SMOOTH SAILING INTO ROUGH WATERS
The year 1900 was very closely a repetition of 1899. In May we
again went to Nyack for the summer, and in the fall, instead of
returning to the St. Lorenz, rented an apartment on Park Avenue,
and taking our furniture out of storage resumed house-keeping. It
was somewhat less expensive and we had tired of hotel fare.
Business was fairly good on the average, though there were dull
periods which made me restless. There was so much to be done I
was eager to make money faster.
In July the balance of the amount due to Mrs. Slater under the
contract with Mallison, which had expired, was paid over to me,
and pending some permanent investment I loaned it out on call.
Through the formation of trusts the trade had entirely changed in
its character. Many of our best customers had been absorbed by one
gigantic combination, and the supplies of the commodity we dealt
in, required by these consumers, were now furnished under a contract
made with the leading firm in the trade, this firm having been one
of the underwriters in the flotation of the securities and also
was represented in the board of directors.
This one consolidation took out of the open market a demand equivalent
to fully one-third of the entire consumption of the United States.
Then there was another trust, a comparatively small affair, but this
too absorbed a number of our customers. A third trust was in course
of organization, and when completed would, with the others, leave
for open competition less than half of the country's requirements.
Backed by a very wealthy concern we tried to get a chance to compete
for the contract with the leading trust, but it was quite useless.
We were told the business could not be given to us, no matter how
advantageous our terms might be, and our inference was that the
object of the trust was not to get the material at the lowest price,
but to give the business to a favored firm without competition.
This large contract naturally excited much interest in the trade
and great efforts were made to ascertain its terms. The generally
accepted theory was that the firm supplied the material as wanted
and the price for each month's deliveries was fixed by the average
of the market for the last ten days of the month. As if bearing
this out it was noted that during the last ten days of each month,
the firm holding the contract did its utmost to manipulate a rise
in price, which would, of course, inure greatly to its benefit.
These changes taking from us the legitimate demand from so many
consumers, made our business far more speculative. Instead of
buying to supply a regular trade, our purchases were made largely
to be resold in wholesale lots to dealers or others, and the profit
would depend on an advance in the market following the purchase.
If the market favored us the business was profitable; if not, then
losses must be met.
At this time we were doing considerable business on joint account
with George Norman, our former clerk. In many of the purchases
and sales we made he had half interest and in the same way we were
interested in many of his operations. This business for many months
proved profitable. Aside from these transactions we both were doing
a good deal of business on individual account, we far more than
was prudent considering our capital, though at that time, in my
anxiety to make money, I did not realize it.
There came a time when, on a small scale, I repeated my error of
1895. The first time it was my misfortune, the second my fault.
For this fatal mistake I have no defense. I should have known
better--but in explanation there is something to say, and while it
is not a defense, it is in a measure some palliation.
There had been a period of inactivity with no opportunity to make
money. My mind was depressed over the loss of legitimate trade
through the trusts and I was harassed by appeals from some of my
moral creditors for help. I felt more than ever before the weight
of my awful burden.
In a recent interview with Mrs. Slater, in which her affairs
had been discussed, I had stated to her my hopes of accomplishing
certain things. A remark she made in reply seemed to have burned
into my brain. Her words were, "To do that you must make money
and lots of it." That was in clear-cut words the task before me.
I "must make money and lots of it." It drove from my mind thoughts
of prudence and safety. I took no account of the risk of my business.
I thought only of the possible profits.
Perhaps I was mad, mentally irresponsible. It certainly seems so
to me now. Possibly I had the fever of a gambler playing for high
stakes. At all events, I plunged to the limit--and the market
went against me. I tried to extricate myself, but too late. It
was impossible. All the capital at my command was lost, and in
addition there was nearly twelve thousand dollars indebtedness on
our contracts in which George Norman had half interest. The horror
that came over me as I realized my awful position I can compare only
to Dante's "Inferno." What should I do? What could I do? I wonder
I did not go insane.
Norman came to my office and tried to encourage me. The contracts
standing in his name had all been settled and he had money left.
When he left it had been agreed that I was to arrange for time for
payment of the differences on our joint-account contracts, and as
opportunity offered he was with his capital to do a joint-account
business with me by which we hoped to make money enough to pay these
differences and recoup my losses. Meanwhile he was to let me have
from month to month what money I would require, above what I could
make myself, to meet my expenses and the payments to Mrs. Slater.
This arrangement gave me a breathing spell. I managed to pull
myself together and go home after the terrible day in a state of
comparative calmness. I could not tell my wife of this new trouble
and I could not tell Mrs. Slater. If my expenses and Mrs. Slater's
payments were provided for why worry either of them? In a few
months, I reasoned, things will come my way again and I will get out
of this awful pit. Meanwhile, I could eat my heart out in useless
regret when alone, but must conceal from all the world my trouble.
I hope no reader of these pages will ever know the fortune of mind
I suffered. It was infinitely worse than any possible physical
torture in the days of the Spanish Inquisition. I once listened to
a sermon on "Hell," delivered by the late Rev. T. DeWitt Talmage.
His word picture of a place of torment was so vivid one could
almost inhale the odor of the burning sulphur and yet the place he
painted was a paradise compared to the hell on earth that was my
portion.
For a few months Norman was as good as his word. He made up the
deficiency in my earnings and continually encouraged me with what
he would do when market conditions warranted operations. Then he
commenced slowly to withdraw his assistance by responding to my
request for money only in part, on the plea that he was himself
hard pressed. I had good reasons for knowing that such was not the
case.