A SQUEEZE
_The great fit of dumps--Keeping afloat--Interest on bonds--A sudden
financial frost--Strauss shows his hand--I beard the lion in his
den--He soars--I give him food for thought--The thermometer rises
once more--They treat me with consideration at the bank_
As every one knows, the recovery of business from that awful fit of
depression which followed '93 was slow. At times it would seem that the
country was ready to throw off its fit of sickness and begin to grow
again. Then there would come along some new set-back, and we were all in
the dumps once more.
It had been a great fight to keep the Meat Products Company afloat
during these hard times. It was all we could do to pay our fixed
charges, which were heavy, as most of the concerns that formed the
corporation had demanded bonds in payment for their properties before
they would consent to join us. There was also, of course, a big issue of
stock, preferred and common, which, by a mutual agreement, was not to be
marketed for three years. We had not yet come in sight of a dividend on
this stock; hence there were signs of dissatisfaction among the little
fellows, who had expected wonders of the company. And the time was fast
approaching when they would be at liberty to dump their stock on the
market for what they could get for it.
The Strauss crowd, since their secret attempt through the tool Frost and
his "syndicate" to thwart our plans, had kept their hands off us. They
knew well enough what was our financial condition, and were biding their
time to strike. But so far, clear down to the winter of '96, we had been
able to meet all interest charges promptly, and had thus kept the
corporation from foreclosure. That year as the time approached for the
March payment of interest on the bonds and sinking-fund requirement, it
became evident that our treasury would not be able to meet the sum
required, and that it would be necessary for us to borrow for the
immediate emergency. We already had a good deal of our paper out in
Chicago, and so Slocum and I went East to raise what we needed. That was
not so easy as it would have been in the days when we could rely on
Farson's aid. But after considerable efforts we got together in New York
what was needed for the emergency, and I left for home. That was the
fourteenth of February. I congratulated myself that the danger was past,
for I was sure that, with the opening of our new plant in Kansas City,
and the constant improvement in our business, we ought to be beyond
attack when the next payment was due in the fall. After that period we
should be on the road to dividends.
I had been at home a couple of days, my attention given to other matters
of importance, when one morning notice came from the Mercantile National
Bank, where we did most of our business, that some large notes were
called. We had over two hundred and fifty thousand dollars in "call"
loans due that bank, and though, during these uncertain times, we could
not get any long paper, the management of the Mercantile had been
friendly to us from the start, and I had no reason to anticipate trouble
in that quarter. But when I went over to see the Mercantile people I met
with only a polite and cool reception. The loans were called; they must
be paid; money was hardening, and so on. It was a granite wall, with
just as much human consideration in it as stone and steel--and back I
went to my office to think.
There was more than the ordinary bankers' caution in this sudden
financial frost; and, whatever was the power working against us, it was
strong enough to close the doors of credit throughout the city. Wherever
I went those dreary two days, from bank to bank, I was met with the same
refusal: money was not to be had on any terms. The word had gone out
that we were a doomed ship, and not a bank would touch our paper. After
a second sleepless night I made up my mind to a desperate step, with the
feeling that if it failed the game was up.
As soon as I reached my office on the last day of grace I got old
Strauss himself on the telephone and asked for an appointment. He was
gracious enough when I reached his office; it was the cordiality of a
hungry eater before a good meal.
"What can I do for you, Mr. Harrington?" he purred.
I cut into the meat of the matter at once.
"What are your terms?"
"Do you mean that you wish to sell your property?" he asked
indifferently.
"Not a bit of it."
"Then how can I help you, Mr. Harrington?" he inquired blandly.
"You can take your hand off the banks, and let us get a living."
He shrugged his shoulders deprecatingly, as if I gave him credit for too
much power, and we had it out at some length. He had no interest in the
Meat Products Company. If the corporation went into the hands of a
receiver, he and his friends might consider buying it up, and he was
willing to discuss terms if we wished to deal in a friendly manner
before it reached the courts. I rose from my chair as if to go.
"Very well, Mr. Strauss," I said dryly. "You have made it impossible for
us to get any money in Chicago, but you don't own the earth. There is
money in New York--about four hundred thousand dollars lying there for
me at this moment."
"To pay the interest on your bonds!" he shot back, showing how closely
he had followed us.
"Yes," I admitted, "to meet our March interest and sinking fund. But I
am going across the street to the telegraph office to wire it out here
and take up our paper."
He looked at me inquiringly, waiting for the next move.
"And the March interest?" he suggested.
"We shall default."
The old dog raised his eyebrows, as if to say that was what he had been
waiting for all along.
"Of course," I went on, "that is what you have been working for, and
that is why the Mercantile people come down on us at this moment. You
think you have got us where you can squeeze the life out of us. Well,
you have."
"You are a smart young man, Harrington," the great packer replied
genially. "But you have got into a big game. You'd much better have
listened to Carmichael when he offered you a chance with us."
[Illustration: _"Only this," I said slowly, "I don't sell out to you."_]
"Thanks!" I said glumly.
"Now, why can't we avoid a fight and settle this matter between
ourselves? There might be something good in it for you."
"I know the way you settle such matters."
"According to your own talk, there isn't much left for you folks."
"Only this," I said slowly, and I walked back to his desk and leaned
over it: "I don't sell out to you. We default. The bonds will be
foreclosed, and maybe your crowd will hold the majority of 'em. But when
we get into the courts, Mr. Strauss, on a receivership, I go before the
judge and tell the story. I have the papers, too. And part of that story
will have to do with certain agreements which our company has made with
you and the other packers. And more than that, behind these arrangements
there are a lot more of the same kind in our safe that we got from
Dround and others. Now, if you want the whole story of the packing
business aired in court and in the papers throughout the country, you'll
have your wish."
"Pshaw!" he said coolly, "you don't suppose that bluff counts! They
can't do a thing to us."
"Maybe not," I replied. "Nothing more than a congressional
investigation, perhaps. And that might block your little game."
"Go on, young feller!" he exclaimed contemptuously.
"That's all. I want you to know that I am in this fight to the end, and
if it ruins me and my friends, I will see that it hurts you. Now, if you
want to fight, let the bank call this money."
We had some more talk on the same subject, and, though the great packer
maintained an air of indifference, I thought I had made some impression
on him. Then we parted, and the old fellow paid me the compliment of
seeing me as far as the door of his office.
From Strauss's place I went to the telegraph office, wired for the
money in New York, and in due time presented myself at the Mercantile
Bank ready to take up the notes, as I had told Strauss. The president of
the bank was waiting for me with a flurried look on his face.
"You have come in to renew your paper, Mr. Harrington?" he remarked, as
if there had been no trouble between us.
"No," I said; "I have come to pay what we owe. I don't do any more
business with you."
"We have reconsidered the matter, and we shall be very glad to renew
your paper."
Strauss had seen the point to my remarks, and concluded to retreat!
"Thank you, I don't care to get any more call money from you fellows," I
said placidly. "You make too much trouble."
Well, when I left the president's room I had arranged for a loan of four
hundred thousand dollars for six months. I had measured myself against
the great Strauss, and never again would the big fellow seem to me so
terrible. I judged that, for a time, the American Meat Products Company
would be left to do business undisturbed....
On my desk, when I returned from the bank that afternoon, was a telegram
from Mr. Dround from New York: "We arrived to-day--leaving for Chicago."
For once, Mr. Dround had made up his mind in a hurry.