Of course I knew at once that the article would play the dickens with
the market. If I had deliberately studied ways and means of disposing
of my one hundred and forty thousand bales to the best advantage I
couldn’t have hit upon a better plan. It would not have been possible
to find one. That article at that very moment was being read all over
the country either in the _World_ or in other papers quoting it. It had
been cabled to Europe. That was plain from the Liverpool prices. That
market was simply wild. No wonder, with such news.
Of course I knew what New York would do, and what I ought to do. The
market here opened at ten o’clock. At ten minutes after ten I did not
own any cotton. I let them have every one of my one hundred and forty
thousand bales. For most of my line I received what proved to be the
top prices of the day. The traders made the market for me. All I really
did was to see a heaven-sent opportunity to get rid of my cotton. I
grasped it because I couldn’t help it. What else could I do?
The problem that I knew would take a great deal of hard thinking to
solve was thus solved for me by an accident. If the _World_ had not
published that article I never would have been able to dispose of my
line without sacrificing the greater portion of my paper profits.
Selling one hundred and forty thousand bales of cotton without sending
the price down was a trick beyond my powers. But the _World_ story
turned it for me very nicely.
Why the _World_ published it I cannot tell you. I never knew. I suppose
the writer was tipped off by some friend in the cotton market and he
thought he was printing a scoop. I didn’t see him or anybody from the
_World_. I didn’t know it was printed that morning until after nine
o’clock; and if it had not been for my friend calling my attention to
it I would not have know it then.
Without it I wouldn’t have had a market _big_ enough to unload in. That
is one trouble about trading on a large scale. You cannot sneak out as
you can when you pike along. You cannot always sell out when you wish
or when you think it wise. You have to get out when you can; when you
have a market that will absorb your entire line. Failure to grasp the
opportunity to get out may cost you millions. You cannot hesitate. If
you do you are lost. Neither can you try stunts like running up the
price on the bears by means of competitive buying, for you may thereby
reduce the absorbing capacity. And I want to tell you that perceiving
your opportunity is not as easy as it sounds. A man must be on the
lookout so alertly that when his chance sticks in its head at his door
he must grab it.
Of course not everybody knew about my fortunate accident. In Wall
Street, and, for that matter, everywhere else, any accident that makes
big money for a man is regarded with suspicion. When the accident is
unprofitable it is never considered an accident but the logical outcome
of your hoggishness or of the swelled head. But when there is a profit
they call it loot and talk about how well unscrupulousness fares, and
how ill conservatism and decency.
It was not only the _evil-minded shorts_ smarting under punishment
brought about by their own recklessness who accused me of having
deliberately planned the coup. Other people thought the same thing.
One of the biggest men in cotton in the entire world met me a day or
two later and said, “That was certainly the slickest deal you ever put
over, Livingston. I was wondering how much you were going to lose when
you came to market that line of yours. You knew this market was not big
enough to take more than fifty or sixty thousand bales without selling
off, and how you were going to work off the rest and not lose all your
paper profits was beginning to interest me. I didn’t think of your
scheme. It certainly was slick.”
“I had nothing to do with it,” I assured him as earnestly as I could.
But all he did was to repeat: “Mighty slick, my boy. Mighty slick!
Don’t be so modest!”
It was after that deal that some of the papers referred to me as the
Cotton King. But, as I said, I really was not entitled to that crown.
It is not necessary to tell you that there is not enough money in the
United States to buy the columns of the New York _World_ or enough
personal pull to secure the publication of a story like that. It gave
me an utterly unearned reputation that time.
But I have not told this story to moralize on the crowns that are
sometimes pressed down upon the brows of undeserving traders or to
emphasize the need of seizing the opportunity, no matter where or
how it comes. My object merely was to account for the vast amount of
newspaper notoriety that came to me as a result of my deal in July
cotton. If it hadn’t been for the newspapers I never would have met
that remarkable man, Percy Thomas.
_XII_
Not long after I closed my July cotton deal more successfully than I
had expected I received by mail a request for an interview. The letter
was signed by Percy Thomas. Of course I immediately answered that I’d
be glad to see him at my office at any time he cared to call. The next
day he came.
I had long admired him. His name was a household word wherever men took
an interest in growing or buying or selling cotton. In Europe as well
as all over this country people quoted _Percy Thomas’_ opinions to me.
I remember once at a Swiss resort talking to a Cairo banker who was
interested in cotton growing in Egypt in association with the late Sir
Ernest Cassel. When he heard I was from New York he immediately asked
me about Percy Thomas, whose market reports he received and read with
unfailing regularity.
Thomas, I always thought, went about his business scientifically. He
was a true speculator, a thinker with the vision of a dreamer and the
courage of a fighting man--an unusually well-informed man, who knew
both the theory and the practice of trading in cotton. He loved to hear
and to express ideas and theories and abstractions, and at the same
time there was mighty little about the practical side of the cotton
market or the psychology of cotton traders that he did not know, for he
had been trading for years and had made and lost vast sums.
After the failure of his old Stock Exchange firm of Sheldon &
Thomas he went it alone. Inside of two years he came back, almost
spectacularly. I remember reading in the _Sun_ that the first thing he
did when he got back on his feet financially was to pay off his old
creditors in full, and the next was to hire an expert to study and
determine for him how he had best invest a million dollars. This expert
examined the properties and analysed the reports of several companies
and then recommended the purchase of Delaware & Hudson stock.
Well, after having failed for millions and having come back with more
millions, Thomas was cleaned out as the result of his deal in March
Cotton. There wasn’t much time wasted after he came to see me. He
proposed that we form a working alliance. Whatever information he
got he would immediately turn over to me before passing it on to the
public. My part would be to do the actual trading, for which he said I
had a special genius and he hadn’t.
That did not appeal to me for a number of reasons. I told him frankly
that I did not think I could run in double harness and wasn’t keen
about trying to learn. But he insisted that it would be an ideal
combination until I said flatly that I did not want to have anything to
do with influencing other people to trade.
“If I fool myself,” I told him, “I alone suffer and I pay the bill at
once. There are no drawn-out payments or unexpected annoyances. I play
a lone hand by choice and also because it is the wisest and cheapest
way to trade. I get my pleasure out of matching my brains against the
brains of other traders--men whom I have never seen and never talked
to and never advised to buy or sell and never expect to meet or know.
When I make money I make it backing my own opinions. I don’t sell them
or capitalise them. If I made money in any other way I would imagine I
had not earned it. Your proposition does not interest me because I am
interested in the game only as I play it for myself and in my own way.”
He said he was sorry I felt the way I did, and tried to convince me
that I was wrong in rejecting his plan. But I stuck to my views. The
rest was a pleasant talk. I told him I knew he would “come back” and
that I would consider it a privilege if he would allow me to be of
financial assistance to him. But he said he could not accept any loans
from me. Then he asked me about my July deal and I told him all about
it; how I had gone into it and how much cotton I bought and the price
and other details. We chatted a little more and then he went away.
When I said to you some time ago that a speculator has a host of
enemies, many of whom successfully bore from within, I had in mind my
many mistakes. I have learned that a man may possess an original mind
and a lifelong habit of independent thinking and withal be vulnerable
to attacks by a persuasive personality. I am fairly immune from the
commoner speculative ailments, such as greed and fear and hope. But
being an ordinary man I find I can err with great ease.
I ought to have been on my guard at this particular time because not
long before that I had had an experience that proved how easily a
man may be talked into doing something against his judgment and even
against his wishes. It happened in Harding’s office. I had a sort of
private office--a room that they let me occupy by myself--and nobody
was supposed to get to me during market hours without my consent. I
didn’t wish to be bothered and, as I was trading on a very large scale
and my account was fairly profitable, I was pretty well guarded.
One day just after the market closed I heard somebody say, “Good
afternoon, Mr. Livingston.”
I turned and saw an utter stranger--a chap of about thirty-five. I
could not understand how he’d got in, but there he was. I concluded
his business with me had passed him. But I didn’t say anything. I just
looked at him and pretty soon he said, “I came to see you about that
Walter Scott,” and he was off.
He was a book agent. Now, he was not particularly pleasing of manner or
skillful of speech. Neither was he especially attractive to look at.
But he certainly had personality. He talked and I thought I listened.
But I do not know what he said. I don’t think I ever knew, not even
at the time. When he finished his monologue he handed me first his
fountain pen and then a blank form, which I signed. It was a contract
to take a set of Scott’s works for five hundred dollars.
The moment I signed I came to. But he had the contract safe in his
pocket. I did not want the books. I had no place for them. They weren’t
of any use whatever to me. I had nobody to give them to. Yet I had
agreed to buy them for five hundred dollars.
I am so accustomed to losing money that I never think first of that
phase of my mistakes. It is always the play itself, the reason why.
In the first place I wish to know my own limitations and habits of
thought. Another reason is that I do not wish to make the same mistake
a second time. _A man can excuse his mistakes only by capitalising them
to his subsequent profit._
Well, having made a five-hundred dollar mistake but not yet having
localised the trouble, I just looked at the fellow to size him up as
a first step. I’ll be hanged if he didn’t actually smile at me--an
understanding little smile! He seemed to read my thoughts. I somehow
knew that I did not have to explain anything to him; he knew it without
my telling him. So I skipped the explanations and the preliminaries
and asked him, “How much commission will you get on that five hundred
dollar order?”
He promptly shook his head and said, “I can’t do it! Sorry!”
“How much do you get?” I persisted.
“A third. But I can’t do it!” he said.
“A third of five hundred dollars is one hundred and sixty-six dollars
and sixty-six cents. I’ll give you two hundred dollars cash if you
give me back that signed contract.” And to prove it I took the money
out of my pocket.
“I told you I couldn’t do it,” he said.
“Do all of your customers make the same offer to you?” I asked.
“No,” he answered.
“Then why were you so sure that I was going to make it?”
“It is what your type of sport would do. You are a first-class loser
and that makes you a first-class business man. I am much obliged to
you, but I can’t do it.”
“Now tell me why you do not wish to make more than your commission?”
“It isn’t that exactly,” he said. “I am not working just for the
commission.”
“What are you working for then?”
“For the commission and the record,” he answered.
“What record?”
“Mine.”
“What are you driving at?”
“Do you work for money alone?” he asked me.
“Yes,” I said.
“No.” And he shook his head. “No, you don’t. You wouldn’t get enough
fun out of it. You certainly do not work merely to add a few more
dollars to your bank account and you are not in Wall Street because you
like easy money. You get your fun some other way. Well, same here.”