THE BATTLE OF THE DOLLARS
ALMOST at the minute of eight o’clock next morning the “Rocket” was
made fast in berth at an East River pier.
Just about three minutes later a closed automobile rolled out on the
wharf. Tom Halstead and Joe Dawson had been invited to go on shore and
see the finish of this notable battle of the dollars. Hank, of his own
choice, remained behind as watchman over the boat.
The two motor boat boys had changed their uniforms for ordinary street
dress, straw hats included. It would have taken a very close friend,
indeed, to have recognized Francis Delavan as that gentleman stepped
ashore from his boat. Over his natty suit he wore an enveloping linen
duster. His eyes and much of his face were obscured behind a pair of
automobile goggles. A cap, the peak pulled well down over his eyes,
completed the concealment. Few of Mr. Delavan’s most intimate friends
would have known him at first or second glance.
The employer and his two young men entered the closed car, which, first
of all, rolled away to the bank of which Mr. Oliver was president. Here
there were some papers that required the signature of the “Rocket’s”
owner.
From the bank the automobile went straight down to the big,
grim-looking building in which the New York Stock Exchange is located.
Here they arrived five minutes before the opening hour, nine o’clock.
Mr. Delavan was already provided with three tickets admitting strangers
to the visitors’ gallery.
As they entered the trio found that, at this hour, they had the gallery
to themselves. Down on the floor, however, some two or three hundred
members of ’Change were already present, gathered in little groups.
Though these men talked mostly in undertones, it was evident that there
was much excitement.
P. & Y. had not alone suffered. Many other stocks had gone down, “in
sympathy.” The outlook was for a gloomy week in financial circles.
Many of the more cautious investors of the country at large were
watching Wall Street and dreading a panic.
Clang! As a sonorous stroke of a gong opened the morning session the
scene became instantly one of turmoil. Bellowing voices broke loose. At
that instant Broker Coggswell slipped into the gallery, taking a seat
behind Mr. Delavan. The entire little party was well out of range of
vision from most of the floor.
“Watch the board,” whispered the broker. “There’s the first quotation—a
thousand shares of P. & Y. at 67—and, by Jove, no taker!”
A few moments later information was posted that ten thousand shares of
P. & Y. had been offered and sold at 66.
“That’s the work of Dimitri & Clark, and Weeks & Bond,” whispered
Coggswell. “My partner has sent me word that those two firms are doing
the selling for Justin Bolton. He’ll sell, through his brokers, a
hundred thousand shares short in the next hour, if need be, to keep the
downward course of the stock in motion. Ah, what did I tell you?”
Ten thousand more shares of P. & Y. had gone at 65½.
“He’s a reckless bear, that fellow, Bolton!” ground out Coggswell,
between his teeth. “He’s selling short at a furious rate. Mr. Delavan,
your enemy, Bolton, expects to close your interests out this forenoon.
If he can bear the stock low enough he’ll begin to buy in for his own
account, as well as to cover his sales. If he can only keep this going
for a while he’ll control the P. & Y. through his bona-fide buyings of
the stock.”
Francis Delavan merely smiled, and Tom Halstead, looking covertly at
him, admired the difference between his employer and Eben Moddridge.
A “bear” is one who is trying to lower the selling price of a stock.
Often, in order to accomplish this, the “bear” “sells short.” That is,
he offers to sell large blocks of the stock in question, at a lower
figure than the market price. This “short operator,” as he is called,
does not actually own the stock that he sells, but he hopes to drive
the price of the stock still lower, and thus be able to buy and fill
his sale at a lower price than he has made the sale for.
When a stock is headed downward in price, the offer of another large
block at a lower price than yet offered has a strong tendency to force
the price still lower, for scared investors who really own large blocks
of the stock may become panic-stricken and close out their holdings of
that particular stock at any price they can obtain.
Thus, a “short operator” may offer, in a falling market, ten thousand
shares of a certain stock at 67. If he makes a sale at that price the
fact may induce some real owner of stock to offer his holding of ten
thousand shares to be sold at the best price offered, say 65. The
“short operator,” who has just disposed of ten thousand shares at 67,
but does not possess those shares, may be able to buy back again enough
shares at 65, which under the terms of his sale, he has disposed of at
67. Thus, he has cleared two dollars a share, or $20,000 in all, by the
operation. If the “short operator” who sells at 67 is able to cover his
sales by buying at the still lower price of 63, his profits would be
$40,000. But if our “short operator” buys at 67, and then the market
rallies, it may be that the “short” cannot buy lower than 71. Having
made his sale, he must fill the order, anyway, and thus he would lose
$40,000.
If a “short” sells stock he does not own, and a sudden rally in that
stock carries the stock up so high that he has not money enough to make
good his sales, then he is ruined and becomes a bankrupt.
If a “bear” sells short, and then the stock continues to drop and drop
in price, it is a happy day for that “bear.” On this Monday morning
Justin Bolton, though not yet actually present, but operating through
brokers whom he instructed by telephone, was prepared to sell short at
a furious rate. First of all, Bolton’s purpose was to “bear” down P. &
Y. to a point where he could buy all the stock he wanted for himself,
and enough more to cover his “short orders” at a profit.
As the four watchers in the gallery looked on, a howl suddenly went up
from the floor:
“P. & Y. at 65!”
“No takers at that price!”
“Bring it on at a lower price!”
“It’s going to smash!”
In lower tones men on the floor of the Exchange below were talking over
the latest information supplied by the newspapers. It was believed
by many that Francis Delavan had looted the railroad of which he was
president, and that a vast sum of the stealings was hidden securely
abroad.
“It’s a bad stock to deal in anyway, at present,” muttered one of the
brokers below. “I have advised all of my clients to keep away from it.”
“If the run is based on false information, someone is going to reap a
heavy profit when the stock begins to soar again,” remarked another
broker.
“It won’t soar in a year. There’s something peculiar and rotten behind
the whole business. The road won’t amount to anything until it has been
reorganized by another crowd.”
Just then an agile young man hurried out on the floor, holding in his
hand the earliest edition of an evening paper. He called out something
to those nearest him. Instantly there was a rush, others crowding about
the bearer of the newspaper.
“Accountants have just finished going over the statements of the P. &
Y. There’s not a dollar short anywhere. The road is as sound as a good
nut.”
That information, backed by the reputation of the accountants, sent a
small squad scurrying off to buy if more P. & Y. were offered at low
prices.
“A thousand shares at 67!” shouted one of those who offered to buy.
“Wanted, two thousand, at 67½!” called another.
“Bosh! That’s only a trick played by those who are ‘long’ to get a
little more for their paper!”
Thus belief and disbelief eddied and surged backward and forward.
Some small sales were made at a fraction above 68. Then, like a
thunderclap came the offer:
“Ten thousand P. & Y. at 66!”
Five minutes later the stock was being offered at 65½ with few takers.
A man entered the visitors’ gallery, taking a swift, careless look at
the others. It was Justin Bolton, but, as he had reason to be sure that
Francis Delavan was hundreds of miles out to sea, Bolton nodded coldly
to Coggswell, merely glanced at the boys, and turned to a seat at some
distance.
Now the Bolton brokers were hurling short stock in, in thousand,
two-thousand and five-thousand lots, trying to break the price below
65. There were takers, for the newspaper report made many buyers look
upon P. & Y. as a fair bargain at 65.
Coggswell took a sidelong look at Justin Bolton, whose gaze was turned
unceasingly upon the floor below.
“Your enemy is smashing things the best he knows how,” whispered the
broker to the “Rocket’s” owner.
“It’ll be rough on him if anything happens to prevent his covering his
sales, won’t it?” smiled back Mr. Delavan.
Another evening newspaper reached the floor below, then half a dozen
appeared, each being glanced over by excited groups of men.
Johnson, the managing vice-president of the P. & Y., had been
found and interviewed. He had confirmed the news given out by the
accountants. P. & Y. went up two points. A messenger entered the
gallery, handing a note to Mr. Coggswell.
“Oliver sends word he likes the looks of things better, and that he
won’t desert you just yet in the battle of the dollars, Mr. Delavan,”
whispered the broker. “Oliver has a million of his own money placed in
this game. He’s buying on the ‘bull’ side of the market.”
“Oliver may be a much richer man, then, by the time night comes,”
smiled the “Rocket’s” owner. This seasoned financier had not, during
all the storm below, shown the faintest trace of excitement. His face
was calm, his voice even. One would have thought him almost bored with
dulness.
“Justin Bolton must be wondering hard why your holdings of P. & Y.
haven’t been dumped into the market,” suggested Coggswell.
“That’s what he’s here for, sitting over yonder,” replied Mr. Delavan.
“As soon as the dealings denote that my holdings are being dumped
Bolton will know that the day and the game are his.”
Some other stocks were being traded in briefly, now. Steel, among
them, was going up a couple of points. Bolton found time to look over
curiously at Coggswell, whom he knew to be directing the fight for
the Delavan-Moddridge combine. Bolton also studied the man behind
the goggles rather attentively, though not once did it occur to the
arch-plotter to connect that half-hidden face with the countenance of
the man he was moving heaven and earth to ruin.
“Twenty thousand P. & Y. offered at 65½!”
That was the next challenge hurled on the floor below. There were no
takers at the moment.
“Twenty thousand at 65!”
Within the next few minutes this offering was traded off in smaller
lots.
“Watch Bolton fidget,” whispered Mr Coggswell. “There’s a bigger
hammering coming, and of course Bolton knows it’s near. We’ll see his
biggest plunge within the next few minutes.”
Within two minutes by the big clock the pounding came.
“Forty thousand P. & Y. offered at 62!”
There was instant pandemonium. While there were those on the floor who
rushed forward to get in on some of the buying at this price, there
were many more who believed that P. & Y. would quickly slump far worse
than it had yet done.
Justin Bolton’s eyes were gleaming. Most of the color had left his
cheeks. His breath was coming in quick, short gasps. It was near the
moment when he hoped to reap millions from his operations, and also
to become the largest owner of P. & Y. Yet this schemer, knowing full
well that the sales below were being made mainly on his own account,
realized also that the Delavan-Moddridge stock had not been sprung.
“Does Delavan think he’s at a moving-picture show?” whispered Joe
Dawson, in Tom Halstead’s ear. “Is he going to do nothing but sit here
and smile?”
“Perhaps there’s nothing he can do here yet,” was Halstead’s answer. “I
am wondering whether he’s going down to ruin, or whether he hopes to
find the way out yet.”
A messenger from one of the brokers on the floor now darted through the
gallery, handing a sheet of paper to Justin Bolton.
That worthy, after glancing over the sheet, penciled a few words upon
it. The messenger hastened back to one of the brokers below.
Bolton’s own face, after the messenger had gone, was of a ghastly
pallor. He looked unsteady, worried—or else as though he were about to
take the most daring plunge of all.
“Watch out for what’s going to happen,” nudged Mr. Coggswell. That
broker had now a pad on his own knee, a fountain pen in hand, as
though prepared to dash off written orders in a hurry.
“Look out for a thunderclap,” whispered Coggswell, as one of the Bolton
brokers on the floor hurried forward.
Then it came:
“Forty thousand P. & Y. at 60!”