Whispering Pines: Opening Act: Charles W. Morse—Ice King, Prince of Financiers, and Steamship Magnate

Whispering Pines

Although he is largely unknown today, Charles Wyman Morse of the Bowdoin Class of 1877 was a prominent figure in the public eye and on the economic landscape during the first two decades of the twentieth century. The Boston Globe of February 11, 1906, described him as “ice king, prince of financiers and steamship magnate,” and he was compared to J. Pierpont Morgan, John D. Rockefeller Sr., and Levi Morton, despite being a generation younger than these titans of business and finance. Faced with the challenge of outlining the complexities of Charlie Morse’s remarkable business and personal life, I’ve chosen to write a two-part Whispering Pines column, with a July installment completing the narrative begun here.

Charlie Morse was born in Bath, Maine, in 1856, into a family involved in shipbuilding, the operation of steam tugboats on the Kennebec River, and the trans-shipment of ice. With lots of attention from his mother and relatives, young Charlie recovered slowly from a case of infantile paralysis in one leg, although he would always walk with a slight limp. According to Morse biographer Philip Woods, Charlie’s father offered to pay his son $1,500 a year to keep the steam towing company’s books. Ever on the lookout for an opportunity to make a profit, Charlie hired a local man to do the job for $500 and pocketed the difference, using it to pay for his Bowdoin education.

Charlie attracted little attention in a Bowdoin class that included strong personalities and future luminaries (e.g., Arctic explorer Robert Peary, Maine Governor William T. Cobb, College Librarian George Little, and inventor Freelan O. Stanley). His name didn’t appear in The Orient as a contributing writer or for scholarly or athletic achievements. However, while he was still a student Charlie negotiated deals to bring ice cut from Maine rivers to New York City and points south, with returning cargoes of southern lumber and coal, that together earned him $100,000 before his graduation. Encouraged by this early success and backed by family business connections, he established Charles W. Morse & Co. Shipping and Ship Brokering in New York.

In the spring of 1884 Charlie married Hattie Hussey, the granddaughter of a business associate in Maine, and they later had three sons and a daughter. Following Hattie’s death from tuberculosis in the summer of 1897, the Morse children were raised in Bath by Charlie’s sister, Jennie.

By this point in his life, Charlie was beginning a whirlwind decade of business activity that catapulted him into the front ranks of wealth and power in America. From New York and Bath, Charlie identified ways in which his knowledge of shipping and the ice business could work to his financial and political advantage. He began by consolidating the ice crop in Maine, using the capacity for shipping large quantities of ice in schooners and barges pulled by Morse ocean-going tugs to markets in New York, Philadelphia, and Baltimore. In order to reach those markets, small-scale ice producers became dependent on (or indebted to) Charlie. Several New York ice companies were his main competitors in the New York metropolitan area, but Charlie used years when the ice crop was weak in New York (but strong in Maine) to sell those firms ice to fulfill their contracts, creating debts that were paid to Charlie as shares of stock. In this way, “The Ice King” gradually acquired his competitors, eventually leading to creation of the American Ice Company in 1899, capitalized at $60,000,000, and with Charles W. Morse as president.

Charlie left little to chance. Tammany Hall boss Richard Croker and New York Mayor Robert Van Wyck were given ice company stock, and Charlie even loaned the mayor the money to buy the stock at half of par value. It paid off; by 1900 no ice could be unloaded on the wharves of New York unless it was American Ice Company ice on Morse ships or barges. The company then doubled the price of ice in the hot summer of 1900, even though it had been a good year for natural ice harvests in Maine and New York. The burden of the price hike fell most heavily on the poor, and people died that summer from eating spoiled food. Public outrage against the “Ice Trust” led to hearings and legal proceedings, and attracted the attention of federal trust-busters. The price of ice went back down shortly thereafter, but it allowed Charlie to pocket another $12,000,000.

As Charlie was acquiring and consolidating ice companies, he was issuing shares of stock valued far in excess of what the companies that he owned or created were worth – a practice known as overcapitalization, or “watering the stock.” During this same period he was purchasing steamship lines at a breathtaking pace (averaging a new line every two weeks at one point). Beginning with the consolidation of several Maine steamship lines into the Eastern Steamship Company, within five years his steamship companies controlled most of the traffic along the Atlantic seaboard from the Gulf of Maine to Galveston, Texas; Puerto Rico; and Cuba. He registered his ships in Bath, Maine, reasoning that any registration revenue should go to the city of his birth. As was the case with ice companies, Charlie’s pattern in buying steamship lines was to pay the asking price, issue stock that exceeded the value of the assets of each company or corporation, and almost immediately organize new corporations to consolidate the management and resources of the individual companies.

To keep pace with his growing empire, Charlie needed access to capital, and the banking system of the early years of the twentieth century, with its limited oversight controls, was an attractive target. At that time, national banks, state banks, and trusts were under separate regulatory authority. Charlie owned, controlled, or served as a director at a dozen or more banks in the New York area. He could secure loans at these banks using stock in his companies as collateral, which were then used to buy more stock in his ice companies, steamship lines, or other banks. Charlie could also write demand notes at the banks for ready access to money for his own business interests and speculative ventures. Investigators would later find that bank clerks and secretaries who earned less than $20 a week were signing papers for weekly $1,000 loans that were transferred to Charlie’s accounts and used to buy stocks in his enterprises.

In 1901 Charlie married Clemence Dodge, a divorcée who had been his landlady and who was once described as “as still and transparent as a glass of water.” New York Mayor Van Wyck was best man at the wedding. The couple lived at 728 Fifth Avenue on “Millionaire’s Row,” a block from the palatial residence of Mrs. Cornelius Vanderbilt, across the street from the mansion of Arabella Huntington (widow of railroad titan C. P. Huntington), and a few blocks removed from the home of John D. Rockefeller Sr. Any rumor about the next business venture of the comparatively young financial wizard from Maine drew the attention of newspapers and investors alike.

As if his business ventures were not enough to keep him in the public eye, Charlie became enamored of the widow of a business associate, and he hatched a scheme to extricate himself from his marriage to Clemence. He hired lawyer Abraham Hummel to locate Clemence’s ex-husband in Texas and persuade him to claim that he had never been served with divorce papers. If the Dodge marriage was still in force, then Clemence needed to annul her marriage to Charlie, clearing the way for Charlie to pursue the young widow. The whole matter became a very public court case that lasted a year, as Hummel’s detectives tried to keep Dodge away from the prosecutor in New York, who suspected perjury (Dodge), suborning perjury (Hummel), and conspiracy (Charles W. Morse). Charlie had to enlist his Uncle James Morse, a boat captain in Bath, to declare (under oath) that he had paid $60,000 personally to Hummel to undo Charlie’s marriage because the Morse children didn’t like Clemence. In the end, Dodge was convicted of perjury, Hummel was disbarred and went to Europe, the widow who had been the object of Charlie’s interest refused to have anything to do with him, and Charlie and Clemence went to Paris for a second honeymoon.

In 1904 Charlie gave the City of Bath $56,600 to build a high school (Morse High School), an act that forever made him a hero in his home town. When the school burned in 1924, the new high school was named in his honor.

In 1907 he and fellow banker F. Augustus Heinze were involved in a plan to corner the copper market by acquiring the outstanding shares of United Copper Company stock (where Heinze, his brothers Otto and Arthur, and Morse were major stockholders). This would force the short sellers to negotiate a price that would guarantee the Heinzes and Morse a hefty profit. Someone (and the Heinzes always argued that it was Morse) dumped 17,000 shares of United Copper stock before the plan could be fully implemented and the price plummeted. The Heinzes did not have sufficient capital to cover their obligations in buying up United Copper stock. This unsettled a market already shaken (no pun intended) by the 1906 earthquake in San Francisco, and caused a run on the banks owned or controlled by Heinze and Morse. Under the pressure of the Panic of 1907, Charlie was forced to relinquish his positions as an officer or a director on all bank boards, and he was indicted for conspiracy, misapplication of funds of the National Bank of North America, and making false bank entries.

Charlie Morse (without Clemence) was on a ship bound for Europe when indictments were handed down; according to a newspaper account he “absquatulated,” a wonderful mid-nineteenth-century term that is the equivalent of “skedaddled.” He returned to a well-publicized three-week trial in which it became apparent to all that National Bank of North America President Arthur Curtis was only a tool in the hands of a manipulative Charles W. Morse. Both men were found guilty of misapplication of funds and of making false entries. The judge agreed with the jury’s recommendation that Curtis’s sentence be suspended and that Charlie be sentenced to fifteen years in a federal prison. On November 6, 1908, Charles W. Morse, handcuffed and flanked by marshals, was forced to walk from the courthouse to the Tombs jail through a jeering crowd, his first steps to becoming Convict #2814 in the Federal Penitentiary in Atlanta.

To be continued…

 

With best wishes for the summer.

John R. Cross

John R. Cross ’76
Secretary of Development and College Relations

Comments

  1. Christopher Hanks '68 says:

    This wonderful story about the Ice King and Bowdoin and famous-people trivia really brought back a wonderful Bowdoin memory for me. I can explain why, but first you need to give me a minute to provide some background:

    On bus trips to swim meets in the 60’s, we used to pass the time playing the Botticelli game. The “starter” would announce they were thinking of someone at least as famous as Botticelli, (1445-1510, Birth of Venus) and announce the first letter of the person’s name – e.g., “C”. Each of us would then take turns thinking of famous people whose names started with the same letter (e.g, Capucine or Claudia Cardinale) and attempt to stump the starter by asking whether he was thinking of the famous person who had done this or that (e.g., fooled around with Inspector Clouseau). If the starter could answer with something correct (e.g., “No, I’m not thinking of Capucine or Claudia Cardinale”), the starter did not have to answer a “direct question” (e.g., Is the person you’re thinking of a man?) and the game would move on – until the starter had been stumped enough times and forced to answer enough direct questions that we could correctly guess their famous person.

    The person who went on to hold the record (using the letter “C” it turns out) for stumping the team for the longest time (more than an hour of deeply trivial back-and-forth, including dozens of direct questions) – was backstroker Jim Willey ’66. When we finally gave up, Jim announced that the famous person he had in mind was Lloyd Groff Copeman, the inventor of the ice-cube tray.

    Coach Butt had to restrain the rest of us from throwing Jim off the bus.

    Epilogue: Jim went on to help run his family’s long-running Canteen Corp. business in Maine (http://canteenmaine.com/company-profile/), which is why he knew about Lloyd Groff Copeland. Since that fateful day on the bus when he narrowly avoided death, I’ve always wanted to ask Jim whether he knows that Lloyd Groff Copeland, in addition to inventing the ice cube tray (and many other food-service-related inventions) , also helped produce a VERY famous granddaughter – Linda Rondstadt!
    (See: http://en.wikipedia.org/wiki/Lloyd_Groff_Copeman .)

  2. Ken Briggs says:

    I applaud John Cross for this exercise in full disclosure. This is the epitome of a cautionary tale; it reflects a degree of honor on the alma mater while exposing the nefarious side of the subject’s unbridled acquisitiveness, aka greed. I remember the tail end of the “iceman” era and found the history of that industry, and Morse’s hugely inventive role it, fascinating. At the same time, I have a once-removed tie to that enterprise. My immigrant grandfather suffered multiple fractures of the spine as the result of being caught in the pincers of one of the ice-cutting rigs on which he was employed as a laborer. This was in the days now glorified by some in which there was no such thing as unemployment or workman’s compensation. So he was consigned to disabled life of poverty. In the larger picture, however, this is a revealing tale of the runaway free enterprise that obtained then and now. Thank you

  3. Paul O. Johnson says:

    We Morse High graduates and citizens of Bath are deeply grateful to John for reminding us loyal alumni of our less than glorious Shipbuilder. Thank you.

  4. Al DeMoya '72 says:

    Thank you, John, for showing us that not all of Bowdoin’s sons are heroic poets and statesmen who bring her fame by deeds well done. Some seem to be scoundrels and villains.

  5. Charles H. Gallagher says:

    Mr. Cross- Thank you and What a Godsend your two articles about Charlie Morse are– I took on the task of writing up our family story about our heritage as pioneers on the Sagadahoc. Parker-Denny-McCobb-Reed-Perry-Morse etc.
    In the stuff sent to Alaska was a box full of Gr. Grandfather’s writings in script as he transitioned from youth and family business work in Phippsburg and Bath to his career and marriage in Boston. Presently I am deciphering Grandpa’s 9 page script which starts “Sitting in his cell in the Tombs Prison” last week. When researching Grandpa’s portion about President Hyde’s callous remarks regarding Charlie, I managed upon your story in Whispering Pines, which clearly delineated what Grandpa Reed was writing about in 1908.
    I am including your article’s internet connection for my family readers to better understand:
    “Professor John Cross outines Charlie’s college experience, his notorious business affairs, as it weaves through Bowdoin, Brunswick, Bath, and American history. Indeed in reading Grandpa Reed’s draft story one wonders if Mr. Cross had the same source! In regards to Charlie’s gift to Bath of their brand new high school in 1904; Grandpa Reed says the “most splendid in Maine”, coupled with Grandpa’s admonishment of Bowdoin’s “Priest and President” Mr. Hyde is parallel in so many ways.
    As in Grandpa’s story both capture the intimate nature of the Lower Kennebec as one big family.
    And one of our greatest suprises was Grandpa did not attend any college as the first thing I did three years ago was call Bowdoin’s Alumni Office to get what I supposed would have saved years of effort -that 25 year biography- Alas the lady said “he’s not on our lists! Oh the disappointment! And Uh oh -the work is cut out now!

  6. Thanks for shedding some light on this and showing us the truth.

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