Charles W. Morse
Encyclopedia
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
in the early 20th century.
Early life
Morse was born in Bath, MaineBath, Maine
Bath is a city in Sagadahoc County, Maine, in the United States. As of the 2000 census, the city population was 9,266. It is the county seat of Sagadahoc County. Located on the Kennebec River, Bath is a port of entry with a good harbor. The city is popular with tourists, many drawn by its...
, in 1856, the son of Benjamin Wyman and Anna (Rodbird) Morse. His father had a large role in the towing business on the Kennebec River
Kennebec River
The Kennebec River is a river that is entirely within the U.S. state of Maine. It rises in Moosehead Lake in west-central Maine. The East and West Outlets join at Indian Pond and the river then flows southward...
. Charles was already involved in the shipping business while a student at Bowdoin College
Bowdoin College
Bowdoin College , founded in 1794, is an elite private liberal arts college located in the coastal Maine town of Brunswick, Maine. As of 2011, U.S. News and World Report ranks Bowdoin 6th among liberal arts colleges in the United States. At times, it was ranked as high as 4th in the country. It is...
, and at his graduation in 1877 he had accumulated a sizable capital. After college he went into business with his father and a cousin, Harry F. Morse, forming C.W. Morse & Company and engaging in an extensive business shipping ice and lumber.
On April 14, 1884, he married Hattie Bishop Hussey of Brooklyn, New York. She bore him three sons and a daughter, and died about 1897.
As his business interests grew, Morse moved to Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
and, in 1897, New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
The "Ice Trust"
He organized the Consolidated Ice Company in 1897 and went into the ice business. In 1899 he merged it with several other companies to form the American Ice Company which, grossly overcapitalized at $60 million, held a virtual monopoly for ice in New York. Morse quickly became known as "The Ice King". At that time commercial ice was cut from frozen rivers, much of it in Morse's native state of Maine.On May 1, 1900, Morse attempted to use his monopoly to raise the price of ice. The plan backfired, however, and it was revealed by the New York Journal and Advertiser that Morse had obtained special privileges from Tammany Hall
Tammany Hall
Tammany Hall, also known as the Society of St. Tammany, the Sons of St. Tammany, or the Columbian Order, was a New York political organization founded in 1786 and incorporated on May 12, 1789 as the Tammany Society...
to run his business, and in exchange Robert Van Wyck (New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
's first mayor over the five united boroughs) had been given a substantial ownership share in the ice companies (by then known as the "Ice Trust") as had Richard Croker
Richard Croker
Richard Croker, Sr. was an American politician, a leader of New York City's Tammany Hall.-Biography:...
, the boss of Tammany Hall. Having formed a holding company called the Ice Securities Company, Morse manipulated its stock and left the ice business with a profit of some $12 million.
Shipping and banking
On June 18, 1901 he married Clemence Dodge, a divorcee from Atlanta, at the Fifth Avenue Presbyterian ChurchFifth Avenue Presbyterian Church
The Fifth Avenue Presbyterian Church is a large congregation of the Presbyterian Church . The church was founded in 1808 as the Cedar Street Presbyterian Church and has been located on Fifth Avenue at 55th Street in midtown Manhattan since 1875. It has approximately 3,250 members from a variety...
in Manhattan. The Morses lived at 724 Fifth Avenue
Fifth Avenue (Manhattan)
Fifth Avenue is a major thoroughfare in the center of the borough of Manhattan in New York City, New York, United States. The section of Fifth Avenue that crosses Midtown Manhattan, especially that between 49th Street and 60th Street, is lined with prestigious shops and is consistently ranked among...
, before moving to Lakewood Township, New Jersey
Lakewood Township, New Jersey
-Demographics:As of the census of 2000, there were 60,352 people, 19,876 households, and 13,356 families residing in the township. The population density was 2,431.8 people per square mile . There were 21,214 housing units at an average density of 854.8 per square mile...
. They maintained a summer home in Bath, Maine. Their marriage was annulled, however, in 1904 when it was determined that Clemence's divorce from her first husband, Charles F. Dodge, was not legal and she was therefore still married to him. Undeterred, she was represented by Samuel Untermyer
Samuel Untermyer
Samuel Untermyer Samuel Untermyer Samuel Untermyer (March 6, 1858 – March 16, 1940, although some sources cite March 2, 1858, and even others, June 6, 1858 also known as Samuel Untermeyer was a Jewish-American lawyer and civic leader as well as a self-made millionaire. He was born in...
, who restored her marital rights; she remained devotedly at the side of Morse until her death in 1926.
Morse returned to the realm of shipping in 1901 when he established the Eastern Steamship Company as a consolidation of three existing lines. These were the Boston and Bangor Steamship Company, dating from 1834; the Portland Steam Packet Company, organized in 1843; and the International Steamship Company, established in 1859.
In 1902 Morse acquired control of both overnight steamboat lines on the Hudson River
Hudson River
The Hudson is a river that flows from north to south through eastern New York. The highest official source is at Lake Tear of the Clouds, on the slopes of Mount Marcy in the Adirondack Mountains. The river itself officially begins in Henderson Lake in Newcomb, New York...
- the People's Line, established in 1835, and the Citizens' Line, established in 1872 - and organized the Hudson Navigation Company to operate them. They were collectively known as the Hudson River Night Line. The People's Line named its new 411-foot steamer C.W. Morse in his honor in 1904. (Morse's uncle James Thomas Morse, his father's brother, was the namesake of the Rockland-Bar Harbor, Maine
Bar Harbor, Maine
Bar Harbor is a town on Mount Desert Island in Hancock County, Maine, United States. As of the 2010 census, its population is 5,235. Bar Harbor is a famous summer colony in the Down East region of Maine. It is home to the College of the Atlantic, Jackson Laboratory and Mount Desert Island...
, steamer J.T. Morse, also built in 1904.)
Morse acquired control of the Metropolitan Steamship Company
Metropolitan Steamship Company
The Metropolitan Steamship Company was for 75 years one of the chief transportation links between New York City and Boston, Massachusetts. It was closely associated with the Whitney family until its acquisition by Charles W. Morse in 1906...
from the Whitney interests in 1906. He organized the Consolidated Steamship Company in January 1907 as a holding company for the Eastern Steamship Company, Metropolitan Steamship Company, Clyde Steamship Company and Mallory Steamship Company. Despite an initial announcement of such a sale, Morse failed in an attempt to purchase the Long Island Sound
Long Island Sound
Long Island Sound is an estuary of the Atlantic Ocean, located in the United States between Connecticut to the north and Long Island, New York to the south. The mouth of the Connecticut River at Old Saybrook, Connecticut, empties into the sound. On its western end the sound is bounded by the Bronx...
steamers of the New York, New Haven and Hartford Railroad
New York, New Haven and Hartford Railroad
The New York, New Haven and Hartford Railroad , was a railroad that operated in the northeast United States from 1872 to 1968 which served the states of Connecticut, New York, Rhode Island, and Massachusetts...
. He did, however, acquire control of the New York and Cuba Mail Steamship Company and the New York and Porto Rico Steamship Company in 1907.
He parlayed this success into a prominent role in high finance in New York City. Morse controlled the National Bank of North America, the New Amsterdam National Bank and was a large owner of the Mercantile National Bank. He became a close associate of F. Augustus Heinze
F. Augustus Heinze
Fritz Augustus Heinze was one of the three "Copper Kings" of Butte, Montana, along with William Andrews Clark and Marcus Daly...
, who became president of Mercantile National, and E.R. Thomas, a young man of large inherited fortune. Their influence grew—Heinze and Morse served as directors together on at least six national banks, 10 state banks, five trust companies and four insurance companies.
Panic of 1907
Along with Augustus Heinze's brothers, Morse helped create a pool of money to drive up and corner the stockCornering the market
In finance, to corner the market is to get sufficient control of a particular stock, commodity, or other asset to allow the price to be manipulated. Another definition: "To have the greatest market share in a particular industry without having a monopoly...
of United Copper
United Copper
The United Copper Company was a short-lived United States copper mining business in the early 20th century that played a pivotal role in the Panic of 1907....
. On October 15, 1907 this corner failed so spectacularly that depositors with Morse's banks began to pull out their deposits. On October 20, the New York Clearing House, which had a critical role clearing checks between banks, forced Morse to resign from his banking interests. This did not stop the panic, however, which went on to topple the Knickerbocker Trust Company
Knickerbocker Trust Company
The Knickerbocker Trust, chartered in 1884 by Frederick G. Eldridge, a friend and classmate of financier J.P. Morgan, figured at one time among the largest banks in the United States and a central player in the Panic of 1907. As a trust company, its main business was serving as trustee for...
, New York's third largest trust, and led to financial turmoil across the country through November. The Morse-controlled steamship lines went into receivership, for varying periods, in February 1908.
Indicted by United States District Attorney Henry L. Stimson
Henry L. Stimson
Henry Lewis Stimson was an American statesman, lawyer and Republican Party politician and spokesman on foreign policy. He twice served as Secretary of War 1911–1913 under Republican William Howard Taft and 1940–1945, under Democrat Franklin D. Roosevelt. In the latter role he was a leading hawk...
, Morse was convicted of violations of federal banking laws. He was sentenced to 15 years in the Atlanta federal penitentiary in November 1908 but remained free on appeal.
On October 8, 1909, the assets of the Metropolitan Steamship Company were sold at foreclosure sale to John W. McKinnon of Chicago. The company was reincorporated three days later in Maine with Morse as president. The Metropolitan Steamship Company and Maine Steamship Company were consolidated with the Eastern Steamship Company in 1911 to form Eastern Steamship Corporation. This concern went into receivership in 1914 and emerged in 1917 as Eastern Steamship Lines.
Having exhausted his legal appeals, Morse departed for Atlanta penitentiary on January 2, 1910. In Atlanta he was a prisoner alongside Charles Ponzi
Charles Ponzi
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, , commonly known as Charles Ponzi, was a businessman and con artist in the U.S. and Canada. Born in Italy, he became known as a swindler in North America for his money making scheme. His aliases include Charles Ponei, Charles P. Bianchi, Carl and Carlo...
, who would go on to create an eponymous fraudulent financial scheme, the Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
, and earn a legacy as one of the most famous swindlers in American history. Because of Morse's wealth and connections, he launched a campaign of lawyers, lobbyists and famous journalists like Clarence W. Barron
Clarence W. Barron
Clarence W. Barron is one of the most influential figures in the history of Dow Jones & Company. As a career newsman described as a "short, rotund powerhouse," he died holding the posts of president of Dow Jones and de facto manager of The Wall Street Journal...
who urged President William Howard Taft
William Howard Taft
William Howard Taft was the 27th President of the United States and later the tenth Chief Justice of the United States...
for leniency. In 1912 Morse became ill, and a panel of Army doctors declared that he suffered from Bright's disease
Bright's disease
Bright's disease is a historical classification of kidney diseases that would be described in modern medicine as acute or chronic nephritis. The term is no longer used, as diseases are now classified according to their more fully understood causes....
and other maladies and would soon die if he remained in prison. Taft signed his pardon, and Morse departed for medical treatment at Wiesbaden
Wiesbaden
Wiesbaden is a city in southwest Germany and the capital of the federal state of Hesse. It has about 275,400 inhabitants, plus approximately 10,000 United States citizens...
. However, it soon became known to the Justice Department that he had feigned illness by drinking a combination of soapsuds and chemicals. Taft later said that the case "shakes one's faith in expert examination."
Later life and death
On his return from EuropeEurope
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, Morse returned to the shipping business. He still controlled the Hudson Navigation Company, which had not been involved in the crash of the Consolidated Steamship Company in 1907. Morse announced on January 11, 1916, plans for a new transoceanic steamship line, which he organized as the United States Shipping Company. This holding company exchanged its stock for that of 16 subsidiary companies, each organized around a steamship.
During World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
he was president of United States Steamship Company, which was the parent company of Groton Iron Works
Groton Iron Works
Groton Iron Works was a company formed in 1917 to build cargo ships for the United States Shipping Board during World War I. The company owned two shipyards: one in Noank, Connecticut for wooden ships; and the other in Groton, Connecticut for steel ships. The focus of this article is the Groton,...
and Virginia Shipbuilding Corporation. The Virginia Shipbuilding Company won contracts to build 36 vessels for the war effort. The freighters were ordered by the United States Shipping Board
United States Shipping Board
The United States Shipping Board was established as an emergency agency by the Shipping Act , 7 September 1916. It was formally organized 30 January 1917. It was sometimes referred to as the War Shipping Board.http://www.gwpda.org/wwi-www/Hurley/bridgeTC.htm | The Bridge To France by Edward N....
, and Morse borrowed from the Emergency Fleet Corporation funds to carry out the contracts. Ultimately, 22 of the ships were completed; the other 14 were cancelled.
Morse controlled the Hudson Navigation Company until its bankruptcy in 1921. The receivers quickly changed the name of the C.W. Morse to Fort Orange.
In 1922 Morse was accused of misrepresentation of his facilities for ship construction; misapplication of funds intended for the building of ships to the building of shipyards; misappropriation of equipment for his own purposes; and failure to turn over to the government the profits of ships it had leased to him. Indicted for war profiteering and fraud, soon after he was confronted with charges of mail fraud involving sales solicitations for stock of the United States Shipping Company. The trial on the war profiteering charges resulted in an acquittal, but a civil suit in 1925 against the Virginia Shipbuilding Company resulted in a judgment for the government of over $11.5 million. The mail fraud case against Morse ended when he was adjudged too ill to stand trial, and after a jury had disagreed the charges against his sons were quashed.
His second wife, Clemence, died in July 1926. Suffering from paralysis, Morse was placed under the guardianship of the probate court of Bath on September 7, 1926, adjudged incompetent to handle his affairs. Having suffered several strokes, he died of pneumonia
Pneumonia
Pneumonia is an inflammatory condition of the lung—especially affecting the microscopic air sacs —associated with fever, chest symptoms, and a lack of air space on a chest X-ray. Pneumonia is typically caused by an infection but there are a number of other causes...
at Bath, Maine, on January 12, 1933.