LUCKY PEOPLE

I must tell you that your parents were right; the world is not fair. Some people succeed while you fail because they are more talented than you are, or more persistent or prettier, and some are smarter...and some are just so lucky they could walk through a car wash and not get damp. Jacob Waltz, on the other hand, almost drowned in the middle of a desert.

To be fair it was a once in a hundred year rainstorm. The clouds above central Arizona opened up on Wednesday, February 18, 1891, and by the next morning the Salt River, which ran past Jacob’s property north of Phoenix, had risen 17 feet. The channel had grown to a mile wide. In the Rio Satillo Valley, the eighty year old retired miner was forced to lash himself to a tree and spent that night, and the following Friday, day and night, with just his head and shoulders above the cold pounding waters.

The Sacramento, California "Sunday Union" reported on the 22nd, that “The northern edge of this flood…entered the city of Phoenix, flooding out many of the poorer families….About a hundred adobe houses fell in…The churches and public buildings have been thrown open to the shelter-less, and a subscription started for their benefit, but many families are still without protection. The river began to fall Friday afternoon…”

That Saturday, February 21, 1891, one of Waltz’s neighbors found the old man shivering in the ruins of his home, crouched atop his soaked bed. He refused to leave unless his heavy candle box came out with him. The Samaritan brought Waltz and his meager possession into Phoenix. Luckily, the now destitute Jacob was matched with a compassionate small businesswoman named Julia Elena Thomas, who had a spare room and a bed. In fact, Julia was probably the only lucky thing that ever happened to Jacob.

Because, besides being compassionate Julia was curious, and susceptible. She cared for the difficult old man as best she could, in part because Julia became intrigued by the heavy candle box Jacob insisted on keeping under his bed.

Before the development of electricity, oil for lamps was expensive to buy and transport. So farm and ranch homes were usually lit by candle. Tallow candles were made from farm animal fat, and every rural home had a candle box. Strength was not a requirement, merely protection from the rats and mice attracted to the tallow’s odor. So the wood was thin but coated with a paint or varnish. The boxes were usually a foot to a foot and a-half long and a foot deep, but usually no more than six inches wide. The top slid into place, making for a nearly air tight closure without the need for weighty hardware.

But Jacob’s box was too heavy to be holding candles, or papers, or keepsakes. What could a broke, sick, old man hold so dear that he risked his life to stand guard over it, while soaking wet, in a collapsing flooded adobe? Eventually Julia peeked, but all she found inside were about 50 pounds of rocks. But it was enough to start her imagination racing. As the months passed Julia teased out Jacob’s story, and it seemed the old man had spent most of his life chasing gold.

He had been born in Germany. And he had chased the shinny metal across the Atlantic. He had worked in the gold mines of North Carolina and Georgia and Mississippi. He could not mine for himself, however, because only an American citizen could own a mineral claim. In 1848, at 38 years old, in Natchez, Mississippi, Jacob had filed a letter of intent to apply for citizenship. But his intentions were put on hold when he chased the California gold strike of 1849. But again, Jacob was unlucky. Like most of the 49ers, he found no gold.

In July of 1861 Jacob finally became an American citizen, in Los Angeles. In 1863 Jacob joined a wagon train bound for the new gold fields around Phoenix, Arizona. Over the next few years he filed three claims for mines in the Bradshaw Mountains. But they produced nothing. In 1868 he homesteaded 160 acres in the Salt River Valley. Every winter Jacob would wander the bitter wilderness of the nearby Superstition Mountains, searching for gold. And, like a lot of other bearded prospectors in the area, Jacob made ends meet by working the Vulture Mine every summer.

Henry Wickenburg had traveled in the same wagon train that had brought Jacob Waltz to Arizona. But unlike Jacob, Henry was lucky. Within a few weeks of arriving in the Phoenix area, Henry stumbled upon a vein of quartz that eventually produced $200 million worth of gold and silver, the Vulture Mine. But very little of that fortune went to Henry, in part because Henry sold the mine after a few years (and eventually died broke), but mostly because of something called “highgrading”.

“Freighters would line up at the mine with wagons to transport the gold ore. As soon as they were out of sight of the mine, the freighters would begin picking through the gold, pocketing the best nuggets. "Highgrading" was the name of this practice, stealing the highest grade pieces of ore. In fact, freighting for the Vulture was more profitable than mining. Several nearby mine owners closed down their mines to become freighters for the Vulture…It was widely known among the prospectors that working at the Vulture for a few months could provide them with a grubstake for the rest of the year…Miners would often work the mine during evenings and weekends for their own benefit. The early owners of the mine treated harshly anyone caught doing personal mining. Later owners may have silently condoned personal mining when they were not able to pay their workers.”

(http://www.jpc-training.com/vulture.htm)

Every successful hard rock mine in the nineteenth century suffered these deprivations, and that is why all modern mines include stamps and smelters on their premises. Nothing leaves the mine site except for refined gold - under guard.

Jacob never told Julia he highgraded the ore in his candle box from an established mine like the Vulture. If he had, she probably would not have believed him, for Julia, like Jacob, had been bitten by the gold bug. Instead, she pressed the old man for more details about his hidden mine in the mountains. Eventually the sick old coot was forced to admit that he had a mine. But where was this bonanza? Although he never produced a map, in infuriating slowness the old man confided obscure details, almost as if he were stringing Julia along to ensure he kept a roof over his head. He told Julia that with a short climb from his mine you could see the peak known as Weever’s Needle, but from the Needle you could not see his mine…You could see the military trail that ran through the Mountains from his mine, but you could not see the mine from the trail…You had to crawl through a hole to see the gold in his mine…that near his mine was a rock shaped like a face…and that the setting sun shown on the entrance of his mine. This was about all that Jacob shared about the source of the ore in his candle box, before he died of pneumonia in Julia's spare bed, on October 25, 1891.

The ore in Jacob’s box brought $4,800 from the assay office – a lot of money in those days. And that proved the case for Julia. Jacob had a mine hidden in the mountains; where else could the ore have come from? A year later the "Arizona Enterprise" noted in its pages that Julia had sold her business (an ice cream parlor) and was actively prospecting the Superstitions, searching for Jacob’s “missing” mine. She even attracted a few financial backers. But after a few more unproductive seasons, Julia lost her financing. I guess Julia was just not very lucky.

But she finally made money off Jacob’s mine, once she gave up trying to find it herself, once she switched to selling maps to Jacob’s “Lost” mine, for $7 apiece. And because Jacob had been born in Germany, making him a “Deutsch man” or ‘Dutchman’ to parochial American ears, the magical mystery was marketed as the “Lost Dutchman Mine.”

You too can find the Lost Dutchman Mine. All you need is a map and an understanding of the intricate and complicated stories weaved to explain how once located, a source of immense and instant wealth could have become lost again, and why, with some 2,000 people every year searching for it in the Superstion Mountains Wilderness Area, "The Lost Dutchman Mine" could have remained lost for a hundred years. Maybe, just maybe, the answer is that all those people before you have just been more unlucky than you. And just around the next bend, the next canyon, the next turn of the card or the next scratch off lottery ticket, you too could be the luckiest person in the world. It could happen.

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WHO ARE THESE GUYS?

I would not have gotten along with John Birch. Probably, whatever your politics, neither would you have. One of his college professors described Birch as “a one-way valve; everything coming out and no room to take anything in”. Honestly I think the odds were pretty good that eventually somebody somewhere was going to shoot him for shooting his mouth off at the wrong time. Politics had nothing to do with it. It just so happened that the bull finally met his china shop on a road in northern China, and that the hot head that pulled the trigger happened to have been a communist. It was just as likely the shooter would have been his next door neighbor.

“Oh, we're meetin' at the courthouse at eight o'clock tonight. You just walk in the door and take the first turn to the right. Be careful when you get there, we hate to be bereft. But we're taking down the names of everybody turning left. Oh, we're the John Birch Society, the John Birch Society. Here to save our country from a communistic plot. Join the John Birch Society, help us fill the ranks. To get this movement started we need lots of tools and cranks.” (lyrics and music by Michael Brown) http://www.youtube.com/watch?v=pG6taS9R1KM

His commanding officer in the forerunner of the CIA, Major Gustav Krause, described the situation rather simply; “Militarily, John Birch brought about his own death.” Birch was a life long missionary on a military mission on August 25, 1945, when he ran into a patrol of Mao’s Red Army. The commander asked Birch to hand over his revolver, and, surrounded by nervous soldiers, Birch decided to argue about it. Eventually, embarrassed and frustrated, the officer shot him. The other members of Birch’s group were held for a few hours and then released unharmed. But the missed opportunity for the application of simple common sense did nothing to stop candy-king Robert Welch from building an elaborate conspiracy theory around Birch’s death; a virtual black hole of paranoia and invective that eventually sucked into it everything Welch came in contact with, including the Republican Party, the Republican President and former five star general and war hero Dwight David Eisenhower –whom Welch accused of being a “conscious, dedicated agent of the Communist Conspiracy” - tooth decay and, believe it or not, the state of Alaska.

I’m not kidding about the Alaska thing. Conservative deity William F. Buckley even mentioned it in a column posthumously published in March of 2008, entitled “Goldwater, the John Birch Society, and Me.” In discussing how to distance conservatism from Welch, Buckley made a joke, which he explained this way; “The wisecrack traced to Robert Welch’s expressed conviction...that the state of Alaska was being prepared to house anyone who doubted his doctrine that fluoridated water was a Communist-backed plot to weaken the minds of the American public.” I like to think of Alaska as the new Texas, that way.

There is a celebration of insanity that stains the American psyche, from the anti-French and anti-Irish ‘Alien and Sedition Acts’ of 1798, through the “Order of United Americans”, the “Know Nothing Party”, the Immigration Restriction League, the anarchists scare, the “Yellow Peril”, the imaginary Pearl Harbor betrayal plots, the Black helicopters hiding in our national parks, the militia movement and the mythical bombs planted in the twin towers. Well, the John Birch Society cemented all that lunacy together on a firm foundation of anti-Semitism. And this legacy of lunacy and head up your exclusion duct paranoia officially began in Indianapolis on December 9, 1958.

Welch organized and financed the meeting. He had made his fortune by inventing “Sugar Babies”, “Junior Mints” and “Pom Poms”. And that wealth gave him the authority to lecture to 12 true believers for two days straight. Welch spewed out such gems of wisdom as, “When Woodrow Wilson, cajoled and guided even then by the collectivists of Europe, took us into the first World War, while solemnly swearing that he would never do so, he did much more than end America's great period of happy and wholesome independence of Europe. He put his healthy young country in the same house, and for a while in the same bed, with this parent who was already yielding to the collectivist cancer. We never got out of that house again. We were once more put back even in the same bed by Franklin D. Roosevelt, also while lying in his teeth about his intentions, and we have never been able to get out of that bed since.” In fact there is disturbing repetition of bed (and parent) analogies throughout Welch’s ideology, whether the commies are in the bed or under the bed, alone in the bed or sharing the bed, there are a lot of beds. And cancer - he refers to cancer a lot.

Warned, Mr Welch, “…both the U.S. and Soviet governments are controlled by the same furtive conspiratorial cabal of internationalists, greedy bankers, and corrupt politicians. If left unexposed, the traitors inside the U.S. government would betray the country's sovereignty to the United Nations for a collectivist New World Order, managed by a 'one-world socialist government.'” Did I mention that the JBS was anti-Semitic? Ayn Rand, no Semitic lover herself, complained, “What is wrong with them (the JBS) is that they don't seem to have any specific, clearly defined political philosophy.” She might have been talking about the Tea Baggers, who, in fact, have been encouraged by the JBS. In fact, ideologically, the John Birch Society was (and is) a sort of thinking man’s Klu Klux Klan, where the KKK remains a sort of the thinking bigots version of the “Tea Baggers”.

In 1966 the New York Times described the JBS as “…the most successful and 'respectable' radical right organization in the country”, which, if you think about it, is the equivalent of being named Miss Congeniality in a mental institution; she even brings smiles to the faces of the invisible people. Robert Welch died in 1985. He left most of his still accumulating fortune to the JBS, which continues to produce cadres of indoctrinated Johnny Apple Seeds, planting fear in every dark nook and cranny where it might take root – sort of like tooth decay.

But the thing about Johnny was that the all the apples which grew from his seeds were sour. Edible apples are possible only through a knowledge of grafting – which puts a whole different light on the apple in the Garden Eden, doesn’t it?

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A PROFESSIONAL

I hate the image of Lincoln that most Americans hold, the five dollar profile of “The Great Emancipator”. You see, Abraham Lincoln saved the Union and ended slavery not because he was a saint but because he was the greatest politician who has ever occupied the White House. And to those who despise “professional politicians”, my response is they have probably never seen a real professional in action. Such Pols  don’t come along often, but when they do, they make the puny impersonations that must usually suffice seem like clowns.

And Lincoln’s professionalism was best displayed in his handling of the biggest clown in his cabinet, a man you have probably never heard of but whose best work you see every day of your life, Salmon Portland Chase. If Chase had been half as smart as he was ambitious, he would have been President instead of Lincoln. That to his dying day he continued to think he deserved to be so, shows what a clown he was.

Doris Kerns Goodwin has called Lincoln’s cabinet “A Team of Rivals”, but I think of it as obtuse triangle. At the apex was Lincoln. He was the pretty girl at the party. Her suitors didn’t really want to know her, but they all wanted to have her. On the inside track was the brilliant, obsequious William Seward - the Secretary of State who thought of himself as Lincoln’s puppet master. And the right angle was Salmon Chase, Secretary of the Treasury, born to money and brilliant but with a stick up his elementary canal. And on Tuesday, December 16, 1862 the competition between these two paramours of Old Abe came to head in the head of Senator Charles Sumner, the Chairman of the Senate Foreign Relations Committee and leading Senatorial Cassandra.

Sumner had come into procession of a letter written by Seward to the American Ambassador to France. In the letter Seward complained that “…the extreme advocates for African slavery and its most vehement opponents are acting in concert together to precipitate a servile war, the former by making the most desperate attempts to overthrow the federal Union; the latter by demanding an edict of universal emancipation as a lawful and necessary if not, as they say, the only legitimate way of saving the Union.” To Sumner this passage was proof that behind the scenes Seward was not fully comitted to destroying the confederacy. And it confirmed what he already heard from Chase.

Stephen Oates writes in “With Malice Toward None”, “Chase in particular felt snubbed and resentful…what bothered Chase the most was the intimacy between Lincoln and Seward…In talks with his liberal Congressional friends, Chase intimated that Seward was a malignant influence on the President...that it was (Seward) who was responsible for the administration’s bungling. So it was that Seward became a scapegoat for Republican discontent.” (pp 355-356)

Sumner convened what I call "The Magnificent Seven", the Republican Senate caucus. Once the Seward letter was read out loud, Senator Ira Harris from New York recorded the reaction. “Silence ensued for several moments, when (Senator Morton Wilkinson of Minnesota) said that in his opinion the country was ruined and the cause was lost…” Senator William Fessenden from Maine added his two cents worth. He had been told by a member of the cabinet there was “…a secret backstairs influence which often controlled the apparent conclusions of the cabinet itself. Measures must be taken”, Fessenden concluded, “to make the cabinet a unity and to remove from it anyone who does not coincide heartily with our views in relation to the war.”

It is sad to say there was not a first rate mind in that room. There might have been, but arrogance drops a smart person’s I.Q. by forty points or more. It can drop the average mind to zero. Not one of the seven seems to have suspected they were being manipulated by Chase. It is startling to think that men who used an outhouse every day could be that arrogant.

They skewered up their courage for two days before saddeling up and calling on the President at 7 P.M. on Thursday, December 19, 1862. For three hours they harangued poor Mr. Lincoln on the dangers of Seward. Lincoln remained agreeable but noncommittal, and proposed that they meet again the next night. And the amazing thing was that throughout the meeting Lincoln actually had William Seward’s resignation in his coat pocket.

Understand, Seward had not offered his resignation out of nobility. He was a politician.
After hearing of the intentions of the Seven, Seward had a flunky deliver his resignation in private as a demand that Lincoln pick Seward over Chase, the genial New Yorker over the prig from Ohio. Of course, the loss of support from New York would poke a fatal hole in Lincoln’s ship of state. So Seward was not expecting Lincoln to pick the prig for the poke

Lincoln’s problem was he needed the prig. Chase’s handling of the Treasury  was brilliant. He was financing the entire war. It was Chase who had begun issuing official U.S. government backed paper currency, greenbacks. That had not been done since the revolution. It was Chase who had put the words “In God We Trust” on every bill, and its still there today. Of course, Chase had also put his own face on every $1 bill, as a form of political advertising, but Lincoln was willing to tolerate that because Chase was honest, doing a good job, and because without Ohio the Union would lose the war.

The other factor was that the whispers about Seward’s “backstairs influence” were false. By December of 1862 it was dawning on even Seward that Lincoln was thinking for himself. When Lincoln had first heard about the Magnificent Seven’s deliberations (from Senator Preston King, the flunky who had delivered Seward’s resignation), the President had exploded. “Why will men believe a lie, an absurd lie, that could not impose upon a child, and cling to it, and repeat it, and cling to it in defiance of all evidence to the contrary?” Lincoln was beset by arrogance from all sides. It seems that everybody in Washington thought they were smarter than Lincoln. But the skinny lawyer from Illinois was about to prove them all wrong.

At ten the next morning Lincoln told his cabinet about the previous night’s meeting. He made no accusations, but Chase immediately blubbered that this was the first he had heard about any of this matter. The President, who had mentioned no names and made no allegations, asked them all, except Seward, to return that night to meet with the Seven. Seward felt the ground giving way under his feet. He had never expected Lincoln might pick Chase. And Chase was not entirely certain he had.

That night the Seven were now the audience to a bravo performance. Gideon Welles, the Secretary of the Navy (then a cabinet office) recorded the festivities. The President “…spoke of the unity of his Cabinet, and how although they could not be expected to think and speak alike on all subjects, all had acquiesced in measures when once decided. ...Secretary Chase indorsed the President's statement fully and entirely…” There were hours more of talking but right there was the end of Chase's mutiny. As the Magnificent Seven were leaving the White House a stunned Senator Browning of Illinois asked one the leaders of the mutiny how Chase could tell them that the cabinet was harmonious, after all his talk about back stairs influence. The reply was simple and bitter; “He lied.” Chase was done as a malignant political influence in the cabinet. No Republican was going to believe anything he ever said again.

The next morning Lincoln called both Seward and Chase to the White House. Welles was again present, I suspect as a witness for Lincoln. “Chase said he had been painfully affected by the meeting last evening, which was a total surprise to him, and…informed the President he had prepared his resignation…“Where is it?” said the President quickly, his eye lighting up in a moment.

“I brought it with me,” said Chase, taking the paper from his pocket…”Let me have it,” said the President, reaching his long arm and fingers towards Chase, who held on, seemingly reluctant…but the President was eager and…took and hastily opened the letter. “This," said he, looking towards me with a triumphal laugh, “cuts the Gordian knot.” An air of satisfaction spread over his countenance such as I have not seen for some time. “You may go to your Departments,” said the President;…(This) “is all I want…I will detain neither of you longer.”

Both Seward and Chase spent a nervous night, not certain as to what Lincoln would do. They had both just been reminded who was in charge of this game. And it was not until a few days later that Lincoln sent a message to both Chase and Seward, saying that the nation could not afford to lose either of their talents. And it did not. Seward never tried to pull Lincoln's strings again.  Chase petulantly continued to resign annually until late 1864, when Lincoln could finally afford to take him up on the offer. But never a man to waste talent, Lincoln appointed the clown to the Supreme Court, where Chase’s firm stance for racial equality would have the best influence on America’s future.

And that is what it looks like when a professional is on the job.

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A LITTLE HELP

I apologize, but the closest I can come to describing the drama in the board room of the New York and Erie Railroad on that crisp November afternoon is to recall one of the concocted tribal councils on the “reality” television show “Survivor”. Now, because of the time compression, deleted conversations, subtle “background” music additions and the myriad of other minor manipulations that fall under the label of “editing”, the only common element between a modern day “Survivor” contestant and Mr. Jacob Little, the Antebellum Napoleon of the Board Room, was that over the span of just a few moments they both stood to win or lose a great fortune. And that has not been a reality for corporate managers in America for so long as to make it hard for modern readers to imagine it was ever true. It ain’t a real game if you are “too big to fail” because then, you can’t lose. And Jacob could.

Jacob Little was called “the original Wall Street Bull”. That was not quite true. The ancient traders, who bought hides from butchers, invented the ‘futures market’, by buying and selling the hides of cattle that had not yet been born. And if farmers thought the prices for hides were approaching the bottom they might hold onto more of their bulls, thus ensuring more cows for next season, when the prices might be better. So, those who expected prices were going up, were expecting a “bull market”. A bull in the stock market is a gambler, aggressive and willing to use his horns to get his way. And that is an apt description of Jacob Little.

Jacob’s contemporary, Henry Clews, claimed that Jacob “…made and lost” nine fortunes on Wall Street. And Matthew Smith, in his book “Sunshine and Shadow in New York” recorded a moment of introspection which Jacob experienced while walking past the mansions surrounding Union Square. “I have lost money enough today to buy this whole square. Yes, and half the people in it,” he said. And that was probably not an exaggeration.

At a time when railroads were the high tech, Jacob Little, tall and slim and “careless in his attire, wearing a hat like that of a farmer, and not a very prosperous one”, was known as the ‘Railway King’. He had realized there was far more money to be made in railroad stock than in running railroads. Between 1830 and 1855, when the nation quadrupled its miles of railroad track, 125 railroad companies issued stock but never laid a single mile of track. They sold preferred stock and common stock, and several varieties of bonds. And then there was the "futures’ market" in railroad stocks and bonds. There was even an ‘options’ market, which was the buying and selling of promises to buy or sell stocks in companies that might not even exist. This was the Wall Street version of the Wild West; have printing press, will fleece all suckers. And even those railroads that were real, suffered from endless manipulation.

Consider the profitable Norwich and Worchester Railroad in Massachusetts, whose largest stockholders signed a secret agreement to sell their Norwich stock only to each other. This created an artificial shortage of the stock, which drove the price up. The partners agreed to hold their shares until Norwich topped $90 a share. They would then dump the stock and leave the suckers owning a suddenly broke and worthless railroad; As the lawyer Tom Hagan explains in “The Godfather”, “Its just business, Sonny.” Just to keep all the crooks honest, any member of the “cartel” who sold below $90 a share pledged to pay a $25,000 fine to his fellow conspirators.

Jacob Little was one of the largest conspirators in the Norwich stock scam, but he was the smart one. As the stock began to rise, Jacob quietly offered to sell his fellows a portion of his stock at $89 a share. Well, perhaps offer is the wrong word. Because after Jacob had done this several times it dawned on the crafty New Englanders that they had to buy his stock in order to avoid a price collapse of their stock. And once Jacob had unloaded all his Norwich stock at $89 a share, he dutifully mailed a $25,000 check to his “partners”. By then he had profited several times that amount by shafting his partners exactly as they had planned on shafting the suckers. The partners let it be known that if the Bull of Wall Street showed his face in Boston again, they intended on claiming his ears.

It was maneuvers such as that which inspired a handful of the lesser wizards of Wall Street to plot Jacob’s demise. They were his fellow board members on the New York and Erie Railroad, and it seemed to them that Jacob was overextended. Besides owning a large chunk of Erie stock of course, Jacob had recently bought several thousand ‘options’ pledging to buy even more. When those options matured in six months, if the option holders demanded it, Jacob would have to deliver the stock at whatever the price.

Jacob was betting, of course, that the price would go down, and as a board member he had the power to help that happen. But the wizards decided to use Jacob’s genius against him. First, they quietly bought up all of Jacob’s options. And then, as the six months ran out, they began to buy every share of Erie stock they could find, bidding the price up 15 points above the price of Jacob’s options. And Jacob remained so blissfully unaware of the doom that was impending, he actually bought even more options.

The ultimate “Survivor” moment arrived on at the 2:00 p.m. meeting on Friday, November 16, 1855. It was the maturity date for Jacob’s options. Jacob was late arriving, and the meeting droned on until the board room clock struck 3:00 p.m. The market was closed for the day. It was no longer possible for Jacob to buy stock to meet his options. And in the best tribal council fashion, one by one the wizards presented their options to their cornered prey. The stack got very impressive. The Napoleon of the Board Room had been broken and broke right before their eyes. But just as Jeff Probst was about to say, “The next person voted off “Survivor”, Jacob Little pulled an immunity idol right out of his derrière.

Actually he pulled it out of London. Jacob was late to the board meeting because he had stopped in the Erie’s stock transfer room to convert Erie Railroad “convertible bonds”, bought weeks earlier on the London Stock Exchange, into Erie common stock. Such bonds are usually not worth the premium they sell for. If you are going to pay that much, you might as well buy the stock. But in this case the wizards had helpfully bid the price of Erie stock so high, they made the premium more than worth the price. And as Jacob fastidiously signed over each share required to fill the options, he was also diluting Erie Stock so that, come morning, the stock took a nose dive. The wizards had been so intent on cutting off the limb that Jacob had climbed out on, that they failed to notice they were on the same limb. And Jacob had even climbed down first.

Clearly somebody had leaked the plot, and, in retrospect that was inevitable. During his 12 years as an independent broker Jacob had built friendships and done favors for local bankers from San Francisco to New Orleans. Somebody was bound to warn Jacob about the brewing coup d’etat. But so brilliantly had Jacob gamed the system that generations of Wall Street bulls used his trick to transfer future fortunes into their bank accounts at the expense of future generations of suckers, until the rules were changed to require a convertible bond be held for at least sixty days before it could be transferred into common stock.

Most Wall Street fairy tails end the story here, with The Napoleon of the Board Room winning until he faded into history. But inevitably Jacob lost one more fortune than he made. He died broke on Sunday, March 28th, 1865. The Board of the New York Stock Exchange adjourned for the day to attend his funeral, but I can not say for certain whether they did this out of respect, or to confirm that Jacob was finally really dead. But I can say it has been the goal of Wall Street brokers ever since to rig the game so that they never run the risk of dying broke, ever again. And that makes it a very different game than the one that Jacob played.

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