Sunday, May 27, 2012
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
Geoffrey Ward has reason for backhanded pride when it comes to his great-grandfather’s malfeasance. Ferdinand was not just any crook; he created a Ponzi scheme before Charles Ponzi was even born. He can legitimately be called the Bernard Madoff of his time, and he had the public infamy and prison sentence to prove it. Ferd, as he was known, was incarcerated at both the Ludlow Street Jail and the Tombs in New York, but it was not until he reached Sing Sing that his gifts as a con man really reached their peak. Thanks to well-placed bribes he got a nicer-than-average cell and the privilege of wearing a straw hat, not a striped one.
Before the arrival of this book, “A Disposition to Be Rich,” which takes its title from Ferd’s mother’s excuse for his problems, not much was written directly about Ward’s chicanery. There are several reasons. His illicit financial dealings were best known as a sad footnote to the Ulysses S. Grant story, since Grant became Ward’s woefully ill-informed partner in the firm of Grant & Ward. (Specialty: securities rehypothecating, or “pledging the same paper over and over again to borrow money, paying the interest on one loan out of the principal for the next, hoping that things would somehow balance out one day.”
And the Panic of 1884, which was prompted in part by the collapse of banks exploited by Grant & Ward, had other causes, among them the depletion of European gold reserves. The eloquent bursts of fury at Grant & Ward from Mark Twain, Grant’s friend and protector, are better remembered than the misdeeds that provoked them. Twain spoke of cursing Ward “with all the profanity known to the one language I am acquainted with,” as well as “odds and ends of profanity drawn from the other two languages of which I have a limited knowledge.”
Finally there was little firsthand evidence of the Ward story. A trunk full of Ferd’s Sing Sing papers has been in Geoffrey Ward’s possession since 1965, but it took him years to examine the letters and family memorabilia inside. Mr. Ward has been understandably slow to tackle this subject. He has also been busy writing “The Civil War” with Ken and Ric Burns and winning the National Book Critics Circle Award for “A First-Class Temperament,” his biography of Franklin D. Roosevelt. He has written many other books, some with Ken Burns, on subjects ranging from baseball to tigers.
But “A Disposition to Be Rich” is a special accomplishment. It is a most peculiar labor of love. It begins by describing the fractious lives of Ferd’s parents, the chronically embattled clergyman Ferdinand De Wilton Ward Sr. and his gloomy wife, Jane Shaw Ward. First as missionaries in India, then as part of a combative Presbyterian faction in Geneseo, N.Y., these parents helped set the stage for their youngest son’s misdeeds. Ferd’s father seems never to have gracefully given up on a feud if he could keep fighting. His mother rued the fact that she had ever borne children and specialized in writing guilt-provoking letters about her impecuniousness. As for these parents’ attitude toward Ferd, “both were right to be worried about his conscience,” Mr. Ward writes in this book. “It would eventually become clear that he had none.”
Born in 1851, Ferd grew up in his mother’s depressive shadow. Later he developed such fine penmanship that he became a secretary to S. Hastings Grant. This opened the door to a business relationship with the Grant family and then to the general.
And at 26 he approached James D. Fish, president of the Marine Bank, an institution that Ferd’s dishonest borrowing would later destroy. Ferd solicited Fish’s help as a mentor and collaborator.
Ferd projected signs of great prosperity, used his extravagance as a lure for investors and had the charm to keep them from withdrawing funds. He once appeared, uninvited, at the home of General Grant late at night, knowing that Grant’s guests included William H. Vanderbilt and others Ferd wanted to impress. The reason for the late-night call, he said, was to present Grant with the profits from an investment that had supposedly tripled during the course of the business day. On a similarly tricky occasion an investor tried to withdraw $50,000 from Ferd’s firm, only to have Ferd offer him $250,000, claiming that the man’s money had quintupled in the space of six months. The man was mollified, and the nonexistent $250,000 was reinvested. Grant & Ward could then continue to bamboozle. As the financier Henry Clews put it, “It is marvelous how the idea of large profits when presented to the mind in a plausible light has the effect of stifling suspicion.”
The scheme succeeded from 1880 to 1884. That it lasted even four years can be ascribed to Ferd’s and Fish’s trading on Grant’s reputation. Ferd let it be thought that his firm was investing in lucrative but hush-hush government contracts. Later, investors were so embarrassed that it became difficult to find witnesses who would testify to this dissembling.