by Amy Reading
CONFIDENCE MAN. A fellow that by means of extraordinary powers of persuasion gains the confidence of his victims to the extent of drawing upon their treasury, almost to an unlimited extent. To every knave born into the world it has been said that there is a due proportion of fools. Of all the rogue tribe, the Confidence man is, perhaps, the most liberally supplied with subjects; for every man has his soft spot, and nine times out of ten the soft spot is softened by an idiotic desire to overreach the man that is about to overreach us. This is just the spot on which the Confidence man works.
As early as 1860, police captains in New York estimated that close to one in ten professional criminals in their city was a confidence man. With just that one sentence—“Have you confidence in me to trust me with your watch until to-morrow?”—Williams had conceived an entire industry.
The Confidence Man did not, of course, invent confidence artistry; he merely perfected a particularly efficient and viral adaptation of it. Williams’s thievery had such an instantaneous impact because it crystallized a set of anxieties that had plagued Americans since before they were Americans. In the seventeenth and eighteenth centuries, as the colonists argued and fought their way to nationhood, a central question that threaded through their debates was: What is the right and proper investment of confidence? Virtually all colonial enterprises—education, judicial courts, taxation, self-defense, currency, churches—required an element of trust, because the colonists had rejected the tradition, class structure, and institutional memory to bolster them. Just as merchants extended credit to grease the engine of trade, so did citizens extend confidence to the strangers who visited their distant towns and the authority figures who ruled them from afar.
And so genuine confidence men, those who betrayed the trust placed in them, captured the public imagination as symbols of the nation-building project. The colonists understood them not as outlaws, or as exceptions to the rules that governed democratic society, but as the logical extension of those rules. Con men differ from later American frontier heroes such as cowboys and private eyes, men who placed themselves beyond the edge of civilization and exercised their freedom by fighting lawlessness. Con men work firmly within the structures of American democratic capitalism, exploiting uncharted territory inside the system itself. They are the innovators and entrepreneurs of such a society, no less than was Benjamin Franklin, their closest forebear. Even in their day, the stories of early American swindlers laid bare a terrible truth. Their country needed them. The new nation would never have prospered without imposture, speculation, and counterfeiting, because America was, from its inception, a confidence trick.
In 1739, Benjamin Franklin, then a printer, invited into his home a schoolmaster named William Lloyd, who impressed him with his excellent manners and learning. Lloyd knew Latin and Greek, which Franklin found humbling because he was struggling to teach himself Latin on the side. After the schoolmaster had departed, Franklin saw with dismay that he’d helped himself to a “fine … ruffled” shirt and a handkerchief “mark’d with an F in red silk.” His guest was no schoolmaster, and his name was not Lloyd. Franklin had been duped, almost certainly by Tom Bell, the most notorious impostor of the American colonies.
Like Franklin, Bell was the son of an upwardly mobile family in Boston. Like Franklin, he had attended the Boston Latin School and obtained an excellent education, advancing even further than Franklin, who was forced to leave at age ten when his father could no longer afford the tuition. Bell’s diploma gained him entry to Harvard, but in 1729, the year before he matriculated, his sea captain father unexpectedly died, throwing the rest of the family on hard times. His mother sold off some property, and Bell entered college as planned, but it was an uneasy fit. He lacked the resources to consort with his prominent classmates, and he lacked the discipline to apply himself to his studies. A few weeks into his first year, he earned a reprimand from the faculty for “Saucy behavior,” and the next two years were peppered with punishments for stealing letters, wine, and, most egregiously, a chocolate cake. The latter finally got him expelled in his junior year.
Like Franklin, he began adulthood without money, reputation, a trade, or a patron. And so he faked it. He ordered a silk jacket and hose on credit (and later lost the lawsuit the tailor brought against him for failing to pay), then steadily acquired the rest of a wardrobe in lieu of a résumé. By adopting the dress of a minister, a schoolteacher, or a gentleman, he talked his way into households like Franklin’s and passed himself off as a man of worth, earning free room and board while the deception lasted and often upgrading to a new suit of clothes or a new mount on his way out the door. He forged letters of introduction to ingratiate himself with wealthy families and to obtain business loans from them. His travels took him from Massachusetts to Barbados, with stops at the penitentiary in between. The farther he traveled and the more frequently his deceptions were unmasked, the wider grew his notoriety as a mumper—someone who cheats as well as begs. It was hard to attain celebrity in the mid-eighteenth century when it took weeks for news to travel by horseback. Yet before long, articles about Bell referred to him as “a famous impostor” or “the famous, or rather infamous Tom Bell,” and the mumper’s artistry became increasingly difficult to practice as he began to be recognized. He was almost as renowned in his time as Franklin himself.
Even beyond the striking similarities of their early lives, the two men could be described in nearly identical terms. Both were self-made men who found opportunity in the undefined crevices between social classes. Both exhibited the self-reliant individualism by which colonists characterized themselves in opposition to the Crown. Perhaps most crucially, both manipulated appearances to cultivate impressions among their peers. In perhaps the most frequently quoted passage of his autobiography, Franklin says, “In order to secure my Credit and Character as a Tradesman, I took care not only to be in Reality Industrious & frugal, but to avoid all Appearances of the Contrary.… [T]o show that I was not above my Business, I sometimes brought home the Paper I purchas’d at the Stores, thro’ the Streets on a Wheelbarrow.” Franklin performed his hard work as a printer for his neighbors. It is passages like this that have led some historians to place Franklin somewhere on the slippery continuum between huckster and con man. Franklin was, in John Updike’s estimation, “an inveterate impersonator.” His personality was constructed of sheathed layers, “one emerging from another like those brightly painted Russian dolls which, ever smaller, disclose yet one more, until a last wooden homunculus, a little smooth nugget like a soul, is reached.”
The trouble was, Bell’s pretenses revealed as hollow that which he imitated. Bell’s education not only gave him rudimentary Greek and Latin; it also schooled him in the manners of the elite, so that when he passed himself off as a refined gentleman, he gave a letter-perfect performance. He knew how to tie a cravat, knew the family trees of New England’s dynasties, knew how to pronounce the names of distant places, knew how to conduct a fluent conversation ranging amusingly on literature, philosophy, and current events. His travels only added to this storehouse of competencies, because in the mid-eighteenth century only ministers and peddlers were as well traveled as swindlers, and people looked to such men for news from faraway colonies. Bell knew, in other words, how to manipulate the social markers by which the elite identified themselves. Bell’s exploits revealed gentility as a covertly political project. Politeness was supposed to be synonymous with moral authority, granting its bearer a natural power over lower, coarser citizens. Colonial elites used the conventions of gentility to retain hierarchies in a democratizing society, a way to define who should naturally rule over the masses. Bell implicitly demonstrated how easily these conventions could be counterfeited, thus reopening the question of how a purportedly classless society should be organized.
In January 1792, a letter reached William Duer at his stone and brick mansion in the Hudson River valley. Duer was the master of Philipse Manor Hall, the former county seat of Frederick Philipse, a
wealthy Dutch trader and the founder of the town of Yonkers. Philipse had been an unrepentant Loyalist, and when war broke out, he was arrested and his fine house confiscated by the State of New York. Not only did Duer purchase it at auction for a sliver of its value; he also paid for it with money earned from veterans’ pay notes that he’d bought at a discount from desperate soldiers and then redeemed at face value from the government. He lived like a baron as he presided over the estate, attended by liveried footmen under the rococo ceiling. So the letter that reached him from a stranger in a debtor’s prison in Baltimore that January had little impact on him. “From ill-placed Confidence I have been steeped in Poverty to the very lips,” the letter began, “I have borne the proud Man’s Contumely, and the oppressor’s wrong; I have felt scorn, and Contempt; and even Insult with Impunity. In this State Poverty is one of the Greatest of Crimes, and of that offense I have been convicted Seven long years.” The letter writer had heard of Duer’s financial success and wrote about his own experiences with debt in order to caution Duer against continuing in his present course. “I sincerely wish, that you would set limits to your Desires. If you had drank deep, as I have done, of the bitter Cup of adversity, you would never Risk Independence again. May the voice of friendship take the liberty to intreat you to stop in time; and sit down, with so ample an Independance [sic], in peace of Mind, and Body!”
Duer did not stop in time. Two months later, he moved from Philipse Manor Hall to the third floor of the New Gaol in lower Manhattan to begin his own seven-year term for insolvency—not, like his Baltimore correspondent, because he’d misplaced his confidence, but because he’d stolen confidence from so many others. He would spend the next seven years mustering all of his resources to obtain an early release, to no avail. He died there at the end of his term in 1799, the scourge of the thousands who had invested with him and who became paupers and debtors themselves when his insolvency triggered the first financial crash in the nation’s young history.
William Duer was born in England, educated at Eton, and schooled in market relations at his father’s prosperous West Indies plantations. He left Antigua for New York in 1768 with a “handsome pecuniary legacy,” which he eventually supplemented with his marriage to the wealthy Catherine Alexander, daughter of Major General William Alexander, Lord Stirling. Duer came to the thirteen colonies to fulfill a contract to supply the British navy with masts and spars formed of New World wood, but as the war approached and the British let his contract expire, he smoothly shifted to provisioning New York’s Fort Miller with wood for barracks and frigates, eventually expanding to alcohol, horses, ammunition, and cattle. By October 1776 he was profiting more than $1,000 a month at a time when other citizens were being asked to weather hardships on behalf of the war effort.
Even had he played by the rules, Duer’s position as a middleman between farmers and army provisioners would have opened him to patriotic wrath, because it was in his interest to underpay civilian merchants and overcharge the government. But Duer played dirty. He manipulated the price differences by hoarding goods, which led to shortages and higher prices; he paid himself before he paid his suppliers; he paid his suppliers in depreciated Continental currency while hoarding the more valuable specie; he obtained commodities from the enemy and paid for them with American agricultural products, for which he faked customs clearances and bribed officials at foreign ports; and he used public money to speculate in bills of exchange, keeping the profits for himself.
William Duer was America’s first high-flying speculator at a time when speculation was a sin and bankruptcy a crime. When the British colonists moved in, they had no capital other than their own future productivity, but they disdained speculation as antithetical both to the Puritan values of thrift and industry and to the Whig values of self-reliance and civic participation. To eighteenth-century clergymen, artisans, and yeomen farmers, the merchant capitalism that the Dutch brought with them from Flanders and Antwerp was far more treacherous than the simple, steady accumulation of wealth that in Protestant theology bespoke God’s will for the chosen. The speculator made money by exchanging paper, and he built fortunes out of airy nothings. Colonists feared that profit untethered from labor, whether speculation or gambling, would encourage dissolute lifestyles untethered from morality. Cotton Mather warned that “gains of money or estate, by games, be the games what they will, are a sinful violation of the law of honesty and industry, which God has given us.”
In pre-Revolutionary days, the rhetoric invoked a more secular hell, the threat of enslavement. Benjamin Franklin, in Poor Richard’s Almanack, warned against allowing one’s paper wealth to outstrip one’s resources, in such now-familiar maxims as “He that goes a borrowing goes a sorrowing,” “When you run in Debt, You give to another Power over your Liberty,” “The Borrower is a Slave to the Lender, and the Debtor to the Creditor,” and “Rather go to Bed supperless than rise in Debt.” Thomas Jefferson was deeply suspicious of the effects of capital derived from sources other than direct labor and trading. As secretary of state, he led the opposition to a federal bank and the government-backed financial instruments that would entice and enable speculators. He thrust on President Washington his belief “that all the capital employed in paper speculation is barren and useless, producing, like that on a gaming table, no accession to itself, and is withdrawn from commerce and agriculture, where it would have produced addition to the common mass: that it nourishes in our citizens habits of vice and idleness, instead of industry and morality.” Government, in Jefferson’s opinion, had as little business in the fiscal arena as it did in the religious, and citizens should be free to create their own local networks of trade without the seduction of government-backed bonds and securities.
But the republican ideology of public virtue and self-restraint was insufficient to the demands of the times. The Revolutionary War hammered on the moral opposition to speculation until it began to give way in the exigencies of the fight. Many of the private merchants who supplied the troops speculated with the bills of exchange that they received as payment, as did Duer.
Duer went much further. His privileged social position enabled him to help shape the government’s fiscal policies in his own interests. He was elected to the Continental Congress in 1777, appointed secretary of the Treasury Board in 1786, and appointed assistant secretary of the Treasury in 1789 under Alexander Hamilton (whose wife was a cousin of Duer’s wife).
In the 1780s, Americans found themselves in a changed economic landscape, and the plentiful opportunities for money made purely from money led to a “spirit of speculation.” In 1780, Congress depreciated its national currency, giving investors the opportunity to exploit the difference between face value and trading value. When soldiers were discharged, they were paid with settlement certificates that themselves became a kind of currency, traded at ten or fifteen cents on the dollar. Indeed, each new form of government issue, from land warrants to debt certificates, turned ordinary citizens into speculators. Duer’s friend Hamilton conceived a bold plan to fund the war retroactively while stimulating the new nation’s economic growth: he proposed that the federal government purchase the Continental Congress’s securities at face value in return for interest-bearing bonds in the new national government. True, Hamilton’s plan would create a moneyed elite among the merchants and bankers who held the government securities, but it would also free capital to water the parched nation, and Hamilton defined capital broadly. “Every thing that has value is capital—an acre of ground, a horse, or a cow, or a public or private obligation, which may, with different degrees of convenience, be applied to industrious enterprise,” he wrote in answer to his critics, namely Jefferson and James Madison, who thought that speculation deadened industrious enterprise. Hamilton wanted to make debt productive for the new nation.
Duer, of course, was one of those elites in a position to gain from Hamilton’s plan, and he endorsed it in his official capacity as assistant secretary, but he also benefited from insider
knowledge of it. It was strictly illegal for him to profit from his foreknowledge of Hamilton’s national funding scheme, but the lure was too great, and he began “talking outdoors” to speculator friends, who invested his money in government securities using their names.
Even this most advantageous government position proved too constraining for Duer’s speculative lust, and he voluntarily left his post at the Treasury after only six months to return to the financial industry. He then launched the project that would send him plummeting into debtor’s prison. Together with Alexander Macomb, a fellow wealthy New Yorker and former war supplier, he spread rumors that he was about to charter a new bank, called the Million Bank. Hamilton reacted exactly as Duer expected: he opposed the new bank on the grounds that speculators would withdraw capital from the recently formed Bank of New York and the soon-to-be-established New York branch of the Bank of the United States, weakening both with the loss of specie and reputation. The next stage of the script called for Bank of New York stock prices to fall, at which point Duer and Macomb would corner the market and gain a controlling interest in the bank. The final, astonishingly audacious stage called for leveraging their capital to do the same to shares of the Bank of the United States—at which point a single investor would be in charge of one of the federal government’s most powerful financial institutions. But news of Duer’s intentions on the Bank of New York leaked, and he had to act faster than he’d planned to raise enough capital. He sold one of his estates and “borrowed” money from his other concerns, and then he frantically started to borrow money from everyone who trusted him, promising them fantastic returns.