by Ron Chernow
Luckily for Grant, wealthy financiers were outraged that their hero lacked the necessary funds for a proper retirement. A group of Wall Street admirers created for Grant a $250,000 Presidential Retiring Fund, which would not only yield $15,000 in annual interest but reinforce his image as overly beholden to the rich. To supplement his income, Grant returned to his scheme for a Mexican railway system and sketched out his blueprint at a fancy dinner at Delmonico’s in lower Manhattan, organized by his friend Matías Romero, the Mexican minister, and attended by twenty railroad tycoons. For Grant, his vision of a railway network in Mexico dovetailed with his wish to deepen U.S.-Mexican relations. Within a month he chaired a committee on the subject that included Collis P. Huntington, Grenville Dodge, and Jay Gould, representing leading railway interests. Through Grant’s influence, William Waldorf Astor introduced a bill in the New York legislature to incorporate the Mexican Southern Railroad, with Grant, Gould, Porfirio Díaz, and Romero among its charter subscribers. Railroads already under way would connect the United States with Mexico City and the new venture would run additional lines south from the Mexican capital, extending to Central and even South America, along with east-west lines to the Gulf of Mexico and the Pacific.
In late March 1881, Grant gathered Julia, Buck and his pretty new bride, Fannie Josephine Chaffee, and Matías Romero and set out for Mexico to hammer out a contract for the new railroad, whose president he had become. Stopping off in Galveston, Texas, he admitted to a reporter that Jay Gould was a stockholder in the new company whose roads would radiate northward and intersect with Gould’s railway empire. It seems strange that Grant, having been bamboozled by Gould in the Gold Corner scheme of 1869, should have entered into a business venture with him. By year’s end, Grant boasted, fifty thousand workers would labor on new Mexican railways. Speaking at a Mexico City banquet in late April, he emphasized that his railway proposals would cement relations between the United States and Mexico, which “should be the warmest of friends, and enjoy the closest commercial relations.”26 By May 11, he had extracted a concession from the government for the Mexican Southern Railroad and returned home a voluble booster of the project. “The road will be in all about 700 miles long,” he told one newspaper, “running from the City of Mexico through Pueblo [sic] to the Pacific Coast, while another branch runs down to the gulf.”27 Unfortunately, the railroad fared poorly, encountering numerous delays and setbacks.
By the time Grant got home, he could no longer evade the pressing question of where he would settle after four years of an unsettled life. Spending the summer in Long Branch, he expanded and refurbished the house to accommodate his grandchildren, then moved to New York City in the fall, where he hoped to engage “in some occupation giving me a good income.”28 To have a Manhattan residence was a decision that exposed Grant to the temptations of the Gilded Age metropolis, an atmosphere in which he could easily lose his moral bearings. Even blessed with bountiful gifts from rich benefactors, Grant couldn’t afford a New York home and George Childs spearheaded yet another syndicate of donors who gave Grant $100,000 for a residence. When Childs and Anthony Drexel appeared at the Fifth Avenue Hotel and presented the Grants with this handsome gift, Julia wasn’t fazed by their largesse: “So I was to have a beautiful home, all my own, and how happy I was all that summer looking for a house and selecting paper, furniture, etc.”29
The Grants made payment on a spacious four-story brownstone at 3 East Sixty-Sixth Street, only steps from Fifth Avenue, its bay windows jutting out to afford a view of Central Park, with a $98,000 price tag. “It was a much larger and a more expensive house than we had intended (or had the means) to buy, but it was so new and sweet and large that this quite outweighed our more prudential scruples,” Julia wrote.30 On September 29, 1881, the Grants occupied the sparsely furnished house—their possessions filtered in piecemeal in the coming weeks—and Fred and Ida and their two children formed part of the household. The new home would be richly furnished, stuffed with trophies collected abroad and assorted items shipped from the Galena house—“handsome parlor books, an old brass bell, wooden sword rack, large black lacquer box . . . two flower vases of silver bronze and cut glass,” as Grant itemized them.31 He had landed in a world where he was bound to feel poor but entitled to be rich. In her memoirs, Julia rejoiced at their warm reception at “the palaces on Fifth Avenue” and commented upon “how regally New York entertains. In our journey around the world I saw nothing that excelled them in magnificence of elegance.”32
The recipient of two generous gifts, Grant still felt a financial pinch and a trace of bitterness that the presidency had impoverished him—the reason he never expressed remorse about accepting gifts from rich admirers. In his mind, private munificence had compensated him for public sacrifice. In refusing to help a young friend obtain a government post, he made the telling remark that “the worst thing that can be done for a young man is to get him a Government position. Such places only give a man a mere support while he holds it, and unfits him for the battle of life when he is discharged.”33 Unable to retire on a presidential pension and having sacrificed his military pension to enter politics, he discreetly supported efforts to restore him to the retired army roster with the rank and pay of general. This proved a surprisingly hard sell in Congress, especially when the hefty gifts to him were publicized. As the Missouri senator George Vest remarked, Grant was “surrounded by wealthy connections, living luxuriously in the city of New York, and possessed, besides other fortune, of the income from $250,000 donated to him by the public.”34
Perhaps reacting to the monetary drawbacks of government service, Grant’s sons had gravitated to the private sector. In 1881 Fred resigned his army commission to become president of a Texas railroad. Jesse, who had married Elizabeth Chapman, joined the produce business with Fred’s brother-in-law Henry H. Honoré Jr. and soon prospered enough to become a member of the American Yacht Club. At least materially, the most successful offspring was Buck, who had graduated from Exeter, Harvard College, and Columbia Law School, acted as his father’s White House secretary, then served as assistant U.S. attorney for the Southern District of New York. With his broad, handsome face and handlebar mustache, he bore a striking resemblance to his father. So winning was his nature that a White House reporter described him as “a modest, retiring lad, as sensitive and kindly as a girl . . . so sensitive that a cross word was more of a punishment to him than a severe chastisement would be to most boys.”35
Starting with the Comstock Lode, Buck had dabbled in speculative mining ventures, especially after marrying the daughter of the former Colorado senator Jerome B. Chaffee, who had reaped a fortune in banking and mining stocks. Grant reposed such trust in Buck that he had given him power of attorney and allowed him to handle his investments during his absence abroad. Buck seemed to thrive in the business world. By October 1881, when he was only twenty-nine, he became squire of a two-hundred-acre farm in Westchester with a twenty-one-room house and nearly one hundred head of horses and cattle. Grant had such implicit faith in Buck’s business sagacity that he boasted he was “a man of some means, gathered by his own exertions.”36 Grant evinced a trust in all his sons, but especially Buck, who, like his father, seemed incapable of guile.
Buck entered into a partnership with a young financier named Ferdinand Ward and the stout, balding James D. Fish, president of the Marine National Bank. So bold and electrifying were Ward’s forays on Wall Street that Buck, who left all business dealings to Ward, imagined he had amassed a $400,000 stake under his tutelage. Ulysses S. Grant had always avoided ethical shortcuts and never lent his prestige to business ventures, denying several efforts to name him president of sundry mining operations. But swayed by his tender confidence in Buck, on November 1, 1880, he entered into a partnership with him and Fish and Ferdinand Ward. Buck added $100,000 to his earlier investment, while Grant and his son Jesse chipped in $50,000 apiece. Grant expected to live comfortably off its income for many years. Later
it turned out that James Fish hadn’t contributed a penny in cash to the firm and Ward had bought his share with worthless securities. In other words, the entire working capital for Grant & Ward came from the Grants, who seemed to have a congenital weakness for confidence men. Before Ward’s larceny was over, Fred Grant would contribute nearly $1.5 million of his own money. Amazingly Grant’s many disappointments with business partners and treacherous White House appointees had not sharpened his instinct for fraud. Once again he would prove an incurably naive man, defeated by his own fundamental decency.
Though he allowed his name to be exploited by a business for the first time, Grant engaged in shockingly little study of the operation. He didn’t review transactions, leaving that to the supposed wizardry of young Ward. Instead he functioned as so much high-priced decoration to lure in the carriage trade. One last time he was touched by a tragic blindness. He never had a lawyer scrutinize the agreement, seemed hazy on its details, and thought he was a limited partner rather than a general partner with full liability if anything went wrong. Grant’s Mexican railway venture was also housed at 2 Wall Street and the association immeasurably enhanced Ferdinand Ward’s stature in the financial district.
In trading securities and commodities at Grant & Ward, Ferdinand Ward enjoyed unlimited power. Only he was allowed to sign checks, manage the books, and run the firm, using Grant’s name as window dressing. Just twenty-nine, but already lionized as the Young Napoleon of Finance, Ward had fair hair, blue eyes, rosy cheeks, and a charming manner. A pathological narcissist, he had no concern for anyone but himself. Cool and unflappable, he had the psychopath’s ability to counterfeit sincerity and present the exact image other people wanted to see. Such was the hypnotic spell he cast that Ohio senator Allen Thurman had labeled him America’s “most successful financier” and predicted the next president “would make a stupendous blunder if he did not make Ferdinand Ward Secretary of the Treasury.”37
Like many greedy personalities, Ward grew up in a threadbare home, steeped in piety, in upstate New York, his parents having served as missionaries in India. His father, a strict Presbyterian minister, inveighed against alcohol, gambling, and “Popery.” His mother was a morbidly self-pitying woman who steeled her children against worldly temptations. “Ferdie” felt stifled by his father’s religious dogmatism and the family austerity. After moving to New York City in 1873, he clerked at the Produce Exchange and learned to trade commodity futures. He married a rich young woman from Brooklyn Heights whose father was a director of the Marine National Bank, catapulting him into the tony sphere to which he aspired. When his father-in-law died, Ward became coexecutor of his estate and began to bilk his widowed mother-in-law. He also purloined money from the Sunday school of the Church of the Pilgrims, where he acted as treasurer.38 With four Irish maids, a French chef, and rich artwork displayed in his home, Ward projected an air of bourgeois respectability and the Grant connection gave him the ideal camouflage for his larceny.
When Grant arrived for his first day at Grant & Ward, he pulled up in a carriage, entered the building arm in arm with Buck, and was swallowed up by an enormous throng of well-wishers. He thrust out his hand to greet Ferdinand Ward. “No one can realize the feeling of pride with which I greeted him, not only as a friend but as a partner,” Ward said.39 The young flimflam man studied his famous victim with scientific care, noting that Grant went to church regularly, deplored off-color stories, and largely abstained from alcohol: “He very seldom touched any liquor except ale, and he drank that sparingly and at rare intervals.”40 Ward made sure to have twenty-five of Grant’s favorite cigars ready whenever he stopped by the office. Twice a week, he traveled uptown to join Grant’s poker games. “I have known [Grant] to go to bed with a heavy Havana in his mouth, put out the lights and continue smoking for a time in the dark,” he recalled. “He would never finish this nightcap cigar, but when it was about half done he would put it somewhere, where it might be reached easily in the morning.”41
Ward sized up Grant as a “child in business matters” who would never be able to uncover his deceptions.42 The firm paid Grant $2,000 monthly for living expenses and Ward funneled extra money to him as needed. Grant associates who invested with Ward walked away with dazzling profits. One friend invested $50,000, disappeared for six months on a European vacation, then came home to a whopping $250,000 check. As others reaped 15 percent to 20 percent profits per month, a mania to invest with Grant & Ward overtook Wall Street. The stupendous returns dulled investor curiosity about how these exorbitant returns were earned and dozens of Union veterans poured in money on the strength of Grant’s name alone.
Going for broke, Ward quizzed Grant about other family members who might like to invest. “He questioned me about the outlying kin, and wherever he found a member of it that had saved up something in a stocking he sent for it and got it,” Grant later said. “In one case, a poor old female relative of mine had scrimped and saved until she had something like a thousand dollars laid up for the rainy day of old age. Ward took it without a pang.”43 Far from being suspicious, Grant showered gifts upon his marvelous young partner, filling his home with exotic mementos—leopard skins, Japanese swords, hand-painted bamboo screens—culled from his global tour. Ward loved to flash a pocketknife engraved with the letters “U.S. Grant,” custom made for the ex-president in Sheffield, England. So intertwined were their lives that Grant even kept a pair of Thoroughbred horses in Ward’s stables.
Grant sternly lectured Ward that if the firm ever engaged in government business, he would terminate the partnership: “I having been President of the United States was not willing that my name should be connected at all with any such transactions.”44 When Buck advised Ward to avoid government contracts, “he said my father’s honor was as dear to him as it was to me.”45 Buck and Fred Grant knew about the supposed government contracts, although their father remained in a state of blissful innocence. Whenever investors quizzed Ward about his mysteriously astronomical profits, he intimated that he had large government contracts for wheat or hay and hinted at the secret influence of Grant or President Arthur.46 In this way, Ward purveyed an image of Grant not as an upstanding former president but as a swindling politician with a hand in procuring government deals. In fact, no government contracts existed and Ward used these fictitious transactions to extract more loans to feed his bottomless greed.
Ferdinand Ward operated what would later be termed a Ponzi scheme, paying off old investors with money from new ones. Violating every principle of sound finance, he piled up staggering debt, using the same securities as collateral for multiple loans. All the while, Grant acted as his unwitting dupe. Ward alone had access to securities in the firm’s vault. Every day, Grant arrived punctually at ten o’clock and enjoyed the firm’s success without devoting any time to business details. Either Ward or the chief clerk slapped letters in front of him, which he often signed without bothering to read. He signed one letter implying he knew of speculation in government contracts and sanctioned the use of his name. When James Fish asked how the firm was doing, Grant raved about its success. “‘I think we have made more money during the past year than any other house in Wall Street, perhaps in the city.’ He said Ward was the ablest young businessman he ever saw.” Fish then asked Grant “whether he had ever examined the books of the firm. He said no; he had only looked over the monthly statements, which were satisfactory to him.”47 Grant’s complacency was shocking. He seemed to think it perfectly normal that gigantic sums of money should fall from the sky without any effort on his part, even though family and friends had invested their life savings with Grant & Ward on the basis of his involvement.
No less gullible was Buck, who had his law office at 2 Wall Street. Ward rebuffed any snooping by Buck into the firm’s internal workings. “I was reduced to doing nothing,” Buck confessed. “I was sort of a customer of the firm.”48 For those who watched skeptically, there was something disturbingly vague and unreal abou
t Grant & Ward’s success. Grant would boast about the extravagant returns, not the way in which they were made. He traveled in a world of Gilded Age financiers who routinely made fortunes in short order and felt himself a lucky newcomer to this privileged class. Although Julia had queasy feelings about Ward, her husband reflexively defended his young partner. “Mother,” he advised her, “I’d give anything in this world if our boys were as smart as that young Ward.”49 He told Julia not to worry about setting aside money for their children’s future. “Ward is making us all rich—them as well as ourselves.”50 The general who had impressed Abraham Lincoln and vanquished Robert E. Lee was powerless to defend himself before the infinite wiles of a shameless young trickster. As Mark Twain later remarked, “It was the unimpeachable credit and respectability of [Grant’s] name that enabled [Fish and Ward] to swindle the public. They could not have done it on their own reputations.”51
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ON MAY 11, 1883, Hannah Simpson Grant died in New Jersey. She went as quietly as she had lived, having maintained a mostly independent existence and refused to exploit her son’s fame. She hadn’t been estranged from Ulysses’s life, but certainly detached. In advising the pastor at the funeral, Grant said he should “speak of her only as a pure-minded, simple-hearted, earnest, Methodist Christian; make no reference to me; she gained nothing by any position I have filled or honors that may have been paid me. I owe . . . all that I am to her earnest, modest and sincere piety.”52
On August 30, the rotund Grant, who had bulked up to two hundred pounds, embarked on a three-week train excursion across the country to celebrate completion of the Northern Pacific Railway. Thirty years earlier, as a young officer, he had helped to outfit an expedition to survey the railway. Now he would hammer in the golden spike uniting two wings of the road and lay the cornerstone for the new capitol at Bismarck in Dakota Territory. With his continental perspective, Grant had toured virtually every state and territory; no other nineteenth-century president traveled so widely or glimpsed so much of the country. As his train sped west, he was astonished that every ten or fifteen miles, the spire of another church or schoolhouse pierced the sky. To Nellie he described the many cities with “horse cars, streets lit with gas, daily papers, and large hotels . . . making it possible to drive from one end of the [rail]road to the other . . . without camping out a single night.”53
