Historic certificate from the Mohawk and Hudson Railroad Company
issued in 1838. This item is hand signed by Jacob Little as the Company's President and is over 170 years old.
Jacob Little acquired a large fortune through stock speculation. He was known for a time as the Napoleon of the Board because of his ability to control and manipulate the stock market. The Civil War wiped out his fortune and he died penniless.
Signature of Jacob Little
Image of Jacob Little
1882 New York Times Article on how Jay Gould used Jacob Little's Convertible Bond Scheme
From the book "FIFTY YEARS IN WALL STREET" by Henry Clews
MY DEBUT IN WALL STREET
MY advent in Wall Street was on the heels of the panic of
1857. That panic was known as the “Western blizzard.”
It was entitled to the name, as its destructive power and chilling
effects had surpassed all other financial gales that had
swept over Wall Street. The first serious result of its fatal
force was the failure of the Ohio Life and Trust Company, a
concern of gigantic dimensions in those days.
The Company had an office in Wall Street, and on the
announcement of the collapse, business became completely
paralyzed. This failure was immediately followed by the suspension
of many large firms that had withstood the shock of
all ordinary collisions and had successfully weathered many
The panic was due in part to excessive importations of foreign
goods, and also to the rapid construction of railroads, to
a large extent on borrowed capital. There were other contributing
causes. The crops were bad that year, and the country
was unable to pay for its imports in produce, and coin
was brought to the exporting point. In October, the New York
City banks suspended payments, and their example was followed
throughout the country. Bank credits had been unduly
expanded everywhere, and the time had naturally arrived for
contraction. It came with a bound, and financial disaster
spread like a whirlwind, becoming general.
The Stock Exchange had been a moderately growing concern
for the ten years previous to this calamity, and the securities
there dealt in had been rapidly accumulating in number
and appreciating in value. Its members were wealthy and
conservative, with a strong infusion of Knickerbocker blood,
an admixture of the Southern element and a sprinkling of
Englishmen and other foreigners.
The effect of the crisis on the majority of Stock Exchange
properties was ruinous. Prices fell fifty per cent. in a few
days, and a large proportion of the Board of Brokers were
obliged to go into involuntary liquidation. There was a great
shaking up all around.
Then came the work of rehabilitation and reorganization.
Confidence gradually returned. The Young Republic had great
recuperative powers, and they were thoroughly exerted in the
work of resuming business. Much of the old conservative element
had fallen in the general upheaval, to rise no more.
This element was eliminated, and its place supplied by better
material, and with young blood, and in December the banks
This panic and its immediate results created an entire revolution
in the methods of doing business in Wall Street. Prior
to this time, the antique element had ruled in things financial,
speculative and commercial. This crisis sounded the death knell
of old fogyism in the “street.” A younger race of financiers
arose and filled the places of the old conservative leaders.
The change was a fine exemplification of the survival of
the fittest, and proved that there was a law of natural selection
in financial affairs that superseded old conservatism and
sealed its doom.
Until that time, the general idea prevailed that those
engaged in financial matters must be people well advanced
in years, even to the verge of infirmity. It is the same idea that
has been handed down, as if by divine right, from old world
prejudices, especially in the learned professions. No doctor
was considered a safe prescriber unless his hoary locks, bald
head and wrinkled brow proclaimed that he had almost passed
the period of exercising human sympathy. The same rule of
judgment was applied to the lawyer and the clergyman.
These unworthy prejudices were fostered by the character
of the Government of the old country, and nurtured by the
surroundings of the venerable monarchies of Europe, where
they exist largely even to the present day. So tenacious of life
are these old-fashioned ideas, that many of them were found
in full vigor, dominating Wall Street affairs up to the crash of
1857, fostering the antique element and choking off salutary
Hence the process of decay of these archaic notions and
our gradual development.
This struggle for new life in Wall Street was not successfully
developed without a serious effort to attain it. The old
potentates of the street fought hard to prolong their obstructive
power, and their tenacious vitality was hard to smother,
reminding one of the nine lives attributed to the feline
species. The efforts of the young and enterprising men to
gain an entrance to the Stock Exchange were regarded by
the older members as an impertinent intrusion on the natural
rights of the senior members. It was next to impossible for a
young man, without powerful and wealthy patrons, to obtain
membership in the New York Stock Exchange at the time of
which I speak.
The old fellows were united together in a mutual admiration
league, and fought the young men tooth and nail, contesting
every inch of ground when a young man sought
entrance to their sacred circle.
The idea then struck me that there was a chance for
young men to come to the front in Wall Street. I was then
engaged in the dry goods importing trade, in which I
received my early training. I had been kept out of the
Exchange for several years by the methods to which I have
alluded. My fate was similar to that of many others. It was
only by an enterprising effort, and by changing the base of
my operations, that I finally succeeded.
The commissions charged at that time were an eighth of
one per cent. for buying and selling, respectively.
After numerous efforts to gain admission to the Exchange,
without success, I finally made up my mind to force it. I at
once inserted an advertisement in the newspapers, and proposed
to buy and sell stocks at a sixteenth of one per cent each way. This was such a bombshell in the camp of these old fogies that they were almost paralyzed. What rendered it more distasteful to them still was the fact that, while they lost customers, I steadily gained them. The result was that they
felt compelled to admit me to their ranks, so that I could be
kept amenable to their rules and do business only in their
own conventional fashion.
My membership cost me, in all, initiation
fee and other trifling expenses in connection therewith,
$500. This presents a striking contrast to the recent price of
a seat, $35,000, but though this difference seems very large,
yet the changes in every other respect connected with Wall
Street affairs have been in similar proportion. Among some of
the old members of that day were Jacob Little, John Ward,
David Clarkson and others whose names may be found in the
archives of the Stock Exchange.
As an instance of the way in which membership was then
appreciated, it may be mentioned that speculators frequently
offered $100 a week, or ten times the cost of membership,
for the privilege of listening at the keyhole during the calls.
Although the prostration growing out of this panic was
very great and of long continuance throughout the country,
general confidence being shaken to its very foundation, yet,
on the whole, it was a great gain, and marked an era of financial
and speculative progress. It was the chief cause in drawing
out the young element in the business of Wall Street,
which might have lain dormant for a much longer period
without this sudden and somewhat rude awakening. It not
only brought Young America to the front in speculation, commerce
and general business, but it imparted an impetus of
genuine enterprise to every department of trade and industry,
from the good effects of which the country has never since
This new element, emanating from the throes of one of the
greatest business revolutions that any country has ever experienced,
has continued to grow and thrive with marvellous
rapidity. It is now getting so large that the Exchange will
soon require a whole block instead of a basement as at its
origin for its head-quarters. The Governing Committee of the
Stock Exchange are now looking forward to arrangements for
this consummation. How the ancient fathers of my early days
in Wall Street would have been shocked at the bare idea of
such amazing progress!
It is not the least singular phase of this evolution in Wall
Street, that the youthful element to which I have referred
stands alone as compared with the progress achieved by the
same class of men in any other nation. In America only does
the youthful element predominate in financial affairs; and
results have justified the selection, which perhaps in no other
nation is possible. Thanks to the freedom of our Republican
institutions, which, in spite of some individual deductions and
the occasional obstructions of “crankdom,” make way for that
progress, in the wake of which the other nations of the world
are emulous to follow.
The Exchange was at this time situated on William Street
between Beaver Street and Exchange Place. That place is rich
in speculative reminiscences. It was there that Jacob Little
made and lost his nine fortunes. It was there that Anthony
Morse, the lightning calculator, operated. He could foot up
four columns of figures as easily as the ordinary accountant
could run up one. He had been a clerk, and having saved
seven hundred dollars by close economy, began to deal in
stocks. His career at that time was more marvellous even
than that of Keene of a recent date. Morse made a fortune of
several millions in a year, and became bankrupt during the
same period, without any available assets to speak of. It was
all honorably lost, however. There was no Ferdinand Ward
game connected with it.
Youthful speculators had not then learned the “crooked”
methods of the young idea of modern times. It was there also
that Daniel Drew began to accumulate those millions that
afterward were subject to such a rude scattering. It was there
that the celebrated “corners” in Rock Island, Prarie du Chien
and Harlem were concocted. It was there that the wealth was
accumulated which built twenty thousand miles of Western
railroads, causing many millions of acres, that would otherwise
have been a wilderness, to blossom like the rose, in
spite of Mr. Powderly’s opinion that no material good can
come out of speculation, and thus adding immense wealth in
real estate to the country, besides conferring incalculable benefits
on trade and commerce, and preparing comfortable
homes not only for the pioneers and surplus population of the
Eastern States, but a teeming soil that has attracted the downtrodden
of every nation to come and partake of the blessings
of freedom and prosperity.
One of Jacob Little’s speculative ventures has been rendered
historically famous through the rule of limitation of
sixty days for option contracts. The necessity for this limit
was brought about by one of his celebrated attempts to
manipulate the market. He was one of the most prominent
speculators in Erie in the early days of Drew’s transactions
with that property and its stocks. Mr. Little had been selling
large blocks of Erie on seller’s option, to run from six to
twelve months. This was in the early history of “corners,”
before the method of managing them scientifically had been
fully developed and while “blind pools” were yet in embryo.
The leading members of the Erie Board formed a pool to
“corner” Mr. Little, and ran Erie shares up to a considerable
height. They imagined that he was in blissful ignorance of
their purpose, and had everything arranged for a coup d’etat
which was to reach its crisis at two o’clock on a certain day,
when Little was to be completely overwhelmed and hopelessly
ruined. An hour prior to the time appointed by the
clique for his disaster he walked into the Erie office, opened a
bag filled with convertible bonds, and requested an exchange
of stock for the same. He had purchased the bonds in
London and had them safely locked up for the emergency,
which he promptly met on its arrival. He got the stock, settled
his contracts, broke the “corner,” and came out triumphantly.
The option limit of sixty days was afterwards adopted in
order to prevent similar triumphs in manipulation on the
As will be illustrated more fully in subsequent chapters,
Mr. Little’s convertible bond trick was used with signal
advantage by his speculative successors in Erie, who practically demonstrated on several occasions that there were millions
Mr. Little was generous and liberal to a fault with his
brother speculators who had experienced misfortune. He used
to say that he could paper his private office with notes he
had forgiven to the members of the Board. He was also
remarkable for his great memory. He could easily remember
all the operations he made in the course of a day without
making a note or a mistake.
Like Drew, he was careless in his attire, wearing a hat like
that of a farmer, and not a very prosperous one, but he had
no compeer in his day at calculating ahead in a speculative
Sunshine and shadow in New York By Matthew Hale Smith - 1869
JACOB LITTLE, THE GREAT BEAR OF WALL STREET.
JACOB LITTLE originated the daring, dashing style of business in stocks, by which fortunes are made and lost in a day. He was born in Newburyport, Mass., and early exhibited great tact and aptitude for business. In 1817 he came to New York, and entered the store of Jacob Barker, who was at that time the most shrewd and talented merchant in the city. He remained with his master five years, and completed his financial education. In 1822 he opened an office in a small basement in Wall Street. Caution, self-reliance, integrity, and a far-sightedness beyond his years, marked his early career.
For twelve years he worked in his little den as few men work. His ambition was to hold the foremost place in Wall Street Eighteen hours a day he devoted to business — twelve hours to his office. His evenings he spent in visiting retail houses to purchase uncurrent money. He was prompt, energetic, reliable. He executed all orders committed to him with fidelity. He opened a correspondence with leading bankers in all the principal cities from New York to New Orleans.
Twelve years of industry, integrity, and energetic devotion to business placed Mr. Little at the head of fmancial operations in Wall Street. He identified himself with the style of business known as " Bearing Stocks." He was called the Great Bear on 'change. His mode of business enabled him to roll up an almost untold fortune. He held on to his system till it hurled him down and beat him to pieces, as it had done many a strong man before.
For more than a quarter of a century Mr. Little's office in the old Exchange building was the centre of daring, gigantic speculations. On ' change his tread was that of a king. He could sway and disturb the street when he pleased. He was rapid and prompt in his dealings, and his purchases were usually made with great judgment. He had unusual foresight, which at times seemed to amount to prescience. He controlled so large an amount of stock that he was called the Napoleon of the Board. When capitalists regarded railroads with distrust, he put himself at the head of the railroad movement. He comprehended the profit to be derived from their construction. In this way he rolled up an immense fortune, and was known everywhere as the Railway King.
He was the first-to discover when the business was overdone, and immediately changed his course. At this time the Erie was a favorite stock, and was selling at par. Mr. Little threw himself against the street. He contracted to sell a large amount of this stock, to be delivered at a future day. His rivals in Wall Street, anxious to floor him, formed a combination. They took all the contracts he offered, bought up all the new stock, and placed everything out of Mr. Little's reach, making it, as they thought, impossible for him to carry out his contracts.
His ruin seemed inevitable, as his rivals had both his contract and the stock. If Mr. " Little saw the way out of his trouble, he kept his own secrets; he asked no advice, solicited no accommodation. The morning dawned when the stock must be delivered, or the Great Bear of Wall Street break. He came down to his office that morning self-reliant and calm as usual. He said nothing about his business or his prospect. At one o'clock he entered the office of the Erie company. He presented certain certificates of indebtedness which had been issued by the corporation. By those certificates the company had covenanted to issue stock in exchange. That stock Mr. Little demanded. Nothing could be done but to comply. With that stock he met his contract, floored the conspirators, and triumphed.
Reverses so common to all who attempt the treacherous sea of speculation at length overtook Mr. Little. Walking from Wall Street with a friend one day they passed through Union Square, then the abode of our wealthiest people. Looking at the rows of elegant houses, Mr. Little remarked, " I have lost money enough to-day to buy this whole square. . Yes," he added, " and half the people in it." Three times he became bankrupt, and what was then regarded as a colossal fortune was in each instance swept away. In each failure he recovered, and paid his contracts in full. It was a common remark among the capitalists, that " Jacob Little's suspended papers were better than the checks of most men."
His personal appearance was commanding. He was tall and slim; his eye expressive; his face indicated talent; the whole man inspired confidence. He was retiring jn his manner, and quite diffident except in business. He was generous as a creditor. If a man could not meet his contracts, and Mr. Little was satisfied that he was honest, he never pressed him. After his first suspension, though legally free, he paid every creditor in full, though it took nearly a million of dollars. He was a devout member of the Episcopal Church. Plis charities were large, unostentatious, and limited to no sect The Southern Rebellion swept away his remaining fortune, yet, without a murmur, he laid the loss on the altar of his country. He died in the bosom of his family. His last words were, * I am going up. Who will go with me ? "