Home | Quotations | Newspaper Articles | Special Features | Links | Search
WAS HAWLEY A FIGURE-HEAD?
Hartford's Interest in the American Exchange, Mark Twain's Experience.
A Hartford dispatch says: Considerable excitement prevails here in business, banking and political circles over the failure of the American Exchange in Europe (limited). Nearly $100,000 of the stock was centered here, and most of the stockholders had been induced to go in the scheme on the representation that Gen. Joe Hawley was the bona fide president. The developments of the past few days have caused many of them to speak bitterly of Hawley, and on all sides they are condemning him for having led them into the concern. S. A. Hubbard of the Hartford Courant, a close personal friend and confidant of Gen. Hawley, was interviewed. He said that it was Cowles Bros. who first started the exchange, running it as a private banking institution. They were large borrowers from a man named Appleton in Boston and eventually they became embarrassed. Appleton was anxious to have his interests protected, and he easily prevailed on Henry F. Gillig, who was then a clerk in a New York bank, to go to London and care for his rights. Gillig consented and soon was in the banking house. Matters went on from bad to worse, and at last the firm became bankrupt. Gillig resumed the business under the name of the American Exchange, and, believing that there was an opportunity to make a fortune, paid Appleton's claim and became the sole proprietor. His ideas were most elaborate, and he soon found that he must have more capital. He interested several capitalists in this country, and the American Exchange in Europe (limited) was organized under the laws of England. Gen. Hawley was induced to become president, and from 1880, the date of its organization, the company paid regular dividends of 6 per cent until 1886, when it made large expenditures in refitting and extending its London office, and did not pay a dividend. Early this year there was an examination, which showed that while considerable resources were tied up, the company was solvent as to its liabilities to its creditors.
Several weeks ago, Mr. Hazard of the American Loan and Trust company, was induced to take a large interest in the exchange, the agreement being that Gillig would cease to be financial manager, the Trust company would place its own manager in the London office, and the large expenses of the New York office would be reduced, the letters of credit of the exchange would be indorsed by a prominent New York financial institution, and the valauble plant and franhises of the institution would be preserved, and, in the words of a prominent member of this syndicate, the stock would be made good, dollar for dollar.
"What is Gen. Hawley's position in all these troubles?" Mr. Hazard was asked.
"He was elected president when the exchange was incorporated in 1880, and was re-elected every year since. He attended to his duties as fully as could be expected and every year spent several months in London, attending to the business of the exchange, all with the approval and complete satisfaction of the stockholders and directors. Two years ago he discovered that the policy he outlined was not being followed, and he read Gillig a lecture. The manager received it humbly and promised to heed the protest. That he didn't is clearly proven by the recent developments. He feels very sore about the matter, and freely blames Gillig and those of the directors who had recently espoused him.
"You said that the exchange is in a very bad condition. Can you say when it will be in shape again?"
"That, of course, at the present stage of the game, is impossible to state. I was in New York all day Friday and Saturday. From 12 noon of Friday to 12 noon of Saturday, upward of $50,000 in checks and cash came piling in to liquidate the indebtedness. Twenty-four hours earlier and it would have proven the bridge to cross the stream. As it was, the money and checks had to be sent back to the senders. Another reason for the failure is attributable to Gillig's vain-glorious desire to make the exchange the grandest thing on earth. The cash was spread out all over the globe, apportioned off to something like 2,800 correspondents. When this money was needed it could not be handled freely."
Mark Twain was seen as his beautiful cottage. He said: "I went into this thing on the representation that Gen. Hawley was the president of the exchange in every sense of the word. I bought $10,000 worth of the stock, and up to 1886 was well satisfied with the venture. Then, when no dividend was declared, I became a little alarmed, but I was assured by some of the directors, my personal friends, that the dividend had been passed in order to make some needed improvements in the London office. I was told that the 1887 dividend was passed in order to extend the arms of the exchange in European and Asiatic cities. This satisfied me, and I had no more doubt until the end of the year. Understand, I am no business man in any great way, but yet I had my eyes open, and I do not like this loaning of money to Barrett, Haverly, Stayner, Stevens and the others, but when I complained I was assured just the same as the other stockholders were, that these loans were well secured and sure in the end to net a handsome amount. But I was duped, and now that the crash has come I can easily see that the concern has been rotten for some months."
"Have you any reason to believe that Gen. Hawley permitted his name to be used for a consideration of $3,000 a year?"
"No, sir; I never heard of such a thing, and I do no believe that he would consent to anything of the kind."
"Where do you put the blame?"
"On that fellow Gillig, and it is good riddance to bad rubbish if he has quit the country."
The reporter then interviewed a relative of the late Gov. Jewell. He, too, smiled when asked about the exchange, and said freely that there had always been considerable friction between Hawley and Jewell. After a little coaxing he said that Gillig, when he started the American Exchange induced a number of American bankers and merchants to consent to the use of their names as directors. Then he sent a letter to Marshal Jewell asking him to be president. The Govenor did not answer it immediately, and a few days later was surprised to receive a pesonal visit from Gillig. The latter was anxious to have Jewell accept and even went so far as to assure him that he would have no duties to perform, would receive a salary of $3,000 a year, and in addition would get a present of a block of the stock. The old war hourse had already decided to decline, and he was considering how he would do so without giving offence. The last proposition settled it. He wasted no words, but showing his visitor to the door. After that Gillig sought the services of many prominent Americans, among them Secretary Barstow, but he met with failure everywhere until he ran against Hawley. I have every reason to believe that he used the same tactics on him that he did with the governor."
"Is that letter of Gillig's in existence?"
"I don't think it is. After the governor died his family destroyed most of his correspondence, and I am quite sure the letter was among the others which were burned."
George P. Bessel, colonel of the 25th Connecticut Volunteers, and a leading banker at present in Hartford, was next seen, and did not hesitate to say that he thought Hawley was to blame in no small degree for the present catastrophe, and then gave a history of Hawley's connection with the exchange.