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Addison G. Jerome

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Addison G. Jerome

Active: 1850s–1864, New York Known as: "Napoleon of the Open Board" Died: 1864, heart attack Peak wealth: $3 million Related: Leonard W. Jerome (partner, William Travers brokerage); the Jerome family were known as the "Jerome Brothers" — a speculation dynasty

King of the New York Public Board (Open Board) in the spring of 1863. His market tips were considered as good as cash in bank; he was said to be liberal to the point of extravagance and had a great following in the Street.

Career

Started in dry goods. Built a reputation through a series of speculative exploits in 1863, becoming acknowledged king of the Open Board. At peak, he was worth $3 million — achieved by successfully cornering four railroad stocks. Lost it all in an attempt to manipulate Old Southern, ending his nine-month reign.

The Open Board was a major competitor to the New York Stock Exchange; the two institutions were merged in 1869 in the wake of the Erie War.

Defeat by Henry Keep

Jerome had cornered Old Southern (Michigan Southern & Northern Indiana Railroad). Keep, as a director, turned bearish — secretly authorized new stock issuance and borrowed Jerome's own ring's shares to sell short against him. When the U.S. Treasury tightened credit in September 1863, the stocks fell. Old Southern "came down like an avalanche." Jerome lost his fortune. He died of a heart attack in 1864.

His story is the prototype of the brilliant bull operator who cannot defend against a patient, systematic bear working from an insider position.

The "Bull-Leader" Definition

William Worthington Fowler (Ten Years in Wall Street) defined the role Jerome embodied:

"Wall Street, considered as an aggregation of human-forces and money-forces, without bull-leaders, would be a flock of sheep without a bell-wether, a mob without a spokesman, an army without a commander. It is the bull-leader who organizes and compacts those forces, brings them under his banner and leads them to victory or — ruin."

Jerome was the bull-leader of his day. The ruin part followed.

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