Sources of Advancement
Membership of the New York Stock Exchange is the equivalent of a liberal education. It costs quite as much in hard cash and brain wear, and is worth neither more nor less when acquired.
—James K. Medbery, Men and Mysteries of Wall Street
The firm of E. H. Harriman began life in a cramped office on the third floor of a building at the corner of Broad Street and Exchange Place. Henry did not long stay at the top of two flights of stairs, thanks to Richard Schell, a prominent operator who had close ties to Commodore Vanderbilt. The portly Schell came to like young Harriman as a broker but hated to wheeze his way up the stairs. He offered to give Henry enough business to cover his rent if he would move to the ground floor. Henry did so willingly and became an instant marketing genius. How many brokers got more business from important clients by having a poor location? 1
For that matter, how many newcomers even survived on Wall Street? Henry set up shop only three years before a major depression blighted the economy for most of the decade. Between 1870 and 1879 a total of 401 firms failed on the New York Stock Exchange. Harriman's was not one of them, largely because he tacked a cautious course even before heavy weather engulfed his fragile enterprise. The boldness for which he was later renowned did not show itself during these years. On Wall Street it was the plungers and the peacocks who got the headlines but the slow, steady plodders who survived the whims and vagaries of a fickle market. Henry stayed resolutely within the latter's ranks. 2
Harriman's firm thrived during rocky times for two reasons. He had a knack for attracting good clients, men of wealth and influence who valued a trustworthy broker. These included the Schell brothers, banker August Belmont, and Charles J. Osborn, one of the brightest and most fearless speculators on the street. Big rollers like the Schells and Osborn employed whole armies of brokers when conducting an operation and soon learned who was reliable. So did Jay Gould and Commodore Vanderbilt, both of whom were reputed to have thrown some orders Harriman's way. 3
But Henry was shrewd enough not to rely on so unstable a foundation as the big operators. He also developed a more solid clientele from the connections