Wall Street Swindler Dupes U.S. President in Gilded-Age Scam
For Ulysses S. Grant, the Union commander who broke the Confederate army, bitter defeat came on Wall Street, not the battlefield.
The date was May 6, 1884, and the brokerage firm on which he had staked his reputation and capital had just collapsed amid fraud.
Stumping into the firm’s office with a cigar gone cold in his lips, the former U.S. president and war hero discovered he had been ruined by his 32-year-old business partner, Ferdinand Ward. He was left with just $80 in his pocket.
Ward was the Bernie Madoff of the Gilded Age. Hailed as the Young Napoleon of Finance, he turned out to be a brazen swindler, as his great-grandson, Geoffrey C. Ward, shows in his unflinching biography, “A Disposition to Be Rich.”
Until now, Ferd Ward has been seen as only “a stock villain” in Grant’s personal tragedy, the author writes. The focus shifts in this deeply researched and elegant narrative, putting the young Iago center stage and giving the noble Othello a walk-on role.
The details, drawn from a cache of private documents long stored unread in a safe, make for a perversely fascinating read. The skeleton in the Ward family closet tells us much about how con artists prey on investors who hunger for returns that are too good to be true.
A slender pastor’s son with pale skin and a blond mustache, Ward understood the power of suggestion; he was a master at spinning precise figures to make his “investments” sound plausible, the author writes. Yet his soft-spoken patter wasn’t what made his victims open their wallets and purses, he says:
“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.”
Ward claimed to be investing in government contracts for commodities such as flour and pork for soldiers and sailors. In fact, he was simply collecting money from new investors to pay off older victims -- a Ponzi scheme decades before Charles Ponzi stumbled on international reply coupons.
As rumors spread that Ward was paying profits of as much as 20 percent a month, people who should have known better sought a piece of the action. Cartoonist Thomas Nast invested his life’s savings in Grant & Ward. Other depositors included William R. Grace, the former New York mayor and founder of W.R. Grace & Co. Grant, who got involved through his son Buck, was dazzled.
Geoffrey Ward was a boy when he first heard about his crooked great-grandfather. Ferd Ward, he learned, was the youngest son of a small-town Presbyterian minister and his wife, two former missionaries to India. Following a childhood that appeared tranquil to outsiders, he went to work at the Produce Exchange in New York. He was 21.
Radiating the quiet good manners he had polished among his father’s parishioners, Ward proceeded to flatter and deceive his way to riches. In just seven years, he managed to marry a wealthy young woman and become partner with Grant and a prominent banker, James Fish, in a new brokerage, Grant & Ward.
“Four years of flush times followed: summer homes, blooded horses, purebred dogs, jewels from Tiffany, European artworks, lavish generosity to family and friends, the birth of a son,” the author writes.
Then disaster struck, as Ward’s pyramid scheme -- robbing Peter to pay Paul, he called it -- came unglued, triggering the collapse of Fish’s Marine Bank, the failure of Grant & Ward and a panic on Wall Street.
The gestation for this biography began in 1965, when the author’s grandfather turned over to him a carton filled with “brittle papers tied into bundles with dirty twine.” These were the contents of Ferd Ward’s trunk from Sing Sing state prison, where he had been incarcerated for grand larceny.
The man who emerged from the letters, faded photographs and other documents was a narcissist who cared not a jot for anyone except himself. Filled with an odd mixture of pride, self-pity and self-righteousness, he saw himself as a victim.
He never repented his depredations, often inflicted on those closest to him. Even locked up in a stone cellblock, he hounded his long-suffering wife for cash, silk handkerchiefs, a tobacco pouch and more.
Grant, meanwhile, had died following a 14-month battle against destitution and throat cancer. Desperate for cash, Grant began turning out magazine articles about his Civil War campaigns and wound up writing his memoirs. He worked hour after hour, soldiering on even as the cancer sapped his strength.
The book, published posthumously, enabled Grant’s wife to pay off many of his creditors. It left historians deeply in his debt.
“A Disposition to Be Rich: How a Small-Town Pastor’s Son Ruined an American President, Brought on a Wall Street Crash and Made Himself the Best-Hated Man in the United States” is published by Knopf (418 pages, $28.95). To buy this book in North America, click here.
(James Pressley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)
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