president whose great name seemed to be making a reality of what Ferd’s mother would call her son’s “life-long disposition to be rich.”1 General Grant himself was said to be especially pleased the boy was to bear his name: Ferdinand Ward, he continued to tell anyone who asked about him, was the ablest young businessman he’d ever met.

  But two days after the baby was born, Ferd quietly transferred the title to 81 Pierrepont Street to his brother-in-law Sidney Green, for a dollar. And Green, in turn, put the house in the name of his sister, still recovering from childbirth in her upstairs bedroom. Ferd already knew what was coming, even if no one else did. Grant & Ward was insolvent; it had been almost from the beginning but never on such a massive scale. Angry creditors would soon crowd in on all Ferd’s assets. By transferring his home to his wife he hoped at least to be able to keep a roof over their heads.

  Outwardly, he continued to live his life as though nothing had changed. He and Ella attended a performance by the Jewell Brothers, illusionists, at the Brooklyn Club; they loaned several canvases to a fund-raising exhibition for Bartholdi’s Statue of Liberty; and presented a gray wolf and several other stuffed animals to the Long Island Historical Society, all purchased from his cousin Henry A. Ward’s Natural Science Establishment in Rochester.

  But since the first of the year, Ferd had been working at an ever-more-frenzied pace to stave off disaster. He grew still thinner, still more pale, and seemed always on the move, racing between his office, the Marine Bank, and the offices of investors and city officials all over southern Manhattan. An old friend visited James D. Fish at his bank early that year and watched Ferd dash in, rush up to the cashier’s desk, sign something, and then race back out again, too distracted to speak to anyone. “I wouldn’t lose my nervous temperament like that young man for all his money,” the visitor said.

  The banker disagreed. “Ah,” he said, “that is a great man; that is a very great man.”2

  Fish still believed in his young partner’s extraordinary ability as a businessman: the steady stream of revenues he had received each month since 1880—at least $585,000 in all ($13.2 million today)—was all the evidence he needed. But he remained concerned about Ferd’s methods and the damage they might do to the reputation of the bank. For more than three years now, he had been playing hide-and-seek with the national bank examiner, permitting Ferd to hold on to securities so that Grant & Ward could raise more funds with them, provided he got them back into their loan envelopes at the bank in time for the quarterly inspection. It had always been his hope that the need for such loans would lessen as the contract business in which he believed Grant & Ward was specializing grew. Instead, it seemed steadily to increase. The firm’s account with the bank rose and fell alarmingly: one day that winter Grant & Ward had $4,365 in the bank, the next it was overdrawn by $145,547, and the following morning it was well into positive territory again. Fish’s exasperation sometimes showed. “I suppose we can stand it a day longer,” he had written Ferd at one point toward the end of 1883, “but I am afraid there is trouble ahead.… If you know of some acceptable man who wants to be President of a small bank down the street, I can find a place for him.”3

  He hadn’t meant it—the bank was his life’s work—but he did fret. At any moment, one or another of the bank’s directors might challenge a loan made to Grant & Ward and ruin everything. There were fifteen directors, including Fish, an amiable, easygoing group who often did business with one another outside the bank and were not prone to questioning each other’s actions. Most attended the twice-weekly meetings largely because after an hour or so of formalities they were treated to a long, leisurely lunch at Delmonico’s.

  Still, Fish took no chances. Among the directors, he and City Chamberlain Tappan could already be counted on to give Grant & Ward the benefit of any doubt, but when the annual election of directors came up on January 11, 1884, Fish made sure that Buck Grant, Bird Spencer of the Erie Railroad, and Ferd himself were all also voted onto the board. To better the odds against raising suspicion still further, Fish also saw to it that Ferd was appointed to the committee that met every three months to ensure that loans were backed by suitable collateral, with all the securities tucked neatly into their envelopes. Ward was a “very active” member of that committee, one director recalled, much “quicker than the rest of us in handling the securities.”4

  Even that was not enough. The firm needed far more money from the bank than it could ever legitimately justify, and so, on February 15, Fish had called his loan clerk, Nathan Daboli, into his office and asked him to shut the door behind him. Ferd was alre
ady inside and did all the talking. Over the next few weeks, he said, the Marine Bank would be making a series of loans that would require what he called “special handling.” The bank records were to show that Grant & Ward had deposited securities to cover each of them, but in reality the firm would continue to hold on to the paper. He explained that Grant & Ward was engaged in so many businesses simultaneously, decisions had to be made so quickly, and large sums had to be raised so fast that it was necessary to keep good securities readily to hand. Mr. Daboli was a man of the world; surely he could understand that. In any case, he needn’t worry: the loans were to be paid back from the millions Grant & Ward was making by the purchase of government contracts—transactions that, of course, were never to be discussed outside the office. All he needed to do was bring them to Mr. Fish for his approval.

  Daboli did as he was told. Over the next two months, Fish would grant loans from the Marine Bank totaling $375,000—$4.6 million today—to eight individuals: Buck Grant; Will Ward; Ella Ward’s brother, Fred Green; the firm’s clerks Walter H. Mallory and George E. Spencer; Edward E. Doty, Ferd’s friend and sometime assistant from Geneseo; and Charles H. Armstrong, the former Pullman porter who called himself Ferd’s “private secretary” because he was entrusted with carrying his canvas satchel filled with paper securities and supposed contracts back and forth between the office and the bank. None of them ever saw a penny. All the money went to Grant & Ward—and much of it went from there to Ferd’s personal account.