Abstract

"Frenzied Finance: Con Artistry in the Progressive Era"

Susanna Blumenthal, University of Minnesota (blume047@umn.edu)

In the last quarter of the nineteenth century, a crescendo of social criticism was directed at “unpunished commercial crime” in the United States, referring to an increasingly volume of shady business “of a more intellectual kind.” Although these “modern crimes of craft” were less violent than those of “ancient times,” it was nonetheless worrying that they were not taken seriously as crimes. So common were stock prospectuses “full of fraudulent misstatements, over-valuations, and over-estimates,” the New York lawyer George W. Alger observed in 1904, that they had become “a popular topic for our shiftless American humor,” pointedly adding that “a problem in America has to begin by being a jest, and we laugh at our troubles long before we think of doing anything about them.” Yet the situation was hardly helped by the muckraking journalists’ “literature of exposure,” prone as they were to hyperbole, which diminished the public’s “capacity for being shocked” by “the modern business vampire” living on other people’s money.

This paper explores the phenomenon of economic duplicity in the Progressive Era, shining a spotlight on the “nervy crooks” who loomed so large in the public imagination. Exhibiting a “twisted intellect which delights in trick and device,” they excited a strange admixture of amusement, admiration, outrage, and despair as it seemed as difficult as it was imperative to “distinguish before the eyes of all men the finance which is finance from the finance which is crime.” No man presented this conundrum more vividly than Thomas Lawson, the famed stock-jobber-turned-muckraker, whose Frenzied Finance (1904) produced moral and market panics, which were variously depicted as larcenous and lunatic by detractors even as he acquired a substantial following among the ranks of the bilked. While this episode can be folded into conventional stories about caveat emptor and its discontents, this paper suggests the machinations of men like Lawson raised more fundamental questions about the extent to which businessmen were free to exploit the mental weaknesses of their fellows.