Monday, June 23, 2014

Jim Fisk: Manipulator, Speculator

James Fisk
After the Civil War, America experience a rapid reconstruction followed by unprecedented industrialization. Government did not dominated the scene but businessmen, speculators, and bankers. Among the most prominent, infamous, and unscrupulous of these men was James Fisk. Ruthless and greedy, he inflicted torment to his enemies and even to his own company.

Jim Fisk (April 1, 1834 – January 6, 1872) is an example of a true Robber Baron. He was a flamboyant man with an appetite for huge profits. Like other tycoons and speculators of his time, he came from a humble background, rising to become a wealthy and powerful businessman. However, his methods of earning and spending gained notoriety and animosity. His extravagant lifestyle earned him the name “Jubilee” Fisk would take a toll on his own mortality.

James Fisk was born in Vermont to a simple family. He was born to a traveling salesman, James Fisk and his wife, Love Ryan. He appeared uninterested in education and dropout at the age of twelve. He only showed enthusiasm in accounting, which would help him in business. After dropping out of school, he took several jobs, from a waiter to a seller of tickets in a circus. Later, he decided to join his father in being a traveling salesman of wares in a horse-drawn wagon. After some time, he earned enough money to buy his father’s business. Under the young Jim Fisk's ownership, he bought more wagons and decorated it colorfully to attract customers. It brought huge increase in the profit for the business.

After his successful venture in his father’s emporium business, in 1860, he took a new path for his life. He work for a large Boston dry good firm of Jordan Marsh & Co. He showed diligence and hardwork and got the attention of the management. Fisk was made a partner of the firm. When the Civil War raged in the early 1860’s, the firm appointed Fisk as an agent to sell cotton-made goods to the Union Army in Washington D.C. Some rumors suggest that Fisk bribed some officials to buy his products. After the Union occupied some Confederate lands, Fisk became a purchasing agent of cotton for his firm. Fisk received a share from his exploits. By the time the Civil War ended, Fisk was a rich man.

However, the end of the Civil War also marked the end of Fisk career at the dry good firm. Deflation struck the country and the company began to falter. Fisk then sold his partnership to save himself from the losses. After his withdrawal from the dry-god business, he worked as an agent for the ferry service tycoon and his future partner, Daniel Drew. His work as an agent to sell steamships of Drew. Once again, he received a part from the profits.

Fisk received support from Drew when he decided to enter the world of speculating in Wall Street. In 1866, Fisk decided to open his own brokerage, the Fisk & Belden. The brokerage gave Fisk substantial wealth and his name began to be recognized in the New York Stock Exchange.

Following his start in NYSE, Fisk name became more widely spoken in 1868. A year before, Drew, Fisk and a new addition, Jay Gould, acquired the lucrative Erie Line. The line was so profitable that one of the most powerful man in the railroad industry, “Commodore” Cornelius Vanderbilt. Vanderbilt already proved himself as a player when he acquired looming railroad companies and turned them into profitable once more. He also acquired one of the four strategic railroads linking the East Coast to the western inland, the New York Central. But the Commodore was not yet satisfied, not until he acquire the Erie Line. Drew, already once defeated by Vanderbilt, asked Fisk and Gould to help him in the upcoming fight.

The so-called Erie War revealed the devious side of the trio. Vanderbilt began a hostile take-over of the line by buying as many stocks as he can to become the majority stockholder thus owner of the line. However, the three men thwarted him. They issued company bonds that were convertible to stocks. The result was devastating to the Commodore. When Vanderbilt bought stocks of the line, it became worthless as new stocks known today as watered down stocks flooded to keep the majority number of share away from him. As month passed, Vanderbilt lost about $10 million to Fisk, Gould, and Drew over the Erie Line. Eventually, Vanderbilt sued them. The three men escaped the state of New York to New Jersey. There, Fisk bribed a State Senator, the corrupt William “Boss” Tweed to get them off the hook. The strain t their wealth, however, proved to be great.  Drew and Vanderbilt decided to reconcile and the three kept the Erie Line. Nevertheless, in the process of protecting their interest, Fisk, Gould, and Drew received criticisms from the public and Erie stock holders for their tactics.

Fisk and Gould were not deterred in their tactics. A year after the Erie War, in 1869, Fisk and Gould wanted to increase the profit of the Erie Line. To increase the profit, the number of freight that uses the line should increase. A solution that they found was the increase of gold prices. If the price of gold increases, the price of wheat would increase due to inflation. Once the prices of wheat increased, and there were only few buyers in the west to buy the product; and, they would be force to sell their wheat to the east coast. Henceforth, the Erie line would be used to transport wheat eastwards. To increase the gold prices, they would have to convince the US Government to keep their gold reserves. They solicited the help of Abel Rathbone Corbin, US President Ulysses Grant’s brother-in-law. Corbin convinced the President not to sell the government’s gold reserve. Fisk and Gould then began to buy as much gold as they can. Their buying spree of gold eventually brought the prices of gold upwards. The higher price of gold did bring the expected rise in the price of wheat, and farmers began to transport their produce to the east coast, giving them a fortune. However, President Grant noticed the plot and ordered the selling of government’s gold reserve to drop down the prices. Luckily, for Fisk and Gould, they sold all their gold in the market. When the government’s gold flooded the market, the prices of gold came tumbling down on September 29, 1869, known as Black Friday. It caused many buyers to incur losses; some even borrowed to buy gold became drowned in debt. Fisk and Gould created a fortune, from both the increase of freights and from their gold at the expense of other speculators and President Grant’s reputation.

Meanwhile, as an official in the Erie Line, Fisk became a thorn. He did spend millions of dollars in improving services, facilities, and equipment. However, he also stole company money for his own means. He also used stock manipulation to get most of his investors.

The money that he stole from the company brought Fisk a luxurious life. His flamboyant lifestyle can be illustrated with his purchase of Pike’s Opera House in New York. He renovated a space there to become his lavish grand office. Not even to mention, he began to produce expensive opera performances that eventually had to be stop for its unsustainability and impracticality. Another show of his fabulous lifestyle was his ownership of the largest steamboat in the Hudson River, the James Fisk.

His love for luxurious things also mirrored his love for women. Although married, Fisk loved to take series of mistresses; one of the most notorious was the alleged prostitute, Josie Mansfield. Josie, however, fell in love with Fisk business colleague, Edward Stoke. Fisk eventually came to know the affair and a legal battle ensued. Stoke was about to collapse because of the financial burden of the suite and decided that Fisk must die. On January 6, 1972, Stoke gunned down Fisk at the Grand Central Hotel. Fisk died soon after.

Fisk was a man of big ambitions and ego. He desired for a better life, regardless of the method. His desires blinded him of the hardship of others. This ruthlessness was applied not just in business but also in his love for women. And this personality of his caused his own death. 

Geisst, C. Encyclopedia of American Business History. New York: Facts on File, 2006. 

Ingham, J. Biographical Dictionary of American Business Leaders. Connecticut: Greenwood Press, 1983. 

McNamara, R. “Jim Fisk, Flamboyant and Unscrupulous Wall Street Character: With Partner Jay Gould, Fisk Manipulated Gold and Railroad Stocks.”  about.com. Accessed October 31, 2013. http://history1800s.about.com

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