Occasionally research takes you down unexpected paths. I was stopped short today and went where the story took me. The evidence left me with more questions and added to the research load, but I wouldn’t miss these jogs in the road for anything. Picking up some loose ends today to see if I can find more Martin descendants, I casually checked back with a number of newspapers to see if there was anything new. And boy, oh boy, I got more than I bargained for.
Chasing down the descendants of my great grandfather’s brother, Ernest M. Martin, I uncovered some intriguing material. Ernest, and my great grandfather Henry A. Martin were both ‘stenographers’ and telegraph operators. I hadn’t previously identified their employers. I assumed they were Western Union. Both men picked up and left Auburn in May of 1883 to work as stenographers in New York City. I speculated that perhaps it might have to do with the soon to be completed Brooklyn Bridge since young people from all over the tri-state area were streaming into the city to work as professionals in Manhattan while living in Brooklyn.
What I found today has given me pause. I found they were employed in the Auburn, NY offices of stockbrokers Watson & Cox and Co. handling the ‘wire’. Irregularities were occurring at the time and investors were beginning to question what was happening with their money. In 1883 local reporters went to two brokerages and asked them point blank why were people losing money? Watson said it was nonsense…that crops were great and there was no reason for panic.
He said that in his opinion, the panicky feeling is the result of a large class of worthless securities being thrown upon the market, which has a tendency, naturally to affect first class collaterals.
“Then you have no idea of a panic? the reporter asked.”
That is nonsense. The country never had better crops; the railroads are in excellent condition for transportation and there is a general feeling of contentment among all classes. You can put me down as saying that there is no cause for alarm.
It wasn’t long before Watson & Cox, Co. had closed their doors and the principal brokers were indicted for grand larceny. Though they went through a trial in 1885, they were not convicted.
What was of interest to me beyond the intrigue of the economic impact on Auburn’s citizens was the fact that Watson & Cox was affiliated with the NYC brokerage Townsend & Yale that hired my grandfather and his brother and brought them from Auburn to NYC. In 1883. Men who would know EVERY transaction and message in and out of those offices at 82 Genesee St.
There is no evidence that Ernest and Henry were called to testify and they both worked for decades as stenographers on the New York Stock Exchange. I also found no evidence that Henry EVER returned to Auburn except to marry in July of 1884. He remained in Brooklyn until his death in 1932. Ernest married his Auburn sweetheart at the same time and immediately returned to Brooklyn. Only Ernest’s wife and daughters returned to visit her parents.
There is much to read on the Watson & Cox case. Just collecting it and organizing it has been Herculean. Of course, this means I have a check list. What is a bucket shop? And worthless securities? And even more unsettling…do bucket shops still exist under another name. And worthless securities? Time to talk to an historian about the stock market and the American economy.
DEFINITION of ‘Bucket Shop’
1. A fraudulent brokerage firm that uses aggressive telephone sales tactics to sell securities that the brokerage owns and wants to get rid of. The securities they sell are typically poor investment opportunities, and almost always penny stocks.
2. A brokerage that makes trades on a client’s behalf and promises a certain price. The brokerage, however, waits until a different price arises and then makes the trade, keeping the difference as profit.
INVESTOPEDIA EXPLAINS ‘Bucket Shop’
1. Bucket shops are sometimes called the boiler room. The U.S. has laws restricting bucket shop practices by limiting the ability of brokerage houses to create and trade certain types of over-the-counter securities.
2. The second definition for a bucket shop comes from more than 50 years ago, when bucket shops would do trades all day long, throwing the tickets into a bucket. At the end of the day they would decide which accounts to award the winning and losing trades to.
“1885, Jan. 5. – The firm of Watson, Cox & Co., brokers is dissolved; the Auburn members of the firm taking quarters with Sheriff Myers. The firm was organized in 1880, as Watson & Neyhart. Mr. Neyhart retiring, Mr. Ashby succeeded him and a New York broker, named Cox, was introduced. The firm did a large business in the purchase and sale of stocks, and great expectations of large fortunes were indulged in, which I regret to say, were not in all cases realized. Some misunderstanding having arisen between the firm and its patrons, the business office was removed and negotiations were carried on at the jail until the 8th of May, when the restrained brokers were honorably discharged.”
Collections of Cayuga County Historical Society, Volumes 9 -11. Published 1891. Page 36
Author, Historian and Genealogical Researcher
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