Ulysses S. Grant — the President Bankrupted by a Wall Street Swindle

Summary

Ulysses S. Grant won the Civil War for the Union and served two terms as President of the United States, yet he spent the final year of his life racing against bankruptcy and a fatal cancer. After leaving office, the famously incorruptible general proved a disastrous judge of business partners, and in 1884 a Wall Street Ponzi scheme bearing his own name destroyed nearly everything he had.

The firm was Grant & Ward, a brokerage in which Grant invested alongside his son and the dazzling young financier Ferdinand Ward. Ward, hailed as the "Young Napoleon of Wall Street," was in fact running a fraud, paying old investors with new investors' money and inventing imaginary government contracts. When the scheme collapsed on May 6, 1884, Grant — who had put his savings and his name behind it — walked out of his office a pauper, reportedly left with about $80 to his name while his wife Julia had another $130.

Destitution arrived alongside disease. Later in 1884 Grant was diagnosed with throat cancer, almost certainly linked to his lifelong cigar smoking, and he understood he was dying with no estate to leave his wife. To provide for Julia and the family, the dying general undertook one last campaign: writing his "Personal Memoirs," a two-volume account of his Civil War years, published through Mark Twain's company on extraordinarily generous terms.

Grant laid down his pen on July 16, 1885, having written some 366,000 words in less than a year, and died on July 23, 1885, at Mount McGregor, New York. The memoirs became a publishing triumph — both a literary masterpiece and a financial one — ultimately earning roughly $450,000 in royalties for his widow. The man who had been ruined by a swindle saved his family with his own pen in the last weeks of his life.

Timeline

The Fortune

When Ulysses S. Grant left the White House in 1877, he was one of the most admired men on earth, but he was not a rich one. A long world tour and an unsuccessful bid for a third presidential nomination left him searching for a way to secure his family's future, and he had little experience and even less aptitude for the world of finance.

The opportunity seemed to come through his son, Ulysses S. Grant Jr., known as "Buck," who had gone into partnership with a charismatic young Wall Street operator named Ferdinand Ward. They formed the brokerage firm of Grant & Ward, and the former president was brought in as a partner, investing $100,000 of his own money — a substantial part of his wealth. The Grant name lent the firm enormous prestige and drew in investors who trusted that a hero of Grant's stature would never be associated with anything dishonest.

For a few years the firm appeared spectacularly successful, reporting returns that made Grant feel, for the first time, genuinely wealthy. Ward, celebrated as the "Young Napoleon of Wall Street," claimed access to lucrative government contracts and seemed to multiply money effortlessly. Grant, trusting and out of his depth, believed the paper profits were real and left the running of the business almost entirely in Ward's hands.

The Cracks

Behind the impressive figures, Grant & Ward was a fraud. Ferdinand Ward was operating what would later be recognized as a Ponzi scheme: the returns paid to existing investors came not from real profits but from the capital of new investors, sustained by Ward's fabricated tales of profitable government contracts. The firm's books were a fiction, and its apparent prosperity rested on a constant inflow of fresh money.

The scheme was entangled with the Marine National Bank, headed by James D. Fish, which helped prop up the firm's illusion of solvency. As long as new money kept arriving and depositors did not demand their funds at once, the deception could continue. But such schemes require perpetual growth, and by the spring of 1884 the inflow could no longer cover the firm's mounting obligations.

The crisis broke in May 1884. With Grant & Ward unable to meet its commitments, Ward came to the old general claiming the firm needed a temporary loan to survive a brief squeeze. Grant, still believing the business was sound, personally appealed to the railroad magnate William H. Vanderbilt, who lent him $150,000 as a personal favor. The money disappeared into the failing enterprise almost immediately, and on May 6, 1884, the Marine National Bank collapsed and Grant & Ward failed entirely.

The Collapse

The failure of Grant & Ward was total and humiliating. The firm's books revealed that the profits had been imaginary, that Ward had looted the enterprise, and that countless investors — including Grant himself — had been deceived. Grant lost essentially everything: his investment, his savings, and the fortune he thought he had accumulated, leaving him and Julia nearly penniless, reportedly with about $80 and $130 between them. Ferdinand Ward was prosecuted, convicted of fraud, and sent to prison.

Grant, mortified that his name had drawn others into ruin, was determined to repay what he could. He turned over property, and to settle the $150,000 personal debt to Vanderbilt he surrendered his swords, medals, war trophies, and Civil War mementos. Vanderbilt eventually arranged for many of these relics to be preserved rather than kept for himself, but the gesture underscored how completely the hero of Appomattox had been stripped of his worldly assets.

Disaster compounded disaster. Within months of the financial collapse, in late 1884, Grant was diagnosed with throat cancer, almost certainly linked to his lifelong cigar smoking. He now faced death with no money to leave his wife, his reputation entangled in a notorious swindle. It was at this lowest point that Grant resolved to do the one thing still in his power: to write, and to write fast enough to outrun the cancer.

What Went Wrong

After

To rescue his family from the ruin Grant & Ward had caused, Grant began writing his "Personal Memoirs," recounting his Civil War campaigns in plain, vivid prose. His friend Mark Twain (Samuel Clemens) intervened to offer a publishing contract through his firm, Charles L. Webster & Company, on extraordinarily generous royalty terms — far better than the standard deal Grant had nearly accepted from another publisher — and advanced him funds to live on.

With throat cancer steadily worsening, Grant wrote with grim determination, at times producing thousands of words a day even as he could barely speak. He completed the manuscript on July 16, 1885, after some 366,000 words, and seven days later, on July 23, 1885, he died at Mount McGregor, New York. The discipline that had won battles drove him to finish the book against the clock of his own dying.

The "Personal Memoirs of U. S. Grant" became one of the great successes in American publishing, praised then and since as a literary masterpiece and the finest memoir written by an American soldier. Sold largely by subscription — more than 300,000 sets — it earned roughly $450,000 in royalties for Julia Grant, securing the family's future after all. The general bankrupted by a swindler had, with his last effort, written his way out of ruin and into lasting literary fame.

Lessons

References

• Ferdinand Ward (Grant & Ward) Wikipedia
• Personal Memoirs of U. S. Grant Wikipedia
• Bankrupt and Dying from Cancer, Ulysses S. Grant Waged His Greatest Battle History.com
• The Personal Memoirs of Ulysses S. Grant National Park Service