A gambler, a forger, a briber, a marketing magnate, and a swindler walk into a race track and their names are Jacob Simon Herzig and George Graham Rice. Actually it’s the same guy who went by the pseudonym George Graham Rice for the majority of his life. Thornton relives Herzig’s many hats frequently switching between marketing a scam, getting rich, and not soon after going broke on his vices and going to one of his many stays in jail. I begrudgingly related at moments to the character piece of this book when he had his midlife crisis at thirty (average life expectancy was 47 years in the 1900s) and had yet to make a meaningful impact on the world. We diverge in our implementation of how to achieve such a goal.
The book detailed a simple yet brilliant two horse race scam, where the bookie wouldn’t place the bets on a horse and put the money on the other horse as a hedge. The most notable moments from Herzig’s bookkeeping years was the use of warning ads against other bookkeepers to boost his own legitimacy, his use of marketing and media, and how he’d ask for his customers phone numbers in an era where this was not common.
Marketing is a big component of this book. You often hear of people who can “sell ice to an eskimo.” Herzig is a great salesman. His flaw is his product was fairy dust mines and vaporware. He recalled his resolution toward advertisements as to “never allow an advertisement go out of the office that unconvincing to a thinker. If my argument convinces the man of affairs, I determined, it will certainly win over the man of no affairs.” Quite smug for a piece of detritus who never worked an honest day in his life. Even Thornton who fawns over Herzig calls his autobiographical admission to potato farming a probable work of fabrication. Herzig moaned about cons ending in “funds of experience” instead of being flush with cash. Herzig flipping between setting up fake mines and running a Broad Street Bucket Shop.
If you want to learn why people lose money in the stock market, go to some one who has run a bucket shop. There is no better place on earth to study the weaknesses and follies of speculators than in one of those places where small lots are handled on small margins.
The Panic of 1907 hit this operation pretty hard and Herzig was conspiratorial against JP Morgan as an engineer behind the crash. As the market rebounded Thornton details how Herzig used obfuscation to go against the bear market to peddle his mining stocks.
Obfuscation and opacity are the hallmarks of confidence swindling, because hustlers know most marks would rather remain silent in ignorance than risk embarrassment by speaking up to admit they don’t understand something.
I found myself not smiling at Herzig’s exploits but Thornton including vignettes of the last day of trading before Christmas in 1910 on the NYSE trading floor and Broad Street helped as I grew tired of the same scams over and over. I respected Herzig for building media empires and learning about his customers, but this respect was tarnished by Herzig’s core belief “if someone was less intelligent than you, it was up to you to take advantage of that person . . . or someone else would.” This philosophy allowed Herzig to steal $500 million over five decades, worth over $6 billion today. Herzig died on the run from police and was outlived by his wife which he married when she had just turned at 18 at the ripe age of 55. Herzig lived lavishly at other’s expenses and not much useful information can be gleaned from this other than historical texture and a beginner’s guide to marketing. In my opinion the opening of the Herzig mausoleum at the Linden Hill Jewish Cemetery to place Jacob Simon Herzig to his final resting place should have been the end of Herzig’s legacy.