public--the only genuine octopus--did not find the menu printed on the
ticker-tape at all appetizing. It was hard at work in its office, miles
away from the Stock Exchange, out of hearing of the ticker, scanning the
financial pages of the newspapers only on the street-cars to pass away
an irksome half-hour. Months before, the fumes of the wine of gambling
had gone to its head; and then the public had been made sober suddenly
by the “shrinkage in quoted values,” otherwise the shearing. Since then
the public had grown a new fleece, though it was not yet itself aware of
it.
It was a delicate task, before the president of the Metropolitan
National Bank. He was a resourceful stock-market manipulator, though
he would have resented being called a thief not half so hotly as being
called a speculator, because that sounded worse in a bank president. He
desired the public to buy bonds; not necessarily at high prices, but at
any prices. It was purely philanthropy on the face of it. That is why
the task was delicate. You can disarm suspicion if you are bad, in
Wall Street. But, if you are good, the hopelessness of it is appalling.
Moreover, there was no time for finesse or subtle strategy or ingenious
experiments with the elemental psychology of stock gamblers. The
occasion called for broadly-painted effects.
The first thing he did was to offer bonds to savings-banks and trustees
of estates all over New England and New York, at concessions too slight
to arouse suspicion, but substantial enough to tempt purchasers. This
through the best bond “drummers” in the land. Then he sought the Stock
Exchange.
The bond-market, which had slumbered profoundly for months, suddenly
awoke. Gilt-edged issues were pressed for sale, not violently at all,
but insistently. They came from many sources, the Street thought, not
knowing the full contents of the huge strong box of the richest man in
the world. The fortunes of the ordinary multi-millionaires grow faster
in the newspapers and in club-comers than in reality. This fortune was
even greater than the gossip of it. Mellen spent time in making people
look at his wealth through a reversed telescope, that it might be
diminished in the public’s estimate. That is all he had ever done to
diminish it, being a practical man.
The bond “specialists” felt faintly alarmed; then they became exultantly
busy. It might be unwise to buy stocks the future market-career of which
was problematical; but everybody knew what Pennsylvania Central first
mortgage fives were. Not to buy them under 125 was to sin regrettably.
The bonds sold at 122. To abstain from purchasing them at 120 was
lunacy. And at 115 passivity became a crime against one’s family. Many
bought, but not enough; and because the supply was greater than the
demand the price shrank further.
The Street held its breath and waited for stocks to follow. But,
simultaneously with the sales of the best bonds of the best railways in
the United States, came purchases of the stocks of the same railways,
and though prices of bonds declined, stocks did not. The Street felt
that to “trade” in such a market was like playing _rouge-et-noir_ in
an utterly dark room. What was the sense of betting on the black if the
bettor could not tell, because of the darkness, whether his chips were
on it or on the red?
The newspapers, being puzzled, printed dozens of columns and hundreds of
explanations, all of them highly ingenious and uniformly incorrect.
In his Monday morning article, Philip King, of _The Sun_, compared the
bond-market to the old story of the great psychologist who, dressed as a
pedlar, offered on a Broadway sidewalk to sell five-dollar gold-pieces,
warranted genuine, to the passers-by at $3.98. Never a fool so foolish,
in the passing thousands, as to shake hands with fortune on the
psychologist’s coin-laden tray. Now they would not buy bonds.
Of the millions of dollars of bonds that were sold, some were
registered in the name of William Mellen or Richard Dawson, or of known
stool-pigeons--clerks in their offices, etc. This became known in the
end, though Dawson delayed the inevitable as long as possible. Then,
of course, the mystery was solved: The “Fort Dawson” crowd was selling
bonds and buying stocks! The country was prosperous. There was no cloud
in the financial sky. Obviously, the greatest capitalists in the United
States were engineering a gigantic stock boom!
The _Evening Scold_, the greatest journalistic exponent of the Undoubted
Wisdom of the Sneer, promptly filled itself with wrath and editorialized
its feelings, as follows:
_The abnormal increase in the cash resources of the New York banks
during the past few weeks, was too good an opportunity for certain bank
presidents and their pals to neglect. The banks are not in Wall Street
to safeguard the interests and the cash of their depositors, but
obviously to help the directors and their schemes. In this instance,
the overgrown arrogance of the latest stock-market millionaires has
degenerated into imbecility, induced by protracted success in their
despoilment of the public. Fortunately, it should prove the undoing of
the financial Condottieri, for the stupid public surely cannot be stupid
enough to permit itself to be hypnotized into paying absurd prices for
brazenly manipulated insecurities like Transcontinental Air Line or
Great Southern Preferred, or into sacrificing gilt-edged bonds. Let the
would-be buyer of stocks, and the would-be seller of bonds, beware!_
But, after all, it was only the very wise--Messrs. Dawson and
Mellen--who bought stocks. Only a few foolish lambs sold stocks at the
high prices and bought bonds at the low! Also some of the alert-eyed
men over whose office doors were foreign names ending in “stein,” and
“baum,” and “berg,” and “mann.” The fools in their folly, and the shrewd
in their shrewdness, were helping the richest man in the world, and the
ablest bank president in the United States, during those stirring days
in Wall Street--shivering days when a great crash in the stock-market
was expected momentarily by so many that it did not come.
The expected never happens in Wall Street. It can’t afford to.
“How do we stand, Richard?” asked Mr. Mellen, as he walked into the
president’s office.
“Almost there,” answered Dawson. “I have sold most of your
semi-speculative issues, and we are working off the last better than I
expected. You got the memorandum of stocks bought to-day?”
Mellen nodded. Then he walked to the busy ticker in the corner, and
regarded the tape.
“The newspapers have warned the public against buying inflated stocks,
or selling bonds at unreasonably low prices. A free press, Richard, is
the best safeguard of the liberties of a nation. We should be grateful
for this boon.” There was a trace of nervousness about his manner; but
it was a nervousness as of relief rather than uneasiness.
Mr. Dawson laughed admiringly, and approached his friend.
“Yes. I’ve sold them impartially all over New England, here, and in
London and Berlin. But the Governments--”
“Never mind those. The Government will make good, somehow. We’ll keep
them to give us the right to agitate the matter later on. I am going to
tell my brother George. I told him to come here to-day at--How do you
do, George; I was just talking about you.”
George B. Mellen, who had entered, was a strongly-built man,
white-haired and clean-shaven. His eyes were of a dean, turquoise blue,
that contrasted pleasantly with the white of his eyebrows. He was the
vice-president of the International Distributing Syndicate, and at least
the sixth richest man in the world. He nodded to his brother, and shook
hands with Dawson, who managed to convey the impression that he had
risen in order to greet affectionately the new-comer. That having been
done, the president returned to his desk.
“George,” said Mellen looking up from the ticker, “I’ve sold every bond
I owned; or will have sold the last this afternoon.” He resumed his
scrutiny of the tape, very calmly.
“Wh-a-at?” said his brother.
“No obligations payable in gold will be worth anything in a short time.
There’s a man who has discovered the secret of making gold. And he’s
making it.” He said it in an utterly unexcited voice.
“What are you talking about?” said George with an indecisive smile. His
brother was bent over the glass dome of the ticker, and George, still
smiling indecisively, looked at Dawson.
An office-boy entered with a note which he gave to the president.
Dawson, as he saw the lad coming, instinctively picked up a dagger-like
paper-cutter from his desk. But when he glanced at the handwriting,
tore open the envelope with his fingers hurriedly, and read the slip it
contained. He rose and gave the paper to William Mellen, saying: “That
is the last of the bonds. They slaughtered prices, didn’t they? But,”
with a jovially apologetic smile, “it was the best that could be done.”
Mellen read the memorandum of the bond sales and the prices received.
“Why, Richard,” he said it with a sort of polite regret that ended with
a gentle sigh, “I should say they did slaughter them. It’s a loss of
about two millions on this lot, from last week’s prices.” He shook his
head several times as in sorrow over a fellow-Christian gone wrong: The
stock-market had sinned. Then he studied the busy ticker once more.
“William, will you kindly explain this farce?” There was no sigh to
George Mel-len’s voice as he asked this. His frown was deep.
“George, I’m not a fool, am I?” asked the richest man in the world,
very earnestly. He must be patient. It was his duty; and duty should be
everything to a man who, his friends thought, believed that the eyes of
Providence were fixed unblinkingly on the centre of his soul.
“Just now, I should say--”
“Well, just now, I certainly am not one. I’ve sold out all my bonds and
bought stocks. Yes, George. That,” gently, “is what I have done.”
“And I’ve done nothing all week but buy bonds and sell stocks!” George’s
eyes took on a curious expression--the blue in them seemed to grow
strangely darker as he half-closed his eyelids. Often the brothers
disagreed. William was the abler. But George was the older; and he
could not forget the days when he lorded it over his slender brother by
physical might.
“You probably bought my bonds, and I bought your stocks,” said William,
nodding as if solving a puzzle the solution of which called for no
exultation. “I am sorry, George. But you must at once sell the bonds and
buy stocks.”
“Explain, hang you; explain!” shouted George Mellen angrily.
“George, keep cool. Richard, will you kindly tell brother George all
about Grin-nell?” He looked at the ticker with an exaggerated air of
attention, to save further explanations.
George looked from his brother to the bank president, and back to his
brother.
“William,” he said at length, quietly. William did not look up from the
ticker. It made George Mellen angry and he said imperiously: “William,
listen to me! There may be a good reason why you have sold out all your
bonds. But there is none why you should not have told me before. Why
didn’t you?”
“I never thought about it,” answered William simply. There was a
mild astonishment on his face, as if at his own forgetfulness of his
brother’s interest.
“You didn’t, either, Dawson, did you?” said George coldly.
“My dear George, I certainly thought William was selling for both of
you. He always does, you know,” said Dawson.
“Oh, have it that way, George; have it that way if it will please
you.” Then to Dawson: “Sell George’s bonds, lump results and strike an
average,” said William Mellen resignedly. Then, with sudden irritation:
“It’s a case of life and death, not of a few dollars.” He began to walk
up and down the office, lost in thought. Mechanically he took a small
pad from the elaborately carved mahogany table in the centre of the
room, walked to an arm-chair by the farthest window, sat down and
presently began to jot down figures with a lead-pencil, while Dawson
told to George B. Mellen the story of Grinnell.
“But the thing is impossible,” said George angrily.
“Absolutely!” assented the bank president, almost amiably. “You are
right, George.” He looked at George with a subtle felicitation in his
eyes--at George’s intellect. “But,” he went on gently, “everything you
think we’ve already thought. We didn’t go off at half-cock, George. It
took facts to convince us. We know that the man can and probably will
flood the world with gold. I have no doubt of it. Neither has William.
Now, give me the list of your bonds and--”
“And I thought I was getting bargains,” said George Mellen bitterly.
“I might have known William’s hand was in it. I thought people had gone
crazy, and were being prepared for a grand boom, manufactured on
the premises! I tell you,” he exploded suddenly, “there’s a trick
somewhere!”
William Mellen looked up suddenly, and stared uncomprehendingly at his
brother, his mind still on his figures and calculations.
“No,” went on George, “I don’t mean you. I mean in this Grinnell
affair.”
“He has on deposit in this bank some forty millions, and about eight or
ten more with other banks.”
“That’s the mystery,” said George musingly. His eyes, as he thought,
took on a straining look, as you see near-sighted people look when
they try, without their glasses, to read printed characters twenty feet
distant, in an optician’s shop.
“I’d make haste, George,” interrupted William Mellen. “When you have
sold out all your bonds I will tell you a plan. The world will be told
of the Grinnell affair, and--”
“You mean?” said Dawson, with a quick start.
“After we have nothing to lose we have everything to gain.”
“But it will--” began Dawson excitedly.
“Don’t guess, Richard,” gently. “You don’t know the details of my plan.”
George knew his brother. He said grimly: “The public doesn’t love the
International Distributing Syndicate; nor us.”
“They’ll love Grinnell less. We are his victims, too; don’t you see?
That will comfort the public. Bloated bondholder will be a synonym for
pauper. They’ll pity us.” He said this with gentle dolefulness.
“William, but our friends? They’ll be ruined,” said George Mellen
doubtfully. He knew his brother.
“You can tell yours to sell out--after _you_ have sold out, not before;
and give no reasons to them, or--” His eyes, for the fraction of a
second, were menacing; he did not finish the threat orally. George
frowned; but he also checked the words that he would have uttered.
“You’ll have my list in fifteen minutes,” George told Dawson. “Willie
will bring it over. Good-bye,” and without another look at either of the
two men he left the room.
“George is--ah--” began Dawson, with a conciliatory smile.
“He always was,” interrupted William Mellen, not unpleasantly; “from his
boyhood up.”
“The public will have more bargains in bonds,” said Dawson.
“Yes.” The richest man in the world smiled and went on musingly: “The
public is very wise. It is selling out its stocks because they are too
high, and buying bonds because they pay in gold. Now, my plan--”
Williams entered. The president frowned, and stabbed the assistant
cashier through the heart with a stiletto made of a vocal icicle: “I am
engaged, sir.”
“It’s--it’s Mr. Grinnell, sir. He insisted upon seeing you. And, I
think, sir, you told me that if he--”
“Why didn’t you show him in at once?” The vocal stiletto was of
steel, and white hot. The timorous assistant cashier left as though a
stupendous draught of air had sucked him out of the room through the
door. The president arose and greeted Grinnell.
“Walk in, Mr. Grinnell,” he said, and held out his hand.
“Good-morning, Mr. Dawson. How do you do, Mr. Mellen?” said Grinnell
cheerfully. Mr. Mellen waved his hand in amicable salutation. It was the
first time that ever Mr. Dawson had seen Mellen indulge in such jovial
friendliness.
“Quite exciting times lately in Wall Street?” said Grinnell
interrogatively, but obviously to make talk. “The people are going
stock-mad. I suppose there will be a smash.”
“It is more than likely,” assented Mellen gravely. Had not Mr. Dawson
been a bank president, with a professional lack of the sense of humour,
he would have winked surreptitiously at his friend.
“Well, if it is only the stock gamblers who suffer, I won’t worry. But,
possibly, small investors may become frightened by the decline in bonds
and sell out. They would be foolish, of course. But I have sympathy
for foolish people; a fellow-feeling, I suppose.” He smiled. Then,
seriously: “Why, do you suppose, there’s been such a slump in bonds?”
“More sellers than buyers,” said Dawson, with a tentative grin.
“Ah!” The young man smiled at the timeworn Wall Street phrase; he had
not heard it before. “But I think bonds are pretty cheap,” he persisted.
“They certainly look so,” assented Dawson.
“They certainly do,” echoed Mellen gravely.
“That means you are buying them,” said the young man with a sort of
naive astuteness. Whereupon Dawson and Mellen congratulated themselves
with glances. Grinnell went on: “I feel like doing the same thing.
However, what I came to see you about is this: I promised not to deposit
any more gold for a month in any bank in New York, didn’t I?”
“In the United States,” said Mellen quickly.
“I don’t think I promised that, but I’ll let it go at that. My promise
certainly did not extend to banks in Europe.”
“As to Europe,” said Dawson with a shake of his head, “I took it for
granted that--”
“Never mind Europe,” interrupted Mellen with a benevolent air. “Are you
going to ship any gold across the ocean, Mr. Grin-nell?”
“I’ve suspended my gold operations entirely, as I promised. That is, I
won’t ship any new gold. But you wouldn’t object to my drawing out some
of the gold I have here and in other New York banks, I suppose?”
“Why--” began Dawson dubiously.
He could not tell what this new move meant.
“Certainly not,” said William Mellen decisively. He sided with Grinnell,
of whom, Grinnell must see, he thought highly.
“Of course not,” echoed Dawson cordially, with an air of primal
authority. To show it was his own decision, he added: “We should be
delighted.”
“I may draw on you soon,” said Grinnell.
“We can sell you drafts on any part of Europe, Asia, Africa, Australia,
South America, and the Philippines,” Dawson told him, smiling.
“I’ll think it over,” Grinnell said seriously. “It won’t prevent me from
depositing more gold when my time is up?”
“Not at all,” said Dawson jovially.
“How much will you deposit?” asked Mellen casually.
“Not much;” the young man smiled.
“No,” said Dawson, with playful sarcasm “not much; about a million a
minute.”
“You’d object to a million a day,” Grin-nell shook his head dolefully.
“He would not object to that,” interjected the richest man in the
world, “if he knew how many days you would keep it up.” There was
no playfulness in his voice, though he tried to speak in an easy,
conversational tone.
“Well,” began Grinnell doubtfully. He went on quickly: “Oh, yes, he’d
object before the end of the first week. I know him.” He nodded toward
the bank president with a boyishly mischievous air. Dawson tried to
smile back; he said:
“I’m getting to know _you_, too. I am going to be more generous in the
future.”
“Good!” said Grinnell; he would take the president at his word when his
month was up. “Now, if I should want drafts on London and Paris in a day
or two--”
“Mr. Williams will be at your service, at any time,” the president
assured him, as though Mr. Grinnell were an ordinary depositor
transacting ordinary business. “No notice is required in _this_ bank,”
with a curious suggestion of bravado. He pushed one of a row of electric
buttons on his desk. The assistant cashier, his fat face distorted
dismally into an anticipatory excuse, appeared.
“Mr. Williams, Mr. Grinnell may call on us for drafts on Europe. You
will place yourself at his disposal, and give him your very best efforts
at all times.”
“Certainly, sir,” said the assistant cashier, with a hasty deference.
“Very glad to do what I can, Mr. Grinnell,” he said, in a grateful
voice, to the young man.
“That is all,” said the president. The assistant cashier apologized
facially, and left the room.
Grinnell rose to go. “Good-morning, Mr. Dawson. I’ll be around when my
month is up.
“You are not doing time, Mr. Grinnell,” smiled the president.
“I feel like it. I don’t like idleness. Good-morning.”
He didn’t like idleness! He would resume the manufacture of gold! Given
rope, the young man would hang himself and the bond-holding public. But
Dawson now had no bonds. When the discovery came, the community would be
convulsed. The bank was fortifying itself with legal tender notes. Gold
would have but little value when the crash came. There were various
points to study. In the entire affair there was but one danger. The
president voiced it.
“William,” he said, “after the cat’s out of the bag, what’s to hinder
Grinnell, out of pure philanthropy, from stopping his production of gold
in order to avert a disastrous world panic?”
“I’ve thought of that,” answered the richest man in the world, with
a calmness that came from previous meditation and settled conviction.
“He’s quite likely to cease his operations in new gold, as he calls
them. But not before there has been a crash, Richard. And we will then
be his principal advisers. I feel he will keep on until the mischief
is done. We are prepared now. And yet, somehow--” His face clouded with
doubt.
George Mellen entered hurriedly. “Here, Richard, here are my bonds.” The
president looked at the long list. “Those I’ve marked with a cross
I’ve already ordered sold. Meighan & Cross, and W. A. Shaw & Co. are
practically giving them away at this moment,” finished George Mellen,
with a touch of bitterness.
William Mellen approached the ticker, and passed the tape through his
fingers with a deftness that betrayed practice.
“I think you are right,” he said softly. “Green River general 4s, 87!”
“I should think the insurance companies--” began George Mellen.
“Richard has already sold them all they can take,” returned his brother
kindly, as though he were anxious to please brother George.
“Also the savings-banks, and about three hundred estates,” added the
president, with a slight touch of pride.
“I’m going to tell Freer, Morrison, Stuyvesant, and one or two others,”
announced George Mellen with a trace of defiance. He anticipated
opposition, but the richest man in the world said:
“I should tell them this much only: That for certain reasons you cannot
divulge, you are selling out your bonds, and that I’ve already sold
mine.”
“The last is unnecessary. They’d guess it without my telling them,” and
George Mel-len left the room abruptly. Mr. Dawson began to write selling
orders, copying the names of the bonds from the list before him. Then
he summoned his trusty brokers and bond specialists, and gave them the
orders, exhorting them to use caution; also much haste.
Under the new selling pressure the market acted crazily. The
inexplicable declines in bond prices of that memorable week had brought
into Wall Street deluded “bargain hunters,” who bought the securities
at “ridiculously low figures,” but, values went still lower, until the
bonds were so very cheap that they were dear--too dear for people to buy
who did not know why they should be so cheap. Therefore, the speculators
in bonds, who had bought, now sold at a loss, thereby adding to the
general uncertainty. But as some sold, others bought, and quotations of
gilt-edged issues, usually so staid and slow of movement, fluctuated
as violently as, in other times, the manipulated and highly speculative
stocks had been wont to do. On the whole, the public bought more bonds
than it sold, and sold more stocks than it bought. Yet, bonds fell,
and fell, and stocks rose and rose. And there still remained the pet
investments of George B. Mellen’s intimate friends; men who, accustomed
to risking much on the turn of the wheel of the ticker, yet kept a
portion of their fortune safe beyond peradventure by buying bonds which
were unassailable by demagogues and socialistic legislatures, unaffected
by hard times or strikes, or crop failures; absolutely safe just so long
as the United States remained a nation of Americans--or, until such time
as aërial navigation supplanted steam railroads. Also, so long as the
gold basis endured, _and no longer!_
Grinnell had stopped outside and spoken to the assistant cashier.
“I think I should like to have a sight draft on London for two million
pounds sterling, Mr. Williams.”