FOUNDING EAST BRIDGEPORT--GROWTH OF THE CITY--THE JEROME
CLOCK BUBBLE--A RUINED MAN--PAYING HONEST DEBTS--DOWN IN THE DEPTHS.
In the year 1851 Mr. Barnum had purchased from William H.
Noble, of Bridgeport, Conn., the undivided half of his late father's homestead--fifty
acres of land on the east side of the river, opposite the city of Bridgeport. Together
they bought the one hundred and seventy-four acres adjoining, and laid out the entire
property in regular streets, and lined them with trees. A beautiful grove of eight acres
was reserved for a park. This they intended for a nucleus of a new city, to be known as
East Bridgeport.
They then commenced selling alternate lots, at the same price
as the land had cost them by the acre, always on condition that a suitable dwelling-house,
store or manufactory should be erected on the ground within a year; that every building
should be placed at a certain distance from the street; that the style of architecture
should be approved by the sellers; that the grounds be inclosed with suitable fences, and
that in all respects the locality should be kept desirable for respectable residents.
A new foot-bridge was built across the river, connecting the
new town with the city of Bridgeport, and a public toll-bridge, which belonged to Barnum
and Noble, was thrown open to the public free. They also erected a covered drawbridge at a
cost of $16,000, which was made free to the public for several years.
They built and leased to a union company of young
coach-makers a large manufactory, which was one of the first buildings erected in the
town, and which went into operation on the first day of the year 1852.
In addition to the inducements of low prices for the lots,
the owners advanced one-half, two-thirds, and sometimes all the funds to erect buildings,
permitting the purchasers to repay them in small sums at their own convenience. The town,
under such favorable auspices, began to develop and to grow with great rapidity.
No one of Barnum's schemes had ever interested him as this
one did. He was willing to listen to any one who thought they had a project favorable to
the advancement of the new city. It was the man's weak spot, and it was this weak spot
which was destined to be touched once too often.
There was a small clock factory in the town of Litchfield, in
which Barnum was a stockholder. Thinking always of his beloved enterprise, it occurred to
him at length that if the Litchfield clock company could be transferred to East
Bridgeport, it would necessarily bring with it numerous families to swell the population.
A new stock company was formed, under the name of the "Terry and Barnum Manufacturing
Company," and in 1852 a factory was built in East Bridgeport.
It will be seen how recklessly the owners of the site were
spending money. They looked for their profits wholly from the sale of the reserved lots,
which they felt sure would bring high values.
In 1855 Mr. Barnum was visited by the President of the Jerome
Clock Company, Mr. Chauncey Jerome, with a proposition that the concern, which was reputed
to be very wealthy, should be removed to East Bridgeport. Negotiations were opened, and at
last Barnum was offered a transfer of the great manufactory with its seven hundred to one
thousand employees, if he would lend his name as security for $110,000 in aid of the
company.
He was shown an official report of the directors of the
company, exhibiting a capital of $400,000 with a surplus of $187,000. They were in need of
money to tide over a dull season and a market glutted with goods. The company also was
represented as being extremely loth to dismiss any of their employees, who would suffer
greatly if their means of livelihood were taken from them. The company was reputed to be
rich; the President, Mr. Chauncey Jerome, had built a church in New Haven, at a cost of
$40,000, and proposed to present it to a congregation; he had given a clock to a church in
Bridgeport, and these things showed that he, at least, thought he was wealthy. The Jerome
clocks were for sale all over the world, even in China, where the Celestials were said to
take out the "movements," and use the cases for little temples for their idols,
"Thus proving that faith was possible without 'works,' " as Mr. Barnum said.
Further testimony came in the form of a letter from the
cashier of one of the New Haven banks, expressing the highest confidence in the financial
strength of the company. Barnum afterwards learned that his correspondent represented a
bank which was one of the largest creditors of the concern.
Barnum finally agreed to lend the clock company his notes for
a sum not to exceed $50,000, and to accept drafts to an amount not to exceed $60,000. He
also received the written guarantee of the President, Chauncey Jerome, that in no event
should he lose by the loan, as he would be personally responsible for the repayment. Mr.
Barnum was willing that his notes should be taken up and renewed an indefinite number of
times just so the maximum of $110,000 was not exceeded. Upon the representation that it
was impossible to say exactly when it would be necessary to use the notes, Barnum was
induced to put his name to several notes for $3,000, $5,000 and $10,000, leaving the date
of payment blank, it being stipulated that the blanks should be filled to make the notes
payable in five, ten, or even sixty days from date. On the other hand, it was agreed that
the Jerome Company should exchange its stock with the Terry and Barnum stockholders, thus
absorbing that concern, and unite the whole business in East Bridgeport.
Three months later Barnum's memoranda showed that the entire
$110,000 had been used. He was then solicited by the New York agent of the company for
five additional notes for $5,000 each. The request was refused unless they would return an
equal amount of his own cancelled notes, since the agent assured him that they were
cancelling these notes "every week." The cancelled notes were brought him next
day and he renewed them. This he did afterwards very frequently, until at last his
confidence in their integrity became so firmly established that he ceased to ask to see
the notes that had been taken up, but furnished new paper as often as it was desired.
But gradually the rumor that the banks were hesitating about
discounting his paper came to Barnum's ears. Wondering at this, he made a few inquiries,
which resulted in the startling discovery that his notes had never been taken up, as
represented by the Jerome Company, and that some of the blank-date notes had been made
payable in twelve, eighteen and twenty-four months. Further investigation revealed the
fact that he had indorsed for the company to the amount of over half a million dollars,
and that most of the notes had been exchanged for old Jerome Company notes due to the
banks and other creditors.
Barnum simply went to work, paid every debt he owed in the
world, and--failed!
The Jerome Company also failed, and in addition to absorbing
Barnum's fortune, was able to pay only about fifteen per cent. of its own obligations. Of
course it never removed to East Bridgeport at all.
The failure was a nine-days' wonder all over the country.
Never had Barnum achieved such notoriety. As he expressed it, he was taken to pieces,
analyzed, put together again, kicked, "pitched into," tumbled about, preached
to, preached about, and made to serve every purpose to which a sensation loving world
could put him.
Barnum declared that he could stand the abuse, the cooling of
false friends and even the loss of fortune, but it made him furious to read and hear the
moralizings over the "instability of ill-gotten gains." His fortune, if made
quickly, had been honestly worked for and honorably acquired, though envious people
pretended not to believe it.
