- Historic Sites
Charles Tyson Yerkes: The Streetcar Baron Who Got Rich Twice
August/september 1983 | Volume 34, Issue 5
A TELESCOPE FULLY six stories high turns its forty-inch lens to the skies above Williams Bay, Wisconsin, where the University of Chicago operates the Yerkes Observatory. Any reasonably sophisticated person, seeing that enormous instrument, would conclude that the observatory is less likely to be named for a noted Midwestern astronomer than for whoever put up the money to build it. But no one would guess this particular donor’s motives.
In 1892 Charles Tyson Yerkes found himself in trouble. A bank had unexpectedly called in a million-dollar loan. He had paid up immediately, but his business rivals smelled blood, and now he couldn’t get a dollar’s worth of credit anywhere. Yerkes thought it over and called on William Rainey Harper, first president of the year-old University of Chicago. Would President Harper be interested in a million dollars to build an observatory? Yes? Fine, it was his. There were only two conditions: he would have to wait a few months for the money, and he must announce immediately that his school had received a magnificent gift from Mr. Yerkes.
The announcement was made. Yerkes’s credit was instantly restored; able once again to borrow the great sums necessary to fuel his complex business affairs, he was soon invulnerable. And five years later President Harper could survey the local heavens through what is still the largest refracting telescope in the world.
Yerkes had been in tighter spots than that; in fact, he was perhaps the only great capitalist of those untrammeled post-Civil War years to actually spend some time in jail. Yerkes was as coolly ruthless as any of his more famous counterparts, but he had not risen, in the classic pattern, from poverty. He was no Cornelius Vanderbilt fighting his way up from the wharves; his family had settled in Pennsylvania three-quarters of a century before the Revolution, and his father was president of a Philadelphia bank when Charles was born in 1837.
The young man began his business career in the proper fashion when, at seventeen, he entered a firm of commission brokers. Five years later he got a seat on the stock exchange and went on to open his own brokerage. Somewhere along the line he discovered that he had a particular genius, an instinctive understanding of how to squeeze riches out of a city. The secret was a fusion between finance and ward politics, and Yerkes could handle politicians as well as any man living. He was famous throughout Philadelphia while still in his twenties, and by 1871 he stood a hair’s breadth away from seizing financial control of the entire city. But the Chicago fire triggered a panic on the Philadelphia exchange, and it caught Yerkes overextended. He had reinvested funds he’d gotten selling bonds for the city; he couldn’t come up with the money and, found guilty of “technical embezzlement,” he went to prison.
If Scott Fitzgerald’s dictum about there being no second acts in American lives were true, that would certainly have been the end of Yerkes. He emerged seven months later to confront a closed and hostile financial community that was grimly pleased the young firebrand had been quenched in his own overweening ambition. But Yerkes wasn’t beaten. He saw where he’d been wrong. He went back to work, and when the banking house of Jay Cooke & Company failed and precipitated the Panic of 1873, Yerkes was not overextended. Instead, as Theodore Dreiser said in The Financier , the first of three novels he devoted to Yerkes’s career, “like a wolf prowling under glittering, bitter stars in the night, he was looking down into the humble folds of simple men and seeing what their ignorance and their unsophistication would cost them.” He kept calm, sold short, and while more than five thousand businesses failed around him, he made a fortune.
Soon he had climbed back to where he d been before his fall, but he was restless. He’d grown weary of the wife who had borne his six children, and in 1881 he divorced her. That was the end of any chance he might have to move in Philadelphia society, but he didn’t care. He married a local beauty named Mary Adelaide Moore and the next year moved to Chicago.