THE FARMERS' COMMERCIAL ASSOCIATION DOES TERRIFIC THINGS TO THE BOARD OF
TRADE
The holidays barely over, Wallingford was upon the road again, and until
the first of May he spent his time organizing new branches, keeping the
endless chain letters booming and taking subscriptions for his new
journal, the _Commercial Farmer_, a device by which he had solved the
grave problem of postage. The _Commercial Farmer_ was issued every two
weeks. It was printed on four small pages of thin paper, and to make it
second-class postal matter a real subscription price was charged--five
cents a year! For this he paid postage of one cent a pound, and there
were eighty copies to the pound. He could convey his semi-monthly
message to a million people at a cost of one hundred and twenty-five
dollars, as against the ten thousand dollars it would cost him to mail a
million letters with a one-cent stamp upon them. And five cents a year
was enough to pay expenses. On the first of May, the enterprising
promoter, who seriously aspired now to become a financial star of the
first magnitude, took a swift thousand-mile journey to the offices of
Fox & Fleecer, where Mr. Fox, polishing, as always, at his glazed scalp,
was still intent upon that bland but perplexing secret problem. Mr.
Wallingford, as a preliminary to conversation, drew his chair up to the
opposite side of the desk and laid upon it a check book and a package of
documents with a rubber band around them. "Four hundred and twenty-five
thousand dollars in cash and negotiable securities," he stated, "and all
to buy September wheat."
Mr. Fox said nothing, but unconsciously his palm went to the top of his
head.
"The September option is at this moment quoted at eighty-seven and
one-eighth cents," went on Mr. Wallingford. "Could it possibly go lower
than sixty-two?"
"It is the invariable rule of Fox & Fleecer," said Mr. Fox slowly,
"never to give advice nor to predict any future performances of wheat.
Wheat can go to any price, up or down. I may add, however, that it has
been several years since the September option has touched the low level
you name."
"Well, I'm going to bet this four hundred and twenty-five thousand
dollars that it don't go as low as sixty-two," retorted Wallingford
stiffening. "I want you to take this wad and invest it in September
wheat right off the bat, at the market, on a twenty-five cent margin,
which covers one million, seven hundred thousand bushels."
Mr. Fox, his eyes hypnotically glued upon the little stack of securities
which represented four hundred and twenty-five thousand dollars, and a
larger commission than his firm had ever in all its existence received
in one deal, filled his lungs with a long, slow intake of air which he
strove to make as noiseless as possible.
"You must understand, Mr. Wallingford," he finally observed, "that it
will be impossible to buy an approximate two million bushels of the
September option at this time without disturbing the market and running
up the price on yourself, and it may take us a little time to get this
trade launched. Probably five hundred thousand bushels can be placed at
near the market, and then we will have to wait until a favorable moment
to place another section. Our Mr. Fleecer, however, is very skillful in
such matters and will no doubt get a good price for you."
"I understand about that," said Wallingford, "and I understand about the
other end of it, too. I want to turn this four hundred and twenty-five
thousand dollars into a clean million or I don't want a cent. September
wheat will go to one dollar and a quarter."
Mr. Fox reserved his smile until Mr. Wallingford should be gone. At
present he only polished his pate.
"That's when you would probably fall down," continued Wallingford; "when
September wheat reaches a dollar and a quarter. If you try to throw this
seventeen hundred thousand bushels on the market you will break the
price, unless on the same day that you sell it you can buy the same
amount for somebody else. Will that let you get the price without
dropping it off ten or fifteen cents?"
"Fox & Fleecer never predict," said Mr. Fox slowly, "but in a general
way I should say that if we were to buy in as much as we sold, the
market would probably be strengthened rather than depressed."
"All right," said Wallingford. "Now I have another little matter to
present to you." From his pocket he drew a copy of the _Commercial
Farmer_, the pages scarcely larger than a sheet of business letter
paper. "I want an advertisement from you for the back page of this. Just
a mere card, with your name and address and the fact that you have been
in business at the same location for thirty years; and at the bottom I
want to put: 'We handle all the wheat transactions of J. Rufus
Wallingford.'"
[Illustration: A LARGER COMMISSION THAN FOX AND FLEECER HAD EVER
RECEIVED IN ONE DEAL]
Of course in a matter so trifling Mr. Fox could not refuse so good a
customer, and J. Rufus departed, well satisfied, to work and wait while
Nature helped his plans.
Across a thousand miles of fertile land the spring rains fell and the
life-giving sun shone down; from the warm earth sprang up green blades
and tall shoots that through their hollow stems sucked the life of the
soil, and by a transformation more wonderful than ever conceived by any
magician, upon the stalks there swelled heads of grain that nodded and
yellowed and ripened with the advancing summer. From the windows of
Pullman cars, as he rode hither and yonder throughout this rich
territory in the utmost luxury that travelers may have, J. Rufus
Wallingford, the great liberator of farmers, watched all this magic of
the Almighty with but the one thought of what it might mean to him. Back
on the Wallingford farm, Blackie Daw and his staff of assistants, now
half-a-dozen girls, kept up an ever-increasing correspondence. Ham
Tinkle was jealous of the very night that hid his handiwork for a space
out of each twenty-four hours, and begrudged the time that he spent in
sleep. During every waking moment, almost, he was abroad in his fields,
and led his neighbors, when he could, to see his triumph, for never had
the old Spicer farm brought forth such a yield, and nowhere in Truscot
County or in Mapes County could such fields be shown. Upon these broad
acres the wheat was thicker and sturdier, the heads longer and larger
and fuller of fine, fat grain than anywhere in all the region round.
The Farmers' Commercial Association, a "combination in restraint of
trade" which was well protected by the fear-inspiring farmer vote, met
monthly, and Wallingford ran in to the meetings as often as he could,
though there was no need to sustain their enthusiasm; for not only was
the plan one of such tremendous scope as to compel admiration, but
Nature and circumstances both were kind. There came the usual early
rumors of a drought in Kansas, of over-much rotting rain in the Dakotas,
of the green bug in Oklahoma, of foreign wars and domestic disturbances,
and these things were good for the price of wheat, as they were
exaggerated upon the floors of the great boards of trade in Chicago and
New York. Through these causes alone September wheat climbed from
eighty-seven to ninety, to ninety-five, to a dollar, to a dollar-five;
but in the latter part of July there came a new and an unexpected
factor. Dollar-and-a-half wheat had been the continuous slogan of the
Farmers' Commercial Association, and every issue of the _Commercial
Farmer_ had dwelt upon the glorious day when that should be made the
standard price. Now, in the mid-July issue, the idea was driven home and
the entire first page was given up to a great, flaming advertisement:
HOLD YOUR WHEAT!
SEPTEMBER WHEAT WILL GO TO
$1.50!
DON'T SELL A BUSHEL OF IT FOR LESS!
The result was widespread and instantaneous. In Oklahoma a small farmer
drove up to the elevator and asked:
"What's wheat worth to-day?"
"A dollar, even," was the answer.
"This is all you get from me at that price," said the farmer, "and you
wouldn't get this if I didn't need fifty dollars to-day. Take it in."
"Think wheat's going higher?" asked the buyer.
"Higher! It's going to a dollar and a half," boasted the farmer. "I got
twelve hundred bushels at home, and nobody gets it for a cent less than
eighteen hundred dollars."
"You'd better see a doctor before you drive back," advised the elevator
man, laughing.
Over in Kansas at one of the big collecting centers the telephone bell
rang.
"What's cash wheat worth to-day?"
"Dollar-one."
"A dollar-one! I'll hold mine a while."
"Better take this price while you can get it," advised the shipper. "Big
crop this year."
"A dollar and a half's the price," responded the farmer on the other end
of the wire.
"Who is this?" asked the shipper.
"J. W. Harkness."
The man rubbed his chin. Harkness owned five hundred acres of the best
wheat land in Kansas.
In South Dakota, on the same day, two farmers who had brought in their
wheat drove home with it, refusing the price offered with scorn. In
Pennsylvania not one-tenth of the grain was delivered as on the same
date a year before, and the crop was much larger. In Ohio, in Indiana,
in Illinois, in Iowa, in Nebraska, all through the wheat belt began
these significant incidents, and to brokers in Chicago and New York were
wired startling reports from a hundred centers: farmers were delivering
no wheat and were holding out for a dollar and a half!
"You can scare the entire Board of Trade black in the face with a
Hallowe'en pumpkin," Wallingford had declared to Blackie Daw. "Say
'Boo!' and they drop dead. Step on a parlor match and every trader jumps
straight up into the gallery. Four snowflakes make a blizzard, and a
frost on State Street kills all the crops in Texas."
Results seemed to justify his summing up. On that day wheat jumped ten
cents within the last hour before closing, and ten thousand small
speculators who had been bearing the market, since they could see no
good reason for the already high price, were wiped out before they had a
chance to protect their margins. On the following day a special edition
of the _Commercial Farmer_ was issued. It exulted, it gloated, it fairly
shrieked over the triumph that had already been accomplished by the
Farmers' Commercial Association. The first minute that it had shown its
teeth it had made for the farmers of the United States ten cents a
bushel on four hundred million bushels of wheat! It had made for them in
one hour forty million dollars net profit, and this was but the
beginning. The farmers themselves, by standing together, had already
raised the price of wheat to a dollar-fifteen, and dollar-and-a-half
wheat was but a matter of a few days. On the boards of trade it would go
even higher. There would be no stopping it. It would soar to a dollar
and a half, to a dollar-seventy-five, to two dollars! Speculation was a
thing ordinarily to be discouraged, yet under these circumstances the
farmers themselves should reap the wealth that was now ripe. They should
take out of "Wall Street" and La Salle Street their share of the money
that these iniquitous centers of financial jugglery had taken from the
agricultural interests of the country for these many years. They
themselves knew now, by the events of one day, that the Farmers'
Commercial Association was strong enough to accomplish what it had meant
to accomplish, and now was the time to get into the market. It should be
not only the pleasure and profit of every farmer, but the duty of every
farmer, to hit the gamblers a fatal blow by investing every loose
dollar, on safe and conservative margins, in this certain advance of
wheat. On the last page of this issue of the _Commercial Farmer_
appeared for the first time the advertisement of Fox & Fleecer, and
copies went to a million wheat growers.
The response was many-phased. Farmers who were convinced of this logic,
and those who were not, rushed their wheat to market at the then
prevailing price, not waiting for the dollar and a half, but turning
their produce into cash at once. To offset this sudden release of grain,
buying orders poured into the markets, the same cash that had been
received from the sale of actual wheat being put into margins upon
fictitious wheat. Prices fluctuated in leaps of five and ten cents, and
the pit went crazy. It was a seething, howling mob, tossing frenzied
trades back and forth until faces were red and voices were hoarse; and
the firm of Fox & Fleecer, long noted for its conservative dealing and
almost passed by in the course of events, suddenly became the most
important factor on the floor.
On the ticker that on the first of May he had installed in his now
mortgaged house upon his mortgaged farm, Wallingford saw the price mount
to a dollar and a quarter, drop to a dollar-eighteen, jump to a
dollar-twenty-two, back to twenty, up to twenty-five, back to
twenty-two, up to twenty-eight. This last quotation he came back into
the room to see after he had on his hat and ulster, and while his
automobile, carrying Blackie Daw and Mrs. Wallingford, was spluttering
and quivering at the door. Then he started for Chicago, leaving his
neighbors back home to keep his telephone in a continuous jingle.
Hiram Hines met Len Miller in the road, for example. Both were beaming.
"What's the latest about wheat?" asked Len.
"A dollar twenty-eight and seven-eighths," replied Hiram; "at least it
was about an hour ago when I telephoned to Judge Wallingford's house.
Suppose its climbing for a dollar-thirty by now. How much you got, Len?"
"Twenty thousand bushels," answered Len jubilantly. "Bought it at a
dollar twenty-four on a five-cent margin, and got that much profits
already, nearly. Raised a thousand dollars on my sixty acres and have
made nearly a thousand on it in two weeks; with Judge Wallingford's own
brokers, too."
"So's mine," exulted Hiram. "Paid a dollar-twenty-six, but I'm
satisfied. When it reaches a dollar-forty I'll quit."
Ezekiel Tinkle walked six miles to see his son Ham at the Wallingford
place.
"Jonas Whetmore's bragging about two thousand dollars he's made in a few
days in this wheat business," he stated. "I don't rightly understand
it, Hamlet. How about it? I don't believe in speculating, but Jonas says
this ain't speculating, and if there's such a lot of money to be made I
want some."
"We all do," laughed Ham Tinkle, who, since he had "made good" with his
new-fangled farming, was accepted as an equal by his father. "I had two
hundred when I started. It's a thousand now, and will be five thousand
before I quit. Bring your money to me, father, and I'll show you how to
get in on the profits. But hurry. How much can you spare?"
"Well," figured Ezekiel, "there's that fifteen hundred I've saved up for
Bobbie's schooling; then when I sell my wheat----"
"Don't do that!" interposed his son quickly. "Wheat is going up so
rapidly because the growers are holding it for a dollar and a half.
Every man who sells his now, weakens the price that much."
"Is _that_ the way of it!" exclaimed the old man, enlightened at last,
and he kicked reflectively at a piece of turf. "To make money out of
this all the farmers must hold their wheat for a dollar and a half! Say,
Hamlet; Charlie Granice sold his wheat at a dollar-six to go into this
thing. Adam Spooner and Burt Powers and Charlie Dorsett all sold theirs,
and they're all members of this association. Ham, I'm going right home
to sell my wheat."
"They are traitors!" charged Hamlet angrily. "I won't send that money
away for you."
"Send it away!" retorted the old man. "Not by a danged sight you won't!
I'll sell my wheat right now while it's high, and put my money in the
bank along with the fifteen hundred I've got there; and you go ahead and
be your own fool. I know advice from your old daddy won't stop you."
Not many, however, were like old man Tinkle, and J. Rufus Wallingford,
as he sped toward Chicago, was more self-congratulatory than he had ever
been in all his life. A million dollars! A real million! Why, dignity
could now attach to the same sort of dealing that had made him forever
avoid the cities where he had "done business." Heretofore his operations
had been on such a small scale that they could be called "common
grafting," but now, with a larger scope, they would be termed "shrewd
financiering." It was entirely a matter of proportion. A million! Well,
he deserved a million, and the other millions that would follow. Didn't
he look the part? Didn't he act it? Didn't he live it?
"Me for the big game!" he exulted. "Watch me take my little old
cast-iron dollars into Wall Street and keep six corporations rotating in
the air at one and the same time. Who's the real Napoleon of Finance?
Me; Judge Wallingford, Esquire!"
"Pull the safety-rope and let out a little gas, J. Rufus," advised
Blackie Daw dryly. "Your balloon will rip a seam. The boys on Wall
Street were born with their eye-teeth cut, and eat marks like you before
breakfast for appetizers."
J. Rufus only laughed.
"They'd be going some," he declared. "Any wise Willie who can make a
million farmers jump in to help him up into the class of purely
legitimate theft, like railroad mergers and industrial holding
companies, ought to be able to stay there. The manipulator that swallows
me will have a horrible stomachache."
Mrs. Wallingford had listened with a puzzled expression.
"But I don't understand it, Jim," she said. "I can see why you got the
farmers together to raise the price of wheat. It does them good as well
as you. But why have you worked so hard to make them speculate?"
J. Rufus looked at her with an amused expression.
"My dear infant," he observed; "when Fox & Fleecer got ready to sell my
near-two-million bushels of wheat this morning, somebody had to be ready
to buy them. I provided the buyers. That's all."
"Oh!" exclaimed Mrs. Wallingford, and pondered the matter slowly. "I
see. But, Jim! Mr. Hines, Mr. Evans, Mr. Whetmore, Mr. Granice, and the
others--to whom do they sell after they have bought your wheat?"
"The sheriff," interposed Blackie with a grin.
"Not necessarily," Wallingford hastened to contradict him in answer to
the troubled frown upon his wife's brow. "My deal don't disturb the
market, and I expect wheat to go on up to at least a dollar and a half.
If these farmers get out on the way up they make money. But the boobs
who buy from them----"
"Ain't it funny?" inquired Blackie plaintively. "There's always a herd
of 'em just crazy eager to grab the hot end."
A boy came on the train with evening papers containing the closing
market quotations. Wheat had touched thirty-four, but a quick break had
come at the close, back to twenty-six! Another column told why. Every
cent of advance in the actual grain had brought out cash wheat in
floods. Members of the great Farmers' Commercial Association had hurried
their holdings to market, trusting to the great body of the loosely
bound organizations to keep up the price--and the great body of the
organization was doing precisely the same thing. At bottom they had, in
fact, small faith in it, and the Board of Trade, sensitive as a
barometer, was quick to feel this psychological change in the situation.
Wallingford said nothing of this to his wife. He had begun to fear her.
Always she had set herself against actual dishonesty, and more so than
ever of late as he had begun to pride himself upon being a great
financier. In the smoking compartment, however, he handed the paper to
Blackie Daw, with his thumb upon the quotations.
"There's the answer," he said. "The Rubes have cut their own throats, as
I figured they would, and you'll see wheat tumble to lower than it was
when this raise began. Hines and Evans and Granice and the rest of them
will hold the bag on this deal, and they needn't blame it to me. They
can only blame it to the fact that farmers won't stick. I'm lucky that
they hung together long enough to reach my price of a dollar and a
quarter."
"How do you know you got out?" asked Blackie, passing over as a matter
of no moment whatever the fact that all their neighbors of Truscot and
Mapes Counties, who had followed "Judge" Wallingford's lead and urging
in the matter of speculation, would lose their all; as would hundreds if
not thousands of other "members" who had been led through the deftly
worded columns of the _Commercial Farmer_ to gamble in their own grain.
"Easy," explained J. Rufus. "The quotations themselves tell it. Fox &
Fleecer had instructions to unload at a dollar twenty-five, and they
follow such instructions absolutely. They began unloading at that price,
buying in at the same time for my farmers, and, in spite of the fact
that they were pitching nearly two million bushels of wheat on the
market after it hit the twenty-five mark, it went on up to thirty-four
before it broke, showing that the buying orders until that time were in
excess of selling orders. The farmers throughout the country simply ate
up my two million bushels of wheat."
"Then it's their money you got, after all," observed Blackie.
"It's mine now," responded J. Rufus with a chuckle. "I saw it first."