Transcriber's Note: Minor typographical errors have been corrected
without note. Irregularities and inconsistencies in the text have
been retained as printed. Words printed in italics are noted with
underscores: _italics_.
MY ADVENTURES WITH YOUR MONEY
BY GEORGE GRAHAM RICE
RICHARD G. BADGER
THE GORHAM PRESS
BOSTON
Copyright, 1911, by The Ridgway Company
Copyright, 1913, by Richard G. Badger
All rights reserved
THE GORHAM PRESS, BOSTON, MASS., U.S.A.
To The American Damphool Speculator, surnamed the American Sucker,
otherwise described herein as The Thinker Who Thinks He Knows But
Doesn't--_greetings_!
This book is for you! Read as you run, and may you run as you read.
G. G. R.
NEW YORK, March 15, 1913.
CONTENTS
PAGE
I THE RISE AND FALL OF MAXIM & GAY 11
_The Birth of an Idea to Coin Money._
_The Higher Mathematics of the Operation._
_How "The One Best Bet" Was Coined._
_Real Inside Turf Information._
_The Public Asks to Be Mystified._
_Prestige Restored by a Clerk's Ruse._
_A Boastful Race Player Gives Aid._
_Fortune Changes Her Mood and Smiles Again._
_The Kentucky Colonel Falls in Line._
_Betting the Public's Money at Great Profit._
_$130,000 Is Lost and Won in a Day._
_A Disastrous Newspaper Wind-up._
II MINING FINANCE AT GOLDFIELD 46
_A Partnership of Pure Nerve._
_Bucking the Tiger on the Desert._
_Bidding $3,000,000 When Broke._
_Millions in the Vista Held No Charms._
_"Human Interest" Versus Technical Mining._
_Beginning the Advertising Business._
_Some Advertising that Paid._
_Building Gold Mines with Publicity._
_Hair-Raising Stories for Distant Readers._
_The Mercury of Speculation._
_The Birth of Bullfrog._
_Enter, Charles M. Schwab._
_Why the Bottom Fell Out._
_How About the Public's Chances?_
_Jumping Jack Manhattan._
III THE BREWING OF A SATURNALIA OF SPECULATION 89
_Trying It on the Stray Dog._
_Advertising for Thinkers._
_Yes, "Business Is Business."_
_Fortunes that Were Missed._
_The Tale of Bullfrog Rush._
_Prize Fights and Mining Promotion._
_The Year of Big Figures._
_The Story of Goldfield Consolidated._
_At the Height of the Frenzy._
IV THE GREENWATER FIASCO 133
_Getting Into the Game._
_All the Copper in the World._
_The Collapse of Greenwater._
_The Shame and the Blame._
V ON THE EVE OF THE GREAT GOLDFIELD SMASH 144
_The Rise of Wingfield and Nipon._
_The Winnings of a Tenderfoot._
_I Am Landed High and Dry._
_The Beginning of the Raid._
_Some Pertinent Personalities._
_The Time When Money Talks._
_Clouds in the Western Sky._
_From Credit to Crash._
_Down with the Sullivan Trust Company._
_Some Hindsight that Came Too Late._
VI NIPISSING AND GOLDFIELD CON 179
_An Orgy in Market Manipulation._
_The Guggenheims Enter Nipissing._
_Nipissing on the Toboggan._
_Who Got the $75,000,000?_
_The Wonder Mining-Camp Stampede._
_Teague Attacks Senator Nixon._
"_Calling for a Show-Down._"
_Manipulating Goldfield Con._
_Enter, Nat. C. Goodwin & Co._
_The Story of the Goldfield Labor "Riots."_
_The Death of Governor Sparks._
VII RAWHIDE 219
_Real Gold at Rawhide._
_The Rawhide Coalition Mines Company._
_A Race of Gamblers._
VIII THE PRESS AGENT AND THE PUBLIC'S MONEY 227
_Publicity via Elinor Glyn._
_"Al" Miller's Siege._
_The Funeral Oration for Riley Grannan._
_Among the "Big Fellows."_
_The Reverse English._
_The Power of the Public Print._
_Rawhide Again._
IX THE WALL STREET GAME 264
_Good Big Fish vs. Bad Little Fish._
_Righteous Wall Street and the "Sucker" Public._
_The Marketing of Mining Stock._
_I Buck the Wall Street Game._
_The "Double-Crossing" of Rawhide Coalition._
_"Inside" Market Support._
X ENTER, B. H. SCHEFTELS AND COMPANY 288
_More Truth on the "Mining Financial News."_
_The Scheftels Principles._
_The Scheftels Company Against Margin Trading._
XI A FIGHT TO THE DEATH 308
_The Firing of the First Guns._
_The Story of Ely Central._
_The Assault on Ely Central._
_The Clash of Battle._
_A Bombshell in the Enemy's Camp._
_A Government Raid Is Rumored._
_The Raid on B. H. Scheftels and Co._
_A Tool's Confession._
_The Guggenheims._
XII THE LESSON OF IT ALL 362
FOREWORD
You are a member of a race of gamblers. The instinct to speculate
dominates you. You feel that you simply must take a chance. You can't
win, yet you are going to speculate and to continue to speculate--and
to lose. Lotteries, faro, roulette, and horse-race betting being
illegal, you play the stock game. In the stock game the cards
(quotations or market fluctuations) are shuffled and riffled and
STACKED behind your back, AFTER the dealer (the manipulator) knows on
what side you have placed your bet, and you haven't got a chance. When
you and your brother gamblers are long of stocks in thinly margined
accounts with brokers, the market is manipulated down, and when you
are short of them, the prices are manipulated up.
You are on guard against the Get-Rich-Quick man, and you flatter
yourself that you can detect his wiles at a glance. You can--one kind
of Get-Rich-Quick operator. But not the dangerous kind. Modern
Get-Rich-Quick Finance is insidious and unfrenzied. It is practised by
the highest, and you are probably one of its easy victims.
One class of Get-Rich-Quick operator uses crude methods, has little
standing in the community, operates with comparatively small capital,
and caters to those who do not think and have only small resources. He
is not particularly dangerous.
The other uses scientific methods--so scientific, indeed, that only
men "on the inside" readily recognize them; occupies a pedestal in the
community; is generally a man of excellent financial standing, a
member of a stock exchange; employs large capital; appeals to thinkers
or those who flatter themselves that they know the difference between
a gold bar and a gold brick, and seeks to separate from their money
all classes and conditions of men and women with accumulations large
or small.
The United States Government during the past few years, at the behest
of the big fellow, who seeks a monopoly of the game, has been raiding
the little fellow--the crude operator whose power to injure is as
nothing compared to the ravages that have been wrought by the
activities of his really formidable prototype.
I have a message to communicate to every investor and speculator, a
story to tell of my experience through the great Goldfield, Bullfrog,
Manhattan and Greenwater mining booms in Nevada of 1905-1908, in which
the public lost upwards of $200,000,000, and of a series of great
mining-stock promotions in Wall Street and other American financial
centers, in which the public sank $350,000,000 in 1910. The narration
of the facts demonstrates that the Government's Get-Rich-Quick crusade
has made it less easy for some of the small offenders to thrive, but
that the transcendentally greater culprits are at this very moment
plucking the public to a fare-you-well, and that the Government has
not lifted a finger against them.
No man, except a common thief, ever started out to promote a mining
company or any other company that he was convinced at the outset had
no merit; and the work of common thieves is quickly recognized and the
offenders are easily apprehended.
The more dangerous malefactors are the men in high places who take a
good property, overcapitalize it, appraise its value at many times
what it is worth, use artful publicity and market methods to beguile
the thinking public into believing the stock is worth par or more, and
foist it on investors at a figure which robs them of great sums of
money. There are more than a million victims of this practice in the
United States.
After years of experience behind the scenes, the conclusion is forced
upon me that the instinct to speculate is so strong in American men
and women that they choose to "take a chance" regardless of the fact
that at the outset they already half-realize they eventually must
lose.
Myself, in boyhood, a victim of the instinct to speculate, I, years
afterward, at the age of 30, learned to cater to the insatiable desire
in others. I spent fortunes for advertising and wrote my own
advertisements. I constructed on big lines powerful dollar-making
machinery that succeeded in getting the money for my enterprises, and
I was generally my own manager. Ten years of hard work in a field in
which I labored day and night has disclosed to me that the instinct to
gamble is all-conquering among women as well as men--the rich and the
poor, the young and the old, the wise and the foolish, the successful
and the unsuccessful.
Worse, if you have lost some of your hard-earned money in speculation,
your case is undoubtedly incurable, because you have a fresh
incentive, namely, to "get even." Experience, therefore, will teach
you nothing. The professional gambler's aphorism, "You can't kill a
sucker," had its genesis in a recognition of this fact, and now stock
promoters and manipulators of the multi-millionaire class subscribe to
its truth and on it predicate their operations.
Nearly everybody speculates (gambles); few win. Where does the money
go that is lost? Who gets it?
Are you aware that in catering to your instinct to "invest," methods
to get you to part with your money are so artfully and deftly applied
by the highest that they deceive you completely? Could you imagine it
to be a fact that in nearly all cases when you find you are ready to
embark on a given speculation, ways and means that are almost
scientific in their insidiousness have been used upon you?
What are these impalpable yet cunningly devised tricks that are
calculated to fool the wisest and which landed YOU? I narrate them
herein.
What are your chances of winning in any speculation where you play
another man's game? HAVE YOU ANY CHANCE AT ALL?
In playing the horse races in years past you had only one chance if
you persisted--YOU COULD LOSE.
In margin-trading on the New York Stock Exchange, New York Curb,
Boston Stock Exchange, Boston Curb, Chicago Board of Trade, Chicago
Stock Exchange, New York Cotton Exchange and kindred institutions,
experience among stock-brokers proves that if you stick to the game
you have only one chance--YOU CAN LOSE.
In railroad, industrial and mining-stock speculation, where you buy
the shares outright and hold them for stock market profits, you have
two chances; if you are of the average and your operations are for a
period continuous--YOU CAN BREAK EVEN IF YOU ARE VERY LUCKY, OR LOSE
IF YOU ARE NOT; and in justice to myself I must be allowed to explain
that I had a much better opinion of the public's chances ten years ago
than I have now, and that experience on the inside has taught me this.
The moral to the investor and speculator is "Never Again!" And yet you
WILL speculate again. Experience teaches that so long as the chance of
speculative gain exists in any enterprise, so long will the American
public continue in its efforts to appease its speculative appetite.
G. G. R.
MY ADVENTURES WITH YOUR MONEY
CHAPTER I
THE RISE AND FALL OF MAXIM & GAY
The place was New York. The time, March, 1901. My age was thirty. My
cash capital, tightly placed in my pocket, was $7.30, and I had no
other external resources. I was a rover and out of a job.
Since August of the year before I had been loafing. My last position,
seven months before, was that of a reporter for the New Orleans
_Times-Democrat_. My last newspaper assignment was the great Galveston
cyclonic hurricane in which 15,000 lives were lost and $100,000,000 in
property was destroyed. I covered that catastrophe for the New York
_Herald_ and other journals as well as for the New Orleans newspaper.
It was a "beat" and I netted a big sum for a few days' hard work, but
the money had all been spent for subsistence.
At the corner of Fortieth Street and Broadway I met an old-time
racetrack friend, Dave Campbell. His face wore a hardy, healthful hue,
but he bore unmistakable evidence of being down on his luck.
"Buy me a drink," he said.
"I've got thirty cents in change and I must have a cigar," I answered,
"and you know I like good ones."
"Well, I'll take a beer," he said, "and you can buy yourself a
perfecto."
No sooner said than done. The cigar and the drink were forthcoming. We
sat down. It was a café with the regulation news-ticker near the lunch
counter.
"Do you still bet on the horses?" asked Campbell.
"No, I haven't had a bet down in more than a year," I answered.
"Well, here's a letter I just received from Frank Mead at New Orleans,
and it ought to make you some money," he said.
"There's a 'pig' down here named Silver Coin," the letter said, "that
has been raced for work recently. I think he's fit and ready and that
within the next few days they will place him in a race that he can
win, and he will bring home the coonskins at odds of 10 to 1."
I had seen letters like that before, but my interest was aroused. I
picked up a copy of the New York _Morning Telegraph_ from the table.
Turning the pages, I noticed a number of tipsters' advertisements, all
claiming they were continually giving the public winners on the races.
THE BIRTH OF AN IDEA TO COIN MONEY
"Do these people make money?" I asked Campbell.
"Yes, they must," he answered, "because the ads have been running
every day for months and months."
"Well, if poorly written ads like these can make money, what would
well-written ads accomplish, and particularly from an information
bureau which might give real information?" I queried. A moment later
the ticker began its click, click, click.
"Here come the entries," said Campbell.
He went to the tape and ejaculated, "By Jiminy! Here's Silver Coin
entered for to-morrow."
The coincidence stirred me.
"I've got an idea for an advertisement," I said. "Get me a sheet of
paper."
It was supplied. I wrote:
+---------------------------+
| Bet Your Last Dollar On |
| SILVER COIN |
| To-day |
| At New Orleans |
| He Will Win At 10 to 1 |
+---------------------------+
And then I faltered. "I must have a name for the signature," I said.
I picked up the newspaper again and turned to the page containing the
entries for that day at the New Orleans races. A sire's name was given
as St. Maxim.
"Maxim!" I said. "That's a good name. I'll use it. Now for one that
will make euphony."
"Gay!" said Campbell. "How's that? It's sporty."
Thereupon I created the trade-mark of Maxim & Gay.
In a postscript to this advertisement I stated that the usual terms
for this information were $5 per day and $25 per week, and that the
day after next Maxim & Gay would have another selection, which would
not be given away free.
"Maxim & Gay" were without an address. Half a block away on Broadway,
at a real estate office, we were informed that upstairs they had some
rooms to let. I engaged one of these for $15 a month--no pay for a
week. Two tin signs were ordered painted, bearing the inscription,
"Maxim & Gay." One was placed at the entrance of the building and the
other on the door upstairs. The sign-painter extended credit.
Before bidding me adieu, Campbell exclaimed of a sudden:
"By golly! I can't understand that scheme. How can you make any money
giving out that Silver Coin tip for nothing?"
"Watch and see!" I said.
Around to the _Morning Telegraph_ office, then on Forty-second Street,
I went.
"Insert this ad and give me $7 worth of space," I said, as I shelled
out my last cent.
When the advertisement appeared the next morning, its aspect was
disappointing. The space occupied was only fifty-six agate lines, or
four inches, single-column measure. It looked puny. Would people
notice it?
That afternoon Campbell and I took possession of the new office of
Maxim & Gay. Luckily, a former tenant had left a desk and a chair
behind, in lieu of a settlement for rent. In walked a tall Texan.
"Hey there!" he cried. "Here's $5. It's yours. Keep it. Answer my
question, and no matter what way you answer it, it don't make any
difference. The $5 is yours."
I looked up in amazement.
"Give me the source of your information on Silver Coin," he said. "I
bet big money. If your dope is on the level, I'll bet a 'gob.' If it
ain't, your confession will be cheap at $5, which will be all the
money I'll lose."
I showed him the letter from Frank Mead.
"That's good enough for me," he said, turning on his heel.
Silver Coin won easily at 10 to 1.
The betting was so heavy in the New York pool-rooms that, at post
time, when 10 to 1 was readily obtainable at the race-track, 6 to 1
was the best price that could be obtained in New York. It is history
that the New York City pool-rooms at that time controlled by "Jimmy"
Mahoney were literally "burned up" with winning wagers. Pool-room
habitués argued it thus: "If the tip is not 'a good thing,' what
object in the world would these people have for publishing the ad? If
the horse loses, the cost of the advertisement is certainly lost. The
only way they can win is for the horse to win." It was good logic--as
far as it went.
THE HIGHER MATHEMATICS OF THE OPERATION
But it was really sophistry. If the horse lost, the inserter of the
Maxim & Gay advertisement would be out exactly $7. If the $7 was used
to bet on the horse, the most that Maxim & Gay could win would be $70.
I was taking the same losing risk as the bettor, with a greater chance
for gain. By investing $7 in the advertisement, it was possible for me
to win much more money from the public by obtaining their patronage
for the projected tipping bureau.
I recall that the experimental features of the advertisement appealed
to me strongly and struck me as being a splendid test of the
possibilities of the business. If the horse won and there were few
responses to the advertisement it would be convincing on the point
that there was no money in the tipster branch of the horse-racing
game. I argued that if the racing public would not believe that an
Information Bureau was what it cracked itself up to be, in the face of
a positive demonstration, how could it be expected to believe the
lurid claims of the fakers whose advertisements crowded the sporting
papers daily and in which they claimed _after_ the races were run
that they named in advance the winners at all sorts of big odds?
The next morning about ten o'clock, Campbell called at my home and
said that he had received another "good thing" by telegraph from Mead
and that the name of the horse was Annie Lauretta, with probable odds
of 40 to 1.
"Jiminy!" he exclaimed. "If we only get a few customers to-day and
this one wins, what will happen?"
Leisurely we walked to the office. "If we get ten subscribers to-day
to start with, we'll make a fine beginning," I said.
As we approached the Hotel Marlborough, which is opposite the building
on Broadway in which the Maxim & Gay Company had its modest little
office, our attention turned abruptly to a crowd of people who were
being lined up by half a dozen policemen.
"What theater has a sale of seats to-day?" Campbell asked.
"Don't know," I answered.
As we approached the office, we found that the line extended into our
own office building. As we ambled up the rickety stairs, we passed the
crowd in line, one by one, until we discovered, to our great
astonishment, that the line ended at our door.
We turned the key, walked in, locked the door, and stood aghast.
Holding up both hands, I gasped, "In heaven's name, what have we
done?" I was appalled.
"Give 'em Annie Lauretta," cried Campbell.
"But suppose Annie don't win," I expostulated.
"Smokes!" exclaimed Campbell. "Are you going to turn down all those $5
bills?"
"Let's see that telegram," I faltered.
I perused it over and over again.
"Mead's judgment on Silver Coin is good enough reason to warrant
advising people to put a wager on another one of his choices,"
Campbell argued. I agreed.
How to convey the information in merchantable form was the next
question. A typist in the Hotel Marlborough, across the way, was sent
for and asked to strike off the name "Annie Lauretta" 500 or 1,000
times on slips of paper. Envelopes were bought and a typed slip was
placed in each. The line increased until it was a block and a half
long.
When all was ready, the door was opened. Campbell passed the envelopes
out as each man handed me $5. I stuffed the money in the right-hand
drawer of the desk, and when that became choked, I stuffed it in the
left-hand drawer. Finally, the money came so thick and fast that I
picked up the waste-paper basket from the floor, lifted it to the top
of the desk and asked the buyers to throw their money into the
receptacle. When a man wanted change, I let him help himself.
For two and a half hours, or until within fifteen minutes of the
calling of the first race at New Orleans, the crowd thronged in and
out of our office. When the last man passed out we counted the money
and found the day's proceeds to be $2,755.
"What will we do next?" asked Campbell. "What's my job, and what do I
get?"
"How much do you want?" I asked.
"Ten dollars a day," he said.
Thereupon he got possession of the $10 and he admitted it was more
money than he had seen in a month.
"What will we do next?" he repeated.
"Let us take a walk," I said. "Lock the office until after the fourth
race, when we see what Annie Lauretta does."
We hied ourselves to a nearby resort and stood by the news ticker to
see what would happen to Annie. It was half an hour since the third
race had been reported.
"Fourth race--tick--tick--tick," it came. "A--Al----,"
"We've lost!" I cried.
"A--AL--ALPENA first."
There was grim silence.
"Tick--tick----,"
"Here she is!" yelled Campbell.
"A-N-N-I-E LAURETTA second--40--20--10" (meaning that the odds were 40
to 1, first, 20 to 1, second, and 10 to 1, third, and that those who
had played "across the board" had won second and third money at great
odds).
I boarded a Broadway car, rode down to the Stewart building and rented
one of the finest suites of offices in its sacred purlieus. I ordered a
leading furniture dealer to furnish it sumptuously. At night I walked
over to the _Morning Telegraph_ office, laid $250 on the counter,
ordered inserted a flaring full-page ad. announcing that Maxim & Gay
had given Annie Lauretta at 40, 20 and 10, second, and previously
Silver Coin at 10 to 1, won, and were ready for more business.
A telegram was sent to Frank Mead, instructing him to spend money in
every direction with a view to getting the very best information that
could be obtained from handicappers, clockers, trainers and every
other source he could reach. Mead continued to wire daily the name of
one horse, which we promptly labeled and thereafter advertised daily
as "The One Best Bet." Soon "One Best Bet" became a term to conjure
with.
The success of this enterprise was phenomenal. In the course of two
years it earned in excess of $1,500,000. There were some weeks when
the business netted over $20,000 profits. At the height of its career,
in the summer of 1902, at the Saratoga race meeting, when the
pool-rooms in New York were open, our net profits for the meeting of a
little less than three weeks were in excess of $50,000.
We established an office in Saratoga and our average daily sales on
race days were 300 envelopes at $5 each. In New York the average was
just as large, and, in addition, we had a large clientele in distant
cities to whom we sent the information by telegraph. The wire
business, in fact, increased to such an extent that it became
necessary to call upon the Western Union and Postal Telegraph
companies to furnish our office in the Stewart building with direct
loops.
I spent the money as fast as I made it. I believed in our own
information and made the fatal error of plunging on it. My error, as I
afterwards concluded, was in not risking the same amount on every
selection. Had I done this, I would not have suffered serious losses.
The trouble was that every time a horse on which I wagered won, I was
encouraged to bet several times as much on the next one, and by
doubling and trebling my bets, I played an unequal game.
The expense of gathering this information within a few weeks increased
to upwards of $1,000 a week, and it was not only our boast, but an
actuality, that the Bureau did really give more than value received.
Undoubtedly, the evil of the venture was the gambling it incited; but
the effort to secure reliable information was honest, and what young
man of my age and of my experiences, having indulged in a lark of the
Silver Coin variety, could withstand the temptation of seeing the
thing through?
Among the leading patrons of the Maxim & Gay Company were soon
numbered important horse owners on the turf, leading bookmakers and
many leaders of both sexes in the smart set. Maxim & Gay made it a
rule to sell no information of any kind to minors and often excluded
young men from the offices for this reason.
HOW "THE ONE BEST BET" WAS COINED
Our methods of advertising were unique. We used full pages whenever
possible, and it was a maxim in the establishment that small type was
never intended for commercial uses. We used in our big display
advertisements a nomenclature of the turf that had never before been
heard except in the vicinity of the stables, and we coined words and
phrases to suit almost every occasion. The word "clocker," meaning a
man who holds a watch on horses in their exercise gallops, was
original with us, and has since come into common use, as has the
phrase, "The One Best Bet," which we also coined.
It was our aim, in using the language of horsemen, to be technical
rather than vulgar, the theory being that, if we could convince
professional horsemen that we knew what we were talking about, the
general public would quickly fall in line.
One morning we were alarmed to see in the _Morning Telegraph_, on
the page opposite our own daily effort, the advertisement of a new
tipster who called himself "Dan Smith." Dan went Maxim & Gay "one
better" in the use of race-track terminology. He evidently employed a
number of negro clockers, for the horse lingo which he used in his
advertisements smelled of soiled hay and the manure pile. It was
awful! But it made a hit with race-goers, and before a week had passed
we recognized "Smith" as a dangerous competitor.
We were loth to believe that the use of this horsy language was
entirely responsible for Smith's success, for we knew that his tips
were not so good as ours. We investigated. His trick was this: In the
sheet that he sent out to his customers, he would name for every race
at least five horses as having a chance to win. He advised his
clients, in varying terms, to bet on every one of them, and if any one
of them won, he would print next morning what he had said on the
preceding day regarding the winner alone, leading the public to
believe that the only horse he had fancied was the actual winner.
I decided to organize another Bureau to knock out Dan Smith. The
intention was "to go" our competitor "a few better" in the use of
vulgar horse-racing colloquialisms and exaggerated claims, and thus
nauseate the betting public and "put the kibosh" on Dan. We created a
fictitious advertiser whom we named "Two Spot," and the next morning
there appeared at our instigation in the _Morning Telegraph_ a large
display advertisement, headed substantially as follows:
+-----------------------------+
| TWO SPOT |
| Turf Info. Merchant |
| Terms, $2 Daily; $10 Weekly |
+-----------------------------+
Following the style which Dan Smith had adopted in his racing sheets,
"Two Spot" mentioned in his first advertisement, as a sample of his
line of "dope," four or five horses to win each race, each one in more
grandiloquent terms than the other, but these were selected because
they, in reality, appeared to be the most likely losers of all the
entries.
A woman was sent over to the newly-organized office of "Two Spot" to
take charge of the salesroom. I was completely taken off my feet the
next day when she informed me that the receipts, as a result of the
first advertisement, were in excess of $300, and that the public not
only did not read between the lines, but had actually fallen for the
hoax.
To cap the climax, on the second day one of the "outsiders" which "Two
Spot" named derisively as the one best bet "walked in" at 40 to 1!
Next day "Two Spot" did a land-office business, and within a few days
we figured that the "Two Spot" venture would net $1,000 a week if
continued. "Two Spot" then went after the game hammer and tongs and
endeavored to gage the full credulity of the public.
The distinctive difference between "Two Spot" and Maxim & Gay was
this: Maxim & Gay, except in one instance, which is chronicled herein,
never pretended to have selected a winner when it had not, while "Two
Spot" enjoying the same source of information as Maxim & Gay, worded
his daily advices to clients so artfully as to be able to claim the
next morning in his advertisements à la Dan Smith, the credit of
having said something good about every winner.
The profits of Dan Smith's venture, I was informed, exceeded a quarter
of a million dollars the first year, and the profits of "Two Spot,"
whose career was cut short within a month by a realization on our part
that we could not afford to be identified with such an enterprise, was
divided among the employees of the "Two Spot" office. "Two Spot" had
been brought into being for the purpose of killing opposition and not
for profit-making. The scheme failed of its purpose.
To give an idea of the character of some of the raw kind of
advertising put out by "Two Spot," and for which the public fell, I
recall this excerpt from one of his tipping sheets:
I am my own clocker. I have slept under horse-blankets for thirty
years. I understand the lingo of horses. Last night, when I was
taking my forty winks in the barn of Commando, I heard him whinny
to Butterfly and tell her to keep out of his way to-day because he
was going to "tin-can" it from start to finish, and if Butterfly
tried to beat him, he would "savage" her. That makes it a cinch
for Commando. Bet the works on him to win.
REAL INSIDE TURF INFORMATION
Maxim & Gay repeated the "Silver Coin" method of advertising only once
during the entire career of the company. This happened in the spring
of 1902, when John Rogers, trainer for William C. Whitney, sent to the
post a mare named Smoke. Our information was that the mare would win,
and our selections for the day named her to win--and she did. Two days
later, she was again entered, against an inferior class of horses, and
the handicap was entirely in her favor. Notwithstanding this, we
inserted an advertisement which appeared in the newspapers on the
morning of the race, reading substantially as follows:
"_Don't bet on Smoke to-day. She will be favorite, but she will
not win. Rockstorm will beat her._"
Sure enough, Smoke opened up favorite in the betting. The betting
commissioners of Mr. Whitney placed large wagers on the horse with the
bookmakers. The bulk of the public's money, however, went on
Rockstorm, and before post time thousands of dollars of the "wise"
money followed suit.
Rockstorm won the race. Smoke led into the stretch, when up went her
tail and she "blew up."
Immediately I was cross-questioned by messengers from the judges'
stand. They asked our reason why we were so positive that Smoke would
lose. Mr. Whitney, I was informed, was actually suspicious that his
mare had been "pulled." The reason for the reversal of form, as I
explained at the time, was this:
William Dozier, our chief clocker at the race-track, who had witnessed
the preparation which Smoke received for the races, was of the opinion
that her training had been rushed too fast, and that her first race,
instead of putting her on edge, had caused a setback. Her first race,
in fact, had "soured" her. Being a veteran horseman, he was positive
that Smoke would lose. I afterwards learned that the training of Smoke
had been left to an understrapper, and that Mr. Rogers himself was not
responsible for her condition.
THE PUBLIC ASKS TO BE MYSTIFIED
The judges were apparently satisfied, but the public could not readily
understand the truth, and we didn't point it out in our
advertisements, because our policy was always to appear as mysterious
as possible as to the source of our information.
Mystery played an important rôle in our organization, and it would
have been better had we never succeeded in the Smoke coup. Up to this
time my personal identity had not been revealed at the race-track, and
even the bookmakers did not know who was the guiding spirit of Maxim &
Gay. "Jimmy" Rowe, trainer for James R. Keene; Peter Wimmer, trainer
for Captain S. S. Brown of Pittsburg, and John Rogers, trainer for
William C. Whitney, were at this early period at various times the
rumored sponsors for Maxim & Gay. The bookmakers and "talent"
generally conceived the idea that nobody but a very competent trainer
in the confidence of horse owners could possibly be responsible for so
much exact information regarding the horses. Of course, the track
officials who made it their business to know everything knew of my
connection with the organization. No sooner, however, did their
messengers ask an interview with me than the fact became public
property around the race-track and the mask was off.
The effect for a while was very bad, for our business fell off
considerably. "Bismarck" Korn, the well-known German bookmaker, put it
to me this way on the day of the Smoke incident:
"You are the first horse tipster I effer saw dat vore eyeclasses,
sported a cane, und vore tailor-made cloding. You look like a
musicianer--not like a horseman. You're a vonder!"
Gottfried Walbaum, another old-time bookmaker, chimed in: "Dat vas
obdaining money under false bredenses. I gafe your gompany dwendy-fife
dollars a veek for two months alreaty. You gif me my money pack! You
are a cheater!"
Riley Grannan, the plunger, said, "Got to hand it to you, kid! Any
time you can put one over on the Weisenheimers that have been making a
living on race-tracks for twenty years you are entitled to medals!"
The attitude of "Bismarck" and of Walbaum was amusing, that of Grannan
flattering. But it was poor business, because most of these
professional race-track people ceased for a while to subscribe for the
Maxim & Gay service.
For months I had purposely kept myself in the background, fearing a
dénouement of this very description. I recalled that in the late 80's,
in a town of northern Vermont, when John L. Sullivan was advertised to
appear in a sparring exhibition, his manager met him at the train,
and, although it didn't rain and the sun didn't shine, an umbrella was
raised to cover John L. while walking from the train to a waiting
landau. No sooner did Sullivan enter the vehicle than the blinds were
drawn. When the carriage reached the hotel, it stopped before a side
door. The manager alighted before Sullivan, again quickly raised the
umbrella and whisked the heavy-weight champion past the crowds and up
to his room without exposing him to the view of anybody whatsoever.
Throughout the day Sullivan was screened from public gaze. His face
was not seen by a single citizen of the town until he appeared on the
stage that night.
I asked the manager why he was so very careful to shield Sullivan from
the popular view prior to his appearance before the footlights. I
recall that he said:
"If the public thought John L. was just an ordinary human being with
black mustaches and a florid Celtic face, they wouldn't go to see him.
The public demand that they be mystified, and to have shown people off
the stage that Mr. Sullivan is just a plain, ordinary mortal would
disillusion them and keep money out of the house."
That piece of showman's wisdom was fresh in mind during the early
career of Maxim & Gay; and so long as Maxim & Gay kept race-track men
guessing as to who was directing its destinies, the organization was a
howling success. Its good periods were mixed with bad periods after
the mystery of sponsorship was cleared up to the satisfaction of the
professionals by the inquiry of the race-track judges into the Smoke
affair.
A few weeks after the Smoke coup, our chief clocker informed us that
the entries for a big stake race which would be run on the following
Saturday had revealed to him a "soft spot for a sure winner," as he
expressed himself, and he said we could advertise the happening in
advance with small chance of going wrong. This we proceeded to do.
Money poured in by telegraph from distant cities for the "good thing"
on Saturday. Our advertisement on the Thursday previous to the race
read like this:
+---------------------------------+
| The Hog-Killing of the Year |
| Will Come Off at Sheepshead Bay |
| On Saturday, at 4 O'clock. |
| Be Sure to Have a Bet Down. |
| Telegraph Us $5 for the |
| Information |
+---------------------------------+
One of our constant patrons resided in Louisville. He was among the
first to whom we telegraphed the information on Saturday morning. The
race was run and the horse _lost_.
About 4:30 P.M. we received a dispatch from our Louisville customer,
reading as follows: "The hog-killing came off on schedule time--here in
Louisville. I was the hog."
Another message from a pool-room habitué reached us, reading: "Good
game. Have sent for more money."
We were often in receipt of messages of similar character on occasions
when our selections failed to win and our customers lost their money;
but these communications were generally in good spirit.
On one occasion we had what we believed to be first-hand information
regarding a horse which was being prepared for a big betting coup by
Dave Gideon, one of the cleverest horsemen in the country. Following
our customary method of using vividly glowing advertisements, with the
blackest and heaviest gothic type in the print shop, we announced:
+----------------------------------------+
| A GIGANTIC HOG-KILLING |
| We have Inside Information of a Long |
| Shot that Should Win To-morrow at |
| 10 to 1 and Put Half of the Bookmakers |
| out of Business. |
| Be Sure to Have a Bet Down on |
| This One. Terms $5. |
+----------------------------------------+
The _argument_ of the advertisement, which appeared beneath these
display lines, was couched in the most glowing terms, and made it very
plain that our information came from a secret source, and, further,
that we had spent legitimately a snug sum of money to secure the
information. We also pointed out that the owner was one of the
shrewdest betting men on the turf and seldom went astray when he put
down a "plunge" bet on one of his own entries.
Next day the race was run. The horse did not finish "in the money."
The following day we received many letters, as we always did when one
of our heavily advertised "good things" lost. One of the most unique
of these epistles contained a remonstrance from a Philadelphia
subscriber. He wrote in this vein:
Dear Sir:--You have been advertising for some days that you would
have a gigantic hog-killing to-day. I was tempted by your
advertising bait and fell--and fell heavily with my entire
bank roll. My bucolic training should have warned me that
"hog-killings" are not customary in the early Spring, but I fell
anyway.
Permit me to state, having recovered my composure, that Armour
or Swift need have no fear of you as a competitor in the
pork-sticking line, for far from making a "hog-killing," you did
not even crack an egg. Pardon me. Thanks. Good-by.
Yours truly,
---- ----
PRESTIGE RESTORED BY A CLERK'S RUSE
In the Summer of the second year of Maxim & Gay's great money-gathering
career, the Information Bureau was "out of luck" and the patronage of
the Bureau fell away to almost nothing. At this period I was seriously
ill and confined to my home. A man in my office decided to take
advantage of my absence from the scene to improve business a bit on
his own hook.
It was the habit of our track salesmen, dressed in khaki, to appear
at the office at noon every day and receive a bundle of envelopes
containing the tips on the races, and then immediately to proceed to
the race-track, stand outside of the gates and vend them at $5 per
envelope.
One day these men, without their knowledge, were supplied with
envelopes containing blank sheets of paper instead of the mimeographed
list of tips. When a handful of town customers reached the office, they
were informed that the selections would be late that day and would be
on sale at the track only.
At about half-past one o'clock the 'phone bell rang, and word came
from the track messengers that apparently a mistake had been made, as
their envelopes contained blanks. They were being compelled to refund
money. They asked what to do.
"Wait," they were told. "We will send a messenger immediately with the
tips."
The messenger never reached the track.
There were no tips issued.
On that day May J. won at odds of 200 to 1.
The next morning, the newspapers contained full-page advertisements
announcing that Maxim & Gay had tipped May J. at 200 to 1 as the day's
"One Best Bet." It could not have been done without a "come-back" if
any tips had been issued.
A BOASTFUL RACE PLAYER GIVES AID
I was not present, but I learned as soon as I became convalescent that
on the afternoon of the day the advertisement appeared claiming credit
for May J. at 200 to 1, the office was thronged with new customers who
enrolled for weekly subscriptions at a rate that put new life into the
business. A few of the customers expressed some doubt as to whether
Maxim & Gay gave out the 200 to 1 shot or not.
That afternoon there appeared on the scene a race player who, laying
$5 down on the desk, said, "Give me your good things. I played May J.
yesterday at 200 to 1 and I am rolling in money."
"Where did you buy your information?"
"From your man at the entrance to the track," he answered.
"At what time?" he was asked.
"A quarter to two," he replied.
"Say, young man, there were a lot of people who came in here this
morning who said they were not sure we gave out that selection at all.
Would you make an affidavit that you bought the information from us?"
"You bet I will!" he said; and thereupon a notary public was called in
and the caller swore that he had bought the Maxim & Gay tips at the
entrance to the race-track and that they contained May J. at 200 to 1.
That affidavit was posted in the office during the remainder of the
day. When the clerk who performed this stunt was asked for more
information as to how he came to secure such an affidavit, he gave
absolute assurance that he did not offer the customer the smallest
kind of bribe to make it, and that nothing but an innate desire to
call himself "on top" had influenced the man to perjure himself.
But I could not tolerate the misleading advertising that had been done
as a result of misplaced energy, and the man responsible for it did
not remain with the company.
FORTUNE CHANGES HER MOOD AND SMILES AGAIN
Peculiarly enough, the May J. advertisement was followed by a series
of brilliant successes for Maxim & Gay in the selection of winners at
big odds, and, within a month our net earnings again reached $20,000
per week. Horse owners, horse trainers and society people who
frequented the club-house at the race-track were our steadiest
patrons.
The women particularly were most loyal to our bureau. The wife of a
young multi-millionaire of international prominence was one of our
most ardent followers. She would never think of putting down a bet
without first consulting Maxim & Gay's selections. On a notable
occasion, this lady arrived at the gate of the Morris Park race-track
with her husband, in their automobile, and took the long stroll to the
club-house. They were a trifle late for the first race; the horses
were already going to the post up the Eclipse chute.
Suddenly the lady discovered she had forgotten to purchase Maxim &
Gay's selections. Hastily calling her husband, she gave him a sharp
berating for not reminding her to buy the selections. They had a short
but earnest interview, which was suddenly terminated by the young man
doing a sprint of a quarter of a mile down the asphalt walk from the
club-house to the main entrance where the tips were sold by the
uniformed employees of Maxim & Gay.
Those who witnessed the sprint of the young financier attested to the
fact that he never showed as much swiftness of foot in his early
college days; but even his unusual speed failed to get him back on
time to acquaint his wife with the name of the horse selected by Maxim
& Gay for the first race, the race having been run and the Maxim & Gay
selection having won. The gentleman thereupon got a curtain lecture
from his better half that astonished and amused the society patrons on
the club-house balcony. Thereafter, he never forgot to get the Maxim &
Gay selections. In fact, he made assurance doubly sure by engaging the
colored attendant in charge of the field-glasses to deliver the
selections to him daily immediately upon his arrival at the course.
Our popularity with racehorse proprietors was mixed. Among the horse
owners with whom we transacted business was Colonel James E. Pepper,
the late noted distiller and owner of a big breeding farm and a stable
of runners. He was an ardent lover of horses, and maintained that his
native Kentucky knowledge of thoroughbreds afforded him an opportunity
to pick probable winners of horse-races better than any of "them ----
faking tipsters." He had great confidence in his judgment for a while.
THE KENTUCKY COLONEL FALLS IN LINE
After separating himself from much cash, while one of his very
intimate friends was "cleaning up" plenty of money on our selections,
he finally strolled into our office one morning and sheepishly stated
that one of his "fool friends" had asked him to step in and get our
"fool selections" for him. We explained that it was against our rule
to give out our choices before 12:30 P.M., whereat he grew exceedingly
wroth. He finally agreed to our conditions, paid his money and was
given an order to get the selections at the track-entrance from one of
our messengers.
Nearly all of our choices won that day. Colonel Pepper came in the
following morning and paid for another subscription, this time for a
week's service. We were "in our stride," the majority of our
selections winning from day to day, and Colonel Pepper had cause for
exultation. On one of these days we divulged, on our racing sheet, the
name of a "sleeper" that we were confident would win at 10 to 1, a big
betting coup having been planned by that Napoleon of the turf, John
Madden. The horse won at big odds, and Colonel Pepper made a "killing"
on the information.
For the next day, our clockers had spotted another horse that had been
got ready by the light of the moon, and we spread it pretty strong in
our advertisements that the horse we would name could just fall down,
get up again and then "roll home alone." The horse did not fall down;
but he won; he "rolled home alone" by about ten lengths. He belonged
to Colonel Pepper. It was anticipated that about 20 to 1 would be laid
against this fellow, but on account of our strong tip, he opened at 10
to 1 and was played down to 3 to 1. The bookmakers were badly crimped.
The next day, as soon as the office opened, Colonel Pepper, hotter
under the collar than even his name might indicate, stamped into the
outer room. Slamming his cane down on the big mahogany table, he
demanded in stentorian tones: "What in the ---- does this ----
business mean? Here I come and subscribe my good money to your ----
fool tips, and you-all are so low-down mean as to give my hoss for the
good thing yesterday! What does it mean, suh; what does it mean?"
The use of considerable diplomacy was necessary to calm down the irate
Colonel, who had no compunctions in winning a big bet on Mr. Madden's
"sleeper," but "---- it, suh, it is outrageous to treat _me_ so."
The Colonel never got over that incident, and while he won a big bet
on his own horse, he always claimed that Maxim & Gay had ruined the
betting odds for him and that but for the vigilance of our clockers
his winnings would have been twice as large. This was true, and time
and again we ruined the price for many another owner who thought he
was going to get away with something on the sly.
Bookmakers as a rule are very much self-satisfied about their
knowledge of the mathematics of the game. In order to show them that
they didn't know all about it, the Maxim & Gay Company inserted an
advertisement one day reading substantially as follows:
+---------------------------------------+
| YOU PAY US $5 |
| |
| WE REFUND $6 |
| |
| If the Horse We Name as |
| |
| THE ONE BEST BET |
| |
| To-day Does Not Win, We Will Not |
| Only Refund Our $5 Fee, Which Is |
| Paid Us for the Information, but Will |
| Pay Each Client an EXTRA DOLLAR |
| By Way of Forfeit. |
| |
| Pay Us $5 To-day for Our One Best |
| Bet, and if the Horse Does Not Win |
| We Will Pay You $6 To-morrow. |
| |
| MAXIM & GAY CO. |
+---------------------------------------+
Our receipts that day were approximately $5,000. The horse did not win.
We refunded $6,000 next day, and netted a considerable sum of money on
the operation.
It happened to be a two-horse race. Our horse was at odds of 1 to 6
in the betting, that is to say, the bookmakers laid only one dollar
against every six bet by the public. The other horse ruled at odds of
5 to 1, meaning that here the bookmakers laid five dollars against the
public's one.
The Maxim & Gay Company sent to the track $1,000 out of the $5,000 paid
in by its customers and wagered the $1,000 on the contending horse at
odds of 5 to 1, drawing down $4,000 in winnings. From this money it
paid its clients the thousand-dollar forfeit, netting $4,000 on the
operation, after of course returning to them their own $5,000.
Had the 1 to 6 shot won, the clients who had received the winning tip
would have been happy, while the Maxim & Gay Company would not have
been compelled to refund any money and would have been ahead $4,000 on
the operation, the $1,000 wagered and in that event lost in the betting
ring on the other horse being subtracted from the $5,000 paid in by its
customers. No matter which horse won our gain was sure to be $4,000 and
we had here the ideal of a "sure thing."
It was a case of "taking candy from a baby"; and yet many of the wise
bookmakers could not at first figure it out. Nearly all of them
subscribed for the information. As for the public, they did not seem to
catch on at all.
BETTING THE PUBLIC'S MONEY AT GREAT PROFIT
The Eastern racing season was about to close and it was decided to
remove the entire force of clerks to New Orleans for the Winter and
there to depart from the usual practice of selling tips only, and to
bet the money of the American public on the horses at the race-track in
whatever sums they wished to send. The company employed Sol
Lichtenstein, then the most noted bookmaker on the American turf, to
bet the money, and made him part of the organization, giving him an
interest in the profits.
The Maxim & Gay Company at this time had made close to $1,000,000, and
recklessly and improvidently I had let it slip through my fingers. It
was "easy come and easy go." As I review that period in my career, I
recall that the whole enterprise appeared to me in the light of an
experiment--just trying out an idea, and having a lot of fun doing it.
Because of its dazzling success I became so confident of my ability to
make money at any time that I didn't take serious heed whether I
accumulated or not. Besides, I had never loved money for money's sake.
All the pleasure was in the accomplishing.
The races at New Orleans were advertised to start on Thanksgiving Day.
On the 15th of October I ordered $20,000 worth of display advertising
to run in thirty leading newspapers in the United States four days a
week, until Thanksgiving. Credit was extended for the bill by one of
the oldest advertising agencies in America.
The advertisements told the public to send their money to Maxim & Gay,
Canal Street, New Orleans. On my arrival there, two days before
Thanksgiving, I called at the post-office, and asked if there was any
mail for Maxim & Gay. The post-office clerk appeared to be startled. He
gazed at me as if he were watching a burglar in the act. His demeanor
was almost uncanny. He didn't talk. He didn't even move. He just
looked. Finally I asked, "What is the matter?"
"Wait a minute," he muttered.
He left the window. He did not return. Instead, what appeared to me to
be a United States deputy marshal ambled up to my side and said, "See
here; the Postmaster wants to see you."
I was escorted into a secluded chamber in the post-office building, and
a few minutes later a post-office official, along with three or four
assistants, came into the room.
"What's the trouble?" I asked.
"You bring us a recommendation as to who you are and what you are and
all about yourself before we will answer any of your questions as to
how much mail there is here for you," the official said.
I smiled. The advertising, then, was a success.
Having been employed as a newspaper man in New Orleans a few years
before, I knew one of the leading lawyers of the city and several bank
officials. Within thirty minutes I had lawyer and bank men before the
Postmaster, vouching for my identity. Thereupon I was informed that
there were 1,650 pieces of registered mail, evidently containing
currency, and, in addition, twelve sacks of first-class mail matter,
which contained many money-orders, checks and inquiries. The official
said that in the money-order department they had notices of nearly
2,000 money-orders issued on New Orleans for the Maxim & Gay Company.
I sent a wagon for the mail, and notwithstanding the fact that a force
of four men under me opened the letters and stayed with the job for two
days, the task was not completed when the first race was called on
Thanksgiving Day. On adding up the receipts, we found a little over
$220,000.
The meeting continued 100 days, and our total receipts for the whole
period were $1,300,000.
Maxim & Gay's system of money-making at New Orleans was as follows:
We charged each client $10 per week for the information. We charged 5
per cent. of the net winnings in addition, and we further contracted to
settle with customers only at the closing odds for bets placed,
retaining for ourselves the difference between the opening odds and the
closing odds. The profit averaged approximately $7,000 a day for 100
days--to us.
As a guarantee of good faith, the Maxim & Gay Company agreed with its
clients that each day it would deposit in the post-office and mail to
them a letter bearing a postmark prior to the hour of the running of
the race, naming the horse their money was to be wagered on; and this
was always done. An honest effort, too, was always made to pick a horse
that was likely to win, for even a child can see that if we did not
intend to bet the money and wanted to pick losers, all we would have
had to do was to make book in the betting ring at the race-track and
not spend thousands of dollars in advertising for money to lay against
ourselves.
Did we invariably bet the money of our clients on the horse we named?
Yes, always--except once!
$130,000 IS LOST AND WON IN A DAY
That incident is not easily forgotten by several. On this day the entry
which we selected was one of Durnell & Hertz's string. The horse was
known to be partial to a dry track. The "dope" said he could not win in
heavy going. It was a beautiful sunshiny morning when we selected this
horse to win, and at noon the envelopes containing the name of the
horse were mailed in the post-office, as usual.
Something happened.
Half an hour before the race was run it began to rain in torrents and
the track became a sea of mud. Durnell & Hertz, realizing that they
were tempting fate to expect their horse to win under such conditions,
appeared in the judges' stand and asked permission to scratch their
entry. The judges refused. I asked Sol Lichtenstein, who had the
wagering of our client's money in charge, what he proposed to do about
betting on the horse under the changed conditions. He exclaimed, "Bet?
Do you want to burn up the money?"
"Well, if he wins," I replied, "we will have to pay, because if he wins
and you don't bet and we say we changed the selection on account of the
rainstorm, they will not believe us and we will have trouble."
"Very well," he said. "You bet my book all the money, and we will, for
the first time, book against our own choice. It's fair, because we must
pay if we lose, and there is no way out of it. But don't burn up that
money." I agreed.
The opening odds against the horse were 2 to 1. Had it been a dry
track, he would have opened a hot favorite at 4 to 5 or so. Slowly the
odds lengthened to 10 to 1, which was the ruling price at the close.
Durnell & Hertz bet on another horse to win. Standing before Sol
Lichtenstein's book, I said:
"Thirteen thousand on our selection, Sol."
"One hundred and thirty thousand to $13,000," he answered. "Here's your
ticket."
Sol and I repaired to the press-stand to see the race. Durnell &
Hertz's entry got off in the lead. At the quarter he was in front by
two lengths. At the half the gap of daylight was five lengths. At the
turn into the stretch the horse was leading by nearly a sixteenth of a
mile. Then I heard a noise behind me as if a miniature dynamite bomb
had exploded. Sol's heavy field-glasses had dropped to the floor.
Sol did not wait to see the finish. The horse won in a gallop.
At the office of Maxim & Gay accounts were figured and checks signed
for the full amount of our obligations, and they were immediately
mailed to all subscribers.
At midnight I met Sol in the lobby of the St. Charles Hotel. He looked
worn.
"I guess that will hold us!" he moaned.
"Hold us?" I answered. "Nothing better ever happened. It'll make us!"
"You poor nut!" he exclaimed. "Lose $130,000 in a day and it will make
you! Stop your noise!"
"Listen!" I rejoined. "At an expense of $3,000 for tolls I have
telegraphed a full-page ad to fifty leading city newspapers, telling
the public that we tipped this horse to-day at 10 to 1 and that we
mailed checks to our customers to-night for $130,000. The gain we will
reap in prestige and fresh business will repay our loss on the horse."
The next day the Western Union Telegraph Company found it necessary to
assign three cashiers to the work of issuing checks to the Maxim & Gay
Company for money telegraphed by new customers. Some individual
remittances were as high as $2,000. The money telegraphed us amounted
to about $150,000, and within ten days eighty per cent. of our own
dividend checks were returned to us by our customers, indorsed back to
us with instructions to double their bets, and within two weeks we were
able to figure that in the neighborhood of $375,000 was sent us as a
result.
A DISASTROUS NEWSPAPER WINDUP
During the progress of the New Orleans meeting, I purchased a
controlling interest in the New York _Daily America_--a newspaper
patterned after the _Morning Telegraph_--from a group of members of
the Metropolitan Turf Association, who had sunk about $75,000 in the
enterprise. The _Morning Telegraph_ was in the hands of a receiver. I
calculated that, by transferring the Maxim & Gay advertisements from
the _Morning Telegraph_ to the _Daily America_, I could make the _Daily
America_ pay and force the _Morning Telegraph_ out of the field. Later,
the late William C. Whitney, who was a shining light on the turf as
well as in finance, was induced to purchase the _Morning Telegraph_.
Then trouble began to brew for me.
One morning I was summoned to the offices of August Belmont on Nassau
Street.
"For the good of the turf, you must omit your Maxim & Gay
advertisements from the _Daily America_ and other newspapers
hereafter," declared Mr. Belmont on my entering his room.
"Why?" asked I.
"They flagrantly call attention to betting on the races," he replied.
"But you allow betting at the tracks."
"Yes," he replied, "but public sentiment is beginning to be aroused
against betting, and an attack is bound to result."
It occurred to me that at that very time Mr. Whitney was engaged in
disposing of his stock in various traction enterprises in New York to
Mr. Belmont and his syndicate, and that in all probability Mr. Whitney
had sought the assistance of Mr. Belmont to put the _Daily America_ out
of business in this way. It was apparent that the _Daily America_ would
lose money fast without the Maxim & Gay advertising. Maxim & Gay, too,
would practically be compelled to close up shop if it could not
advertise. I promised to consider.
Returning to the _Daily America_ office, I decided to pay no attention
to Mr. Belmont's request, having become convinced that it was conceived
in the interest of the _Morning Telegraph_.
A few days later I was again summoned over the 'phone to Mr. Belmont's
office. When I was ushered into Mr. Belmont's presence he said:
"If you don't quit advertising the Maxim & Gay Company in the _Daily
America_, I will see William Travers Jerome, and he will stop you."
Mr. Jerome was then District Attorney, and the idea of doing anything
that Mr. Jerome considered illegal appalled me.
"If Mr. Jerome sends word to me that the Maxim & Gay advertising is
illegal, I will discontinue it," I said.
I did not hear from Mr. Jerome, and so went on with the advertising.
Within a few weeks the Washington race meeting opened at Bennings.
When the Maxim & Gay staff reached there, we were all informed that
the Post-office department was about to begin an investigation into
our business affairs, and all of our staff voluntarily appeared before
the inspectors and underwent an examination. Our books were also
submitted. This investigation, coming on the heels of Mr. Belmont's
threat, convinced me that the influence of Mr. Belmont and Mr. Whitney
reached all the way to Washington, and I concluded that if I did not
discontinue the Maxim & Gay advertising in the _Daily America_, and
then, of course, discontinue the _Daily America_, they would make
serious trouble. So I hung out the white flag. I announced my
retirement from the Maxim & Gay Company and offered to sell my
newspaper to Mr. Whitney.
My exchequer was low. Nearly every dollar I had made in the Maxim & Gay
enterprise had been lost by me in plunging on the races myself.
During the following week Mr. Whitney received me at his palatial home
on Fifth Avenue just after his breakfast hour. He interviewed me for
about an hour, obtained my price on the paper, which was what I had put
into it, namely $60,000, and promised to cable to Colonel Harvey, then,
as now, the distinguished editor of the Harper publications, who was in
Paris, asking his advice, saying that Colonel Harvey advised him in all
newspaper matters. I did not hear from Mr. Whitney again; but I did
discover that my business manager was in close communication with Mr.
Whitney and that the state of my financial condition every evening was
being religiously reported to him.
A few weeks later I was compelled to put the paper in the hands of a
receiver, and a representative of Mr. Whitney bought it for $6,500, or
about 10 cents on the dollar, and put it to sleep, leaving the field
to the _Morning Telegraph_. From that moment the _Morning Telegraph_,
which for a short period had been refusing all tipster advertising,
resumed the acceptance of such business and has continued that policy
up to this day.
A year after I retired from Maxim & Gay, Attorney-General Knox decided
that racehorse tipping is an offense against the old lottery law, and
those who now advertise tips instruct that no money be sent by mail.
Having lost the _Daily America_ and having "blown" the Maxim & Gay
Company, I was again broke. But my credit was good, particularly among
race-track bookmakers. That Summer, 1904, I became a race-track
plunger, first on borrowed money and then on my winnings. By June I had
accumulated $100,000. In July I was nearly broke again. In August I was
flush once more, having recouped to the extent of about $50,000. Early
in September I went overboard; that is to say, I quit the track losing
all the cash I had and owing about $8,000 to a friendly bookmaker.
Disgusted with myself, I longed for a change of atmosphere. I stayed
around New York a few days, when the yearning to cut away from my
moorings and to rid myself of the fever to gamble became overpowering.
I bought a railroad ticket for California and, with $200 in my clothes,
traveled to a ranch within fifty miles of San Francisco, where I hoed
potatoes, and did other manual labor calculated to cure race-trackitis.
In less than six weeks I felt myself a new man, and decided to stick to
the simple life forevermore--away from race-tracks and other forms of
gambling.
But I didn't.