Free People, Free Markets. George Melloan
gave him a pugnacious look. Woodlock wrote that “he had a fine memory, a capacity for penetrating recesses where no other reporter could gain access.” He also took shorthand and, according to Woodlock, was never accused of misquoting anyone.
News agencies in those days created bulletins on flimsy sheets of paper interleaved with carbon paper, writing the news with a stylus on the top sheet and making as many as 24 copies at a time. Boy runners would distribute the flimsies to clients. The Dow Jones runners must have resembled Fagin’s boys in “Oliver Twist” as they dodged among the carriages and beer wagons and jostled men in top hats, except that they were engaged in an honest business, not picking pockets. The partnership thrived, and after seven years the three bought their old-fashioned printing press and started a more practical way of serving their growing list of clients, a printed newspaper, although meanwhile keeping their news bulletin service up and running.
Today, what was then a little four-page newspaper has become the largest-circulation newspaper in America, delivered both on newsprint and the World Wide Web to readers not only in the United States but throughout the planet. It is said to be one of the nation’s most influential publications, not only because it still digs hard for news, in the manner of Dow, Jones and Bergstresser, but because its editorial pages provide a daily diet of vigorous commentary.
Jones specialized in collecting news while sharing in the conviviality of stock traders, bankers and hangers-on in the barroom of the Windsor Hotel at Fifth Avenue and 46th Street, a place sometimes referred to as the “all-night Wall Street.” He also kept the dozen or so boy runners in line with a strict disciplinary code and the force of his personality. Bergstresser did his digging in the daytime, successfully mining the money houses on Wall and Broad streets for news.
An account of late 19th-century Wall Street reporting was given much later by Oliver Gingold, an Englishman who joined Dow Jones in 1900 and played a key role in stock market coverage for a further 60-plus years. Journal reporter Cynthia Crossen quoted him in an article about the Journal’s history on the occasion of the sale of Dow Jones & Co. to Rupert Murdoch’s News Corp. in 2007.
Said Gingold: “In those days, a financial journalist was a combination private detective, stenographer and gossip columnist. Gathering news was a bare-knuckle business. Many companies refused to issue annual reports even to their own stockholders. Reporters spent long hours waiting outside directors’ rooms or corporate offices for a chance at buttonholing an insider. Messengers shadowing the reporters ran the news back to the office where scribes made carbon copies—as many as 24 at a time—that were hand delivered to subscribers.
“What soon distinguished Dow Jones from its competitors was its revolutionary approach to financial journalism: Instead of collaborating with companies and investors to manipulate the financial markets—and taking a piece of the action—they would try to impartially distinguish fact from rumor. From the beginning, they forbade their employees from investing in companies they were covering (a rule sometimes observed in the breach). An early Wall Street Journal motto was succinct but audacious: ‘The truth in its proper use.’”
All three of the founders were talented, but it was Dow, quiet and studious, who was the philosophical and ethical pillar of the operation. He insisted that his team remain aloof from the constant offers of bribes from brokers and investors to reporters willing to promote their stocks. He kept a check on Eddie Jones, whose evenings at the Windsor sometimes brought him into contact with ambitious speculators.
And thus it was he who was most responsible for earning Dow Jones a reputation for probity, which served them well in a place and era where well-founded, honest reporting was of great value to subscribers who were in the business of betting large sums on the stock of this or that railroad or bank. Aside from the moral and ethical dimensions, Dow, a student of markets, would demonstrate that integrity had market value, a lesson that would not be lost on future editors of the Journal.
It was also Dow who ultimately began to offer opinions on subjects broader than the trading of stocks and bonds, venturing into questions of corporate management or public policy. It was he who early on started the Review & Outlook column, which still carries the institutional opinions, or editorials, of the Wall Street Journal.
Those editorials today, more than a century later, still in some sense reflect the personality of Charles Dow. For example, the Journal editorial writers sail under the pennant, “Free People, Free Markets,” which is very much in keeping with what we know of the philosophy of Charles Dow. They defend the sanctity of contracts, holding that, when legally and voluntarily made between private individuals, they should be upheld not only by the parties but by the law. Dow argued that markets could not exist without mutual trust, and that was true of the rambunctious Wall Street of the Gay Nineties just as it is today.
Yet another parallel with today was the founders’ belief in sound money. They argued strongly against the Sherman Silver Purchase Act of July 14, 1890, which required the U.S. Treasury to buy 4,500,000 ounces of silver a month. Since the Treasury issued newly printed paper dollars for the silver, this was simply a way of engaging in the politically tempting practice of inflating the currency, something the Journal has been wary of throughout its history because it has been a tempting way for politicians to repay public debts with cheaper dollars while at the same time falsely blaming the rising cost of living and erosion of public savings on producers and merchants.
The act was popular with silver miners, of course, but also the powerful farm lobby, because it enabled farmers to more easily pay off their land purchase debts. A downside, in addition to higher living costs, was its effects on the working of the then-existent gold standard, which had provided sufficient monetary soundness to facilitate rapid U.S. and European economic growth in years previous. Foreigners grew suspicious of the dollar and began to demand physical gold, which resulted in a gold outflow, sending U.S. supplies of physical gold down to a dangerous level.
The Journal at that time was just an upstart, but it had influence with Wall Street and New York banks. It helped win repeal of the silver act in January 1893. Journal opinion editors today would be overjoyed if they could achieve a monetary victory of that importance. Despite sharp criticism from the Journal, the modern Federal Reserve Board has persisted in its dubious faith in the economic efficacy of its artificial suppression of interest rates, thus encouraging excessive borrowing, particularly by the government, and costing savers and pension funds many billions of dollars in lost earnings.
When Dow expanded his oeuvre from market commentary to a broader range of editorial topics as the turn of the 19th century approached, one of the subjects that engaged him was the rising militancy and influence of organized labor. By one count, there were 37,000 strikes between 1881 and 1905, some of them violent. One of the most dramatic was the 1894 Pullman Strike, an attempt to shut down the railroads led by Socialist Eugene V. Debs. President Grover Cleveland was only able to end the strike by calling out the army to enforce a court order.
One of Dow’s most interesting editorials addressed the issues raised by the strike of anthracite miners in eastern Pennsylvania in May 1902. John Mitchell, leader of the United Mine Workers of America, had taken some 100,000 miners off the job to back his demands for union recognition, a shorter working day and more pay. The 163-day strike was a major issue because it threatened to reduce the winter fuel supply for a nation then wedded to coal for most of its energy, including home heating. As compared to “soft” or bituminous coal, anthracite “hard” coal has a high carbon content. It was a vital ingredient for high-quality carbon steel production. Many railroad locomotives of the era were designed to use it because it was relatively smokeless, and its high heat and slow burning gave trains a longer range before refueling.
In addition to the economic threat, there was a sociological element as well. Many of the miners were recent immigrants from middle Europe trying to gain an economic foothold in a new land. Some of these Poles, Hungarians and the like spoke very little English and were vulnerable to exploitation by the mining companies in the absence of union representation.
Since the steel, railroad and mining stocks were affected, a Wall Street editor might have been expected to take the side of management. But, partly because of industry leaders’ arrogance in the face of union demands, Dow took an evenhanded approach instead.